Slide 1: Grafton Group plc Final Results 2011
rafton Group plc inal Results 2011
Slide 2: Profile
Profile Predominantly UK and Ireland based Building Materials Group JV operation in Belgium growing – Now in top 20 merchants in Belgium Principal activities • Builders Merchanting (No. 3 in UK, No. 1 in ROI) • Plumbers Merchanting (No. 4 in UK, No. 1 in ROI) • DIY Retailing in Ireland (No. 1 in ROI
Slide 3: Positive Highlights of 2011
Positive Highlights of 2011 Positive Trends 2
Slide 4: Group Irish & UK Trading Locations
Group Irish & UK Trading Locations g Builders Merchanting Plumbers Merchanting Manufacturing DIY Retailing 3
Slide 5: Group Belgium Trading Locations
Group Belgium Trading Locations Branches at 31st December 2011 Menen (2 branches) Lauwe Gullegem Ieper Mouscron Comines Zwelevele Roselare Builders Merchanting 4
Slide 6: Final Financial Highlights - 2011
Final Financial Highlights - 2011 2011 2010 % Growth Turnover €2,054m €2,004m 2.5% EBITDA # €97.4m €95.1m 2.4% Adjusted operating profit * €56.9m €50.6m 12.5% Operating Profit €22.7m €33.0m (31.4%) Adjusted EPS ** 15.4c 18.5c Free Cash Flow €67m €86m Exceptional Items €32.1m €15.4m Dividends 7.5c 7.
Slide 7: Final Results 2011 – Trends & Comments
Final Results 2011 – Trends & Comments Turnover Growth • Group turnover up 3% on 2010 to €2.05 billion (1% increase in 2010) • Sustained modest turnover growth continues into 2012 • 4.3% like for like growth in UK merchanting business in 2011 Profit Recovery • Profit recovery continued in 2011 • Gro
Slide 8: Grafton Group – Cautious Growth Targeted
Grafton Group –Cautious Growth Targeted Experienced acquirers participating in industry consolidation - potential for further expansion Belgium annualised turnover now circa €55m. Further operating profit growth expected in 2012 based on cost savings and modest turnover growth subject to market cond
Slide 9: Merchanting Turnover Showing Positive Growth Again
Merchanting Turnover Showing Positive Growth Again 2500 FY 2011 •UK Like for Like Sales Up 4.3% •Ireland Like for Like Sales Down 4.9% •Group Merchanting Up 2.6% 2000 1500 H1 €'000 H2 €'000 1000 Total €'000 500 0 2008 2009 2010 2011 Total rising but progress held back by Ireland 8 8
Slide 10: Geographical Analysis - 73% UK Based Turnover
Geographical Analysis - 73% UK Based Turnover Geographical Analysis 1600 73% of Group turnover generated in the UK (2010: 1400 71%) €1,493.2m 1200 €1,432.5m UK turnover up 4% (2010: 1000 UK 7%) Republic of Ireland down 6%. 800 ROI (2010: -10%) 600 Belgium JV Belgium turnover up 8% on a €571.
Slide 11: Group Operating Result – 2011
Group Operating Result – 2011 Year 2011 2010 €m €m Adjusted operating profit 56.9 50.6 Restructuring costs (12.7) (5.3) Intangible amortisation (2.2) (2.2) Onerous lease provision & asset impairment – Ireland (19.3) (10.1) Operating profit per income statement 22.7 33.0 Significant improvement in op
Slide 12: An Improving Picture
An Improving Picture Segment Results 2011 2010 2009 2008 €000 €000 €000 €000 Merchanting * 64,924 61,524 33,250 121,921 Retail 2,120 2,351 3,274 11,790 Manufacturing (535) (3,457) (5,060) (3,159) Segment operating profit 66,509 60,418 31,464 130,552 Turnover 2,053,833 2,004,418 1,979,796 2,672,984 O
Slide 13: Improving Trends
Improving Trends 73% of Group turnover now in UK. Belgium 1% of Group turnover in 2011 UK merchanting and UK manufacturing continue to show like for like sales growth. First 9 weeks in 2012 UK merchanting up 5% (4% like for like) Irish merchanting profitable in difficult market Continued str
Slide 14: Cash Generation
2011 2010 Cash Generation € million € million Segment operating profit (before exceptional items & amortisation) 67 61 Central costs (10) (10) Adjusted operating profit 57 51 Exceptional items – onerous leases / impairment & restructuring costs (32) (5) Depreciation & other non cash items 63 49 Proc
Slide 15: Reducing Net Debt
Reducing Net Debt € 584m € 551m € 550m Group debt refinanced Net Debt €436m to 2014 & 2016 with core banking partners. €322m Sustained reduction in €255m €226m gearing & net debt continues Good liquidity, positive free cash flow and cash deposits 2005 2006 2007 2008 2009 2010 2011 Debt reduc
Slide 16: Working Capital Trends
Working Capital Trends 2007 2008 2009 2010 2011 €’m €’m €’m €’m €’m Stock 386 331 265 272 271 Debtors 536 354 307 306 323 Creditors (490) (417) (387) (400) (422) Total 432 268 185 178 172 164 83 7 6 Currency & other items (56) 11 2 12 108 94 9 18 Year on year reduction 4 Yr Total Reduction to Dec 20
Slide 17: Margin Recovery Continues
Operating Margin History (Core – before central costs) Year UK ROI Group 2001 6.3% 13.1% 8.6% 2002 7.0% 12.2% 8.5% 2003 7.3% 13.0% 8.7% 2004 7.8% 13.1% 9.1% Margin 2005 6.9% 10.7% 8.4% 2006 6.7% 11.3% 8.6% Recovery 2007 7.3% 10.8% 8.7% Continues 2008 4.5% 5.5% 4.9% 2009 3.2% -1.7% 1.6% 2010 4.1% 0.4
Slide 18: Group Operating Margin Recovering
Group Operating Margin Recovering Group Margin % 10 9 8 7 6 5 4 3 2 1 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 On the road to margin improvement 17
Slide 19: Very Limited Debt Repayments until 2014 & 2016
Very Limited Debt Repayments until 2014 & 2016 Dec 2011 Dec 2010 € million €’million Debt Maturity at 31 December 2011 Gross debt 361 489 Cash (135) (234) 225 €'Millions Net debt 226 255 150 Gearing 23% 26% 75 Gross debt maturities – calender year * 0 2012 2013 2015 2016 2014 2017 on 2011 - 147 2012
Slide 20: 2012 - Outlook and Management Focus
2012 - Outlook and Management Focus UK growth forecast to remain subdued Further “self-help” initiatives in Management succession and in near term. In medium-term progress development provides renewed capacity demand fundamentals for the housing to improve performance in difficult RMI market remain
Slide 21: Benefits of Cost Reduction Initiatives Reflected in Results
Benefits of Cost Reduction Initiatives Reflected in Results Total headcount reduction since 1st January 2008 is approx 3,350 employees Over €100m in annual cost reductions achieved from rationalisation measures Tight overhead & margin management Return to profit growth Business well positi
Slide 22: Rationalisation Costs and Benefits
Rationalisation Costs and Benefits Restructuring Cost Benefit Staff Reductions – 48 months to 48 months to Dec 2011 per annum December 2011 €’ millions €’ millions Employee Changes Payroll Savings per annum Numbers € millions UK 13 56 -1,730 48 Ireland 37 47 -1,640 46 * 50 103 -3,370 94 Over €100m i
Slide 23: Group Focus for 2012
Group Focus for 2012 Gain market share Management changes improve operating profit margin Further self-help initiatives planned Working capital management Continue to grow direct sourcing and supply chain management Increased shareholder value and returns 22
Slide 24: Principal Brands – UK and Northern Ireland
Principal Brands – UK and Northern Ireland 23
Slide 25: Principal Brands – Ireland
Principal Brands – Ireland 24
Slide 26: Specialist Brands – UK
Specialist Brands — UK elumbwerld ACORN INSULATION ¥ & DRYWALL HIREBASE BOUNDARY BATHROOMS CORGI CORG j dir ect | products and services delivered vlrect to your d AKeelsupply e seconsolar mani! inim FaQgi WwW fF belt Whe The Complete Bathroom 25
Slide 27: Irish Merchanting
*Heiton Buckley CHADWICKS BUILDERS MERCHANTS Irish Merchanting
Slide 28: Irish DIY Retail Brands
TE crt Cot inhouse There’s no better buy in DIY ift}hOUse AT THE PANELLING CENTRE 7
Slide 29: Irish DIY Retail Brands
Vifoodie's DIY ARES Irish DIY Retail Brands 28
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Slide 32: House Starts & Completions UK 1998-2010
House Starts & Completions UK 1998- 2010 – Last 11 Years Starts Completion 250000 ‘000 s ‘000 225,000 187,000 200000 219,000 Average 191 189 178,000 174,000 148,000 High 234 219 150000 Low 111 148 100000 118,000 Median 195 184 Current 118 * 120* 50000 0 Historic Lows! *Estimated UK Completions UK St
Slide 33: House Completions – Ireland 1990-2010
House Completions – Ireland 1990- 2010 Completions Completions ‘000 100000 80000 Average 44 High 93 60000 Low 11 40000 Median 36 20000 Current 11* 18,000 0 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 Completions Historic Lows! *Estimated Current activity is at an unsustainably low le
Slide 34: Estimated UK Merchanting League Table
Estimated UK Merchanting League Table Circa 2,000 independents 10% 3rd Largest Builders 30% Grafton Merchant 18% 23% 19% Jewson Wolseley Travis Perkins (excluding Wickes) Sector Turnover £12 billion plus Independents Independents £4.6 billion plus 33
Slide 35: Top 10 Debtors in UK and Ireland
Top 10 Debtors in UK and Ireland Ire Ire UK UK Total in Dec Dec Dec Dec Euro 2011 2010 2011 2010 €’000 €’000 £’000 £’000 1 581 524 1,410 1,153 2 262 478 978 855 3 192 328 829 450 4 185 252 577 400 5 153 234 574 339 Only two accounts 6 152 202 555 316 exceed €1m across the Group 7 151 152 527 307 8 1
Slide 36: Gross Margin Remains Consistent
Gross Margin Remains Consistent Gross Margin Management Financial 2005 2006 2007 2008 2009 2010 2011 Year Gross 31.5% 32.3% 32.7% 32.3% 31.6% 31.8% 31.5% Margin 35
Slide 37: Bank Covenants
Bank Covenants Bank Covenants Actual Net worth as defined €783m €1,094m Gearing * 85% 21% Current Liabilities : Current Assets 120% 68% Debt €’Million Minimum EBITDA / Interest Ratio Bank Debt 277 Period Actual Covenant 12 Mths to: US Loan Notes & other 84 Yr to 11:3 : 1 3:1 31/12/11 31/12/10 Cash (
Slide 38: Summary of DIY Store Sizes in the Republic of Ireland
Summary of DIY Store Sizes in the Republic of Ireland 37
Slide 39: For Further Information
For Further Information Gavin Slark Chief Executive Officer Colm ó Nualláin Finance Director Charles Rinn Group Financial Controller / Secretary Address: Grafton Group plc, Heron House, Corrig Road, Sandyford Industrial Estate, Dublin 18 Telephone: 353 1 216 0600 Fax: 353 1 295 4470 Email: email@gra