Novus Holdings Ltd. · JSE:NVS
Novus — FY2017 Earnings Presentation
27 slides from Novus's earnings presentation, Jun 12, 2017
Slide 1: Annual Financial Results
Presentation Monday, 12 June 2017 ANNUAL FINANCIAL RESULTS For the year ended 31 March 2017
Slide 2: Contents
Contents 2017 IN CONTEXT FINANCIAL REVIEW OPERATIONAL REVIEW OUTLOOK & STRATEGY Presented by: Keith Vroon, Chief Executive Officer Edrich Fivaz, Chief Financial Officer 2
Slide 3: 2017 in Context
2017 IN CONTEXT © novus holdings THE STUMP 3
Slide 4: Business Features - 2017
Business Features - 2017 • Core print business came under pressure due to continued volume declines. • Costs were removed from the business by mothballing of equipment as a result of volume declines. Core business • Consumer spending pattern in retail sector has impacted print retail advertising. •
Slide 5: Results Summary
Results Summary Revenue R4 312m (FY16) R4 175m 3,3% Operating profit excl. impairments and profit/(loss) on disposal of assets R529m (FY16) R651m 18,7% Headline earnings per share 110,8c (FY16) 139,9c 20,8% Dividend per share 56,0c (FY16) 70,0c 20,0% 2017 IN CONTEXT 5
Slide 6: Financial Review
FINANCIAL REVIEW © novus holdings
Slide 7: Group Overview
Group Overview Revenue • Turnover increased by 3,3% to R 4,3bn. • Pricing increases outpaced by volume declines. R’m • Label volumes grew steadily. FY14 FY15 FY16 FY17 • Tissue volumes slightly negative due to project 5 000 disruption. 4 500 4 261 4 312 • Africa project revenues declined, Liberia pr
Slide 8: Print Segment: Commentary
Print Segment: Commentary Revenue • Revenue increased marginally by 1,8%. • Volume declines in all segments, excluding books and directories. R’m FY14 FY15 FY16 FY17 • NPS volume declines resulting from project 4 500 disruption. 3 898 4 043 3 918 3 987 • Impact of grammage reductions and title closu
Slide 9: Other Segment: Commentary
Other Segment: Commentary Revenue • Other segments revenue increased by 27,3%. • Labels turnover increased by 44.1%. • Tissue revenue increased by 7.6% in spite of project R’m FY14 FY15 FY16 FY17 related downtime. 350 326 • Non-print related voter registration work was 31,2% performed during the yea
Slide 10: Group Income Statement Summary
Group Income Statement Summary % Change 2017 2016 (Rounded) Revenue R4 312m R4 175m 3,3% ▲ Gross Profit R1 105m R1 260m -12,3% ▼ Gross Margin 25,6% 30,2% -4,6% ▼ Fixed Overheads R576m R609m 5,4% ▼ Operating Profit R529m R651m -18,7% ▼ (Excluding impairments and profit/(loss) on disposal of assets) O
Slide 11: Cash Position Analysis
Cash Position Analysis 2017 (R’m) 2016 (R’m) Continue to explore growth opportunities, supported by Cash Generated from Operations 662 ▼ 720 a firm cash position and capacity to raise debt. Net Property, Plant, Equipment and Intangibles -236 ▼ -214 • Debt Equity Ratio: Taxation Paid -189 ▼ -178 FY17
Slide 12: Capital Expenditure
Capital Expenditure Print Other • Expansion capex in FY17 related to digital printing • Majority of the R 118m capex was incurred on the project and related infrastructure. Tissue expansion project. • Maintenance capex for FY17 related to current • Labels expansion items related to finishing equipme
Slide 13: Operating Review
OPERATING REVIEW 13
Slide 14: Revenue Contribution: Print Product Category
The print division remains at the core Revenue Contribution: of Novus Holdings and Print Product contributed 92% to Group Category revenue and 109% to Group operating profit excluding capital items. Share of Group Share of Group Volume Category Revenue 2017 Revenue 2016 Growth/(Decline) Magazines 19
Slide 15: Revenue Contribution: Other Product Category
The division currently Revenue Contribution: contributes 8,0% of Other Product revenue, but is the area of biggest potential for Category the Group. Share of Group Share of Group Volume Category Revenue 2017 Revenue 2016 Growth/(Decline) Labels 3,1% 2,7% 65,9% ▲ Tissue 3,6% 3,4% (7,0%) ▼ Other Secur
Slide 16: Print: Performance and Focus Areas
Print: Performance and Focus Areas Performance 2017 2016 Revenue – net of intersegment revenue (R’000) R3 986 504 R3 918 108 Operating profit – excluding impairments and profit/(loss) on disposal of assets (R’000) R575 300 R684 953 Total Assets – net of intersegment assets (R’000) R2 965 002 R3 176
Slide 17: Other: Performance and Focus Areas
Other: Performance and Focus Areas Performance 2017 2016 Revenue – net of intersegment revenue (R’000) R325 960 R256 409 Operating (loss)/profit – excluding impairments and profit/(loss) on disposal of assets (R’000) (R46 474) (R34 178) Total Assets – net of intersegment assets (R’000) R634 549 R520
Slide 18: Operating Challenges and Risks
Operating Challenges and Risks Consumer spending Publishers traditional Key infrastructure / low economic business models under failure (Eskom, water growth forecasts duress supply, etc.) Health and Labour activism Exchange rate safety incidents and skills shortage fluctuations OPERATING REVIEW 18
Slide 19: Outlook
OUTLOOK 19
Slide 20: Outlook
Outlook 1 2 3 Challenging operating Continued volume Match operational environment and decline in most capacity to market depressed economic traditional print demand through outlook with currency market segments. continuous evaluation volatility remains. of operations, and 4 match equipment type Cre
Slide 21: Status Update on Current Matters
Status Update on Merger notification process – Media24 / Novus Holdings Current Matters • Competition Commission recommended to the Tribunal that the ‘merger’ be approved subject to the sell down condition. • Caxton application to intervene. • Tribunal hearing date needs to be set. • There may be an
Slide 22: Questions
QUESTIONS 22
Slide 23: Appendix
© novus holdings
Slide 24: Investment Case
Investment Case Cash flow History of strong cash flow generation and cash conversion with low financial leverage. Market position Strong market position in an industry that benefits from operational leverage. Well-located, world-class production facilities on company-owned properties located in clos
Slide 25: Product Offering
Product Offering Retail inserts and Catalogues Magazines • Brochures, leaflets and catalogues • ABC-listed magazines • Reports and calendars • Trade magazines, • Retail inserts for the majority of • Club magazines • South African retailers • Free-to-market magazines Newspapers Books and Directories
Slide 26: Summarised financial results for the year ended 31 March 2017
Summarised financial results for the year ended 31 March 2017
Slide 27: Investor Relations Contacts
Investor Relations Contacts +27 21 550 2500 Investor.Relations@novus.holdings