Smiths News Plc · LSE:SNWS
Smiths News — H1 2016 Earnings Presentation
23 slides from Smiths News's earnings presentation, Apr 19, 2016
Slide 1: Interim Results
Interim Results 19 April 2016
Slide 2: Highlights
Highlights Mark Cashmore Group Chief Executive
Slide 3: Highlights
Highlights Group performance in line with our expectations ► Total revenue * £948.4m +4.2%* ► Adjusted PBT * £27.2m +13.0%* ► Adjusted EPS 8.9p +3.5% ► Free cash flow £18.0m +12.5% ► DPS 3.0p +3.4% ► Continued confidence across the Group supports further dividend growth Good progress on strategic pr
Slide 4: Group Financial Update
Group Financial Update Nick Gresham Chief Financial Officer
Slide 5: Cautionary statement
Cautionary statement This document contains certain forward-looking statements with respect to Connect Group PLC’s financial condition, its results of operations and businesses, strategy, plans, objectives and performance. Words such as ‘anticipates’, ‘expects’, ‘intends’, ‘plans’, ‘believes’, ‘seek
Slide 6: Group performance
Group performance £m Feb 2016 Feb 2015 Change % News & Media 21.0 21.5 (2.4)% Books 1.9 1.9 0.4% Education & Care 2.8 2.8 0.0% Parcel Freight 5.0 1.5 -** Group operating profit 30.6 27.7 10.6% Net finance charges (3.4) (3.6) (5.5)% Group PBT 27.2 24.1 13.0%* Tax (5.7) (4.9) 15.5% Group PAT 21.5 19.2
Slide 7: Non recurring and other items
Non recurring and other items £m Feb 2016 Feb 2015 Integration costs (0.0) (0.2) Network reorganisation costs (1.1) (0.8) Acquisition costs (1.8) (6.3) Amortisation of acquired intangibles (5.1) (2.7) Total before taxation (8.0) (10.0) Taxation 1.8 1.2 Total after taxation (6.2) (8.8) • Total cash c
Slide 8: Free cash flow
Free cash flow £m Feb 2016 Feb 2015 Operating profit 30.6 27.7 Depreciation and amortisation 6.6 4.8 EBITDA 37.2 32.5 Working capital (6.1) (3.9) Capital expenditure (5.7) (4.0) Net interest and fees (2.5) (3.3) Taxation (3.1) (3.4) Pension funding (2.6) (2.3) Other 0.8 0.4 Free cash flow 18.0 16.0
Slide 9: Net debt
Net debt £m Feb 2016 August 2015 Feb 2015 Opening net debt (153.4) (93.0) (93.0) Free cash flow 18.0 39.8 16.0 Dividend (15.3) (21.4) (14.4) Non recurring items (6.9) (8.2) (4.8) Net acquisition financing - (67.0) (61.1) Other (3.3) (3.6) (0.6) Closing net debt (160.9) (153.4) (157.9) Net debt : EBI
Slide 10: Business update
Business update Connect a
Slide 11: Connect News & Media
Connect News & Media 2016 H1 News Total Revenue £731.0m -2.1% ► Total sales ahead of medium term strategic Total adj. op profit £21.0m -2.4% forecast News Revenue £717.7m -2.2% News Profit £20.0m -2.7% ► Newspaper market continuing to show resilience Media Revenue £13.2m +4.0% Media Profit £1.0m +4.
Slide 12: Pass My Parcel
Pass My Parcel ► Successful Peak - growing capability and brand Click & Collect Market awareness ► 20% p.a. growth forecast ► Secured second major client with ASOS ► 33% of sales through mobile ► Launch of mobile returns solution ► 25% of clothing orders returned ► Expecting to handle circa 1 millio
Slide 13: Connect Books
Connect Books 2016 H1 ► Medium term recovery on track Total Revenue £103.5m +0.1% LFL Revenue +4.6% ► Wholesale sales and margin growth Adj op profit £1.9m +0.4% ► Wordery continuing impressive progress LFLs ► Wholesale +6.6% ► UK Academic markets remains difficult ► Wordery +22.5% ► Libraries -11.9
Slide 14: Connect Education & Care
Connect Education & Care 2016 H1 Total Revenue £31.6m 0.2% ► Growing share in a currently challenging market LFL Revenue -1.3% ► Continued strong revenue growth in Early Years Adj op profit £2.8m 0.0% Segmented LFLs ► Growing mix of online orders: >30% ► Early Years +10.7% ► Education -0.3% ► New we
Slide 15: Connect Parcel Freight
Connect Parcel Freight 2016 H1 ► Impressive revenue and profit performance Total Revenue £82.4m 12.0%* ► IDW market continuing to grow LFL Revenue 12.0% ► Winning customers and market share Adj. op profit £5.0m 8.0%* *Based on the same 26 week period last year ► Relentless focus on service Key stati
Slide 16: Summary & outlook
Summary & outlook ► A good performance in H1 with confidence to deliver our full year expectations ► Progress against key strategic priorities remain on track Cost savings continuing to mitigate revenue decline in the short term PMP growth expected to offset core business decline in the medium term
Slide 17: Appendices
Appendices
Slide 18: Reported Sales Performance
Reported Sales Performance FY16 FY15 FY14 Jan July H1 FY July IMS H1 Jan IMS FY H1 Jan IMS IMS IMS News News -4.0% -4.2% -3.4% -3.4% -3.4% -2.5% (0.7%) - (0.5%) - Magazines -3.4% -3.2% -4.6% -4.7% -5.1% -5.2% (6.4%) - (8.1%) - LFL -2.3% -3.7% -4.2% -3.5% -3.3% -2.8% (2.1%) (2.1%) (2.8%) (2.8%) Total
Slide 19: Financial KPIs
Financial KPIs £m HY 2016 FY 2015 FY 2014 FY 2013 FY 2012 Revenue 948.4 1,875.1 1,808.5 1,806.9 1,803.9 Profit before tax 27.2 56.5 50.0 49.9 47.5 Profit after tax 21.5 45.4 40.7 38.9 36.1 EPS 8.9 19.7p 19.6p 19.0p 17.9p Free cash flow 18.0 39.8 37.2 32.6 27.2 DPS 3.0p 9.2p 8.8p 8.4p 7.8p Net Debt 1
Slide 20: Income Statement
Income Statement £m HY 2016 FY 2015 FY 2014 FY 2013 FY 2012 Revenue 948.4 1,875.1 1,808.5 1,806.9 1,803.9 Underlying operating profit 30.6 63.8 55.5 56.4 51.2 Non recurring items (8.0) (27.5) (6.9) (10.8) (10.9) Statutory operating profit 22.6 36.3 48.6 45.6 40.3 Net finance charges (3.4) (7.3) (5.5
Slide 21: Balance Sheet
Balance Sheet £m HY 2016 FY 2015 FY 2014 FY 2013 FY 2012* Intangible assets 168.8 174.8 65.7 68.2 67.1 Property, plant & equipment 45.1 44.6 29.0 26.6 24.5 Other non current assets 12.0 12.4 12.4 12.8 14.5 Total non current assets 225.9 231.8 107.1 107.6 106.1 Cash 4.6 10.9 20.4 10.1 5.1 Other curre
Slide 22: Cash flow
Cash flow £m HY 2016 FY 2015 FY 2014 FY 2013 FY 2012 Operating profit 30.6 63.8 55.5 56.4 51.2 Depreciation and amortisation 6.6 10.8 8.0 7.6 6.9 EBITDA 37.2 74.6 63.5 64.1 58.1 Working capital (6.1) (8.0) 1.2 (5.0) (9.1) Capital expenditure (5.7) (9.2) (10.3) (7.9) (5.1) Net interest (2.5) (5.8) (6
Slide 23: Net debt
Net debt £m HY 2016 FY 2015 FY 2014 FY 2013 FY 2012 Opening net debt (153.4) (93.0) (98.5) (100.5) (63.3) Free cash flow 18.0 39.8 37.2 32.6 27.2 Dividend (15.3) (21.4) (17.7) (16.0) (14.9) Non recurring items (6.9) (8.2) (4.4) (5.9) (10.3) Net acquisition financing - (67.0) (0.3) (5.1) (38.1) Other