Johnson Service Group Plc · LSE:JSG
Johnson Service — H1 2016 Earnings Presentation
20 slides from Johnson Service's earnings presentation, 2016
Slide 1: Interim Results for the 6 months ended 30 June 2016
PO RINSON INTERIM RESULTS For the 6 months ended 30 June 2016 Chris Sander Chief Executive Officer Yvonne Monaghan Chief Financial Officer
Slide 2: Strong performance with Adjusted Operating Profit increased by 42.5% to £16.1 million
2 Strong performance with Adjusted Recent acquisitions delivering Operating Profit1 increased by synergy benefits and performing 42.5% to £16.1 million ahead of expectations Adjusted Profit Before Tax2 Significant increase in our presence increased by 39.6% to £14.1 million in the UK Textile Rental
Slide 3: Income Statement
3 Income Statement Continuing operations 2016 H1 2015 H1 Change Revenue £137.6m £109.2m 26.0% Adjusted operating profit1 £16.1m £11.3m 42.5% Adjusted operating margin1 11.7% 10.3% Exceptional items £(0.7)m £(7.6)m Adjusted PBT1 £14.1m £10.1m 39.6% Adjusted EPS1 3.3p 2.6p 26.9% Fully diluted number o
Slide 4: Financial Results – Cash Flow
4 Financial Results – Cash Flow £m 2016 H1 2015 H1 2015 FY Continuing adjusted operating profit 16.1 11.3 27.9 Depreciation and software amortisation (excl. exceptionals) 20.0 15.0 32.4 Working capital (excl. exceptionals) 2.7 2.0 1.7 Capital expenditure – Fixed assets (5.2) (3.8) (4.4) – Rental sto
Slide 5: Revenue and Profit 2012-2016
5 Revenue £m Profit £m 120 18 16 100 14 80 12 10 60 8 40 6 4 20 2 0 0 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 -2 Textile Rental Drycleaning Textile Rental Drycleaning Note: Profit is stated before exceptional items and amortisation of customer contracts
Slide 6: Our operating sites
6 Workwear Restaurant/Catering Our operating • 17 laundries • 6 laundries sites • 5 depots • 1 depot • 2,100 employees • 1,250 employees • 359 commercial vehicles • 160 commercial vehicles • 37,000 customers • 10,000 locations serviced Hotel Linen Drycleaning • 6 laundries • 203 branches • 1 depot •
Slide 7: Textile Rental
7 Textile Rental 2016 H1 2015 H1 Increase Revenue £115.7m £85.7m 35.0% Adjusted operating profit1 £17.3m £12.4m 39.5% Margin 15.0% 14.5% Textile Rental includes five recognised brands Restaurant Premium High High and Workwear linen and volume volume catering chefs’ wear hotel linen hotel linen linen
Slide 8: Textile Rental
8 Textile Rental Revenue growth of 35.0%, Zip, Afonwen and Chester including £12.3m from Zip, acquisitions, expanding Afonwen and Chester volume hotel linen Apparelmaster organic Zip rebranded as Bourne growth from new business and Chester as Afonwen at wins, existing customers and end of June 2016
Slide 9: Drycleaning
9 Drycleaning 2016 H1 2015 H1 Change Revenue £21.9m £23.5m (6.8%) 1 Adjusted operating profit £0.6m £0.5m 20.0% Margin 2.7% 2.1% Partnership with Since the restructure Waitrose continues in early 2015, 203 branches and to expand and we performance has 154 Waitrose anticipate a small been solid with
Slide 10: Exceptional items
10 Continuing, £m 2016 H1 2015 H1 Acquisition related costs 0.9 0.8 Pension costs 0.3 - Textile Rental property disposal (0.5) - Restructuring costs – Textile Rental - 0.6 Restructuring costs – Drycleaning - 6.2 Total 0.7 7.6 Acquisition related costs Pension costs Property disposal Include professi
Slide 11: Bank Facility, Hedging and Interest
11 Bank Facility Hedging Interest • Amended Bank Facility signed in • Hedging swaps in place from Jan • Interest cost (excluding notional April 2016 and set to mature in April 2016 which hedge £15.0m at 1.47% pension interest costs) increased to 2020 to Jan 2019 and £15.0m at 1.67% to £1.7m (2015 H1
Slide 12: Pensions and Tax
12 Pensions Tax • Net IAS 19 Pension deficit reduced to • Underlying tax rate1 of 20.3% (2015: £10.1m (Dec 2015: £11.9m): 20.7%) compared to a weighted average rate of 20.0% (2015: ‐ Liabilities increased partly due to 20.25%) the reduction in discount rate assumption • No credit or charge in respec
Slide 13: Share Price and acquisition history
13 100 Drycleaning 80 Strategic Review SGP Disposal Ashbon Acquisition 60 Share Price (p) Cannon London Linen Zip Acquisition Acquisition Acquisition 40 Bourne Chester Acquisition Acquisition 20 Drycleaning Afonwen Strategic Review Acquisition 0 Dec 2011 Dec 2012 Dec 2013 Dec 2014 Dec 2015 Results 2
Slide 14: Exploit operational opportunities; Invest for our future
14 Exploit operational opportunities Invest for our future • Continue to integrate • Continue to invest in our processing acquisitions effectively within the facilities to enhance our customer business service • Exploit Continue to realise operational • Target investment across the Group benefits fr
Slide 15: Thank You
(F)JOHNSON THANK YOU
Slide 16: Segmental results 2016 H1 vs 2015 H1
16 2016 H1 2015 H1 Operating Operating Revenue Profit1 Revenue Profit1 £m £m £m £m Textile Rental - Trading 115.7 16.7 85.7 11.9 - Allocated Income - 0.6 - 0.5 115.7 17.3 85.7 12.4 Drycleaning - Retail Drycleaning 21.9 0.6 23.5 0.5 Unallocated Costs - Group Costs - (1.8) - (1.6) TOTAL 137.6 16.1 109
Slide 17: Acquisitions: Bourne and Afonwen
17 Acquired on 31 Facilitates January 2016 for logistical Reported revenue Transfer of work £15.0m and synergies and of £7.0m for the facilitates further additional debt of growth within year to 31 January growth at Bourne £2.7m, including existing customer 2015 freehold site base Reported revenue A
Slide 18: Acquisition of Chester Textiles
18 Acquired on 28 Geographical April 2016 for Laundries in History of annual Capital investment coverage £52.6m on a debt Cardiff, Reading revenue growth of over £9.0m complements free, cash free and Pwllheli and a and reputation for over the previous previous basis including depot in Leeds excellen
Slide 19: Hotel linen acquisitions overview
19 Bourne (2014) Zip Textiles (2016) Afonwen (2016) Chester Textiles (2016) Employs c450 people Employs c145 people Employs c750 people Employs c130 people Processes 1,300,000 pieces Processes 465,000 pieces Processes 2,600,000 pieces Processes 500,000 pieces per week1 per week1 per
Slide 20: The Enlarged JSG Hotel Linen Business
20 The Enlarged JSG Hotel Linen Business • Comprises six well invested processing facilities and a substantial depot in Leeds • Provides extensive national coverage to customers throughout England and Wales • Each site exclusively focused on high volume hotel linen Leeds Chester • Combined revenue o
Johnson Service Group — H1 2016 Earnings Presentation on 6ix