Johnson Service Group Plc · LSE:JSG
Johnson Service — H1 2023 Earnings Presentation
32 slides from Johnson Service's earnings presentation, Sep 5, 2023
Slide 1: Interim Results
Interim Results 30 June 2023 “Strong organic growth. Confidence for the full year A and for longer term growth.” y Chief Executive Officer Chief Financial Officer
Slide 2: Contents
1) 2) CONTENTS Operational Highlights Financials Investment Sustainability Operational Performance Outlook Investment Case Appendices
Slide 3: Operational Highlights
JOHNSON Service Group PLC OPERATIONAL HIGHLIGHTS “we expect the full year outturn to be slightly ahead of the guidance provided in our July trading update."
Slide 4: Operational Highlights
2023 Interim Results S@: JOHNSON q Service Group PLC Operational Highlights ¢ Continuing strong organic growth in HORECA with increased number of locations serviced ¢ Increasing sales activity and strengthening pipeline of new business enquiries in both Workwear and HORECA « Inflationary cost increa
Slide 5: Slide 5
Slide 6: Financial Highlights
2023 Interim Results Financial Highlights 2023 2022 2022 H1 H1 FY Revenue (£m) 215.0 1762 3857 Adjusted EBITDA (£m)'? 57.7 428 104.9 Adjusted EBITDA margin (%)'2 26.8 243 272 Adjusted operating profit (Em)? 19.0 128 A412 Adjusted operating margin (%)? 8.8 73 10.7 Adjusted PBT (£m)?5 16.4 11.2 38.2 A
Slide 7: Energy and Employment Costs
Energy • Market remains volatile although energy unit prices have generally fallen • 2023 H1 energy costs represented 10.3% of revenue (2019 H1: 6.5%; 2022 H1: 9.3%; 2022 FY: 9.4%) 2023 HY Cost Analysis • Material price increases implemented across our customer base to compensate 8.8% • Impact of en
Slide 8: Cash Flow
2023 Interim Results Cash Flow Adjusted operating profit Depreciation, impairment and software amortisation Working capital fixed assets and software Capital expenditure | rental stocks (net) fixed asset proceeds Interest Tax Exceptional items (cash effect) Dividends Additional pension contributions
Slide 9: Other Financial Information
2023 Interim Results Other Financial Information Interest « Interest cost of £2.6m including £1.0m relating to lease liabilities (2022 H1: £1.6m and £0.8m respectively; 2022 FY: £3.0m and £1.5m respectively) « Notional pension interest cost of £0.2m (2022 H1: Enil; 2022 FY: Enil) Bank Facility + £85
Slide 10: Investment
“We continue to believe investing in our estate an advantage in the delivering unrivalled our customers int efficient way."
Slide 11: Acquisition of Celtic Linen
2023 Interim Results Acquisition of Celtic Linen ‘e JOHNSON « Service Group PLC = Operates in the Republic of Ireland's (‘ROI’) Healthcare and HORECA sectors, delivering over one million items weekly = €31.5m acquisition in August 2023 - largest linen supplier to ROls Healthcare market - second larg
Slide 12: Acquisition of Regency Laundry
2023 Interim Results te JOHNSON « Service Group PLC Acquisition of Regency Laundry = £5.75m acquisition in February 2023 = 26,000 sq ft leasehold processing facility in Corsham = Operates in the luxury/bespoke segment of the HORECA sector in the South of England = Regularly delivers c200k pieces of
Slide 13: New HORECA Site
2023 Interim Results 9; e JOHNSON w Service Group PLC New HORECA Site = 46,000 sq ft strategically located leasehold site in the South-East = £16.0m investment split 50:50 FY23/FY24 = Highly automated and energy efficient equipment = Anticipated to open in the second half of 2024 = Initial capacity
Slide 14: Capital Expenditure
2023 Interim Results “eee” s, fe: Capital Expenditure JOHNSON Service Group PLC fF 4 2. j mM Automated sortation system en” Glasgow Investment > — Granthant Extension and additional ironers New commercial vehicles 14
Slide 15: Sustainability
Sustainability “We continue to make excellent progress with embedding our sustainability programme across the Group...” ak way Change the future.
Slide 16: Sustainability progress
• Electric vehicles / HVO fuel being utilised where practicable • Successful implementation of innovative water recycling technology at our Shaftesbury site continues to consistently deliver over 75% water recycling rates; further installation underway in Hayle • Formal development of our approach a
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Slide 18: Operational Performance: Workwear
2023 Interim Results Operational Performance JOHNSON Service Group PLC * JOHNSONS Workwear 2023 H1 | 2022 H1 | 2022 FY Revenue (£m) 66.0 134.6 Adjusted EBITDA (£m)'25 22.2 46.6 Adjusted EBITDA margin (%)'23 33.6 34.6 Adjusted operating profit (£m)?3 10.0 21.9 Adjusted operating margin (%)* 15.2 163
Slide 19: 2023 Interim Results
2023 Interim Results Service Group PLC
Slide 20: Operational Performance: HORECA
2023 Interim Results Operational Performance JOHNSON Service Group PLC JOHNSONS ; JOHNSONS Hotel Linen Hotel Restaurant & Catering Linen Revenue (£m) 143.9 110.2 251.1 Adjusted EBITDA (£m)'2 36.3 23 63.0 Adjusted EBITDA margin (%)'2 25.2 211 25.1 Adjusted operating profit (Em)? 10.9 5S) 241 Adjusted
Slide 21: 2023 Interim Results
2023 Interim Results Service Group PLC
Slide 22: Outlook
JOHNSON Service Group PLC OUTLOOK “The Board remains of the opinion that the operating margin of each individual Division can return to the historic levels achieved in 2019 however, the timing of achieving this is dependant on where a number of inflationary pressures, most notably energy and labour,
Slide 23: Outlook
2023 Interim Results Outlook JOHNSON Service Group PLC * Trading momentum remains encouraging = Challenges of cost pressures are being proactively managed ~ * Confident in medium and long-term growth prospects * EBITDA margin will continue to improve towards pre-COVID levels over the medium term = E
Slide 24: Investment Case
JOHNSON Service Group PLC INVESTMENT CASE “The Group's objective is to employ a disciplined approach to investment, returns and capital efficiency to deliver , sustainable compounding growth whilst |. also maintaining a strong balance sheet.” :
Slide 25: Disposals and Acquisitions revenue mix
2012 Revenue 2022 Revenue 2012 Revenue 2022 Revenue 21% 22% 35% 53% 26% 65% 78% 100% Textile Services HORECA Drycleaning Workwear Facilities Management Disposals Acquisitions
Slide 26: An Essential Service Provider
An Essential Quality Service A Local Service Service Provider We provide our Our proximity to The services we customers enables us to customers with a provide to our quickly respond to their quality service which customers are essential needs they can rely upon to their business Sustainable Substitu
Slide 27: Strong Organic Growth
Market Leader with Scale Advantages Balance Sheet Strength Provides Flexibility ▪ Consistently organically extending market leadership ▪ Leverage ratio expected to remain below management’s ▪ High barriers to entry target range of 1.0-1.5x ▪ Scale and depth to provide nationwide coverage ▪ Strong ca
Slide 28: Clear Priorities for use of Capital
Clear Priorities for use of Capital ▪ The Group maintains a strong Balance Sheet ▪ Medium to long-term leverage target of 1x – 1.5x, other than for short term specific exceptions ▪ Framework remains unchanged and will continue to take into account the following criteria as part of a periodic review
Slide 29: Appendices
JOHNSON Service Group PLC Appendices
Slide 30: Segmental Analysis
2023 Interim Results Appendix 1 . JOHNSON Segmental Analysis Service Group PLC 2023 HY 2022 HY 2022 FY Adjusted Revenue Revenue £m £m Workwear 134.6 21.9 46.6 HORECA 143.9 10.9 363 110.2 5S) 23.3 251.1 241 63.0 Textile Rental 215.0 22.0 60.7 176.2 15.5 45.5 385.7 46.0 109.6 Group Costs - (3.0) (3.0)
Slide 31: Financial Track Record
2023 Interim Results Appendix 2 Financial Track Record Revenue (£m) 3857 2018 2019 2020 2021 2022 Adjusted Operating Profit (£m) 528 46.0 412 2018 2019 2021 2022 19 Adjusted EBITDA (£m) 119.0 1014 1049 2018 2019 2020 2021 2022 JOHNSON Serv ce Greup PLC Adjusted Diluted EPS excluding super deduction
Slide 32: www.jsg.com
JOHNSON Service Group PLC www.jsg.com
Johnson Service Group — H1 2023 Earnings Presentation on 6ix