Slide 1: Full Year Results Presentation 2019
Full Year Results Presentation 2019 Presented by Paul Fineman, CEO and Giles Willits, CFO
Slide 2: Another Year of Significant Progress
ANOTHER YEAR OF SIGNIFICANT PROGRESS Success delivered through: Growth Investment Innovation organic growth in capital, driving sales of across all regions equipment, over 50,000 SKUs processes and in the year people Acquisition Financial of Impact record revenues, Innovations, Inc. profits, EPS and
Slide 3: Our Customer Focused Business
OUR CUSTOMER FOCUSED BUSINESS Revenues by: Customer destination Product design 53% 22% 15% 8% 2% & development USA UK Europe AUS ROW Season 56% 39% 5% Minor Christmas Everyday seasons Customers Being their Partner of choice Product 77% 11% 8% 4% Dis lfilm g &f ur urin t ri b e u g Celebrations Gifti
Slide 4: Our Commitment to Shareholders
OUR COMMITMENT TO SHAREHOLDERS Delivering growth Generating cash Improving returns Adjusted EPS (pence)(a) Average leverage Dividend (pence) Continue to deliver double digit Sustain long term average leverage Trend upwards until 2.5x covered three‑year compound annual growth between 1.0x and 2.0x (4
Slide 5: Financial overview
Financial overview IG Design Group plc FULL YEAR RESULTS PRESENTATION 2019 5
Slide 6: Financial Highlights
FINANCIAL HIGHLIGHTS Revenue Adjusted profit Net cash/(debt) (£m) (£m) (a) (£m) 448.4 30.3 17.1 3.0 4.4 327.5 21.8 311.0 16.6 (17.5) 229.0 237.0 10.8 (29.4) 9.2 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 +37% on 2018 +39% on 2018 +£12.7m on 2018 (a) Adjusted profit is
Slide 7: Summary of Full Year Results
SUMMARY OF FULL YEAR RESULTS 31 March 31 March 2019 2018 % £m £m change Revenue 448.4 327.5 37 Gross profit 84.6 70.0 21 Overheads (52.0) (46.8) 11 Adjusted operating profit 32.6 23.2 41 Adjusted operating margin % 7.3% 7.1% Finance charge (2.3) (1.4) 67 Adjusted profit before tax 30.3 21.8 39 Excep
Slide 8: On Track to Deliver Group Margin Targets
ON TRACK TO DELIVER GROUP MARGIN TARGETS Sales Adjusted operating profit Adjusted margin Group revenue 2019 2018 Growth 2019 2018 Growth 2019 2018 50% Americas $m 289.9 158.8 83% 20.0 12.7 57% 6.9% 8.0% 28% UK £m 127.1 123.3 3% 8.1 7.9 3% 6.4% 6.4% 14% Europe €m 73.0 58.5 25% 10.0 7.5 33% 13.7% 12.9
Slide 9: Strong Cash Conversion Funding Growth Investment
STRONG CASH CONVERSION FUNDING GROWTH INVESTMENT Year ended Year ended 31 March 2019 31 March 2018 £m £m Working capital Adjusted EBITDA 38.7 28.0 Change in trade and other receivables £m 25.6 (9.1) Change in inventory Impact Innovations 24.8 4.3 0.4 Change in creditors, provisions and accruals (18.
Slide 10: Balance Sheet
BALANCE SHEET As at As at 31 March 2019 31 March 2018 £m £m Intangibles 83.7 36.5 Fixed assets 39.8 35.5 Stock 69.6 49.3 Trade and other receivables 45.5 37.5 Net cash 17.1 4.4 Trade and other payables (75.0) (59.2) Deferred income and provisions (4.6) (2.4) Taxation (0.5) (1.1) Net assets 175.6 100
Slide 11: New Facilities to Support Organic and M&A Growth
NEW FACILITIES TO SUPPORT ORGANIC AND M&A GROWTH Lender Renewal Facility Margin Covenant Club facilities Corporate revolving credit facility and overdraft 2022 $80m 1.05% Leverage Working capital revolving credit facility 2022 £85m 1.05% Stock and unfunded debtors HSBC Asia receivables financing 202
Slide 12: Future Targets
FUTURE TARGETS Financial KPI targets Strategic drivers Annual organic Shareholder commitments revenue growth 3-5% EPS Working with the Three-year CAGR winners double digit growth EBITDA Growth of 8-10% Leverage Design & innovation 1-2x average debt Operating cash conversion in excess of 75% Dividend
Slide 13: Strategy and outlook
Strategy and outlook IG Design Group plc FULL YEAR RESULTS PRESENTATION 2019 13
Slide 14: Strategy in Action: Working with the Winners
STRATEGY IN ACTION Working with the winners Design & innovation Working with the winners Efficiency & scale Growing revenue through organic growth with both existing and new customers, suppliers and product areas. Top 10 customers Sales by channel (%) 2019 62% 38% 2018 50% 50% Mass and discount reta
Slide 15: Strategy in Action: Design & Innovation
STRATEGY IN ACTION Working with the winners Design & innovation Design & innovation Efficiency & scale Develop opportunities in new channels and adjacent product categories while expanding our presence in the growing market for celebration events throughout the year • A near doubling of revenues of
Slide 16: Strategy in Action: Efficiency & Scale
STRATEGY IN ACTION Working with the winners Design & innovation Efficiency & scale Efficiency & scale Increasing margins through investments in process, people and accretive M&A. We are focused on unlocking synergies and strengthening our ‘one‑stop‑shop’ position with customers • The acquisition of
Slide 17: Impact Innovations – On Schedule to Deliver $5M Operational Synergy
IMPACT INNOVATIONS – ON SCHEDULE TO DELIVER $5M OPERATIONAL SYNERGY Synergy driver Synergy timings Comment Status • In December 2018, we consolidated Combine 2019 2020 2021 the manufacturing operations of Consolidation to Memphis announced on time in Q3 of the combined US business into one manufactu
Slide 18: Managing Our Challenges
MANAGING OUR CHALLENGES Brexit US-China tariffs • No significant trading flows with European • Negotiating terms with suppliers and customers customers or suppliers • Redirecting the supply of goods from other • Mitigating potential impact through: countries, such as Vietnam, Indonesia and India • m
Slide 19: 2020 Outlook
2020 OUTLOOK Working with the winners • Growth opportunities to expand across territories and regions with long established customers • Mass and discount retailers also growing through diversifying Channels including e-commerce and convenience stores Design & innovation • 2020 will see increased inv
Slide 20: Why Invest?
WHY INVEST? We will continue We will enhance We will continue to We will We will continue to drive organic net margins drive innovation, discerningly to convert profit growth, through through deliver excellent pursue M&A into cash and our diversified investment – service and remain opportunities del
Slide 21: Appendix
Appendix IG Design Group plc FULL YEAR RESULTS PRESENTATION 2019 21
Slide 22: Major Investments
MAJOR INVESTMENTS July 2016 Acquisition of Lang Capital expenditure September 2017 March 2018 M&A Investment bag 2nd printing press June 2016 machine, UK operational Netherlands Anker Play Products established, USA August 2018 April 2015 Acquisition of Paper conversion Impact Innovations, USA machin
Slide 23: Largest Shareholders
LARGEST SHAREHOLDERS(C) Hedlund family(a) Octopus Miton Group Schroders Plc Investments 27.97% 5.05% 4.52% 8.15% BlackRock Close Brothers AM Polar Capital Paul Fineman(b) 3.99% 3.97% 3.37% 3.25% (a) In addition to the Hedlund family’s beneficial interest set out above, the Hedlund family is also int
Slide 24: Strategy
STRATEGY Our strategy is built on leveraging our core Strategic drivers strengths and focusing on market opportunities Working with the winners • Increasing revenue through organic growth Working with with both existing and new customers, the winners suppliers and product areas t & d Pr Design & inn
Slide 25: Managing Our Challenges
MANAGING OUR CHALLENGES Challenge Supply Customer Currency Leadership Economic Margin chain and and and uncertainty headwinds integrity competition liquidity people Response • Clear procedures and • Focus on design, • Focus on resilient • A portfolio of • Operating in local • Give our people the pol
Slide 26: Alternative Performance Measures
ALTERNATIVE PERFORMANCE MEASURES A full reconciliation between our adjusted and reported results is provided below: 31 March 2019 31 March 2018 £m £m Adjusted EBITDA 38.7 28.0 Exceptional items (8.3) 0.5 LTIP charges (3.0) (2.2) EBITDA 27.4 26.3 £m £m Adjusted profit before tax 30.3 21.8 Exceptional
Slide 27: thedesigngroup.com
IG Design Group plc No 7 Water End Barns Water End Eversholt MK17 9EA T +44 (0)1525 887 310 thedesigngroup.com