investor presentation - communisis · 3 communisis at a glance what we do •customer engagement...
TRANSCRIPT
Investor presentation2015 preliminary results
Andy Blundell, Chief Executive
Mark Stoner, Finance Director
March 2016
2
What we do
Communisis is an integrated marketing services company
which improves communication between brands and their
customers. We create engaging content and deliver it
across multiple customer touch-points; in digital,
broadcast and print channels.
Communisis Investor presentation | 2015 Results
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Communisis at a glance
What we do
• Customer Engagement
(Design)
• Personalised Communications
(Produce)
• Brand Deployment
(Deploy)
Key facts
• Fully listed (CMS)
• 2200+ employees (170+overseas)
• Blue chip clients in:
Communisis Investor presentation | 2015 Results
40%
23%
8%
7%
4%3% 15%
Financial services
Consumer goods
Utilities
Public sector
Retail & distribution
Telecoms
Other
4
Financial highlights
• Strong growth in
profitability, operating
margin and earnings per
share
• Free cash flow doubled
• Dividend increase for
the fifth consecutive
year
Communisis Investor presentation | 2015 Results
Comparison 2015
to 2014£m As reported
Constant
currency*
Total revenue £354m +3% +6%
Adjusted operating profit** £18.3m +14% +20%
Adjusted operating margin** 7.6% +10% +13%
Adjusted earnings per share*** 5.18p +12% +21%
Dividend per share 1.47p +10% +10%
Profit before tax £17.3m +£30m +£30m
Free cash flow £12m +£6m +£6m
Net debt £39.4m -£3.5m -£3.5m
* As reported excluding the translation effect of changes in foreign exchange rates
**Before exceptional items and the amortisation of acquired intangibles
***Fully diluted and excluding the after tax effects of exceptional items and the amortisation of acquired
intangibles
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Some of our clients
Communisis Investor presentation | 2015 Results
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Market trends
• Outsourcing of incoming and outgoing customer
communications
• Precision marketing through personalised
communications
• More consistent messaging in global campaigns
• Clients reducing the number of service providers
• Client brands focusing on improving customer
retention and attraction
Communisis Investor presentation | 2015 Results
Customer engagement
= persuasive content +
relevant channel
The market demands
a marketing services
provider capable of
‘creating once,
publishing
everywhere’ to
connect brands to
individuals
“
““ “
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Value creation
Communisis Investor presentation | 2015 Results
Growth
People Efficiency
Value
8
Growth
• Organic sales growth
• Broaden and deepen the service offering
• Increase international presence
Communisis Investor presentation | 2015 Results
Growth
People Efficiency
Value
9
Customer engagement - Design
Communisis Investor presentation | 2015 Results
10
Personalised communications - Produce
Communisis Investor presentation | 2015 Results
11
Brand deployment - Deploy
Communisis Investor presentation | 2015 Results
12
Innovation
Communisis Investor presentation | 2015 Results
The Bakery
Andy Blundel l
CEO, Communisis PLC
The future of customer communicat ions
Welcome to the Communisis
2016 Client Conference
Apple Pay Client conferences
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International office locations
Communisis Investor presentation | 2015 Results
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Efficiency
Clients through
international
Deploy hubs
Communisis Investor presentation | 2015 Results
28
Design co-location in
London
• Optimise direct cost and overhead base
• Improve capacity utilisation
• Capitalise on synergy
Total
operational
waste down by14%
Carbon
footprint 7%
Invoiced
packs / FTE 6%
Growth
People Efficiency
Value
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People
Attract the best people
• Launch of new graduate recruitment scheme seeing
several graduates complete a two-year development
programme
Engage, develop and reward
• 12 managers enrolled onto our Inspire Programme
which was formulated to support and develop middle-
tier management
Optimise structures
• Re-alignment of senior leadership
Communisis Investor presentation | 2015 Results
Growth
People Efficiency
Value
2015Summary financials
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Summary income statement• Total revenue increased 3% reported, 6% on a constant currency
basis
• Margin improved to 7.6%
• Exceptional items include credit against deferred consideration
of £6.7m, restructuring £(2.0)m, property provision release
£0.4m, acquisition costs £(0.5)m
• Underlying Profit before tax of £10.6m (PY £7.8M) +35% reported
• Adjusted Earnings per share increase +12% (+21% on constant
currency)
• Delivering bottom line improvements
Communisis Investor presentation | 2015 Results
2015
£m
2014
£m
Trading 239 232
Pass through 115 111
Total revenue 354 343
Adjusted operating profit 18.3 16.0
Amortisation of acquired intangibles (1.2) (1.0)
17.1 15.0
Exceptional items 4.0 (24.7)
Net finance costs (3.8) (3.5)
Profit before tax 17.3 (13.2)
Tax (2.8) (1.9)
Profit after tax 14.5 (15.1)
Adjusted earnings per share 5.18p 4.62p
Operating margin 7.6% 6.9%
4.194.62
5.18
0
1
2
3
4
5
6
2013 2014 2015
Adjusted Earnings Per Share(EPS)
Pence per share (pps)
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Sector and segment analysis
Communisis Investor presentation | 2015 Results
43%
24%
8%
5%
4%
7%
9%
Turnover by Sector 2014
Financial Services
Consumer Goods
Utilities
Retail and Distribution
Telecoms
Public sector
Other
8%
44%
16%
32%
Segmental split of turnover 2014
Design
Produce
Deploy
Pass Through
40%
23%
8%
4%
3%
7%
14%
Turnover by Sector 2015
Financial Services
Consumer Goods
Utilities
Retail and Distribution
Telecoms
Public sector
Other
9%
44%
15%
32%
Segmental split of turnover 2015
Design
Produce
Deploy
Pass Through
12%
51%
37%
Segmental split of contribution 2015
Design
Produce
Deploy
9%
53%
38%
Segmental split of contribution 2014
Design
Produce
Deploy
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Segmental performance
Communisis Investor presentation | 2015 ResultsRevenue
(£m
)
Design Produce
150.7
Deploy
55.2 53.8
2014 2015
(+3%)
+8% CC
Pass through
110.6 113.4
2014 2015
+3% +
7% CC
151.6
2014 2015
+1%
150.7
Contr
ibuti
on
(£m
)
4.3
2014 2015
+29%3.4 19.3
2014 2015
18.9
+2%
13.8 14.1
2014 2015
+2% +
8% CC
26.5 35.4
2014 2015
+34%
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Key metrics
Communisis Investor presentation | 2015 Results
-8
-4
0
4
8
12
*2011 *2012 2013 2014 2015
£m
Free Cash Flow
1.50
0.0
0.5
1.0
1.5
2.0
2.5
2011 2012 2013 2014 2015
Pence p
er
share
Dividends
+10%+9%
+11%
2.20pps
+10%
2.20pps
1.80pps1.65
pps
2.00pps
1.50pps
£9.0m
£11.5m
£13.3m
£16.0m
£18.3m
5.3%
6.4% 6.9% 6.9%
7.6%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
0
2
4
6
8
10
12
14
16
18
20
*2011 *2012 2013 2014 2015
%
£m
Adjusted Operating Profit
Adjusted operating profit
Operating margin (on sales excluding pass through)
*restatedfortheeffectsof
IAS19R
21
Summary cash flow & net debtFree cash flow doubled
• Increased profitability
• Tight working capital management
• A tax repayment
• Lower exceptional cash items
• Reduced levels of capital expenditure
Acquisition of Life Marketing Agency
• Two-year promissory loan notes (payable Q1’17)
Free cash flow improvement trend expected to continue
Communisis Investor presentation | 2015 Results
2015
£m
2014
£m
EBITDA 29.3 27.1
Working capital increase 0.2 1.1
Pension contributions (2.9) (1.2)
Interest and tax (3.7) (4.7)
Exceptional items (2.0) (5.1)
Capital expenditure (8.8) (11.2)
Free cash flow 12.0 6.0
Investment in new contracts (2.2) (3.2)
Acquisitions (0.6) (6.5)
Dividends (4.3) (3.7)
Other 0.3 (0.7)
Decrease (increase) in bank
debt
5.2 (8.1)
Net bank debt (28.0) (33.0)
Finance leases (2.1) (2.9)
Promissory loan notes (9.3) -
Net debt (39.4) (35.9)
-10
-5
0
5
10
15
2013 2014 2015
£m
Free Cash Flow
22
Communisis Investor presentation | 2015 Results
Bank facilities
Total facilities (£65m Revolving Credit and £5m Overdraft) £70m
Utilised at December 2015 £28m
Headroom 60%
Average utilisation during the year £44m
Headroom 37%
EBITDA : Net bank debt
• December 1.0
• Average for the year 1.5
• EBIT : Interest for the year 4.8
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Outlook
Encouraged by increasing demand for the Group’s integrated marketing services
• Focus on the creation of value
• Bottom line profit improvement
• Improving free cash flow
• Progressive reduction in debt
Supported by
• Success in winning and retaining multi-year contracts
• New business pipeline
Communisis Investor presentation | 2015 Results
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Thank you