Videndum Plc · LSE:VID
Videndum — FY2023 Earnings Presentation
40 slides from Videndum's earnings presentation, Apr 23, 2024
Slide 1: Full Year Results 2023
Enabling the capture and sharing of exceptional content. Full Year Results 2023 23 April 2024 Capture. Share.
Slide 2: Agenda
Agenda 1. Full Year 2023 Summary ▪ Stephen Bird, Group Chief Executive 2. Current Trading and Outlook ▪ Stephen Bird, Group Chief Executive 3. Market and Strategy Update ▪ Stephen Bird, Group Chief Executive 4. Financial Review ▪ Andrea Rigamonti, Group Chief Financial Officer 5. Summary ▪ Stephen B
Slide 3: Full year 2023 financial summary
Full year 2023 financial summary ▪ 2023 financial performance significantly impacted by three headwinds: 1. Challenging macroeconomic environment 2. Destocking 3. Strikes by US writers and actors ▪ Revenue from continuing operations 31% lower YoY ▪ Adjusted operating expenses from continuing operati
Slide 4: Current trading and outlook
Current trading and outlook ▪ Industry confidence in the post-strike recovery remains strong, however the significant pick up in the cine and scripted TV market anticipated in March did not materialise and is now expected from June ▪ Macroeconomic environment affecting the consumer and independent c
Slide 5: Market & strategy update
Market & strategy update 5 | Videndum plc
Slide 6: Videndum well positioned to deliver recovery in 2024
Videndum well positioned to deliver recovery in 2024 Non-recurring impact of strikes and destocking 1 2 The two major strikes are over Destocking largely completed Content creation market continues to have good medium-term prospects 3 4 5 Structural growth drivers Technology advancement Positive imp
Slide 7: Market conditions are starting to improve
Market conditions are starting to improve Non-recurring impact of strikes Cine and scripted TV market recovery and destocking ▪ Although industry confidence in the post-strike ▪ The two major strikes are over recovery remains strong, the cine and scripted TV market is taking more time than anticipat
Slide 8: Structural growth drivers remain attractive
Structural growth drivers remain attractive 1. The internet/e-commerce 3. Video sharing platforms e.g. TikTok/YouTube ▪ CIPA data (Camera & Imaging Products Association) ▪ Global short video platforms market size growing shows growing sales of compact system cameras c.10% CAGR 2023-30 (Source: grand
Slide 9: Technology advancement driving shorter product replacement cycles
Technology advancement driving shorter product replacement cycles ▪ Robotics and AI-driven technology for broadcast studio automation ▪ Sodium-based, sustainable portable power solutions ▪ Anton/Bauer Salt-E Dog received the “Best Sustainable Product” Award at the National Association of Broadcaster
Slide 10: Positive impact expected from key global media events
Positive impact expected from key global media events ▪ Summer 2024 Olympics and Paralympics contract ▪ 2024 US Presidential Election ▪ US political advertising spend forecast to increase 30% in 2024 vs 2020 ▪ 60+ countries holding national elections in 2024 10 | Videndum plc
Slide 11: Financial review
Financial review 11 | Videndum plc
Slide 12: Full year 2023 results
Full year 2023 results Continuing Operations* FY 23 FY 22 £m £m ▪ Revenue 31% lower than 2022 Revenue 306.9 442.5 ▪ Gross margin* impacted by the lower revenue; CIGO Gross profit 118.8 193.4 applied in Italy to partly mitigate Gross margin % 38.7% 43.7% Operating expenses (106.0) (127.2) ▪ Operating
Slide 13: Revenue bridge
Revenue* bridge FY 2022 Strikes Consumer ▪ Strikes impacted the majority of the year & ICC ▪ Consumer and ICC demand continued to Destocking Other FY volume Price FX 2023 be suppressed ▪ Majority of destocking effect seen in H1 ▪ Other volume includes the non-repeat of the Olympics and one-off 2022
Slide 14: Operating profit bridge
Operating profit* bridge FY 2022 Strikes ▪ c.50% marginal contribution impact from lower volumes ▪ Price more than offset inflation, with raw materials inflation plateauing in areas Consumer & ICC ▪ Cost savings include control of discretionary spend, and restructuring ▪ Other includes inefficiencie
Slide 15: Efficiencies and mitigating actions
Efficiencies and mitigating actions ▪ Long-term, restructuring self-help actions taken to streamline our cost base and maximise synergies to ensure the business is well set up for long-term growth ▪ Rycote manufacturing and R&D consolidated with other sites (manufacturing: Lastolite, R&D: AUDIX) ▪ M
Slide 16: Divisional performance
Divisional performance Revenue Operating profit* FY 23 FY 22 % change FY 23 FY 22 £m £m £m £m Media Solutions 153.7 217.8 -29% 11.4 35.1 Production Solutions 101.2 137.8 -27% 12.1 31.4 Creative Solutions 52.0 86.9 -40% 0.8 16.7 Corporate Costs - - - (11.5) (17.0) Continuing Operations 306.9 442.5 -3
Slide 17: Net debt bridge
Net debt bridge Other Equity FY 22 final Net lease items1 net raise Free cash dividend additions ▪ Net debt fell by £65m driven by £125m flow* equity raise; partly offset by Dec 22 Net debt ▪ Free cash outflow* but increase in trade 13 Operating profit* working capital* limited to £1m 21 Depreciatio
Slide 18: Summary
om | = Videndum jt a | Summary 18 | Videndum pic
Slide 19: Summary and outlook
Summary and outlook 1. 2023 exceptionally challenging 2. Industry confidence in the post-strike recovery is strong, however the cine and scripted TV market is taking more time than anticipated to recover, macroeconomic environment remains challenging 3. Focused on high-end professional content creat
Slide 20: Q&A
Q&A Dialling in from the UK: 0800 358 1035 Scan the QR code to dial in from all other locations Access code: 689780 Press *1 to ask a question Press *2 to withdraw your question Press *0 for operator assistance 20 | Videndum plc
Slide 21: Appendices
om | = Videndum jt a | Appendices 21 =| Videndum pic
Slide 22: Strong business in attractive market with structural growth drivers
Strong business in attractive market with structural growth drivers 1. At the heart of 2. Market-leading, 3. Innovative 4. Well invested 5. Worldwide 6. Senior the growing premium proprietary and efficient distribution management content brands in technology driving manufacturing channel bench creat
Slide 23: Strikes by US writers and actors
Strikes by US writers and actors Speculation of a strike by the Writers Guild of America (WGA) after 07 Mar 2023 members voted in favour of demands that called for increased compensation, better residuals and protection against AI 02 May WGA strike commenced; the majority of US cine and scripted TV
Slide 24: Responsibility framework & our sustainability journey
Responsibility framework & our sustainability journey Key focus areas 2023 ▪ Scope 1 and 2 emissions have reduced by c.30% since 2019 ▪ Improved Scope 3 data capture system for Category 1 and improved the quality of data for Category 4 and 9 ▪ Included additional suppliers in climate scenario analys
Slide 25: FX sensitivities
FX sensitivities Currency Current spot FY 23 FY 22 rates average average (19 Apr 24) rates rates USD 1.24 1.24 1.24 EUR 1.17 1.15 1.17 YEN 192 174 161 ▪ The expected year-on-year impact on 2024 OP* at current spot rates would be broadly nil ▪ The expected further impact from Currency Movement Impact
Slide 26: Cash generation
Cash generation Continuing Operations FY 23 FY 22 Variance £m £m Operating profit* 12.8 66.2 (53.4) Depreciation(1) 20.5 20.1 0.4 (1) Includes depreciation, amortisation of software and capitalised development costs Dec/(inc) in inventory* 2.0 (9.7) 11.7 Dec/(inc) in trade receivables 17.1 (6.7) 23.
Slide 27: Loan covenants
Loan covenants Dec-23 Dec-23 Leverage calculation Interest cover calculation £m £m Reported Net Debt 128.5 Covenant EBITDA 39.8 Add discontinued ops lease liabilities 0.3 Depreciation of PP&E (14.0) Remove upfront loan fee 0.8 Covenant EBITA 25.8 Covenant Net Debt 129.6 Reported 12-month net finance
Slide 28: Five-year summary
Five-year summary 80 15% FY19 FY20 FY21 FY22* FY23* 70 Revenue (£m) 376.1 290.5 394.3 442.5 306.9 60 10% Operating profit* (£m) 52.4 9.9 46.2 66.2 12.8 50 Operating margin* 13.9% 3.4% 11.7% 15.0% 4.2% 40 Operating cash flow* (£m) 44.5 25.4 49.7 59.7 10.8 30 5% 20 Operating cash conversion* 85% 257%
Slide 29: Our structure and where we operate
Our structure and where we operate 29 | Videndum plc
Slide 30: Our structure
Our structure Videndum plc is organised in three Divisions: ▪ Media Solutions ▪ Production Solutions ▪ Creative Solutions 2023 Financials* Headquarters in the UK Revenue Number of employees £306.9m 1,600 (2022: £442.5m) Group 2023 revenue split 17% Adjusted operating profit* Number of countries with
Slide 31: Where we operate
Where we operate Manufacturing sites R&D sites ▪ Sites in 10 countries; sell into 100+ countries Procurement centre Distribution sites ▪ Well-invested manufacturing facilities in Italy, Costa Rica, UK, US ▪ R&D centres in UK, Italy, US, Israel US Germany Japan ▪ Far East Procurement Centre in Shenzh
Slide 32: Media Solutions Products
Media Solutions Products* for Professional Photography/Videography, Influencer/Vlogger, Cine and Scripted TV Photo & video Lighting Smartphonography Audio capture Carrying Adjacent supports & vlogging solutions supports Manfrotto Manfrotto JOBY Rycote Lowepro Manfrotto R&O 055 Fast Twin Carbon Tripo
Slide 33: Media Solutions
Media Solutions ▪ Market drivers include mid-term increase in professional content creation, audio capture, retail commerce and vlogging; macroeconomic environment continues to affect business confidence ▪ Strategy focused on developing innovative new products to improve customer productivity to gro
Slide 34: Production Solutions Products
Production Solutions Products* for Broadcast, Cine and Scripted TV Studio pedestals Tripods & Fluid Heads Prompters Mobile Power Vinten Sachtler OConnor Sachtler/Vinten Autoscript Autocue Anton/Bauer Salt-E Dog Osprey pedestal Range Vario Ped Ultimate 1040 flowtech system flowtech Tripod aktiv fluid
Slide 35: Production Solutions
Production Solutions ▪ Market drivers include demand for automated production, on-location news and sport, and original content ▪ Strategy: focused on developing innovative new technologies to accelerate product replacement cycles in TV studios, on-location news and sporting events, cine and scripte
Slide 36: Creative Solutions Products
Creative Solutions Products* for Cine and Scripted TV and Live Streaming Enterprises Cine Live Production SmallHD Monitors Teradek Wireless Wooden Camera Live Wireless Broadcast IP Video Connectivity Cine 13, Vision 24, Cine 7 + RX Module, RT CTRL.3 Controller, Bolt 6 Accessories Ranger Mk II, Range
Slide 37: Creative Solutions
Creative Solutions ▪ Market drivers include streaming and demand for original content ▪ Strategy: focused on continuing to deliver 4K/HDR replacement cycle, as well as developing innovative new technology for monitoring, collaboration and streaming in high-end cine and scripted TV, live production a
Slide 38: Product portfolio
Product portfolio Audio capture Distribution, rental Mobile power Smartphonography AUDIX & services Anton/Bauer JOBY JOBY Camera Corps Rycote The Camera Store Monitors Supports & Stabilisers SmallHD Avenger Backgrounds IP Video Gitzo Colorama Teradek Prompters JOBY Savage Autocue Manfrotto Superior
Slide 39: Important notice
Important notice Forward-looking statements This presentation contains forward-looking statements with respect to the financial condition, performance, position, strategy, results and plans of Videndum plc (the “Group”, “Videndum”, or the “Company”) based on Management’s current expectations or beli
Slide 40: Thank you
Thank you Videndum plc Bridge House, Heron Square, Richmond, TW9 1EN United Kingdom T +44 (0)20 8332 4600 [email protected] videndum.com Capture. Share.