Slide 1: Final Results
Peter Egan Chief Executive Officer Yvonne Monaghan Chief Financial Officer Tim Morris Group Financial Controller Final Results 12 months ended 31 December 2018
Slide 2: Highlights
2018 Final Results Highlights “Our strategy of driving the quality of growth organically by investing in our operations, coupled with selective acquisitions, has delivered another strong year of substantial growth.” 2
Slide 3: Highlights
2018 Final Results Highlights Financial Highlights Another consistent and strong financial performance • Revenue up 10.4% to £321.1m; organic growth of 7.8% Revenue up • Adjusted operating profit up 6.2% to £46.0m1 • Adjusted profit before taxation up 7.1% to £42.5m1 • Adjusted diluted earnings per
Slide 4: Income Statement
2018 Final Results Income Statement 2018 2017 Increase Revenue (£m) 321.1 290.9 10.4% Adjusted operating profit (£m)1 46.0 43.3 6.2% Adjusted operating margin (%)1 14.3 14.9 n/a Exceptional items (£m) (0.6) (0.5) n/a Adjusted PBT (£m)1 42.5 39.7 7.1% Adjusted EPS (p)1 9.3 8.7 6.9% Number of shares u
Slide 5: Cash Flow
2018 Final Results Cash Flow £m 2018 2017 Adjusted operating profit 46.0 43.3 Depreciation and software amortisation 55.4 49.0 Working capital (5.9) (0.8) Capital expenditure – fixed assets and software (18.1) (16.5) – rental stocks (net) (46.7) (41.0) – fixed asset proceeds 0.2 0.2 Interest (3.5) (
Slide 6: Investment Expenditure £18.1m
2018 Final Results ££ Investment Expenditure £18.1m £10.7m Key Projects in 2018 Southall (Stalbridge) £3.3m Edinburgh (PLS) £1.9m Chester (Afonwen) £1.1m Wrexham (Stalbridge) £0.9m Letchworth (Workwear) £0.8m Gateshead (Workwear) £0.4m 6
Slide 7: Other Financial Information
2018 Final Results Other Financial Information Interest, Bank Facility & Hedging Return on Capital Employed (ROCE) Interest • Marginal increase to 16.3% (2017: 16.2%) • Interest cost (excluding notional pension interest) of £3.2m • Calculated as adjusted operating profit divided by the average (2017
Slide 8: Delivery of Strategic Plan
2018 Final Results Delivery of Strategic Plan • Market leading position • Leading edge customer service • Delivery of operational efficiencies • Development of bespoke IT platforms • Maintaining margin over the medium term • Launch of a Group-wide brand recognition programme • New high volume linen
Slide 9: Acquisitions
2018 Final Results Acquisitions “The acquisition of South West Laundry was a welcome addition to our coverage for Stalbridge.” 9
Slide 10: Acquisition of South West Laundry
2018 Final Results Acquisition of South West Laundry • Modern and well equipped facility, located in Hayle, Cornwall • Predominantly serves the HORECA market in the South West • Complements existing Stalbridge business; 175 miles from nearest plant • Processes some 340,000 pieces of linen per week •
Slide 11: Operational Performance
2018 Final Results Operational Performance “Another year of substantial organic growth with both Divisions delivering higher levels of new business wins and maintaining consistently high levels of customer satisfaction scores.” 11
Slide 12: Workwear
2018 Final Results Operational Performance Workwear 2018 2017 Increase Revenue (£m) 128.8 122.4 5.2% Adjusted operating profit (£m)1 22.7 21.1 7.6% Margin (%) 17.6 17.2 n/a Notes: 1. Before amortisation of intangible assets (excluding software amortisation) and exceptional items 12
Slide 13: Workwear footprint: laundries, employees, vehicles, wearers
2018 Final Results 17 Laundries 2,250 Employees 375 Vehicles 1.3m Wearers 13
Slide 14: Workwear
2018 Final Results Operational Performance Workwear • Record level of new sales wins • Underlying revenue growth of 5.2% • Increased sales to existing customers • Encouraging level of Direct Sales of £4.6m (2017: £3.5m) • Customer retention maintained at 95% • Production efficiencies and strong cost
Slide 15: HORECA
2018 Final Results Operational Performance HORECA Hotel, Restaurant & Catering Linen High Volume Hotel Linen (HVL) 2018 2017 Increase Revenue (£m) 192.3 168.5 14.1% Adjusted operating profit (£m)1 28.0 26.8 4.5% Margin (%)2 14.6 15.9 n/a Notes: 1. Before amortisation of intangible assets (excluding
Slide 16: HORECA footprint: laundries, employees, vehicles, items
2018 Final Results 17 3,400 Employees 390 8.5m items Laundries Vehicles 16
Slide 17: HORECA
2018 Final Results Operational Performance HORECA Hotel, Restaurant & Catering Linen High Volume Hotel Linen (HVL) • Overall revenue growth of 14.1% with all brands trading ahead of 2017 • Strong underlying revenue growth of 9.6% • Consistently high customer satisfaction rating • Stalbridge new sale
Slide 18: Our Customers
2018 Final Results Our Customers “Our continual investment in the business allows us to provide an excellent service to our customer base.” 18
Slide 19: Our Customers
2018 Final Results Our Customers 19
Slide 20: Five Year History
2018 Final Results Five Year History Revenue (£m) Adjusted Operating Profit (£m) 321.1 50 46.0 290.9 43.3 300 256.7 37.7 40 188.2 30 25.9 200 155.0 20.2 20 100 10 0 0 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Adjusted Diluted EPS (p) Dividend per Share (p) 10 9.3 3.5 3.1 8.7 7.6 3.0 2.8 8 2.
Slide 21: Our Executive Team
2018 Final Results Our Executive Team Peter Egan Yvonne Monaghan Chief Executive Officer Chief Financial Officer Industry Experience: 26 Years Industry Experience: 34 Years Mark Woolfenden Donald Smith Gerry Moore Tim Morris Gary Collis MD, Hotel Linen MD, Stalbridge MD, Workwear Group Financial Con
Slide 22: The Future
2018 Final Results The Future “Continued focus on growing the business through targeted investment.” 22
Slide 23: The Future
2018 Final Results The Future Organic Growth Investment Acquisitions Opportunities Programme • Strong new sales and • To create a market-leading, best • Further synergy gains, including customer retention in class, modern estate to support: scale efficiencies, anticipated from • Boosted by: - furthe
Slide 24: See
See @e @ ee & © 3 O*: JOHNSON e Group PLC
Slide 25: Appendix: Segmental Analysis
2018 Final Results Appendix 1 Segmental Analysis 2018 2017 Adjusted Adjusted Revenue Operating Profit1 Revenue Operating Profit1 £m £m £m £m Workwear 128.8 22.7 122.4 21.1 HORECA 192.3 28.0 168.5 26.8 Textile Rental 321.1 50.7 290.9 47.9 Group Costs - (4.7) - (4.6) TOTAL 321.1 46.0 290.9 43.3 Note 1