February 18, 2015

Recall Financial Results – Half-Year Ended 31 December 2014

Revenue growth +8.4%; Earnings growth ahead of revenue growth; Full year guidance reaffirmed

Sydney, Australia: February 18th, 2015 -  (ASX: REC), a global leader in document storage, digital document management, data protection and secure destruction services today released its half year results for the 2015 financial year. Financials are presented in USD and comparisons to the prior corresponding period are made on a constant currency basis. Financials for the prior corresponding period are presented on a pro forma basis as if the legal entity structure of Recall Holdings as at 18 December 2013 (the date of demerger from Brambles) was in existence for all of H1 FY14.

Pro forma
financial highlights

H1 FY15 
Actual FX  

H1 FY15 
Constant FX  

H1 FY14 
Actual FX   

Change % 
Constant FX






 Underlying EBITDA





 Underlying EPS
 (US cents per share)





 (AUD cents per share)





  • Strong revenue growth of 8.4%, led by positive performance in Americas and Asia
  • Achieving earnings leverage with 11.9% EBITDA growth, exceeding revenue growth
  • Business portfolio strengthened with six acquisitions and the sale of SDS Germany
  • Revenue growth across all service lines
  • DMS revenue grew 10.3%; carton growth of 11.1%, net carton growth in all regions
  • Improved organic carton growth of 2.2% (up from 1.7%)
  • SDS revenue grew 4.0% (ex. SDS Germany) supported by a positive turnaround in North America
  • Facility Optimisation Program on track
  • Utilisation rates improved
  • Capital expenditures less than 7% of revenue
  • Digital strategy successfully launched
  • Dividend determined AUD 9.0 cents; increased by 12.5%
  • Full year guidance reaffirmed

President and CEO Doug Pertz said, “During the first half of the year, we made good progress on each of our three strategic objectives of sustainable profitable growth, operational excellence and innovation for the future.  We completed six acquisitions, improved utilisation rates, commenced execution of the Facility Optimisation Plan and reduced our capital spend. All of these factors contributed to driving sustainable, profitable growth ahead of our target. 

“We experienced positive revenue growth across all service lines and achieved a key milestone in our digital strategy with the successful launch of the Recall PortalTM in North America and ANZ regions, which is greatly enhancing our customer experience. Additionally, we conducted a successful trial of CommandIGTM – our document and digital information governance and collaboration solution – with North America and ANZ releases expected this year. 

“Of note this half are the excellent results in our businesses in the Americas and Asia, with the Americas delivering revenue growth of 15%, including 6% organic growth, and Asia delivering organic growth of 13%.  The North America SDS business improvement program performance was on target and supported significant earnings leverage in the Americas.

"While we were not satisfied with the first half results in our Australian business, which was impacted by strategic price reductions for large customer contract renewals during FY14, fewer one-time projects and lower than expected activity revenue, we are pleased that net carton growth was positive.  In addition, the negative impact of contract price renewals is less than the prior period.” said Mr. Pertz.


Operating costs increased due to the full period impact of the re-investment in sales and marketing undertaken over the course of FY14. Costs also increased due to acquisitions and increased depreciation and amortisation.  Despite increased operating costs, Recall achieved earnings leverage during H1 FY15,  generating EBIT growth of +10.2% (+6.1% excluding SDS Germany) and EBITDA growth of +11.9% (+9.4% excluding SDS Germany) on revenue growth of +8.4% (+8.8% excluding SDS Germany).

Total capital expenditure for the period was $27.5 million, equivalent to 6.4% of revenue, with $14.5 million invested in business growth. This compares with capital expenditure in H1 FY14 of $42.3 million, equivalent to 10.4% of revenue.  The reduced capex spend reflects increased rigour and focus on improving ROCI.

Net debt of $558 million increased by $74 million during the period, less than the total cost of completed acquisitions of $106 million.  Net debt to EBITDA stands at less than 2.5x, below the covenant level of 3.5x on the amended syndicated loan facility negotiated in October 2014.  With continued support from lenders, the facility was increased to $1.05 billion with a single five-year term to October 2019.

The Board has determined that the interim dividend will be increased by 12.5% to 9.0 AUD cents per share.  The interim dividend is expected to be paid on 24 April 2015 to shareholders on the Recall register on 7 April 2015 with an ex-dividend date of 1 April 2015; The dividend will be franked to 30%, with 70% qualifying as conduit foreign income.


For full year FY15, Recall reaffirms guidance that, on a constant currency basis and after adjusting for the disposal of the SDS business in Germany, revenue growth is expected to approach double digits, and EBITDA growth will be at least in line with revenue growth. Revenue growth will be stronger in H2 FY15 due to the impact of acquisitions and on-boarding of large accounts. The effective tax rate of the group is expected to be at or slightly below the H1 FY15 rate of 36.7%.

Recall’s outlook is based on assumptions regarding present and future business strategies and the environment in which Recall will operate in the future.  Recall’s future results are subject to market conditions and unforeseen circumstances and risks that may arise.  This earnings release, the investor presentation, Appendix 4D and conference call / webcast details are all available on the company’s investor relations website at recall.com.

About Recall

Recall is a global leader in information management solutions, offering customers complete management of its physical and digital information assets with one partner. Recall’s innovative solutions empower organizations to make better business decisions throughout the information lifecycle, while keeping regulatory compliance and eliminating unnecessary resources, time and costs. Recall services more than 80,000 customer accounts in over 300 dedicated operation centers, spanning five continents in 24 countries. For more information, please visit recall.com.

For further information, please contact:

Investor Relations

Bill Frith

Senior Director, Investor Relations


+61 2 9583 0244

Australian media enquiries

Fleur Jouault

Director, GRACosway


+61 405 669 632

U.S. media enquiries


David Sprague or Amanda Fountain


+1 781-684-0770