Investor presentation 2015 preliminary results Andy Blundell , Chief - - PowerPoint PPT Presentation

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Investor presentation 2015 preliminary results Andy Blundell , Chief Executive Mark Stoner , Finance Director March 2016 Communisis Investor presentation | 2015 Results What we do Communisis is an integrated marketing services company which

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Investor presentation

2015 preliminary results

Andy Blundell, Chief Executive Mark Stoner, Finance Director March 2016

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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

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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

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Growth

  • Organic sales growth
  • Broaden and deepen the service offering
  • Increase international presence

Communisis Investor presentation | 2015 Results

Growth People Efficiency

Value

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Customer engagement - Design

Communisis Investor presentation | 2015 Results

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Personalised communications - Produce

Communisis Investor presentation | 2015 Results

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Brand deployment - Deploy

Communisis Investor presentation | 2015 Results

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Innovation

Communisis Investor presentation | 2015 Results

The Bakery

Andy Blundell CEO, Communisis PLC

The future of customer communications

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

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Design co-location in London

  • Optimise direct cost and overhead base
  • Improve capacity utilisation
  • Capitalise on synergy

Total

  • perational

waste down by

14%

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

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2015 Summary 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
  • f £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%

4.19 4.62 5.18

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 Results

Revenue (£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 Contribution (£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

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 per share

Dividends

+10% +9% +11% 2.20 pps +10% 2.20 pps 1.80 pps 1.65 pps 2.00 pps 1.50 pps

£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% 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)

* restated for the effects

  • f

IAS19R

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Summary cash flow & net debt

Free 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

5 10 15 2013 2014 2015

£m

Free Cash Flow

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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