Rws Holdings Plc · LSE:RWS
Rws — FY2018 Earnings Presentation
33 slides from Rws's earnings presentation, December 2018
Slide 1: Full Year Results
Full Year Results December 2018 Andrew Brode Richard Thompson Desmond Glass Chairman Chief Executive Officer Chief Financial Officer
Slide 2: An outstanding year
RWS 2018© FULL YEAR RESULTS An outstanding year Extended our leadership in global language services Celebrated our 60th year in Excellent H2 performance Successfully completed business and our 15th year from Moravia with assimilation and rebranding of unbroken growth in adjusted operating profit to
Slide 3: Strong, cash-generative growth driving returns
RWS 2018© FULL YEAR RESULTS Strong, cash-generative growth driving returns Sales Moravia contribution Adjusted PBT 1 £306.0m 11 months £61.8m + 87% £126.9m revenue + 43% +5% organic, constant FX £17.0m adjusted operating profit + 6% organic, constant FX FY 2017: £164.0m +14% revenue growth, constant
Slide 4: A 15-year track record of unbroken growth
A 15-year track record of unbroken growth RWS 2018© FULL YEAR RESULTS 350 Annual revenue (£m) 70 Annual adjusted PBT 1 (£m) 300 60 250 50 200 40 150 30 100 20 50 10 0 0 20.00 Adjusted diluted EPS 2 (pence) 8.00 Dividend 2 year total (pence) 7.00 15.00 6.00 5.00 10.00 4.00 3.00 5.00 2.00 1.00 0.00 0.
Slide 5: Financial Review 2018
Financial Review 2018
Slide 6: Income statement
RWS 2018© FULL YEAR RESULTS Income statement Year ended Year ended Strong revenue growth – up 87% 30 September 2018 30 September 2017 › Acquisition of Moravia (£m) (£m) › Full period contribution from LUZ & AOP Revenue 306.0 164.0 › Organic growth – 3% reported; 5% underlying1 Cost of sales (187.2)
Slide 7: Underlying segmental revenue analysis
RWS 2018© FULL YEAR RESULTS Underlying segmental revenue analysis Underlying revenue growth 2018 2017 YoY YoY Currency Acquisition Underlying1 Reported Reported Growth Growth Impact Impact YoY Patent Translation & Filing (£m) (£m) (£m) (%) (£m) (£m) (£m) +5% Patent Translation Patent Information 102
Slide 8: Segmental operating margin analysis
RWS 2018© FULL YEAR RESULTS Segmental operating margin analysis Patent Patent Language Translation & Life Sciences Moravia Information Solutions Filing 25% FY18 FY17 FY18 FY17 FY18 FY17 FY18 FY17 FY18 H1181 Adjusted 46% Revenue 102.3 97.8 9.7 7.7 52.3 45.3 14.9 13.2 126.9 52.1 operating profit 5% by
Slide 9: Group currency analysis
RWS 2018© FULL YEAR RESULTS Group currency analysis Analysis of key Group currencies – FY 2018 Analysis of key Group currencies – FY 2017 (in GBP equivalents) (in GBP equivalents) Revenue by currency Operating costs by currency 200 200 100 100 - - USD EUR GBP CZK USD EUR GBP CZK The acquisition of M
Slide 10: Managing our currency risk
RWS 2018© FULL YEAR RESULTS Managing our currency risk › We are effectively economically hedged at Group level › Natural hedge of USD denominated debt › Additional currency specific hedging through currency forwards at both Group and entity level › Focused on reducing earnings volatility through bet
Slide 11: Balance sheet and cash flow
RWS 2018© FULL YEAR RESULTS Balance sheet and cash flow As at As at Year ended 30 Year ended 30 Balance sheet 30 September 2018 30 September 2017 Cash flow September 2018 September 2017 (£m) (£m) (£m) (£m) Non-current assets 429.8 169.5 Profit before tax 39.7 33.9 Trade and other receivables 72.6 41
Slide 12: Adjusted profit before tax bridge
RWS 2018© FULL YEAR RESULTS Adjusted profit before tax bridge 70 3.1 (0.3) (3.1) 18.7 (1.2) 1.3 61.8 60 50 43.3 40 30 20 10 0 2017 Effect of acquisitions11 Trading performance Corporate costs Interest on additional MtM of forward Net exchange 2018 debt contracts differences 12 1 Includes 11 months t
Slide 13: Operational Review 2018
Operational Review 2018
Slide 14: Leaders in specialist, growing market segments
RWS 2018© FULL YEAR RESULTS Leaders in specialist, growing market segments Life Sciences Moravia Patent Translation & Filing › Technical translations and › Technology-enabled linguistic validation for localization for companies › World’s premier provider of pharmaceutical, biotech, requiring global
Slide 15: Increased diversification of services: revenue
RWS 2018© FULL YEAR RESULTS Increased diversification of services: revenue 5% 5% 10% 8% 33% 34% Revenue Revenue 42% Revenue 43% Proforma revenue 20% for FY for FY for FY 27% for FY 2016 60% 2018 2019 65% 2017 17% 5% 4% 19% 3% Patent Translation Patent Life Language Moravia & Filing Information Scien
Slide 16: Increased diversification of services: profit
RWS 2018© FULL YEAR RESULTS Increased diversification of services: profit 3% 9% 28% 25% 31% Proforma Adjusted Adjusted 44% 44% 46% adjusted 27% operating profit operating profit operating profit for FY 2017 5% for FY 2018 61% for FY 2019 1% 2% 21% 22% 24% Patent Translation Patent Life Language Mora
Slide 17: Extended our geographical reach
RWS 2018© FULL YEAR RESULTS Extended our geographical reach 8 502 67 497 297 56 64 548 11 2,459 FTE employees 399 10 17
Slide 18: Patent Translation & Filing
RWS 2018© FULL YEAR RESULTS Patent Translation & Filing Revenue growth and improvement in adjusted operating profit through tight control of overheads and FX gains. Strong growth Patent Translation & Filing Patent Translation & Filing opportunities in China and America. Revenue (£m) Adjusted PBT (£m
Slide 19: Patent Information
RWS 2018© FULL YEAR RESULTS Patent Information Strong growth for the search business and PatBase service. Integration and rebranding of AOP completed on 1 October 2018. Patent Information Revenue (£m) Patent Information Adjusted PBT (£m) Strong underlying1 revenue AOP fully integrated into RWS 12 To
Slide 20: Life Sciences
RWS 2018© FULL YEAR RESULTS Life Sciences First full year of results for RWS Life Sciences, formed on 1 October 2017, following the integration of CTi and LUZ. Strong growth Life Sciences Revenue (£m) Life Sciences Adjusted PBT (£m) opportunity in Asia Pacific. 60 Total: £45.3 16 Revenue increased b
Slide 21: Moravia
RWS 2018© FULL YEAR RESULTS Moravia Strong H2 performance with new and existing clients. Assimilation and rebranding to RWS Moravia completed on 1 October 2018. Moravia 11 months to 30 Sept Moravia 11 months to 30 Sept Revenue (£m) Adjusted PBT (£m) Management team Strong H2 performance reorganized
Slide 22: Language Solutions
RWS 2018© FULL YEAR RESULTS Language Solutions Good growth showing benefits of FY 2017 reorganization. Establishing a small team in the US to capitalize on growth Language Solutions Revenue (£m) Language Solutions Adjusted PBT potential in the region. (£m) Revenue increased by 12% Reorganization sup
Slide 23: Case study: cross-selling
RWS 2018© FULL YEAR RESULTS Case study: cross-selling Improving the patenting process for a multinational biopharmaceutical company Background › American multinational biopharmaceutical company › Existing 10-year relationship with RWS Life Sciences › RWS Life Sciences referral to RWS Patent Translat
Slide 24: Market Dynamics
Market Dynamics
Slide 25: Attractive growth markets
RWS 2018© FULL YEAR RESULTS Attractive growth markets PCT European Patent Life Sciences Localization Filings Filings US$1,060bn market US$46.5bn market 243,500 310,784 by 2022 7.9% CAGR 2009-2018 4.5% increase in 2017 4.4% increase in 2017 Source: Common Sense Advisory Source: WIPO Source: EPO 6.5%
Slide 26: Challenges and opportunities
RWS 2018© FULL YEAR RESULTS Challenges and opportunities Unitary Patent › Now expected to be introduced in Q2 2019 at the earliest › German ratification delayed pending a court appeal that claims the UP is unconstitutional › UK ratified unitary patent in May. Uncertainty remains over UK’s membership
Slide 27: Strategic Priorities
Strategic Priorities
Slide 28: Our strategic priorities remain
RWS 2018© FULL YEAR RESULTS Our strategic priorities remain #1 #2 #3 #4 Drive organic growth Cross-sell Harness technology Selective acquisitions › Increase sales › Strengthen Group mentality › Further leverage RWS Moravia › Extend capabilities › Additional services › Sell our full service offering
Slide 29: Current Trading and Outlook
Current Trading and Outlook
Slide 30: Current trading and outlook
RWS 2018© FULL YEAR RESULTS Current trading and outlook › Promising start to FY 2019 with a strong performance in the first two months › Confident in delivering another record year: › leveraging growth opportunities in America and Asia Pacific › continued focus on equipping sales teams to sell acros
Slide 31: Thank you
Thank you RWS.com RWS 2018© FULL YEAR RESULTS
Slide 32: Appendices
Appendices
Slide 33: Shareholders list
RWS 2018© FULL YEAR RESULTS Shareholders list As at 23 November 2018 Top seven shareholders Holding (%) Andrew S Brode 33.0 Liontrust Asset Management 11.8 Aberdeen Standard Investment 7.8 Octopus Investments 6.4 Canaccord Genuity 5.5 Investec 3.1 Merian Global Investors 2.5 33