Johnson Service Group Plc · LSE:JSG
Johnson Service — H1 2022 Earnings Presentation
28 slides from Johnson Service's earnings presentation, September 2022
Slide 1: Interim Results
Interim Results 6 months ended 30 June 2022 Peter Egan Chief Executive Officer Yvonne Monaghan Chief Financial Officer
Slide 2: Highlights
Highlights “Continuing recovery in HORECA. Confidence for longer term growth.” 2
Slide 3: Highlights
2022 Interim Results Highlights • Strong commercial momentum in HORECA with volumes continuing to recover as hospitality returns to more normal and predictable levels; Q2 volumes at 91% of 2019 level • Successfully continued to secure and implement material price increases across our customer base •
Slide 4: Trading Environment
2022 Interim Results Trading Environment Workwear - Remained resilient throughout the pandemic - Revenue growth of 2.3% YOY - Strong customer retention at 95% - Seeing a small contraction in terms of products on rental - Market remains competitive HORECA - Continued recovery in HORECA - Volumes at 8
Slide 5: Financials
Financials “…we have achieved a significant improvement in the Group’s financial performance…” 5
Slide 6: Income Statement
2022 Interim Results Income Statement 2022 2021 2021 HY HY FY Revenue (£m) 176.2 99.6 271.4 Adjusted EBITDA (£m)1,2,3 42.8 16.9 67.9 Adjusted EBITDA margin (%)1,2,3 24.3 17.0 25.0 Adjusted operating profit / (loss) (£m)2,3,4 12.8 (9.5) 12.7 Adjusted operating margin (%)2,3,4 7.3 (9.5) 4.7 Exceptiona
Slide 7: Management of Cost Pressures
2022 Interim Results Management of Cost Pressures Energy • Highly volatile market with unprecedented day ahead and forward pricing 2022 H1 Cost Analysis • 2022 H1 energy costs represented 9.3% of revenue (2019 H1: 6.5%) 7.3% • We expect energy costs to increase as a % of revenue in H2 given current
Slide 8: Cash Flow
2022 Interim Results Cash Flow 2022 HY 2021 HY1 2021 FY £m £m £m Adjusted operating profit / (loss) 12.8 (9.5) 12.7 Depreciation, impairment and software amortisation 30.0 26.4 55.2 Working capital (9.1) (7.4) (18.3) Fixed assets and software (6.7) (8.7) (24.4) Capital expenditure Rental stocks (net
Slide 9: Other Financial Information
2022 Interim Results Other Financial Information Interest Taxation • Interest cost of £1.6m, including £0.8m relating to lease • Effective tax rate1 of 9.7% (2021 HY: 23.1%; 2021 FY: (5.3%)) liabilities (2021 HY: £1.6m and £0.8m respectively; 2021 FY: • £2.6m credit relating to 130% super deduction
Slide 10: Capital Structure
2022 Interim Results Capital Structure Capital Allocation Policy Dividend • Maintaining a strong balance sheet • Interim dividend of 0.8 pence per share • Continuing capital investment to increase processing • Intention to reduce cover from 3x to 2.5x by FY2024 capacity and efficiency • Appropriate
Slide 11: Operations
Operations “Our organic growth is underpinned by increased sales activity and a strengthening pipeline of new business enquiries…” 11
Slide 12: Capital Expenditure £6.7m
2022 Interim Results Hinckley Northern Automated Ireland sortation Upgrade of Capital Expenditure system processing facility £6.7m Investment Workwear Laundry Management system Shaftesbury Carbon Trust backed upgrade water recycling system “Focusing on capital investment to improve energy and produc
Slide 13: Operational Performance Workwear
Operational Performance Workwear 13
Slide 14: Operational Performance Workwear
2022 Interim Results Operational Performance Workwear 2022 HY 2021 HY 2021 FY Revenue (£m) 66.0 64.5 128.9 Adjusted EBITDA (£m)1,2,3 22.2 23.0 46.3 Adjusted EBITDA margin (%)1,2,3 33.6 35.7 35.9 Adjusted operating profit (£m)2,3,4 10.0 11.3 22.5 Adjusted operating margin (%)2,3,4 15.2 17.5 17.5 Note
Slide 15: Operational Performance Workwear
2022 Interim Results Operational Performance Workwear • Organic revenue growth of 1.7% • Purchase of small number of contracts in Feb 2022 • Customer retention levels remained at 95% (2021: 95%) • Existing customer satisfaction at 85%, maintaining our position of providing first class service • Sale
Slide 16: Operational Performance HORECA
Operational Performance HORECA Hotel, Restaurant & Catering 16
Slide 17: Operational Performance HORECA
2022 Interim Results Operational Performance HORECA Hotel, Restaurant & Catering 2022 HY 2021 HY 2021 FY Revenue (£m) 110.2 35.1 142.5 Hotel, Restaurant & Catering Linen Adjusted EBITDA (£m)1,2,3 23.3 (3.5) 26.2 Adjusted EBITDA margin (%)1,2,3 21.1 (10.0) 18.4 Hotel Linen Adjusted operating profit /
Slide 18: Operational Performance HORECA
2022 Interim Results Operational Performance HORECA Hotel, Restaurant & Catering • Volumes were 83% of normal in first quarter, improving to 91% in the second quarter • Additional employee cost carried through the winter months impacted margin but enabled us to meet demand as volumes increased • Enc
Slide 19: Sustainability
The Johnsons Way JSG’s refreshed approach to sustainability Sustainability “We believe that embedding a best in class sustainability programme throughout our operations will help position us as a leader in responding to the challenges faced by the textile services industry and prove to be a differen
Slide 20: Sustainability
2022 Interim Results Sustainability • Launch of “Johnsons Way” in February 2022 • Inaugural Sustainability Report published with overview of progress made on the “Johnsons Way” • Successful conclusion of the wastewater recycling pilot at our Shaftesbury site with installation also planned for our Co
Slide 21: Outlook
Outlook “We will continue to identify opportunities for us to invest to strengthen our position in the market and enhance our competitive advantage.” 21
Slide 22: An Essential Service Provider
2022 Interim Results An Essential Service Provider “…delivering outstanding customer service…” An Essential Cost Effective Substitution Service Provider The cost of our Limited alternatives The services we service is generally to our offering in a provide to our not significant to the market that ha
Slide 23: Outlook
2022 Interim Results Outlook ”Trading momentum since June 2022 remains encouraging” Workwear HORECA Outlook • Focus remains on continuous • Volumes for the six weeks to the middle • Trading momentum remains encouraging improvement of our processes and of August increasing to 92% • Expect full year o
Slide 24: Appendices
JOHNSON Service Group PLC Appendices
Slide 25: Appendix 1 Segmental Analysis
2022 Interim Results Appendix 1 Segmental Analysis 2022 HY 2021 HY 2021 FY Adjusted Adjusted Adjusted Operating Operating Operating Profit / Adjusted Profit / Adjusted Profit / Adjusted Revenue (Loss)1 EBITDA1,4 Revenue (Loss)1,2,3 EBITDA1,2,3,4 Revenue (Loss)1,2 EBITDA1,2,4 £m £m £m £m £m £m £m £m
Slide 26: Appendix 2 Prior Period Restatement
2022 Interim Results Appendix 2 Prior Period Restatement Following an IFRIC agenda decision clarifying the accounting for configuration and customisation costs incurred in implementing Software-as-a Service, the Group identified £1.5m of capitalised software costs which have now been expensed to the
Slide 27: Appendix 3 Financial Track Record
2022 Interim Results Appendix 3 Financial Track Record Revenue (£m) Adjusted EBITDA (£m) Adjusted Diluted EPS - excluding super deduction (p) 119.0 350.6 10.5 321.1 101.4 9.3 290.9 92.3 8.7 271.4 229.8 67.9 53.6 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 -3.3 1.7 Adju
Slide 28: www.jsg.com
JOHNSON Service Group PLC www.jsg.com
Johnson Service Group — H1 2022 Earnings Presentation on 6ix