Slide 1: Technology and Resources for Education
TECHNOLOGY AND RESOURCES FOR EDUCATION © 2020, RM plc
Slide 2: Agenda
AGENDA © Highlights David Brooks © Financial Review Neil Martin © 2020 Divisional Review Neil Martin © Focus & Outlook David Brooks © Q&A E) wu
Slide 3: Highlights
©HIGHLIGHTS COVID-19 drives school closures and exam cancellations © Positive Q1 offset by COVID-19 dominated Q2 as improving momentum was materially impacted by school closures and exam cancellations © Revenue down 17% and adjusted operating profits reduced by 57% driven largely by the reduction in
Slide 4: COVID-19 Impact – A Story of Two Quarters
COVID-19 IMPACT – A STORY OF TWO QUARTERS
Slide 5: COVID-19 Impact – Market Backdrop
COVID-19 IMPACT – MARKET BACKDROP • School attendance - UK schools • 10.0 8.0 UK school closures 20 March 6.0 4.0 2.0 0.0 12 19 26 02 09 16 23 30 07 14 21 28 04 11 18 25 Mar Mar Mar Apr Apr Apr Apr Apr May May May May Jun Jun Jun Jun
Slide 6: COVID-19 Impact – Three Phase Approach
COVID-19 IMPACT – THREE PHASE APPROACH
Slide 7: Financial Summary
RM pic FINANCIAL SUMMARY RM plc
Slide 8: H1 Financial Overview
H1 FINANCIAL OVERVIEW Adjusted* Revenue Operating Profit Net Debt at HY £95m £9.7m £21m £79m £14m £4.2m Improved £6.8m *Adjusted operating profit is before the amortisation of acquisition related intangible assets; one time property related items; sale of non-current assets; impairment and restructu
Slide 9: Revenue Development
REVENUE DEVELOPMENT 10% 0% • -10% -20% -30% • -40% -50% Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 30% 20% • 10% 0% -10% -20% -30% -40% -50% -60% RM Resources RM Results RM Education Q1 Q2
Slide 10: Income Statement
INCOME STATEMENT £m 2020 2019 Variance *Adjusted operating profit is before the amortisation of acquisition related intangible assets; one time property related items; sale of non-current assets; impairment and restructuring costs. FY20 is reported under IFRS16 “Leases” for the first time which impa
Slide 11: Cash Flow and Pension
CASH FLOW AND PENSION 2020 2019 Net debt at 30 Nov 15.0 5.8 Profit from operations 2.8 8.8 Adjustments 3.1 1.2 Operating cashflows 5.9 10.0 Working capital (3.0) (13.3) Cash (used)/generated in operations 2.9 (3.3) Pension contributions (1.0) (2.2) Tax paid (1.8) (1.7) Capital expenditure (2.1) (3.2
Slide 12: Financial Resilience
© FINANCIAL RESILIENCE . Significant unutilised facility and increased debt leverage covenants to 3.5x for 2020 . Good cash generative characteristics . Additional funding not deemed necessary at this stage . Financial viability maintained through stress test scenarios
Slide 13: Divisional Review
olin) Pe : 2 et Ww RM plc 2020 DIVISIONAL REVIEW RM plc
Slide 14: RM Resources
RM RESOURCES 10.0% Weekly order intake vs 2019 0.0% -10.0% -20.0% School closure announcement -30.0% -40.0% -50.0% Return from Easter break -60.0% -70.0% Announcement of school openings -80.0% in England Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk Wk 4 5 6 7 8 9 10 11 12 13 14
Slide 15: RM Results
RM RESULTS Geography RM Customer Expected Exam Exam Bodies Cancellations Revenue Adjusted Operating Profit 16.8 4.5 15.1 £m £m 3.0 2019 2020 2019 2020
Slide 16: RM Education
RM EDUCATION Initiatives launched since COVID-19 lockdown Revenue Adjusted Operating Profit 29.5 29.1 4.9 £m 4.3 £m 2019 2020 2019 2020
Slide 17: Focus & Outlook
RM pic FOCUS & OUTLOOK RM plc E
Slide 18: Potential shift in education market
Potential shift in education market Technology-enabled blended learning is here to stay The move to digitising education will accelerate change Role of technology in assessment will increase The widening attainment gap will be a concern and focus These changes are aligned to our existing strategic t
Slide 19: Outlook
© OUTLOOK RM plc © Trading is starting to improve as schools open. Exam boards planning how to deliver assessments in 2021 © We expect to remain profitable in H2 © Major capital programmes set to re-start © Education needs support and innovation more than ever
Slide 20: Q&A
Q&A
Slide 21: Appendix
RM plc APPENDIX
Slide 22: Income Statement
CINCOME STATEMENT 6 MONTHS TO 31 MAY 2020 2019 £M ADJUSTED ADJUSTMENTS TOTAL ADJUSTED ADJUSTMENTS TOTAL Revenue - 79.3 - 95.5 Cost of sales - (45.7) - (54.7) Gross profit - 33.5 - 40.7 Gross profit % - 42.3% - 42.7% Operating expenses - (29.3) - (31.0) Amortisation of acquisition related intangibles
Slide 23: Cash Flow
©CASH FLOW OPERATING CASH FLOWS - £M Profit from operations Amortisation & impairment of intangibles Depreciation & impairment of PPE Share-based payments Provisions Other adjustments Operating cash flows before movements in working capital (Increase)/decrease in inventories (Increase)/decrease in r
Slide 24: Balance Sheet
© BALANCE SHEET £M 31 MAY 2020 31 MAY 2019 Goodwill 45.2 Intangible assets 18.6 Property, plant & equipment 10.3 Right of use asset - Defined benefit pension surplus 0.7 Other receivables 0.9 Contract fulfilment assets 1.5 Deferred tax assets 5.7 Total non-current assets 82.9 Inventories 25.0 Trade
Slide 25: RM Resources
ORM RESOURCES Helping teachers to teach and learners to learn by developing engaging and inspiring resources Provide education supplies and . curriculum products for schools and 2 nurseries in the UK and internationally VA - : classroom proposition VALUE improving learning outcomes prop E ADD Unique
Slide 26: RM Results
ORM RESULTS Driving the global modernisation of assessment = A global leader in providing digital assessment és solutions that support lifelong learning VEA \ ! / Improve the quality, efficiency Secure, seamless and VALUE and speed of our customer’s hassle free e-assessment > assessment lifecycle an
Slide 27: RM Education
Helping UK schools to improve the impact of technology on teaching and learning Software, services and technology provider to UK schools and colleges Delivering cost effective, Helping schools to make the reliable, secure technology most of their IT investment Growth in multi- Committed Increasing a
Slide 28: Divisional Summary
DIVISIONAL SUMMARY Revenue £M Adjusted Operating Margin 2020 2019 Variance 2020 2019 Variance RM Resources RM Resources RM Results RM Results RM Education RM Education Group Group Adjusted Operating Profit £M Revenue Adjusted Operating Profit 2020 2019 Variance RM Resources RM Results RM Education C