Videndum Plc · LSE:VID
Videndum — The Vitec Group — FY2006 Earnings Presentation
33 slides from Videndum's earnings presentation, Mar 5, 2007
Slide 1: 2006 Full Year Results
2006 Full Year Results Gareth Rhys Williams, Chief Executive Alastair Hewgill, Finance Director 5 March 2007
Slide 2: Agenda
Agenda Highlights – Gareth Rhys Williams Financial Review – Alastair Hewgill Divisional Review – Gareth Rhys Williams Strategy and Outlook – Gareth Rhys Williams 2
Slide 3: 2006 Highlights
2006 Highlights Ongoing performance improvement Continued strong sales growth Reported sales growth of 14% Organic constant currency growth of 12% Good conversion to profit PBT up 31% to £24.1m Strong cash generation EPS up by 36% to 35.3p Dividend increased by 6.5% to 16.5p 4 acqu
Slide 4: Financial review
vitecgroup Financial review
Slide 5: Income statement
Income statement Benefits of operational gearing 2006 2005 Δ £m £m % Revenue 222.3 194.9 14.1% Gross margin % 41.9% 40.7% +1.2 pts Operating expenses* (68.0) (59.3) 14.7% Operating profit* 25.2 20.0 26.0% Operating margin % 11.3% 10.3% +1.0 pts PBT* 24.1 18.4 31.0% Tax charge % 40.0% 4
Slide 6: Revenue growth since 2002
Revenue growth since 2002 Pre FX: 11% pa or 8% pa excluding acquisitions Compound average annual growth rates: 240 Reported Pre-FX* 11.0% Pre-FX* 220 Reported 7.8% Organic**, pre-FX* Revenue (£m) Organic**, pre-FX* 8.0% 200 180 160 140 2002 *** 2003*** 2004 2005 2006 * Pre-FX based on reported sales
Slide 7: Operating profit bridge
Operating profit bridge Operating profit up 30% in constant currency 35 Price/Cost Op. Exps Vol/Mix 30 Acquisitions FX Transl FX Transact 25 20 15 10 2005 Profit* 2006 Profit* 5 £20.0m £9.9m £2.2m (£6.7m) £0.5m (£0.2m) (£0.5m) £25.2m * Operating profit before restructuring, goodwill charges and non-
Slide 8: Strong operational cash flow
Strong operational cash flow Debt increased to £18.9m 25.0 Ne t De bt and Fre e Cas h Flow N et D ebt Free C ash Flo w 20.0 15.0 10.0 5.0 0.0 2002 2003 2004 2005 2006 Cash generated from operations £28.7m (2005: £29.8m) After working capital increase of £6.9m (2005: £5.3m decrease) 22.0% of re
Slide 9: Key financial topics
Key financial topics UK Pension IAS19 deficit lowered UK pensions - IAS 19 deficit £1.0m (2005: £3.1m) Principally, a higher discount rate offset by greater longevity Triennial revaluation in April 2007 FX impact in 2006 ‘only’ £0.7m adverse (2005: £0.9m adverse) Adverse £1.0m in H2 vs £0.
Slide 10: Pointers for 2007
Pointers for 2007 Estimate of finance charge is £1.7m, including Loan amortisation and FX option costs Higher interest cost due to acquisitions Tax Targeting at 38% tax rate Estimate of cash taxes is 33% Capital expenditure up c. £5m on 2006 Potential Bexel Olympics “pull-forward”
Slide 11: Divisional review
vitecgroup Divisional review
Slide 12: Imaging & Staging
Imaging & Staging 24% sales growth 2006 2005 Δ £m £m % Revenue 94.6 76.2 24.1% Operating profit* 16.6 13.6 22.1% Operating margin %* 17.5% 17.8% -0.3 pts * Pre goodwill charges and profit on sale of property Imaging Growth in lighting supports for professionals D-SLR growth remains robus
Slide 13: Broadcast Systems
Broadcast Systems Continued progress and profit growth 2006 2005 Δ £m £m % Revenue 100.5 91.5 9.8% Operating profit* 6.9 5.2 32.7% Operating margin %* 6.9% 5.7% 1.2 pts * Pre goodwill charges, restructuring costs and profit on sale of property Camera Dynamics - performing well Costa Rica p
Slide 14: Broadcast Services
Broadcast Services Good cost control and successful major events 2006 2005 Δ £m £m % Revenue 27.2 27.2 0.0% Operating profit 1.7 1.2 41.7% Operating margin % 6.3% 4.4% 1.9 pts US rental market flat Traditional broadcasters under pressure Successful Turin Winter Olympics contracts Opene
Slide 15: Margins trend: Return on Sales
Margins trend H2 saw further benefits of volume and efficiency 25% 20% Return on Sales 15% 10% 5% 0% - 5% H1 2003 H2 2003 H1 2004 H2 2004 H1 2005 H2 2005 H1 2006 H2 2006 B roadcast Syst ems B roadcast Services Imaging & St aging Group 15
Slide 16: Strategy
vitecgroup Strategy
Slide 17: Strategy
Strategy Innovation, efficiency and growth Relentless launching of new products and services Exploit operational and distribution scale Acquire and integrate related businesses 17
Slide 18: A Platform for Growth
“A Platform for Growth” The Vitec Group plc CEO: Gareth Rhys Williams FD: Alastair Hewgill Imaging and Staging Broadcast Systems Broadcast Services CEO: Francesco Bernardi CEO: Joop Janssen CEO: Andy Crist 2006 2006 2006 Sales £94.6m Sales £100.5m Sales £27.2m Profit £16.6m Profit £6.9m Profit £1.7m
Slide 19: A Platform for Growth
“A Platform for Growth” The Vitec Group plc CEO: Gareth Rhys Williams FD: Alastair Hewgill Imaging and Staging Broadcast Systems Broadcast Services CEO: Francesco Bernardi CEO: Joop Janssen CEO: Andy Crist 2006 2006 2006 Sales £94.6m Sales £100.5m Sales £27.2m Profit £16.6m Profit £6.9m Profit £1.7m
Slide 20: Outlook
vitecgroup
Slide 21: 2007 Outlook
2007 Outlook Market conditions continue to be favourable Attractive product ranges 2006 acquisitions to contribute Continue to review acquisition opportunities FX adverse ‘headwind’ of some £2.5m “We look forward to further growth in 2007” 21
Slide 22: Appendices
Appendices - Organisation - Breakdown of revenue growth - Analysis of operating and free cash flow - FX update - New products launched in 2006 - Petrol - Autoscript - Tomcat Global & Brilliant Stages
Slide 23: A platform for growth
A platform for growth Previous portfolio now run as integrated units The Vitec Group plc Imaging & Staging Broadcast Systems Broadcast Services CEO: Francesco Bernardi CEO: Joop Janssen CEO: Andy Crist Imaging Accessories Camera Dynamics Communications Avenger / Gitzo / Kata / Manfrotto Autoscript C
Slide 24: Revenue growth continues
Revenue growth continues On reported and constant currency bases Δ 2005 FX 2005* 2006 Organic Acq’sition £m £m £m £m % £m % £m % Divisional revenue Imaging & Staging 76.2 (0.7) 75.5 94.6 25.3% 14.3 18.9% 4.8 6.4% Broadcast Systems 91.5 (1.1) 90.4 100.5 11.2% 8.7 9.6% 1.4 1.6% Broadcast Service
Slide 25: Operating cash flow
Operating cash flow Continued strong performance 2006 2005 Δ £m £m £m Operating profit* 25.2 20.0 5.2 Significant items (1.7) (0.8) (0.9) Depreciation / amortisation 10.6 10.1 0.5 Working capital (6.9) 5.3 (12.2) Provisions made / (utilised) 2.1 (3.4) 5.5 Other (0.6) (1.8) 1.2 Disconti
Slide 26: Free cash flow
Free cash flow Net debt up £13.5m over 12 months after £15.8m spent on acquisitions 2006 2005 Δ £m £m £m Cash generated from operations 28.7 29.8 (1.1) Capital expenditure (13.2) (11.7) (1.5) Proceeds of asset sales 2.0 2.1 (0.1) Net interest paid (1.5) (1.3) (0.2) Tax paid (5.5) (1.6) (3.
Slide 27: FX update (2007 vs 2006)
FX update (2007 vs 2006) Full year profit effect could be c. £2.5m worse, assuming rates stay unchanged throughout 2007 Year on Year Translation Transaction Total Effect £/$ €/$ £/€ £m £m £m Past years Average spot 2004 1.82 1.24 1.47 (0.9) (3.9) (4.8) Average spot 2005 1.82 1.24 1.46 0.1 (1.0) (0.9
Slide 28: New products launched in 2006
New products launched in 2006 National The ‘Fusion’ robotic Geographic range pedestal integrates with of camera bags & prior generations supports for the outdoor enthusiast Avenger X-Pole lighting support needs no floor or ceiling New Ergo-tech range of camera bags from Kata Soft Voice from Clear-Co
Slide 29: Petrol
Petrol Broadcast and high end DV camera bags Distributed through Sachtler Products for all the production crew Operates with Kata 29
Slide 30: Autoscript
Autoscript Innovative products that complement Vitec’s broadcast offering Accessories Software Packages On-Camera Units Executive Systems Rise and fall stands Go-Prompt 12 First generation wireless prompting 30
Slide 31: Tomcat & Brilliant Stages
Tomcat & Brilliant Stages Tomcat and Brilliant Stages’ high-end custom and standard staging systems for leading events around the world will complement the Group’s existing Litec business 31
Slide 32: Important Notice
Important Notice This presentation is being made only to, and is only directed at, persons to whom such presentations may lawfully be communicated (“relevant persons”).Any person who is not a relevant person should not act or rely on this presentation or any of its contents. Information in the follo
Slide 33: 2006 Full Year Results
2006 Full Year Results Gareth Rhys Williams, Chief Executive Alastair Hewgill, Finance Director 5 March 2007