Restore Plc · LSE:RST
Restore — Investor Day (November 2023)
51 slides from Restore's investor day presentation, Nov 16, 2023
Slide 1: Capital Markets Event
v Capital Markets Event 16TH NOVEMBER 2023
Slide 2: Agenda
Agenda • Jamie Hopkins (Chair) – Introduction • Charles Skinner (CEO) – Background • Nigel Dews (MD) – Records Management • Mark Horrocks (MD) – Digital • Steve Talbot (MD) – Technology • Natalie Matthews (Interim MD) – Datashred • Tim Ryder (MD) – Harrow Green • Dan Baker (CFO) – Finance • Charles
Slide 3: Simple but not easy
Simple but not easy • What we do is not complex • Execution is critical • What are the market dynamics • What is the customer buying • How to deliver efficiently, accurately and cost-effectively
Slide 4: Strength of our business
Strength of our business • Market leader • Recurring revenues • Constant and continuing market demand • High operating margins • Off-site • Blue chip customers with particular scope in B2G
Slide 5: Structural changes
Structural changes 1) New Chair 2) New CFO 3) Two new BU Managing Directors 4) Most central departments removed
Slide 6: Management style changes
Management style changes • De-centralise • Minimise internal charges • Short lines of communication • Reduce demand for information from centre • Not acquisition led • Eyes on, hands off
Slide 7: Nigel Dews – MD, Records Management
Capital Markets Event th 16 November 2023 NIGEL DEWS – MD, RECORDS MANAGEMENT
Slide 8: Nigel Dews – Managing Director
Nigel Dews – Managing Director • Appointed Managing Director of Records Management in January 2020 • Previously Managing Director for Restore Harrow Green (2008 – 2019) • Joined Harrow Green in 1999 • Early career with Pickford’s Removals • Records Management responsibility at Harrow Green and Pickf
Slide 9: Our Business
Our Business Highlights • Over 22 million boxes in store • 52 secure storage sites across the UK • 900 colleagues • Over 1.4 million items handled every month • Market leading position • Strong recurring revenue (70% of revenue generated from storage)
Slide 10: Our customers
Our customers We have a broad customer base with a good mix of both public and private customers
Slide 11: Key Elements
Key Elements Main characteristics of our business Solid recurring Sticky Simple but not revenue customers easy Digital Price increases High switching opportunities costs
Slide 12: Immediate focus
Immediate focus • Margin recovery • Productivity improvements • Increased governance over pricing decisions • Sales and cost incentives for local teams • Increase revenue per box • Price uplift • Revenue leakage • Decrease cost per box • Property consolidation • Unvended opportunities • Innovative s
Slide 13: Thanks
v Thanks Nigel Dews Managing Director Records Management 13
Slide 14: Digital Vision & A Clear Model For Success
Capital Markets Event 16th November 2023 Mark Horrocks MD Restore Digital Digital Vision & A Clear Model For Success
Slide 15: Introduction
Introduction Joined Restore Digital in April 2016 and held the roles of Operations & IT Director and Commercial Director before being appointed Managing Director in January 2019. Mark Horrocks Managing Director C A PI TA L M A R KE T S EV EN T 16 T H N O V EM B ER 2 0 2 3
Slide 16: Who are Restore Digital?
Who are Restore Digital? We are the UKs leading digital transformation specialists, providing solutions and services to address document and information management challenges across all sectors. Our digital services help businesses to gain insight, automate processes and improve workflows to become
Slide 17: We offer a range of services across six categories
WE OFFER A RANGE OF SERVICES ACROSS SIX CATEGORIES Digital Document Document Digital Workflow Consultancy & Claims Mailroom Management Scanning & AI Professional Services Management
Slide 18: Restore Digital – An Overview
Restore Digital – An Overview Business No. 1 Certifications Market position ISO 9001, 27001, 14001, 45001, Higher proportion of revenues Increased scale / 22301, BS10008, Cyber Essentials Plus from long term/higher margin product mix, services. improving margins 8 900m 760 £54.5m Sites for local Clo
Slide 19: Our customers include
Our customers include C A PI TA L M A R KE T S EV EN T 16 T H N O V EM B ER 2 0 2 3
Slide 20: Recent Achievements / Changes
Recent Achievements / Changes Intense Focus Other Substantial B2G On Public Sector D i g i t a l M ailroom Improved Operational Wins Contract Wins & Sales Efficiency £140m HMRC contract WIN HMLR & UKVI By reducing operational scanning sites to reflect changing service demand. Securing Gold level tie
Slide 21: Immediate Business Focus
Immediate Business Focus Dominance in Complex Mailroom Solutions Enhanced Service Offerings Partnership Strategic Acquisitions Customer-Centric Approach Revitalised Sales Force C A PI TA L M A R KE T S EV EN T 16 T H N O V EM B ER 2 0 2 3
Slide 22: Market leaders, transforming businesses
“Market leaders, transforming businesses”
Slide 23: Capital Markets Event
Capital Markets Event 16th November 2023
Slide 24: Steve Talbot – Managing Director
Steve Talbot – Managing Director Started in Security Shredding. Sold my business to PHS who Restore subsequently purchased in 2016. Entered the IT Recycling market by joining Restore PLC and making our first acquisition of IT Efficient c£2m Involved in the subsequent acquisitions in Birmingham, Guil
Slide 25: Our Business
Our Business Highlights The largest full IT lifecycle services 400+ colleagues Provide Nationwide Service in the UK C£33m Locations: IT Processing Specialists Restore Technology, Bedford Ultratech & Ultratest, Stevenage Restore Technology, Birmingham Relocom, Bedford Restore Technology, Runcorn On-s
Slide 26: This is how we make money
This is how we make money Receipt of new product, Environmentally unpacking, asset tagging, conscious disposal of imaging and configuration unreuseable IT equipment and related assets Deliver to desk and install – predominantly to office but expanding into WFH Re-marketing revenue (Ecommerce) Supply
Slide 27: Our Customers
Our Customers Technology AVIVA ‘Capita BNP PARIBAS NHS com, |®, Commercial Ministry Service of Defence AIRBUS =O
Slide 28: CDW with Restore Technology
CDW with Restore Technology A large government agency with over 100,000 employees, many/most of whom have IT requirements Appointed through CDW to manage all of the Government agency's IT assets throughout their lifecycle CDW went into considerable amount of due diligence on our capability and recog
Slide 29: Opportunities
Opportunities Blue-chip and B2G clients Further develop our channel partnerships (CDW, Softcat, etc) Leverage Ultratech/Ultratest strength of market position and IP New financial IT system (gone live) and fully-integrated operational system, generating operational efficiencies particularly in transp
Slide 30: Thank You!
Thank You! Steve Talbot Managing Director
Slide 31: Capital Markets Event
Capital Markets Event 16th November 2023 Natalie Matthews – Managing Director
Slide 32: Natalie Matthews – Managing Director
Natalie Matthews – Managing Director Appointed Interim Managing Director of Datashred in October 2023 3 years in Restore - Transformation and Integration Director 25 years in senior leadership roles Previous career was spent in the IT Sector for 30 years Track record of successfully delivering chang
Slide 33: Our Business
Our Business One of the 2 dominant and genuinely national operators in the UK supplying secure paper destruction services 11 sites across the UK 50,000 tonnes of material shredded annually 350 colleagues 150+ fleet Strong contracted annuity revenues @ 62% plus paper sales (total revenues subject to
Slide 34: Our Customers
Our Customers Good mix of private and public sector Average customer lifecycle is 7 years
Slide 35: Key Elements
Key Elements Strong recurring Revenue from both Digital platforms and strong MI Customer self service Revenues & rolling ‘Destruction & Paper Sales’ contracts Price increases Marketing leading CSAT scores Strong staff engagement
Slide 36: Challenges
Challenges ➢ Revenue and market conditions shift with paper price, currently near bottom of cycle ➢ Commodity market with limited price differentiation opportunities ➢ Low barriers to entry for small, local operators ➢ Market unconsolidated due to historic high price expectations from potential vend
Slide 37: Opportunities
Opportunities ➢ Can and should be the lowest-cost producer in the market ➢ Well-invested with 2, perhaps 3, of best facilities in UK ➢ Historic high overhead has improved operational, MI and sales processes and can now be reduced ➢ Leverage Restore plc’s property footprint to reduce rent as % of rev
Slide 38: Natalie Matthews – Managing Director
Natalie Matthews – Managing Director
Slide 39: Tim Ryder – MD, Restore Harrow Green
Capital Markets Day 16th November 2023 TIM RYDER – MD, RESTORE HARROW GREEN
Slide 40: Tim Ryder – Managing Director
Tim Ryder – Managing Director • Joined Harrow Green in 1993 • Appointed Managing Director of Restore Harrow Green in January 2020 • Three years in the Records Management team 2012-2015 • Operational, Records/Storage/Account Management • Team focused, margin management, delivery
Slide 41: Our Business
Our Business Highlights • Strong revenue growth since pandemic recovering MOD contract revenue gap • Market Leader in Commercial Moving Market • Growth in Life Science and Storage services • 370 colleagues and growing - 10 sites in Q1/24. • Largely organic growth with strategic acquisitions along th
Slide 42: Our Customers
Our Customers We have a broad customer base with a good mix of both public and private customers
Slide 43: Key Elements
Key Elements Continued Expanding Offering organic growth geographical more services and locations diversifying Market leader Cost Management Growing resources
Slide 44: Focus & Margin
Focus & Margin Sales & Development • Maximise the opportunity • New Services and Incentives Operational Efficiency • Managing resources • Continued move from temp to perm labour Property • London Portfolio Strategy • Setup & opening of new Oxford Site Delivery of key projects • Large Pharma and BT p
Slide 45: Thank you
Thank you Tim Ryder Managing Director Restore Harrow Green
Slide 46: Dan Baker – CFO
Dan Baker – CFO • Joined Restore on 13 November 2023 • Chartered Accountant (qualified with Arthur Andersen/Deloitte) • Blue-chip background (Johnson Matthey, Smith & Nephew) • Group and business experience, of big and small companies • Why I joined: 1. Strong business 2. Strong people 3. Management
Slide 47: Restore is a highly cash generative business…
Restore is a highly cash generative business… Cash conversion* oOur priority is now to maintain shareholder returns and reinvest for organic growth. 140% oSpecific incremental capex investments will be made 120% over an above historic averages where it makes 100% business sense, e.g. ~£10m to increa
Slide 48: …with ample borrowing facilities in place
…with ample borrowing facilities in place o£200m Revolving Credit Facility entered into in January 2022. o£25m US Private Placement with 5-year term entered into during Q1 2023. o£25m floating debt hedge secured in Q3 2023. Amount (£’m) Interest rate Revolving Credit Facility 200.0 SONIA + Credit Ad
Slide 49: CEO Priorities
Oc CEO Priorities
Slide 50: The 2 year Restore narrative
The 2 year Restore narrative Focus on operating margin Importance of cash generation Business units to unleash potential
Slide 51: Thank you Q&A
Thank you Q&A