Smiths News Plc · LSE:SNWS
Smiths News — H1 2021 Earnings Presentation
18 slides from Smiths News's earnings presentation, May 5, 2021
Slide 1: Interim Results
Interim Results 5 May 2021
Slide 2: Jon Bunting, Chief Executive Officer: Headlines
Jon Bunting Chief Executive Officer Headlines
Slide 3: Headlines
Headlines Performance on track with progress in all core areas • Overall profit in line with Board expectations • Core wholesale business performing ahead of last year • Efficiencies offsetting decline in core sales with service maintained • Capital management objectives on track Proactive managemen
Slide 4: Tony Grace, Chief Financial Officer
Tony Grace Chief Financial Officer
Slide 5: Adjusted Income Statement - Continuing
Adjusted Income Statement - Continuing £m Adjusted H1 2021 H1 2020 Change % Revenue 551.6 623.1 -11.5% Operating profit 18.9 19.9 -5.0% Operating margin 3.4% 3.1% Net finance charges (4.5) (3.6) 25.0% Profit before tax 14.4 16.3 -11.7% Tax (3.0) (3.1) -3.2% Profit after tax 11.4 13.2 -13.6% EBITDA (
Slide 6: Free cash flow - continuing
Free cash flow - continuing £m Restated H1 2021 H1 2020 Operating profit – adjusted 18.9 19.9 Depreciation and amortisation 5.5 5.0 EBITDA (including IFRS16) 24.4 24.9 Working capital (4.8) (3.3) Capital expenditure (0.6) (3.8) Lease payments (2.9) (3.9) Net interest and fees (6.3) (3.3) Taxation (2
Slide 7: Net debt
Net debt £m Restated H1 2021 FY 2020 H1 2020 Opening Bank net debt (79.7) (74.6) (74.6) Free cash flow – continuing 4.6 5.0 10.9 Finance lease and other 0.1 0.1 2.2 Dividend paid - (2.4) (2.4) Purchase of own shares ESS (0.4) (0.7) (0.7) Disposal costs - - (3.7) Discontinued Tuffnells working capita
Slide 8: Operational and strategic progress
Jon Bunting Chief Executive Officer Operational and strategic progress
Slide 9: Operational and strategic progress
Operational and strategic progress Proactively managing through the pandemic Impact on sales and markets Ancillary businesses Capital management policy Priorities and outlook 9
Slide 10: Proactively managing through Covid
Proactively managing through Covid 19 1. Safety The wellbeing of our colleagues and customers is paramount Pandemic continued to impact sales and operations 2. Service Lockdowns 2 and 3 – significantly fewer retail closures Maintaining as full a service as possible Resilient business model mitigatin
Slide 11: Sales performance
Sales performance • Improvement and stability relative to H2 FY2020 • Impact of reduction in travel and commuting, minus 4% of revenue decline • Newspaper sales less variable than magazines which were impacted more severely by lockdowns • Recovery aided by substitution between retailers as customer
Slide 12: Ancillary businesses
Ancillary businesses DMD • International travel key to recovery • Outsourced operations minimising costs • Current break even position Instore • Pandemic impacting market demand • Major retailers re-evaluating merchandising models • Small positive contribution Outlook • Pace of recovery remains uncl
Slide 13: Capital management policy
Capital management policy Context • Refinancing completed November 2020 • All major contracts secured to at least 2024 • Resilience through the pandemic • Cash, capex and debt in line with expectations Capital Management Policy • Reducing and maintaining net debt to 1x net debt leverage covenant by
Slide 14: Priorities and outlook
Priorities and outlook Operational priorities H2 • Tight management of COVID-19 recovery period • Further progress with sustainable efficiencies • Maintaining service KPIs • Close control of ancillary businesses Shareholder value • Clear and balanced capital management objectives • Targeting net deb
Slide 15: Any questions?
Any questions? é
Slide 16: Appendix - Statutory Income Statement - Continuing
Appendix - Statutory Income Statement - Continuing £m H1 2021 H1 2020 Change % Adjusted operating income 18.9 19.9 -5.0% Adjusted items (0.1) (9.6) -99.0% Operating profit 18.8 10.3 82.5% Net finance charges (2.8) (3.6) -22.2% Profit before tax 16.0 6.7 138.8% Tax (3.0) (2.3) 30.4% Profit after tax
Slide 17: Smiths logos
smiths @ ® martin lavell ¢ systems
Slide 18: 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’