Enabling the capture and sharing of exceptional images. The Vitec Group plc Full Year Results 2017 Transformational year for the Group 22 February 2018
Important notice Forward-looking statements This presentation contains forward-looking statements with respect to the financial condition, performance, position, strategy, results and plans of The Vitec Group plc (the “Group”, “Vitec”, or the “Company”) based on Management’s current expectations or beliefs as well as assumptions about future events. These forward -looking statements are not guarantees of future performance. Undue reliance should not be placed on forward-looking statements because, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by o ther factors that could cause actual results, and the Group’s plans and objectives, to differ materially from those expressed or implied in the forward-looking statements. The Company undertakes no obligation to publically revise or update any forward-looking statements or adjust them for future events or developments. Nothing in this presentation should be construed as a profit forecast. The information in this presentation does not constitute an offer to sell or an invitation to buy shares in the Company in any jurisdiction or an invitation or inducement to engage in any other investment activities. The release or publication of this presentation in certain jurisdictions may be restricted by law. Persons who are not resident in the United Kingdom or who are subject to other jurisdictions should inform themselves of, and observe, any applicable requirements. This presentation contains brands and products that are protected in accordance with applicable trademark and patent laws by virtue of their registration. Adjusted performance measures In addition to statutory reporting, Vitec reports total performance for continuing and discontinued operations on an adjusted basis before charges associated with acquisition of businesses, impairment of goodwill, restructuring costs and material non-operating events. Adjusted performance measures (“APMs”) in this presentation are denoted by an *. Each item excluded in the APMs is considere d to be significant in nature and/or value. The purpose of excluding these items is to better reflect the underlying business and enable more meaningful comparison over time. This is consistent with how the business performance is reported to the Board and Operations Executive. A definition of the APMs used in this presentation and a reconciliation from adjusted operating profit to statutory operating profit is included in the Appendix. Page 2
Agenda > Highlights > Stephen Bird, Group Chief Executive > Financial Review > Kath Kearney-Croft, Group Finance Director > Market and Strategy Update > Stephen Bird, Group Chief Executive > Q&A Page 3
Highlights: record Group performance 1. Transformation of the Group’s portfolio > Disposals funded acquisitions > New operating structure > Significant number of market-leading new products launched 2. Record Group performance > Revenue for continuing operations up 10.8%, adjusted PBT* up 13.4% > Adjusted operating margin* for total operations improved to 11.8% from 11.0% > ROCE for total operations increased to 19.6% from 17.5% 3. Total dividend increased by 12.1% 4. Strong cash conversion of 119% ɸ , reduction in net debt to £42.9m 5. Well-positioned to be able to deliver future growth * Before charges associated with acquisition of businesses, impairment of goodwill, restructuring costs, and significant costs relating to the integration of acquired businesses and material non- operating events, as described in the Appendix ɸ Total operations excluding the acquisition of JOBY and Lowepro 2017 was a transformational year for the Group Page 4
Financial Review Page 5
Full year results: a record performance Better / Total performance for 2017 2016 Better / (worse) at continuing and > Record adjusted* revenue, (worse) Constant discontinued operations FX £m £m PBT and EPS Revenue * 378.1 376.2 0.5% (2.9%) > Improvement in gross Gross profit * 162.4 148.6 9.3% 4.2% margin %* Gross margin % * 39.5% +350 bps +290 bps 43.0% Operating expenses * (107.1) (9.8%) (6.3%) (117.6) > Higher opex Operating profit * 44.8 41.5 8.0% (1.2%) > Investment to drive Operating margin % * 11.8% 11.0% +80 bps +20 bps sales and future growth Net finance expense (4.0) (2.8) PBT * 37.5 12.0% 2.8% 42.0 > Higher corporate costs Adjusted EPS * 61.3 11.1% 68.1 > Full year dividend increased Dividend per share 30.5 27.2 12.1% by 12.1% to 30.5p ROCE 17.5% 19.6% +210 bps > Increase in ROCE to 19.6% * Before charges associated with acquisition of businesses, impairment of goodwill, restructuring costs and material non-operating events, as described in the Appendix Page 6
Continuing operations Better / 2017 2016 Better / (worse) at (worse) Constant > Benefit from the disposal of FX Continuing operations £m £m Haigh-Farr and Bexel Revenue 353.3 318.9 10.8% 6.4% comparing continuing to total Gross profit * 135.9 15.2% 9.4% 156.5 Gross margin % * 42.6% +170 bps +120 bps 44.3% operations Operating expenses * (111.3) (94.5) (17.8%) (13.6%) > Higher growth rates in Operating profit * 45.2 41.4 9.2% - revenue and adjusted Operating margin % * 13.0% -20 bps -80 bps 12.8% PBT* Net finance expense (4.0) (2.8) > Improvement in the PBT * 42.4 37.4 13.4% 4.1% Adjusted EPS * 70.5 61.0 15.6% Group’s gross margin* % * Before charges associated with acquisition of businesses, impairment of goodwill, restructuring costs and and operating margin* % material non-operating events, as described in the Appendix Page 7
Divisional performance Revenue Adjusted operating profit* Better / Better / Better / (worse) Better / (worse) 2017 2016 2017 2016 (worse) at Constant FX (worse) at Constant FX Continuing operations £m % % £m % % £m £m Imaging Solutions 175.9 151.4 16.2% 11.3% 29.9 25.2 18.7% 13.4% Production Solutions 114.2 121.6 (6.1%) (9.6%) 15.2 16.3 (6.7%) (21.1%) Creative Solutions 63.2 45.9 37.7% 31.9% 13.0 9.5 36.8% 31.3% 353.3 318.9 10.8% 6.4% 58.1 51.0 13.9% 6.2% Corporate & unallocated - - - - (12.9) (9.6) (34.4%) (34.4%) 353.3 318.9 10.8% 6.4% 45.2 41.4 9.2% - * Before charges associated with acquisition of businesses, impairment of goodwill, restructuring costs and material non-operating events, as described in the Appendix > Transformational acquisition of JOBY and Lowepro Imaging Solutions > Sales outperformed CIPA trends; high growth in APAC > Spectrum “repack” in the US has led to lower studio sales Production Solutions > New product launches well received by the market > Benefitted from continued strong growth in ICC market Creative Solutions > Higher technology product offering enhanced by RTMotion acquisition > Includes impact of higher LTIP and bonus accruals Corporate & unallocated Page 8
Group total revenue bridge £m Translation 380 Discontinued operations > Excluding discontinued operations 370 > Anticipated reduction in revenue in EU Acquisitions Services driven by non-repeat of Olympics Transaction 360 > Underlying revenue growth driven by Creative Solutions and Imaging Solutions 350 offsetting decline in US studio business Underlying Revenue > Translational FX benefit from weakening EU Services FY 16 FY 17 of Sterling 340 Revenue Revenue 330 £8.1m £18.4m £376.2m (£32.5m) (£5.2m) £13.1m £378.1m * Before charges associated with acquisition of businesses, impairment of goodwill, restructuring costs and material non-operating events, as described in the Appendix Page 9
Group total adjusted operating profit* bridge £m > Anticipated reduction in profit in EU 46 Translation Services and higher corporate costs 44 > Underlying profit growth driven by Discontinued operations EU Services 42 > Higher sales and an & Corporate costs Acquisitions improvement in gross margin % 40 Transaction > Partly offset by investment to Underlying 38 Profit drive future growth > Benefit from acquisitions with 36 JOBY/Lowepro ahead of plan 34 > Selling new JOBY products into FY 16 FY 17 Profit* Profit* 32 channel > Earlier capture of synergies 30 £41.5m (£6.4m) £3.1m £3.3m £3.8m £44.8m (£0.5m) * Before charges associated with acquisition of businesses, impairment of goodwill, restructuring costs and material non-operating events, as described in the Appendix Page 10
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