4imprint : Results presentation for the period ended 31 December 2023

Full Year Results 2023

Highlights

Kevin Lyons-Tarr, CEO

Full Year Results 2023	1

Results Summary

RevenueOperating profit Basic EPS

$1.33bn	$136.2m	377.9c
 16%	 32%	 32%

	Total paid and
Cash and bank deposits	proposed regular DPS

$104.5m	215.0c
2022: $86.8m	2022: 160.0c

Full Year Results 2023	2

Financial

Review

David Seekings, CFO

Full Year Results 2023	3

Income Statement

	2023	2022
	$m	$m
Revenue	1,326.5	1,140.3	16%
Gross profit	401.9	321.9	25%
Gross profit margin	30.3%	28.2%
Marketing costs	(159.9)	(128.7)	24%
Selling costs	(47.2)	(38.6)	22%
Admin & central costs	(56.8)	(50.4)	13%
Share option related charges	(1.1)	(0.8)	38%
DB pension admin costs	(0.7)	(0.5)	40%
Operating profit	136.2	102.9	32%
Operating margin	10.3%	9.0%
Interest	4.3	0.7
Pension finance income	0.2	0.1
Profit before tax	140.7	103.7	36%
Tax	(34.5)	(23.6)
Profit after tax	106.2	80.1	33%
Basic EPS	377.9c	285.6c	32%

• Revenue +16%
  o H1 +23%; H2 +11%
  o US $1,302.6m; UK $23.9m
• Gross profit +25%
  o Significant improvement in YOY GP%
  o Recovery from pandemic-related factors
• Marketing costs +24%
  o Marketing spend remains productive
  o Revenue per marketing dollar $8.30 (2022: $8.86; 2019: $5.58)
  o Brand component the key driver
• Selling costs +22%
  o Year of investment, mostly in customer service resource, in 2023
• Admin/other overheads +13%
  o Key senior additions to the team to support growth
  o DB pension admin includes buy-in costs o Head Office costs $5.0m (2022: $5.0m)
• Operating profit +32%
  o Operating margin rises above 10%
  o Reflects improved gross margin dynamics and marketing productivity
• Net finance income
  o YOY increase of $3.7m
  o Improving yields and large cash balances
• Effective tax rate 25% (2022: 23%)

Full Year Results 2023	4

Balance Sheet

	2023	2022
	$m	$m
Fixed assets	35.2	30.2
Right-of-use assets	11.4	13.1
Goodwill	1.0	1.0
Deferred tax assets	3.8	2.4
Retirement benefit asset	-	1.2
	51.4	47.9
Inventories	13.6	18.1
Receivables	68.4	87.5
Payables	(89.9)	(84.8)
	(7.9)	20.8
Current tax	0.4	(1.2)
Deferred tax liabilities	(1.6)	(0.4)
Cash and bank deposits	104.5	86.8
Lease liabilities	(12.3)	(13.7)
	91.0	71.5
Net assets	134.5	140.2

• Fixed asset additions include:
  o Screen printing and embroidery machinery o Initial phase of DC expansion ($3.8m)
• Working capital net negative $7.9m
  o Significant improvement in supply chain conditions
  o Unwinding of elevated working capital position at December 2022
  o More typical working capital profile expected going forward
• Pension (retirement benefit asset) o Buy-in completed in June 2023
  o Substantially all remaining pension benefits insured
  o Eliminates inflation, interest rate and longevity risks
  o Plan assets ($17.5m) and company 'top-up'
  (£3.2m or $4.1m) used to pay the buy-in policy premium
• Financial strength
  o Cash and bank deposits $104.5m; no debt o Use of cash under regular review in
  accordance with capital allocation framework and balance sheet funding guidelines

Full Year Results 2023	5

Cash Flow

	2023	2022
	$m	$m
At start of period	86.8	41.6
Operating profit	136.2	102.9
Share option non-cash charges	1.1	0.8
Pension admin costs paid by Plan	0.5	0.5
Depreciation and amortisation	4.7	4.0
Amortisation of right-of-use assets	1.7	1.5
Change in working capital	29.2	(8.5)
Capital expenditure	(9.7)	(8.0)
Underlying operating cash flow	163.7	93.2
Contributions to defined benefit pension	(6.5)	(4.3)
Consideration for business combination	-	(1.7)
Tax	(33.8)	(20.8)
Interest	3.9	0.7
Own share transactions	1.4	(0.9)
Capital element of lease payments	(1.4)	(1.2)
Exchange and other	1.2	(1.1)
Free cash flow	128.5	63.9
Dividends to Shareholders	(110.8)	(18.7)
Net cash inflow in the period	17.7	45.2
At end of period	104.5	86.8

• Excellent operating cash generation through the year
  o Strong trading and operating profit
  o Supply chain pressures in 2022 fully addressed o Unwinding of elevated 2022 working capital
  balances leading to cash inflow in 2023 of $37.7m
  o Cash conversion of 120%
• Pension
  o Company contributions of $6.5m paid in 2023, including 'top-up' contribution of $4.1m
  o Deficit contributions ceased in H2 after buy-in transaction
• Tax payments rising in line with profitability
• Net interest income reflects healthy cash balances throughout the year and improving interest rates on deposits
• $110.8m paid in dividends to Shareholders
  o Interim and Final regular dividends increasing in line with capital allocation guidelines
  o Special dividend of $2.00 per share paid in H1 2023

Full Year Results 2023	6

Operational

Review

Kevin Lyons-Tarr, CEO

Full Year Results 2023	7

Market
									• After two exceptional years fuelled by
ASI Industry Sales North America 2004 - 2023	$bn			the strong post-pandemic recovery,
									annual industry growth in 2023 of 1.2%
28.0						25.8	25.8	26.1	(~$310m) was the lowest in more than
26.0						a decade (with the exception of 2020),
			22.9	24.7
24.0				23.6	23.2		an indication of industry
22.0			21.5	22.0			20.7		'normalisation' combined with a more
19.6	19.8	20.5					cautious macroeconomic environment
20.0	19.4
18.6		18.5
18.0	17.8		17.4
16.9							• Despite very strong 2022 comparatives
	15.9
16.0									and softer industry growth in H2,
14.0									market share gains continued to be
12.0									made
10.0									• 4imprint's share of total market 5.0%
									vs. 4.3% in 2022 and 3.3% in 2019
Source: ASI

No. of orders received ('000)

				529
			519
457		426				New
			1,561
1,130	268	1,003	1,341		Existing
	692
2019	2020	2021	2022	2023

• More than 2 million orders received for the first time in company history, 12% above 2022
• 529,000 new customer orders were received in 2023, 2% over 2022
• 311,000 new customers acquired, 1% over 2022
• Existing customer orders up 16% over 2022, representing consistent retention performance and quality of customers acquired

Full Year Results 2023	8

Marketing Effectiveness

US and Canada Acquired and Retained %

• Total marketing spend +24% at $159.9m (2022: $128.7m) inclusive of planned marketing testing in H2

• Revenue per marketing dollar KPI slightly below 2022 but still well above pre- pandemic levels and includes cost of planned testing in H2, geared towards future planning rather than near-term gain

• Reshaping of marketing mix continued with brand element more than 35% of the total marketing spend

• Recent brand awareness metrics very encouraging

o Unaided above 15% for the first time o Aided greater than 50% for the first

time

• New customer acquisition softened in H2 due to challenging prior year comparative and slowing industry growth

• Retention rates remained strong and consistent

Full Year Results 2023	9