SIX MONTHS ENDED 30 SEPTEMBER 2019 - Novus Holdings · Novus Holdings Interim Financial Results...

Novus Holdings Interim Financial Results 2020

SIX MONTHS ENDED30 SEPTEMBER 2019


AGENDA

2

NOVUS HOLDINGS | 2019 INTERIM RESULTS

EXECUTIVEOVERVIEW

3


OPERATING PROFIT (Excl. profit/ (loss) on disposal of assets and investments, impairments and reclassification of foreign currency translation reserve)

R146 m [Sep ’18: R228m](36%)

HEADLINE EARNINGS PER SHARE

29,4c [Sep ‘18: 49,4c] (40,5%)

REVENUE

R2 227 m [Sep ‘18: R2 297m](3,0%)

RESULTS SUMMARY

4EXECUTIVE OVERVIEW

Novus Holdings Interim Financial Results 2020 5


GROUP INCOME STATEMENT KEY FEATURES [SIX MONTHS ENDED 30 SEP 2019]

6FINANCIAL REVIEW

2019 2018 % CHANGE (Rounded)

Revenue R2 227m R2 297m (3,0%) ▼

Gross profit R478m R599m (20,3%) ▼

Gross margin 21,4% 26,1% (4,7%) ▼

Overheads R332m R371m (10,5%) ▼

OPERATING PROFIT(Excl. profit/ (loss) on disposal of assets and investments, impairments and reclassification of foreign currency translation reserve)

R146m R228m (35,9%) ▼

OPERATING MARGIN(Excl. profit/ (loss) on disposal of assets and investments, impairments and reclassification of foreign currency translation reserve)

6,6% 9,9% (3,3%) ▼

HEADLINE EARNINGS PER SHARE(Cents)

29,4c 49,4c (40,5%) ▼

Novus Holdings Interim Financial Results 2020 7FINANCIAL REVIEW

CASH FLOW MOVEMENTS

SIX MONTHS ENDED 30 SEPTEMBER 2019

-54

-199

+128

+84

+44

+0 +28 +26 +17

-286

-28 -28 -41 -3 -86

-350

-250

-150

-50

50

150

250

Cas

h b

alan

ce 0

1 A

pr

20

19

Op

era

tin

g p

rofi

t

De

pre

ciat

ion

Inve

nto

rie

s

Trad

e a

nd

oth

er

rece

ivab

les

Trad

e a

nd

oth

er

pa

yab

les

Loan

re

pay

me

nts

an

d n

et

inte

rest

Taxa

tio

n p

aid

Acq

uis

itio

n o

f P

PE

Acq

uis

itio

n o

f as

soci

ate

Pro

cee

ds

on

dis

po

sal o

f as

sets

Pro

cee

ds

on

dis

po

sal o

f b

usi

ne

ss

Div

ide

nd

s p

aid

Oth

er

Cas

h b

alan

ce 3

0 S

ep

20

19

R’000

Novus Holdings Interim Financial Results 2020 8FINANCIAL REVIEW

CAPEX OVERVIEW [EXCL. INTANGIBLES]


9

31

12 18 17

83

104

72

3724

0

20

40

60

80

100

120

140

160

Maintenance Expansion

2015 20172016 2018 2019R’000


Product CategoryVolume growth

/ (decline)

Magazines 17,6% ▼

Newspapers 1,4% ▼

Retail Inserts & Catalogues 6,4% ▼

Books & Directories 13,0% ▼

Publishing N/A

PRINT SEGMENT | Commentary

9FINANCIAL REVIEW

• Decline in print revenue of 6,3%.• Print gross profit margin decreased by

5,5% to 24,0%.• This segment has also seen operating

expenses measured as % of revenue decrease from 17,7% to 17,1%.

• Revenue and gross profit margin impacted by competiveness in Print segment.

• Timing variance on prior year of a major print project also impacted revenue and gross profit.

• Above inflationary raw material price increases.

• Volatile ZAR / EUR well managed.

R’000 FY16 FY17 FY18 FY19 FY20

1 955 6712 039 501

2 127 939

1 828 5341713 702

35

07

88

31

92

50

34

29

14

21

45

11

11

7 4

29

32,0%

28,2%

30,5%29,5%

24,0%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0

500 000

1 000 000

1 500 000

2 000 000

2 500 000

Revenue Operating Profit exc. Capital Items Gross Profit


Magazines9,1%

Books30,7%

Newspapers10,9%

Retail Inserts

& Catalogues26,0%

Publishing0,3%

Segment revenue split:

77% Non - Print


PACKAGING SEGMENT |Commentary

10FINANCIAL REVIEW

R’000 FY16 FY17 FY18 FY19 FY20

56 076 57 017 93 575

359 113 382 252

43

45

98

31

13

03

4

28

22

0

34

26

6

31,0%

18,7%

26,1%

17,1% 17,1%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0

500 000

1 000 000

1 500 000

2 000 000

2 500 000



• Packaging revenue contribution to the Group showed an increase of 6,4%.

• ITB revenue up on prior year by 15,7%.• Total Labels business revenue down on

prior year by 13,2% due to the disposal of the UV Flexo labels business.

• Gross margin remained flat year on year. Operating expenses down 7,2% due to exclusion of the UV Flexo business.

• Other costs well contained.


/ (decline)

Labels – Gravure 14,4% ▲

Labels – UV Flexo Disposal

Flexible Plastic Packaging 7,9% ▲

Labels4,4%

Flexible Plastic

Packaging12,7%


17,1%


TISSUE SEGMENT | Commentary

11FINANCIAL REVIEW

R’000 FY16 FY17 FY18 FY19 FY20

71 010 79 99873 069 109 805 131 463

-29

55

-24

94

9

-23

84

1

-14

77

3

-56

19

15,4%

-11,6%

-20,1%

-2,0%1,4%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

-500 000

0

500 000

1 000 000

1 500 000

2 000 000

2 500 000



• Revenue increased contributing 5,9% to Group revenue during the period (FY19: 4,8%).

• Gross profit margin improved by 3,4% turning positive.

• The operating loss in Tissue reduced by 62% (FY19: 38% improvement).

• Positive EBITDA.• Operating expenses reduced year-on-

year by 42%. • Operating expenses measured as % of

revenue decreased from 11,5% to 5,6% during the year.


/ (decline)

Tissue 8,1% ▲

Tissue5,9%


5,9%


• Diversified operations (Packaging and Tissue) increased revenue contribution from 20% to 23%.

• Gross profit significantly impacted by margin pressure in Print segment.

• Lost Print volumes is partially replaced by lower margin Packaging revenue.

• Operating overheads declined by 10,5%.• Overheads as a % of revenue reduced to

14,9% (2018: 16,1%).• Changes in seasonal cycle of operations

resulting in an anticipated better H2 contribution than prior year.

GROUP OVERVIEW

12FINANCIAL REVIEW

FY16 FY17 FY18 FY19 FY20R’000

2 082 7572 176 516

2 294 583 2 297 4522 227 417

35

21

78

30

41

33

33

21

07

22

79

58

14

60

76

31,4%

26,5%28,7%

26,1%

21,4%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0

500 000

1 000 000

1 500 000

2 000 000

2 500 000

Revenue Operating Profit exc. Capital Items Gross Profit %


Tissue5,9%

Group segments:

Print77,0%

Packaging17,1%


OUTLOOK & SEGMENTAL FOCUS

14OUTLOOK

PR

INT

TISS

UE

PAC

KA

GIN

G

• Print will continue to drive operational efficiencies and to adjust capacity requirements, while focusing on retaining market share in a challenging environment.

• Respite in paper pricing in H2.

• Major project revenue recognition will manifest in H2.

• Preferred outcome for the Tissue operation is to exit.

• Remain committed to ensuring that this business' profitability continues to improve.

• Packaging is expected to contribute positively to the Group revenue in H2.

• ITB has stabilised after prior year challenges and looks to continued growth in H2 on this basis.

• Labels is expected to continue to grow with its extended product offering.

Continued focus on optimising resources to drive sustainable growth throughout the Group.

We remain exposed to a fluctuating and weak Rand, which could create further margin pressures going forward.

Net working capital reduction by circa R300m, resulting in favourable year-end net cash balance.

B-BBEE Level One rating ensures a competitive advantage when tendering for large contracts and projects.

GR

OU

P

GR

OU

P

Novus Holdings Interim Financial Results 2020 15OUTLOOK

FY20 REFINED FOCUS

Ensure optimal group capital structure and that operations are suitably sized for their respective markets

• Refine target linked KPI’s per facility on a monthly basis and take corrective measures where required.• Optimise net working capital by reducing stockholding and debtors’ book, as well as stretching trade creditors.• Ensure cash extracted in H2 is not re-absorbed.

Maintain and grow our market shares and positions ofstrength

• Continued focus on customer service and retention, as well as implementing business development and marketing initiatives.

• Defending and growing market share.• Target opportunities in the book market, which is showing some resurgence, leveraging our improved B-BBEE

score.

Drive operationalefficiencies

• Lean structures in place and more efficient management structures continue to be identified.• Further embed culture of innovation.• Continue to leverage market leading skills to drive operational efficiencies.• Continuously assess individual plant performance against targets, and remove excess capacity.• Continual drive on cost-saving initiatives.

Grow non-traditional printing businesses’ revenuecontribution

• Ongoing focus on improving the margins and profitability of non-traditional printing operations.• Ensure facilities are correctly sized in terms of industry best practice.• Material acquisitions will not be pursued. However, only smaller acquisitions that are closely aligned to current

or existing activities will be considered . • Continue to extract value out of packaging division.

Continue to transform ourbusiness

• Sustaining and optimising B-BBEE status.• All elements of the scorecard included in managements KPI’ to ensure alignment.

GROUP STRATEGY UPDATE


+27 21 550 [email protected]

INVESTOR RELATIONS CONTACTS

SIX MONTHS ENDED 30 SEPTEMBER 2019 - Novus Holdings · Novus Holdings Interim Financial Results...

Documents

Transcript of SIX MONTHS ENDED 30 SEPTEMBER 2019 - Novus Holdings · Novus Holdings Interim Financial Results...