Investor Presentaiton
EBITDA & Capex ($mm)
HarperCollins is a consistent cash flow generator benefiting from shift to e-commerce
HarperCollins is the second largest book publisher in the world. It produces strong FCF conversion and consistently high ROIC
HarperCollins: EBITDA & CapEx
HarperCollins: ROIC (1)
$350
$300
+65%
18.0%
17.1%
$303
$306
15.6%
16.0% 15.1%
14.0%
12.0%
10.0%
8.0%
6.0%
ROIC
$214
ال
$252
$244
$250
$199
$200
$185
$37
$17
$9
$11
$12
$16
2.0%
$7
$150
$100
$50
15.4%
13.9%
12.8%
11.2%
4.0%
ROIC temporarily depressed by recent M&A activity ($349mm for
HMH Books & Media in May 2021) as integration expenses and
capital investments are incurred before synergies are fully
realized
$0
FY2016 FY2017
FY2018 FY2019
EBITDA Capex
FY2020 FY2021 FY2022
0.0%
FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022
Source: Company filings
"...the margins should continue to expand in the business because of some good long-term trends. So, one is the digital trend. As the business shifts to
digital, the business becomes more efficient and the margins do go up...even on the print business, as that business moves online, the online sales
channel is more efficient...that efficiency leads itself to expanding margins...we have much better decision-making around forecasting how many books
we need to print. That used to be a big inefficiency... And our industry just gets consistently more and more efficient, and we see the working capital
required to run our business continues to go down."
– Brian Murray, HarperCollins CEO, Credit Suisse Communications Conference (15 June 2021)
IRENIC
=
(1) ROIC defined as Cash NOPAT / (Total Assets - Goodwill & Intangibles); based upon segment level disclosures provided by News Corp. Cash NOPAT defined as tax
affected EBIT at 21% U.S. corporate tax rate, plus D&A, less Capex
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