Slide 1: Preliminary Results
Preliminary Results Technology and Resources for Education 29 March 2023 Mark Cook Emmanuel Walter Chief Executive Officer Chief Financial Officer (interim) © 2021, RM plc
Slide 2: Agenda
Agenda Divisional Performance, Highlights Financial Review Strategy & Outlook Q&A Mark Cook Emmanuel Walter Mark Cook CEO CFO (interim) CEO
Slide 3: 2022 Summary
2022 Summary Revenue Growth of 4% driven by strong growth in RM Assessment and the TTS business within RM Resources Progress on business transition materially impacted by IT implementation Continuing Operations adjusted operating profit of £7.5m (2021: £16.5m) impacted by IT implementation in RM Res
Slide 4: Financial Summary
Financial Summary
Slide 5: Group Financial Overview
Group Financial Overview Adjusted* Revenue Adjusted* Operating Profit Net Debt Dividend Diluted EPS £214m £7.5m 4.2p £47m 0p £214m £47m 4.7p £206m £16.5m 14.0p £7.5m 4.2p £18m 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 Up 4% Down 55% Down 70% up £29m No dividend Continuing Operations revenues
Slide 6: Revenue Development
Revenue Development Adjusted* Revenue up 4% £m +£8.1m 220.0 215.0 1.0 210.0 7.1 0.0 205.0 200.0 214.2 195.0 206.1 190.0 185.0 180.0 2021 RM Resources RM Assessment RM Technology 2022 RM Resources was in line with 2021 with strong growth in the TTS brand of 10% and international growth of 40% offsett
Slide 7: Adjusted Operating Profit
Adjusted Operating Profit Adjusted* operating profit down £9m £m -£9.0m 18.0 16.0 14.0 - 7.3 12.0 10.0 1.7 - 2.9 8.0 16.5 - 0.5 6.0 4.0 7.5 2.0 - 2021 RM Resources RM Assessment RM Technology Corporate 2022 RM Resources profits are down £7.3m to £2.8m. Margins were held level on flat revenues, but c
Slide 8: Income Statement
Income Statement £m 2022 2021 Variance Continuing Discontinuing Total Continuing Discontinuing Total Total Revenue 214.2 4.9 219.0 206.1 4.7 210.9 8.2 Adjusted* Operating Profit 7.5 1.6 9.1 16.5 2.0 18.5 (9.4) Adjusted* Operating Margin 3% 33% 4% 8% 43% 9% -5% Interest (2.2) - (2.2) (1.4) - (1.4) (0
Slide 9: Cashflow
Cashflow Elevated net debt underpinned by new Banking Facility to July 2025 £18.3m £7.54m £24.5m £46.8m £6.1m £5.2m £4.5m £2.5m £5.3m Net Debt Adjusted Adjustments Capex Proceeds from Pension Dividends Interest, tax, Net Debt Nov 2021 cash sales of assets lease payments Nov 2022 generated from opera
Slide 10: Divisional Summary
Divisional Summary
Slide 11: RM Resources
RM Resources Strong TTS growth offset by IT implementation challenges in Consortium Revenue in line with the prior year at £114m Record revenue year for the TTS brand in the UK and Internationally Revenue Adjusted Operating Profit Consortium revenues were down as IT implementation £m £m challenges d
Slide 12: RM Assessment
RM Assessment Strong growth and new customer wins Revenue growth of 22% driven by exam schedule recovery post- Covid and both customer expansion and volume growth ? Operating profit up 29% to £7.4m driven by revenue growth Revenue Adjusted Operating Profit £m £m Operating margins recover to 18.9% bu
Slide 13: RM Technology
RM Technology Revenue growth and progress on turnaround Revenue up 2% driven by Services revenues Won largest MAT school group infrastructure contract in sector. £26m opportunity over 5 years Revenue Adjusted Operating Profit £m £m Operating profits were down due to lower gross margins 4.7 4.9 refle
Slide 14: Key Developments
Key Developments
Slide 15: IT Implementation
IT Implementation Implementation challenges but significant improvements delivered Significant disruption in 2022 caused by implementation issues leading to programme reset and review of groupwide IT enterprise architecture requirements Programme now completed for Consortium and is delivering signif
Slide 16: Inflationary backdrop
Inflationary backdrop Cost base Inflationary trends Material and freight cost inflation driven by FY22 FY23 global supply chain issues other + = New freight forwarding contract 3P software + + Increase Direct shipments E-commerce platform launch labour + ++ Labour cost inflation results from cost-of
Slide 17: Proposed sale of RM Integris & RM Finance
Proposed sale of RM Integris & RM Finance Class 1 transaction Flexible, easy-to-use, cloud-based school Cloud based, easy-to-use, School finance management software system management software system RM Integris and Finance are Cloud-Based software products used by over 2,000 schools in the UK Market
Slide 18: Bank Facility Amendments
Bank Facility Amendments Establishes a secure footing for RM Plc on which to rebuild shareholder value Multicurrency Revolving Credit Facility Agreed +12 months extension to 5 July 2025 Quarterly Minimum adjusted post IFRS16 LTM EBITDA target from May 23 to November 24, which will revert to an adjus
Slide 19: Outlook
Outlook Chief Executive priorities
Slide 20: Initial Observations
Initial Observations Strong fundamentals on which to build Great Customers Continuous Market Dynamics Product USP Passionate People Improvement Market fundamentals and trends A rich 50-year heritage of working Some distinct and differentiated Opportunity to improve execution are clear and well found
Slide 21: CEO Priorities
CEO Priorities Areas to be addressed as part of Transformation Programme 1. Simplify 2. Strengthen 3. Succeed 1. Revenue & Margin 2. Spend and Working Development 1. Revenue & Margin 2. SpendCapital and Working 3.3.Operating OperatingModel Model3. 4.4.Strategic StrategicImperatives Imperatives Devel
Slide 22: Outlook
Outlook Education remains a government funding priority, but school budget headwinds exist in the near-term Despite challenging macroeconomic backdrop, growth expected in all divisions Transformation approach focusses on improving operating margins and operational effectiveness More stable operating
Slide 23: Q&A
Q&A
Slide 24: Appendix
Appendix
Slide 25: Divisional Summary
Divisional Summary Revenue £M (continuing operations only) Adjusted* Operating Margin 2022 2021 Variance 2022 2021 Variance RM Resources 114.4 114.4 - RM Resources 2.5% 8.8% -6.3pp RM Assessment 38.9 31.9 +7.1 RM Assessment 18.9% 17.9% +1.0pp RM Technology 60.9 59.9 +1.0 RM Technology 3.6% 8.5% -4.9
Slide 26: Income Statement
Income Statement PERIOD TO 30 NOVEMBER 2022 2021 £M ADJUSTED ADJUSTMENTS TOTAL ADJUSTED ADJUSTMENTS TOTAL Revenue 214.2 - 214.2 206.1 - 206.1 Cost of sales (146.9) - (146.9) (138.8) - (138.8) Gross profit 67.3 - 67.3 67.4 - 67.4 Gross profit % 31.4% - 31.4% 32.3% - 32.3% Operating expenses (59.8) (5
Slide 27: Cashflow
Cashflow OPERATING CASH FLOWS - £M 2022 2021 (Loss)/Profit from operations, including discontinued operations (20.0) 5.6 Amortisation & impairment of intangibles 4.4 2.4 Depreciation & impairment of PPE 5.1 4.4 Increase/(decrease) in provisions 1.5 (0.4) Utilisation of contract fulfilment asset 2.3
Slide 28: Balance Sheet
Balance Sheet £M 30 NOVEMBER 2022 30 NOVEMBER 2021 Goodwill 49.4 49.2 Intangible assets 25.5 26.1 Property, plant & equipment 15.9 16.1 Defined benefit pension surplus 24.0 35.0 Other receivables 0.3 0.1 Right of use Asset 16.4 18.0 Contract fulfilment assets 1.7 1.5 Deferred tax assets 0.2 0.2 Tota
Slide 29: Pension
Pension IAS19 pension position remains in surplus; triennial valuation concluded 5% 40.0 30.0 IAS19 Surplus/(defecit) (£m) 4% 20.0 10.0 3% 0.0 -10.0 2% -20.0 -30.0 1% -40.0 2015 2016 2017 2018 2019 2020 2021 2022 Pension deficit Discount rate RPI inflation IAS19 pension surplus reduced by £7.7m to a
Slide 30: 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 and WHAT WE DO innovative teaching resources and education supplies to schools and nurse
Slide 31: 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 transform WHAT WE DO assessments to unlock teaching and learning benefits. We don’t just provide a technology platform Global Assess
Slide 32: RM Technology
RM Technology Helping educators harness technology to improve the learning environment Strategic IT services partner for schools and colleges to deliver a WHAT WE DO technology environment that improves learning outcomes and make the most of their IT investments UK IT Services in Education Current m
Slide 33: Market opportunity remains positive
Market opportunity remains positive Positive long-term structural trends in Education Sector Use of technology in Digital delivery in Assessment Education Accelerating as schools progress on Engagement building on digital long digital maturity journey with only solutions post COVID-19 disruption 9%