Slide 1: Full-year results for the year ended 31 March 2020
Internal ELECTROCOMPONENTS Full-year results for the year ended 31 March 2020 2020 Full-year Results 2 June 2020
Slide 2: Safe Harbour
Internal SAFE HARBOUR This presentation contains certain statements, statistics and projections that are or may be forward-looking. The accuracy and completeness of all such statements, including, without limitation, statements regarding the future financial position, strategy, projected costs, plan
Slide 3: Agenda
Internal AGENDA Lindsley Ruth 1 OVERVIEW AND COVID-19 UPDATE CEO David Egan CFO 2 2020 PERFORMANCE 3 CURRENT TRADING AND PRIORITIES Lindsley Ruth 4 WELL POSITIONED TO EMERGE STRONGLY CEO 2020 Full-year Results 3
Slide 4: Overview and COVID-19 Update
Internal 1 OVERVIEW AND COVID-19 UPDATE Resilient business well positioned for future opportunities 2020 Full-year Results
Slide 5: Overview of 2020: Strong performance in uncertain markets
Internal OVERVIEW OF 2020 Strong performance in Continued revenue Outperformance in Another step forward uncertain markets growth and market industrial and RS PRO, in customer share gains in all offsetting cyclical experience, NPS(1) up three regions decline in electronics 3.1% Adjusted(2) profit Im
Slide 6: Resilient business in response to COVID-19
Internal RESILIENT BUSINESS IN RESPONSE TO COVID-19 We are balancing the needs of all our stakeholders as we respond to the COVID-19 crisis Ensure our people remain safe and healthy > Support our communities and play our part > Home working for all roles that can do so Supporting ventilator manu
Slide 7: Well positioned for future opportunities
Internal WELL POSITIONED FOR FUTURE OPPORTUNITIES Investment in our We are seeing the benefits of investment in a differentiated and adaptable model – Broader range & diverse customer base business has made it – Digitally led omni-channel offer demanded by customers more adaptable and – Global and
Slide 8: 2020 Performance
Internal 2 2020 PERFORMANCE A year of good strategic and operational progress 2020 Full-year Results
Slide 9: Financial highlights
Internal FINANCIAL HIGHLIGHTS Market outperformance > Profitability maintained > Robust balance sheet > Like-for-like(1) revenue growth (%) Adjusted(2) operating profit (£m) Net debt (£m) 189.8 8.9 220.3 220.7 122.4 56.3 1.9 2.2 (0.5)% (1) RS PRO Digital Group 2019 2020 Like-for-like change 2019 202
Slide 10: Summary income statement
Internal SUMMARY INCOME STATEMENT Highlights Like-for-like(1) £m 2020 2019 Change change Revenue saw a benefit from currency (£10.9 million) and extra trading days (£9.3 million) Revenue 1,953.8 1,884.4 3.7% 2.2% Gross margin of 43.7%, down 0.8 percentage Gross margin (%) 43.7% 44.5% (0.8) pts (
Slide 11: Regional performance
Internal REGIONAL PERFORMANCE Adjusted(2) operating Adjusted(2) operating Revenue (£m) Highlights profit (£m) profit margin (%) Like-for- Like-for- Like-for- 2020 like(1) 2020 like(1) 2020 like(1) change change change Strong performance driven almost entirely by share gains EMEA 1,239.8 2.2% 197.0
Slide 12: Cash flow
Internal CASH FLOW Highlights £m 2020 2019 Free cash flow marginally lower driven EBITDA 256.2 232.9 by accelerated strategic investment Add back impairments and (profit) / loss on disposal of 0.1 2.3 We have invested in inventory non-current assets – Repositioned electronics and Movement in wor
Slide 13: Robust balance sheet
Internal ROBUST BALANCE SHEET We enter this period of Net debt on 31 March was £189.8 million (including £56.3 million of lease liabilities) uncertainty in a strong The Group’s financial metrics remain strong, with net debt to adjusted EBITDA of 0.7x and EBITA to interest of 33.6x financial posi
Slide 14: Current Trading and Priorities
Internal 3 CURRENT TRADING AND PRIORITIES Driving efficiency and scalability as we continue to focus on managing our cash flow and liquidity 2020 Full-year Results
Slide 15: Current trading
Internal CURRENT TRADING Summary Like-for-like change Group like-for-like revenue growth declined 14% over first eight weeks of year Northern Europe (19)% At a Group level the rate of revenue decline moderated slightly during May as Southern Europe (21)% lockdown restrictions began to ease in so
Slide 16: Key priorities – efficiency and scalability
Internal KEY PRIORITIES – EFFICIENCY AND SCALABILITY We will proactively Short term – we will proactively manage our cost base manage our cost base, – Tight control of discretionary costs while protecting core business to take advantage of market opportunities while continuing to – Not currently a
Slide 17: Key priorities – liquidity and cash
Internal KEY PRIORITIES – LIQUIDITY AND CASH We are highly focused Sufficient liquidity under demanding stress test scenarios on managing cash We have performed stress tests under a range of potential scenarios of different duration and severity – relating to COVID-19 flow and liquidity The addi
Slide 18: Well Positioned to Emerge Strongly
Internal 4 WELL POSITIONED TO EMERGE STRONGLY We remain focused on growing market share 2020 Full-year Results
Slide 19: Emerging themes in a post COVID-19 world
Internal EMERGING THEMES IN A POST COVID-19 WORLD Businesses Increased focus on working digitally convenience and efficiency £1.2bn digital business Value-added solutions Supply chain continuity Safety in the even more critical workplace Building scalable infrastructure Range expansion 2020
Slide 20: Executing upon a clear strategy – Destination 2025
Internal WELL POSITIONED – EXECUTING UPON A CLEAR STRATEGY Strong progress to date We are driving a differentiated offer on Destination 2025 – More choice – RS PRO, OKdo, range expansion, solutions capabilities – Improving user experience – RS mobile-first responsive website to launch H1 We are
Slide 21: Well positioned – a leader in digital
Internal WELL POSITIONED – A LEADER IN DIGITAL Our current position Electrocomponents digital revenue as a percentage of Group revenue £1.2 billion digital business 70% We have invested to transform online 60% experience and build a strong talent pool % of revenue 50% Digital is a unique diffe
Slide 22: Well positioned – targeted range expansion
Internal WELL POSITIONED – TARGETED RANGE EXPANSION We are collaborating Our current position Broad offer appealing to wide customer and sector spread across the Group, Strong supplier relationships pivoting our offer to take High inventory availability with over £400 million of inventory in s
Slide 23: Well positioned – value-added solutions
Internal WELL POSITIONED – VALUE-ADDED SOLUTIONS Our current position Grow Evolve Innovate Well positioned in an environment where customers need to reduce costs and lower To be total cost of ownership launched eProcurement eProcurement Complete suite of solutions across design, FY21 Launched pr
Slide 24: Summary
Internal SUMMARY Well positioned to A year of good strategic and operational progress during 2020 continue to drive Rapid COVID-19 response to support the needs of all stakeholders sustainable growth and superior returns for Business model proving highly adaptable and resilient shareholders
Slide 25: Q&A
Internal 5 Q&A Thank you for your continued interest in Electrocomponents 2020 Full-year Results
Slide 26: Appendix
Internal 6 APPENDIX 2020 Full-year Results
Slide 27: Basis of preparation
Internal BASIS OF PREPARATION Unless otherwise stated: Figures have been prepared using International Financial Reporting Standards as adopted by the European Union Adjusted measures of profitability and cash flow exclude amortisation of intangible assets arising on acquisition of businesses, su
Slide 28: Four key reasons to invest
Internal FOUR KEY REASONS TO INVEST 1 2 3 4 UNIQUELY POSITIONED IN DRIVING MARKET BUILDING A LEAN AND STRONG BALANCE SHEET ATTRACTIVE MARKET SHARE GAINS SUSTAINABLE MODEL AND ATTRACTIVE CASH FLOW ▪ Global player in large fragmented marketplace We aim to grow at greater than two times the ▪ We have m
Slide 29: Impact of adoption of IFRS 16
Internal IMPACT OF ADOPTION OF IFRS 16 The Group adopted IFRS 16 ‘Leases’ on 1 April 2019 with no restatement of Income statement > Cash flow > comparatives Definition of net debt has been updated £0.2 million net increase to PBT £14.8 million increase in free cash flow to include lease liab
Slide 30: Guidance points
Internal GUIDANCE POINTS Trading days Foreign exchange Expect around £2.8 million negative impact on revenue from fewer trading Currency movements increased 2020 adjusted profit before tax by days in the year to March 2021 £0.4 million Other guidance points If May rates persist we would expect
Slide 31: Driving operational efficiency
Internal DRIVING OPERATIONAL EFFICIENCY Cost discipline Like-for-like adjusted operating cost growth of 1.6%, less than revenue growth of 2.2%. Stripping out investment in strategic initiatives of £14 million, underlying adjusted operating costs modestly declined Adjusted operating costs as a pe
Slide 32: Key performance indicators
Internal KEY PERFORMANCE INDICATORS FINANCIAL 2020 2019 Change KPI changes Like-for-like revenue growth (%) 2.2 8.3 This year, we have included five Adjusted operating profit conversion (%) 25.8 26.3 (0.5) pts additional non-financial KPIs to help Adjusted operating profit margin (%) 11.3 11.7 (0.
Slide 33: Net debt movements
Internal NET DEBT MOVEMENTS Strong balance sheet £m 2020 2019 Net debt rose to £189.8 million, due Net debt at 1 April (122.4) (65.0) primarily to the inclusion of lease Lease liabilities at 1 April 2019 on adoption of IFRS 16 (53.3) - liabilities of £56.3 million as a result of Adjusted free cash
Slide 34: Impact of foreign exchange
Internal IMPACT OF FOREIGN EXCHANGE Translation Exposure Euro and USD movements to Sterling € to £ $ to £ Reported profit sensitivity to a one 1.50 cent movement in: 1.40 – Euro: £1.4 million 1.30 – USD: £0.5 million 1.20 1.10 1.00 Transaction Exposure Group Treasury maintains 3-7 month hedging