Slide 1: Norcros plc Interim Results Six Months to 30 September 2013
Norcros plc Interim Results Six Months to 30 September 2013
Slide 2: Introduction
Introduction Martin Towers Chairman
Slide 3: Highlights
Highlights Revenue increased by 16.3% on a constant Page 3 currency basis Revenue1 £116.7m +16.3% Underlying operating profit2 increased by 3.5% Underlying operating profit2 £6.8m +3.5% Significantly improved underlying operating cash3 generation : 102% of underlying EBITDA Underlying operatin
Slide 4: Financial Review
Financial Review Martin Payne Group Finance Director
Slide 5: Income Statement
Income Statement Page 5 26 weeks 26 weeks +/- 52 weeks Sept 2013 Sept 20123 Mar 20133 Reported Constant £m £m Currency £m Revenue 116.7 106.3 +9.8% +16.3% 210.7 Underlying1 operating profit 6.8 6.6 +3.5% +6.5% 13.0 Margin 5.8% 6.2% 6.2% Finance charges – cash (0.7) (0.6) (1.3) Underlying1 PBT 6.1 6.
Slide 6: Income Statement – key bridges
Income Statement – key bridges Page 6 Revenue Underlying operating profit 0.5 0.0 4.1 0.4 (0.2) 116.7 0.0 6.8 £m 11.7 £m (5.9) 6.6 106.3 Sep-12 Currency UK SA RoW Sep-13 Sep-12 Currency UK SA RoW Sep-13 6
Slide 7: Tax, Earnings and Dividends
Tax, Earnings and Dividends Page 7 Underlying1 Reported Basic underlying EPS (pence) Sept Sept Mar Sept Sept Mar 2013 2012 2013 2013 2012 2013 1.9 £m £m £m £m £m £m Profit before Tax 6.1 6.0 11.7 0.5 4.4 5.4 1.1 0.9 Tax (charge)/credit (0.8) 0.1 (0.7) - 0.4 0.2 Earnings 5.3 6.1 11.0 0.5 4.8 5.6 Sep
Slide 8: Cash Flow
Cash Flow 26 weeks 26 weeks 52 weeks Sept 2012 Page 8 Sept 2013 March 2013 £m £m £m Underlying EBITDA 9.9 9.7 19.2 Underlying Operating Cash Flow to Working Capital (0.2) (6.9) (7.7) underlying EBITDA Other 0.4 0.5 (0.7) 102% Underlying operating cash 10.1 3.3 10.8 56% Capital Expenditure (2.1) (2.4
Slide 9: Balance Sheet
Balance Sheet Page 9 Lower debt; leverage 1.4x underlying EBITDA Net debt (IFRS) £m 28.8 30.7 19.6 IAS19R Pension deficit decreased to £26.6m • Recovery plan payments of £1.0m in H1 • 4.3% discount rate Sep 13 Sep 12 Mar 13 • 3.1% RPI / 2.1% CPI Pro forma Leverage (Net IFRS Debt to underlying EB
Slide 10: Operating Review
Operating Review Nick Kelsall Group Chief Executive
Slide 11: Business Overview - Focused and market leading group
Business Overview - Focused and market leading group Group Revenue – 6 months to 30 September 2013: £116.7m Australia 5% £5.5M £72.8M UK South £38.4M 62% Africa 33% £6.2M £30.3M 24% 16% 20% £9.2M £14.7M 42% 34% 60% 4% £2.7M £23.0M £25.1M Revenue Growth @ constant currency: Group +16.3% UK +19.1% SA
Slide 12: UK Operations – Solid performance in challenging markets
UK Operations – Solid performance in challenging markets Overall Revenue +1.5% • UK +1.5% • Exports +1.3% UK market volume now flat versus March 2013 -5% Outperformance in trade and retail; share gain Exports – Irish market bottoming out Q1 impacted by retail destocking; Q2 much stronger – r
Slide 13: UK Operations – Solid performance in challenging markets
UK Operations – Solid performance in challenging markets Overall Revenue +14.1% • UK Revenue +26.1% • Export + 1.9% Q1 overall revenue +9.3%; Q2 +19.2% Performance strong in UK trade and retail - Retail Partnership Programme - Merchant buying groups Export performance impacted by destocking an
Slide 14: UK Operations – Solid performance in challenging markets
UK Operations – Solid performance in challenging markets Overall Revenue -11.3% • UK -15.4% • Exports +30.5% UK sales decline – B&Q range review prior year and retail destocking Core DIY business ahead - market share gain in B&Q Trade business in line; improving in Q2 Export growth very stro
Slide 15: UK Operations – Solid performance in challenging markets
UK Operations – Solid performance in challenging markets Overall Revenue +22.2% Increased share in difficult market Further penetration of distributor accounts Pull-through of housebuilder business Screwfix account gaining momentum Continued new product introductions; Tile to Gypsum and Pr
Slide 16: UK Operations – Solid performance in challenging markets
UK Operations – Solid performance in challenging markets Page 16 Revenue Underlying operating profit 7.0 12.0% £72.8m £61.1m £61.7m 6.0 10.0% 14.7 2.2 2.2 2.7 5.0 8.0% 4.0 34.1 33.2 30.3 6.0% £m 3.0 4.0% 2.0 24.8 26.3 25.1 2.0% 1.0 0.0 26 weeks 26 weeks 26 weeks 0.0% 26 wks to Sep 12 26 wks to Mar 1
Slide 17: SA Operations – Continuing progress
SA Operations – Continuing progress Page 17 Page 17 Overall Revenue +31.1% at constant currency Strong growth in independent and export markets Significant reduction in operating loss - Benefits of prior year restructuring and management changes - Production costs lower despite higher input cost
Slide 18: SA Operations – Continuing progress
SA Operations – Continuing progress Page 18 Page 18 Overall Revenue +4.0% at constant currency • Like for like +19.5% (exc Nortec disposal) • Export +46.5% Strong growth in Builder’s Warehouse and Union Tiles Operating profit higher and cash generation strong Investment in best in class labora
Slide 19: SA Operations – Continuing progress
SA Operations – Continuing progress Page 19 Page 19 Overall Revenue +11.2% at constant currency Benefits of improved in-stock levels in store Increased investment in marketing Imported product to increase depth of offer Underlying profit higher than last year Strong regional footprint - 21
Slide 20: SA Operations – Continuing progress
SA Operations – Continuing progress Page 20 Revenue1 Underlying operating profit 0.8 2.0% £38.4m 1.8% £34.3m 1.6% £32.9m 6.2 0.6 4.8 1.4% 5.0 9.2 1.2% 8.8 8.0 0.4 1.0% £m 0.8% 0.6% 23.0 0.2 20.7 19.9 0.4% 0.2% 26 wks to Sep 12 26 wks to Mar 13 26 wks to Sep 13 0.0 26 weeks 26 weeks 26 weeks 0.0% Sep
Slide 21: Group Strategy Update
Group Strategy Update Page 21 Page 21 Nick Kelsall Group Chief Executive
Slide 22: Group Strategy – Faster and focused growth agenda
Group Strategy – Faster and focused growth agenda Page 22 Page 22 Growth Target * Double revenues by Organic ..2018 ….- Organic and * Market leading Acquisition ……acquisition ..positions .- Maintain 50% * Complementary .. Returns Target revenue derived * Strong trade and ..industry segments/ from ov
Slide 23: Group Strategy - Update
Group Strategy - Update Page 23 Range of Vado revenue synergies have been identified Page 23 Clearer view of scale once products are launched - Benefits to flow in FY 14/15 - Further update at full year Business plan being developed for Adhesives in wider Sub -Saharan Africa - Market research
Slide 24: Summary & Outlook
Summary & Outlook Solid H1 results Page 24 in difficult Page 24 markets Further progress Q2 performance in H2 encouraging Market conditions improving in UK/ South Africa Clear and Focused Growth Strategy 24
Slide 25: Appendices
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Slide 26: UK Pension scheme
UK Pension scheme Page 26 Assets under management - £381m UK Pension IAS 19 Assets & Liabilities Scheme closed to new entrants and future accrual from April 13 - stops future build up of liabilities 400 Mature Scheme; 10,155 members 300 • Pensioners (62%), Deferred (38%) • Average age of pensi
Slide 27: Exceptional and non underlying operating items
Exceptional and non underlying operating items Page 27 Sept Sept March 2013 2012 2013 £m £m £m Exceptional operating items Increase in legacy leasehold provision - - (3.0) Business unit restructuring (1.5) - (0.2) Disposal of Nortec in TAL business - - (0.3) Disposal of former Nortec site in TAL bus
Slide 28: Legacy leasehold obligations
Legacy leasehold obligations Swindon - Light Industrial Units Page 28 • Lease expiry 2014 • Occupied to lease expiry • Current cash shortfall against rental income c. £0.5m p.a. Swindon - Warehousing / Distribution Unit • Lease expiry 2022 • Sublet to 31 Dec 2018 (Network Rail Infrastructure Ltd
Slide 29: Net debt reconciliation
Net debt reconciliation Page 29 Sept Sept March 2013 2012 2013 £m £m £m Net debt (IFRS) – opening (30.7) (17.8) (17.8) Net cash flow 2.6 (1.6) (12.8) Other non cash movements (0.2) (0.1) - Foreign exchange (0.5) (0.1) (0.1) Net debt (IFRS) - closing (28.8) (19.6) (30.7) 29