4imprint Group Plc · LSE:FOUR
4imprint — H1 2013 Earnings Presentation
28 slides from 4imprint's earnings presentation, August 2013
Slide 1: Results presentation for the half year ended 29 June 2013
Results presentation for the half year ended 29 June 2013
Slide 2: Slide 2
Slide 3: Half Year Results 2013
Half Year Results 2013 1. Highlights 2. Financial review 3. Direct Marketing review 4. Outlook John Poulter Chairman Gillian Davies Group Finance Director Kevin Lyons-Tarr CEO, 4imprint Direct Marketing 1
Slide 4: Highlights – John Poulter
Highlights — John Poulter i S ~
Slide 5: Strong organic growth, profit ahead of expectations
Strong organic growth, profit ahead of expectations • Group revenue up 14% • Underlying* profit before tax up 41% • Underlying* basic EPS up 54% • Interim dividend 5.60p, up 7% • Robust financial position - net cash £14.83m * Underlying is before share option charges, defined benefit pension charges
Slide 6: Financial Review – Gillian Davies
Financial Review – Gillian Davies 4
Slide 7: Results Summary
Results Summary H1 2013 H1 2012 % change FY 2012 Revenue £'000 £'000 £'000 • 13% at constant currency 4imprint Direct Marketing 93,515 81,297 +15% 168,905 SPS 8,055 7,802 +3% 15,517 Inter-segment (789) (742) (1,499) Total 100,781 88,357 +14% 182,923 H1 2013 H1 2012 % change FY 2012 Profit £'000 £'00
Slide 8: Statutory Income Statement
Statutory Income Statement H1 2013 H1 2012 † FY 2012 † £'000 £'000 % change £'000 Revenue 100,781 88,357 +14% 182,923 • Defined benefit Underlying* operating profit 4,652 3,387 +37% 9,938 pension admin charges (paid by DB pension administration charges (207) (239) (438) the Scheme) Share option char
Slide 9: Cash Flow
Cash Flow • Shares issued £0.20m • EBT share purchase £(0.13)m EBITDA: £5.53m • Interest £0.04m Working capital: £2.14m • Other £0.07m Capex: £(0.67)m £7.00m 8,452 (236) (1,208) 182 (1,584) 1,250 (2,702) £’000 14,832 10,678 Operating cash flow: £7.00m 29 December DM operating SPS operating Head Offi
Slide 10: Balance Sheet
Balance Sheet 29 Jun 30 Jun 29 Dec 2013 2012 2012 £'000 £'000 £'000 • Robust financial position Fixed assets 13,304 12,782 13,292 • 4imprint Direct Marketing Pension Scheme bank account - 11,400 - net operating assets Deferred tax asset 5,158 6,561 6,281 £7.06m 18,462 30,743 19,573 • SPS net operati
Slide 11: Reduction in Pension Deficit
Reduction in Pension Deficit Expenses managed and paid by the Trustee now included in the Company Based on 4.3% year end P&L, per IAS 19 (revised) discount rate (22,894) 4,913 1,584 (471) (17,075) (207) Discount rate: 4.7% (2012: 4.3%): +£4.2m Other assumptions: +£0.7m 29 December 2012 Actuarial gai
Slide 12: Pension Deficit
Pension Deficit 29 Jun 29 Dec • At 5 April 2013: 2013 2012 £'000 £'000 • 1,168 pensioners (456 have insured benefits) Liability (95,222) (100,263) • 618 deferred Assets 78,147 77,369 Deficit (17,075) (22,894) pensioners Deferred Tax 4,859 6,001 • Scheme closed to future Net Deficit (12,216) (16,893)
Slide 13: 2013 Full Year Outlook
2013 Full Year Outlook • Tax rate at c28%, no cash payment in H1, US instalments of c$3.2m due in H2 • Share based payments charge c£0.8m for the year • Pension – regular contributions £3.2m for 2013, pending agreement of April 2013 valuation and future company deficit repayment rate • Impact of IAS
Slide 14: SPS
UK based trade supplier selling manufactured and branded promotional products to more than 2,000 distributors in UK and Europe H1 2013 H1 2012 FY 2012 £'000 £'000 £'000 Total revenue 8,055 7,802 15,517 Gross margin 4,209 4,010 8,117 • Revenue 3% ahead of prior year (Q2: 12% ahead) Gross margin % 52.
Slide 15: Direct Marketing – North America
Direct Marketing – North America H1 2013 H1 2012 FY 2012 US Dollars $'000 $'000 $'000 Revenue 138,670 122,791 256,504 • Revenue increased by 13% Gross profit 49,056 43,792 90,362 • Marketing spend increased Gross profit % 35.4% 35.7% 35.2% by 7% Marketing costs (26,343) (24,538) (46,836) • Selling a
Slide 16: Direct Marketing Review – Kevin Lyons-Tarr
Direct Marketing Review – Kevin Lyons-Tarr 14
Slide 17: 4imprint Direct Marketing Model
4imprint Direct Marketing Model • Sale of custom-printed merchandise, used to promote a brand, service or product • Purchases by individuals within businesses and organisations of all sizes • Product customised and shipped to customer directly from suppliers • Investment in marketing, technology and
Slide 18: Strong Organic Growth
Strong Organic Growth North America - Revenue 300 • Positive H1 performance, 250 256.5 representing further progress 224.5 200 190.1 • Total DM Revenue £93.52m, ($m) 150 122.8 138.7 +15% 100 • North American revenue 50 $138.67m, +13%; industry 0 +5%, 2010 2011 2012 2012 H1 2013 H1 • UK DM revenue £3
Slide 19: Consistent Customer Acquisition and Retention
Consistent Customer Acquisition and Retention 600,000 No. of Orders Received 500,000 400,000 300,000 • Orders received +14% 200,000 • More than 300,000 100,000 orders in H1 - 2010 2011 2012 2012 H1 2013 H1 • Orders from new New customer orders Existing customer orders customers up 5% Customers Acqui
Slide 20: Marketing Driving Growth
Marketing Driving Growth • Marketing spend $26.3m, +7%; revenue +13% • Increase in H1 revenue/marketing dollar from $5.00 to $5.26 driven by: • Modest increase in catalogue circulation (7% increase in H1) as improvements in H2 2012 were fully established • Favourable catalogue costs achieved in H1 •
Slide 21: Growth Opportunities
Growth Opportunities • In H2 identify further opportunities to drive customer acquisition using prospecting database • Continue to expand Blue Box® programme and online marketing • New US ‘4imprint Outlet’ site launched in June, including patent-pending ‘Steal a DealTM’ price negotiation technology;
Slide 22: Outlook - John Poulter
Outlook - John Poulter i S ~ 20
Slide 23: Outlook
Outlook The Group continues to take advantage of the growth opportunities presented by 4imprint Direct Marketing’s large and highly fragmented markets, as well as continuing to drive revenue growth in SPS. Following the strong first half results, the Board expects a good performance for the year as
Slide 24: Appendices
Appendices i S ~
Slide 25: Financial Track Record
Financial Track Record SPS Revenue (£m) Underlying profit before tax (£m) 120 7 6.66 Direct Marketing 6 5.51 7.3 6.9 7.1 5 4.67 80 6.4 6.4 4 3.32 3 2.62 87.6 93.5 40 76.6 81.3 69.4 2 1 0 0 2011 H1 2011 H2 2012 H1 2012 H2 2013 H1 2011 H1 2011 H2 2012 H1 2012 H2 2013 H1 Net cash (£000) 14,832 Underlyi
Slide 26: Market Size
Market Size Promotional Products Revenue ($ billions) Growth History – 4imprint v Market 256.5 25 260 37 240 224.5 4imprint US & Canada Revenue ($m) 20 220 32 Market Size ($bn) 15 200 190.1 180 170.6 165.4 27 10 160 145.4 140 23.6 22 5 22.9 23.1 22.0 120 20.7 0 100 18.5 17 2008 2009 2010 2011 2012 2
Slide 27: Shareholder List
Shareholder List As at 12/7/2013 No. of shares % BlackRock Investment Management 4,096,591 15.3 Aberforth Partners 2,439,208 9.1 SVG Investment Managers 2,058,775 7.7 Artemis Investment Management 1,858,000 7.0 Mr K.J. Minton 1,718,010 6.4 Ennismore Fund Management 1,411,790 5.3 Legal & General Inve
Slide 28: Slide 28