Johnson Service Group Plc · LSE:JSG

Johnson Service — H1 2018 Earnings Presentation

21 slides from Johnson Service's earnings presentation, September 2018

  1. Slide 1: Interim Results: Six months ended 30 June 2018

    (J JOHNSON SERVICE GROUP PLC INTERIM RESULTS Six months ended 30 June 2018 Chris Sander Chief Executive Officer Yvonne Monaghan Chief Financial Officer Peter Egan Chief Operating Officer

  2. Slide 2: Financial Highlights

    …… 2 Financial Highlights Strong financial performance reflecting organic growth & successful delivery of earnings from acquisitions - Revenue up 10.3% to £152.2m; organic growth of 7.2% - Adjusted operating profit up 7.0% to £19.9m1 - Adjusted profit before taxation up 8.3% to £18.2m1 Revenue - Adj

  3. Slide 3: Financial summary H1 2018 vs H1 2017

    …… 3 2018 H1 2017 H1 Increase Revenue (£m) 152.2 138.0 10.3% Adjusted operating profit (£m)1 19.9 18.6 7.0% Adjusted operating margin (%)1 13.1 13.5 n/a Adjusted PBT (£m)1 18.2 16.8 8.3% Adjusted EPS (p)1 4.0 3.7 8.1% Number of shares used in EPS calc2 369.9 368.6 n/a Dividend (p) 1.0 0.9 11.1% Note

  4. Slide 4: Cash flow and net debt

    …… 4 £m 2018 H1 2017 H1 2017 FY Adjusted operating profit 19.9 18.6 43.3 Depreciation and software amortisation 26.5 23.4 49.0 Working capital (excl. exceptionals) (3.8) (0.9) (0.8) Capital expenditure – fixed assets (7.2) (7.0) (16.5) – rental stocks (net) (22.6) (18.2) (41.0) – fixed asset proceed

  5. Slide 5: Interest, Bank Facility & Hedging, Tax, Pensions

    …… 5 Interest, Bank Facility & Hedging Tax  Interest cost (excluding notional pension interest) of £1.6m  Effective tax rate on adjusted profit before taxation1 of 19.5% (2017 H1: £1.6m) (2017 H1: 19.4%)  Reduction in notional pension interest cost to £0.1m (2017 H1: £0.2m) reflects lower pension

  6. Slide 6: Operational and strategic update

    …… 6  Acquisition of South West Laundry in August 2018  Ongoing evaluation of further acquisition opportunities  Continued focus on strong organic growth exploiting market opportunities  Continued capital investment to support organic growth and drive efficiencies  Continued successful restruct

  7. Slide 7: Acquisition of South West Laundry

    …… 7  Cornwall’s leading specialist for laundry and linen hire solutions  Modern and well equipped 18,000 square foot leasehold facility  Following a fire in early 2017, the laundry has been completely rebuilt, redesigned and reconfigured to improve efficiency and fitted out with state- of-the-ar

  8. Slide 8: Acquisition of South West Laundry

    INTERIM RESULTS / 2018 /...... 8 Acquisition of Sou SERVICE GROUP PLC

  9. Slide 9: Investment in plant, machinery and fleet

    …… 9  Major investment in plant, machinery and fleet to improve quality, efficiency and capacity: - Kannegiesser small piece ironer to increase capacity by 50% - Kannegiesser XFM towel folders (x2) to increase capacity by 30% - 50% of commercial fleet to be replaced in 2018  Significant new busine

  10. Slide 10: Wrexham integration into Stalbridge

    …… 10 Work Transferred In  Fully rebranded to Stalbridge £86k WIV transferred in - £34k Grantham  Employees retrained to Stalbridge procedures & quality standards - £32k Dorset - £10k Chester  Discontinued retail drycleaning operation - £10k Pwllheli  Replacement of obsolete & non-standard linen

  11. Slide 11: Key Projects in 2018

    …… 11 Key Projects in 2018 Southall Unit 3 (Stalbridge)* £3.3m Edinburgh (PLS)* £1.1m Wrexham (Stalbridge)* £0.9m Shaftesbury (Stalbridge) £0.6m Birmingham (Bourne) £0.5m Hinckley (Apparelmaster) £0.5m * Due for completion in H2 2018

  12. Slide 12: Workwear results

    …… 12 2018 H1 2017 H1 Increase Revenue (£m) 63.2 60.4 4.6% Adjusted operating profit (£m)1 10.8 10.2 5.9% Margin (%) 17.1 16.9 n/a 17 2,250 380 1.3m Laundries Employees Vehicles Wearers Notes: 1) Before amortisation of intangible assets (excluding software amortisation) and exceptional items

  13. Slide 13: Workwear commentary

    …… 13  Underlying revenue growth of 4.6%  Growth reflects our continuing investment in sales and marketing  Production efficiencies and strong cost control led to an increased margin of 17.1%  Strong sales and some large customers returning to our service  Customer retention remains in excess o

  14. Slide 14: HORECA results

    …… 14 2018 H1 2017 H1 Increase Revenue (£m) 89.0 77.6 14.7% Adjusted operating profit (£m)1 11.4 10.5 8.6% Margin (%)2 12.8 13.5 n/a 17 3,350 400 8.9m Laundries Employees Vehicles Items HORECA includes six recognised brands Premium Premium Restaurant High High High Linen & Linen & & Catering Volume

  15. Slide 15: HORECA commentary

    …… 15  Overall revenue growth of 14.7% with all brands trading ahead of 2017  Underlying revenue growth of 9.0%  2017 benefitted from £1.1m of one-off, high margin subcontracted work  High volume hotel linen business now recognised as a national provider  Wrexham acquisition rebranded as Stalbr

  16. Slide 16: Our Customers

    INTERIM RESULTS / 2018 /...... 16 Our Customers COTE BRASSERIE > C2 ACCORHOTELS CAPRICE #) g Ua CROWWNE PLAZA DOUBLETREE C Gord 2 HOTELS & RESORTS UBLETI La Holiday Inn : y RINCES: Samworth Brothers W LIL GE BEE VILLAGE Warounns Gl ES (FJOHNSON SERVICE GROUP PLC

  17. Slide 17: H1 revenue, operating profit, EPS and dividend history

    …… 17 H1 Revenue (£m) H1 Adjusted Operating Profit (£m) 200 25 152.2 18.6 19.9 150 138.0 20 115.7 15.5 15 100 85.7 10.8 64.0 74.4 9.0 10 5.9 50 5 0 0 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 H1 Adjusted Diluted EPS (pence) H1 Dividend per Share (pence) 5.0 1.2 4.0 1.0 3.7 1.0 0.9

  18. Slide 18: A combined industry experience of over 200 years

    …… 18 Yvonne Chris Peter Monaghan Sander Egan Chief Financial Officer Chief Executive Officer Chief Operating Officer Industry Experience: 34 Years Industry Experience: 42 Years Industry Experience: 26 Years Gerry Mark Donald Gary Tim Moore Woolfenden Smith Collis Morris Managing Director, Managing

  19. Slide 19: Shareholder Value

    …… 19 Shareholder Value Organic Growth Opportunities Investment Programme Acquisitions  Strong new sales and customer retention  To create a market-leading, best in class,  Further synergy gains, including scale modern estate to support: efficiencies, anticipated from recent  Boosted by: acquisi

  20. Slide 20: Thank You

    (AJCHNSON THANK YOU

  21. Slide 21: Segment revenue and adjusted operating profit

    …… 21 2018 H1 2017 H1 Adjusted Adjusted Revenue Operating Profit1 Revenue Operating Profit1 £m £m £m £m Workwear 63.2 10.8 60.4 10.2 HORECA 89.0 11.4 77.6 10.5 Textile Rental 152.2 22.2 138.0 20.7 Group Costs - (2.3) - (2.1) TOTAL 152.2 19.9 138.0 18.6 Note 1: Before amortisation of intangible asset

Johnson Service Group — H1 2018 Earnings Presentation on 6ix