Smiths News Plc · LSE:SNWS
Smiths News — H1 2019 Earnings Presentation
16 slides from Smiths News's earnings presentation, May 1, 2019
Slide 1: Interim Results
Interim Results 1 May 2019
Slide 2: Chief Executive Officer
Jos Chief Executive Officer
Slide 3: Headlines
Headlines Group trading in line with expectations Revenue £732.5m -4.4% EBITDA £18.0m -25.6% Operating profit £13.0m -27.8% Adjusted PBT £9.9m -34.4% Adjusted EPS 3.2p -36.0% Free cash flow £5.8m -42.0% Prudent capital management Capex £2.7m -40.9% Net Debt £77.5m -7.3% Operational progress Prioriti
Slide 4: Smiths News and DMD
Smiths News Revenue ► Focused leadership and accountability £639.4m -4.0% Adjusted Operating Profit ► Removal of distractions related to Group integration £20.3m 20.1% ► Efficiencies in core operations offsetting revenue decline ► Excellent progress with contract renewals ► Good performance against
Slide 5: Tuffnells
Tuffnells Revenue ► Performance impacted by legacy challenges from FY18 £80.2m -8.1% ► Revenue decline Adjusted operating loss £8.6m n/a ► Insufficiently variable cost base ► Management actions gaining traction: Adjusted operating loss trend ► Increased revenue per consignment H1 18 £0.2m loss H2 18
Slide 6: Tuffnells
Tuffnells Peter CEO Tuffnells
Slide 7: Transformation initiatives
Transformation initiatives ► Cost reduction initiatives starting to gain traction ► Strong focus on cost management and control ► Cost-to-serve model developed and part of Tuffnells’ DNA ► Loss making customers renegotiated or exited ► Targeted pricing initiatives launched ► Transition to the right
Slide 8: Chief Financial Officer
Tony Chief Financial Officer
Slide 9: Group performance
Group performance £m Adjusted H1 2019 H1 2018 Smiths News 20.3 16.9 DMD 1.3 1.3 Tuffnells (8.6) (0.2) Group operating profit 13.0 18.0 Net finance charges (3.1) (2.9) Group PBT 9.9 15.1 Tax (1.9) (3.0) Group PAT 8.0 12.1 Number of shares 246.2 245.7 Earnings per share 3.2p 5.0p Connect Group PLC 9
Slide 10: Adjusting items
Adjusting items £m H1 2019 H1 2018 Network and re-organisation costs (1.3) (0.5) Vacant property - 0.5 IPR settlement income 0.3 - Sale and leaseback costs (0.5) - Pension ‘buy in’ costs (1.5) - Brierley Hill insurance claim (0.2) - NMW Regulatory compliance 0.1 - Impairment of non-current assets -
Slide 11: Free cash flow
Free cash flow £m H1 2019 H1 2018 Operating profit – adjusted 13.0 18.0 Depreciation and amortisation 5.0 6.2 EBITDA 18.0 24.2 Working capital movement 2.4 1.8 Capital expenditure (2.7) (4.4) Finance lease payments (1.5) (1.9) Net interest paid (2.6) (3.5) Taxation (1.2) (3.4) Adjusted items (6.8) (
Slide 12: Net debt
Net debt £m H1 2019 H1 2018 Opening net debt (83.4) (82.1) Free cash flow to equity 5.8 10.0 Finance lease creditor movement 1.5 1.5 Pension deficit (1.2) (2.5) Dividend paid - (16.5) Disposal proceeds - 13.7 Discontinued disposal proceeds to - - repay overdraft Other (0.2) 1.3 Discontinued operatio
Slide 13: Summary and Q&A
Summary and Q&A
Slide 14: FY19 Priorities
FY19 Priorities FY19 Status priorities Tuffnells H2 Initiatives profitability gaining traction SN contract 98% magazines renewals 65% total SN cost Outperforming savings expectations Plans, resources, model facility Further Head office initiatives streamlining planned Core values Well received roll-
Slide 15: Summary: Trading, Strategy, Outlook
Summary Trading ► ► Overall performance in line with expectations Smith News exceeding expectations ► Tuffnells impacted by legacy challenges ► Central services model aiding performance Strategy ► Smiths News strategy firmly on track ► Tuffnells turnaround focused on a sustainable fix ► Lean princip
Slide 16: 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