investor presentation - communisis · 3 communisis at a glance what we do •customer engagement...

Investor presentation2015 preliminary results

Andy Blundell, Chief Executive

Mark Stoner, Finance Director

March 2016

2

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

3

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:


40%

23%

8%

7%

4%3% 15%

Financial services

Consumer goods

Utilities

Public sector

Retail & distribution

Telecoms

Other

4

Financial highlights

• Strong growth in

profitability, operating

margin and earnings per

share

• Free cash flow doubled

• Dividend increase for

the fifth consecutive

year


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

5

Some of our clients


6

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


Customer engagement

= persuasive content +

relevant channel

The market demands

a marketing services

provider capable of

‘creating once,

publishing

everywhere’ to

connect brands to

individuals

“

““ “

7

Value creation


Growth

People Efficiency

Value

8

Growth

• Organic sales growth

• Broaden and deepen the service offering

• Increase international presence


Growth

People Efficiency

Value

9

Customer engagement - Design


10

Personalised communications - Produce


11

Brand deployment - Deploy


12

Innovation


The Bakery

Andy Blundel l

CEO, Communisis PLC

The future of customer communicat ions

Welcome to the Communisis

2016 Client Conference

Apple Pay Client conferences

13

International office locations


14

Efficiency

Clients through

international

Deploy hubs


28

Design co-location in

London

• Optimise direct cost and overhead base

• Improve capacity utilisation

• Capitalise on synergy

Total

operational

waste down by14%

Carbon

footprint 7%

Invoiced

packs / FTE 6%

Growth

People Efficiency

Value

15

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


Growth

People Efficiency

Value

2015Summary financials

17

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

of £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


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%

4.194.62

5.18

0

1

2

3

4

5

6

2013 2014 2015

Adjusted Earnings Per Share(EPS)

Pence per share (pps)

18

Sector and segment analysis


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

19

Segmental performance

Communisis Investor presentation | 2015 ResultsRevenue

(£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

Contr

ibuti

on

(£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


-8

-4

0

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 p

er

share

Dividends

+10%+9%

+11%

2.20pps

+10%

2.20pps

1.80pps1.65

pps

2.00pps

1.50pps

£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%

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)

*restatedfortheeffectsof

IAS19R

21

Summary cash flow & net debtFree 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


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

0

5

10

15

2013 2014 2015

£m

Free Cash Flow

22


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

23

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


24

Thank you

investor presentation - communisis · 3 communisis at a glance what we do •customer engagement...

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