Videndum Plc · LSE:VID
Videndum — The Vitec Group — H1 2017 Earnings Presentation
45 slides from Videndum's earnings presentation, Aug 10, 2017
Slide 1: Half Year Results 2017
The Vitec Group plc Half Year Results 2017 10 August 2017 Significant strategic progress transforming the Group Enabling the capture and sharing of exceptional images
Slide 2: Important notice
The Vitec Group plc 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 curr
Slide 3: Agenda
The Vitec Group plc Agenda > Highlights > Stephen Bird, Group Chief Executive > Financial Review > Kath Kearney-Croft, Group Finance Director > Market and Strategy Update > Stephen Bird, Group Chief Executive > Q&A Page 3
Slide 4: Highlights
The Vitec Group plc Highlights Disposals of Bexel Continued Significant progress and Haigh-Farr will underlying growth executing our further improve for the Group led by strategy to ROCE** and higher technology transform the Group margins businesses ROCE** at 19.4% benefited from Adjusted operating
Slide 5: Financial Review
Financial Review
Slide 6: Half year results in line with expectations
The Vitec Group plc Half year results in line with expectations Better / Total performance for H1 H1 > Growth in sales of higher Better / (worse) at continuing and 2017 2016 (worse) Constant technology (including discontinued operations acquisitions) and £m £m FX Revenue 187.6 171.1 9.6% (1.2%) phot
Slide 7: Continuing operations
The Vitec Group plc Continuing operations Better / H1 H1 Better / (worse) at 2017 2016 (worse) Constant Continuing operations £m £m FX > Focus on driving Revenue 164.9 144.0 14.5% 3.1% growth in core markets Gross profit * 73.7 61.1 20.6% 9.2% after disposals Gross margin % * 44.7% 42.4% +230 bps +2
Slide 8: Divisional performance
The Vitec Group plc Divisional performance Revenue Adjusted operating profit* Better / Better / H1 H1 Better / H1 H1 Better / (worse) at (worse) at Continuing operations 2017 2016 (worse) 2017 2016 (worse) Constant FX Constant FX £m £m £m % £m £m £m % Broadcast 86.5 75.2 15.0% 3.2% 10.6 8.2 29.3% 10
Slide 9: Group total operating profit bridge
The Vitec Group plc Group total operating profit* bridge £m 22 FX > Lower activity in discontinued businesses 20 > Revenue growth and gross margin Acquisitions improvement offset by 18 Discontinued investment in driving operations Underlying sales and future Profit* growth > 2016 acquisitions 16 con
Slide 10: Strong cash generation
The Vitec Group plc Strong cash generation H1 H1 Better / > Working capital Total performance for continuing 2017 2016 (worse) investment: and discontinued operations £m £m £m > Low FY 16 inventory Operating profit * 21.2 17.4 3.8 levels Depreciation (1) 8.5 8.6 (0.1) > Exceptionally large Working c
Slide 11: Net debt
The Vitec Group plc Net debt £m 80 > Net debt of £52.6 million Free Cash flow > Net inflow on acquisitions & disposals: > £11.1 million on 70 Haigh-Farr disposal Acquisitions > £1.6 million of earnouts Dividends & Disposals on Wooden Camera’s FY16 performance 60 Transactions > Repayment of $50 milli
Slide 12: Other financial developments
The Vitec Group plc Other financial developments > ROCE improved to 19.4% (FY 16: 17.5%) on higher operating profit*, lower assets and favourable FX in H1 > FY 17 Capex neutral and depreciation reduced by c. £3 million following Bexel disposal FY 17 FY 18 Revenue reduction c. £15m c. £40m Operating
Slide 13: Market & Strategy Update
Market & Strategy Update
Slide 14: Continued underlying growth
The Vitec Group plc Continued underlying growth Photographic Division revenue versus CIPA shipments Broadcast Division product revenue** versus IABM Moving annual totals at constant currency, indexed to 100 at December 2012 At constant currency, indexed to 100 at December 2012 120 160 CIPA Shipments
Slide 15: Executing on strategy to continue to realise growth
The Vitec Group plc Executing on strategy to continue to realise growth Improve the core and focus on new markets and technology > Sustained investment in innovative new product development across the Group > Products recently launched include: > Production Equipment: Autoscript Intelligent Promptin
Slide 16: Executing on strategy to continue to realise growth
The Vitec Group plc Executing on strategy to continue to realise growth Get closer to our customers > Further growth in own distribution and e-commerce channels > Collaborations with industry and technology leaders, e.g. Leica Expand in APAC > Photographic APAC growth but further opportunities with
Slide 17: Disposal of US broadcast services business
The Vitec Group plc Disposal of US broadcast services business > Sold Bexel to a subsidiary of NEP Group Inc. on 1 August 2017 > Net cash consideration of $32.0 million (£24.2 million) > Represents a further step in the transformation of the Group > Supports Vitec’s stated aim of improving Group ope
Slide 18: A higher technology focused business
The Vitec Group plc A higher technology focused business Broadcast Division Revenue* Higher Tech*** 23% 26% 28% 31% 41% 43% 46% 57% *Reported revenue excluding IMT (disposed November 2014) and Haigh-Farr (disposed May 2017) Traditional 77% 74% 72% 69% **H1 2017 reported revenue excluding IMT, 59% 57
Slide 19: Summary
The Vitec Group plc Summary > Significant strategic and operational progress > Continued underlying growth led by higher technology businesses > Disposals improve Group operating margins and returns going forward > Only just starting to benefit from growth in APAC > Strong cash generation and a robu
Slide 20: Questions
The Vitec Group plc Questions Page 20
Slide 21: Appendices
Appendices
Slide 22: Vitec products by category
The Vitec Group plc Vitec products by category Bags Camera accessories Distribution, rental & services * Clockwise from top left: Manfrotto: Manhattan Collection; Manfrotto: Xume filters; Wooden Camera: Ultra Arm; Offhollywood: OMOD; Camera Corps: Q-Ball 3; OConnor: O-Rig Pro Kit; Sachtler: Comporte
Slide 23: Vitec products by category
The Vitec Group plc Vitec products by category Lighting & controls Wireless systems Mobile power On-camera monitors * Clockwise from top left: Lastolite: triFlip kit contents silver; Paralinx: Dart; Teradek: Sphere; SmallHD: 3203 HDR Monitor; Anton/Bauer: V90 & G90 Cine Batteries; Manfrotto: Lykos;
Slide 24: Vitec products by category
The Vitec Group plc Vitec products by category Prompters Supports * Clockwise from top left: Autocue: PSP17 teleprompter; Avenger: Wind Up stand; Manfrotto: Befree Live; Sachtler: Sachtler Ace L – Freddie Wong Signature Edition; Vinten: Osprey Elite pedestal; OConnor: Ultimate 2560 Fluid Head; Gitzo
Slide 25: Vitec products by category
The Vitec Group plc Vitec products by category Robotic camera systems * Left to right: Vinten: Vantage; Hexagon Track system powered by Technopoint; Camera Corps: Q-Ball 3. Page 25
Slide 26: Group total revenue bridge
The Vitec Group plc Group total revenue bridge £m 190 FX 180 Discontinued operations Acquisitions 170 Underlying Revenue 160 H1 16 H1 17 Revenue Revenue FY 15 150 Revenue £171.1m (£4.4m) £0.8m £4.1m £16.0m £187.6m * Before charges associated with acquisition of businesses, restructuring costs and ga
Slide 27: Foreign exchange – key impacts on Vitec
The Vitec Group plc Foreign exchange – key impacts on Vitec a) Translation > Translational impact is unhedged > The majority of the Group’s profit is in USD and EUR > H1 2017 benefited from weaker Sterling versus H1 2016 b) Transaction > Vitec typically hedges c. 75% of its transactional exposures o
Slide 28: Borrowings
The Vitec Group plc Borrowings > Revolving credit loan facility of £125m > Committed until July 2021 with relationship banks > Margin at 100 bps over LIBOR > Significant covenant headroom > Private Placement shelf facility of $50m established in 2011 repaid in May 2017 > June 2017 Net Debt of £52.6m
Slide 29: GAAP reconciliation: profit before tax and earnings per share (EPS)
The Vitec Group plc GAAP reconciliation: profit before tax and earnings per share (EPS) H1 H1 2017 2016 D Continuing operations £m £m £m * Before charges associated with acquisition of Adjusted profit before tax* 19.7 15.2 4.5 businesses, restructuring costs and gain on disposal of (1) business, as
Slide 30: Overview
The Vitec Group plc Overview
Slide 31: Company profile
The Vitec Group plc Company profile The Vitec Group plc is a leading global provider of premium branded products and solutions to the fast changing and growing “image capture and sharing” market Designs, manufactures and distributes high performance products and software including camera supports,
Slide 32: Broadcast Division
The Vitec Group plc Broadcast Division FY 2016 Revenue £224.8m (US$302.7m) Operating Profit* £21.0m (US$28.3m) Operating Margin* 9.3% Page 32 * Before restructuring costs, charges associated with acquisition of businesses and impairment of goodwill. Page 35
Slide 33: Broadcast brands
The Vitec Group plc Broadcast brands Product category Brands Supports OConnor, Sachtler, Vinten, Wireless systems Paralinx, Teradek, Distribution, rental and Camera Corps, The Camera Store, VitecEV services Robotic camera systems Camera Corps, Vinten On-camera monitors SmallHD Lighting Litepanels Pr
Slide 34: Photographic Division
The Vitec Group plc Photographic Division FY 2016 Revenue £151.4m (US$203.9m) Operating Profit* £20.5m (US$27.6m) Operating Margin* 13.5% Page 37 Page 34 * Before restructuring costs, charges associated with acquisition of businesses and impairment of goodwill.
Slide 35: Photographic brands
The Vitec Group plc Photographic brands Product category Brands Supports / Tripods Avenger, Gitzo, Manfrotto Bags Manfrotto, National Geographic⃰ Lighting Colorama, Lastolite, Manfrotto Filters Manfrotto * National Geographic bags are manufactured and distributed under licence Page 35
Slide 36: Our customers
The Vitec Group plc Our customers Broadcasters and TV Networks Outside Broadcasters: Sports/Live Events Independent Content Creators Cameramen Cinematographers Lighting Specialists Professional Photographers and Videographers Amateur Photographers and Videographers Bloggers and vlo
Slide 37: Our purpose and values
The Vitec Group plc Our purpose and values Vitec’s purpose is to support our customers to capture and share exceptional images. Our products and services encompass a variety of technologies, designed and engineered to ensure that, whatever the conditions, the content maker has the best equipment to
Slide 38: Our Culture
The Vitec Group plc Our OurCulture culture As a group, we have an entrepreneurial spirit and we want this mindset to influence all aspects of our business operations. We encourage team- working and collaboration both within and across divisions, as well as the harnessing of new technologies to conti
Slide 39: Where we operate
The Vitec Group plc Where we operate > Sites in 10 countries; sell into 100+ countries 2016 Revenue 3% > Sales: UK accounts for only 9.5% of revenue Europe > Complex restructuring and streamlining been delivered to plan 18% 31% > Well capitalised, world class manufacturing in Italy, Costa Rica, UK &
Slide 40: Competitive landscape
The Vitec Group plc Competitive landscape Broadcast Camera Supports Cine Camera Supports On Set Wireless Prompters 3x 2x 7x 13x 55% 55% 90% 60% Vitec market share Competition market share Photographic Tripods 5x Batteries LED Lights Photographic Bags 31% 7% 5% Vitec management estimates by sales val
Slide 41: Strategic priorities
The Vitec Group plc Strategic priorities A strategy for realising growth in a changing market Page 41
Slide 42: Business model
The Vitec Group plc Business model > Our business model is focused on achieving our five strategic priorities Page 42
Slide 43: Financial overview
The Vitec Group plc Financial overview > A strong business 45 14% > Exited from non-core 12% businesses 40 10% > Streamlined and 35 8% restructured 6% > Integrated some great 30 acquisitions 4% 25 2% > Good margins 20 0% 2011 2012 2013 2014 2015 2016 > Consistent management focus Operating Profit* (
Slide 44: M&A track record
The Vitec Group plc M&A track record FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 £60m invested (to end FY 2016) 20% return 1. M&A clearly aligned with strategic objectives 2. Doing the right deal: disciplined approach 3. Extraction of synergies £60m invested to end FY 2016 with a 20% ROI Page 44
Slide 45: Thank you
Thank you The Vitec Group plc Bridge House Heron Square Richmond TW9 1EN UK Telephone: +44 (0)20 8332 4600 Fax: +44 (0)20 8948 8277 www.vitecgroup.com The information in this presentation does not constitute an offer to sell or an invitation to buy shares in the Company in any jurisdiction or an inv