Slide 1: Norcros plc Interim Results
Norcros plc 1 Interim Results Six months to 30 September 2015
Slide 2: Introduction
Introduction Martin Towers Chairman 1
Slide 3: Highlights
Highlights Revenue1 Strong first half performance £118.7m +12.0% Underlying operating profit Revenue increased by 12.0% on a constant currency basis £9.9m +34% Underlying operating profit increased by 34% to £9.9m Underlying profit before tax Underlying profit before tax increased by 40% to
Slide 4: Financial Review
Financial Review Martin Payne 1 Group Finance Director
Slide 5: Income Statement – continuing operations
Income Statement – continuing operations Interim Interim +/- +/- Full Year Sept 2015 Sept 2014 Reported Constant Mar 2015 £m £m Currency £m Revenue 118.7 108.6 +9.3% +12.0% 222.1 Underlying1 operating profit 9.9 7.4 +34% +37% 17.0 Return on Sales 8.3% 6.8% 7.6% Finance charges – cash (0.5) (0.7) (29
Slide 6: Income Statement – key bridges
Income Statement – key bridges Revenue1 Revenue 1,2 5.6 118.7 106.0 118.7 79.9 £m 72.8 7.1 Sept '14 2.6 Sept '15 £m 38.8 108.6 33.2 Sept '14 Currency UK SA Sept '15 UK SA Group Underlying operating profit Underlying operating profit / ROS% 8.3% 1.0 9.9 10.0% 6.8% 8.0 8.8% 7.4 9.9 £m 1.6 £m 6.4 Sept
Slide 7: Tax, Earnings and Dividends
Tax, Earnings and Dividends Underlying1,2 Reported2 Diluted underlying EPS (pence) Sept Sept Mar Sept Sept Mar 2015 2014 2015 2015 2014 2015 £m £m £m £m £m £m 21.1 11.8 8.1 Profit before Tax 9.4 6.7 15.8 7.0 6.3 11.0 Sep-15 Sep-14 Mar-15 FY Tax charge 2.1 1.7 2.8 1.6 1.6 2.9 Dividend per share (penc
Slide 8: Cash Flow
Cash Flow Interim Interim Full Year Sept 2015 Sept 2014 Mar 2015 £m £m £m Underlying Operating Cash Flow / Underlying EBITDA Underlying EBITDA 12.8 10.4 23.0 Working Capital (0.2) 0.6 (1.5) 112% Other 0.7 0.6 1.4 104% 100% Underlying operating cash 13.3 11.6 22.9 Capital Expenditure (3.2) (3.4) (7.0
Slide 9: Balance Sheet
Balance Sheet £m Net debt (IFRS) Strong cash generation leaves net debt at £29.2m after the acquisition of Croydex 29.2 20.0 Leverage 1.1 times pro-forma underlying EBITDA 14.2 Sep-15 Sep-14 Mar-15 IAS19R deficit decreased to £42.4m (Mar 15: £44.3m) times Leverage - Net debt (IFRS) to pro-form
Slide 10: Operating Review
Operating Review Nick Kelsall Group Chief Executive 1
Slide 11: Business Overview
Business Overview UK SA Group Group Revenue (continuing operations) £ 79.9m £ 38.8m £ 118.7m Triton £ 26.2m Vado £ 15.9m Croydex £ 5.8m Johnson Tiles £ 27.9m Adhesives £ 4.1m Johnson Tiles £ 5.4m TAL £ 9.4m 1 Tile Africa £ 24.0m Revenue Growth (constant currency) +9.8% +16.9% +12.0% 11
Slide 12: Triton – Resilient performance
Triton – Resilient performance Overall Revenue + 3.1% • UK + 1.9% • Exports + 10.0% UK market volumes marginally up; mixer outperforming electric Maintained high share and position as market leader Trade share gain driven by electrics Focus on mixer share gain via specification Strong pe
Slide 13: Vado – Continued growth momentum
Vado – Continued growth momentum Overall Revenue + 7.4% • UK + 16.7% • Exports - 9.6% Continued strong performance in UK retail and trade: • Further brand traction in retail and additional resource 13 • Robust specification pipeline (Cala and Miller Homes wins) Actions taken to improve Middle
Slide 14: Croydex – A complementary fit for Norcros
Croydex – A complementary fit for Norcros Acquired June 2015 Leading Market Position Innovative products Full category management Unique coverage of accessories market Products Bathroom accessories and cabinets Shower rods and rails Toilet seats Channels Retail DIY Builders merchants
Slide 15: Croydex – Performance in line with expectations
Croydex – Performance in line with expectations Overall Revenue £5.8m (3 months to September 2015) Robust financial performance post acquisition Growth momentum being maintained Business as usual – seamless integration Synergies being initiated; customers/specification/sourcing Potential
Slide 16: Johnson Tiles – Significant improvement in performance
Johnson Tiles – Significant improvement in performance Overall Revenue - 4.5% • UK - 2.7% • Exports - 16.7% UK market; trade continuing to strongly outperform retail UK trade +5.0%; growth in housebuilder and private specification UK retail -9.6%; key account performance and reduction in low
Slide 17: Norcros Adhesives – Growth momentum sustained
Norcros Adhesives – Growth momentum sustained Overall Revenue + 20.6% Increase in share – good performance in UK retail and trade Further traction into targeted key accounts Focus on specification and new contract resource in H2 Fixer training school to be opened Q3 New product developme
Slide 18: UK Operations – Strong progress across all businesses
UK Operations – Strong progress across all businesses Revenue Underlying Operating Profit £149.1m £13.8m 30.5 6.8 £79.9m £72.8m 59.7 18 £8.0m 5.8 15.9 14.8 £6.4m 4.1 3.4 27.9 29.2 52.1 26.2 25.4 1 Interim Sept 15 Interim Sept 14 Full Year Mar 15 Interim Sept 15 Interim Sept 14 Full Year Mar 15 Trito
Slide 19: JTSA – Share gain and sustained operational improvement
JTSA – Share gain and sustained operational improvement Overall revenue + 12.5% at cc Further improvement in performance – business in profit Good growth in all market sectors Growth driven through NPD – additional sizes and inkjet ranges New stand-by generators installed to reduce impact
Slide 20: TAL – Strong progress driven by share gain
TAL – Strong progress driven by share gain Overall revenue + 20.5% at cc Share gain in domestic market + exports Growth in tile adhesive driven by focus on rapid set products 20 Building and construction products performed well - waterproofing and flooring products Additional growth opport
Slide 21: Tile Africa – Share gain driven by improved store offering
Tile Africa – Share gain driven by improved store offering Overall revenue + 16.5% at cc In stock and on display ratio now 90%; key driver Further progress made on range consistency and bespoke 21 store offering Continued success of “lifestyle” store upgrade model New CX store format (7 st
Slide 22: SA Operations – Strong progress across all businesses
SA Operations – Strong progress across all businesses Revenue1 Underlying Operating Profit £64.7m £3.2m 9.2 15.2 £38.8m 5.4 £33.2m £1.9m 22 4.8 9.4 7.8 40.3 £1.0m 24.0 20.6 Interim Sept 15 Interim Sept 14 Full Year Mar 15 Interim Sept 15 Interim Sept 14 Full Year Mar 15 1 Tile Africa TAL Johnson Til
Slide 23: Group Outlook & Strategy
Group Outlook & Strategy Nick Kelsall Group Chief Executive 1
Slide 24: Lead UK indicators - Cautious optimism
Lead UK indicators - Cautious optimism Mortgage Loan Approvals (seasonally adjusted) 80,000 60,000 Loan approvals showing 40,000 some upturn but inconsistent 20,000 0 Aug-12 Aug-13 Aug-14 Aug-15 Source: HM Treasury Housing Transactions 160,000 120,000 Transactions relatively flat. Government housing
Slide 25: Lead SA indicators – Positive medium term outlook
Lead SA indicators – Positive medium term outlook GDP (% change) 4 3 GDP downgraded in the short term due to labour, political and energy uncertainty. 2 Medium term growth forecasts above 1 UK/Eurozone 0 Source: Investec 2012 2013 2014 2015 2016 2017 2018 Hardware/Paint/Glass Retail Sales (% change)
Slide 26: Group Strategy – Key Targets Retained
Group Strategy – Key Targets Retained Growth Target Organic Acquisition • Double revenues to £420m by 2018 Returns Target • Organic and acquisition • Market leading positions • Complementary • Maintain 50% revenue derived industry segments/ 26 geographical • Sustainable pre-tax from overseas • Stron
Slide 27: Group Strategy – Continuing Progress
Group Strategy – Continuing Progress Clear, consistent, and focused growth strategy Croydex acquisition completed + integrated Acquisition pipeline is well developed and expanding Trade and specification remains a key focus Targeted geographical expansion opportunities 1 Maintaining stro
Slide 28: Summary
Summary Clear & Focused Growth Strategy Medium Term Indicators Favourable Focused Pipeline of 28 Acquisition Organic Opportunities Growth Opportunities Solid H1 Results 1
Slide 29: Appendices
Appendices 1
Slide 30: Exceptional items and acquisition related costs
Exceptional items and acquisition related costs Sept Sept March 2015 2014 2015 £m £m £m Exceptional operating items Highgate Park - dispute settlement 2.0 - - Highgate Park - legal costs (0.1) (0.1) (0.3) Pension settlement gain 0.4 - 1.7 Exit of Sheffield lease - - (2.5) Loss on disposal of freehol
Slide 31: Net debt reconciliation
Net debt reconciliation Sept Sept March 2015 2014 2015 £m £m £m Net debt (IFRS) – opening (14.2) (26.9) (26.9) Net cash flow (14.1) 6.9 12.7 Other non cash movements (0.1) 0.1 0.1 Foreign exchange (0.8) (0.1) (0.1) Net debt (IFRS) - closing (29.2) (20.0) (14.2) 1 31
Slide 32: UK Pension Scheme
UK Pension Scheme Super-mature scheme UK Pension IAS 19R Assets & Liabilities • 8,266 members. 65% pensioners with average age 77 500 • Annual pensioner payroll near peak at c. £20m per annum 450 Actions taken to date 400 • April 2013 - scheme closed to new entrants and future accrual 350 • 2014