Smiths News Plc · LSE:SNWS
Smiths News — Q1 2020 Earnings Presentation
15 slides from Smiths News's earnings presentation, May 13, 2020
Slide 1: Interim Results
Results gaieynane0 oe : »y Connect 4
Slide 2: Jon Bunting, Chief Executive Officer
Jon Bunting Chief Executive Officer
Slide 3: Headlines H1
Headlines H1 Summary H1 performance ► Group performance in line with the Board’s expectations ► Smiths News - £3.1m of cost savings offsetting margin decline ► Central Functions - £1m of cost efficiencies achieved Delivery of key strategic priorities ► Tuffnells - strategic review and subsequent dis
Slide 4: Tony Grace, Chief Financial Officer
Tony Grace Chief Financial Officer
Slide 5: Group continuing performance
Group continuing performance Restated £m Adjusted H1 2020 H1 2019 Smiths News 19.4 20.3 DMD 0.5 1.3 Group operating profit 19.9 21.6 Net finance charges (3.6) (3.0) Group PBT 16.3 18.6 Tax (3.1) (3.6) Group PAT 13.2 15.0 Number of shares 245.9 246.2 Earnings per share 5.4p 6.1p Connect Group PLC 5
Slide 6: Continuing - Adjusting items
Continuing - Adjusting items £m H1 2020 H1 2019 Network and re-organisation costs (2.3) (1.2) Goodwill impairment (5.7) - Provision of expected credit losses (0.9) - Impairment of investment in JV (0.3) - Pension (0.4) (1.5) IPR settlement income - 0.3 Amortisation of acquired intangibles - (0.2) To
Slide 7: Free cash flow (continuing and discontinued)
Free cash flow (continuing and discontinued) £m H1 2020 H1 2019 Adj. Operating profit – continuing 19.9 21.6 Adj Operating profit - discontinued (9.2) (8.7) Depreciation and amortisation 10.5 5.1 Adjusted EBITDA 21.2 18.0 Working capital movement (2.7) 2.4 Capital expenditure (5.9) (2.7) Proceeds of
Slide 8: Net debt
Net debt £m H1 2020 H1 2019 Opening net debt (73.9) (83.4) Free cash flow - continuing 5.0 19.4 Free cash flow - discontinued 4.1 (13.6) Lease creditor movement 0.6 1.5 Pension deficit (0.7) (1.2) Dividend paid (2.4) - Other (0.7) (0.2) Bank net debt (68.0) (77.5) Bank net debt : EBITDA 2.0x 1.95x B
Slide 9: Jon Bunting, Chief Executive Officer
Jon Bunting Chief Executive Officer
Slide 10: Guiding principles of lockdown trading
Guiding principles of lockdown trading 1. Safety 2. Service The wellbeing of our Maintaining as full colleagues and a service as customers is possible paramount 3. Capability 4. Sustainability Mitigating actions must Working with our not damage our long partners to support term capability the supply
Slide 11: Operations update
Operations update Smiths News operations continue in all territories ► Adjustments to working practices for safety of colleagues and customers ► Up to 10% of retail outlets closed – typically high volume stores ► Customer support services in UK and India ► Mitigating cost savings across operations ►
Slide 12: Immediate priorities
Immediate priorities Managing through lockdown ► Working to guiding principles and mitigating the financial impact on H2 Preparing for exit and recovery phase ► Adapting service and processes for the ‘new normal’ Resizing the Group functions ► Pressing ahead with restructuring opportunities Renewal
Slide 13: Smiths News Track Record
Smiths News Track Record Gross Revenue £1,600m ► Declining but predictable revenues £1,400m £1,200m £1,000m ► Cost savings offsetting margin decline £800m £600m £400m ► Consistently strong profits and cash £200m £0m 2013 2014 2015 2016 2017 2018 2019 ► Capital light, cash generative model Margin Dec
Slide 14: Summary
Summary Trading ► ► Performance in line with expectations All strategic priorities delivered H1 ► Smith News exceeding expectations Current ► Manage through lockdown and exit ► Press ahead with Group resizing priorities ► Renegotiation of banking facilities Future ► Lockdown - uncertain impact ► ’Ne
Slide 15: Cautionary statement
Cautionary statement This document contains certain forward-looking statements with respect to Connect Group PLC’s financial condition, its results of operations and businesses, strategy, plans, objectives and performance. Words such as ‘anticipates’, ‘expects’, ‘intends’, ‘plans’, ‘believes’, ‘seek