Headlam Group Plc · LSE:HEAD
Headlam — H1 2025 Earnings Presentation
25 slides from Headlam's earnings presentation, September 2025
Slide 1: Half Year Results
The leading, most trusted experts in flooring HALF YEAR RESULTS September 2025 1
Slide 2: Introduction
INTRODUCTION Continued Good progress on Strong balance challenging transformation sheet market conditions plan 2
Slide 3: Introduction: Continued challenging market conditions
INTRODUCTION ● Improved trend in Q2 but weak market conditions have continued, Continued reflecting delayed recovery challenging ● This has impacted our core distribution businesses, where revenue has continued to decline market conditions ● Continued growth in Trade Counters and Larger Customers ha
Slide 4: Introduction: Good progress on transformation plan
INTRODUCTION ● Transition of 32 businesses into Mercado is fully complete and embedded; a major milestone ● Consolidated 6 Brands sales teams into 1 national team Good progress on ● Significant network optimisation throughout 2025, focusing on South-East and Midlands transformation ● Acceleration of
Slide 5: H1 2025 Financial Performance
H1 2025 FINANCIAL PERFORMANCE 5
Slide 6: Flooring Market
FLOORING MARKET The flooring market has continued to decline in 2025, but lead indicators continue to be positive Indicators of year-to-date market performance Lead indicators Consumer confidence 100% Housing transactions 0 80% -10 60% -20 40% 20% -30 - -40 -20% Apr-24 Dec-23 Dec-24 Apr-23 Feb-24 Fe
Slide 7: Income Statement
INCOME STATEMENT 4% revenue decline; underlying loss before tax of £19.9m reflecting cumulative market decline H1 2025 % of H1 2024 % of ● Revenue declined 3.8% on a same-day basis Un der lyin g r es u lt* £m revenue £m revenue ● Continued growth in Trade Counters and Larger Revenue 244.7 100.0% 256
Slide 8: Underlying Result Before Tax
UNDERLYING RESULT BEFORE TAX Revenue decline and Trade Counters investment were the key factors affecting profit; cost inflation more than offset by transformation plan benefits ● Revenue decline contributed to £3.5m reduction in profit ● The final element of the Trade Counter rollout programme cont
Slide 9: Non-Underlying Items
NON-UNDERLYING ITEMS A P&L expense of £11.9m, of which £8.2m was cash and £3.7m non-cash H1 2025 H1 2025 H1 2025 H1 2024 Cash Non-cash Total Total ● £0.5m of amortisation of acquired intangibles, Con tin u in g oper ation s * £m £m £m £m broadly flat year-on-year Amortisation of intangibles - (0.5)
Slide 10: Cash Flow
CASH FLOW Net Debt lower than a year ago; outflow in H1 principally reflects VAT timing on December 2024 property disposals and stock investments H1 H1 ● Underlying Operating Cash Flow was an outflow of £18.7m principally 2025 2024 reflecting £10.8m VAT timing (collected on property sales in £m £m D
Slide 11: Balance Sheet
BALANCE SHEET Strong balance sheet underpinned by property and working capital June June 2025 2024 £m £m £24m (1) Property, plant and equipment 72.9 125.3 Net debt at end of H1 Intangibles 13.4 18.7 Inventories 105.0 124.9 £72m Trade and other receivables 114.0 104.3 Borrowing facilities Cash 23.2 2
Slide 12: Update on Strategy and Transformation Plan
UPDATE ON STRATEGY AND TRANSFORMATION PLAN 12
Slide 13: Significant Long-Term Market Opportunity
SIGNIFICANT LONG-TERM MARKET OPPORTUNITY Headlam operates in a market worth £2.5 to 3 billion in the UK and there are large sections of the market in which Headlam is underweight, providing opportunity for significant growth (1) £2.5 - 3.0bn UK market Two-thirds residential, one-third commercial Onl
Slide 14: Strategy Acceleration
STRATEGY ACCELERATION We are accelerating our existing strategy with a transformation plan to simplify the business Existing strategy + Transformation plan 1 Simplify our customer offer 2 Simplify our network 3 Simplify how we operate 14
Slide 15: Transformation Plan Progress
TRANSFORMATION PLAN PROGRESS Completed In progress Consolidated 32 trading businesses into 1 national Award-winning point-of-sale refresh for our independent business retailer customers Consolidated 6 Brands sales teams into 1 national team Customer Contact Centre optimisation All customers transiti
Slide 16: Transformation Plan Progress
TRANSFORMATION PLAN PROGRESS 16
Slide 17: Transformation Plan Progress
TRANSFORMATION PLAN PROGRESS Completed In progress Optimisation of South-East England: Ipswich DC and Productivity and efficiency improvements Enfield cross-dock closed; Rayleigh DC opened Investment in fast-moving stock to improve customer Consolidation of distribution centres in Glasgow service Co
Slide 18: Transformation Plan Progress
TRANSFORMATION PLAN PROGRESS Completed In progress Consolidation of Finance functions to support customer Integrated supplier sourcing strategy and consolidation simplification Harmonisation of range and product to create a Headlam offer Centralised buying function Overhead efficiency from simplifie
Slide 19: Transformation Plan Benefits
TRANSFORMATION PLAN BENEFITS We have upgraded our annual profit benefit target to £35m+ Target upon completion ● Net of reinvestment in enhancing our customer proposition Annual profit £35m+ improvement ● Cost savings and margin benefits from centralised buying and ranging ● Disposal of property Gro
Slide 20: Outlook & Summary
OUTLOOK & SUMMARY 20
Slide 21: Short-Term Outlook
SHORT-TERM OUTLOOK Market remains weak, albeit lead indicators continue to be positive ● The market has continued to decline in 2025, with indications that recent months have been a bit weaker Market remains weak ● Headlam revenue broadly flat in June and July; August slightly weaker Lead indicators
Slide 22: Long-Term Outlook
LONG-TERM OUTLOOK There is a material profit opportunity from the combination of the existing strategy, the transformation plan and market improvement Implementation of existing strategy + Transformation plan + Market improvement 22
Slide 23: Q&A
Q&A Chris Payne Chief Executive Adam Phillips Chief Financial Officer 23
Slide 24: Appendix
APPENDIX 24
Slide 25: About Us
ABOUT US Long heritage; strong and broadening foundations Over 30 years of operating excellence Nationwide network and operations • Knowledgeable and long • Next day delivery from extensive serving colleagues distribution network • Servicing a large and diverse • Order anywhere, collect anywhere fro