Slide 1: Technology and Resources for Education
Technology and Neil Martin Chief Executive Officer Resources for Education Mark Berry Six months to 31 May 2021 Chief Financial Officer © 2021, RM plc
Slide 2: Agenda
AGENDA z Neil Martin Mark Berry Neil Martin Overview Financial Review Priorities Q&A & Outlook
Slide 3: Summary
SUMMARY Stronger performance despite continued COVID-19 disruption Performance more resilient than H1 prior year despite school closures and all 2021 UK school exams cancelled Revenue up 21% and in line with 2019 driven by strong trading in RM Resources enabling adjusted operating profits to double
Slide 4: Current Market Backdrop
CURRENT MARKET BACKDROP COVID-19 impacts starting to reduce but global disruption continues UK schools School attendance - English schools 9.0 School closures for 8 weeks resulting in similar 8.0 Lockdown Lockdown days lost as prior year 7.0 Partial school 6.0 Re-opening All UK school exams cancelle
Slide 5: Financial Summary
RM plc Financial Summary RM plc
Slide 6: H1 Financial Overview
H1 FINANCIAL OVERVIEW An improved start to the year with good momentum through Q2 Adjusted* Adjusted* Revenue Operating Profit Diluted EPS Net Debt Dividend £96.1m £8.2m 7.1p £10.5m 1.7p £8.2m 7.1p £14m £10m £96m 1.7p £79m £4.2m 3.2p 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 Up 21% Up 96% Up
Slide 7: Improved Resilience
IMPROVED RESILIENCE Monthly Revenue Change - Year on Year 70% Year on year revenue growth (%) 60% 50% 40% 30% IMPROVED 20% RESILIENCE 10% 0% ‐10% Dec Jan Feb March April May Q1 Q2 Revenue up 21% on 2020 despite schools being closed for broadly the same number of days but across different quarters Re
Slide 8: H1 Revenue and Profit Development
H1 REVENUE AND PROFIT DEVELOPMENT Revenue up 21% Adjusted operating profit up 96% £m £m +£4.0m +£16.8m 10.0 100.0 9.0 95.0 90.0 8.0 85.0 7.0 80.0 6.0 75.0 70.0 5.0 65.0 4.0 60.0 3.0 55.0 50.0 2.0 2020 RM RM RM 2021 2020 RM RM RM Corporate 2021 Resources Results Education Resources Results Education
Slide 9: H1 Income Statement
H1 INCOME STATEMENT £m H1 2021 H1 2020 Variance Revenue 96.1 79.3 +21% Adjusted Operating Profit 8.2 4.2 +96% Operating Margin 8.5% 5.3% +3.2pp Interest (0.6) (0.7) -5% Interest costs reflect debt facility charges and finance costs related to the defined benefit pension schemes Adjusted Profit befor
Slide 10: Cashflow and Pension
CASHFLOW AND PENSION 6.0 Cash Flow 4.0 Net Debt at £10.5m is down £3.9m on 2.0 May 2020 and £9.2m higher than ‐ November 2020 ‐2.0 ‐4.0 Cash Generated from operations of £8.4m ‐6.0 ‐8.0 Capex spend reflects the focus on our ‐10.0 capital programmes and is expected to ‐12.0 remain elevated at these l
Slide 11: H1 2021 Divisional Review
RM plc H1 2021 Divisional Review RM plc
Slide 12: RM Resources
RM RESOURCES Strong Q2 performance following the reopening of UK schools Revenue +37% vs 2020 300% Rolling 4 week order intake vs 2020 UK revenue +1% vs. 2019 250% International revenue -21% vs. 2019 200% 150% Strong catch-up sales in Q2, supporting curriculum and managing COVID transmission risk 10
Slide 13: RM Results
RM RESULTS Improved H1 performance driven by the partial recovery of global exam activity Revenue in line with prior year as partial recovery of global exam activity is offset by insourcing by a key customer in 2020 Geography Customers Exam Activity Exam Activity ? vs.2020 vs. 2019 UK School exams 3
Slide 14: RM Education
RM EDUCATION Revenues benefit from schools’ focus on blended learning infrastructure Revenue improvement from hardware sales supporting Revenue Adjusted Operating Profit school ICT infrastructure £m £m Gross margin reduced due to revenue mix change 32.3 29.1 4.9 4.4 Operating costs increased followi
Slide 15: Priorities & Outlook
RM plc Priorities & Outlook GS RM plc
Slide 16: Initial Observations
INITIAL OBSERVATIONS STRENGTHS OPPORTUNITIES Purpose led culture and people More customer centric Strong brands and market position Focus on attractive market segments Industry renowned customers Digital and data capabilities Breadth of domain knowledge Increase innovation Cash generative business m
Slide 17: Market Context
MARKET CONTEXT Significant COVID-19 disruption globally Elevated policy focus on education Becoming more Modernisation Digital of Assessment Increasing digital Growing need for Global catch-up funding initiatives focus on:- engagement in teaching accreditation and increasing and learning use of tech
Slide 18: RM plc Context
RM plc CONTEXT Near-term adverse COVID-19 influence but positive medium term opportunity Near Term Continued revenue disruption Negative UK funding sentiment despite catch-up initiatives Medium Term Brand strengths aligned to medium term funding focus Strengthening of positive market trends around u
Slide 19: Positioning for the Future
POSITIONING FOR THE FUTURE Priority Build a clear path to sustainable growth Strategy Sharpen focus on market opportunity & domain strength Enablers Culture Investment Collaboration Capabilities Commercially Target scale Whole to become Adopting a digital accountable, opportunities greater than the
Slide 20: Summary
SUMMARY RM is a resilient business with strong balance sheet and good cash generative characteristics COVID-19 has caused short-term disruption but has strengthened positive global market dynamics Solid foundations on which to benefit from market opportunity Near Term: Return to pre-COVID trading le
Slide 21: RM plc
RM plc RM plc
Slide 22: Appendix
RM plc Appendix
Slide 23: Divisional Summary
DIVISIONAL SUMMARY Revenue £M Adjusted Operating Margin 2021 2020 Variance 2019 Variance 2021 2020 Variance 2019 Variance RM Resources 48.2 35.1 +37% 49.2 ‐2% RM Resources 5.5% ‐5.8% +11.4pp 6.3% ‐0.8pp RM Results 15.5 15.1 +3% 16.8 ‐8% RM Results 21.1% 19.7% +1.4pp 27.1% ‐6.0pp RM Education 32.3 29
Slide 24: Income Statement
INCOME STATEMENT 6 MONTHS TO 31 MAY H1 2021 H1 2020 £M ADJUSTED ADJUSTMENTS TOTAL ADJUSTED ADJUSTMENTS TOTAL Revenue 96.1 - 96.1 79.3 - 79.3 Cost of sales (58.5) - (58.5) (45.7) - (45.7) Gross profit 37.5 - 37.5 33.5 - 33.5 Gross profit % 39.1% - 39.1% 42.3% - 42.3% Operating expenses (29.3) - (29.3
Slide 25: Cashflow
CASHFLOW OPERATING CASH FLOWS - £M H1 2021 H1 2020 Profit from operations 7.0 2.8 Amortisation & impairment of intangibles 1.4 2.3 Depreciation & impairment of PPE 1.8 2.0 Share-based payments (0.4) 0.4 (Decrease)/increase in provisions (0.4) 0.7 Other adjustments - (2.2) Operating cash flows before
Slide 26: Balance Sheet
BALANCE SHEET £M 31 MAY 2021 31 MAY 2020 Goodwill 49.3 49.2 Intangible assets 26.0 22.7 Property, plant & equipment 13.5 5.6 Defined benefit pension surplus 10.1 0.6 Other receivables 0.1 0.3 Right of use Asset 17.7 6.0 Contract fulfilment assets 2.7 2.7 Deferred tax assets 1.5 6.5 Total non-current
Slide 27: RM Resources
RM Resources Helping teachers to teach and learners to learn by developing engaging and inspiring resources Provide education supplies and curriculum WHAT WE DO products for schools and nurseries in the UK and internationally Unique own designed curriculum HOW WE ADD resources focused on improving O
Slide 28: RM Results
RM Results Driving the global modernisation of assessment A global leader in providing digital assessment WHAT WE DO solutions that support lifelong learning HOW WE ADD Improve the quality, efficiency Secure, seamless and and speed of our customer’s hassle-free e-assessment VALUE assessment cycle an
Slide 29: RM Education
RM Education Helping UK schools to improve the impact of technology on teaching and learning WHAT WE DO Software, services and technology provider to UK schools and colleges Delivering cost effective, Helping schools to make the HOW WE ADD reliable and secure most of their IT investment VALUE techno