INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 OCTOBER 2019 10 DECEMBER 2019
SERGE CRASNIANSKI CHIEF EXECUTIVE OFFICER & DEPUTY CHAIRMAN OVERVIEW
AGENDA • FINANCIAL AND OPERATIONAL SUMMARY • OUR BUSINESS MODEL • FINANCIAL REVIEW • BUSINESS REVIEW • INNOVATION AND DIVERSIFICATION • CONCLUSION 3
FINANCIAL SUMMARY Further revenue and profit growth • Continued strong cash generation from operations • Interim dividend maintained at 3.71 pence per Ordinary share • Adjusted Underlying Revenue ¹ Reported Revenue up Profit before tax 2 up 0.4% 3.3% at £123.9m up 6.7% at £28.5m (H1 2019: £119.8m) (H1 2019: £119.8m) (H1 2019: £26.7m) EBITDA margin Cash generated from EBITDA 3 up 17.4% at increased to 37.0% operations £45.9m up 13.7% to £41.1m (H1 2019: 32.6% 2 ) (H1 2019: £39.1m) (H1 2019: £36.1m) Earnings per share Net cash Total ordinary dividend (Diluted) £25.2m per share maintained up 13.2% to 6.0p at 3.71p (H1 2019: £32.4m) (H1 2019: 5.3p) ¹ Underlying revenue excludes Sempa revenue 2 Adjusted for discontinued operations and exceptional items in H1 2019 3 EBITDA includes £2.6m IFRS16 positive impact 4
OPERATIONAL SUMMARY Continued expansion of Laundry business Identification remains resilient; underpinned by strong performance in France and Japan Kiosk revenue growth ‘KIS Food ’ segment formed following acquisition of Sempa in April 2019 5
BUSINESS MODEL AND GROWTH STRATEGY 6
STEPHANE GIBON CHI E F FI N AN CI AL OFFI CE R FINANCIAL REVIEW
KEY FINANCIALS £m REPORTED REVENUE 140 Reported revenue up 3.3% at £123.9m • 120 123.9 (up 1.8% at constant currency) 122.2 119.8 100 110.6 92.8 Underlying revenue 1 up 0.4%. 80 • 60 Cash generated from operations • 40 up 13.7% to £41.1m 20 0 H1 2016 H1 2017 H1 2018 H1 2019 H1 2020 EBITDA £m 50 EBITDA has benefit from continued 40% • Laundry expansion, a contribution from 45.9 40 Sempa 39.1 44.9 35% 40.5 30 33.8 33.4 Depreciation charge was higher in H1 • 2020 vs H1 2019 20 30% 10 0 25% H1 2015* H1 2016 H1 2017 H1 2018 H1 2019 H1 2020 EBITDA EBITDA Margin ¹ Underlying revenue excludes Sempa revenue 8
KEY FINANCIALS REPORTED PROFIT BEFORE TAX % £m Reported profit before tax up • 35 30% 8.8% at £28.3m 32.9 30 25% 31.0 28.3 Adjusted profit before tax 2 up 25 • 26.0 20% 25.8 6.7% at £28.5m; excluding H1 20 15% 2019 and H1 2020 adjustments 15 10% 10 Reported profit before tax • 5% 5 margin increased to 23% 0 0% H1 2016 H1 2017 H1 2018 H1 2019 H1 2020 PBT PBT Margin RECONCILIATION OF REPORTED PROFIT BEFORE TAX TO ADJUSTED PROFIT BEFORE TAX £m 29 0.2 28.5 28.3 28 27 26 25 Exceptional items Reported profit before tax Adjusted profit before tax H1 2020 H1 2020 2 In H1 2019 adjusted for discontinued operations (Profit on disposal of Stilla Technologies SA £3.2m, Loss on Max Sight Holding Investment £2.7m) and an 9 exceptional item related to restructuring cost in Japan of £1.2m. In H1 2020, adjusted for exceptional items related to a £0.2m restructuring in the UK
EARNINGS PER SHARE AND DIVIDENDS DILUTED EARNINGS PER SHARE 7.00 6.00 6.40 5.84 5.95 Pence per share Diluted earnings per share 6.0p • 5.00 5.33 4.98 4.00 Maintained interim dividend per share • of 3.71p 3.00 2.00 £31.9m cash will be returned to • shareholders via dividend payments in 1.00 2020 0.00 H1 2016 H1 2017 H1 2018 H1 2019 H1 2020 DIVIDEND HISTORY 4.00 3.50 3.71 3.71 3.71 3.00 Pence per share 3.09 2.50 2.58 2.00 1.50 1.00 0.50 0.00 2016 2017 2018 2019 2020 Ordinary dividend 10
NET CASH BRIDGE £m 120 68.3 100 80 (27.6) (1.7) 60 (10.2) 40 32.4 25.2 (31.9) 20 (4.1) 0 Closing Opening Operating Investment in Capitalised Acquisitions Dividends Tax Net Cash at Net Cash at estate and cash flow R&D and SW 30 October 2019 30 October 2018 infrastructure Excluding the acquisition of Sempa for £10.2m, the net cash position would have increased by 9.0% to £35.4m • 11
REVENUE BRIDGE £m 130 3.9 (0.2) 0.4 125 123.9 3.5 (2.6) (0.5) (0.4) 119.8 120 115 110 105 100 From Laundry H1 2019 B2B Photobooths Kiosks Other Sales H1 2020 acquisitions except B2B 12
REPORTED PBT BRIDGE £m 31 0.2 1.0 30 0.5 29 (0.7) 28.3 1.8 (0.7) 28 (0.2) 27 0.2 26.0 26 25 24 Laundry Finance and H1 2019 FX Acquisitions Restructuring Kiosks Photobooth Sales H1 2020 except B2B Other Gains 13
RESULTS BY GEOGRAPHIC AREA ASIA CONTINENTAL EUROPE UK & REPUBLIC OF IRELAND Austria, Belgium, France, Germany, Netherlands, United Kingdom and Ireland China, Japan, Singapore, COUNTRIES Poland, Portugal, Spain and Switzerland (Including Corporate) South Korea, Vietnam 25,436 units 11,357 units 10,061 units VENDING UNITS % OF THE GROUP 54.0% 24.0% 21.0% H1 2020 H1 2019 Change H1 2019 3 H1 2020 H1 2019 Change H1 2019 3 H1 2020 H1 2019 Change H1 2019 3 REVENUE £77.0m £70.4m +9.4% £70.1m £24.1m £27.5m -19.6% £28.5m £22.8m £21.9m +4.1% £23.4m OPERATING £25.3m £20.7m +22.2% £20.9m £1.8m £4.6m -60.9% £4.6m £3.4m £1.5m +126.7% £1.7m PROFIT 32.9% 29.4% 11.9% 29.8% 7.5% 16.7% -55.1% 16.2% 14.9% 6.8% +119.0% 7.3% MARGIN Best performing region, • Revenue declined 19.6% due to • Japan turnaround plan proven • contributing 62.2% of Group challenging market conditions highly effective, country has revenue (2018: 58.8%) and lower consumer activity, in returned to profitability the UK affecting photobooth performance Strong revenue and operating • Excluding one-off restructuring • profit performance, driven by costs in H1 2019, operating profit better than expected • Laundry business in the region improved by 26% photobooth performance in continued to perform well France and Laundry expansion 3 H1 2019 trading results of overseas subsidiaries converted at 2019 exchange rates. For constant currency comparatives, average rates of exchange used were £/€ 1,129 (H1 2019: 1,12), £/Yen: 145.17 (H1 2019: 135.00) 14
ERIC MERGUI CHI E F OPE RATI N G OFFI CE R BUSINESS REVIEW
VENDING UNITS IN OPERATION CONTINENTAL EUROPE UK & REPUBLIC OF IRELAND ASIA 10,500 13,000 Number of vending units in operation 26,000 10,000 12,000 24,000 25,436 10,061 10,105 9,500 24,787 12,055 10,037 11,909 24,550 11,000 22,000 11,357 9,000 10,000 20,000 8,500 18,000 9,000 8,000 16,000 8,000 7,500 14,000 7,000 7,000 12,000 6,500 6,000 10,000 6,000 5,000 H1 2018 H1 2019 H1 2020 H1 2018 H1 2019 H1 2020 H1 2018 H1 2019 H1 2020 Re-installation of new machines • Machine units increased by 2.6% with Decline in units reflected removal of • • and non-profitable machines were unprofitable photobooths and kiosks the number of laundry units up 16.0% relocated. in the UK and photobooths up 4.3% Number of vending units in operation (% of estate) 0% 3% 0% 1% 9% 14% 5% 50% 52% 19% 30% 10% 5% 6% 96% Photobooth Kiosk Laundry Children's rides Other 16
IDENTIFICATION OVERVIEW H1 2020 H1 2019 Change World’s largest operator of photobooths with • market-leading brands across all operating regions Number of units in operation 28,439 28,421 +0.1% Established network of 28,439 photobooths , 61.0% 61.0% • Percentage of total Group vending estate representing 61.0% of total vending estate (number of units) - Integrated software conforms to ISO and Revenue £76.5m £79.1m (3.3%) • ICAO photo ID regulations Capex £5.4m £3.9m +38.5% Dedicated support maintenance and • remote telemetry H1 2020 PERFORMANCE Excluding the UK, revenue remained resilient (+0.8%), reflecting solid performance in France and Japan • Total revenue declined due to challenging market conditions in the UK • More than 12,000 photobooths connected to government organisations for the secure upload of photo ID in • the UK and Continental Europe Invested in Identification in Japan and UK to strengthen position in high-footfall sites and consolidate leading • market position 17
LAUNDRY OVERVIEW H1 2020 H1 2019 Change Rapidly expanding business area with • 5,179 units in operation Total laundry units deployed 4,636 +11.7% 5,179 (owned, sold and as a result of acquisitions) Key growth driver for the Group • Total revenue from laundry operations £25.6m £21.9m +16.9% Three key areas of Laundry services • Revolution (excludes Launderettes and B2B): • Revolution: Outdoor self-service laundry units - Number of Revolutions in operation 2,995 2,527 +18.5% • Launderettes: self-service shops • B2B Laundry Services: distribution and Percentage of total Group vending estate - 6.3% 5% leasing of equipment (number of units) Total revenue from Revolutions £17.4m £13.9m +25.2% - Revolution capex £6.5m £4.3m +51.2% - H1 2020 PERFORMANCE Laundry continues to grow, with revenues increasing 11.7% • Revolution expansion progressing well; year-on-year total revenues up 25.2% • Increased investment in existing Laundry estate and rollout • Built presence in newer markets including Germany, Austria and Switzerland as part of expansion strategy • B2B Laundry improving in the UK and is expected to report growth in FY2020 • Group seeking to continue to grow Laundry market presence organically and through bolt-on acquisitions • 18
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