FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of April 2003 (April 30, 2003)
Commission File Number: 0-15850
ANSELL LIMITED
(Translation of registrant's name into English)
Level 3, 678 Victoria Street, Richmond, Victoria 3121, Australia
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F ___
---
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulations S-T Rule 101(b)(1): X
---
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7):
Indicate by check mark whether by furnishing the information contained in this
Form, the registrant is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ___ No X
---
This Form 6-K is designated as incorporated by reference into the Form F-3
Registration Statement filed with the Securities and Exchange Commission on
November 20, 1990 with file numbers 33-37752 and 33-37752-01, the Form F-3
Registration Statement filed with the Securities and Exchange Commission on
April 30, 1991 with file number 33-40228, the Form F-3 Registration Statement
filed with the Securities and Exchange Commission on October 31, 1994 with file
numbers 33-85802 and 33-85802-1, the Form S-8 Registration Statement filed with
the Securities and Exchange Commission with file number 33-18603, and the Form
F-3 Registration Statement filed with the Securities and Exchange Commission on
July 25, 1997 with file number 333-6472.
This Form 6-K contains forward-looking statements within the meaning of the
Securities Exchange Act of 1934 as amended, and information that is based on
management's beliefs as well as assumptions made by and information currently
available to management. When used in this Form 6-K, the words "anticipate,"
"approach," "begin," believe," "continue," "expect," "forecast," "going
forward," "improved," "likely," "look forward," "opportunity," "outlook,"
"plans," "potential," "proposal," "should" and "would" and similar expressions
are intended to identify forward-looking statements. These forward-looking
statements necessarily make assumptions, some of which are inherently subject to
uncertainties and contingencies that are beyond the Company's control. Should
one or more of these uncertainties materialize, or should underlying assumptions
prove incorrect, actual results may vary materially from those anticipated,
expected, estimated or projected. Specifically, the ability of the Company to
realize its ongoing commitment to increasing shareholder value through its
ongoing restructuring, asset dispositions, strategic review and implementation,
and cost cutting initiatives, may be affected by many factors including:
uncertainties and contingencies such as economic conditions both in the world
and in those areas where the Company has or will have substantial operations;
foreign currency exchange rates; pricing pressures on products produced by its
subsidiaries; growth prospects; positioning of its business segments; future
productions output capacity; and the success of the Company's business
strategies, including further structural and operational changes, business
dispositions, internal reorganizations, cost cutting, and consolidations.
NEWS RELEASE
[LOGO OF ANSELL]
Ansell Limited
A.C.N. 004 085 330
Level 3, 678 Victoria Street, Richmond,
3121, Australia
GPO Box 772H, Melbourne,
Victoria 3001, Australia
Telephone (+61 3) 9270 7270
Facsimile (+61 3) 9270 7300
www.ansell.com
30 April 2003
Ansell Healthcare - Operating Update
The Chairman of Ansell Limited, Dr. Ed Tweddell announced on 16 April 2003 that
the Company would undertake an on-market buy-back of up to 10 million shares
over the coming year.
Prior to commencing the buy-back, the CEO, Mr. Harry Boon, said: "Ansell
Healthcare, the Company's core operating business, has recorded a strong third
quarter performance, with segment EBITA, in US dollars, up more than 10% from
the same quarter last year".
Some highlights:
.. Strong results in the Occupational Division, which accounts for more than
half of Ansell's total sales, with continued growth in both sales and
operating margins. The Company's focus on new generation ergonomic gloves
and lower cost production has led to a consistent improvement in the
Occupational Division's performance.
.. As previously advised, supply to the US surgical glove market, which
accounts for less than 10% of Ansell's total revenue, was disrupted in the
first half. Supply increased from early January, and back orders, which
stood at over US$7million, have been reduced by almost 60%; the remainder
should be cleared during the fourth quarter.
.. Improved surgical gloves supply in the US market has resulted in higher
Professional Division third quarter sales than in each of the two previous
quarters. EBITA also improved from the previous quarter, despite increased
latex raw material prices. There has been no unusual pricing pressure in
the surgical glove segment, and an ongoing program has been implemented to
recover the loss of US surgical glove customers.
.. Based on a strong third quarter, April's sales trend, and anticipated
further improvements in plant operations, Ansell expects the core
Healthcare business segment to record double-digit US dollar EBITA growth
in the second half when compared with both the corresponding prior period
and the recent first half.
Mr. Boon commented: "Although trading results over the remaining months will
determine the final outcome, the core Healthcare segment continues to track
towards the previously published target of double-digit US dollar EBITA growth
for the full year".
Ansell Ltd is a global leader in healthcare barrier protective products. With
operations in the Americas, Europe and Asia, Ansell employs more than 12,000
people worldwide and holds leading positions in the natural latex and synthetic
polymer glove and condom markets. Ansell operates in three main business
segments: Occupational Healthcare, supplying hand protection to the industrial
market; Professional Healthcare, supplying surgical and examination gloves to
healthcare professionals; and Consumer Healthcare, supplying sexual health
products and consumer hand protection. Information on Ansell and its products
can be found at http://www.ansell.com.
For further information:
Media Investors & Analysts
----- --------------------
Peter Brookes Rustom Jilla David Graham
Cannings Chief Financial Officer General Manager-Finance & Treasury
Tel: (+61) 0407 911 389 Tel: USA (+1) 732 345 5359 Tel:(+61) 3 9270 7215
Email: pbrookes@cannings.net.au Email: rjilla@ansell.com Email: dgraham@ap.ansell.com
------------------------ ----------------- ---------------------
Attention ASX Company Announcements Platform.
Lodgement of Open Briefing.
[LOGO] [LOGO]
Ansell Limited corporatefile.com.au
Level 3
678 Victoria Street
Richmond VIC 3121
Date of Lodgement: 30-Apr-2003
Title: Open Briefing. Ansell. CEO's Business Update
corporatefile.com.au
Ansell Limited recently announced an on-market buy-back of 10 million
shares following a capital management review by the board. What were
the parameters and outcome of the review?
CEO Harry Boon
The process was thorough. It involved forecasting our cash flows
through to June 2005, as well as reviewing our projected balance
sheet, including levels of net interest-bearing debt, over this
period. We also took into account the board's guideline of maintaining
key credit ratios consistent with an "investment grade" financial
profile.
Our analysis showed we'd generate funds surplus to the requirements of
the business. And out of this, we've chosen to adopt a "balanced
capital management strategy", which allows us to return some surplus
cash to shareholders through the share buy-back after retaining
adequate funds for internal growth, capital expenditure, working
capital needs, and capacity for bolt-on acquisitions. The board has
also indicated it would review our dividend policy after the full-year
results were available.
corporatefile.com.au
In February, you indicated the core Healthcare segment was on track to
achieve the targeted double-digit earnings growth for the current
year, that is segment EBITA close to US$93 million. Segment EBITA for
the first half ended
1
December 2002 was US$43 million, up only 4 percent on the prior year.
What has been the performance of the business so far in the second
half?
CEO Harry Boon
Although we don't report quarterly, I can confirm that third-quarter
EBITA was up more than 10 percent from the same quarter last year. And
so far, it's looking like we'll have double-digit growth in EBITA in
the second half. That is, double-digit EBITA growth compared with the
second half last year and double-digit EBITA growth compared with the
recent first half.
Based on a strong third quarter, April's sales trend, and anticipated
further improvements in plant operations, the core Healthcare segment
continues to track towards the previously published target of
double-digit US dollar EBITA growth for the full year. Of course,
trading results over the remaining months will determine the final
outcome.
corporatefile.com.au
To what extent has Ansell's cost base been impacted by the recent
sharp rises in the price of latex, your key raw material, and
petroleum based products?
CEO Harry Boon
Along with all our competitors, we've felt the impact of higher latex
and oil prices, although we've partly offset this through forward
purchasing and hedging arrangements, as well as contractual price
increases with some of our leading customers.
While latex prices have risen steadily this financial year,
historically, prices spike upwards during the December to March
period, when latex production falls due to the seasonal effect known
as wintering. We don't expect the most recent seasonal increases to
continue, although prices should remain firm. More than half our
products contain no natural latex, while key products like surgeons'
gloves and condoms contain a lot of packaging value added and
relatively low amounts of latex. Only exam gloves are heavily impacted
by latex costs, and this affects all producers.
General fuel oil prices have increased this year, but this is not a
major cost in the overall structure. Additionally, our synthetic
nitrile gloves are made from oil-based derivatives, and we have fixed
price contractual purchasing arrangements in place.
corporatefile.com.au
In the first half, your Professional Healthcare business saw sales and
EBITA fall versus the prior year, partly due to the slow ramp-up of
the Shah Alam factory in Malaysia and the impact of the two-month long
US Food and Drug Administration (FDA) detention order on surgeons'
gloves from Shah Alam. To what extent has your US surgeons' glove
business been able to recover since the lifting of the order in
January?
2
CEO Harry Boon
Third-quarter US surgical glove sales were well above the first half's
monthly average, and, including new orders and back order fulfillment,
haven't been materially different from the first quarter, that is
before the FDA detention.
When the detention was lifted on January 6, we'd accumulated more than
US$7 million in worldwide back orders for surgeons' gloves, of which
60 percent was fulfilled during the third quarter. This involved
running our plants "24-7", and significant air-freighting to reduce
transport times. We expect to eliminate the remaining back orders
during the current quarter, after which normal ordering patterns will
become re-established. We've already launched an ongoing program aimed
at restoring relationships with many of the hospitals and distributors
who left us, and the good news is that only about 5 percent of the
original back orders have been cancelled, indicating firm customer
support for our products.
However, order intake usually declines as supplies flow into the
market following a period of significant back orders. There's also a
time lag before hospital evaluations can be resumed and new business
won. We've certainly had some short-term loss of US surgical glove
customers, but only when remaining back orders are cleared, and normal
ordering patterns are re-established, will we be able to assess the
full impact.
To put this all in perspective, surgeons' gloves account for just over
20 percent of Ansell's total revenue, and the US surgical glove
business is less than half of that. We also have significant sales
into the European and Asia/Pacific markets, and we've had
uninterrupted production and shipments from our surgeons' gloves
plants in Colombo and Melaka, even while Shah Alam was experiencing
problems that are now resolved.
corporatefile.com.au
What has been the trend in margins in the Professional business? Have
you had to cut prices to win back any of your US surgeons' glove
customers?
CEO Harry Boon
I'm pleased to confirm that we've experienced no unusual pricing
pressure on surgeons' gloves as a result of the supply situation. With
the additional air-freight costs to re-supply the US market, EBITA
margins in the Professional business have been slightly lower than the
first half's 12.8 percent. Air-freight should return closer to normal
levels during the fourth quarter. Improved sales volumes should result
in second-half Professional EBITA being higher than the first half.
corporatefile.com.au
One of Ansell's major competitors, SSL International plans to refocus
on its core businesses, which include condoms. Ansell's Consumer
Healthcare business performed strongly in the first half. How is the
business positioned against a potentially stronger competitor?
3
CEO Harry Boon
SSL has several other consumer products besides condoms that require
time and effort. We don't believe SSL has been holding back in its
condom business in recent times, so there's no reason to anticipate a
significant change in the competitive environment if SSL proceeds with
its announced plan to focus solely on its consumer business.
corporatefile.com.au
Ansell's Occupational Division grew strongly in the first half. To
what extent is the business being affected by the US economic
slowdown?
CEO Harry Boon
The Occupational Division represents more than half of Ansell's total
revenue, and the Division's performance is a key component of Ansell's
improved results this year.
Occupational's sales increased again in the third quarter and, even
more importantly, we continued to improve our margins. The focus on
new generation ergonomic gloves and lower cost production has led to a
consistent improvement in the division's performance.
We believe Occupational's strategy to diversify its distribution and
customer base serves to reduce our exposure to economic cycles. For
example, demand from industries such as meat and food processing
should help offset any future economic impact on the automotive and
general manufacturing sectors.
corporatefile.com.au
In February, you indicated that Ansell is proceeding with the
Occupational Value Proposition (OVP), and hoped to sign its second
major customer, after Ford USA, during the second half. Are you still
on track to sign another major contract in the current half?
CEO Harry Boon
We've continued aggressively testing the OVP concept, and have had a
strong and positive response from potential customers to the idea of
working in partnership to reduce the total cost of hand protection and
injuries, and share in the benefits.
A leading US non-automotive manufacturer is the most advanced in
negotiations with us, and we expect to sign a formal agreement on a
pilot OVP program covering six of its plants during the current
quarter. Assuming the program proves successful over the pilot period,
we'll progressively roll out OVP to its remaining facilities over the
following 12 to l8 months.
corporatefile.com.au
When you announced Operation Full Potential (OFP) more than a year
ago, you indicated Ansell might need to take some asset write-offs to
complete the
4
transition of manufacturing from the US to Asia and Mexico and the
consolidation of your marketing and sales operations into fewer
locations in Europe and the US. Do you expect to incur any of these
write-offs during the current year?
CEO Harry Boon
As we indicated last year, we've continued to monitor the condition of
our assets and make appropriate decisions. Among these assets is our
investment in Ambri, which is on our books at the original cost of
AUD$9.3 million. However, Ambri's share price has been trading at much
lower levels in recent months, and this will be reviewed at year-end.
As we've also said, we're now focused on the consolidation of our
offices in the US, and this will be ongoing for the next 18 months.
During the current year, we've booked against our profit over US$1
million in one-off charges relating to the first stage of
consolidating one of our US marketing locations to New Jersey from
Ohio.
corporatefile.com.au
Ansell's first-half tax rate was unusually high following a decision
to accelerate the recovery of deferred US tax assets. In February, you
indicated that the second-half tax rate would return to a more
"normal" rate of around 20 percent. Has the tax rate been in line with
expectations so far in the second half?
CFO Rustom Jilla
Ansell's effective tax rate is affected by the geographic spread of
our profits each year. So far this half, we're experiencing relatively
greater profit flows from our European businesses, which are generally
subject to higher tax rates. As most of our available tax losses are
in the US and Australia, the effective book tax rate for the second
half is more likely to come in around 22 percent.
corporatefile.com.au
Less than 6 percent of Ansell's revenue is earned in Australian
dollars, yet this is your reporting currency. Given any future
buy-backs or dividend payments will have to be made in Australian
dollars, is it your intention to adopt any hedging to protect your
earnings in Australian dollar terms?
CFO Rustom Jilla
We fully recognise future share buy-backs or dividend payments would
need to be funded in Australian dollars, and take a range of
US-Australian dollar exchange rates into consideration when projecting
future cash flows. With so little of Ansell's trading revenue booked
in Australian dollars, there's little scope or need for hedging. And
as a matter of policy, we don't believe there's any sense in hedging
for the translation of accounts to Australian dollars, which is purely
a book entry exercise.
5
corporatefile.com.au
Thank you Harry and Rustom.
-----------------------------------------------------------------------
For previous Open Briefings with Ansell, visit www.corporatefile.com.au
For more information about Ansell, visit www.ansell.com
6
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ANSELL LIMITED
(Registrant)
By: /s/ DAVID M. GRAHAM
-----------------------------
Name: DAVID M. GRAHAM
-----------------------------
Title: GROUP TREASURER
-----------------------------
Date: April 30, 2003