Slide 1: Interim Results
Interim Results Neil Martin Chief Executive Officer Technology and Resources for Education Emmanuel Walter 23 August 2022 Chief Financial Officer © 2021, RM plc
Slide 2: Agenda
Agenda H1 Overview Financial Review Strategy & Outlook Q&A Neil Martin Emmanuel Walter Neil Martin CEO CFO CEO
Slide 3: 2022 H1 Summary
2022 H1 Summary > Revenue growth of 4% and encouraging wins across all Divisions which will benefit subsequent periods > Reduced profitability reflects required turnaround in RM Technology division, impacts related to the IT change programme and high inflation, notably freight costs > Implementation
Slide 4: Financial Summary
Financial Summary
Slide 5: H1 Financial Overview
H1 Financial Overview Adjusted* Adjusted* Revenue Operating Profit Diluted EPS Net Debt £100m £5.0m 4.0p £41.5m £100m £8.6m 7.5p £41.5m £96m £5.0m 4.0p £10.5m 2021 2022 2021 2022 2021 2022 2021 2022 Up 4% Down £3.6m Down 3.5p up £21m > Revenues up 4% with good growth in the Resources and Assessment
Slide 6: H1 Revenue
H1 Revenue Revenue up 4% £m +£4.3m 102.0 -6% +17% 100.0 98.0 +7% 96.0 94.0 92.0 90.0 2021 RM Resources RM Assessment RM Technology 2022 > RM Resources up 7% with International revenues growing 41% and UK 2% despite revenue delayed into H2 due to IT implementation > RM Assessment up 17% on prior year
Slide 7: H1 Adjusted profit
H1 Adjusted profit Adjusted operating profit down £3.6m £m -£3.6m 10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 - 2021 RM Resources RM Assessment RM Technology Corporate 2022 > RM Resources down £1.6m with revenue growth held back by impacts associated with the IT implementation which delayed shipments a
Slide 8: H1 Divisional Summary
H1 Divisional Summary Revenue £M Adjusted Operating Margin 2022 2021 Variance 2022 2021 Variance RM Resources 51.6 48.2 +3.4 RM Resources 2.3% 5.9% -3.6pp RM Assessment 18.2 15.5 +2.7 RM Assessment 15.1% 21.1% -5.9pp RM Technology 30.4 32.3 -1.9 RM Technology 8.3% 14.2% -5.8pp Group 100.3 96.1 +4.3
Slide 9: H1 Income Statement
H1 Income Statement £m 2022 2021 Variance Revenue 100.3 96.1 +4% > Interest costs reflect debt facility charges and Adjusted Operating Profit 5.0 8.6 -42% finance costs related to the defined benefit pension schemes Adjusted Operating Margin 5.0% 9.0% -4.0pp Interest (0.8) (0.6) -24% > Adjusted effe
Slide 10: H1 Cashflow
H1 Cashflow Consistent operating cash generation offset by programme investment spend £m 2022 2021 Variance 2019 Variance Adjusted operating profit 5.0 8.6 -3.6 9.9 -4.9 Non-cash items 2.3 1.4 +0.9 0.6 +1.7 Working capital outflow (10.9) (1.2) -9.7 (11.7) +0.8 Adjusted cash generated from operations
Slide 11: Pension
Pension Surplus driven by discount rate increase; triennial valuation concluded 4% 50.0 40.0 30.0 IAS19 Surplus/(defecit) (£m) 3% 20.0 10.0 0.0 2% -10.0 -20.0 -30.0 1% -40.0 2015 2016 2017 2018 2019 2020 2021 H1 FY22 Pension deficit Discount rate RPI inflation > IAS19 pension position improved by £8
Slide 12: Strategy & Outlook
Strategy & Outlook Investment case for the future
Slide 13: Taking RM Forward
Taking RM Forward Building a platform to unlock growth Market Strategy reset Enablers to Strong cash opportunity unlock growth generation through change Changing education Building on strong New technology Well positioned for landscape is creating market and brand platform, strengthened sustainable
Slide 14: Market opportunity affirming growth potential
Market opportunity affirming growth potential Positive long-term trends with opportunity for RM to win Use of technology Digital delivery in Aggregated School Covid Recovery in Education Assessment Procurement and normalisation Growth in larger school Global education Accelerating as schools Engagem
Slide 15: Taking RM Forward requires transition
Taking RM Forward requires transition Market Strategy Enablers to Strong cash opportunity reset unlock growth generation through change Transition Strategy Org & Leadership Systems & Process Strategy reset driving execution Divisions to aligned to target markets New IT platform implementation change
Slide 16: RM Resources
RM Resources > Global Covid Recovery and focus on lost learning st Market > Curriculum focus on STEM. Early Years development and 21 century skills Dynamics > Channel strength leverage in UK through optimising digital channels Growth > Continued international growth Potential > Highest H1 Internatio
Slide 17: RM Assessment
RM Assessment > Exams returning to pre COVID-19 levels Market > Broad customer segment demand improving Dynamics > Assessment market will be fully digital “when not if” Growth > Customer growth with focus on digital maturity development Potential > Sales pipeline building following COVID-19 disrupti
Slide 18: RM Technology
RM Technology > Schools market changing to significantly increase number of buying group “trusts” Market > Long term technology expansion and adoption in Education Dynamics > Leading provider in growing IT Managed Services market Growth > Increase share of customer spend by leveraging leading custom
Slide 19: Building RM for the future
Building RM for the future We enrich the lives of learners through resources and technology for schools and digital assessment Market leading positions in resilient markets Leading Customer Reach and Channel Strength Resources Assessment Technology Resources to Improve Learning Assessment Partner ac
Slide 20: Summary
Summary > School funding increasing but near-term school budgets will be under pressure due to inflationary headwinds > Market drivers that underpin the strategy reset continue to strengthen and support long-term path to sustainable growth > Transition to deliver change is progressing with new leade
Slide 21: Q&A
Q&A
Slide 22: Appendix
5). Appendix
Slide 23: Income Statement
Income Statement PERIOD TO 31 MAY 2022 2021 £M ADJUSTED ADJUSTMENTS TOTAL ADJUSTED ADJUSTMENTS TOTAL Revenue 100.3 - 100.3 96.1 - 96.1 Cost of sales (66.2) - (66.2) (63.1) - (63.1) Gross profit 34.2 - 34.2 32.9 - 32.9 Gross profit % 34.1% - 34.1% 34.3% - 34.3% Operating expenses (29.2) - (29.2) (24.
Slide 24: Cashflow
Cashflow PERIOD TO 31 MAY 2022 2021 OPERATING CASH FLOWS - £M ADJUSTED ADJUSTMENTS TOTAL ADJUSTED ADJUSTMENTS TOTAL Profit/(loss) from operations 5.0 (11.5) (6.5) 8.6 (5.0) 3.6 Amortisation & impairment of intangibles - 1.0 1.0 0.4 1.0 1.4 Depreciation & impairment of PPE 2.2 - 2.2 1.8 - 1.8 Gain on
Slide 25: Balance Sheet
Balance Sheet £M 31 MAY 2022 31 MAY 2021 Goodwill 49.5 49.3 Intangible assets 24.1 19.4 Property, plant & equipment 16.6 13.5 Defined benefit pension surplus 39.7 10.1 Other receivables 0.1 0.1 Right of use Asset 17.0 17.7 Contract fulfilment assets 4.7 2.7 Deferred tax assets 0.2 1.5 Total non-curr
Slide 26: RM Resources
RM Resources Innovative curriculum resources, inspiring content and outstanding service UK Market leader with 2 distinctive brands, TTS and Consortium, RM Resources improves learning outcomes by providing unique WHAT WE DO and innovative teaching resources and education supplies to schools and nurse
Slide 27: RM Assessment
RM Assessment Enhancing the role digital assessment solutions play throughout lifelong learning journey We help our customers accelerate their adoption of digital and WHAT WE DO transform assessments to unlock teaching and learning benefits. We don’t just provide a technology platform Global Assessm
Slide 28: RM Technology
RM Technology Helping educators harness technology to improve the learning environment Strategic IT services partner for schools and colleges to deliver WHAT WE DO a technology environment that improves learning outcomes and make the most of their IT investments UK IT Services in Education Current m
Slide 29: UK Education Funding
UK Education Funding Total school spending per pupil, relative to level in 2009-10 Source: Institute for Fiscal studies
Slide 30: Path to Academisation
Path to Academisation Schools in England by type Source: RM 2022 2023 2024 2025 2026 2027 2028 2029 2030 LA Maintained Single Academy Trust 2-5 Schools 6-30 Schools 30+ Schools