Rws Holdings Plc · LSE:RWS
Rws — H1 2021 Earnings Presentation
28 slides from Rws's earnings presentation, Jun 8, 2021
Slide 1: Half Year Results 2021
Half Year Results 2021 8 June 2021 Andrew Brode Richard Thompson Des Glass RWS 2021© Chairman Chief Executive Officer Chief Financial Officer 1 © 2021 RWS
Slide 2: World's leading provider of technology-enabled language content and IP services
World’s leading provider of technology-enabled language content and IP services Language & Content IP Services Technology 15% 17% 23% 45% Language Regulated Services Industries 18 of the 90 of the • The capabilities, scale and reach to serve the largest global companies top 100 top 20 patent brands
Slide 3: A robust first half performance
A robust first half performance REVENUE ADJUSTED PBT2 ADJUSTED BASIC EPS2 £326.4m £50.5m 10.5p + 92% + 53% + 12% + 3% underlying1 + 25% underlying1 H1 2020: £169.7m H1 2020: £33.1m H1 2020: 9.4p PROPOSED INTERIM DIVIDEND CASH NET CASH/(DEBT)3 2.00p £62.2m £11.8m + 14% After the SDL combination and £
Slide 4: A transformational period
A transformational period fSDL integration Combination positions RWS IP Services – improved progressing well with cost as a leader in structural trading compared to H2 synergies of £33m by Sept. growth and fragmented 2020, albeit held back by Covid-19 2022 now identified markets Regulated Industries
Slide 5: Financial Review HY 2021
Financial Review HY 2021 5 © 2021 RWS
Slide 6: Income statement
Income statement 6 months ended 6 months ended Reported revenue up significantly following the 31 March 2021 31 March 2020 (£m) (£m) acquisition of SDL: › LFL growth +0.2% Revenue 326.4 169.7 › Underlying1 growth +3% Cost of sales 179.9 (103.9) Gross margin 610bps higher at 44.9% driven by the Gross
Slide 7: Underlying segmental revenue bridge
Underlying segmental revenue bridge UNDERLYING1 REVENUE GROWTH £m 340 6.0 2.0 (1.1) 1.8 333.9 (7.5) 326.4 155.5 -2% IP Services 320 300 280 +9% Regulated Industries 260 240 220 +1% Language Services 200 180 169.7 Language & Content 160 +4% Technology H1 2020 Acquisitions2 Regulated Language IP Servi
Slide 8: Balance sheet
Balance sheet As at As at Balance sheet 31 March 2021 30 September 2020 (£m) (£m) Non-current assets 1,058.4 456.5 SDL combination Trade and other receivables 173.1 82.1 › Goodwill and intangible assets have provisionally Other current assets 4.1 0.6 increased in advance of the completed purchase pr
Slide 9: Net debt/cash bridge
Net debt/cash1 bridge £m 80 70 55.0 60 50 (9.9) (10.0) 40 21.2 30 20 25.7 0.5 11.8 (28.2) 10 (5.8) (20.2) (1.4) 0 -10 -20 (15.1) Opening H1 2021 Non-cash Working SDL cash Capex Tax Dividends Lease Interest Other Closing net debt1 operating items capital acquired payments net cash1 profit 1 Net debt/
Slide 10: Operational Review 2021
Operational Review 2021 10 © 2021 RWS
Slide 11: IP Services
IP Services H1 performance Revenue (£m) Adjusted Operating Profit › Improved trading performance in H1 21 vs H2 20 reflecting stabilisation and (£m) 70 upturn (CC revenue down 2% H1 21 on H1 20) 30 › Highly successful PatBase 2.0 launch – 8% growth year-on-year 60 › Continue to be held back by Covid
Slide 12: Language and Content Technology
Language and Content Technology H1 performance Revenue (£m) Adjusted Operating Profit › A strong H1 with CC revenue +4% (£m) › Growth coming from Content Technology 60 30 Integration process 50 25 › Focus on operational improvement › Rationalising the Group’s technology products 40 20 › Iconic Trans
Slide 13: Language Services
Language Services H1 performance Revenue (£m) Adjusted Operating Profit › Strong growth in fMoravia (revenue up +5% in CC), with increased sales to (£m) several major Technology customers (underlying currency) › fSDL CE slightly impacted by accounts consolidation (dissynergies) resulting from the in
Slide 14: Regulated Industries
Regulated Industries H1 performance › Strong underlying revenue growth in the period +9% Revenue (£m) Adjusted Operating Profit › Growth is coming from all lines of business – Life Sciences, Linguistic Validation and Legal / Financial (£m) › Impressive customer focus being maintained by all RI Teams
Slide 15: SDL integration
SDL integration y. 4 \\ ? ‘ 15 ©2021 RWS
Slide 16: Expect to deliver significantly increased cost synergies
Expect to deliver significantly increased cost synergies Additional cost savings as we progress integration £33m by Sept. • Savings from office consolidation, technology 2022 rationalisation • Improved efficiency from greater use of technology in service delivery Original £15m expected by Sept 2022
Slide 17: Multiple opportunities to drive efficiencies and leverage scale
Multiple opportunities to drive efficiencies and leverage scale Increased sales opportunities Operational efficiencies and enhanced proposition • Enhanced status as world leader • Elimination of duplication to use best of both • Leverage enlarged footprint and sales teams operating models, service a
Slide 18: Environmental, Social and Governance
Environmental, Social and Governance 18 © 2021 RWS
Slide 19: ESG – increased focus
ESG – increased focus Engagement on materiality Social • Communicated with shareholders holding 80% • Employee health and wellbeing - special events, of issued share capital (excluding directors) eg. Well-being week, mindfulness sessions, and Pilates and yoga classes • Embarked on engagement program
Slide 20: ESG – increased focus
ESG – increased focus Community Governance • New enlarged intake of University of Manchester • Board and Committee independence sponsored Language students welcomed • Increased disclosure on website of internal • RWS employees given the opportunity to work as governance documents mentors with Univer
Slide 21: Current trading & Outlook
Current trading & Outlook 21 © 2021 RWS
Slide 22: Our strategic priorities remain
Our strategic priorities remain Drive Cross-sell and joint Harness technology Selective aquisitions 1 organic growth 2 sell 3 4 › Focus on quality of › Strengthen Group mentality › Focus on the development of › Complementary to existing services to clients › Sell our full service offering Language C
Slide 23: Summary and Outlook
Summary and Outlook • SDL integration progressing well, with a strong management team in place to realise the increased synergies • The second half has started well, with a recovery in certain markets • Well placed to deliver good progress in line with our expectations for the full year, despite for
Slide 24: Thank you and questions?
Thank you and questions? 24 © 2021 RWS
Slide 25: Appendices
Appendices 25 © 2021 RWS
Slide 26: Key investment case highlights
Key investment case highlights Strong market positions in structurally growing end markets Experienced Attractive and management team sustainable margins Successful track record Market leading language and of value-enhancing M&A content technology products Strong balance sheet ensuring Strong cash f
Slide 27: A 17-year track record growth
A 17-year track record growth 27 © 2021 RWS
Slide 28: Shareholders list
Shareholders list As at 30 April 2021 Top shareholders Holding (%) Andrew S Brode 23.2 Liontrust Asset Management 8.6 Canaccord Genuity Wealth Management 5.0 Octopus Investments 3.5 Aberdeen Standard Investments 3.0 Financiere de l’Echiquier 2.5 Janus Henderson Investors 2.4 28 © 2021 RWS