Smiths News Plc · LSE:SNWS
Smiths News — Q1 2023 Earnings Presentation
23 slides from Smiths News's earnings presentation, May 3, 2023
Slide 1: Interim Results
Interim Results 3 May 2023
Slide 2: Headlines
Jon Bunting Chief Executive Officer Headlines
Slide 3: Delivering in a challenging macro environment
Headlines Key metrics in line with plan • Adjusted Operating Profit of £20.4m up 6.8% • Adjusted profit before tax of £17.1m, up 11.8% • Delivering in a • Adjusted EPS of 5.6p up 9.8% Average net debt of £26.3m down 55.3% challenging Strong sales and close cost control • Price rises driving strong r
Slide 4: Financial performance
Paul Baker Chief Financial Officer Financial performance
Slide 5: Financial headlines
Financial headlines Revenue £550.1m +1.0% Revenue Price increases and one- +6.8% off events Adjusted operating profit £20.4m Free cash outflow Adjusted earnings per share 5.6p +9.8% Prior year includes one-off receipts of £14.6m FY in line with expectations Free cash flow -£0.2m -101.1% Average bank
Slide 6: Revenue year on year
Revenue year on year Newspapers Out-performing historic range Benefit of price increases Magazines Returning to historic range Newspapers Magazines One Shots +0.5% -6.1% +88% One Shots World Cup Pokémon trading cards Football collections 6
Slide 7: Adjusted income statement
Adjusted income statement Operating profit +£1.3m (6.8%) £m Adjusted H1 2023 H1 2022 Better wholesale margin, and Revenue 550.1 544.8 additional revenue offsetting impact of inflation Operating profit 20.4 19.1 Operating margin 3.7% 3.5% Net finance charges (3.3) (3.8) Profit before tax 17.1 15.3 Ne
Slide 8: Free cash flow – continuing
Free cash flow – continuing Free cash flow -£0.2m £m H1 2023 H1 2022 Adjusted operating profit 20.4 19.1 Prior half year benefitted from one-off Depreciation and amortisation 4.8 5.3 receipts. EBITDA 25.2 24.4 H1 2023 impacted by £5m of trade Working capital (13.6) (7.8) receivables paid on the firs
Slide 9: Movement in bank net debt since H1 2022
Movement in bank net debt since H1 2022 Net debt : EBITDA reducing H1 2022 0.9x H1 2023 0.5x 23.2 38.8 Average net debt -55% (5.0) 7.5 (9.8) 22.9 H1 2022 £59m H1 2023 £26m H1 2022 Operating Working Tuffnells DC Dividend H1 2023 Net debt cashflow Capital Net debt Operating cashflow c£23m Rolling 12 m
Slide 10: Modelling guidance
Modelling guidance Change of headline • Adjusted operating profit – maintain performance performance measure New measure from FY2023 • Cash flow – consistent underlying cash flows allowing debt reduction and dividends No change to underlying profit • Net debt – reducing with consistent operating cas
Slide 11: Delivering success
Jon Bunting Chief Executive Officer Delivering success
Slide 12: A good performance in line with our plans
Strong headline results Strong sales benefitting from price and margin mix Inflationary impacts A good managed to plan performance Sustainable efficiencies progressing well in line with Accelerated contract awards our plans clarifying network to 2029 Progress on new organic revenue streams 12
Slide 13: A unique network and service proposition
A unique network and service proposition Network of 36 depots – 24,000 daily deliveries Exclusivity with all major publishers Fixed high density footprint Synergistic deliveries Predictable volumes and costs Essential partner to our customers 13
Slide 14: Long-term value drivers
Long-term value drivers Value creation Accelerating our Delivering Developing new contract renewals great service profit streams to give clarity of our to support efficiency by leveraging our assets network and cash flows and minimise waste and customer base 14
Slide 15: Accelerating our contract renewals
Accelerating our contract renewals 65% re-secured to Circa 65% of contractual revenues 2029 re-secured to at least 2029 Clarity of network scale and footprint 35% ongoing Visibility of future cash flows agreements Contracted sales revenues New contracts to at least 2029 Existing agreement to 2025 /
Slide 16: Delivering great service
Priorities FY2022 Delivering great service 99.6% 99.9% Market leading KPIs 96.8% 93.1% No.1 for customer satisfaction Capital light operating model Long term efficiency opportunities Leveraging the network and customer base Pick and On time Returns Returns pack delivery Collection processing accurac
Slide 17: Developing new profit streams
Future direction Leveraging Developing new profit streams capabilities Moving up the value chain Service Logistics Supply chain Direct to Categories expansion services integration consumer and data 17
Slide 18: Developing new profit streams
Opportunity assessment Developing new profit streams Network wide roll out from February 2023 Trials in FY2022 were successful c.1,900 independent customers and Recent expansion of offer from DVDs growing at 100 per week to include books Processing over 50 tonnes of cardboard Supplying major retaile
Slide 19: Tangible shareholder value
Tangible shareholder value Progress 2020 - 2023 Make dark blue - 2 options sent £10m Focused strategy £98.8m £4m £82.6m Strong balance sheet £49.9m £2m 2020 2021 2022 2020 2021 2022 Attractive dividends Average net debt Dividend payments 19
Slide 20: Summary and outlook
Summary and outlook On track • Cover price growth normalising in H2 • to deliver • Markets remaining resilient and predictable Clear flightpath for costs and efficiencies full year • On track to meet full year expectations expectations 20
Slide 21: Any questions?
Any questions? é
Slide 22: Cautionary statement
Cautionary statement This document contains certain forward-looking statements with respect to Smiths News plc’s financial condition, its results of operations and businesses, strategy, plans, objectives and performance. Words such as ‘anticipates’, ‘expects’, ‘intends’, ‘plans’, ‘believes’, ‘seeks’
Slide 23: smiths
smiths