Upload
others
View
1
Download
0
Embed Size (px)
Citation preview
Communisis at a glanceWhat we do
Omni-channel Brand communication servicesFor a better customer experience
Marketing communications Design/Deploy• Relevant, engaging and
captivating content
Customer communicationsProduce• Reliable, easy to understand
and efficient documents
Key facts
• Fully listed (CMS)• £105m market cap• 4.4% dividend yield• 2200+ employees (150+ overseas)
• 51 locations in 16 countries• Blue chip clients in:
41%
23%
8%
7%
4%
17%Financial services
Consumer goods
Utilities
Government & charities
Retail
Other
2
Communisis today – what do we do• Add value to brand communications• Create and distribute marketing messages and customer
communications on behalf of our clients• Work B2B, providing services B2C• Operate through three segments – Design, Produce and Deploy
Communisis Our clientsTheir
customersB2B B2C
Services
Communisis Our clients Their customers
3
Some of our clients
4
2015 Interim results
Financial highlights
Strong growth in profitability, operating margin and earnings per share driven by:• Enduring client relationships• Higher margin services
Improved free cash flow and reduced bank debt by:• Targeted investment• Cash control
Dividend increase for the fifth consecutive year, in line with progressive dividend policy
Comparison H1 2015to H1 2014
£m As Reported
Constant Currency*
Total revenue £175m +3% +6%
Adjusted operating profit**
£7.2m +18% +25%
Adjusted operating margin**
6% +16% +20%
Adjusted earnings per share***
2.01p +15% +23%
Dividend per share 0.73p +9% +9%
Free cash flow £6m +£5m +£5m
Bank debt (improvement)
£32m -£2m -£2m
* 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
6
Operational highlightsContinued growth• Integrated agency model developed and launched as PSONA
Life marketing Agency acquired. Insight-led shopper marketing agency
• Significant new multi-year contractual relationships secured or retained AXA UK. Six year term. Incoming and outgoing marketing and customer
communications EE. Two year contract. Marketing communications Long-standing utility sector client. Five years. Outgoing transactional
communications
• Overseas expansion Three new locations (Bucharest, Milan, Warsaw) New consumer goods clients scaling up the portfolio
Innovation• New digital services platform developed for multi-channel customer messaging -
successfully used by Nationwide Building Society, as it enabled Apple Pay • Won gold and bronze POPAI awards for innovative point-of-purchase and in-store
communications
7
Design
Design – Marketing communicationsActivities
• Building an integrated digital
agency - PSONA launched
• Bespoke London office opened
• New capabilities acquired - Life
Marketing Agency - Insight-led
shopper marketing
Metrics
H1 contribution increased from £1.6m to £2m, +24%. Margin reduced from 13.9% to 12.2%. Full six months revenue from 2014 and
early 2015 acquisitions Recovery in data activities
repositioning in analytics broader sector appeal
Synergy realisation Weighting of certain retail based
revenue and contribution to H2 with a more evenly spread cost base
11%
% of group contribution
9
Design – Any channel, any category
Capabilities Production & data agencies Creative agencies
10
Direct mail programme to merchants
11
Digital journey to increase engagement
12
Internal communications
13
Produce
Produce – Customer communicationsActivities
Outgoing• Personalised direct mail• Personalised cheque books• Personalised statements, billings and
correspondence• Digital messaging (email/mobile/tablet) –
new in 2014 • Specialist customer communication
consulting services – new in 2014Incoming• Digital capture, distribution and archiving of
customer correspondence – new in 2014
Differentiation
Expertise in: Document composition IT integration Process integrity Regulatory compliance Reliable large scale production
of personalised communications• Investment in market-leading
technology, a significant barrier to entry
• Trusted supplier of business-critical communications
% of group contribution
56%
15
Produce - Integrated technology & service excellence
Campaign workflow
DAM
Rules
Correspondence preference database
Document composition &
production workflow
Correspondence archive
Web
SMS
16
Produce – Customer communicationsTrends
• Market growth from new
outsourcing contracts
Incoming and outgoing
• Market share gains
• Digital messaging
• Demand for specialist consulting
• Migration from paper to digital
formats
Metrics
H1 contribution increased from £8.7m to £9.7m, +12%Margin improved from 11.2% to 12.5% • New higher margin services Full six months contribution from
incoming mail Growth in non print including digital
messaging and consulting (now 16% of contribution, nil in 2013)
• Move to white paper• Process improvement and cost
reduction• Better capacity utilisation on
restructured base
17
Deploy
Deploy – Marketing communicationsActivities & capabilities
• Brand activation services - sourcing and distributing point of sale marketing collateral across Europe
• People, process and technology based service with modest infrastructure costs
• Clients – consumer goods brands in the food, drink, personal care, household, pharmaceutical and technology sectors
Metrics
H1 contribution increased from £5.6m to £5.8m, +3% Margin improved from 20.7% to 24.1% • Growth in revenues from new
clients and new territories on a constant currency basis
• Effective sourcing• Hubs in operation, scale
economies on new clients• Euro weakness impacted sterling
reported result by £(0.4)m% of group contribution
33%
19
Deploy - Our presenceHub
Client 1
Client 2
Client 3
20
0500
1,0001,5002,0002,5003,0003,5004,0004,5005,000
2015 H1 gross revenue by territory
Deploy – Marketing communications
Rapid growth of clients
and countries:
• Countries increased
from 19 (2014) to 21 (H1
2015)
• H1 clients grew from 9
(2014) to 23 (H1 2015)
£000
68 9
23
6
15
1921
2012 2013 2014 2015
Deploy strategic clients and countries
Clients Countries
21
2015 Interim resultsSummary financials
Summary income statement• Revenue increased 3% reported, 6% on a constant
currency basis
• Margin improved and toward the double-digit target
Profits weighted toward H2. Full year progress expected
• Exceptional items include ongoing restructuring costs and acquisition-related fees.
• Tax charge at the estimated effective annual rate of 22.9%
• Earnings per share increase +8% (+22% on constant currency)
Focused on bottom line growth
H1 2015£m
H1 2014£m
Trading 118.8 116.3
Pass through 55.8 53.0
Total revenue 174.6 169.3
Segmental contribution 17.5 15.9
Central and corporate costs (10.3) (9.8)
Adjusted operating profit 7.2 6.1
Amortisation of acquired intangibles
(0.8) (0.4)
6.4 5.7
Exceptional items (1.4) (1.2)
Net finance costs (1.8) (1.6)
Profit before tax 3.2 2.9
Tax (0.7) (0.7)
Profit after tax 2.5 2.2
Adjusted earnings per share 2.01p 1.75p
Operating margin 6.0% 5.2% 0.00
0.30
0.60
0.90
1.20
1.50
1.80
2.10
H1 2013 H1 2014 H1 2015
Penc
e pe
r sha
re (p
ps)
Adjusted earnings per share
23
Margin & dividend
+16%+10%
+16%
+0%
24
Summary cash flow & net debt statementH1 2015
£m H1 2014
£m
EBITDA 12.8 11.3
Working capital increase (0.6) (0.2)
Pension contributions (0.6) (0.6)
Interest and tax (0.5) (1.9)
Exceptional items (1.7) (1.9)
Capital expenditure (3.4) (5.6)
Free cash flow 6.0 1.1
Investment in new contracts (1.1) (1.4)
Acquisitions - (5.8)
Dividends (2.8) (2.3)
Other (0.7) (0.1)
Decrease (increase) in bank debt
1.4 (8.5)
Net bank debt (31.7) (33.3)
Finance leases (2.4) (2.9)
Promissory loan notes (9.3) -
Net debt (43.4) (36.2)
• Improved free cash flow due to
Increased profitability
Tight working capital management
A tax repayment
More normal maintenance levels of capital expenditure
• Acquisition of Life Marketing Agency
Consideration comprised new shares and two-year promissory loan notes
Free cash flow improvement trend expected to continue
-10.0
-5.0
0.0
5.0
H1 2013 H1 2014 H1 2015£mFree cash flow
25
Bank facilities
• Bank debt less than 50% of facilities
£65m Revolving Credit Facility until March 2018
£5m overdraft, renewable annually
• Average rolling 12 month bank debt £44.5m
due to inter-period fluctuations in working capital
• Bank debt and average bank debt 1.1x and 1.6x EBITDA
• Interest cover 4x
0
10
20
30
40
50
60
70
80
12M to June 10 12M to June 11 12M to June 12 12M to June 13 12M to June 14 12M to June 15
£m
Bank Debt and Facilities
Period end bank debt Average intra period bank debt Total facilities
26
Summary balance sheet• Reduction in net assets reflects a £21m
goodwill impairment at December 2014
• Intangible assets Goodwill impairment offset by new
intangibles on acquisitions
• Pension deficit Unchanged from December 2014 £19.5m triennial valuation deficit at
March 2014 Changes principally driven by fall in
gilt/bond yields
H1 2015£m
H1 2014
£m
Property, plant and equipment 24.6 24.5
Intangible assets 193.8 195.8
Deferred tax and other 5.1 3.4
Non-current assets 223.5 223.7
Inventories 6.8 8.1
Receivables 66.8 61.3
Trade and tax payables (95.4) (85.2)
Pension deficit (39.2) (31.4)
Net debt (43.4) (36.2)
Net assets 119.1 140.3
Share capital 51.9 49.7
Reserves 67.2 90.6
Shareholders’ funds 119.1 140.3
27
OutlookConfident outlook for the full year with the prospect of:
• Revenue growth• Continuing profit improvement• Ongoing cash generation and reduction in bank debt
Supported by:
• Success in winning and retaining multi-year contracts• Growing reputation for delivering brand activation services across
Europe• Strong pipeline of opportunities
28
Investment caseManagement team with a record of achievement and strategy for growth
• Increasingly profitable and cash generative business
• Continued move into higher margin services
• Benefits of operational gearing following investments in market-leading technology and multi-year contracts
• Client-led international expansion
• Portfolio of blue-chip clients
• Differentiated offer and competitive position
• Progressive dividend policy
29