Smiths News Plc · LSE:SNWS
Smiths News — FY2019 Earnings Presentation
16 slides from Smiths News's earnings presentation, Nov 6, 2019
Slide 1: Preliminary Results
Preliminary Results 6 November 2019
Slide 2: Introduction
Introduction Gary Kennedy Chairman
Slide 3: Financial Headlines
Financial Headlines FY19 FY18 Var. % Revenue £1,467.9m £1,534.3m -4.3% Adjusted PBT £23.2m £28.4m -18.3% Adjusted EPS 7.9p 9.3p -15.1% Free cash flow £8.3m £20.2m -58.9% Net Debt £73.9m £83.4m 11.3% DPS 1.0p 3.1p -67.7% Statutory continuing loss after tax £31.5m (FY2018: £38.1m loss) Connect Group P
Slide 4: A disappointing year
A disappointing year Good progress in many areas ► Revised operating structure swiftly established ► Smiths News delivering strong results ► Central restructure on track ► Announced sale and leaseback of selected Tuffnells facilities ► Prudent capital management Offset by material underperformance o
Slide 5: Smiths News
Smiths News A strong performance from our largest business ► Adjusted operating profit up 12.1% on revenue down 4.3% ► Undistracted delivery of core service and efficiency targets ► Cost saving initiatives mitigating margin decline ► Contract renewals delivered on improved terms ► Future cost saving
Slide 6: Group Centre
Group Centre Good progress that will deliver significant future benefit ► Focus on efficient delivery of service to stakeholders ► Offshore service and technology centre established ► Consolidation and simplification of support functions ► Investment in continuous improvement and program management
Slide 7: Tuffnells
Tuffnells A disappointing performance with multiple challenges ► Legacy weakness proving greater than anticipated ► Materially reduced consignment volumes ► Inflexible operational structure exacerbating difficulties ► Quality of service impacted by scope of challenges ► Aggressive and disruptive com
Slide 8: Strategic review of Tuffnells
Strategic review of Tuffnells The number one priority for turnaround of Group ► Determine the further actions and investment necessary for a sustainable recovery ► Provide clarity for all stakeholders on the future of Tuffnells within the Group Stakeholder driven analysis ► Best interests of the bus
Slide 9: Group Financial Update
Group Financial Update Tony Grace Chief Financial Officer
Slide 10: Group performance
Group performance £m Adjusted Aug 2019 Aug 2018 Change % Smiths News 43.6 38.9 12.1% Tuffnells (14.1) (5.0) -182.0% Group operating profit 29.5 33.9 -13.0% Net finance charges (6.3) (5.5) -14.5% Group PBT 23.2 28.4 -18.3% Tax (3.8) (5.5) 30.9% Group PAT 19.4 22.9 -15.3% Number of shares 246.4 246.0m
Slide 11: Adjusting items
Adjusting items £m Aug 2019 Aug 2018 Impairment of tangible & intangible assets (45.5) (46.1) Amortisation of acquired intangibles (6.8) (7.1) Network and re-organisation costs (6.4) (3.1) Brierley Hill insurance claim (0.2) - NMW regulatory compliance 0.2 (0.5) Pension buy-in (2.2) - Pass My Parcel
Slide 12: Free cash flow
Free cash flow £m Aug 2019 Aug 2018 Operating profit – adjusted 29.5 33.9 Depreciation and amortisation 9.3 11.9 EBITDA 38.8 45.8 Working capital (3.9) 7.7 Capital expenditure (8.6) (8.5) Finance lease payments (2.8) (3.8) Net interest and fees (5.1) (5.8) Taxation (2.6) (6.5) Other 0.8 (0.4) Free c
Slide 13: Net debt
Net debt £m Aug 2019 Aug 2018 Opening net debt (83.4) (82.1) Free cash flow 8.3 20.2 Finance lease creditor & 2.8 3.2 other Pension deficit (1.6) (4.7) Dividend paid - (24.1) Disposal proceeds - 12.9 Discontinued cash flow - (8.8) Closing net debt (73.9) (83.4) Net debt : EBITDA 1.9x 1.8x • Committe
Slide 14: Summary and Q&A
Summary and Q&A Gary Kennedy Chairman
Slide 15: Priorities and outlook
Priorities and outlook Clear priorities for FY2020 ► Strategic Review and turnaround of Tuffnells ► Cost and service momentum in Smiths News ► Network improvement and efficiency ► Optimising Head Office functions ► Capital discipline ► Leveraging and energising our people Connect Group PLC 15
Slide 16: Cautionary statement
Cautionary statement Notes to Editors This document contains certain forward-looking statements with respect to Connect Group PLC’s financial condition, its results of operations and businesses, strategy, plans, objectives and performance. Words such as ‘anticipates’, ‘expects’, ‘intends’, ‘plans’,