Smiths News PLC · LSE:SNWS

Smiths News — Connect Group — H1 2018 Earnings Presentation

14 slides from Smiths News's earnings presentation, May 1, 2018

  1. Slide 1: Interim Results

    Interim Results 1 May 2018

  2. Slide 2: Headlines

    Headlines Trading ► Revenue £766.5m -3.4% ► Adjusted PBT £15.1m -30.3% ► Adjusted EPS 5.0p -28.6% Capital management ► Free cash flow £10.0m 495.1% ► Net Debt £83.6m 44.2% ► DPS 3.1p 0.0% Operations ► Smiths News - resilient performance with benefit of World Cup in H2 ► DMD – good profit growth driv

  3. Slide 3: Group Financial Update

    Group Financial Update David Bauernfeind Chief Financial Officer

  4. Slide 4: Group performance – continuing operations

    Group performance – continuing operations £m Adjusted Feb 2018 Restated Change Feb 2017 % Early Distribution 18.2 20.7 -11.9% Tuffnells (0.2) 4.3 -105.8% Group operating profit 18.0 25.0 -28.0% Net finance charges (2.9) (3.3) 12.7% Group PBT 15.1 21.7 -30.3% Tax (3.0) (4.5) 33.3% Group PAT 12.1 17.2

  5. Slide 5: Adjusting items – continuing operations

    Adjusting items – continuing operations £m Feb 2018 Restated Feb 2017 Network and re-organisation costs (0.5) (1.4) Vacant property 0.5 - Acquisition and disposal costs - (0.9) Pension credit - 0.7 Impairment of non-current assets (2.0) - Amortisation of acquired intangibles (3.6) (3.6) Total before

  6. Slide 6: Continuing free cash flow

    Continuing free cash flow £m Feb 2018 Restated Feb 2017 Operating profit – adjusted 18.0 25.0 Depreciation and amortisation 6.2 5.5 EBITDA 24.2 30.5 Working capital 1.8 (9.4) Capital expenditure (4.4) (8.2) Finance lease payments (1.9) (2.2) Net interest and fees (3.5) (2.3) Taxation (3.4) (4.5) Adj

  7. Slide 7: Net debt

    Net debt £m Feb 2018 Restated Aug 2017 Feb 2017 Opening net debt (82.1) (141.7) (141.7) Free cash flow to equity 10.0 1.7 28.7 Pension deficit (2.5) (2.4) (4.8) Dividend paid (16.5) (15.9) (23.6) Disposal proceeds 13.7 - 58.2 Discontinued cash flow (9.0) 6.8 (1.1) Finance lease creditor & 2.8 1.6 2.

  8. Slide 8: Business update

    Business update Connect a

  9. Slide 9: Smiths News and DMD

    Smiths News ► Resilient performance ► Revenue in line with medium-term forecast Revenue £662.2m -4.2% ► Service levels remain strong Profit £20.4m -7.3% ► £5m sustainable efficiencies second half weighted ► Boost to sales in H2 from World Cup ► Well positioned for publisher contract renewals Revenue

  10. Slide 10: Pass My Parcel

    Pass My Parcel ► Volume growth driven by Amazon consumer returns ► Strong service KPIs proving last mile capability Total Volume ► Sub-scale operation driving costs 1.9m 389% Revenue ► Last mile contracts proving better fit to capability £3.4m 250% Loss Proposition re-engineering £3.5m -45.8% ► A su

  11. Slide 11: Tuffnells

    Tuffnells ► Revenue growth behind expectations in a tough market Revenue £87.3m 0.9% ► Quality of revenue impacting profitability Loss £0.2m -105.8 % ► Costs significantly challenged in the period ► Driver vacancies ► Service rectification ► Management attrition ► Actions in hand for H2 turnaround ►

  12. Slide 12: Summary

    Summary A challenging first half ► Continued resilience of Smiths News and DMD ► Tuffnells and Pass My Parcel driving Group under-performance ► Transformation savings progressing slower than planned ► Net debt of £83.6m, down £66.3m year on year ► Interim dividend 3.1p Second half priorities ► Revis

  13. Slide 13: Discontinued operations & Adjusted items

    Discontinued operations & Adjusted items £m Feb 2018 Restated Feb 2017 Adjusted profit before tax 1.6 3.3 Taxation (0.3) (0.7) Profit from discontinued operations 1.3 2.6 Adjusted items - discontinued Loss on disposal of subsidiaries (10.5) - Acquisition and disposal costs (0.2) (0.6) Amortisation o

  14. Slide 14: 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

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