4imprint Group Plc · LSE:FOUR
4imprint — FY2012 Earnings Presentation
33 slides from 4imprint's earnings presentation, February 2013
Slide 1: Results presentation for the year ended 29 December 2012
Results presentation for the year ended 29 December 2012
Slide 2: Slide 2
Slide 3: Final Results 2012
Final Results 2012 1. Highlights 2. Financial review 3. Direct Marketing review 4. Group strategy and outlook John Poulter Chairman Kevin Lyons-Tarr CEO, 4imprint Direct Marketing Gillian Davies Group Finance Director 1
Slide 4: Highlights – John Poulter
Highlights — John Poulter os Ye “Ba . YL
Slide 5: Highlights – strong growth and strategic progress
Highlights – strong growth and strategic progress • Group revenue† £182.92m (2011: £158.82m), up 15% • Underlying* profit before tax† £9.98m (2011: £8.13m), up 23% • Underlying* basic EPS† 28.32p (2011: 22.01p), up 29% • Net cash £10.68m, an increase of £5.22m • Proposed full year dividend 15.45p, (
Slide 6: Financial Review – Gillian Davies
Financial Review – Gillian Davies 4
Slide 7: Results Summary
Results Summary Continuing Operations 2012 2011 % change Revenue £'000 £'000 • 14% at constant currency 4imprint Direct Marketing 168,905 146,030 +16% SPS 15,517 14,221 +9% Inter-segment (1,499) (1,427) Total 182,923 158,824 +15% 2012 2011 % change Profit £'000 £'000 • 9% at constant currency 4impri
Slide 8: Statutory Income Statement
Statutory Income Statement Continuing Operations 2012 2011 £'000 £'000 % change Revenue 182,923 158,824 +15% 8,486 • SAYE and LTIP Underlying* operating profit 9,938 +17% scheme Share option charges (655) (517) Exceptional items (592) (1,935) • Costs incurred as a consequence of Exceptional impairme
Slide 9: Exceptional Items and Discontinued Operations
Exceptional Items and Discontinued Operations Exceptional items – £0.59m • Business separation including office relocation • Fees related to Group’s inter-company loan refinancing • Fees related to pension buy-in Discontinued Operations • Sale of Brand Addition completed 23 March 2012 • Proceeds £24
Slide 10: Tax
Tax 2012 2011 • Continuing operations effective Continuing operations £'000 £'000 rate 27% (2011: 38%); following completion of Group inter- Profit before tax and company loan refinancing goodwill impairment* 7,705 5,101 • Tax payable in US (38% Current tax 1,122 1,074 Deferred tax 988 876 marginal
Slide 11: Cash Flow
Cash Flow •Net disposal cash flow £18.54m •Regular DB contributions •Discontinued operations £(3.09)m operating cash flow £(3.49)m •Additional contribution to DB scheme £(9.28)m for •Tax £(1.32)m pension risk reduction •Interest £0.01m •Other £0.11m •UK Office purchase £(0.78)m •Exceptional items £(
Slide 12: Balance Sheet
Balance Sheet 2012 2011 £'000 £'000 • Net assets £13.79m, increase of £0.73m Fixed assets 13,292 12,904 Deferred tax asset 6,281 6,115 • 4imprint Direct Marketing 19,573 19,019 net operating assets £9.76m (ROCE 118%) Inventories 3,338 2,728 Receivables 20,190 * 17,828 • SPS net operating assets Paya
Slide 13: Movement in Pension Deficit
Movement in Pension Deficit Cost of buy in £25.20m, (£12.00m contributions, £13.20m scheme £(4.43)m interest cost assets) £3.40m asset return Liabilities secured £20.46m assumptions (5,950) 12,366 (23,547) (1,028) (22,894) (4,735) Discount rate: 4.3% (2011: 4.9%): £(6.73)m Other assumptions: £0.78m
Slide 14: Pension Deficit
Pension Deficit 29 Dec 31 Dec 2012 2011 £'000 £'000 Liability (100,263) (92,870) • 1,155 pensioners, 618 Assets 77,369 69,323 deferred Deficit (22,894) (23,547) Deferred Tax 6,001 5,885 • Scheme closed to future Net Deficit (16,893) (17,662) accrual Expected • Pension buy in completed for return on
Slide 15: 2013 Full Year Outlook
2013 Full Year Outlook • Tax rate at c28% • Share based payments charge c£0.8m • Pension – regular contributions £3.2m, pending valuation at April 2013. Pension finance charge c£1.0m in line with amendments to IAS19 • Deferred consideration due for Brand Addition £1.25m, March 2013 • Purchase of sha
Slide 16: SPS: UK based trade supplier of promotional products
UK based trade supplier selling manufactured and branded promotional products to more than 2,000 distributors in UK and Europe 2012 2011 £'000 £'000 Total revenue 15,517 14,221 Gross margin 8,117 7,430 • Revenue 9% ahead of prior Gross margin % 52.3% 52.2% year, gaining market share Direct costs (3,
Slide 17: Direct Marketing – North America
Direct Marketing – North America 2012 2011 • Revenue increase 14% - US Dollars $'000 $'000 market growth 5% Revenue 256,504 224,523 Gross profit 90,362 79,969 • Marketing spend increased by 18% Gross profit % 35.2% 35.6% Marketing costs (46,836) (39,793) • Selling and other overhead costs increased
Slide 18: Direct Marketing Review – Kevin Lyons-Tarr
Direct Marketing Review – Kevin Lyons-Tarr 16
Slide 19: 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 20: Highlights
Highlights Revenue - North America • North American revenue $256.5m, +14%; industry +5%, 300 256.5 250 224.5 • UK DM revenue +16%, now 200 190.1 above £7m ($m) 150 • Total DM operating profit 100 £11.0m, +10% 50 0 • North American operating profit 2010 2011 2012 $17.3m, +9% • Strong cash generation
Slide 21: Customer Acquisition and Retention
Customer Acquisition and Retention 45% Customers Acquired & Retention Percentage 40000 40% 35000 35% 30000 30% 25000 25% 20000 • More than 135k new 20% 15000 customers acquired 15% 10% 10000 • Strong retention, 21% 5% 5000 increase in existing customer orders 0% 0 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2
Slide 22: Marketing Driving Growth
Marketing Driving Growth • Marketing spend $46.8m, up 18% • Revenue/marketing dollar $5.48 vs. $5.64 in 2011 ($5.40 in 2010) • Catalogue circulation increased by 14%, expanded platform established for customer acquisition • Increase primarily due to speciality catalogues published 4 times per year (
Slide 23: Looking Ahead – key initiatives
2013 Looking Ahead – key initiatives • Drive revenue growth in line with investment in marketing • Customer acquisition: • Speciality catalogues now fully established as part of customer acquisition mix • Modest increase in circulation using new proprietary marketing database to identify opportuniti
Slide 24: Well positioned for growth
2013 Well positioned for growth The progress achieved in 2012 expands our platform for growth and further strengthens the already substantial barriers to entry: • Proprietary technology and processes • Marketing investment and analytical expertise/resource • Large customer base • Scale; well establi
Slide 25: Group Strategy and Outlook
Group Strategy and Outlook John Poulter 23
Slide 26: Group Strategy
Group Strategy • Pursue further profitable and cash generative organic growth in 4imprint Direct Marketing • Continue to develop the full potential of SPS • Reduce risk of UK legacy defined benefit pension scheme to the Group • Maintain a progressive dividend policy based on a robust financial posit
Slide 27: Outlook
Outlook Demand in the early weeks of the new year has been encouraging. The Board is confident of further progress in 2013. 25
Slide 28: Appendices
Appendices A
Slide 29: Financial Track Record
Financial Track Record Revenue* (£m) Underlying profit before tax* (£m) 200 12.00 9.98 14.0 10.00 160 12.8 8.13 14.8 8.00 120 5.71 6.00 80 168.9 146.0 4.00 129.0 40 2.00 0 0.00 2010 2011 2012 2010 2011 2012 SPS Direct Marketing Net cash/(debt) (£000) 10,678 Underlying EPS* and dividend per share 11,
Slide 30: Market Size
Market Size Promotional Products Revenue ($ 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 31: Shareholder List
Shareholder List As at 15/2/2013 No. of shares % Aberforth Partners 4,879,517 18.2 SVG Investment Managers 3,036,682 11.4 Artemis Investment Management 2,520,000 9.4 Blackrock Investment Management 2,074,408 7.8 Mr K.J. Minton 1,718,010 6.4 Ennismore Fund Management 1,411,790 5.3 Legal & General Inv
Slide 32: Promotional Product Range
Promotional Product Range 2012 4imprint Direct Marketing Revenue by Product Category Toys & Novelties 2% Misc Food & Candy Wellness & Safety 1% 1% Bags Awards & Office 4% 19% 4% Technology 5% Trade Show and Signage 5% Auto Home & Tools Writing 5% 14% Outdoors & Leisure 6% Stationery Apparel 8% 14% D
Slide 33: Slide 33