Slide 1: Excellence in ventilation
Excellence in ventilation Volution Group plc Interim Results 31 January 2020
Slide 2: Agenda
Agenda • H1 2020 Headlines • Financial Review • Operational Review and Outlook Ronnie George • Q&A Chief Executive Officer Andy O’Brien Chief Financial Officer Volution Group plc Interim results to 31 January 2020 1
Slide 3: H1 2020 Headlines
H1 2020 Headlines Financial headlines Revenue Adjusted EPS Adjusted operating margin Net debt to EBITDA +5% (constant currency) to +6.5% to +0.7pp (+1.3pp organic) to 1.3x due to cash conversion of £119m 8.2p per share 18.3% 93.0% Operational headlines UK operating profit up 5.0% Integration of Vent
Slide 4: Progress against strategy
Progress against strategy Strategic Pillars H1 2020 Progress • New products supporting good growth in UK Public RMI Organic growth in all our markets and particularly successful in Germany (Xenion) • UK Commercial and Nordics projects markets subdued • Ventair integration progressing well; focus on
Slide 5: Our business – three geographic segments
34.9% Our business – three geographic segments UK Continental Europe Australasia • 54.3% of Group revenue (includes exports • 32.3% of Group revenue (includes exports) • 13.4% of Group revenue from UK) • Nordics, Germany, Belgium and Netherlands • New Zealand and Australia • New build residential, R
Slide 6: Financial Review
Andy O’Brien – CFO Financial Review Interim results to 31 January 2020
Slide 7: Financial KPIs
Financial KPIs Revenue £m Adjusted operating profit £m Adjusted operating profit margin % £118.8m £21.8m 18.3% LFL CAGR 13% CAGR 9% margin (excluding 118.8 21.8 21.7 Ventair) 114.8 20.2 19.4 98.7 18.3 18.5 18.3 18.9% 17.1 17.6 88.5 15.2 70.1 HY16 HY17 HY18 HY19 HY20 HY16 HY17 HY18 HY19 HY20 HY16 HY1
Slide 8: Financial summary
Financial summary Results in line with expectations; good progress on operating margin expansion and cash generation H1 2020 H1 2019 Movement Movement cc • Adverse FX impact of £1.8m on revenue and £0.3m on adjusted operating profit Revenue (£m) 118.8 114.8 3.4% 5.0% compared to prior period Adjuste
Slide 9: Reconciliation of adjusted to reported profit
Reconciliation of adjusted to reported profit H1 2020 H1 2019 Movement • No exceptional operating costs in period £m £m £m (H1 2019: £1.2m) Adjusted profit before tax 20.5 19.1 1.4 • Loss of £0.9m (H1 2019: £nil) on fair value Items excluded from adjusted measures: of financial instruments Exception
Slide 10: Operating margin
Operating margin Good organic margin improvement across all geographies 17.6% H1 drivers: • Reading efficiency Group 18.3% 18.9% • Value Engineering • Australasia integration 17.4% United 18.9% Kingdom 18.9% H2 and FY 2021 levers: • Reading/Torin-Sifan optimisation 21.1% • Value Engineering Continen
Slide 11: Strong cash conversion bringing leverage down to 1.3x
Strong cash conversion bringing leverage on a like-for-like basis under IAS 17 down to 1.3x H1 2020 H1 2019 Movement Movement Net debt £m £m £m £m % Adjusted EBITA (A) Depreciation 22.4 3.2 20.8 1.6 1.6 1.6 7.6% £60.5m Adjusted EBITDA 25.6 22.4 3.2 14.0% Change in net working capital (0.9) (3.5) 2.6
Slide 12: Operational Review and Outlook
Ronnie George – CEO Operational Review and Outlook Interim results to 31 January 2020
Slide 13: New operating segments
New operating segments 34.9% UK Continental Europe Australasia 54+32+14M % of Volution Group revenue (by segment) UK54.3% Continental Europe 32.3% Australasia13.4% Volution Group plc Interim results to 31 January 2020 12
Slide 14: UK
UK Solid progress in Residential; challenging market conditions in Commercial. 1.5pp expansion in operating profit margin % of Volution Group 46+54+M Total Total revenue H1 2020 H1 2020 (cc) H1 2019 growth growth (cc) £m £m £m % % UK revenue 64.5 64.7 66.6 (3.3)% (3.0)% Residential RMI 20.0 20.0 19.
Slide 15: Continental Europe
Continental Europe Adjusted operating profit up 3.6%. Central Europe growth offsets challenging market conditions in Nordics % of Volution Group 68+32+M Total Total revenue H1 2020 H1 2020 (cc) H1 2019 growth growth (cc) £m £m £m % % Continental Europe revenue 38.4 39.7 40.0 (3.8)% (0.5)% Nordics 21
Slide 16: Australasia
Australasia Good organic revenue growth and margin expansion, supplemented by the acquisition of Ventair in March 2019 % of Volution Group 87+13+M Total Organic Inorganic Total revenue H1 2020 H1 2020 (cc) H1 2019 growth growth (cc) growth (cc) growth (cc) £m £m £m % % % % Australasia revenue 15.9 1
Slide 17: Ventilation growth drivers
Ventilation growth drivers HEALTH AND WELLBEING CONSUMER PREFERENCE Indoor air quality Quietness Reducing energy bills Mould and condensation control through efficiency Air-tight, insulated buildings Connectivity and control temperature control …DRIVING INCREASING REGULATION Legislation, regulation
Slide 18: Summary and outlook
Summary and outlook • Delivered earnings in line with expectations despite weak macroeconomic backdrop • Adjusted operating profit up 9.1% on constant currency basis • Adjusted operating profit margin improved by 0.7pp • Cash conversion at 99.5% (93% on a like-for-like basis under IAS 17) • Second h
Slide 19: Thank you
a 2) ° . D Thank you
Slide 20: Appendix
Appendix
Slide 21: Impact of adopting IFRS16
Impact of adopting IFRS16 6 months to 31 January 2020 • Adopted by Volution Group plc on 1 August Old ‘IAS 17’ IFRS 16 Reported IFRS 16 2019, replacing IAS 17 Basis impact basis £m £m £m • Recognises all leases on the balance sheet as the distinction between operating lease Adjusted operating profit
Slide 22: Consolidated statement of financial position summary
Consolidated statement of financial position summary 31 January Effect of 31 January 31 July 2020 IFRS 16 2020 2019 £m £m £m £m Non-current assets Property, plant and equipment 22.7 22.0 44.7 23.8 • Right-of-use assets – measured at their Intangible asset – goodwill 113.4 — 113.4 118.2 carrying amou
Slide 23: Excellence in ventilation
Excellence in ventilation 1. MVHR (Mechanical Ventilation with Heat Recovery) 6 2. dMVHR 5 (Decentralised Mechanical 9 Ventilation with Heat Recovery) 3 4 3. MEV (Mechanical Extract Ventilation) 5 4. PIV (Positive Input 1 Ventilation) 2 5. Single Room Extract Fans 8 6. Inline Fans 7 7. Passive Venti
Slide 24: Our investment case
Our investment case Why invest in Volution Operational Structural Market In many of our markets we have leading brands, products and sales channel access. 15 Growing focus on There is increasing global focus on indoor air quality. There will be increasing demand leadership market leading brands indo
Slide 25: Business model
Business model Creating sustainable value WE LISTEN We listen to our customers and end users to help them solve their ventilation WE INNOVATE problems and meet their regulatory obligations. We continue to innovate products to meet customer needs and regulatory obligations. WE GROW We deliver growth
Slide 26: Cautionary statement
Cautionary statement This document may contain forward-looking statements which are made in good faith and are based on current expectations or beliefs, as well as assumptions about future events. You can sometimes, but not always, identify these statements by the use of a date in the future or such