Johnson Service Group Plc · LSE:JSG
Johnson Service — FY2019 Earnings Presentation
28 slides from Johnson Service's earnings presentation, March 2020
Slide 1: Final Results
Peter Egan Chief Executive Officer Yvonne Monaghan Chief Financial Officer Tim Morris Group Financial Controller Final Results 12 months ended 31 December 2019
Slide 2: Highlights
2019 Final Results Highlights “We have continued to deliver strong organic growth complimented by the impact of our recent acquisitions.” 2
Slide 3: Highlights
2019 Final Results Highlights Strategic Highlights Highly focused textile services business with increasing nationwide geographical coverage Revenue up • Fresh Linen acquisition increases HORECA coverage to the South East • A number of customer contracts acquired in January and July 2019 • On 28 Feb
Slide 4: Income Statement
2019 Final Results Income Statement 2019 2018 Increase Revenue (£m) 350.6 321.1 9.2% Adjusted operating profit (£m)1,2 52.8 46.0 14.8% Adjusted operating margin (%)1,2 15.1 14.3 n/a Exceptional items (£m) - (0.6) n/a Adjusted PBT (£m)1,3 48.2 42.5 13.4% Adjusted EPS (p)1,3 10.5 9.3 12.9% 4 Number of
Slide 5: IFRS 16 Impact
2019 Final Results IFRS 16 Impact Pre IFRS 16 Post IFRS 16 at December 2019 Impact at December 2019 Revenue (£m) 350.6 - 350.6 1 Adjusted operating profit (£m) 51.7 1.1 52.8 Adjusted operating margin (%)1 14.7 - 15.1 Finance costs (£m) (3.1) (1.5) (4.6) Adjusted PBT (£m)1 48.6 (0.4) 48.2 Adjusted EP
Slide 6: Cash Flow
2019 Final Results Cash Flow £m 2019 2018 Adjusted operating profit 52.8 46.0 Depreciation and software amortisation 66.2 55.4 Working capital 2.7 (5.9) Capital expenditure – fixed assets and software (20.0) (18.1) – rental stocks (net) (45.9) (46.7) – fixed asset proceeds 0.3 0.2 Interest (4.6) (3.
Slide 7: Other Financial Information
2019 Final Results Other Financial Information Interest, Bank Facility & Hedging Return on Capital Employed (ROCE) Interest • Marginal increase to 16.6% (17.4% excluding the impact of IFRS 16) (2018: 16.3%) • Interest cost of £4.6m including £1.8m relating to lease liabilities • Calculated as adjust
Slide 8: Investment Expenditure £20m
2019 Final Results Investment Expenditure Leeds Glasgow Ironing line £20m New operational facility upgrade Investment Shaftesbury Ironing line upgrade Bourne Wrexham Power Press Mezzanine Basingstoke floor Industrial unit upgrade Southall Dispatch Manchester Aberdeen extension Garment folder Relocat
Slide 9: Leeds Plant
2019 Final Results Leeds Plant On plan, to budget and timetable…. • 45,000 sq. feet site in Gildersome, Leeds • Equipment installation underway • c300,000 pieces per week of volume from current Leeds distribution hub; c200,000 pieces per week from other sites • Opportunity to deliver logistics benef
Slide 10: Acquisitions
2019 Final Results Acquisitions “The acquisition of Fresh Linen is part of our continuing strategy to increase the size and scale of our hospitality service in the UK and extend our geographical reach.” 10
Slide 11: Acquisition of Fresh Linen
2019 Final Results Acquisition of Fresh Linen • Main site is a large freehold located in Clacton-on-Sea, Essex • Distribution hub located in Rainham, London • Predominantly serves 4 star hotels, budget hotels and gym clubs in the hospitality market in the South East • Processes some 900,000 pieces o
Slide 12: Operational Performance
2019 Final Results Operational Performance “Both divisions have delivered high levels of new business wins and maintained consistently high levels of customer satisfaction scores.” 12
Slide 13: Workwear
2019 Final Results Operational Performance Workwear 2019 2018 Increase Revenue (£m) 135.3 128.8 5.0% Adjusted operating profit (£m)1,2 24.4 22.7 7.5% Margin (%) 2 18.0 17.6 n/a Notes: 1. Before amortisation of intangible assets (excluding software amortisation) and exceptional items 2. 2019 includes
Slide 14: Workwear
2019 Final Results 17 Laundries 2,300 Employees 375 Vehicles 1.7m Garments per week Workwear 14
Slide 15: Workwear
2019 Final Results Operational Performance Workwear • Underlying revenue growth of 5.0% • Sales to ‘new to rental’ customers accounted for 17.6% of new business won • Increased sales to existing customers • Customer retention maintained at 95% • Existing customer satisfaction at 86%, in line with 20
Slide 16: HORECA
2019 Final Results Operational Performance HORECA Hotel, Restaurant & Catering Linen Hotel Linen Hotel, Restaurant & Catering 2019 2018 Increase Revenue (£m) 215.3 192.3 12.0% Adjusted operating profit (£m)1,2 33.1 28.0 18.2% Margin (%)2 15.4 14.6 n/a Notes: 1. Before amortisation of intangible asse
Slide 17: HORECA
2019 Final Results HORECA Hotel, Restaurant & Catering 18 3,800 Employees 480 600m Laundries Vehicles Pieces per Year 17
Slide 18: HORECA
2019 Final Results Operational Performance HORECA Hotel, Restaurant & Catering Linen Hotel Linen Hotel, Restaurant & Catering • Overall revenue growth of 12.0% with all brands trading ahead of 2018 • Strong underlying organic growth of 7.4% • Consistently high customer satisfaction rating, with our
Slide 19: Our Customers
2019 Final Results Our Customers “Our continual investment in the business allows us to provide an excellent service to our customer base.” 19
Slide 20: Our Customers
2019 Final Results Our Customers 20
Slide 21: Five Year History
2019 Final Results Five Year History Revenue (£m) Adjusted Operating Profit (£m) 321.1 350.6 60 52.8 290.9 46.0 300 256.7 50 43.3 37.7 40 188.2 200 30 25.9 20 100 10 0 0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Adjusted Diluted EPS (p) Dividend per Share (p) 12 10.5 4.0 3.5 10 8.7 9.3 3.1 3
Slide 22: Our Executive Team
2019 Final Results Our Executive Team Peter Egan Yvonne Monaghan Chief Executive Officer Chief Financial Officer Industry Experience: 27 Years Industry Experience: 35 Years Mark Woolfenden Donald Smith Helen Wood Tim Morris Steve McKeever MD, Hotel Linen MD, Stalbridge MD, Workwear Group Financial C
Slide 23: JSG's Commitment to ESG
2019 Final Results JSG’s Commitment to ESG Investments in Reduced the ironing equipment Trialling water weight of to reduce recycling plant clear wrap energy use Investment in Academy driving Trialling electric heat exchangers to development vehicle delivery reduce energy use opportunities for in Lo
Slide 24: The Future
2019 Final Results The Future “Continued focus on growing the business through targeted investment.” 24
Slide 25: Delivery of Strategic Plan
2019 Final Results Delivery of Strategic Plan Organic Investment M&A • Market leading position within Workwear & HORECA • National coverage; local service • Dedicated to providing first class customer service • Maintaining margin over the medium term • Implementation of a Group-wide brand recognitio
Slide 26: The Future
2019 Final Results The Future “We anticipate that the Group will deliver organic growth across both divisions, whilst continuing to focus on customer satisfaction and investment to optimise operational efficiencies. Trading performance since the year end has been in line with our expectations.” Orga
Slide 27: See
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Slide 28: Appendix: Segmental Analysis
2019 Final Results Appendix 1 Segmental Analysis 2019 2018 Adjusted Adjusted Revenue Operating Profit1,2 Revenue Operating Profit1 £m £m £m £m Workwear 135.3 24.4 128.8 22.7 HORECA 215.3 33.1 192.3 28.0 Textile Rental 350.6 57.5 321.1 50.7 Group Costs - (4.7) - (4.7) TOTAL 350.6 52.8 321.1 46.0 Note