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Australia | Healthcare | Products
Market capitalisation   AUD 3,155.9m
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Overview

ANN is a vertically integrated and multinational manufacturer of rubber gloves and other personal protection products that it develops, manufactures, packs and sells directly and through selected third party distributors to manufacturing businesses, hospitals, medical practitioners, supermarkets and other customers around the world.

Business Lines

ANN derives most of its operating revenues from the sale of industrial and medical gloves as well as other personal protection products in Australia, the Americas, Europe and Asia. 51% of the USD1,489.8 million it generated in the 2018 financial year came from product sales in the Americas, 37% from Europe and the rest from Asia and Australia.

ANN owns and operates over 50 research, manufacturing, packaging and distribution facilities around the world. It develops and produces a range of standardised and bespoke products including rubber gloves, industrial clothing and other personal protection products that it markets and sells directly and through selected third parties to hospitals, medical practitioners, manufacturing facilities, supermarkets and other customers around the world. ANN broadly categorises its products and operations into three segments:

  • Industrial products including protective gloves, footwear and other clothing for use mostly within the oil and gas, mining, automotive and manufacturing sectors. Its products are designed, manufactured and marketed under its ActivArmr, AlphaTec, HyFlex, ProjeX, VersaTouch, Viking, Trellchem and MicroGard brands; 
  • Medical products such as surgical and examination gloves, personal safety devices and infection prevention products for medical professionals, veterinarians and patients. Its products are marketed under its Encore, Gammex, Micro-Tough, Sandel and Medi-Grip brands; and
  • Single-use rubber gloves for scientific, medical and industrial applications that it markets under its MicroFlex and ToughNTuff brands.

Strategy, Risks and Opportunities

Healthcare product manufacturing is often characterised as competitive and susceptible to legal and regulatory changes, multinational competitors and new technologies. Companies try to reduce these risks and maintain margins by investing in their own plant and equipment, and by continuously improving and diversifying their products and customer segments. Specifically, ANN has indicated its near-term focus is to: optimise and increase its product portfolio with a particular emphasis on higher value products and market segments; undertake opportunistic and strategic acquisitions of key product manufacturers; and continue to develop channel partnerships in new international markets [1].

ANN competes directly with other domestic and international personal protection manufacturers that are also trying to attract customers through various pricing, quality and other customer propositions. Some of its larger global competitors are: Top Glove, Hartalega Holdings and Kossan Rubber Industries of Malaysia, which are three of the world’s largest rubber glove manufacturers; and Worldwide Protective Products and Honeywell International of the United States, two of the world’s largest producers of industrial hand and arm protectionary products.

ANN has established a vertically integrated and multinational business model with reliable channels-to-market across a diverse set of countries. It also operates in a range of industries and exports to a number of different countries, giving it the ability to allocate more of its resources to sectors with favourable demand drivers and to distribute more of its products to countries with favourable exchange rates, and vice-versa. Going forward, it should continue to benefit from increased sales and economies of scale through organic growth, expanding its product range and geographic presence, optimising its operations and vertically integrating up the supply chain as well as undertaking complementary and value-accretive acquisitions. Its downside commercial risks could include: a broader economic slowdown, particularly within the medical and manufacturing sectors that could affect the propensity of consumers to purchase discretionary personal protectionary products; erosion of market share and gross margins from other multinational competitors and just in time manufacturers who hold little inventory, especially in the larger and more competitive American, European and Asian markets; loss of a key customer, distributor, supplier or employee; changes to the availability, quality and delivered price of raw materials and third party supplier costs that are unhedged and cannot be passed on to customers through pricing increases; an appreciation of the AUD, which would lower the unhedged value of its exports and any foreign capital it chooses to expatriate back to Australia (equally however, this could lower the AUD-equivalent cost of any manufacturing, packaging and distribution undertaken outside of Australia); greater international product restrictions and regulations that may increase its compliance costs or prevent it from selling certain products in some markets; the development and widespread adoption of an alternative, cost-effective technology or application by a competitor; restricted growth due to a lack of manufacturing capacity or attempting to enter multiple markets without gaining traction in any particular market; and any inheritance of undue liabilities or commercial risks through new product offerings, acquisitions and entrances into new markets.

History

2002: Ansell was established in 1899 when the Dunlop Pneumatic Tyre Company of the United Kingdom opened an Australian bicycle tyre manufacturing plant and branch, known as the Dunlop Pneumatic Tyre Company of Australasia. The Dunlop Pneumatic Tyre Company of Australasia changed its name to the Dunlop Rubber Company of Australasia in 1906 and to Dunlop Perdriau in 1929 after it merged with the Perdriau Rubber Company. The business was initially involved in the production of bicycle and automobile tyres, but in 1948 it started expanding its product range into footwear and other rubber products and in 1967 changed its name to Dunlop Australia

In 1969, Dunlop Australia acquired the Ansell Rubber Company, a business formed in 1905 by Eric Norman Ansell that primarily manufactured and distributed condoms, balloons, household rubber gloves, surgical gloves and gas masks. In 1980, Dunlop Australia changed its name to Dunlop Olympic after it acquired Olympic Consolidated Industries, a manufacturer of tyres and other industrial products. It was first listed on the Australian Stock Exchange in 1985 (DOL.AX) and changed its name to Pacific Dunlop in 1986 (PDP.AX), reflecting its geographic expansion and in the same year it also established a joint venture called South Pacific Tyres with Goodyear Tire to manufacture and distribute tyres in Australasia

By the mid 1990’s Pacific Dunlop had operations in 20 countries and had diversified into clothing, footwear, batteries, healthcare products and food. It suffered from financial difficulties in the late 1990’s and chose to sell its food and battery businesses as well as its clothing and footwear businesses. Pacific Dunlop turned its focus to healthcare products through its Ansell subsidiary, and in 2002 was renamed Ansell (ANN.AX). At the time ANN had 17 manufacturing plants across Asia Pacific, the Americas and Europe, it operated within the professional healthcare, occupational healthcare and consumer healthcare markets, and it held a 50% shareholding in South Pacific Tyres, a 50% shareholding in Pacific Marine Batteries and a 45% shareholding in BT Equipment

2003: ANN sold its non-core investments in Pacific Marine Batteries and BT Equipment

2006: ANN divested its 50% interest in South Pacific Tyres and expanded its Asian presence by: acquiring 75% of Jissbon, a Chinese condom importer and distributor; and establishing a new trading entity known as Ansell (Shanghai) Commercial Trading Company to sell occupational healthcare products in China

2007: ANN continued to expand its international presence through the acquisitions of two condom manufacturing and distribution businesses, Unimil of Poland and Blowtex of Brazil

2009: ANN acquired the assets of Hawkeye Glove Company in the United States and initiated a restructure of its global manufacturing plants to reduce costs on the back of growing financial pressures during the global financial crises

2012: Two years after restructuring its global operations, ANN undertook a series of acquisitions centred on diversifying its international operations and product range. They included: Sandel Medical Industries, a business involved in the development of disposable staff and patient safety products in the United States; Shanghai Feidun Trading Company, a condom distributor in China; Trelleborg Protective Products, a Swedish manufacturer of chemical protective body suits; a minority interest in Yulex Corporation, a manufacturer of biopolymers based in the United States; and a 10% shareholding in Lakeland Industries, a United States producer of industrial safety clothing and accessories. ANN also launched a partnership with Koreca Industries to distribute its products in Korea

2013: ANN continued its international expansion by acquiring: Comasec SAS, a French manufacturer of specialty gloves; Preferred Surgical Products of the United States, a product and technology company specialising in infection prevention products; and Hércules Equipamentos de Proteção of Brazil, a manufacturer of personal protective equipment. It also opened a new research and development centre in Sri Lanka

2014: ANN acquired two more international manufacturing and distribution companies: Midas, a specialist polyurethane dipping and textile/yarn technology business based in South Korea; and BarrierSafe Solutions International of the United States, a global producer of single-use gloves under its MicroFlex brand as well as protective footwear through its OnGuard business. It also launched a global restructuring program which led to: the divestment of its household glove and cleaning products portion of the Comasec business; the divestment of its Hawkeye military glove manufacturing business; and the closure of its medical goods manufacturing plant in Malaysia, consolidating production at its factories in Sri Lanka and Southern Malaysia

2015: ANN continued its strategy of growth via acquisition by purchasing Hands International, a Sri Lankan based manufacturer and exporter of knitted glove liners, and Microgard, an international manufacturer and distributor of chemical protective clothing headquartered in the United Kingdom. ANN also sold its 10% interest in Lakeland Industries

2016: ANN chose to divest its non-core protective footwear business, OnGuard

2017: ANN acquired Nitritex of the United Kingdom, a manufacturer of sterile and non-sterile consumables including disposable gloves, goggles and face masks. Through the acquisition, it inherited the BioClean brand and a manufacturing plant in Malaysia. It also chose to sell its entire sexual wellness division that produced and sold condoms and lubricants to supermarkets, medical facilities and other customers under its SKYN, Blowtex, LifeStyles, Jissbon, KamaSutra and Manix brands

Governance

ANN was first listed on the Australian Stock Exchange on 22 August 1985. It had 142.3 million shares on issue at the end of the 2018 financial year, 8% of which were owned by BlackRock and the rest by a mix of approximately 34,000 retail and institutional investors.

The ANN Board collectively owned 0.5 million shares at the end of last year. The Board currently comprises:

  • Glenn Barnes has been the Independent Chairman since October 2012 and an Independent Director since September 2005. Glenn comes from a science and finance background, having previously been a Director of Lion Nathan and Veda Advantage and the Executive General Manager of Business and Personal Financial Services at National Australia Bank. He currently serves on the board of Australian Unity;
  • John Bevan has been the Independent Deputy Chairman since February 2017 and an Independent Director of the company since August 2012. John is also a Director of BlueScope Steel;
  • Magnus Nicolin has been the Managing Director and Chief Executive Officer since March 2010;
  • Marissa Peterson has been an Independent Director August 2006. Marissa also serves on the boards of Oclaro and Humana;
  • Peter Day has been an Independent Director since August 2007. Peter serves on the boards of Alumina, Boart Longyear and SAI Global;
  • Leslie Desjardins has been an Independent Director since November 2015. Leslie serves on the boards of Aptar Group and the Terry Fox Foundation;
  • Christina Stercken has been an Independent Director since October 2017. Christina is also a Partner with EAC Euro Asia Consulting and a Director of Ascom Holdings and the Myanmar-Amara Foundation; and
  • Bill Reilly has been a Non-Independent Director since October 2017.

Magnus Nicolin has been the Managing Director and Chief Executive Officer since March 2010. Magnus comes from a commerce background, having previously been the President of Europe, Middle East, Africa and Asia Pacific at Newell Rubbermaid and the Chief Executive Officer of Esselte.

References

Unless otherwise stated, all numbers are based on those reported at the end of the prior financial year.

ANN’s historic Annual Reports, Presentations, Prospectuses and Other Announcements can be viewed below or they can be sourced from its website (www.ansell.com) or the Australian Securities Exchange (www.asx.com.au)

ANN.AX Annual Report 2018 - ANN.AX Annual Result Presentation 2018 | ANN.AX Annual Report 2017 - ANN.AX Annual Result Presentation 2017 | ANN.AX Annual Report 2016 - ANN.AX Annual Result Presentation 2016 | ANN.AX Annual Report 2015 - ANN.AX Annual Result Presentation 2015 | ANN.AX Annual Report 2014 - ANN.AX Annual Result Presentation 2014 | ANN.AX Annual Report 2013 - ANN.AX Annual Result Presentation 2013 | ANN.AX Annual Report 2012 - ANN.AX Annual Result Presentation 2012 | ANN.AX Annual Report 2011 - ANN.AX Annual Result Presentation 2011 | ANN.AX Annual Report 2010 - ANN.AX Annual Result Presentation 2010 | ANN.AX Annual Report 2009 - ANN.AX Annual Result Presentation 2009 | ANN.AX Annual Report 2008 | ANN.AX Annual Report 2007 (Editorial) - ANN.AX Annual Report 2007 (Financial Statements) | ANN.AX Annual Report 2006 (Editorial) - ANN.AX Annual Report 2006 (Financial Statements) | ANN.AX Annual Report 2005 (Editorial) - ANN.AX Annual Report 2005 (Financial Statements) | ANN.AX Annual Report 2004 (Editorial) - ANN.AX Annual Report 2004 (Financial Statements) | ANN.AX Annual Report 2003 (Editorial) - ANN.AX Annual Report 2003 (Financial Statements) | ANN.AX Annual Report 2002 | ANN.AX Annual Report 2001 | ANN.AX Annual Report 2000 | ANN.AX Annual Report 1999 | ANN.AX Annual Report 1998

[1] Refer to page 14 of the ANN Annual Report 2018

Comparative Metrics

Summary Income Statement (USDm)

FY17AFY18AFY19FFY20FFY21F
Revenue 1,374.5 1,489.8 1,569.5 1,652.2 1,742.9
Revenue growth -12.6% 8.4% 5.4% 5.3% 5.5%
EBITDA 224.0 203.1 215.4 224.9 235.1
EBITDA Margin 16.3% 13.6% 13.7% 13.6% 13.5%
NPAT normalised 120.0 126.3 140.6 136.2 150.4
NPAT reported 147.7 484.3 130.1 130.9 150.4
EPS normalised 81.4 87.8 101.8 101.7 112.3
EPS growth -17.4% 8.0% 15.9% -0.1% 10.4%

Summary Balance Sheet (USDm)

FY17AFY18AFY19FFY20FFY21F
Total assets 2,450.5 2,522.5 2,457.8 2,521.6 2,581.3
Net debt 446.7 -30.8 95.7 82.7 47.7
Total liabilities 1,239.6 987.9 1,005.9 1,010.1 990.8
Shareholders' equity 1,210.9 1,534.6 1,451.8 1,511.5 1,590.5
ROCE 8.0% 7.1% 8.2% 8.4% 8.6%
WC to revenue 21.9% 20.9% 20.8% 20.8% 20.8%
Net debt to capital 26.9% -2.0% 6.2% 5.2% 2.9%
Interest cover 9.9 16.2 >25.0 >25.0 >25.0

Summary Cashflow Statement (USDm)

FY17AFY18AFY19FFY20FFY21F
Operating free cashflow 194.9 139.0 161.8 154.6 169.5
Capital expenditure 107.1 46.7 65.0 65.0 63.2
Distributable cashflow 86.6 614.1 86.3 84.3 106.3
Post-tax DPS declared 56.4 58.8 60.0 70.0 69.7
Franking 0.0% 24.5% 24.5% 24.5% 24.5%
Payout 52.2% 51.2% 43.1% 52.4% 47.4%
Dividend cover 2.4 1.5 2.1 1.7 1.9

Summary Discounted Cashflow Valuation (USDm)

Financial year end30-JunShares on issue133.9
WACC8.4%TV/DCF64.6%
Explicit value2,622.8Terminal value1,695.1
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Ansell is shutting three production facilities, two in Mexico and one in South Korea. It is part of a $30 million efficiency program and the glove maker ......Click Here
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Shareclarity has revised the Ansell Limited DCF Valuation, which has remained at AUD24.79. The value gap is now 6.9%.Shareclarity take: "ANN will close 2 of its manufacturing plants in Mexico and 1 in South Korea, as part of its transformation program. Cost savings have already been built into forecasts"
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Shareclarity has revised the Ansell Limited DCF Valuation up 0% to AUD24.79. The share price is currently AUD23.70 and the value gap is 4.6%.
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Shareclarity has revised the Ansell Limited DCF Valuation, which has remained at AUD24.71. The value gap is now 7.2%.
  0
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Grollo group property manager Martin Ansell said the Grollos had not yet decided if they would sell the hotel or self operate it. The new pub will be ......Click Here
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Shareclarity has revised the Ansell Limited DCF Valuation down 2% to AUD24.71. The share price is currently AUD25.53 and the value gap is -3.2%.
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Australian rubber gloves manufacturer Ansell has suffered a sharp share-price plunge after warning that US President Donald Trump's deepening ......Click Here
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The Ansell share price has decreased -9.3% today, compared to -0.9% by the other 14 Healthcare (Products) companies on Shareclarity.Shareclarity will review all publicly available information and update the DCF valuation accordingly.
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Shareclarity has revised the Ansell Limited DCF Valuation up 5% to AUD25.20. The share price is currently AUD26.49 and the value gap is -4.9%.Shareclarity take: "A significant reduction in ANN's net debt balance on the back of the divestment of its sexual wellness division, and a lower capital expenditure profile has resulted in a small valuation uplift."
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Macquarie has accused her of misrepresenting her consensual affair with Robert Ansell, lying about it to extract a payout and launching a "misleading ......Click Here
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The share price has moved 10% above the DCF valuation. The share price is currently AUD28.46 and the value gap is -15.7%% downside. It has the 4th best metrics of the 14 Healthcare(Products) companies on Shareclarity.1. Vita Life Sciences (VLS.AX)    12 of 152. Sirtex Medical (SRX.AX)    10 of 153. Fisher & Paykel Healthcare (FPH.NZ)    9 of 154. Ansell    8 of 155. ResMed Inc (RMD.AX)    7 of 156. Blackmores (BKL.AX)    7 of 157. BLIS Technologies (BLT.NZ)    5 of 158. SeaDragon (SEA.NZ)    5 of 159. AFT Pharmaceuticals (AFT.NZ)    3 of 1510. Clover Corporation (CLV.AX)    3 of 1511. Creso Pharma (CPH.AX)    2 of 1512. Rhinomed (RNO.AX)    2 of 1513. Holista Colltech (HCT.AX)    2 of 1514. Promisia Integrative (PIL.NZ)    0 of 15Key financial metrics: value gap, P/E, EV/EBITDA, P/B, dividend yield, debt to capital, Interest cover, WC to revenue, WACC, TV/DCF, 3yr EPS growth, 3yr EBITDA margin, 3yr dividend cover, 3yr cash conversion, 3yr ROCE
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The biggest rises were Lynas, up 11.2 per cent, Treasury Wine up 5.6 per cent, Ausdrill up 4.9 per cent, Estia Health up 3.8 per cent, and Ansell up 3.5 ......Click Here
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Shareclarity has revised the Ansell Limited DCF Valuation.Click here to view this change.
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Shareclarity has revised the Ansell Limited DCF Valuation.Click here to view this change.
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Shareclarity has revised the Ansell Limited DCF Valuation.Click here to view this change.
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McLaughlin sued the bank and her ex-boss Robert Ansell in November, saying Ansell forced her into a relationship from 2015 to 2017. The affair ended when Ansell's wife found out by reading their text messages, she said. McLaughlin is seeking $US40 million ($50 million) in damages, saying her ......Click Here
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Shareclarity has revised the Ansell Limited DCF Valuation up 0% to AUD23.68. The share price is currently AUD25.90 and the value gap is -8.6%.Click here to view this change.
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Shareclarity has revised the Ansell Limited DCF Valuation , which has remained at AUD23.66. The value gap is now -5.5%.Click here to view this change.
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Shareclarity has revised the Ansell Limited DCF Valuation down 1% to AUD23.66. The share price is currently AUD23.92 and the value gap is -1.1%.Click here to view this change.
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Meanwhile, a number of Australian companies, including BlueScope, Ansell, Macquarie and pokies giant Aristocrat, are set to benefit from Mr Trump's drastic company tax cuts in the US, which is slashing the corporate tax rate from 35 per cent to 21 per cent. Transurban recorded a deferred tax asset of ......Click Here