Slide 1: Preliminary Results – Inspiring Living Spaces
Click to edit Master title style Inspiring Living Spaces Preliminary Results Year ended 31 March 2021
Slide 2: Introduction
Click to edit Master title style Introduction Nick Kelsall, Chief Executive Officer
Slide 3: Highlights
Click to edit Master title style Highlights £324.2m Our employee response to COVID-19 challenges has been Revenue1 +0.7% outstanding £33.8m Health and Safety of our stakeholders remains paramount; Underlying Operating Profit +4.6% zero transmissions in the workplace Very strong recovery; H2 re
Slide 4: Financial Review
Click to edit Master title style Financial Review Shaun Smith, Chief Financial Officer
Slide 5: Income Statement
Click IncometoStatement edit Master title style Constant Currency 2021 2020 Reported LFL4 £m £m % % Revenue 324.2 342.0 -5.2% +0.7% Underlying1 operating profit 33.8 32.3 +4.6% Margin 10.4% 9.4% Finance charges – cash (3.2) (3.5) Underlying1 PBT 30.6 28.8 +6.3% Exceptional operating items2 (3.8) (9.
Slide 6: Income Statement – Key Bridges
Click Incometo Statement edit Master title Bridges – Key style Revenue Underlying operating profit 13.9 6.2- - 3.2 0.2 0.9 £m 2.5 £m 342.0 324.2 33.8 1.2 32.3 FY20 Currency Pro-rating UK SA FY21 FY20 Currency UK SA FY21 Revenue1 Underlying operating profit / ROS% 9.3% +0.7% 9.4% 10.4% 321.9 324.2 10
Slide 7: Tax, Earnings & Dividends
Click to edit Master Tax, Earnings title style & Dividends Diluted underlying EPS (pence) Underlying1 Reported +10.3% 2021 2020 2021 2020 £m £m £m £m 31.7 31.1 28.2 2 FY19 FY20 FY21 Profit before Tax 30.6 28.8 18.5 15.0 Tax charge (5.5) (6.0) (3.5) (4.1) Dividend per share (pence) Earnings 25.1 22.8
Slide 8: High Cash Conversion
Click to edit High Cash Master title style Conversion 2021 2020 £m £m Underlying EBITDA 37.9 38.6 Working capital 21.8 (4.8) Depreciation of right of use assets 4.0 4.5 Cash conversion1 Operating profit impact of IFRS16 1.3 0.5 Other 0.8 (0.4) 174% Underlying operating cashflow 65.8 38.4 96% 99% Net
Slide 9: Strong Balance Sheet and Improved Liquidity
Click StrongtoBalance edit Master Sheettitle and style improved Liquidity £m Net cash / (debt) 10.5 Net cash £10.5m March 2021: £36.4m Net debt March 2020 FY21 FY20 FY19 Main bank facility: £120m RCF + £30m accordion (36.4) (35.0) Net assets £148.4m (2020: £104.4m) Pension deficit £18.3m (20
Slide 10: UK Pension Scheme – Significantly Lower Deficit
Click to editScheme UK Pension Master –title style lower deficit significantly UK Pension IAS 19R Assets & Liabilities IAS 19R deficit significantly lower £18.3m (March 2020: £48.9m) 10000 Assets increased by £35.9m to £397.8m – March 2020 COVID19 impact 9500 Liabilities increased by £5.3m to £
Slide 11: COVID – Decisive Action Taken
Click to–edit COVID Master Decisive titletaken. action style Balance sheet & liquidity position much improved Decisive action taken to safeguard employees, reduce costs, strengthen balance sheet and improve liquidity Underlying operating profit includes £4.3m of COVID-19 government job retention
Slide 12: Operating Review
Click to edit Master title style Operating Review Nick Kelsall, Chief Executive Officer
Slide 13: Key Messages
Click to edit Master title style Key Messages Excellent recovery delivering outstanding FY21 performance Strong leadership & committed employees Adapted to the ‘new normal’ & backed “CV-19 winners” Leading market positions, strong brands & channel diversity Market share gains – multi-chann
Slide 14: Compelling Business Model
Click to edit Master title style Compelling Business Nick Kelsall, Chief Executive Officer Model
Slide 15: Business Model – Norcros DNA Driving Outperformance
Click to editBusiness Compelling Master title style Model – Norcros DNA Driving Outperformance Focused operating model NEW PRODUCT Experienced management EXPERIENCED DEVELOPMENT MANAGEMENT Market leading positions ASSEMBLY CHANNEL Group scale advantages versus smaller competitors MANAGEMENT
Slide 16: Business Model – Diversified UK Channels
Click to editBusiness Compelling Master title style Model - Diversified UK Channels UK Channel Revenue FY211 Export 14% Independent, Specialist & Online 21% Retail 13% DIY specification Trade & 51% Broad market coverage increasing market penetration & reduced customer concentration 1 Financial year
Slide 17: Leading Position in UK Housebuilder Segment
Click to editBusiness Compelling Master title style– Leading Position in UK Housebuilder Segment Model Top-10 UK House Builders Further significant synergies and growth opportunities across housebuilder accounts Leading market positions in resilient housebuilder segment – further opportunities 17
Slide 18: New Product Development Investment
Click to editBusiness Compelling Master title style Model – New Product Development Investment H2Eco products ~ Private label enclosure ‘easy install’ hanging Swich Tap ~ Ideal Home 80% water saving range via Merlyn systems award for sustainability awards Norcros Pro 30 Fast Track Hand sanitising 52
Slide 19: ESG; Increasing Momentum & Opportunities
Click to editBusiness Compelling Master title Modelstyle – ESG; Increasing Momentum & Opportunities Increasing ESG focus Local ESG policies and initiatives at different stages of development Establishing overall Group ESG strategy & ambitions Environment Assessing how we further reduce our i
Slide 20: Business Review
Click to edit Master title style Business Review Nick Kelsall, Chief Executive Officer
Slide 21: Business Overview
Click to edit Business Master title style Overview Group % FY21 Revenue Market leader in the manufacture and marketing of showers in the UK £54.5m 16.8 Market leading supplier of shower enclosures and trays £43.3m 13.4 Leading manufacturer and supplier of taps, mixer showers, bathroom accessories an
Slide 22: UK Operations
Click to edit Master title style UK Operations Nick Kelsall, Chief Executive Officer
Slide 23: UK Revenue – Excellent H2 Performance
Click to edit Master UK Revenue title H2 – Excellent style Performance % Revenue Change (FY21 v. FY20) H11 H2 FY211 30% 14% Market share gains across Small Format, DIY and Online channels driving strong -1% H2 performance 22% 4% New account wins & solid Specification and Distributor sales. Slowe
Slide 24: UK – Delivering Outstanding FY21 Performance
Click to edit Master UK – Significant title style Delivering Outstanding FY21 Performance H2 Recovery Revenue1 Underlying Operating Profit1 £228.1m £225.4m £220.2m 11.3 11.8 12.3 £26.9m £26.5m 41.4 41.7 32.8 £24.4m 16.2 14.8 15.0 21.7 23.7 24.1 41.4 38.2 42.3 12.2% 39.5 43.3 42.5 11.6% 56.6 48.6 54.
Slide 25: South Africa Operations
Click to edit Master title style South Africa Operations Nick Kelsall, Chief Executive Officer
Slide 26: South Africa Fundamentals
Click Southto edit Master Africa title Fundamentals - Investment style - Sustained Performance in Tough Markets Norcros South Africa South African Dynamics Strong heritage, market leading positions & strong brands Large economy & business friendly environment Sustained robust financial perform
Slide 27: South Africa Revenue – H2 Recovery
Click to South edit Master Africa Revenuetitle style – H2 Recovery - RMI Bounce & Market Share Gains % Revenue Change (FY 21 v. FY20) £ Reported Constant Currency 1 1 H1 H2 FY21 29% 22% 3% Lock-down DIY bounce offsets slower recovery in construction markets -9% -21% -34% 41% 33% 12% Home renovat
Slide 28: South Africa – Continued Solid Performance
Click Southto edit Master Africa title style – Continued Solid Performance Despite Economic Conditions Revenue1 & 2 Underlying Operating Profit1 & 2 £6.9m £102.7m £104.0m 17.5 £86.5m 20.9 £6.7m 12.5 12.5 12.4 £6.6m 20.2 19.1 19.4 53.8 54.9 7.6% 50.0 6.5% 6.6% 4 4 FY19 FY20 FY21 FY19 FY20 FY21 3 Tile
Slide 29: Group Outlook & Strategy
Click to edit Master title style Group Outlook & Strategy Nick Kelsall, Group Chief Executive
Slide 30: Outlook – Market Indicators
Click to edit Outlook Master – Market title style Indicators UK - Significant post CV-19 recovery South Africa - Consumer led RMI recovery Key Housing Stats Dwellings Completed & Plans submitted Sources: GOV.UK & HMRC Q1 2021 Source: Stats SA March 2021 55,000 500,000 35,000 Quarterly completions an
Slide 31: Group Strategy – Vision Remains Valid
Click GrouptoStrategy edit Master title Remains – Vision style Valid 2025 VISION “A leading supplier of bathroom and kitchen products in selected geographies, offering strong brands, contemporary designs, trusted quality, outstanding service, innovation and a wide product range” STRATEGIC TARGETS £6
Slide 32: UK Fragmentation & Share Gain Opportunity
Click GrouptoStrategy edit Master – UKtitle style Fragmentation & Share Gain Opportunity Industry UK Bathroom – Selective Markets @ MSP £220m £221m £440m £350m £405m £472m £2.1bn 100% 90% 80% 70% 60% Rest of Market 50% Top Players 40% 30% 20% 10% 0% Showers Enclosures & Adhesives Tiles Brassware Fur
Slide 33: Successful Acquisition Track Record
Click GrouptoStrategy edit Master titleSuccessful - Highly style Acquisition Track Record 1 Revenue target strategy Group 2 Underlying ROCE of >15% 3 Geographic fit Acquisition criteria 4 Complementary market 5 Preferred channel mix 6 Export potentia
Slide 34: Complementary Acquisitions Creating Value
Click GrouptoStrategy edit Master title style – Complementary Acquisitions Creating Value O Consolidator in Large and Fragmented Markets N Ventilation Shower trays Decorative E Radiators & drains Well developed acquisition pipeline Many opportunities across product sub sectors and channels S T
Slide 35: Summary & Key Messages
Click to edit Summary Master & Key title style Messages Excellent recovery delivering outstanding FY21 performance Significant H2 bounce & continued momentum Leading market positions & strong brands continue to drive market outperformance Share gains - stock availability & customer service
Slide 36: Appendix
Appendix Click to edit Master title style
Slide 37: Investment Case – Track Record of Sustained Growth
Click to editCase Investment Master title style – Track Record of Sustained Growth Underlying Operating Profit (2) £m Revenue(1) £m 400 42 342.0 350 331.0 324.2 37 Overseas UK South Africa 300.1 UK South Africa Rest of World 34.4 33.8 32.3 300 271.2 32 235.9 27.4 250 218.7 222.1 27 210.7 23.8 196.1
Slide 38: Investment Case – Track Record of Sustained Growth
Click to editCase Investment Master title style – Track Record of Sustained Growth pence pence Diluted underlying EPS (p) 1 Dividends per share (p) 35 9.0 Interim Final 8.4 8.2 31.7 31.1 7.8 29.5 8.0 30 28.2 7.2 27.8 27.8 7.0 6.6 25 22.0 6.0 5.6 21.0 5.1 20 19.0 4.6 18.0 5.0 16.0 4.2 4.0 3.6 15 3.1
Slide 39: UK Channels – Trade and Independent Retail Share Gains
Click to edit Master UK Channels – Tradetitle andstyle Independent Retail Share Gains Trade UK Channel Revenue - FY21 Growth in small format channel capturing market share • Screwfix – Triton, Croydex & Adhesives momentum; Merlyn and Abode new listings • Toolstation – Merlyn & Croydex – strong p
Slide 40: UK Channels – Covid Driven RMI Boost; H2 Export Recovery
Click to edit Master UK Channels – Covidtitle styleRMI Boost; H2 Export Recovery Driven UK Channel Revenue - FY21 DIY Retail Triton – strong performances driven by RMI growth Merlyn – successful instore rollout & online launch in Wickes (FY20: 1%) 1% Croydex – continued strong B&Q and Wickes
Slide 41: South Africa Channels – Robust Retail & Export
Click to South editChannels Africa Master title style Retail & Export; Slower Commercial Recovery – Robust Retail ~ End Consumers, Interior Designers & Small Private Builders TAF Well invested 32 owned and 2 franchise stores Improved Retail demand enhanced by stock availability & ranging Constru
Slide 42: Balanced & Diversified Business Portfolio – Significant Progress
Click to edit&Master Balanced title style Diversified Business Portfolio – Significant Progress Revenue FY131 Revenue FY211 RoW Discontinued £210.7m £324.2m Portfolio of complementary market leading businesses with strong brands 1 Financial years ended 31st March 42
Slide 43: Diversified Business Portfolio – Diversified Channels
Click to edit&Master Balanced title style Diversified Business Portfolio - Diversified Channels UK Channel Revenue - FY21 UK Channel Revenue - FY211 2% 1% 11% 14% 3% 41% £122.8m 21% £220.2m 51% 43% 13% Trade Trade DIY Retail DIY Retail Independent, Online & Specialist Retail Independent, Online & Sp
Slide 44: Business Model – Diversified SA Channels
Click to editBusiness Compelling Master title style Model - Diversified SA Channels Small Retail Commercial and Supply & Fit Commercial Export Tradesmen SA Revenue Split FY211 Tile Africa 53% TAL 18% House of Johnson Tiles 12% Plumbing 17% Broad market coverage increasing market penetration & reduce
Slide 45: SA Fragmentation & Consolidation Opportunity
Click GrouptoStrategy edit Master – SA title style Fragmentation & Consolidation Opportunity Industry South Africa Bathroom – Selective Markets @ MSP £149m £426m £325m# £312m# £1.2bn 100% 90% 80% 70% 60% Rest of Market 50% 40% Top 3 Players 30% 20% 10% 0% Adhesives & Floor Tiles Bathroom Retail Plum
Slide 46: Exceptional items and acquisition related costs
Click to edititems Exceptional Master andtitle style related costs acquisition Exceptional items 2021 2020 £m £m (3.8) - COVID -19 related restructuring - (9.0) COVID -19 related impairment (3.8) (9.0) Acquisition related costs 2021 2020 £m £m Acquisition related deferred remuneration (earn out) - (
Slide 47: Net Debt Reconciliation
Click to edit Net Debt Master title style Reconciliation 2021 2020 £m £m Net debt – opening (36.4) (35.0) Net cash flow 46.5 0.4 Other non-cash movements (0.2) (0.2) Foreign exchange 0.6 (1.6) Net cash / (debt) – closing 10.5 (36.4) 47
Slide 48: UK Pension Cashflows
Click to editCashflows UK Pension Master title style Cash outflow close to peak * * * Annual pensioner payroll, excludes non-predicted costs such as transfer out and early retirement payments 48
Slide 49: Preliminary Results – Inspiring Living Spaces
Click to edit Master title style Inspiring Living Spaces Preliminary Results Year ended 31 March 2021