Slide 1: Final Results Presentation
Final Results Presentation For the year ended 31 December 2020 Europe’s leading floorcoverings distributor
Slide 2: Presentation Team
Presentation Team Steve Wilson Chris Payne Chief Executive Chief Financial Officer 1
Slide 3: Agenda
Agenda Overview and 2020 Looking Ahead • About the Business • OIP 2021 and Future • 2020 Overview • Growth Opportunities • 2020 Financial Overview • Environmental, Social and Governance (ESG) Strategy • Operational Improvement Programme (OIP) 2020 • 2021 Trading 2
Slide 4: Overview and 2020
headlam group plc Overview and 2020
Slide 5: About The Business
About The Business Headlam is Europe’s leading floorcoverings distributor, providing the channel between suppliers and trade customers of floorcoverings Years operating 29 Distribution hubs and centres Businesses 23 67 Trade counters Active customer accounts 53 24,830 Commercial fleet 363 As at 31 D
Slide 6: 2020 Overview
2020 Overview • Demonstrated the resilience of the business, and its highly cash generative nature despite initial impact of COVID-19 • Quick and ongoing mitigating actions have preserved Balance Sheet strength, and strengthened the business going forward • Accelerated Operational Improvement Progra
Slide 7: UK Distribution Daily Sales
UK Distribution Daily Sales* £k Sales 2,550k 2,050k 1,550k 1,050k 550k 050k Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2016 2017 2018 2019 2020 6 * Calculated on a like-for-like basis, being based on activities and businesses that made a full contribution in both the current and previous year a
Slide 8: 2020 Financial Overview
2020 Financial Overview • Revenue only 15.3% below 2019 at £609.2m (2019: £719.2m), a strong recovery from H1 2020 30.6% below • Underlying¹ profit before tax of £15.9m (2019: £39.5m), a strong reversal of H1 2020 underlying¹ loss before tax of £1.2m • Statutory loss before tax of £17.1m (2019: £35.
Slide 9: 2020 Income Statement
2020 Income Statement Income Statement 2020 2019 £M £M Revenue 609.2 100.0% 719.2 100.0% Cost of sales (420.3) (69.0)% (489.8) (68.1)% Gross profit 188.9 31.0% 229.4 31.9% Distribution costs (121.3) (19.9)% (135.7) (18.9)% Administrative expenses (49.7) (8.2)% (51.5) (7.1)% Operating profit 17.9 2.9
Slide 10: Non-Underlying Items
Non-Underlying Items 2020 2019 £M £M Non-underlying items Goodwill impairment 28.0 2.1 Amortisation of intangibles 1.6 1.4 Movements and finance costs for deferred and contingent consideration - 0.1 Non-underlying non-cash items 29.6 3.6 Acquisitions related fees 0.7 0.7 – Business restructuring cos
Slide 11: 2020 Cash Flow Movement
2020 Cash Flow Movement 2020 2019 £M £M Cash flows from operating activities EBITDA 37.0 62.5 Change in inventories 15.3 (0.6) Change in receivables 23.2 (4.7) Change in payables (4.8) (2.0) Share-based payments and profit on sale of PPE – 0.7 Cash generated from the operations 70.7 55.9 Interest an
Slide 12: Balance Sheet
Balance Sheet As at 31 December 2020 Balance Sheet 2020 2019 £M £M Property, plant and equipment 122.9 114.6 Intangibles 21.1 48.5 Inventories 118.5 132.4 Trade and other receivables 101.6 123.7 Cash 60.8 33.4 Trade and other payables (178.4) (181.9) Borrowings (9.2) (6.4) Other assets and liabiliti
Slide 13: UK Sterling Net Debt
UK Sterling Net Debt Daily Balances £Thousands Average net debt* in 2020: £8.6 million (2019: £3.3 million) 60,000 40,000 20,000 0 (20,000) (40,000) (60,000) 05-Feb 12-Feb 19-Feb 26-Feb 04-Mar 11-Mar 18-Mar 25-Mar 06-May 13-May 20-May 27-May 03-Jun 10-Jun 17-Jun 24-Jun 01-Jul 08-Jul 15-Jul 22-Jul 29
Slide 14: Operational Improvement Programme (OIP)
Operational Improvement Programme (OIP)
Slide 15: OIP Summary
OIP Summary Overview: • A programme of substantial operational change taking place across the business • Considerable planning and employee engagement to ensure effective implementation • Material operational and financial improvements • Several projects accelerated against COVID-19 backdrop to help
Slide 16: OIP Achievements in 2020
OIP Achievements in 2020 Transport Integration • Accelerated roll-out against the backdrop of COVID-19 • Full national roll-out on-track to be complete by early Q4 2021 Network Consolidation • Opening of Ipswich distribution centre in July 2020 enabled consolidation activities to commence • Consolid
Slide 17: OIP Achievements in 2020
OIP Achievements in 2020 E-commerce Capabilities • Relaunched B2B websites with improved functionality • Development of e-commerce infrastructure to better support larger customers Trade Counter Proposition • Finalised plans to enhance the existing sites and expand the national network • Plan to inc
Slide 18: Looking Ahead
headlam group plc Looking Ahead
Slide 19: OIP 2021 and Future
OIP 2021 and Future Following extensive planning, two new key projects now being launched alongside ongoing projects Ongoing Projects Buying Customer Focus • More strategic group- • Sales force level approach to effectiveness product purchasing and • Tailored customer ranging service propositions •
Slide 20: An Example: Opportunity with Large Retailers
An Example: Opportunity with Large Retailers • Larger retailers (incl. DIY) currently c 10% of total revenue, but +40% of retail sales • Significant opportunity to increase market penetration and grow revenue in this customer group • New ‘Key Accounts’ team already making progress, growing business
Slide 21: Environmental, Social and Governance (ESG)
Environmental, Social and Governance (ESG) 20
Slide 22: ESG Strategy
ESG Strategy ESG Strategy Report to be published May 2021, with associated KPIs to measure performance Environmental • Already engaged in activities to reduce GHG emissions, with Transport Integration meaningfully reducing direct emissions • Materiality Assessment published in 2020 Annual Report, id
Slide 23: 2021 Trading
2021 Trading • Experienced very limited disruption to product flow to-date from the EU following Brexit • Trading in Jan and Feb 2021, typically the quietest trading months, soft given lockdowns and non-essential retail businesses closed • Months ahead to benefit from easing of restrictions, reopeni
Slide 24: Overall Summary
Overall Summary • Entering 2021 a stronger business through both mitigating actions and OIP • Following extensive planning, OIP accelerated to more quickly realise revenue benefits and cost base improvements, and mitigate against potential COVID-19 related reduction in demand • 7.5% UK operating mar
Slide 25: Q&A
headlam group plc Q&A
Slide 26: Headlam Group plc
Headlam Group plc PO Box 1 Gorsey Lane Coleshill Birmingham B46 1LW Tel: 01675 433000 Fax: 01675 433030 E-mail: headlamgroup@headlam.com Sat Nav: B46 1JU To find out more visit us online at www.headlam.com