Slide 1: Technology and Resources for Education
TECHNOLOGY AND RESOURCES FOR EDUCATION © 2019, RM plc
Slide 2: Agenda
>AGENDA > Highlights David Brooks > Financial Review Neil Martin > 2019 Divisional Review Neil Martin > 2019/2020 Focus & Outlook David Brooks > Q&A RM plc
Slide 3: National curriculum resources
National Regional High visibility Cloud based Full suite Using AI in digital revenue Safeguarding curriculum education supplies assessment digital pupils online resources provider platforms generalist #1 #1 Digitally 50,000 End to end >1m exams taken & 60% of National presence >70% digital 13m exams
Slide 4: Highlights of H1 2019
2 HIGHLIGHTS OF H1 2019 Trading in line to deliver full year expectations > Revenue up 1% with good growth in RM Results and timing benefits from the adoption of IFRS15 which more than offset a difficult UK schools market — > International revenues increased 33% offsetting a 3% decline in the UK > A
Slide 5: Financial Summary
RM plc FINANCIAL SUMMARY
Slide 6: Financial Overview
FINANCIAL OVERVIEW Revenue up 1% £m 2019 2018 Variance 100.0 95.0 90.0 85.0 2018 RM RM RM Legacy IFRS15 2019 Resources Results Education Adjusted operating profit up 17% 10.0 9.0 8.0 7.0 6.0 5.0 Adjusted figures exclude the amortisation of acquisition related intangible assets; 2018 RM RM RM IFRS15
Slide 7: Cash Flow and Pension
CASH FLOW AND PENSION 0.0 (5.8) -5.0 (3.3) -10.0 (2.2) £m (1.7) -15.0 (3.2) (4.7) (21.2) -20.0 (0.2) -25.0 Nov 30 Cash used Pensions Tax Capex Dividends Other May 31 2018 in 2019 operations 4% 40 35 30 IAS19 Deficit level (£m) 3% 25 20 15 2% 10 5 1% 0 2014 2015 2016 2017 2018 2019 H1 Pension deficit
Slide 8: 2019 Divisional Review
RM plc 2019 DIVISIONAL REVIEW —
Slide 9: RM Resources
RM RESOURCES Revenue Adjusted Operating Profit 3.5 1.6 47.6 47.7 4.2 3.1 £m £m 2018 2019 2018 2019 Education Legacy Legacy Revenue breakdown Adjusted Operating Margin 8.2% 6.3% UK International Legacy 2018 2019
Slide 10: RM Results
RM RESULTS Revenue Adjusted Operating Profit 4.5 16.8 £m 12.3 £m 2.8 2018 2019 2018 2019 Revenue breakdown Adjusted Operating Margin 27.1% 23.0% UK International 2018 2019
Slide 11: RM Education
RM EDUCATION Revenue Adjusted Operating Profit 1.1 0.8 4.3 30.4 28.6 3.6 £m £m 2018 2019 2018 2019 Education Legacy Revenue breakdown Adjusted Operating Margin 14.7% 11.6% Services Connectivity 2018 2019 Digital Platforms Legacy
Slide 12: 2019 Focus & Outlook
2019 FOCUS & OUTLOOK
Slide 13: Potential to accelerate strategy through M&A where appropriate
Potential to accelerate strategy through M&A where appropriate
Slide 14: Progress in H1
2 PROGRESS IN H1 IP and technology International Innovate with our customers development growth Acquisition of digital Acquisition brings new New IT services contract assessment technologies customers in Asia Pac and with England’s largest including e-testing Europe and a regional multi academy trus
Slide 15: Acquisition of SoNET Systems
> ACQUISITION S SONET SYSTEMS 0 090 IP and International hnol technology eon development End-to-end Digital Assessment E-Testing Test creation Test delivery Results & Analytics SONET Assessment Master RM Assessor? RM plc (1s)
Slide 16: Acquisition Highlights and Financials
> ACQUISITION S SONET SYSTEMS 0 090 IP and International growth technology development 2 Acquisition Highlights 2 Acquisition Financials + Addition of SoNET’s e-testing software to current * Acquisition completed June 2019 for a e-marking capability enables delivery of a full end- consideration of £
Slide 17: Outlook
RM plc OUTLOOK
Slide 18: Outlook
2 OUTLOOK RM plc Trading in line to deliver full year expectations New acquisition strengthens RM Results strategic position Continued focus on international markets UK market remains subdued - efficiency gains remain key Strong free cash flow supports investment plans
Slide 19: RM plc
RM plc
Slide 20: Appendix
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Slide 21: Divisional Summary
DIVISIONAL SUMMARY Revenue £M Adjusted Operating Margin HY19 HY18 Variance HY19 HY18 Variance RM Resources 49.2 51.1 -4% RM Resources 6.3% 8.2% -1.9pp RM Results 16.8 12.3 +37% RM Results 27.1% 23.0% +4.1pp RM Education 29.5 31.5 -7% RM Education 14.7% 11.6% +3.2pp Group 95.5 94.9 +1% Group 10.2% 8.
Slide 22: Income Statement
> INCOME STATEMENT £M Revenue Cost of sales Gross profit Gross profit % Operating expenses Amortisation of acquisition related intangibles Acquisition related costs Property related costs Operating profit Operating profit % Net investment income and finance costs Profit before tax Tax Profit after t
Slide 23: Cash Flow
> CASH FLOW OPERATING CASH FLOWS - £M Profit from operations Amortisation & impairment of intangibles Depreciation & impairment of PPE Share-based payments Provisions Other adjustments Operating cash flows before movements in working capital (Increase)/decrease in inventories (Increase)/decrease in
Slide 24: Balance Sheet
> BALANCE SHEET £M 31 MAY 2019 31 MAY 2018 Goodwill 45.2 Intangible assets 19.5 Property, plant & equipment 9.8 Defined benefit pension surplus 0.7 0.6 Other receivables 0.9 1.0 Contract fulfilment asset les I Deferred tax assets 5.7 4.8 Total non-current assets 82.9 80.8 Inventories 25.0 22.1 Trade
Slide 25: Pupil Projections
PUPIL PROJECTIONS 5,500 Full-time equivalent pupils (000s) 4,800 4,677 4,504 4,004 Predicted increase (2016-25) of 173,000 FTE pupils 4,100 Equivalent to c.650 averaged sized primary schools PRIMARY SCHOOLS 3,400 3,325 2,955 2,758 Predicted increase (2016-25) of 567,000 FTE pupils 2,700 SECONDARY SC