Johnson Service Group Plc · LSE:JSG
Johnson Service — FY2023 Earnings Presentation
32 slides from Johnson Service's earnings presentation, 2024
Slide 1: Service Group PLC
Service Group PLC
Slide 2: Contents
JOHNSON Service Group PLC CONTENTS 1) Operational Highlights 2) Financials 3) Investment 4) Sustainability 5) Operational Performance 6) Outlook 7) Investment Case Appendices
Slide 3: Operational Highlights
2; JOHNSON Service Group PLC OPERATIONAL HIGHLIGHTS “We are continuing to focus on expanding the Group through targeted investment in our existing sites together with identifying earnings enhancing acquisition opportunities.”
Slide 4: Operational highlights
HORECA volumes continued to improve with increased number of locations being serviced Workwear customer retention levels were 91% whilst increased activity from prospective customers will have a positive impact into 2024 Energy costs remained elevated but less volatile than 2022 Price increases and
Slide 5: Financials
ent? JOHNSON Service Group PLC FINANCIALS “We are pleased to report a strong performance for the year, demonstrating the resilience of our business model against a backdrop of macroeconomic pressures...”
Slide 6: Financial Highlights
2023 Final Results Financial Highlights 2023 2022 Revenue (£m) 465.3 3857 Adjusted EBITDA (£m)'? 131.5 104.9 Adjusted EBITDA margin (%)'2 28.3 27.2 Adjusted operating profit (£m)? 50.5 41.2 Adjusted operating margin (%)? 10.9 10.7 Adjusted PBT (£m)? 44.5 38.2 Adjusted diluted EPS (p)?3 7.8 8.0 Adjus
Slide 7: Energy
Energy • Market remains volatile although to a lesser extent than experienced during 2022 2023 Cost Analysis • 2023 energy costs represented 10.0% of revenue (2022: 9.4%; 2019: 6.2%) • Material price increases implemented across our customer base to compensate 10.9% • Impact of energy prices being p
Slide 8: Cash Flow
2023 Final Results Cash Flow JOHNSON Service Group PLC £m Adjusted operating profit Depreciation,impairment and software amortisation Working capital fixed assets and software Capital expenditure | rental stocks (net) fixed asset proceeds Interest Tax Exceptional items (cash effect) Dividends Additi
Slide 9: Other Financial Information
2023 Final Results Other Financial Information Interest « Interest cost of £6.0m including £2.1m relating to IFRS 16 lease liabilities (2022: £3.0m and £1.5m respectively) + Notional pension interest cost of £0.5m (2022: Enil) and expected to be Enilin 2024 Bank Facility * £120.0m Revolving Credit F
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Slide 11: Acquisition of Celtic Linen
2023 Final Results Acquisition of Celtic Linen ‘e JOHNSON « Service Group PLC = Operates in the Republic of Ireland's (‘ROI’) Healthcare and HORECA sectors, delivering over one million items weekly = €31.5m acquisition in August 2023 - largest linen supplier to ROI's Healthcare sector - second large
Slide 12: Acquisition of Regency Laundry
2023 Final Results te JOHNSON « Service Group PLC Acquisition of Regency Laundry = £5.75m acquisition in February 2023 = 26,000 sq ft leasehold processing facility in Corsham = Operates in the luxury/bespoke segment of the HORECA sector in the South of England = Regularly delivers c200k pieces of lu
Slide 13: New Crawley Site
2023 Final Results te ww JOHNSON Service Group PLC New Crawley Site = 46,000 sq ft strategically located leasehold site in the South-East = £16.0m investment with cash spend of £6.9m in 2023 = Anticipated to open in the second half of 2024 = Highly automated and energy efficient equipment = Initial
Slide 14: Perth automated sortation and Grantham extension
2023 Final Results Service Group PLC Perth Automated sortation system Grant! - 2 Extension and additional ironers
Slide 15: Sustainability
JOHNSON Service Group PLC Sustainability “We have continued to build on the foundations of our sustainability strategy with communication and involvement of employees at all levels being a key focus.” 15
Slide 16: Commitment to sustainability
• We continue to demonstrate our commitment to sustainability across every area of our business and have made excellent progress against our strategy • Carbon: 6.9% reduction in TCO2e / Tonnes processed intensity rate • Water: 5.6% reduction in M3 / Tonnes processed intensity rate • 56% of cotton pu
Slide 17: Operational Performance
oe JOHNSON Service Group PLC OPERATIONAL PERFORMANCE "..we are encouraged with the Group's performance as we plan to further expand capacity in each of our businesses.” 17
Slide 18: Operational Performance: Workwear
2023 Final Results Operational Performance JOHNSON Service Group PLC JOHNSONS Workwear Revenue (£m) Adjusted EBITDA (£m)'23 Adjusted EBITDA margin (%)'23 Adjusted operating profit (£m) Adjusted operating margin (%)* Notes: 1. Adjusted operating profit plus depreciation charge for property, plant and
Slide 19: Operational Performance
2023 Final Results Operational Performance JOHNSON Service Group PLC Organic revenue increased by 5.9% New sales during the year at highest level since COVID-19 impacted in 2020; wins in Q4 2023 positively impacting 2024 25% of all new sales sold in the period came from new-to-rental Customer retent
Slide 20: Operational Performance: HORECA
2023 Final Results JOHNSON Service Group PLC Operational Performance JOHNSONS JOHNSONS ee: CELTIC (Cp sonNsons ~ LINEN ofast Hotel Linen rant & Catering Linen Revenue (£m) 322.7 251.1 Adjusted EBITDA (£m)'2 89.7 63.0 Adjusted EBITDA margin (%)'2 27.8 25.1 Adjusted operating profit (Em)? 36.0 241 Adj
Slide 21: Operational Performance
2023 Final Results Operational Performance JOHNSON Service Group PLC ¢ Organic revenue increased by 21.9% « New sales remain strong: achieved above target independent sales and signed and installed some multi-site group business, particularly in Restaurant and Catering « Focus on sales activity with
Slide 22: Outlook
JOHNSON Service Group PLC OUTLOOK “We remain focused on organic growth initiatives, optimising operational efficiencies and continuing to expand our geographical coverage through the successful execution of our strong M&A pipeline.” bw 22
Slide 23: Encouraging trading momentum
Encouraging trading momentum Proactive management of costs Divisional EBITDA margin will continue to improve Integration and expansion of recent acquisitions underway Expansion strategy being delivered through new Crawley site, depot and targeted investment Focus on expanding the Group through targe
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Slide 25: Disposals and acquisitions revenue mix
2012 Revenue 2023 Revenue 2012 Revenue 2023 Revenue 21% 22% 31% 53% 26% 69% 78% 100% Textile Services HORECA Drycleaning Workwear Facilities Management Disposals Acquisitions
Slide 26: An Essential Service Provider
An Essential Quality Service A Local Service Service Provider We provide our Our proximity to The services we customers enables us to customers with a provide to our quickly respond to their quality service which customers are essential needs they can rely upon to their business Sustainable Substitu
Slide 27: Strong Organic Growth
Market Leader with Scale Advantages Balance Sheet Strength Provides Flexibility ▪ Consistently organically extending market leadership ▪ Leverage ratio expected to remain below management’s ▪ High barriers to entry target range of 1.0-1.5x ▪ Scale and depth to provide nationwide coverage ▪ Strong ca
Slide 28: Clear Priorities for use of Capital
Clear Priorities for use of Capital ▪ The Group maintains a strong Balance Sheet ▪ Medium to long-term leverage target of 1x – 1.5x, other than for short term specific exceptions ▪ Framework remains unchanged and will continue to take into account the following criteria as part of a periodic review
Slide 29: Appendices
-@. @:-°°° e owe 2 one “6 ®. *2@ . ) e 2: °@°2:9 Service Group PLC Appendices 29
Slide 30: Segmental Analysis
2023 Final Results Appendix 1 . JOHNSON Segmental Analysis Service Group PLC Workwear HORECA 3227 36.0 897 251.1 241 63.0 Textile Rental 465.3 574 138.3 385.7 46.0 109.6 Group Costs = (6.9) (6.8) - (4.8) (47) Pses7] siz] 1049) Notes: 1. Operating Profit before amortisation of intangible assets (excl
Slide 31: Financial Track Record
2023 Final Results Appendix 2 Financial Track Record Revenue (£m) 2019 2020 2021 2022 2023 528 505 412 2019 2021 2022 2023 19 Adjusted EBITDA (£m) Adjusted EBITDA Margin (%) JOHNSON Serv ce Grcup PLC Adjusted Diluted EPS excluding super deduction (p) 10.5 2019 2021 2022 2023 33 Dividend per Share (p
Slide 32: www.jsg.com
JOHNSON Service Group PLC www.jsg.com