Novus Holdings Ltd. · JSE:NVS
Novus — FY2018 Earnings Presentation
23 slides from Novus's earnings presentation, June 2018
Slide 1: Annual Financial Results for the financial year ended 31 March 2018
PRESENTATION JUNE 2018 Annual Financial Results for the financial year ended 31 March 2018 NOVUS HOLDINGS | 2018 ANNUAL RESULTS
Slide 2: Contents
Contents EXECUTIVE OVERVIEW FINANCIAL REVIEW OPERATING REVIEW OUTLOOK PRESENTED BY: Neil Birch – Chief Executive Officer NOVUS HOLDINGS | 2018 ANNUAL RESULTS CONTENTS 2
Slide 3: Executive Overview
EXECUTIVE OVERVIEW NOVUS HOLDINGS | 2018 ANNUAL RESULTS 3
Slide 4: Results Summary
Results Summary Revenue R4,308m (FY ‘17: R4,312m) (0,1%) Operating profit excl. impairments and profit/(loss) on disposal of assets R501m (FY ’17: R529m) (5,3 %) Headline earnings per share 102,9c (FY ‘17: 110,8c) (7,1 %) Dividend 52 cps (FY ‘17: 56 cps) (7,1%) NOVUS HOLDINGS | 2018 ANNUAL RESULTS E
Slide 5: Business Features – For Financial Year Ended 31 March 2018
Business Features – For Financial Year Ended 31 March 2018 Core EBIT FY2017: R537m Print volumes under pressure, with volumes declining by 11% during the year. While GP margins remain stable, the inability to immediately remove Core business - R118m overheads from the business is impacting profitabi
Slide 6: Financial Review
FINANCIAL REVIEW NOVUS HOLDINGS | 2018 ANNUAL RESULTS 6
Slide 7: Group Overview
Group Overview REVENUE • Printing revenues (84% of overall revenue) remained under pressure due to volume declines on all product categories with an overall tonnage decline of 11,5%. R’000 FY15 FY16 FY17 FY18 • The acquisition of ITB Plastics (ITB) resulted in an additional R265m being contributed b
Slide 8: Print Segment: Commentary
REVENUE Print Segment: Commentary • Revenue in the Print segment declined by 8,8% compared to prior year. • Volumes declined by 11,5% across product categories compared to prior year. R’000 FY15 FY16 FY17 FY18 • Significant volume declines on magazines and newspaper publications. • Print segment’s r
Slide 9: Tissue Segment: Commentary
REVENUE Tissue Segment: Commentary • Driven by increased capacity utilisation as tonnage increased by 49%. • Refurbishment and upgrade of tissue mill 1 meant that some capacity was lost during the latter part of the 2017 calendar R’000 FY15 FY16 FY17 FY18 year. • Full production only possible from D
Slide 10: Packaging Segment: Labels Commentary
Packaging Segment: Labels Commentary R’000 FY15 FY16 FY17 FY18 REVENUE • Focus on business development initiatives resulted in 250 revenues increasing by 61,9% from prior year. • Africa sales of R45m (prior year R41m) were achieved, 210 predominantly in wet glue labels for alcoholic beverage 24,2% 2
Slide 11: Packaging Segment: ITB Commentary
Packaging Segment: ITB Commentary R’000 FY18 REVENUE 300 • Business generated satisfactory revenue of R265m for 265 the six months that it was part of the Group. • The business experienced disruptions due to the relocation of 250 14,0% equipment to a consolidated location. 200 GROSS MARGIN • Gross p
Slide 12: Group Income Statement Summary
Group Income Statement Summary (Financial year ended 31 March) 2018 2017 % CHANGE (Rounded) Revenue R 4 308 m R 4 312 m (0,1 %) ▼ Gross profit R 1 126 m R 1 105 m 1,9% ▲ Gross margin 26,2 % 25,6 % 0,6 % ▲ Overheads R 626 m R 576 m 8,7 % ▲ Operating profit R 501 m R 529 m (5,3 %) ▼ (Excluding impairm
Slide 13: Cash Position Analysis
Cash Position Analysis 2018 R’m 2017 R’m Cash generated from operations 684 ▲ 662 Net property, plant, equipment and intangibles -116 ▲ -236 FREE CASH FLOW • Cash generated from Taxation paid -169 ▲ -189 operations improved largely on the back of reduced Free cash flow 399 ▲ 236 working capital outf
Slide 14: Capital Expenditure
Capital Expenditure • Expansion capex in FY2018 was kept to a • Majority of the R87m capex was incurred on Tissue, OTHER PRINT minimum, with majority of spend relating to as project to refurbish tissue mill one was completed securing uninterrupted water supply in Cape during the year, together with
Slide 15: Right-sizing of the Business Units
Right-sizing of the Business Units TISSUE PRINT The following impairments have been raised during the year as we right-size our operations: - Print R201,9m - Tissue R170,2m • Right-sizing of operations and capacity • Revised tissue business model removed by way of the following: following final impl
Slide 16: Operating Review
OPERATING REVIEW NOVUS HOLDINGS | 2018 ANNUAL RESULTS
Slide 17: Revenue Contribution: Print Product Category
Revenue Contribution: Print Product Category SHARE OF GROUP SHARE OF GROUP VOLUME CATEGORY REVENUE 2018 REVENUE 2017 GROWTH/(DECLINE) Magazines 15,6 % 19,4% (19,6%) ▼ Newspapers 18,6% 20,7% (10,3%) ▼ Security Products -% -% - The Print division remains at the core Retail Inserts & Catalogues 28,3% 2
Slide 18: Revenue Contribution: Packaging and Tissue Product Category
Revenue Contribution: Packaging and Tissue Product Category SHARE OF GROUP SHARE OF GROUP VOLUME CATEGORY REVENUE 2018 REVENUE 2017 GROWTH/(DECLINE) Labels 4,9% 3,1% 99,1% ▲ ITB 6,1% -% - Tissue 4,1% 3,6% 49,0% ▲ Security Products 0,6% 1,0% - This segment currently contributes 16,0% of AFRICA SALES
Slide 19: Outlook
OUTLOOK NOVUS HOLDINGS | 2018 ANNUAL RESULTS
Slide 20: Segment Updates / Focus Areas
Segment Updates / Focus Areas PACKAGING TISSUE PRINT • Print volumes continue to decline in • Tissue is finally at a stage where the • Continued growth and improved line with general industry trends. actual process can be tested against contribution from Labels is very • The strong retail relationsh
Slide 21: Group Outlook
Group Outlook 1 2 3 The environment remains While the general economic The recent Print merge and challenging as most markets are outlook remains constrained ITB rationalization is part of an still feeling the effect of a enjoys recognition as an innovator ongoing process and while that constrained
Slide 22: Questions
QUESTIONS NOVUS HOLDINGS | 2018 ANNUAL RESULTS
Slide 23: Investor Relations Contacts
Investor Relations Contacts +27 21 550 2500 Investor.Relations@novus.holdings NOVUS HOLDINGS | 2018 ANNUAL RESULTS