Videndum Plc · LSE:VID
Videndum — The Vitec Group — FY2020 Earnings Presentation
35 slides from Videndum's earnings presentation, Feb 25, 2021
Slide 1: The Vitec Group plc Full Year Results 2020
Enabling the capture and sharing of exceptional content. The Vitec Group plc Full Year Results 2020 25 February 2021
Slide 2: Important notice
Important notice Forward-looking statements This presentation contains forward-looking statements with respect to the financial condition, performance, position, strategy, results and plans of The Vitec Group plc (the “Group”, “Vitec”, or the “Company”) based on Management’s current expectations or
Slide 3: Agenda
Agenda Full Year 2020 Summary > Stephen Bird, Group Chief Executive Market and Strategy Update > Stephen Bird, Group Chief Executive Financial Review > Martin Green, Group Finance Director Summary > Stephen Bird, Group Chief Executive Q&A Page 3
Slide 4: Summary
Summary 1. FY 2020 results as expected; H2 significantly outperformed H1 as markets started to recover Many areas saw revenue growth vs 2019, including JOBY smartphonography accessories (+c.70%) and 2. streaming products (+c.50%) with recurring revenue doubling 3. Strong cash performance, with high
Slide 5: Market & Strategy Update
Market & Strategy Update Page 5
Slide 6: Well placed to benefit from structural market changes
Well placed to benefit from structural market changes Key market driver How Vitec benefits 1. Video communication has grown exponentially > Increasing demand for our streaming solutions 2. More content has been consumed on subscription > When production sets fully reopen we expect channels like Netf
Slide 7: Vitec's addressable market has expanded, driven by substantial growth in streaming
Vitec’s addressable market has expanded, driven by substantial growth in streaming Photographic market* Broadcast market ICC/Cine/Streaming market TAM TAM TAM £1.1bn £0.4bn £0.7bn Market CAGR Market CAGR Market CAGR c. +1% Flat c. +17%** Market trend Market trend Market trend Imaging Solutions Produ
Slide 8: Imaging Solutions
Imaging Solutions > Professional/B2B high end segment resilient (c.65% Imaging revenue) > Professional expected to recover well > B2B grew 12% YoY > Entry-level, hobbyist segment (c.20%) declining as smartphones continue to replace lower value cameras > JOBY, audio and motion control products expect
Slide 9: JOBY – an important new engine for growth
JOBY – an important new engine for growth > Strategically important growth engine to offset decline in hobbyist segment > Benefitting from increase in vlogging, social media usage and video communication during the pandemic > JOBY smartphonography accessories grew c.70% YoY > Entered the fast-growin
Slide 10: Production Solutions
Production Solutions > Investing in faster growing on-location markets, including LED lighting and mobile power products due to growing demand for 24-hour news > Safe distancing and continuing cost pressures in TV studios benefit our robotic camera systems and voice-activated prompting > Benefit fro
Slide 11: Creative Solutions
Creative Solutions > Greatest market opportunity, fastest area of growth, highest margin potential Cine market > Teradek Bolt and SmallHD monitors powered by Amimon’s proprietary technology in cine market > Expect strong bounce back in original content production once sets reopen; structural change
Slide 12: Creative Solutions cont.
Creative Solutions cont. Enterprise market > Teradek’s high end streaming products are used by corporates, governments, schools; these products do not incorporate Amimon technology > High quality, zero-latency wireless video for medical market uses Amimon > Video communication has grown exponentiall
Slide 13: Socially responsible business: building our ESG credentials
Socially responsible business: building our ESG credentials Environmental > Engaged specialist independent company to enhance the monitoring and reporting of our sustainability initiatives > Setting new targets, including being carbon neutral by 2050 > Focus on reducing energy usage, water consumpti
Slide 14: Financial Review
Financial Review Page 14
Slide 15: Full year 2020 results
Full year 2020 results FY 20 FY 19 Better / Better / (worse) (worse) organic at > H2 significantly outperformed H1 as markets started £m £m constant FX to recover (10% revenue decline vs 37% in H1) Revenue 290.5 376.1 (23)% (23)% > Reduced gross margin due to lower revenue Gross profit * 113.4 170.1
Slide 16: Cash generation
Cash generation Better / £m FY 20 FY 19 (worse) > Focus on cash generation Operating profit* 9.9 52.4 (42.5) > £8.0m decrease in working capital Depreciation (1) 19.0 18.6 0.4 > Driven by sustainable £10.6m reduction in inventory Dec / (inc) in working capital 8.0 (7.2) 15.2 Capital expenditure (2)
Slide 17: Net debt
Net debt £m 100 Dec 19 Net debt Employee Net lease FX Dec 20 Net debt > Net debt £5.2m lower than Dec-19 and £16.6m lower additions 90 incentive than June 2020 Lease shares Liabilities Free cash flow* Upfront fees Lease Liabilities > Total liquidity of £143.2m: on RCF > £122.3m unutilised RCF 80 > £
Slide 18: Divisional performance
Divisional performance Revenue Operating profit* Better / Better / Better / (worse) Better / (worse) FY 20 FY 19 FY 20 FY 19 (worse) organic at (worse) organic at constant FX constant FX £m £m % % £m £m % % Imaging Solutions 156.7 196.6 (20)% (21)% 9.7 27.1 (64)% (66)% Production Solutions 80.1 111.
Slide 19: FY21 financial considerations
FY21 financial considerations Profit before tax* Capex > H2 weighted (full recovery by H2 and Olympics) > JOBY brought in-house (c.£3m capex ) > Repayment of UK furlough proceeds: c.£1m > Increased R&D (c.£6m increase on FY20) > Higher amortisation charge vs PY: c.£2m Cash/Net Debt > Net finance exp
Slide 20: Summary
Summary Page 20
Slide 21: Summary
Summary 1. Full year 2020 results as expected – strong recovery in H2 2. Markets drivers remain intact with many areas of growth 3. Investing to benefit from opportunities as a result of structural market changes 4. Strong start to 2021 – increased confidence that trading conditions will continue to
Slide 22: Outlook
Outlook “We have had a strong start to 2021. Although there remains some uncertainty about the duration of the impact of COVID-19 and FX is an increasing headwind, our confidence that underlying trading conditions will continue to improve has increased. 2021 will be a year of recovery and investment
Slide 23: Q&A
BBC News, 2020 Q&A Phone number: 0800 640 6441 Confirmation code: 785927 Page 23
Slide 24: Appendices
Appendices Page 24
Slide 25: Investment proposition
Investment proposition 1. Content creation market will return to growth 2. Robust financial position, long-term financing and short-term flexibility 3. Well positioned for medium-term organic growth post COVID-19 4. Market-leading brands with premium pricing, increasing technology capability 5. M&A
Slide 26: Medium-term prospects
Medium-term prospects Creative Solutions > Expect strong bounce back in content production, when sets reopen > Significant growth from 4K/HDR proprietary integrated eco-system replacing the installed base of HD equipment > COVID-19 driven a fundamental structural change to the cine market – on set,
Slide 27: Where we operate
Where we operate > Sites in 11 countries; sell into 100+ countries > Sales: UK accounts for only 7% of revenue US > Well capitalised, world-class manufacturing facilities in Israel Japan Italy, Costa Rica, UK & US China > Low cost APAC sourcing, including China & Vietnam Costa Rica > R&D centres in
Slide 28: Competitive landscape (pre-pandemic)
Competitive landscape (pre-pandemic) Manual cine/broadcast Supports On Set Wireless Prompters Photographic Bags 6x 13x 4x 5x 55% 37% 27% 85% Photographic Tripods Batteries LED Lights Key 5x Vitec market share 1.4x 4.4x 36% Competition market share 21% 9% For 85% of its revenue, Vitec is #1 or #2 in
Slide 29: Vitec Imaging Solutions products
Vitec Imaging Solutions products Photo & video supports Lighting Smartphonography Audio capture Motion control & stabilisers Bags Clockwise from top left: PHOTO & VIDEO SUPPORTS - Manfrotto: Befree 3 Way Advanced for Sony, Fast Twin Carbon Tripod with Nitrotech 612 head, Gitzo: Légende, Ball Head se
Slide 30: Vitec Production Solutions products
Vitec Production Solutions products Studio pedestals On-location supports Prompters Mobile power Distribution, rental & services Robotic camera systems Lighting & controls Bags & camera accessories Clockwise from top left: STUDIO PEDESTALS - Vinten: Quartz Two pedestal; ON-LOCATION SUPPORTS - OConno
Slide 31: Vitec Creative Solutions products
Vitec Creative Solutions products Video transmission systems Camera accessories Monitors IP Video Clockwise from top left: VIDEO TRANSMISSION SYSTEMS - Teradek: Bolt 4K, Orbit PTZ, Ranger; CAMERA ACCESSORIES - Wooden Camera: Arri Mini LF Unified Accessory Kit, Director’s Monitor Cage v3; Teradek: RT
Slide 32: FX sensitivities
FX sensitivities Currency Current spot FY 21 FY 20 rates average average (24 Feb 21) rates rates USD 1.41 1.29 1.28 EUR 1.16 1.12 1.14 YEN 148 138 140 > The expected year-on-year impact on 2020 adjusted PBT* at current spot rates would be a headwind of £4.2m > The expected further impact from Curren
Slide 33: Five year summary
Five year summary % Total performance for continuing and discontinued operations 50 15 40 10 30 20 5 10 0 FY16 FY17 FY18 FY19 FY20 Adjusted operating profit* (£m) Adjusted operating margin* (%) Total continuing and discontinued FY16 FY17 FY18 FY19 FY19 operations Revenue (£m) 376.2 378.1 385.4 376.1
Slide 34: Our leadership team
Our leadership team Stephen Bird Group Chief Executive Appointed: April 2009 Shares: 317,957 Martin Green Jennifer Shaw Jon Bolton Group Finance Director Group Communications Group Company Secretary Director & HR Director Appointed: April 2003 Appointed: June 2016 Appointed: Sept 2008 Shares: 112,11
Slide 35: The Vitec Group plc
The Vitec Group plc Bridge House Heron Square Richmond TW9 1EN United Kingdom T +44 (0)20 8332 4600 F +44 (0)20 8948 8277 info@vitecgroup.com www.vitecgroup.com Page 35