Embed Size (px)
Citation preview
John Menzies plcInterim Results Presentation
Edinburgh | 14 August 2012
Our team & agenda
1.Group highlights & financial overview
2. Aviation business review
3. Distribution business review
4. Outlook and summary
Craig Smyth, MD Menzies Aviation
David McIntosh, MD Menzies Distribution
Paul Dollman, Group Finance Director
Paul Dollman, Group Finance Director
Page 2
Group Highlights
Financial Review
Menzies Aviation
Menzies Distribution
Summary & Outlook
Questions
Appendices
John Menzies plc | Interim Results Presentation | 14 August 2012
Group Highlights & Financial OverviewPaul Dollman, Group Finance Director
Page 3 John Menzies plc | Interim Results Presentation | 14 August 2012
Group Highlights
Financial Review
Menzies Aviation
Menzies Distribution
Summary & Outlook
Questions
Appendices
Group highlights
Financialperformance
Operationalperformance
Valuecreation
Group continues to deliver its strategy
Underlying operating profits ahead at both divisions
Progressive dividend policy continues
Three acquisitions & two new country entries completed
Contract gain momentum continues at Aviation
Clear and deliverable growth prospects for the Group
Good progress in difficult economic times
Both divisions continue to deliver operational excellence
UK cargo restructure provides a significant step forward
Major branch rationalisation completed
Page 4 John Menzies plc | Interim Results Presentation | 14 August 2012
Group Highlights
Financial Review
Menzies Aviation
Menzies Distribution
Summary & Outlook
Questions
Appendices
Segmental operating profit
Profits up across both divisions
Page 5 John Menzies plc | Interim Results Presentation | 14 August 2012
Group Highlights
Financial Review
Menzies Aviation
Menzies Distribution
Summary & Outlook
Questions
Appendices
£m H1 2012 H1 2011 Change
Aviation 14.5 13.8 +5%
Distribution 14.0 13.7 +2%
Corporate (0.6) (0.6) -
Underlying operating profit 27.9 26.9 +4%External interest (2.0) (2.5)
Pension interest (charge) / income (0.5) 0.7
(2.5) (1.8)
Underlying profit before tax 25.4 25.1 +1%
Underlying earnings per share 32.0p 32.4 p -1%
Menzies Aviation – Financial overview
Underlying earnings growth continues
£m H1 2012 H1 2011 Change
Turnover (incl. JVs and Assoc.) 340.2 332.7 +2%
Underlying operating profit 14.5 13.8 +5%
Underlying operating profit at constant FX 15.4 13.8 +12%
Operating margin % 4.3% 4.1%
Page 6 John Menzies plc | Interim Results Presentation | 14 August 2012
Group Highlights
Financial Review
Menzies Aviation
Menzies Distribution
Summary & Outlook
Questions
Appendices
Menzies Aviation – Underlying operating profit bridge
Continued momentum
Oper
atin
gPr
ofit
(£m
)
Page 7 John Menzies plc | Interim Results Presentation | 14 August 2012
Group Highlights
Financial Review
Menzies Aviation
Menzies Distribution
Summary & Outlook
Questions
Appendices
H1 2011Operating
profit
Cargo forwarding
Ground handling
Cargohandling
H1 2012Operating
profit
Business development
OtherFX
13.8
(1.1)
0.50.4
1.9
(0.9) (0.1)14.5
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
Menzies Distribution – Financial overview
Improved business efficiency
£m H1 2012 H1 2011 Change
Turnover (incl. JVs and Assoc.) 648.2 673.0 -4%
Underlying operating profit 14.0 13.7 +2%
Operating margin % 2.2% 2.0%
Page 8 John Menzies plc | Interim Results Presentation | 14 August 2012
Group Highlights
Financial Review
Menzies Aviation
Menzies Distribution
Summary & Outlook
Questions
Appendices
Menzies Distribution – Underlying operating profit bridge
Cost savings continue to be delivered
Page 9 John Menzies plc | Interim Results Presentation | 14 August 2012
Group Highlights
Financial Review
Menzies Aviation
Menzies Distribution
Summary & Outlook
Questions
Appendices
Oper
atin
gPr
ofit
(£m
)
H1 2011Operating
profit
Other salesNewspapers H1 2012Operating
profit
Costsavings
Magazines Diversification/ New
business
13.7
(2.2)
0.10.5
1.7 0.2 14.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
(80.1)
10.0
(7.3)
(12.7)
(10.9) (1.3)
(7.1)
1.9(107.5)(110.0)
(100.0)
(90.0)
(80.0)
(70.0)
(60.0)
(50.0)
(40.0)
(30.0)
(20.0)
(10.0)
-
Net debt development
Debt : EBITDA remains below 1.5
Page 10 John Menzies plc | Interim Results Presentation | 14 August 2012
Group Highlights
Financial Review
Menzies Aviation
Menzies Distribution
Summary & Outlook
Questions
Appendices
Net Debt December
2011
CapexTax and interest
Operatingcash flow
Net Debt June2012
Dividends Pensionand other
Acquisitions and
investments
Net D
ebt (
£m)
FX on cash and debt
Exceptionals
£m 2012
Aviation – Mexican labour agreement (1.4)
Aviation – Stansted restructure (0.4)
Distribution – Rationalisation costs (1.5)
(3.3)
Page 11 John Menzies plc | Interim Results Presentation | 14 August 2012
Group Highlights
Financial Review
Menzies Aviation
Menzies Distribution
Summary & Outlook
Questions
Appendices
Business Review Menzies Aviation Craig Smyth, Managing Director
Page 12 John Menzies plc | Interim Results Presentation | 14 August 2012
Half year overview
Robust performance Operating profit up £0.7m at £14.5m
Underlying profits up 12% on constant currency basis
Progress with loss making sheds
Top line momentum Ground handling turns Absolute 5.3% LFL 2.2%
Cargo volumes Absolute 3.7% LFL 6.7%
Continued contract gains and successful renewals
Looking forward... Continued attractive airline focus
Analytical approach to targeting new attractive stations
Organic and acquisition business development
Robust performance through adverse economic conditions
Page 13 John Menzies plc | Interim Results Presentation | 14 August 2012
Group Highlights
Financial Review
Menzies Aviation
Menzies Distribution
Summary & Outlook
Questions
Appendices
-30%
-20%
-10%
0%
10%
20%
30%
Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212
Turns by quarter
Absolute LFL
0
100
200
300
400
500
600
700
0
5
10
15
20
25
30
35
H1 09 H1 10 H1 11 H1 12
Hours per turn Yield
Ground handling
Continue to outperform market
Volumes | YoY% change
£Yi
eld
Hou
rs p
er tu
rn
Absolute volume growth continues to outstrip underlying market
LFL dropped off due to economic environment but has stabilised
Growth strategy continues to work through contract wins
Yield slightly decreasing due to aircraft mix and competitive pressures
Improved productivity offsets yield diminution
On time performance strong at >99%
Productivity & Yield
Page 14 John Menzies plc | Interim Results Presentation | 14 August 2012
Group Highlights
Financial Review
Menzies Aviation
Menzies Distribution
Summary & Outlook
Questions
Appendices
0
20
40
60
80
100
120
140
160
180
200
0
50
100
150
200
250
300
350
H1 09 H1 10 H1 11 H1 12
Tonnes per FTE Yield
Cargo handling
Robust performance
Top line momentum
Cargo business improving through restructure and contract wins
Volumes | YoY% change
Absolute volume growth in first half of 2012 through contract wins
Adverse economic conditions impacting underlying volumes
LFL volumes remain fragile
Yield remains consistent
Consistent focus on productivity improvements
Further progress with UK closures -Chicago now the only significant loss making shed
Tonn
es p
er F
TE
£Yi
eld
Productivity & Yield
-30%
-20%
-10%
0%
10%
20%
30%
Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212
Tonnes by quarter
Absolute LFL
Page 15 John Menzies plc | Interim Results Presentation | 14 August 2012
Group Highlights
Financial Review
Menzies Aviation
Menzies Distribution
Summary & Outlook
Questions
Appendices
Contracts
Robust performance
Top line momentum
Good contract win and renewals track record
22Additional contracts
£14mAdditional revenue
£58mRenewed revenue
Cargo Handling
Ground Handling
Cargo Handling
Ground Handling
Cargo Handling
Ground Handling
Contracts won/lost Revenue won/lost Contract renewals
Page 16 John Menzies plc | Interim Results Presentation | 14 August 2012
Group Highlights
Financial Review
Menzies Aviation
Menzies Distribution
Summary & Outlook
Questions
Appendices
1518
1512
6
11 129
610
41 2
75
3 25 5
1
118
10
6
9
4 13
61
106
9 6
13
58 5
2 15
5 52
No. of stations in 2007No. of new stations to 2012
Customer penetration
Top 5 customer penetration
11 10 10 9 9
Expanding attractive relationships
Group Highl igh ts
Financ ial Review
Menz ies Aviation
Menz ies Distribut ion
Summary & Outlo ok
Que stions
Appe ndices
Page 17 John Menzies plc | Interim Results Presentation | 14 August 2012
Refined growth strategy
To be the world’s Number One aviation ground services provider
1. Consolidation & penetration
2. Exploration & expansion
3. OpportunisticAttractive Stations
Multi variable regression
model
Modified BCGranking
Anchor customer focus
Operational lens
Focussed growth model with analytical prioritisation
Strategic analysis model Growth strategy
Page 18 John Menzies plc | Interim Results Presentation | 14 August 2012
Group Highlights
Financial Review
Menzies Aviation
Menzies Distribution
Summary & Outlook
Questions
Appendices
Market opportunities
c.£1bn revenue opportunity from top attractive stations
Top 50 attractive stations in new countries
Remaining Addressable turnsSmall anchor customersLarge anchor customers
Europe East Europe
Africa & ME
North AmericaLatin AmericaAsia
Page 19 John Menzies plc | Interim Results Presentation | 14 August 2012
Group Highlights
Financial Review
Menzies Aviation
Menzies Distribution
Summary & Outlook
Questions
Appendices
Longer term ambition
Growth over the next 8 years:
Market Growth 5%
Shape of Menzies Aviation in 2020:
Revenue £2bn, EBIT £100m40 countries & 250 stations
Source: OAG of handling market (2011), Boeing Current market outlook
31 MillionTurns 2012
Available Ground Handling Market
2012 Revenue c.£26bn
2020 Revenue c.£36bn
Airport Authority
Other 16.0%
1.6%
3.8%
1.0%0.7%
1.1%0.7%
3.0%
Page 20 John Menzies plc | Interim Results Presentation | 14 August 2012
Group Highlights
Financial Review
Menzies Aviation
Menzies Distribution
Summary & Outlook
Questions
AppendicesSelf Handled72.1%
Summary
The way forward
Good year given the economic conditions
Underlying profit up 12% on a constant currency basis
Growth through contract gain momentum
Grow through our refined and targeted growth strategy
Continue to grow with attractive customers
Still a big market opportunity
Resilient results
Robust performance with targeted approach to the future
Page 21 John Menzies plc | Interim Results Presentation | 14 August 2012
Group Highlights
Financial Review
Menzies Aviation
Menzies Distribution
Summary & Outlook
Questions
Appendices
Business Review Menzies DistributionDavid McIntosh, Managing Director
Page 22 John Menzies plc | Interim Results Presentation | 14 August 2012
Half year overview
Delivering expectations
Operating profit Operating profit up £0.3m to £14.0m
Cover price growth boosts newspaper margins
Cost savings of £1.7m achieved
Sales
Cost & productivity Cost savings initiatives continuing to deliver
Further branch rationalisation completed
SAP benefits being realised
Volume declines continue to track as predicted
Monthly magazines more resilient than weeklies
Monday to Friday newspapers ahead
Page 23 John Menzies plc | Interim Results Presentation | 14 August 2012
Group Highlights
Financial Review
Menzies Aviation
Menzies Distribution
Summary & Outlook
Questions
Appendices
SalesMagazinesNewspapers
Sunday Sun launch depresses sales value
Cover price growth helps to mitigate fall
Volume declines in line with expectations
Celebrity category continues to struggle
Tough market conditions
Page 24 John Menzies plc | Interim Results Presentation | 14 August 2012
Group Highlights
Financial Review
Menzies Aviation
Menzies Distribution
Summary & Outlook
Questions
Appendices
Efficiency initiatives
Constant evolution of the branch network
Branch rationalisation programme
4Branch closures
3Downsized to spoke
Magazine packing in hubs
Returns processing centralised
Transport routes redrawn
Group Highlights
Financial Review
Menzies Aviation
Menzies Distribution
Summary & Outlook
Questions
Appendices
Page 25 John Menzies plc | Interim Results Presentation | 14 August 2012
Diversify
Continuing to make progress
Menzies Marketing Services Expands
• Acquisition of Fore Partnership’s retail consultancy arm
Regional Press
• £50m of new revenue target achieved early
8,000retail outlets served
£500mannual news turnover
12%of overall UK market
Page 26 John Menzies plc | Interim Results Presentation | 14 August 2012
Group Highlights
Financial Review
Menzies Aviation
Menzies Distribution
Summary & Outlook
Questions
Appendices
Summary
Continued strong performance
Robust performance
Cost efficiency
OutlookOutlook for magazine market looks challenged
Clear expansion opportunities within new revenue ventures
Continuing to deliver stable profit stream
Potential for further cover price growth
SAP efficiencies being delivered
Major rationalisation of branch infrastructure
Page 27 John Menzies plc | Interim Results Presentation | 14 August 2012
Group Highlights
Financial Review
Menzies Aviation
Menzies Distribution
Summary & Outlook
Questions
Appendices
Outlook & SummaryPaul Dollman, Group Finance Director
Page 28 John Menzies plc | Interim Results Presentation | 14 August 2012
Outlook & Summary
Resultssummary
Outlook
Strategy
Group Highlights
Financial Review
Menzies Aviation
Menzies Distribution
Summary & Outlook
Questions
Appendices
Page 29 John Menzies plc | Interim Results Presentation | 14 August 2012
Financially strong
Consistent strategy
Clear and deliverable growth prospects
Good results in challenging times
Structural progress made at both divisions
Investment for growth
Group continues to trade well
Difficult economic conditions persist
On track to meet expectations
Questions
Page 30 John Menzies plc | Interim Results Presentation | 14 August 2012
Group Highlights
Financial Review
Menzies Aviation
Menzies Distribution
Summary & Outlook
Questions
Appendices
Appendix 1Additional Information
Page 31 John Menzies plc | Interim Results Presentation | 14 August 2012
Menzies Aviation services
Check-in & boarding Baggage, ramp handling and de-icing Cleaning Lounges Other passenger services
Ground handling
Build & break Roll-through Trucking (airside & landside) Manpower provision Documentation processing
Cargo handling
World’s largest wholesale freight forwarder Air freight & express Support major passenger carriers as well as
freighters £93m spend in 2011
Cargo forwarding
61% of total revenue
23% of total revenue
16% of total revenue
Page 32 John Menzies plc | Interim Results Presentation | 14 August 2012
Group Highlights
Financial Review
Menzies Aviation
Menzies Distribution
Summary & Outlook
Questions
Appendices
Menzies Aviation network
136stations
32countries
9regions
17,000employees
500airlines
71mpassengers
1.8mtonnes of cargo
850,000aircraft turns
Page 33 John Menzies plc | Interim Results Presentation | 14 August 2012
Group Highlights
Financial Review
Menzies Aviation
Menzies Distribution
Summary & Outlook
Questions
Appendices
Menzies Distribution network
5.0m NewspapersEVERY DAY
13Hub branches
4,000 Employees
2.1m MagazinesEVERY DAY
25,000 customersEVERY DAY
John Menzies plc | Interim Results Presentation | 14 August 2012
Group Highlights
Financial Review
Menzies Aviation
Menzies Distribution
Summary & Outlook
Questions
Appendices
Page 34
Appendix 2Additional financial information
Page 35 John Menzies plc | Interim Results Presentation | 14 August 2012
Profit before tax reconciliation
£m 2012Underlying profit before taxation 25.4
JVs & Associates tax (0.7)
Contract amortisation (2.2)
Exceptionals (3.3)Associate goodwill impairment (0.9)Profit before taxation 18.3
Page 36 John Menzies plc | Interim Results Presentation | 14 August 2012
Group Highlights
Financial Review
Menzies Aviation
Menzies Distribution
Summary & Outlook
Questions
Appendices
Balance sheet
£m H1 2012 H1 2011
Tangible fixed assets and investments 146.6 161.2
Goodwill, intangibles and other assets 108.0 104.8
254.6 266.0
Working capital and other (17.9) (40.8)Net debt (107.5) (99.7)
Pension liability (net of deferred tax) (59.5) (33.7)
Net assets 69.7 91.8
Total equity 69.7 91.8
Page 37 John Menzies plc | Interim Results Presentation | 14 August 2012
Group Highlights
Financial Review
Menzies Aviation
Menzies Distribution
Summary & Outlook
Questions
Appendices
Earnings per share
£m H1 2012 H1 2011 Change
Earnings per share 21.3p 27.9p -24%Underlying earnings per share 32.0p 32.4p -1%
Weighted ave. number of shares (m) 60.056 58.415
Page 38 John Menzies plc | Interim Results Presentation | 14 August 2012
Group Highlights
Financial Review
Menzies Aviation
Menzies Distribution
Summary & Outlook
Questions
Appendices
Free cash flow
£m H1 2012 H1 2011
Underlying operating profit 27.9 26.9
- Depreciation 11.7 11.1
- Other non-cash items (3.9) (4.6)
35.7 33.4Dividends from JVs & associates 1.7 2.6Working capital movement (23.2) (7.6)
Exceptional spend (4.2) (0.6)
Operating cash flow 10.0 27.8Tax (4.8) (4.9)Net capex (12.7) (8.6)Net interest paid (2.5) (3.1)Free cash flow (10.0) 11.2
Page 39 John Menzies plc | Interim Results Presentation | 14 August 2012
Group Highlights
Financial Review
Menzies Aviation
Menzies Distribution
Summary & Outlook
Questions
Appendices
Net cash flow
£m H1 2012 H1 2011
Free cash flow (10.0) 11.2
Dividends (10.9) (8.1)
Acquisitions and investments (1.3) 0.6Additional pension payment (3.2) (3.1)Purchased shares (3.9) (2.3)
Net cash flow (29.3) (1.7)Net debt at start of period (80.1) (99.0)Currency translation 1.9 1.0Net debt at end of period (107.5) (99.7)
Page 40 John Menzies plc | Interim Results Presentation | 14 August 2012
Group Highlights
Financial Review
Menzies Aviation
Menzies Distribution
Summary & Outlook
Questions
Appendices
Aviation segmental analysis
£m H1 2012 H1 2011 Change
Underlying operating profitGround handling 10.6 11.6Cargo handling 3.7 2.5Cargo forwarding 1.3 0.9Unallocated costs (1.1) (1.2)
14.5 13.8 +5%Operating marginGround handling 5.1% 5.7%Cargo handling 4.7% 3.2%Cargo forwarding 2.4% 1.7%Unallocated costs - -
4.3% 4.1% +0.2%
Page 41 John Menzies plc | Interim Results Presentation | 14 August 2012
Group Highlights
Financial Review
Menzies Aviation
Menzies Distribution
Summary & Outlook
Questions
Appendices
