Novus Holdings Ltd. · JSE:NVS
Novus — FY2016 Earnings Presentation
30 slides from Novus's earnings presentation, Jun 9, 2016
Slide 1: Annual Financial Results
Presentation Thursday, 9 June 2016 Annual Financial Results For the year ended on 31 March 2016
Slide 2: Content
Content 1 Group at a Glance 4 Operational Review 2016 In Context: 2 Business Highlights & 5 Outlook & Strategy Results Summary 3 Financial Review 6 Q&A Presented by Keith Vroon, Acting Chief Executive Officer 2
Slide 3: Group at a Glance
Group at a Glance Number of full-time employees helping to ensure our leadership position in the industry: 2003 (FY15: 1915) 3
Slide 4: 2016 In Context
2016 In Context 4
Slide 5: Business Highlights
Business Highlights Acquisition Digital Print Solutions was acquired in May 2015 to diversify the Group’s revenue streams, and was amalgamated with Paarl Media Paarl in November 2015 to form Novus Print Solutions. Repositioning Labels was repositioned within the Heatset division, and Tissue now form
Slide 6: Results Summary
Results Summary Revenue Headline Earnings per share R4 175m (FY15) R4 261m 139,9c (FY15) 127,6c 2,0% 9,6% Dividend Operating profit per share excl. impairments and profit/(loss) on disposal of assets 70c (FY15) 64c R651m (FY15) R635m 9,4% 2,5% 6
Slide 7: Financial Review
Financial Review 7
Slide 8: Income Statement Summary
Income Statement Summary 2016 2015 % Change (Rounded) Revenue R4 175m R4 261m -2,0% Gross Profit R1 260m R1 169m 7,7% Gross Margin 30,2% 27,4% 2,8% Fixed Overheads R609m R534m 14% Operating Profit R651m R635m 2,5% (Excluding impairments and profit/(loss) on disposal of assets) Operating Margin 15,6%
Slide 9: Cash Position Analysis
Cash Position Analysis Item 2016 (Rm) 2015 (Rm) Continue to explore growth opportunities, Cash Generated from Operations 720 802 supported by a firm cash Net Property, Plant, position and capacity to Equipment and Intangibles -214 -178 raise debt. Taxation Paid -178 -173 • Cash Conversion Free Cash
Slide 10: Print Segment: Highlights
Print Segment: Highlights Rm 4500 Revenue: R4 043m R3 918m • Decline in line with volume pressure mainly on 4000 R3 898m newspapers and magazines. 3500 35% 32% Gross Profit Percentage positively impacted 3000 29% by: 2500 • Positive impact of forex. 2000 • Foreign paper pricing adjustments. • Mix of
Slide 11: Other Segment: Highlights
Other Segment: Highlights Rm Revenue: 300 • Increase of 17,6% in revenue encouraging but lagged expectations. 31% R256m • Delay in the tissue capital expansion programme 250 stunted revenue growth, whilst increasing costs R218m were experienced. 200 • Flexibles/labels capital expansion programme 22%
Slide 12: Capital Expenditure
Capital Expenditure Print Other Rm Rm 300 300 250 250 200 200 R175m 150 150 100 100 R137m R36m R60m 50 R78m R80m 50 R52m R48m R4m R4m R17m R6m 0 0 FY14 FY15 FY16 FY14 FY15 FY16 Maintenance Expansion Maintenance Expansion • Expansion capex in FY16 related to digital printing equipment, • Expansion ca
Slide 13: Factors affecting Performance
Factors affecting Performance Foreign Paper Prices Impact of the global oversupply of paper, leading to low hard currency price increases. Exchange Rate Ongoing volatility of the Rand, mainly favourable for the year. Waste Minimisation / Improved press utilisation and ongoing analysis of optimum pro
Slide 14: Operating Review
VY Operating Review 14
Slide 15: Print: Revenue
Print: Revenue The print division remains at the core of Novus Holdings and contributed 94% to Group revenue and 105% to Group operating profit excluding capital items. Category Share of Group Share of Group Comments Revenue 2016 Revenue 2015 Magazines 20,6% 22,5% • The market for magazines, as repo
Slide 16: Print: Revenue
Print: Revenue Category Share of Group Share of Group Comments Revenue 2016 Revenue 2015 Retail Inserts 29,0% 28,6% • Total retail advertising spend across all advertising platforms increased by 9,5% year on year. (TV, print, radio, outdoor, internet, cinema) • Total retail print advertising share d
Slide 17: Print: Performance and Focus Areas
Print: Performance and Focus Areas Performance 2016 2015 Revenue – net of intersegment revenue (R’000) R3 918 108 R4 043 480 Operating profit – excluding impairments and profit/(loss) on disposal of assets (R’000) R684 953 R625 083 Total Assets – net of intersegment assets (R’000) R3 176 514 R3 221
Slide 18: Other: Revenue
Other: Revenue The division currently contributes 6,1% of revenue, but is the area of biggest potential for the Group. Category Share of Group Share of Group Comments Revenue 2016 Revenue 2015 • Labels and flexibles operation now structured within Heatset printing division Labels 2,7% 2,4% effective
Slide 19: Other: Performance and Focus Areas
Other: Performance and Focus Areas Performance 2016 2015 Revenue – net of intersegment revenue (R’000) R256 409 R218 004 Operating (loss)/profit – excluding impairments and profit/(loss) on disposal of assets (R’000) (R34 178) R9 614 Total Assets – net of intersegment assets (R’000) R520 727 R299 88
Slide 20: Operating Challenges and Risks
Operating Challenges and Risks Low economic growth forecasts. Labour activism and skills shortage. Key infrastructure failure. Exchange rate fluctuations. (Eskom, water supply, etc.) Health and Safety incidents. 20
Slide 21: Outlook & Strategy
© VY Outlook & Strategy 21
Slide 22: Outlook
Outlook 1 2 3 4 Match operational capacity to market Challenging operating Matching equipment Continued volume demand through environment and type to market trends decline in most continuous evaluation depressed economic in terms of print run traditional print of operations, align outlook with curre
Slide 23: Strategy
Strategy Extend leadership position and maximise cash returns from core print business. Delivering on current diversification projects. Identifying new targets for investment and diversification in suitable growth areas, at the right price. 23
Slide 24: Questions
Questions 24
Slide 25: Appendix
VY Appendix 25
Slide 26: 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. Facilities Well-located, world-class production facilities on company-owned properties loca
Slide 27: 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 Books and Directories Newspapers •
Slide 28: Summarised audited results for the year ended 31 March 2016
Summarised audited results for the year ended 31 March 2016 28
Slide 29: Investor Relations Contacts
Investor Relations Contacts Edrich Fivaz and Carrie Nixon +27 21 550 2500 Investor.Relations@novus.holdings 29
Slide 30: novus holdings
© novus holdings