Smiths News Plc · LSE:SNWS
Smiths News — H1 2022 Earnings Presentation
23 slides from Smiths News's earnings presentation, May 4, 2022
Slide 1: Interim Results
Interim Res EET) ults Fee tii
Slide 2: Headlines
Jon Bunting Chief Executive Officer Headlines
Slide 3: Good performance delivering profit growth and strong net debt reduction
Headlines Good performance • Adjusted EBITDA (ex IFRS16) £20.7m up 1.0% delivering profit • Resilient sales and strong margin in the period growth and • Continued execution of business priorities strong net debt • Net debt below 1 x Adjusted EBITDA (ex IFRS16) reduction • Interim dividend of 1.4p 3
Slide 4: Progress driven by core sales and cost management
Performance drivers Core sales • Resilient sales of newspapers • Strong sales of magazines and one shots Progress driven • Beneficial mix boosting margin Cost management by core sales • Clear plans focused on key locations • Further operating efficiencies and cost • Service standards maintained thro
Slide 5: Financial performance
Paul Baker Chief Financial Officer Financial performance
Slide 6: Financial headlines
Financial headlines Revenue -1.2% Revenue resilient with beneficial mix mitigating Adjusted EBITDA (ex IFRS16 leases) +1.0% inflation Adjusted operating profit +1.1% Free Cash Flow includes Pension and Tuffnells Deferred Adjusted earnings per share +10.9% Consideration (DC) receipts of £14.6m Free c
Slide 7: Revenue year on year
Revenue year on year Newspapers and Weekly Magazines Lower end of historic range Magazines Better than expected due to soft Monthly One Shots comparative period (lockdowns) magazines 45% 1.1% Weekly Newspapers magazines One Shots -2.9% -2.6% Pokémon trading cards Improved football collections 7
Slide 8: Continuing adjusted income statement
Continuing adjusted income statement Operating profit +£0.2m £m Adjusted H1 2022 H1 2021 Better wholesale margin, and Revenue 544.8 551.6 additional revenue offsetting impact of inflation Operating profit 19.1 18.9 Operating margin 3.51% 3.43% Net finance charges (3.8) (4.5) Profit before tax 15.3 1
Slide 9: Movement in bank net debt since H1 2021
Movement in bank net debt since H1 2021 Net debt : EBITDA reducing H1 2021 1.8x H1 2022 0.9x 70.0 20.6 8.1 Average net debt -34% 6.5 (4.0) 38.8 H1 2021 £90m H1 2022 £59m H1 2021 Operating Pension Tuffnells Dividend H1 2022 Net debt cashflow DC Net debt Operating cashflow c£20m Rolling 12 months 9
Slide 10: Free cash flow – continuing
Free cash flow – continuing Free cash flow +£12.9m £m H1 2022 H1 2021 Operating profit – adjusted 19.1 18.9 Benefits from one-off receipts Depreciation and amortisation 5.3 5.5 Underlying cash flow stable EBITDA (including IFRS16) 24.4 24.4 Working capital (7.8) (4.8) Capital expenditure (1.2) (0.6)
Slide 11: Headline performance measure
Headline performance measure £m H1 2022 H1 2021 Change of headline performance measure Adjusted EBITDA (pre IFRS16) 20.7 20.5 New measure from FY2023 Add back IAS17 rent 3.7 3.9 No change to underlying profit Depreciation and amortisation (owned assets) (2.0) (2.4) drivers IFRS16 depreciation (lease
Slide 12: Operational progress
Jon Bunting Chief Executive Officer Operational progress
Slide 13: Market stabilising after two years of volatility
Recovery from the pandemic • Magazines most impacted by the pandemic • Removal of restrictions aiding recovery • Travel and commuting sales rebuilding Market • Long-term planning forecast unchanged stabilising after 15% two years of 10% 5% 0% volatility -5% -10% -15% -20% -25% -30% H1 2019 H2 2019 H
Slide 14: Pro-actively managing inflationary pressures
Inflationary pressure • Focus on three key pressures: Pro-actively 1 Labour shortages managing 2 Fuel 3 National Minimum Wage inflationary • Continuing operational efficiencies pressures • Additional revenue gains • Service levels maintained 14
Slide 15: Good progress on our sustainability journey
Sustainability and people Good progress on our sustainability journey 15
Slide 16: Meeting the needs of all our stakeholders
Capital management • Bank Net Debt below 1 x Adjusted EBITDA (ex IFRS16 leases) • Total capex of c. £4m per annum Meeting • Flexibility for carefully targeted investment • Distributions cap increased from £4m (2021) to £10m the needs p.a. (2022- 2025) of all our Lower borrowings stakeholders Cash Ta
Slide 17: On track to meet market expectations for the full year
Priorities and outlook Priorities H2 • Management of inflationary pressures • Maintaining service KPIs On track to • Sustainable efficiencies programme meet market Outlook • Overall trading in line with expectations expectations • Inflationary pressures within forecast and closely monitored for the
Slide 18: Any questions?
Any questions? é
Slide 19: Interim Financial Results Appendices
Interim Financial Results Appendices
Slide 20: Movement in bank net debt and net debt
Movement in bank net debt and net debt £m Adjusted H1 2022 H1 2021 Opening bank net debt (53.2) (79.7) Continuing operations free cash flow 17.5 4.6 Discontinued operations free cash flow (0.3) (1.3) Free cash flow 17.2 3.3 Dividend paid (2.8) - Purchase of own shares ESS - (0.4) Discontinued: Tuffn
Slide 21: Our new website – smithsnews.co.uk
Our new website – smithsnews.co.uk 21
Slide 22: Cautionary statement
Cautionary statement This document contains certain forward-looking statements with respect to Smiths News plc’s financial condition, its results of operations and businesses, strategy, plans, objectives and performance. Words such as ‘anticipates’, ‘expects’, ‘intends’, ‘plans’, ‘believes’, ‘seeks’
Slide 23: Smiths
smiths