Slide 1: 2021 Half Year Results
Heading Sub-Heading Date 2021 Half Year Results September 2021 Delivering experiences Beyond expectations DELIVERING EXPERIENCES BEYOND EXPECTATIONS 1
Slide 2: Financial Highlights
Financial Highlights Revenue Growth Organic growth £390.1m 29% 26% 2020: £302.0m CFX: 30% 2020: (22.1%) Gross Margin Adjusted operating profit1 Adjusted PBT2 15.1% £13.9m £13.0m 2020: 14.5% 2020: £4.1m 2020: £3.2m Interim Dividend Adjusted EPS Net debt 3.3p 278% £56.0m 2020: Nil to 10.08p 2020: £41.
Slide 3: Revenue progression
Revenue progression • Organic revenue growth 25.6% in H1 2021. Overall revenue 29% Total Revenue per month up on 2020 and 22% up on 2019; • US fulfilment business ceased at end of 2020. Excluding this from comparative, overall growth 43% in H1 2021; • 2020 comparative seriously impacted by Covid-19
Slide 4: Gross margin progression
Gross margin progression 2019v2020 2019 v 2020 Gross margin improvement of 0.6% compared with H1 2020. 2019 2019 margin margin 16.6% 16.6% 16.6% 16.6% Broadly, margin impacted by volume and mix factors: Volume (0.3)% (1.3)% Volume Mix (0.3)% (1.3)% (1.2)% (0.8)% • Volume: - Linked primarily to purch
Slide 5: Current position
Current position General Market Conditions • Further lockdowns in early 2021 dented pace of recovery. Recent lockdowns in ANZ; • Relaxation of restrictions in UK&I has had beneficial impact – but still further to go; • Corporate market recovery slower than expected – but more enquiries. Recovery mos
Slide 6: Long term strategy remains unchanged
Long term strategy remains unchanged Why? How? Success Measures Specialisation Relevance Portfolio management Growth in technical product sales1 Profitability Acquisition Long term growth in gross margin Defensibility Value add services Geographical Support Acquisition Number of territories Coverage
Slide 7: Progress
Progress Specialisation 2020 2021 9% 8% 34% 36% ▪ No significant change in mix of technologies 42% 41% ▪ Relative recovery in displays importance; 15% 15% Displays Projection Technical Other Displays Projection Technical Other Geographical Coverage 2020 2021 7.9% 7.4% ▪ Operations in 20 territories;
Slide 8: AVIXA market report June 2021
AVIXA market report June 2021 Global AV market declined • Decline in 2020 updated to 17% from 8% estimate in July 2020. EMEA decline 20%; by 17% in 2020. Growth • Market expected to recover to previous trajectory; in 2021 of 8.4% and • Retail, cinema, events and hospitality were hardest hit end user
Slide 9: Revenue bridge H1 2021
vs H1 2020 Revenue bridge H1 2021 30.1% Revenue increase (CFX) Organic 25.6% 25.6% £390.1m Organic revenue increase M&A FX 4.5% (0.9)% 29.2% £302.0m 9
Slide 10: UK & Ireland
UK & Ireland 7 • Trading continues to improve with enquiries increasing following the easing of lockdowns. New brands added in the last year are preforming well. • Margin recovery to 15.4% (vs 14.0% full year 2020) as vendor rebates normalise. Offices in Mix will take longer as higher margin rental,
Slide 11: EMEA
EMEA • EMEA has continue to build scale and gain market share, especially in Germany and France, with regional growth of 66.2%. • Gross margin consistent with prior years. • NMK and eLink acquisitions performing well. • Operating margin of 4.3% ahead of both H1 2020 (1.6%) and H1 2019 (3.7%) 11
Slide 12: Asia Pacific
Asia Pacific • APAC revenue relative flat on the prior year. • Broadcast business has performed well and enquiries have increased for larger projects. • Recent severe lockdowns have slowed improvement and increased short-term uncertainty. 8 Offices in Asia Pacific 12
Slide 13: North America
North America • Trading improved steadily with revenue of £29.1m at a gross margin of 17.2%. • Organic growth of c30% excluding low margin fulfilment activity exited in 2020. • Focus on inventory management with positive benefit from sale of aged stock. 1 Office in North America 1 13
Slide 14: Trading results
Trading results • Strong revenue recovery with growth of 30%. Summary Income Statement Constant • Organic growth of 25.6% despite impact of exiting H1 H1 Actual Starin fulfilment activity in December 2020 £m currency 2021 2020 change (approximately 38% like for like). change • Partial recovery in gr
Slide 15: Strong balance sheet
Strong balance sheet Balance Sheet £m H1 2021 H1 2020 • Acquisitions of NMK and eLink in the period Non-current assets 105.4 93.8 • Continued focus on cash management whilst investing in working capital to support strong growth Inventories 117.8 110.6 • Adjusted net debt of £56.0m (£21.0m at Decembe
Slide 16: Investing in growth
Investing in growth Cash Flow • Net cash outflow from operations before tax of £5.2m £m H1 2021 H1 2020 (H1 2020 inflow: £9.0m) Adjusted EBITDA 16.7 7.1 • Return to more normal working capital patterns results Decrease/(Increase) in stock (28.7) 8.3 in adjusted EBITDA cash conversion of -31%. This r
Slide 17: Acquisitions
Acquisitions • Acquisition in April 2021 of unified communications division of • Based in UAE, with separate company in Qatar. Operating eLink; across Middle East; • Based in Hamburg and operating throughout the DACH region; • Strong heritage in professional audio, carrying premium brands such as Sh
Slide 18: Summary and outlook
Summary and outlook Continued recovery, with more to come Revenue growth Gross Margin Adj. Op. Profit1 Adj. Net Debt2 29% 15.1% 238% £56.0m CFX: 30% 2020: 14.5% CFX: 240% 1.7x Adj. EBITDA Strong market position Market Acquisitions Good leadership well cash positions integrated generation Positioned
Slide 19: Appendices
Appendices 19
Slide 20: Experienced management team and Board
Experienced management team and Board Andrew Herbert Stephen Fenby Stephen Lamb Mike Ashley Hilary Wright Non-Executive Chairman Managing Director Finance Director Non-Executive Director Non-Executive Director Group Finance Director of Joined Midwich as Finance Joined end July 2018 Extensive retail
Slide 21: Executive Leadership Team
Executive Leadership Team Michael Broadbent Tom Sumner Mark Lowe Lutz Kern Managing Director – Asia Pacific Managing Director - EMEA Managing Director – UK and Regional Director - DACH Ireland Joined as Managing Director Joined Midwich in 2007 Joined Midwich Business After working in the AV industry
Slide 22: Case study: Inside the Midwich-equipped PYTCHAir private jet
Case study Inside the Midwich-equipped PYTCHAir private jet A private jet has been converted into an environmentally friendly and ultra-modern meeting space for the PYTCH live events and virtual studio company with discreet but powerful technology from global AV distributor, Midwich. “Rather than bu
Slide 23: Case study: Theatre of Digital Art (ToDa) Dubai, UAE
Case study Theatre of Digital Art (ToDa) Dubai, UAE ToDA is the very first and unique Theatre of Digital Art in the UAE which offers its visitors to experience art differently from a gallery visit. Its uniqueness lies in the modern, immersive way of discovering masterpieces of the world's most notab
Slide 24: ToDA – Theatre of Digital Art
ToDA – Theatre of Digital Art 24
Slide 25: Expected market trends
Expected market trends Corporate • COVID-19 has accelerated hybrid working adoption and widespread cloud conferencing usage; • Even businesses who reject a hybrid model will need to invest in solutions to support those self isolating and to plan for continuity in the event of further outbreaks and c
Slide 26: Market share guidance
Market share guidance Estimated Addressable global market (2019) customer value add plus manufacturer direct Low margin $116.9bn $58.5bn or fulfilment Additional potential upsides from: AV • increase service revenue; • take direct business through the $246.6bn $233.8bn channel; • take some fulfilmen
Slide 27: Long track record of growth
Long track record of growth Fourteen years of revenue growth. Thirteen years of GP% growth 800 20% 712 686 18% 700 16% 600 574 14% Gross margin (%) Revenue (£m) 500 472 12% 400 370 10% 314 291 8% 300 234 202 203 211 6% 200 173 184 157 134 4% 100 2% 0 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2
Slide 28: Why Midwich?
Why Midwich? -WHY OUR CUSTOMERS CHOOSE U ( a 8 Vertical market focus Training and events Nurturing tong- term relationships ‘We help our customers to win and deliver successful projects” Sp Midwich Group Plc Credit/business Working 100% services together trade only - Q Market and web Award-winning P
Slide 29: Demand drivers in the AV Industry
Demand drivers in the AV Industry Driver Reason Examples • Touch screen in shopping centre reduces need for help desk staff Reduces people costs • Touch screen ordering in fast food outlet reduces serving staff Cost Saving Reduces waste • Elimination of posters reduces paper waste Saves time • Video
Slide 30: Market Data – AVIXA 2021
Market Data – AVIXA 2021 Global Pro AV Market Size by Region - 2021 Global Pro AV Market Revenues ($m) Total Revenue CAGR Geographic Area Share of Global 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 ($bn) (20121- 2026) Europe 22% 51.0 225.0 242.6 258.6 213.7 231.9 257.7 279.6 296.9 313.6 329.0
Slide 31: Our 2021 ESG goals
Our 2021 ESG goals Our People The Environment Charity support The Community • Create internal • Every Group • Every office to • Safely welcome environment company to have a have a our teams back teams to champion nominated local community to our offices being greener charity programme • Welcome NMK
Slide 32: Group results highlights
Group results highlights 6 months ended 30 June 2021 6 months to 6 months to Constant 30 June 2021 30 June 2020 Growth % currency £m £m growth % Revenue 390.1 302.0 29% 30% Gross Profit 59.1 43.8 35% 36% Gross profit margin 15.1% 14.5% Adjusted operating profit1 13.9 4.1 238% 240% Adjusted profit be
Slide 33: Regional results highlights – H1 2021
Regional results highlights – H1 2021 Region Revenue Revenue CFX % Org % GP % GP % GP % H1 2021 H1 2020 2021 2020 Change £m £m UK&I 128.6 103.1 24.8% 24.8% 15.4% 15.5% -0.1% EMEA 210.2 127.2 66.2% 58.2% 14.5% 14.5% - APAC 22.2 21.7 (2.4)% (2.5)% 17.7% 15.7% +2.0% North America 29.1 50.0 (36.3)% (43.
Slide 34: Adjustments to statutory results – H1 2021
Adjustments to statutory results – H1 2021 £m H1 2021 H1 2020 Statutory operating profit/(loss) 7.6 (0.7) Acquisition related expenses 0.3 0.4 Share based payments and employer taxes 2.4 1.3 Amortisation of acquired intangibles 3.6 3.1 Adjusted operating profit 13.9 4.1 Statutory profit after tax 4.
Slide 35: Modelling considerations
Modelling considerations 1 M&A/deferred consideration payments c.£6.5m in H2 2021 Acquisitions New ERP amortisation now expected to commence in 2022 ERP amortisation Annual charge c.£0.5m Expected to be £2.5m-£3m before further M&A Interest (adjusted) Effective rate 27-28% of adjusted profit Tax c.3
Slide 36: Midwich Group Plc
Midwich Group Plc