Smiths News Plc · LSE:SNWS
Smiths News — FY2021 Earnings Presentation
20 slides from Smiths News's earnings presentation, Nov 4, 2021
Slide 1: Preliminary Results
Preliminary Results 4 November 2021
Slide 2: Jon Bunting, Chief Executive Officer
Jon Bunting Chief Executive Officer
Slide 3: Headlines FY2021
Headlines FY2021 Performance ahead of expectations • Adjusted EBITDA of £42.6m up 9% • Free cash flow of £24.0m up 120% • Bank net debt of £53.2m, an improvement of 33% Operational performance underpinning progress • Resilient markets and business model • Focused cost control delivering above target
Slide 4: Tony Grace, Executive Director
Tony Grace Executive Director
Slide 5: Continuing adjusted income statement
Continuing adjusted income statement £m Adjusted FY 2021 FY 2020 Change % Revenue 1,109.6 1,164.5 -4.7% Operating profit 39.6 35.1 12.8% Operating margin 3.6% 3.0% Net finance charges (8.7) (7.2) -20.8% Profit before tax 30.9 27.9 10.8% Tax (4.6) (4.2) 9.5% Profit after tax 26.3 23.7 11.0% EBITDA (e
Slide 6: Adjusting items – continuing
Adjusting items – continuing £m Adjusted FY 2021 FY 2020 Network and re-organisation costs 0.1 (6.8) Asset impairment (1.6) (6.4) Share of profits from joint ventures (0.3) - Pensions (1.0) (0.9) Transformation programme planning costs (1.1) - Other 0.1 0.1 Total before tax and interest (3.8) (14.0)
Slide 7: Free cash flow – continuing
Free cash flow – continuing £m FY 2021 FY 2020 Operating profit – adjusted 39.6 35.1 Depreciation and amortisation 10.7 10.6 EBITDA (including IFRS16) 50.3 45.7 Working capital 1.0 (5.7) Capital expenditure (2.4) (7.0) Lease payments (5.9) (6.8) Net interest and fees (9.5) (6.5) Taxation (6.3) (2.2)
Slide 8: Net debt
Net debt £m Adjusted Aug 2021 Aug 2020 Opening bank net debt (79.7) (72.1) Free cash flow 24.0 10.9 Lease creditor & other - 0.5 Dividend paid (1.2) (2.4) Purchase of own shares ESS (2.6) (0.7) Disposal costs - (3.7) Discontinued: pension deficit recovery - (0.8) Discontinued: Tuffnells working capi
Slide 9: IFRS 16 reconciliation
IFRS 16 reconciliation Reconciliation of EBITDA £m FY 2021 FY 2020 EBITDA (IFRS 16) – reported 50.3 45.7 Less: Rent charge (IAS17) (7.7) (6.6) EBITDA (ex IFRS16) 42.6 39.1 Net Debt (IFRS16) – reported (81.2) (112.9) Add back: IFRS16 lease liability 29.2 33.4 Add back: Unamortised bank fees (1.2) (0.
Slide 10: Jon Bunting, Chief Executive Officer
Jon Bunting Chief Executive Officer
Slide 11: Year at a glance
Year at a glance • Revenue – down 4.7% • EBITDA – up 9% Contracts secured • Cash flow – up 120% Refinancing • Net debt – down 33% Lockdown restrictions • Dividend 1.5p Sales recovery H1 Revenue – 11.5% H2 Revenue + 3.1% Sustainability review Dividends 0.5p 1.0p Operations efficiency £6.0m savings In
Slide 12: Plans and priorities on track
Plans and priorities on track Operations • Service exceeding KPI targets • Cost savings offsetting margin decline • Clear plans for further cost savings • Sustainability review driving new thinking Sales and markets • Market restabilising • Opportunities for sales efficiency and targeted growth • Mu
Slide 13: Sales performance
Sales performance 15% • Clear and gradual recovery from lows of first lockdown 10% 5% • Impact on travel and high street locations now easing 0% -5% • Pandemic estimated to have -10% impacted market by an additional 5% -15% -20% • Trends expected to re-stabilise -25% in the year ahead -30% H1 2019 H
Slide 14: Inflationary pressures
Inflationary pressures Immediate challenges • Driver shortages • Fuel costs • Contractor pressures • Warehouse operatives Strategy for mitigation • Service KPIs are paramount • Targeted investment • Routing efficiency • Robust solutions Impact in FY2022 • Net impact currently estimated at (£2.0m) EB
Slide 15: Sustainability
Sustainability Context • Responsible market leader • Changing stakeholder expectations • More progressive and proactive vision Objectives of review • Holistic approach • Adopt recognised standards • Compatibility with commercial progress • Strengthen our stakeholder partnerships Progress to date • F
Slide 16: Priorities
Priorities • Service and efficiency – maintain KPIs and deliver targeted efficiencies • Inflationary pressures – sustainable response to shift in cost profile • Sales development – EPoS based replenishment and returns with all major multiple retailers by FY2023 • Sustainability – transparent targets
Slide 17: Summary and outlook
Summary and outlook A strong performance in a challenging year • Operational control underpinning financial progress • Achievement of all key targets • Clear plans to maintain our direction Delivering shareholder value • Strong underlying finances • Prudent capital management • Restoration of regula
Slide 18: Any questions?
Any questions? é
Slide 19: Smiths
smiths @ ® martin lavell ue systems
Slide 20: 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’