Johnson Service Group Plc · LSE:JSG
Johnson Service — H1 2019 Earnings Presentation
29 slides from Johnson Service's earnings presentation, September 2019
Slide 1: Interim Results
Peter Egan Chief Executive Officer Yvonne Monaghan Chief Financial Officer Tim Morris Group Financial Controller Interim Results 6 months ended 30 June 2019
Slide 2: Highlights
2019 Interim Results Highlights “Continued organic growth delivers another consistent and strong financial performance. Full year results expected to be slightly ahead of current market expectations.” 2
Slide 3: Highlights
2019 Interim Results Highlights Financial Highlights Continued organic growth delivers another consistent and strong financial performance • Revenue up 9.8% to £167.1m; organic growth of 7.5% Revenue up • Adjusted operating profit up 13.6% to £22.6m1,2 • Adjusted profit before taxation up 10.4% to £
Slide 4: Financials
2019 Interim Results Financials “There is good momentum in the Group and we have started the second half strongly.” 4
Slide 5: Income Statement
2019 Interim Results Income Statement 2019 H1 2018 H1 Increase Revenue (£m) 167.1 152.2 9.8% Adjusted operating profit (£m)1,2 22.6 19.9 13.6% Adjusted operating margin (%)1,2 13.5 13.1 n/a Adjusted PBT (£m)1,3 20.1 18.2 10.4% Adjusted EPS (p)1 4.4 4.0 10.0% Number of shares used in EPS calc4 369.4
Slide 6: IFRS 16 Impact
2019 Interim Results IFRS 16 Impact Pre IFRS 16 Post IFRS 16 at June 2019 Impact at June 2019 Revenue (£m) 167.1 - 167.1 Adjusted operating profit (£m)1 22.0 0.6 22.6 Adjusted operating margin (%)1 13.2 - 13.5 Finance costs (£m) (1.7) (0.8) (2.5) Adjusted PBT (£m)1 20.3 (0.2) 20.1 Adjusted EPS (p)1
Slide 7: Cash Flow
2019 Interim Results Cash Flow £m 2019 H1 2018 H1 2018 FY Adjusted operating profit 22.6 19.9 46.0 Depreciation and software amortisation 32.6 26.5 55.4 Working capital 0.2 (3.8) (5.9) Capital expenditure – fixed assets and software (9.3) (7.2) (18.1) – rental stocks (net) (21.6) (22.6) (46.7) – fix
Slide 8: Other Financial Information
2019 Interim Results Other Financial Information Interest, Bank Facility & Hedging Return on Capital Employed (ROCE) Interest • Marginal increase to 16.9% (June 2018: 16.8%) • Interest cost of £2.5m includes £0.9m relating to lease • Calculated as rolling 12 month adjusted operating profit liabiliti
Slide 9: Investment Expenditure £9.3m
2019 Interim Results Investment £9.3m Investment in H1 Expenditure Glasgow Ironing line Similar level upgrade anticipated in H2, in addition to c£3m Shaftesbury at Leeds Ironing line upgrade Wrexham Gateshead Mezzanine Garment folder floor upgrades Basingstoke Industrial unit Southall upgrade Dispat
Slide 10: Leeds Plant
2019 Interim Results Leeds Plant On plan, to budget and timetable…. • 45,000 sq. feet site in Gildersome, Leeds • Build ahead of schedule; handover expected late Q3 2019 to enable circa 6 months install, M&E and commissioning • c300,000 pieces per week of volume from current Leeds distribution hub;
Slide 11: Operational Performance
2019 Interim Results Operational Performance “A strong performance reflecting excellent sales growth, the benefits of recent acquisitions and continued high levels of customer retention across all market sectors.” 11
Slide 12: Workwear
2019 Interim Results Operational Performance Workwear 2019 H1 2018 H1 Increase Revenue (£m) 67.5 63.2 6.8% Adjusted operating profit (£m)1,2 12.1 10.8 12.0% Margin (%) 17.9 17.1 n/a Notes: 1. Before amortisation of intangible assets (excluding software amortisation) and exceptional items 2. 2019 H1
Slide 13: Workwear key facts
2019 Interim Results 17 Laundries 2,300 Employees 380 Vehicles 1.3m Wearers 13
Slide 14: Workwear
2019 Interim Results Operational Performance Workwear • Organic revenue growth of 6.8% to £67.5m • Increased sales to existing customers • 19% of new business from “new to rental” customers • Customer retention maintained at 95% • Continued focus on efficiency improved margin to 17.9% (H1 2018: 17.1
Slide 15: HORECA
2019 Interim Results Operational Performance HORECA Hotel Linen Hotel, Restaurant & Catering Linen 2019 H1 2018 H1 Increase Revenue (£m) 99.6 89.0 11.9% Adjusted operating profit (£m)1,2 12.9 11.4 13.2% Margin (%) 13.0 12.8 n/a Notes: 1. Before amortisation of intangible assets (excluding software a
Slide 16: HORECA key facts
2019 Interim Results 17 3,500 Employees 415 500m items Laundries Vehicles 16
Slide 17: HORECA
2019 Interim Results Operational Performance HORECA Hotel Linen Hotel, Restaurant & Catering Linen • Headline revenue growth of 11.9% • Strong organic revenue growth of 8.0% • Modest benefit from IFRS 16 of £0.3m • Growth at Hotel Linen through new hotel signings and bolt-on hotels • Stalbridge cont
Slide 18: Our Customers
2019 Interim Results Our Customers “Our continual investment in the business allows us to provide an excellent service to our customer base.” 18
Slide 19: Our Customers
2019 Interim Results Our Customers 19
Slide 20: Rebranding
2019 Interim Results Rebranding “A universal signature across all JSG businesses that unites our brands together.” 20
Slide 21: Rebranding
2019 Interim Results Rebranding • New Group-wide corporate brand will link together our local brands and extend national brand recognition • Create a more recognisable, more memorable, and more approachable brand • Rebranding of vehicle livery, sites and stationery underway • Brand rollout will take
Slide 22: Our Success Factors
2019 Interim Results Our Success Factors “Our people are fundamental to us being able to deliver our market-leading customer service standards.” 22
Slide 23: Our Success Factors
2019 Interim Results Our Success Factors • Market leading position within Workwear & HORECA • National coverage; local service • Dedicated to providing first class customer service • Contracted customer base • High customer retention; long customer relationships • Representation across many industri
Slide 24: The Future
2019 Interim Results The Future “We anticipate that the results for the year will be slightly ahead of current expectations.” 24
Slide 25: The Future
2019 Interim Results The Future “There is good momentum in the Group and we have started the second half strongly. In view of the encouraging performance over the summer months we anticipate that the results for the year will be slightly ahead of current expectations.” Organic Growth Investment Acqu
Slide 26: See
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Slide 27: Appendix - Segmental Analysis
2019 Interim Results Appendix 1 - Segmental Analysis 2019 H1 2018 H1 Adjusted Adjusted Revenue Operating Revenue Operating £m Profit1,2 £m Profit1 £m £m Workwear 67.5 12.1 63.2 10.8 HORECA 99.6 12.9 89.0 11.4 Textile Rental 167.1 25.0 152.2 22.2 Group Costs - (2.4) - (2.3) TOTAL 167.1 22.6 152.2 19.
Slide 28: Appendix - Five Year History
2019 Interim Results Appendix 2 - Five Year History H1 Revenue (£m) (1) H1 Adjusted Operating Profit (£m) (1) H1 Adjusted Diluted EPS (p) (1) 180 25 5 160 140 20 4 120 15 3 100 80 10 2 60 40 5 1 20 0 0 0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Share Price (p) Divid
Slide 29: Appendix - Our Executive Team
2019 Interim Results Appendix 3 - Our Executive Team Peter Egan Yvonne Monaghan Chief Executive Officer Chief Financial Officer Industry Experience: 26 Years Industry Experience: 34 Years Mark Woolfenden Donald Smith Helen Wood Tim Morris Gary Collis MD, HORECA MD, HORECA MD, Workwear Group Financia
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