4imprint Group Plc · LSE:FOUR
4imprint — FY2011 Earnings Presentation
27 slides from 4imprint's earnings presentation, March 2012
Slide 1: Results presentation for the year ended 31 December 2011
Results presentation for the year ended 31 December 2011
Slide 2: Slide 2
Slide 3: Final Results 2011
Final Results 2011 1. Highlights John Poulter 2. Financial review Gillian Davies 3. Operational review Kevin Lyons-Tarr 4. Group strategy and outlook John Poulter 1
Slide 4: Highlights – John Poulter
Highlights — John Poulter os Ye “Ba . YL
Slide 5: Highlights
Highlights • North American Direct Marketing (now circa 90% of group) – revenue $225m, up 18% • SPS – Management changes, new products, volumes stabilised, profitability improved • Legacy Pension Scheme – ETV exercise completed, circa £10m reduction in assets and liabilities • Ungeared balance sheet
Slide 6: Financial Review – Gillian Davies
Financial Review – Gillian Davies 4
Slide 7: Financial Highlights
Financial Highlights • Revenue was £158.82m (2010: £143.72m) an increase of 11%1 • Underlying* operating profit was £8.49m (2010: £6.22m), an increase of 36%1 • Underlying profit before tax was £8.13m, (2010: £5.71m) an increase of 42%1 • Net cash at year end was £5.46m • Underlying basic earnings p
Slide 8: Financial Highlights
Financial Highlights Revenue* (£m) Underlying operating profit* (£'000) 200 SPS 9000 8,486 Direct M arketing 160 12 .8 14 .7 6,221 120 6000 80 14 6.0 129 .0 3000 40 0 0 2011 2010 2011 2010 Net cash/(debt) Underlying EPS* (pence) 25 6000 5,463 22.01 5000 20 17.53 4000 15 3000 10 2000 5 1000 (239) 0 0
Slide 9: Income Statement
Income Statement 2011 2011 2010 2010 Underlying* Total Underlying Total restated** restated** Underlying £'000 £'000 £'000 £'000 % change • 14% at constant Continuing Operations currency Revenue 158,824 158,824 143,723 143,723 +11% Underlying operating profit 8,486 8,486 6,221 6,221 +36% • 42% at co
Slide 10: Cash Flow
Cash Flow • Continuing Group (£0.50m) – increase to support revenue growth • Brand Addition £3.92m – short term timing difference 3,419 (3,606) •Tax £1.41m 1,994 (1,794) •Finance costs £0.37m •Other £0.05m 10,897 (1,830) (3,378) £’000 • Continuing Group: £8.49m 5,463 • Brand Addition: £5.02m • Excep
Slide 11: Divisional Summary
Divisional Summary Revenue 2011 2010 2011 restated** v 2010 Continuing operations £'000 £'000 4imprint Direct Marketing 146,030 128,972 +13% SPS 14,221 16,252 -12% Inter-segment (1,427) (1,501) Total continuing operations 158,824 143,723 +11% Operating profit 2011 2010 2011 restated** v 2010 Continu
Slide 12: Direct Marketing
Direct Marketing 2011 2010 North America: $'000 $'000 • Revenue increase 18% - Revenue 224,523 190,077 market growth 6.5% Gross profit 79,969 68,564 • Stable gross profit at 36% Gross profit % 36% 36% • Sales and marketing costs Sales & Marketing (51,331) (45,269) increased by 13% Other overheads (1
Slide 13: SPS: revenue 12% below prior year in a difficult market
2011 2010 £'000 £'000 • Revenue 12% below prior year Revenue 14,221 16,252 in a difficult market Gross margin 7,430 8,396 • Order intake level stabilised Gross margin % 52% 52% from H2 2010 and in 2011 Direct costs (3,930) (4,409) • Stable gross margin at 52% Gross profit 3,500 3,987 • H2 operating
Slide 14: Conditional Brand Addition Sale
Conditional Brand Addition Sale • On 16 February 2012 conditional agreement was reached to sell Brand Addition to H.I.G, a private equity investment firm, subject to Shareholder approval and German and Austrian competition clearances • At 31 December 2011, Brand Addition was disclosed as an asset he
Slide 15: Balance Sheet
Balance Sheet Proforma FY10 on a discontinued 2011 2010 basis £'000 £'000 £'000 • Working capital Fixed assets 12,904 14,246 13,214 (continuing operations) Goodwill - 9,084 4,743 £5.16m, 3.2% revenue Deferred tax asset 6,115 6,348 6,060 (2010 pro forma: £4.15m, 29,678 24,017 2.9% revenue) 19,019 • D
Slide 16: Movement in Pension Deficit
Movement in Pension Deficit £0.58m interest charge Settlement charge £0.58m £0.39m asset return Company contributions (£0.38m) assumptions ( 3,468) 3,000 (977) (23,547) (197) (21,905) Discount rate: 4.9% (2010: 5.5%): £7.4m Other assumptions: (£2.8m) CPI/RPI: (£1.1m) Opening deficit Change in liabil
Slide 17: Pension Deficit
Pension Deficit • 1,153 pensioners, 654 2011 2010 deferred £'000 £'000 Liability (92,870) (99,460) • Scheme closed to future Assets 69,323 77,555 accrual Deficit (23,547) (21,905) Deferred Tax 5,885 5,911 • ETV offer completed ( 307 Net Deficit (17,662) (15,994) acceptances) reducing liability and a
Slide 18: Tax
Tax FY 2011 Continuing Discontinued Total Total 2011: operations operations 2011 2010 £'000 £'000 £'000 £'000 • Continuing operations Profit before tax and effective rate of 38%: high goodwill impairment 5,101 4,079 9,180 8,087 proportion of US profit Tax charge 1,950 302 2,252 1,225 • Discontinued
Slide 19: Operational Review – Direct Marketing
Operational Review – Direct Marketing Kevin Lyons-Tarr 17
Slide 20: Operating Highlights
Operating Highlights: • Revenue +18%; Industry Sales - North America +6.5% 224.5 225 200 190.1 175 170.6 165.4 • Operating profit $15.9m 145.4 150 (2010: $12.2m) +30% Sales $m 125 100 75 • More than 4.8m unique 50 25 web visitors 0 2007 2008 2009 2010 2011 • More than 450k individually No. of Orders
Slide 21: Strategy: Capture market share in a large, highly-fragmented market
Strategy: Capture market share in a • Continued market share large, highly-fragmented gain in 2011 market • Sales doubled since 2006 vs. industry decline of 1.3% • 4imprint Direct Marketing is the largest promotional products direct marketer in US • 2011 revenue growth of $34m exceeds annual revenue
Slide 22: Driving growth: Customer acquisition
Driving growth: Customer acquisition • More than 120,000 new customers acquired in Customers Acquired by Quarter 2011 35000 • 6% catalogue circulation 30000 2011 Average: increase More than 30k 25000 customers acquired per quarter • 34% increase in internet- 20000 based marketing spend 15000 • More
Slide 23: Driving growth: Customer retention
Driving growth: • Consistent customer Customer retention retention rates even as number of customers acquired increases • 60% of total revenue comes from customers on file • Personalised, database driven, Blue Box® sample mailings drive repeat purchases and showcase the increasing breadth and depth
Slide 24: Driving growth: Products, technology, people
Driving growth: •Expanding product range Products, technology, people and specialty catalogues support both acquisition and retention of customers •Technology development that continuously improves the customer experience, drives efficiency and enhances analytical capability •Award-winning work envi
Slide 25: Looking ahead: 2012 key initiatives
2012: 2012 Key initiatives: Looking ahead: • Drive customer acquisition via increased circulation of both core and specialty We continue to see significant catalogue titles; increased internet marketing opportunity for growth as our investment unique model is well positioned • Develop new, additiona
Slide 26: Group Strategy and Outlook
Group Strategy and Outlook John Poulter 24
Slide 27: Group Strategy and Outlook
Group Strategy and Outlook • Target to double Direct Marketing revenue over next five years at stable operating margin, through organic growth • Reduce risk of UK defined benefit pension fund to the Group using proceeds from the sale of Brand Addition • Maintain a progressive dividend policy Outlook