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MarketScreener Homepage  >  Equities  >  Australian Stock Exchange  >  Asaleo Care Limited    AHY   AU000000AHY8

ASALEO CARE LIMITED

(AHY)
  Report
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09/17ASALEO CARE : Appointment of Chief Financial Officer
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Asaleo Care : Appendix 4D for the half year ended 30 June 2020

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08/17/2020 | 06:33pm EDT

Asaleo Care Limited ABN 61 154 461 300

30‐32 Westall Road, Springvale Victoria, 3171

www.asaleocare.com

18 August 2020

Company Announcements Office

ASX Limited

20 Bridge Street

Sydney NSW 2000

Electronic lodgement via ASX Online

Asaleo Care Limited (AHY) - Appendix 4D for the half year ended 30 June 2020

In accordance with ASX Listing Rule 4.2A.3, please find attached the Appendix 4D for the half year ended 30 June 2020 for immediate release. The Appendix 4D incorporates the Interim Financial Report.

Yours sincerely,

James Orr

Company Secretary

Asaleo Care Limited ABN 61 154 461 300 30‐32 Westall Road, Springvale Victoria, 3171 www.asaleocare.com

Appendix 4D Rule 4.2A.3

Half year report

Asaleo Care Limited

ABN 61 154 461 300

1. Details of reporting period and the previous corresponding period

Reporting Period:

half year ended 30 June 2020

Previous Corresponding Period:

half year ended 30 June 2019

2. Results for announcement to the market

Key information

30 June

30 June

2020

2019**

Statutory results*

2.1

Revenue from ordinary activities

214,964

Up

9.6%

from

196,125

(thousands)

2.2 Net profit after tax for the period attributable

18,847

Up

158.7%

from

7,286

to members (thousands)

2.3 Net profit after tax from continuing

22,700

Up

81.3%

From

12,520

operations (thousands)

2.4 Basic earnings per share (cents)

3.5

Up

169.2%

from

1.3

2.5 Diluted earnings per share (cents)

3.5

Up

169.2%

from

1.3

Underlying results*

2.1

Revenue from ordinary activities

214,964

Up

9.6%

from

196,125

(thousands)

2.2

Net profit after tax for the period attributable

22,785

Up

50.3%

from

15,156

to members (thousands)

2.3

Basic earnings per share (cents)

4.2

Up

50.0%

from

2.8

2.4

Diluted earnings per share (cents)

4.2

Up

50.0%

from

2.8

Dividends

Amount per

Franked amount per

security

security

Current Period

2.5

Interim dividend

0 cents

-

2.5

Final dividend (in respect of prior year)

2.0 cents

-

Previous corresponding period

2.5

Interim dividend

0 cents

-

2.5

Final unfranked dividend

0 cents

-

2.6

Record date for determining entitlements to

N/A

the dividend

2.6

Payment date

N/A

30 June 2020

30 June 2019

2.7

Net tangible asset backing per ordinary

5.2

2.4

security (cents per share)

2

Asaleo Care Limited ABN 61 154 461 300

30‐32 Westall Road, Springvale Victoria, 3171

www.asaleocare.com

For explanation of the figures reported above or other item(s) of importance not previously released to the market, please refer to the attached Interim Financial Report (which incorporates the Directors' Report and Financial Statements).

* Supplementary comments

As required for statutory reporting purposes, the statutory financial information for Asaleo Care Limited (the Company) and its controlled entities (collectively referred to as the Asaleo Care Group) has been presented for the financial period ended 30 June 2020 and for the comparative period ended 30 June 2019.

A reconciliation between the 2020 Underlying financial information and Asaleo Care Group's statutory financial information is included in Note 4(c) of the Interim Financial Report.

The statutory results in this Report are based on the Interim Financial Report which has been reviewed by PwC.

* Restated 2019 results

Numbers have been restated due to the classification of Baby Diaper business as a discontinued operatons.

James Orr

Company Secretary

Date: 18 August 2020

3

Asaleo Care Limited

ABN 61 154 461 300

Interim Financial Report

for the half year ended

30 June 2020

Asaleo Care Limited

ABN 61 154 461 300

Interim Financial Report - 30 June 2020

Contents

Page

Directors' Report

1

Auditor's Independence Declaration

2

Interim Financial Statements

Consolidated Statement of Profit or Loss and Other Comprehensive Income

3

Consolidated Balance Sheet

4

Consolidated Statement of Changes in Equity

5

Consolidated Statement of Cash Flows

6

Notes to the Consolidated Financial Statements

7

Directors' Declaration

17

Independent auditor's review report to the members

18

Asaleo Care Limited

Directors' report

30 June 2020

Directors' Report

Your Directors present their report on the consolidated entity (referred to hereafter as the Group) consisting of Asaleo Care Limited and the entities it controlled at the end of, or during, the half year ended 30 June 2020.

Directors

The following persons were directors of Asaleo Care Limited during the half year ended 30 June 2020:

Harry Boon

Independent Non-Executive Director

Sid Takla

Chief Executive Officer and Managing Director

Mats Berencreutz

Non-Executive Director (nominee of Essity AB)

Marie-Laure Mahe`

Non-Executive Director (nominee of Essity AB)

Sue Morphet

Independent Non-Executive Director

JoAnne Stephenson

Independent Non-Executive Director

Review of operations

A review of operations of the Group during the half year, and the results of those operations is contained in Asaleo Care Limited's statement to the Australian Stock Exchange and the Investor Results Release dated 18 August 2020.

The impact of Covid-19 has been considered in the review of the carrying value of assets and provisions for half year ended 30 June 2020. The assessment concluded that although market conditions and economic factors have changed there is no material impact on the carrying value of balance sheet items.

Significant Changes in State of Affairs

On 25 June 2020 the Company announced it has ceased the Baby Diaper business in New Zealand, which involves the closure of the Te Rapa manufacturing facility.

Auditor's independence declaration

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 2.

Rounding of amounts

The Company is of a kind referred to in Instrument 2016/191, issued by the Australian Securities and Investments Commission, relating to the 'rounding off' of amounts in the directors' report. Amounts in the directors' report have been rounded off in accordance with that Instrument to the nearest thousand dollars, or in certain cases, to the nearest dollar.

This Directors' Report is made in accordance with a resolution of Directors.

Harry Boon

Director

Dated this 17th day of August 2020

1

Auditor's Independence Declaration

As lead auditor for the review of Asaleo Care Limited for the half-year ended 30 June 2020, I declare that to the best of my knowledge and belief, there have been:

  1. no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and
  2. no contraventions of any applicable code of professional conduct in relation to the review.

This declaration is in respect of Asaleo Care Limited and the entities it controlled during the period.

Alison Tait

Melbourne

Partner

17 August 2020

PricewaterhouseCoopers

PricewaterhouseCoopers, ABN 52 780 433 757

2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001 T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au

Liability limited by a scheme approved under Professional Standards Legislation.

Asaleo Care Limited

Consolidated Statement of Profit or Loss and Other Comprehensive Income

For the half year 30 June 2020

Consolidated entity

30 June

Restated

Notes

30 June

2020

2019

$'000

$'000

Revenue from continuing operations

214,964

Sale of goods

4(b)

196,125

Other revenue from ordinary activities

533

315

215,497

196,440

Other income

840

466

Expenses

(131,427)

Cost of sales of goods

(119,857)

Other expenses from ordinary activities:

(22,130)

Distribution

(20,933)

Sales and administration

(23,845)

(24,434)

Other

4(c)

(2,329)

(6,760)

Finance costs

4(c)

(4,172)

(7,628)

Profit before income tax

4(c)

32,434

17,294

Income tax (expense)

(9,734)

(4,774)

Profit from continuing operations

22,700

12,520

(Loss) from discontinued operations

3

(3,853)

(5,234)

Profit for the period

18,847

7,286

Item that may be reclassified to profit or loss

(846)

Changes in the fair value of cash flow hedges

12

(1,466)

Exchange differences on translation of foreign operations

12

(3,741)

810

Income tax relating to these items

12

291

290

Other comprehensive (loss) for the period, net of tax

(4,296)

(366)

Total comprehensive income for the period

14,551

6,920

Total comprehensive income for the period attributable to:

14,551

Owners of Asaleo Care Limited

6,920

Cents

Cents

Earnings per share attributable to the ordinary equity holders of the

Company:

3.5

Basic earnings per share

5

1.3

Diluted earnings per share

5

3.5

1.3

The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.

3

Notes

ASSETS

Current assets

Cash and cash equivalents

Trade receivables

Inventories

7

Derivative financial instruments

10

Current tax receivable

Other current assets

Total current assets

Non-current assets

8

Property, plant and equipment

Right-of-use assets

Intangible assets

9

Total non-current assets

Total assets

LIABILITIES

Current liabilities

Trade payables

Other payables

Lease Liabilities

Current tax liabilities

Derivative financial instruments

10

Employee provisions

Total current liabilities

Non-current liabilities

Borrowings

11

Lease liabilities

Deferred tax liabilities

Employee provisions

Total non-current liabilities

Total liabilities

Net assets

EQUITY

Contributed equity

Other reserves

12

Retained earnings

Total equity

Asaleo Care Limited

Consolidated Balance Sheet

As at 30 June 2020

Consolidated entity

30 June 31 December

2020 2019

$'000 $'000

63,584 33,169

9,760 23,841

113,182 104,663

1,038 561

16 2,123

7,469 6,905

195,049 171,262

149,353 151,946

23,823 22,992

133,896 134,773

307,072 309,711

502,121 480,973

56,342 48,618

16,927 16,510

10,687 9,297

3,244 3,025

3,201 2,189

11,997 10,864

102,398 90,503

181,525 171,263

16,001 16,175

16,011 20,502

373 405

213,910 208,345

316,308 298,848

185,813 182,125

260,815 260,815

32,333 36,629

(107,335) (115,319)

185,813 182,125

The above Consolidated Balance Sheet should be read in conjunction with the accompanying notes.

4

Asaleo Care Limited

Consolidated Statement of Changes in Equity

For the half year 30 June 2020

Attributable to owners of

Asaleo Care Limited

Contributed Reserves

Retained

Total

Consolidated entity

Notes

equity

earnings/

equity

(losses)

$'000

$'000

$'000

$'0000

Balance at 1 January 2019

260,815

39,110

(135,270)

164,655

Impact of change in accounting policy

-

-

(2,407)

(2,407)

Profit for the period

-

-

7,286

7,286

Other comprehensive (loss)

-

(366)

-

(366)

Total comprehensive (loss)/profit for the period

-

(366)

7,286

6,920

Balance at 30 June 2019

260,815

38,744

(130,391)

169,168

Balance at 1 January 2020

260,815

36,629

(115,319)

182,125

Profit for the period

-

-

18,847

18,847

Other comprehensive (loss)

-

(4,296)

-

(4,296)

Total comprehensive (loss)/profit for the period

-

(4,296)

18,847

14,551

Transactions with owners in their capacity as owners:

Dividends provided for or paid

6

-

-

(10,863)

(10,863)

Balance at 30 June 2020

260,815

32,333

(107,335)

185,813

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes. 5

Asaleo Care Limited

Consolidated Statement of Cash Flows

For the half year 30 June 2020

Notes

Cash flows from operating activities

Receipts from customers (inclusive of goods and services tax)

Payments to suppliers and employees (inclusive of goods and services tax)

Income taxes paid

Interest received

Borrowing costs

Net cash inflow/(outflow) from operating activities

Cash flows from investing activities

Payments for property, plant and equipment

8

Receipts from sale of property, plant and equipment

Proceeds from the sale of Consumer Tissue Australia

Payments related to sale of business transaction costs

Net cash (outflow)/inflow from investing activities

Cash flows from financing activities

Proceeds from borrowings

Repayment of borrowings

Payment of principal elements of lease

Dividends paid to company's shareholders

Net cash (outflow) from financing activities

Net increase/(decrease) in cash and cash equivalents

Cash and cash equivalents at the beginning of the financial year

Effects of exchange rate changes on cash and cash equivalents

Cash and cash equivalents at end of period

Consolidated entity

30 June 30 June

2020 2019

$'000 $'000

251,012 261,518

(198,456) (286,404)

52,556 (24,886)

(2,540) (9,382)

112 315

(3,556) (8,433)

46,572 (42,386)

(9,284) (16,477)

  • 31
  • 180,000
  • (6,965)
    (9,284) 156,589

30,000 35,000

(20,000) (180,000)

(5,662) (6,140)

(10,863)-

(6,525) (151,140)

30,763 (36,937)

33,169 67,355

  1. 148

63,584 30,566

The above Consolidated Statement of Cash flows includes both continuing and discontinued operations. Amounts related to discontinued operations are disclosed in Note 3.

The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes. 6

Asaleo Care Limited Notes to the Consolidated Financial Statements 30 June 2020

1 Summary of significant accounting policies

The principal accounting policies adopted in the preparation of these Consolidated Interim Financial Statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated. The Interim Financial Statements are for the consolidated entity consisting of Asaleo Care Limited and its subsidiaries.

(a) Basis of preparation of interim report

This Condensed Consolidated Interim Financial Report for the half year ended 30 June 2019 has been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001.

The Condensed Consolidated Interim Financial Report does not include all of the information required for a full annual financial report and should be read in conjunction with the annual report of the consolidated entity as at and for the year ended 31 December 2019 and any public announcements made by Asaleo Care Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

The accounting policies applied by the consolidated entity in this Condensed Consolidated Interim Financial Report are consistent with those applied in the Annual Report for the year ended 31 December 2019.

This financial report is presented in Australian dollars with all values rounded to the nearest thousand dollars or where the amount is $500 or less, zero, unless otherwise stated, in accordance with ASIC Corporations (Rounding in Financial/Director's Reports) Instrument 2016/191.

(b) New accounting standards and interpretations

The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.

2 Critical accounting estimates and judgement

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period are discussed below.

  1. Discontinued operations

The Baby Diaper business was withdrawn from operations on 25 June 2020 and is reported in the financial statements for the half-year ended 30 June 2020 as a discontinued operation. The Baby Diaper business includes the Te Rapa manufacturing site, along with the Treasures brand. Cessation will allow the group to concentrate on its core, higher margin businesses in Personal Care and Hygiene in the Retail and Business-to-Business markets.

Provisions have been raised with respect to the make good of leased property, inventories on hand and redundancies. A sale process of the business assets will be undertaken. Any profits on the sale of assets or changes to expenses as the provisions are realised will be recognised in the second half of 2020.

The Australian Consumer Tissue business was sold on 29 March 2019 for $186.1 million including a favourable working capital adjustment of $6.1 million of which $2.7 million was received in 2019. A receivable of the balance of $3.4 million has been recorded as an Other Current Asset. Further, an environmental indemnity granted by the Group in favour of the purchaser in respect of the manufacturing facility sold with the business is subject to a limit of $9 million. At the date of this report, an environmental assessment of the site is in progress. Based on a preliminary assessment, an amount of $0.16 million has been provided.

The results of the Baby Diaper business and Australian Consumer Tissue business for the current and comparative periods, have been classified as a discontinued operation in the statement of comprehensive income and all related note disclosures.

7

Asaleo Care Limited Notes to the Consolidated Financial Statements 30 June 2020 (continued)

2 Critical accounting estimates and judgement (continued)

(ii) Impairment assessment of indefinite life intangibles

The Group tests annually or where there are indicators of impairment whether goodwill has suffered any impairment. The Group has reassessed growth assumptions and consider these assumptions to remain valid over the long term. As there were no indicators of impairment, the Group has not updated the value in use calculations used for the year ended 31 December 2019. The recoverable amount of cash-generating units (CGUs) have been determined based on value-in-use calculations. These calculations require the use of assumptions for each CGU.

Management is required to make significant judgements concerning future cash flows, including changes in competitive positions, expectations of growth, cost of capital and the determination of fair values when assessing the recoverable amount of assets (or groups of assets). Inputs into these valuations require assumptions and estimates to be made about forecast earnings before interest and tax and related future cash flows, growth rates, applicable discount rates, useful lives and residual values.

The judgements, estimates and assumptions used in assessing impairment are management's best estimates based on current and forecast market conditions. Changes in economic and operating conditions impacting these assumptions could result in changes in the recognition of impairment charges in future periods.

The impact of Covid-19 on the market and economic environment in which The Group operates continues to be monitored. The impairment assessment considered the financial impact of Covid-19 on the Group's CGUs.

(iii) Indefinite useful lives of brands

Assessment of the recoverable value of an intangible asset and the assessment that an asset has an indefinite life require management judgement and are reassessed at each reporting date.

No factors have been identified in the period that would alter the Group's assumption of indefinite useful life for the brands.

Management intends to continue to promote, maintain and defend the brands to the extent necessary to maintain their value for the foreseeable future.

(iv) Income taxes

The Group is subject to income taxes in Australia and foreign jurisdictions. The calculation of the Group's tax charge involves a degree of estimation and judgement. There are transactions and calculations for which the ultimate tax determination is uncertain.

The Group has recognised deferred tax assets relating to carried forward tax offsets. The assumptions regarding future realisation of deferred tax assets may change due to future operating performance and other factors.

(v) Impairment of inventory

The provision for impairment of inventories requires a degree of estimation and judgement. Provisions are established for obsolete and slow moving inventories, taking into consideration the ageing of inventories, discontinued lines, sell through history and forecast sales.

(vi) Customer rebates

Trade receivables are disclosed net of rebates payable. The Group has the legal right to offset such balances as they are with the same customers and it is the Group's intention to net settle any outstanding items.

The main judgement related to accruals for customer rebates is the timing and extent to which temporary promotional activities has occurred prior to period end. Customer rebates consist primarily of customer pricing allowances and promotional allowances, which are governed by agreements with trade customers (retailers and distributors). Accruals are recognised under the terms of these agreements, to reflect the expected promotional activity and our historical experience.

(vii) Leases

In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option. Extension options are only included in the lease term if the lease is reasonably certain to be extended (or not terminated). Potential future cash outflows have not been included in the lease liability because it is not reasonably certain that the leases will be extended.

The assessment is reviewed if a significant event or a significant change in circumstances occurs which affects this assessment and that is within the control of the lessee.

8

Asaleo Care Limited Notes to the Consolidated Financial Statements 30 June 2020 (continued)

3 Discontinued operations

The Baby Diaper business ceased operating from 25 June 2020 and is reported in the financial statements for the half-year ended 30 June 2020 as a discontinued operation. The Baby Diaper business includes the Te Rapa manufacturing site, along with the Treasures brand. Cessation will allow the group to concentrate on its core, higher margin businesses in Personal Care Hygiene in Retail and Business-to-Business markets.

The Australian Consumer Tissue business was sold on 29 March 2019. Costs related to the sale and transition to new owners were incurred for the 6 months ended 30 June 2020. As such, the results have been disclosed as a discontinued operation.

The financial performance and cash flow information presented reflects the operations for the 6 months ended 30 June 2020.

Discontinued Baby Diaper operations

Revenue from operations

Expenses

(Loss) before income tax Income tax benefit

(Loss) after income tax of discontinued Baby Diaper operations

Australian Consumer Tissue business

Revenue from operations

Expenses

(Loss) before income tax Income tax benefit

Profit/(Loss) after income tax of discontinued Australian Consumer Tissue operations

Gain on sale subsidiary

Profit/(Loss) from discontinued Australian Consumer Tissue operations

(Loss) from total discontinued operations

Statement of Cash Flows for discontinued Baby Diaper operations Net cash (outflow) from operating activities

Net cash (outflow) from financing activities

Net (decrease) in cash generated by discontinued operations

Statement of Cash Flows for discontinued Australian Consumer Tissue operations

Net cash (outflow) from operating activities

Net cash inflow from investing activities

Net cash (outflow) from financing activities

Net (decrease)/increase in cash generated by discontinued operations

(Loss) per share from discontinued operations attributable to the ordinary equity holders of the Company

Basic (loss) per share

Diluted (loss) per share

30 June

30 June

2020

2019

$'000

$'000

4,637

5,900

(14,201)

(7,003)

(9,564)

(1,103)

2,686

310

(6,878)

(793)

  • 34,260
    (2,202) (50,048)
    (2,202) (15,788)
    5,227 3,985

3,025 (11,803)

  • 7,362

3,025 (4,441)

(3,853) (5,234)

(5,445) (448)

  1. (409)
    (5,837) (857)

(2,202) (38,296)

  • 172,033
  • (1,669)

(2,202) 132,068

Cents

Cents

(0.7)

(1.0)

(0.7)

(1.0)

9

Asaleo Care Limited Notes to the Consolidated Financial Statements 30 June 2020

(continued)

4 Segment information

(a) Description of segments

Asaleo Care is a leading Personal Care and Hygiene Company that manufactures, markets, distributes and sells essential everyday consumer products across the Feminine Care, Incontinence Care, Consumer Tissue and Professional Hygiene product categories.

The operating segments are Retail Australia, Retail New Zealand and Business to Business (B2B). While a separate management reporting structure is in place for Retail Australia and Retail New Zealand, they have been aggregated into one reportable segment as they have similar customers and economic characteristics, such as margins and growth forecasts.

The consolidated entity is organised on an international basis into the following reporting segments:

Reporting Segment

Description

Retail

This segment manufactures and markets toilet and facial tissue, wipes, paper towel,

napkins, personal hygiene products for feminine and incontinence including pads,

tampons and liners to retail customers within Australia, New Zealand and the Pacific

Islands. All Pacific Islands product sales are recognised in the Retail segment.

B2B

This segment manufactures and distributes tissue and personal hygiene products

including hand towels, napkins, soaps, facial and toilet tissue and other hygiene

accessories through a distributor network to business end users including schools,

restaurants, shopping centres, airports, industrial companies, aged care facilities and

hospitals within Australia and New Zealand. Incontinence products and support

services are provided to healthcare professionals in residential and community care

facilities, aged care facilities and hospitals.

Reporting segments and their related results below are consistent with the Group's internal reporting provided to the chief operating decision maker, being the Chief Executive Officer and Managing Director.

(b) Segment information provided to senior management

Reportable segment information provided to senior management for the half year ended 30 June is as follows:

Continuing

30 June 2020

Retail

B2B

Operations

$'000

$'000

$'000

Revenue from external customers

103,640

111,324

214,964

Underlying EBITDA

24,993

24,445

49,438

Continuing

Restated 30 June 2019

Retail

B2B

Operations

$'000

$'000

$'000

Revenue from external customers

89,680

106,445

196,125

Underlying EBITDA

18,971

20,799

39,770

10

Asaleo Care Limited Notes to the Consolidated Financial Statements 30 June 2020 (continued)

  • Segment information (continued)
  1. Underlying EBITDA

The Chief Executive Officer assesses the performance of the operating segments based on a measure of Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA). This measurement basis excludes the effects of non-recurring expenditure from the operating segments such as impairment and asset write-downs, restructuring costs, strategic review costs and accelerated depreciation, and this is then referred to as Underlying EBITDA. Interest income and expenditure are not allocated to segments, as this type of activity is driven by the central treasury function, which manages the cash position of the Group.

A reconciliation of underlying EBITDA to operating profit before income tax is provided as follows:

Consolidated entity

30 June

30 June

2020

2019

$'000

$'000

Underlying EBITDA

49,438

39,770

Restructuring costs*

(108)

(284)

Kawerau site upgrade*

-

(476)

EBITDA

49,330

39,010

Finance costs

(4,172)

(7,628)

Interest received

112

315

Depreciation

(12,826)

(11,481)

Accelerated depreciation*

-

(2,912)

Amortisation

(10)

(10)

Profit before income tax

32,434

17,294

  • These expenses are included in other expenses in the Consolidated Statement of Profit or Loss and Comprehensive Income with the remaining mostly being the royalties, refer to Note 13 and FX losses.

5 Earnings per share

(a) Earnings per share

Consolidated entity

30 June

30 June

2020

2019

Cents

Cents

Basic earnings per share

3.5

1.3

Diluted earnings per share

3.5

1.3

(b) Weighted average number of shares used as denominator

Consolidated entity

2020

2019

Weighted average number of ordinary shares used as the denominator in

Number

Number

543,122,491

calculating basic earnings per share

543,122,491

Weighted average number of ordinary and potential ordinary shares used as the

543,122,491

denominator in calculating diluted earnings per share

543,122,491

11

Asaleo Care Limited Notes to the Consolidated Financial Statements 30 June 2020 (continued)

6 Dividends

Ordinary shares

Consolidated entity

30 June

30 June

2020

2019

$'000

$'000

2020: payment of 2019 final dividend of 2.0 cents per share (2019: No dividend

10,863

-

provided for or paid)

7 Inventories

Consolidated entity

30 June

31 December

2020

2019

$'000

$'000

Raw materials and stores*

28,871

27,073

Work in progress*

4,567

5,958

Finished goods*

79,744

71,632

113,182

104,663

*The above categories of inventories are net of non-recurring inventory write-downs. Provisions relating to the Te Rapa manufacturing facility for inventory write downs amounted to $1.4 million and write downs allocated to manufacturing spares amounted to $0.8 million for the period ended 30 June 2020. Write downs of inventories amounted to $0.4 million in 2019.

8 Property, plant and equipment

Freehold

Buildings

Plant and

Capital

Total

land

equipment

development

$'000

$'000

$'000

$'000

$'000

Half Year ended 30 June 2020

2,568

10,470

125,669

13,239

151,946

Opening net book amount 1 January 2020

Exchange differences

(37)

(177)

(2,293)

(226)

(2,733)

Reclassification of Asset Class

-

-

6,816

(6,816)

-

Additions

-

-

1,444

7,840

9,284

Disposals

-

-

(326)

(753)

(1,079)

Depreciation

-

(415)

(7,650)

-

(8,065)

Closing net book amount

2,531

9,878

123,660

13,284

149,353

.

12

Asaleo Care Limited Notes to the Consolidated Financial Statements 30 June 2020 (continued)

8 Property, plant and equipment (continued)

(a) Capital commitments

Capital expenditure contracted for at the reporting date but not recognised as liabilities is as follows:

Consolidated entity 30 June 31 December

20202019

$'000 $'000

Property, plant and equipment

2,152

4,624

  • Intangible assets

The Group's intangible assets comprise goodwill, brands and other intangible assets.

Goodwill represents the excess consideration paid by the Group in acquiring a business over the fair value of the assets and liabilities acquired. Goodwill is carried at cost less accumulated impairment losses and is considered as having an indefinite useful economic life.

Management have determined that all of the Group's brands have indefinite useful lives. These assets have no legal or contractual expiry date and are integral to the future of revenue generation. Management intends to continue to promote, maintain and defend the brands to the extent necessary to maintain their value for the foreseeable future.

Goodwill and the brands are not amortised and are tested for impairment annually or more frequently if events or changes in circumstances indicate that they might be impaired and are carried at cost less accumulated impairment losses.

Other intangible assets include trademarks and product development.

Consolidated entity

Opening net book amount

Exchange differences

Amortisation charge

Closing net book amount as at 30 June 2020

Brands and

Goodwill

other rights

Total

$'000

$'000

$'000

41,142

93,631

134,773

(287)

(580)

(867)

-

(10)

(10)

40,855

93,041

133,896

At 31 December 2019, the Retail NZ CGU had limited headroom of $8.1 million and its recoverable amount is sensitive to forecast EBITDA and its discount rate. No factors have come to light in the 6 months to 30 June 2020 that would indicate an impairment.

13

Asaleo Care Limited Notes to the Consolidated Financial Statements 30 June 2020 (continued)

10 Derivative financial instruments

Consolidated entity

30 June 31 December

2020

2019

$'000

$'000

Current assets

1,038

Forward foreign exchange contracts - cash flow hedges

561

Total current derivative financial instrument assets

1,038

561

Current liabilities

3,151

Forward foreign exchange contracts - cash flow hedges

1,899

Interest rate swap contracts - cash flow hedges

-

12

Other hedging instruments

50

278

Total current derivative financial instrument liabilities

3,201

2,189

(2,163)

(1,628)

(a) Fair value measurements

Asaleo Care Ltd discloses fair value measurements by level of the following fair value measurement hierarchy:

  1. quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1);
  2. inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) (level 2); and
  3. inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3).

The fair value of level 2 financial derivatives is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

At 30 June 2020 and 31 December 2019 the Group's derivative instruments were all level 2:

  • Derivative financial assets $1,038,000 (2019: $561,000)
  • Derivative financial liabilities $3,201,000 (2019: $2,189,000)

14

Asaleo Care Limited Notes to the Consolidated Financial Statements 30 June 2020 (continued)

11 Non-current liabilities - borrowings

Consolidated entity

30 June

31 December

2020

2019

$'000

$'000

Unsecured

92,500

Bank loans

82,500

Senior Notes

90,000

90,000

Capitalised debt establishment costs

(975)

(1,237)

Total unsecured current borrowings

181,525

171,263

Facility

Facility limit

Maturity date

Facility A

70,000

31-Jul-21

Facility B

40,000

31-Jul-23

Facility C

50,000

31-Jul-22

Series A Notes

65,000

26-Jun-25

Series B Notes

25,000

26-Jun-28

Total

250,000

(a) Financial undertakings

As at 30 June 2020, the Group was compliant with all financial undertakings of the revolving cash advance financing facilities and the Senior Notes facilities.

12 Reserves

Consolidated entity

30 June

31 December

2020

2019

Movements:

$'000

$'000

Cash flow hedges

(1,167)

Opening balance

2,178

Revaluation - gross

(846)

(4,696)

Deferred tax

291

1,351

(1,722)

(1,167)

Share-based payments

15,861

Opening balance

15,861

15,861

15,861

Foreign currency translation

21,935

Opening balance

21,071

Currency translation differences arising during the year

(4,484)

1,079

Deferred tax

743

(215)

18,194

21,935

32,333

36,629

15

Asaleo Care Limited Notes to the Consolidated Financial Statements 30 June 2020 (continued)

13 Related party transactions

The following transactions occurred with related parties:

Consolidated entity

30 June

30 June

2020

2019

Purchases of goods

$

$

40,475,791

Purchases of materials and goods from related parties

31,228,791

Other transactions

2,222,615

Royalties - Essity Hygiene and Health Aktiebolag

3,235,848

All transactions with related parties were made at normal commercial terms and conditions and at market rates.

14 Events occurring after the reporting period

No matters occurred after the reporting date

16

Asaleo Care Limited

Directors' Declaration

30 June 2020

Directors' Declaration

In the Directors' opinion:

  1. the interim financial statements and notes set out on pages 3 to 16 are in accordance with the Corporations Act 2001, including:
    1. complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements, and
    2. giving a true and fair view of the consolidated entity's financial position as at 30 June 2020 and of its performance for the half year on that date, and
  2. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable, and
  3. at the date of this declaration, there are reasonable grounds to believe that the members of the extended closed group will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross guarantee.

Note 1 confirms that the interim financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board.

The Directors have been given the declarations by the chief executive officer and chief financial officer required by section 295A of the Corporations Act 2001.

This declaration is made in accordance with a resolution of Directors.

Harry Boon

Director

Dated this 17th day of August 2020

17

Independent auditor's review report to the members of Asaleo Care Limited

Report on the half-year financial report

We have reviewed the accompanying half-year financial report of Asaleo Care Limited (the Company) and the entities it controlled during the half-year (together the Group), which comprises the consolidated balance sheet as at 30 June 2020, the consolidated statement of changes in equity, consolidated statement of cash flows and consolidated statement of profit or loss and other comprehensive income for the half-year ended on that date, selected other explanatory notes and the directors' declaration.

Directors' responsibility for the half-year financial report

The directors of the Company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that gives a true and fair view and is free from material misstatement whether due to fraud or error.

Auditor's responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Australian Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including giving a true and fair view of the Group's financial position as at 30 June 2020 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of Asaleo Care Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001.

PricewaterhouseCoopers, ABN 52 780 433 757

2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001 T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au

Liability limited by a scheme approved under Professional Standards Legislation.

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Asaleo Care Limited is not in accordance with the Corporations Act

2001 including:

  1. giving a true and fair view of the Group's financial position as at 30 June 2020 and of its performance for the half-year ended on that date;
  2. complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.

PricewaterhouseCoopers

Alison Tait

Melbourne

Partner

17 August 2020

Disclaimer

Asaleo Care Limited published this content on 18 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 August 2020 22:32:06 UTC


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Sales 2020 429 M 303 M 303 M
Net income 2020 34,0 M 24,0 M 24,0 M
Net Debt 2020 102 M 71,7 M 71,7 M
P/E ratio 2020 15,8x
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Average target price 1,16 AUD
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Spread / Highest target 26,8%
Spread / Average Target 13,6%
Spread / Lowest Target -8,29%
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NameTitle
Sid Takla Chief Executive Officer, MD & Director
Harry Boon Independent Non-Executive Chairman
Campbell R. Richards Chief Financial Officer
Mats Berencreutz Non-Executive Director
Sue M. Morphet Independent Non-Executive Director
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