Smiths News Plc · LSE:SNWS
Smiths News — FY2023 Earnings Presentation
25 slides from Smiths News's earnings presentation, Nov 8, 2023
Slide 1: Preliminary Results
Preliminary Results 8 November 2023
Slide 2: Headlines
Jon Bunting Chief Executive Officer Headlines
Slide 3: A good performance in all key areas
Headlines Key financial measures • Adjusted Operating Profit of £38.8m up 1.8% • FCF of £21.8m supporting £10m of dividends • A good Average Net Debt halved to £25.0m Core operations performance • • Cover price rises offsetting volume declines One off events further boosting sales and margin in all
Slide 4: Financial performance
Paul Baker Chief Financial Officer Financial performance
Slide 5: Financial headlines
Financial headlines Revenue £1,091.9m +0.2% Revenue Price increases, World Cup +1.8% and Royal Succession Adjusted operating profit £38.8m Adjusted earnings per share 10.8p 0% Free cash outflow Prior year includes one-off receipts of £22.1m Free cash flow £21.8m -54.8% Average bank net debt £25.0m -
Slide 6: Revenue year on year
Revenue year on year Newspapers Out-performing historic range Benefit of price increases and Royal Succession Collectables +43% Newspapers +0.6% Magazines Within historic range Magazines -5.1% Collectables World Cup Pokémon trading cards Football collections 6
Slide 7: Adjusted income statement
Adjusted income statement Operating profit +£0.7m (+1.8%) £m Adjusted FY2023 FY2022 Better wholesale margin, and Revenue 1,091.9 1,089.3 additional revenue offsetting impact of inflation Operating profit 38.8 38.1 Operating margin 3.7% 3.5% Net finance charges (6.5) (7.0) Profit before tax 32.3 31.1
Slide 8: Free cash flow – continuing
Free cash flow – continuing £m FY2023 FY2022 Free cash flow £21.8m Adjusted Operating profit 38.8 38.1 Prior year benefitted from one-off Depreciation and amortisation 9.2 10.5 receipts. Adjusted EBITDA 48.0 48.6 FY23 working capital is impacted by Working capital (4.9) (0.6) c.£5m of trade receivab
Slide 9: Movement in bank net debt
Movement in bank net debt Bank Net debt : EBITDA (ex IFRS16) FY21 1.2x FY22 0.3x FY23 0.1x Average net debt FY21 £89m FY22 £50m FY23 £25m Cash flow FY21 £20.4m FY22 £23.0m Working capital impacted by c.£5m of trade receivables paid in first week of FY24 FY23 £24.7m 9
Slide 10: Net debt timing – impact of 53rd week on FY2024
Net debt timing – impact of 53rd week on FY2024 Net debt increases in the first week of FY24 due to the timing of publisher payments FY24 close on 31 August 2024 will include these payments 10
Slide 11: Strategic update
Jon Bunting Chief Executive Officer Strategic update
Slide 12: A good performance with focused delivery
Strong headline results Strong sales benefitting from price and margin mix Inflationary impacts A good managed to plan performance Sustainable efficiencies progressing well with focused Accelerated contract awards delivery secured to 2029 Progress on new organic revenue streams 12
Slide 13: Strategic priorities
Strategic priorities Value creation Enhancing Leveraging our Delivering for the core capabilities all stakeholders 13
Slide 14: Enhancing the core
Enhancing the core Milestone achievement 65% Network clarity secured to 2029 New contracts – London and Midlands Excellent visibility of cash flow 35% ongoing agreements Existing agreements ongoing Contracted sales revenues Contracted to at least 2029 Existing agreements to 2025/2026 14
Slide 15: Service Efficiency
Enhancing the core Service Efficiency Timeliness and accuracy Network and routing consolidation Integration of technology Targeted savings of c.£5.0m in FY24 Leading customer satisfaction Overhead and central services 15
Slide 16: Leveraging our capabilities
Future direction Leveraging our capabilities Leveraging capabilities Moving up the value chain Service Logistics Supply chain Direct to Categories expansion services integration consumer & data 16
Slide 17: Logistics, Supply chain, Direct to consumer
Opportunity assessment Leveraging our capabilities Logistics Supply chain Renting of excess space Home News Delivery Sortation services Direct to Retail & Regional Press Direct to consumer Categories & data Love Media - joint venture investment DVDs and Books Continued experimentation Growing catego
Slide 18: Service expansion
Opportunity assessment Leveraging our capabilities Service expansion Network wide roll out from February 2023 Circa 4,000 paying customers and growing steadily New categories and new customer groups in the pipeline Expected to deliver c.£1m contribution in FY24 18
Slide 19: Delivering for all stakeholders
Future direction Delivering for all stakeholders Leveraging capabilities Moving up the value chain Retailers Publishers Shareholders People Environment 19
Slide 20: ESG progress
Delivering for all stakeholders ESG progress Science based targeting People: diversity, inclusion and capability Supply chain partnerships Community and Governance 20
Slide 21: Priorities FY2024
Priorities FY2024 Continue to manage inflationary pressure Sustainable cost reduction of circa £5.0m Renew remaining large publisher contracts Increase contribution from new business opportunities Refinance our banking facilities which run to August 2025 21
Slide 22: Summary and outlook
Summary and outlook Performance • The new financial year has started well to date • • Inflation in line with plan Cost savings on track in line with • New revenues growing • our plans On track to meet full year market expectations 22
Slide 23: Any questions?
Any questions? é
Slide 24: 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 25: smiths
smiths