Slide 1: Return to Growth strategy gathers momentum
Return to Growth strategy gathers momentum Half year 2021 results 21 September 2021 Return to Growth strategy gathering momentum 1
Slide 2: Today's presenters
Today’s presenters Steve Francis Ian Ashton Chief Executive Officer Chief Financial Officer Return to Growth strategy gathers momentum 2
Slide 3: H1 2021 Results – Agenda
H1 2021 Results – Agenda H1 21 Results & H2 Outlook Operational & Strategic Update Summary Return to Growth strategy gathers momentum 3
Slide 4: Growth strategy drives SIG back to profit
Growth strategy drives SIG back to profit Introduction Return to Growth strategy gathers momentum • Earlier and stronger profit delivery • UK Distribution regaining share and rebuilding margins • UK Exteriors strong; France and Poland record H1s; Germany improving • Strategic initiatives on track an
Slide 5: H1 2021 Results
H1 2021 Results H1 21 Results & H2 Outlook H1 21 Results & H2 Outlook Key H1 financials Outlook and guidance Operational & Strategic Update Summary Return to Growth strategy gathers momentum 5
Slide 6: Key H1 financials
Key H1 financials H1 21 Results & H2 Outlook £m H1 2021 H1 2020 Revenue 1,108 839 LFL sales 33.0% (24.1)% Gross profit 287 209 Gross margin 25.9% 24.9% Underlying operating profit/(loss) 14 (43) Operating margin 1.2% (5.1)% Finance costs (11) (11) Underlying profit/(loss) before tax 3 (54) Other ite
Slide 7: Group revenues – back to growth
Group revenues – back to growth H1 21 Results & H2 Outlook Variance to 2019 Sales per working day vs prior year (7)% 8% 61% 4% 10% (7)% (15)% (33)% Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 • Group continued upward trajectory across the business with successful return to growth strategy • Adjusting for Co
Slide 8: Revenue change by business unit
Revenue change by business unit H1 21 Results & H2 Outlook £4m £14m £10m £20m £0m £83m £74m £84m Variance to H1 2019 £1,108m £839m £56m £27m £42m £3m £7m £10m £9m H1 2020 UK UK France Germany Benelux Ireland Poland FX H1 2021 underlying Distribution Exteriors underlying • Healthy return to growth vs
Slide 9: Gross margin and operating costs
Gross margin and operating costs H1 21 Results & H2 Outlook Gross margin • H1 gross margin of 25.9%, 100bps higher than 2020 • Gross margin improvement driven by increased supplier 25.9% rebates as a result of improved trading levels and favourable 25.4% product mix 24.9% • Geographically, driven by
Slide 10: Cash flow
Cash flow H1 21 Results & H2 Outlook £'m H1 2021 H2 2020 H1 2020 • Working capital in H1 2021 reflects increases in Total operating profit/(loss)* 9 (65) (102) stock and quicker supplier payments to secure Depreciation and non-cash items 39 75 80 stock in the face of supply shortages and longer Work
Slide 11: Outlook and technical guidance
Outlook and technical guidance H1 21 Results & H2 Outlook • H2 solid so far. Remain cautious due to material shortages and supply chain disruption – but demand expected to remain robust • Revenue will reflect further input inflation – expect higher impact from this in H2 than seen in H1. UK Distribu
Slide 12: 2021 progress: plans on track
2021 progress: plans on track Operational & Strategic Update H1 21 Results & H2 Outlook Strong market for profitable growth Business model Operational & Strategic Update • 2021 progress Summary • Platform for future growth Return to Growth strategy gathers momentum 12
Slide 13: Strong market for profitable growth
Strong market for profitable growth Operational & Strategic Update Continued strong rebound of construction industry expected post Covid-19 and medium/long term strength due to structural market shortages, government stimulus and sustainability initiatives • European Green Deal (~€1 trillion • Struc
Slide 14: Business model: Why stakeholders choose SIG
Business model: Why stakeholders choose SIG Operational & Strategic Update For our customers What we do • Proximity: Extensive network, scale: large yet • Distribute market-leading brands local • Drylining/ insulation • Expertise: Experts in our field: one-stop access • Construction accessories to w
Slide 15: 2021 progress
2021 progress Operational & Strategic Update 2021 Actions 2021 Targets Continue to upgrade sales teams/branches; revised UK back to profit, get back to strong positive incentives; enhanced sales tools Group-wide EBITDA Deepen expertise; enhance service; build trust Market share gains Work
Slide 16: SIG's Return to Growth 'Handbook' - the 7 Pillars
SIG’s Return to Growth ‘Handbook’ - the 7 Pillars Operational & Strategic Update Constructing the Future Our strategy: To continuously grow our leadership positions and market share through expertise, service and proximity 1. 2. 3. 4. 5. 6. 7. Responsible Winning Superior Specialist Valuable Highest
Slide 17: Platform for future growth in place
Platform for future growth in place Operational & Strategic Update New German MD – industry and SIG-experienced New Chief People Officer Leadership now in place New Benelux leadership team New Strategy Director role and appointment Local empowerment Local sourcing and trading to fill gap
Slide 18: Revenues by Country since Q1 2018
Revenues by Country since Q1 2018 Operational & Strategic Update • Turnaround in UK now visible: back to Q1 2019 levels, further to go • Strong Growth in EU countries: now well above Q1 2018 levels Monthly SPWD by Country (Quarterly Average) Indexed to March 2018 142 125 124 110 119 104 105 95 92 93
Slide 19: Successful rebuild of UK leadership and organisation
Successful rebuild of UK leadership and organisation Operational & Strategic Update Plan to enhance Operational efficiency and efficacy Rebuilt UK business in six months 1 Right-size structure and organisation UK merger and reduction in central roles completed generating £4m of savings and reduction
Slide 20: UK Distribution Daily Sales & Market Share Trends
UK Distribution Daily Sales & Market Share Trends Operational & Strategic Update • UK Distribution daily sales have rebounded strongly • Recapture of market share well underway Average Daily Sales by Quarter, £m 2.18 1.97 1.84 1.74 1.53 1.44 1.43 1.36 1.37 COVID Lock-down #1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Slide 21: UK Distribution gross margins rebuilt
UK Distribution gross margins rebuilt Operational & Strategic Update • Despite the significant inflationary conditions and supply dislocations, UK Distribution has rebuilt UK Distribution gross margins margins to historic levels in the last year • Main levers: • Improved supplier relationships (both
Slide 22: Summary
Summary Summary H1 21 Results & H2 Outlook Operational & Strategic Update Medium term goals remain unchanged Summary Conclusion Return to Growth strategy gathers momentum 22
Slide 23: Medium term goals remain unchanged
Medium term goals remain unchanged Summary The Group has the following medium term key financial goals: • Group operating margin of approximately 3%, trending towards approximately 5% in the longer-term Margin • Underpinned by a target operating margin of approximately 5% within the Group’s operatin
Slide 24: Growth strategy drives SIG back to profit
Growth strategy drives SIG back to profit Summary • Revenue-driven strategy delivering ahead of expectations • Reconnection with customers, suppliers and employees • Return to growth driven by investment in people • Successful rebuild of UK leadership and organisation • Building blocks for growth in
Slide 25: Appendix
Appendix Return to Growth strategy gathers momentum 25
Slide 26: Return to Growth strategy: key milestones
Return to Growth strategy: key milestones The execution of the “Return to Growth” strategy is on track, with the first milestones having been achieved Current status and milestones of the “Return to Growth” strategy 2020 2021 2022 2023 Cash Return to YOY growth Return to profit Return to cash genera
Slide 27: Underlying financials by segment
Underlying financials by segment Change vs LFL LFL Operating Change vs Operating Change vs Revenue PY vs 2020 vs 2019 (loss)/profit PY margin PY UK Distribution £239m 54.5% 54.0% (19.4)% £(5.4)m £22.0m (2.2)% +1,540bps UK Exteriors £199m 59.0% 58.2% 14.4% £7.9m £16.5m 4.0% +1,080bps Total UK £439m 5
Slide 28: Other items – continuing operations
Other items – continuing operations PBT Impact Cash Impact £m H1 H1 H1 2021 2020 2021 Amortisation of acquired intangibles (2.3) (2.8) - Impairment charges - (42.8) - Impairment of goodwill Acquisition costs/disposals/exits (0.3) 1.2 (0.1) Net restructuring costs (2.2) (3.5) (2.2) Investment in omni
Slide 29: Net debt bridge
Net debt bridge £2m £25m £10m £16m £50m £46m £2m IFRS 16 £289m impact: IFRS 16 £231m impact: £238m £234m £4m £58m Opening Post IFRS 16 Cash inflow Other Working Capital Capex** Interest Lease additions/ FX/ Post IFRS 16 Closing net debt opening from items* and tax renewals Other closing net debt (pr
Slide 30: Number of trading sites in 2021
Number of trading sites in 2021 31 Dec Acquired/ Closed/ 30 Jun 2020 opened merged 2021 UK Distribution 43 5 (1) 47 UK Exteriors* 116 - - 116 Total UK 159 5 (1) 163 France Distribution 38 - - 38 France Exteriors 106 - - 106 Total France 144 - - 144 Germany 51 - - 51 Benelux 15 1 (1) 15 Ireland 9 - -
Slide 31: Disclaimer
Disclaimer This presentation may include certain forward-looking statements, beliefs or opinions, including statements with respect to SIG plc’s business, financial condition and results of operations. These forward-looking statements can be identified by the use of forward-looking terminology, incl