Slide 1: Norcros plc Preliminary Results Year ended 31st March 2013
Norcros plc Preliminary Results Year ended 31st March 2013
Slide 2: Introduction
Introduction Martin Towers Chairman
Slide 3: 2013 Highlights
2013 Highlights Page 3 Fourth consecutive year of revenue and profit growth Revenue1 South Africa returned to profit £210.7m +10.2% Strategy Review • Faster and focused growth strategy Underlying2 operating profit • Organic growth and by acquisition • New strategic targets £13.0m +7.4% Acqui
Slide 4: Board Changes
Board Changes Page 4 Retirees from the Board at the AGM on 24 July 2013 • John Brown, Senior Independent Director and Chairman of the Audit Committee • David Hamilton, Executive Director and Company Secretary New appointments • David McKeith to join the Board at AGM as Senior Independent Directo
Slide 5: Financial Review
Financial Review Martin Payne Group Finance Director
Slide 6: Income Statement
Income Statement Page 6 2013 2012 +/- +/- £m £m Reported Constant Currency Revenue 210.7 200.3 +5.2% +10.2% Underlying1 operating profit 13.0 12.1 +7.4% +7.3% Margin 6.2% 6.0% Finance charges – cash (1.3) (1.4) - 7.1% Underlying1 PBT 11.7 10.7 +9.3% Exceptional operating items (4.4) - Exceptional fi
Slide 7: Income Statement – Key Bridges
Income Statement – Key Bridges Page 7 Revenue Underlying operating profit 0.8 0.0 1.5 0.0 (0.6) 12.6 £m 13.0 £m (9.0) 210.7 12.1 6.0 200.3 2012 Currency UK SA RoW 2013 2012 Currency UK SA RoW 2013 Page 7
Slide 8: Revenue Analysis – broken down by business unit
Revenue Analysis – broken down by business unit Page 8 UK South Africa £116.8m £122.8m £74.0m £77.6m 4.4 4.1 £65.0m 8.2 11.3 7.2 67.3 18.1 19.4 59.1 15.9 47.7 46.9 41.9 53.6 51.1 2012 2013 2012 2012 2013 reported constant currency Triton Johnson Tiles Norcros Adhesives Tile Africa TAL Johnson Tiles
Slide 9: Tax, Earnings & Dividends
Tax, Earnings & Dividends Page 9 Underlying Reported Diluted underlying EPS (pence) 2013 2012 2013 2012 £m £m £m £m Profit before Tax 11.7 10.7 10.0 9.4 1.9 1.9 Tax (charge)/credit (0.7) 0.4 (0.9) - 1.6 Earnings 11.0 11.1 9.1 9.4 2011 2012 2013 Effective Tax rate 6.0% n/a 9.0% n/a Dividend per share
Slide 10: Cash Flow
Cash Flow 2013 2012 Page 10 £m £m EBITDA pre exceptional items 19.2 18.4 Working capital increase £7.7m Working capital (7.7) (0.4) UK, Other (0.7) 0.1 £7.1 Underlying Operating cash flow 10.8 18.1 Capex (6.7) (6.7) Proceeds from property disposal 2.5 - SA, Pension deficit recovery (2.0) (1.0) £0.4
Slide 11: Balance Sheet
Balance Sheet Page 11 Net debt includes £10.6m net cash effect of Vado £m Net debt (IFRS) acquisition Leverage 1.4x EBITDA on a proforma basis 30.7 17.8 Property 10.6 • Planning consent obtained for Highgate Park / Morrisons project in Tunstall 2011 2012 2013 • Early discussions on remaining s
Slide 12: UK Pension Scheme
UK Pension Scheme Scheme closed to new entrants and future accrual Page 12 from April 13 - stops future build up of liabilities UK Pension IAS 19 Assets & Liabilities Mature Scheme; 10,155 members 500 • Pensioners (62%), Deferred (38%) • Average age of pensioners is 76 400 Assets up 6% at £390
Slide 13: Operating Review
Page 13 Operating Review Nick Kelsall Group Chief Executive Page 13
Slide 14: Business Overview
Business Overview Focused supplier of high quality and innovative showers, taps, bathroom Page 14 accessories, tiles and adhesives Market leader in Showers Market leading manufacturer of Tile and Building 29 retail stores and 6 Adhesives franchises selling Tiles, Sanitary ware, Showers and Adhesives
Slide 15: UK Operations – Strong performance in challenging markets
UK Operations – Strong performance in challenging markets Page 15 Overall revenues : -4.6% • UK -3.5%, Exports: -10.9% • Stronger H2 performance v H1 • UK market share gain Triton volume ahead +1.6%; UK market volume decline –c5.0% Increased market share in Retail due to strong performance in
Slide 16: UK Operations – Strong performance in challenging markets
UK Operations – Strong performance in challenging markets Page 16 Overall revenues : +13.8% • UK: +16.8%, Exports: -9.3% Strong revenue growth despite market decline of c6%; markets more challenging in H2 Strong market share gains in UK retail largely driven by B&Q new tiling concept Trade p
Slide 17: UK Operations – Strong performance in challenging markets
UK Operations – Strong performance in challenging markets Page 17 Overall revenues : +7.1% • Second half gain of new accounts • Screwfix growth • Gains in specification • Progress in distributor accounts • Targeting new accounts following the withdrawal of competitor Ready Mix Adhesive Plant, Tuns
Slide 18: UK Operations – Strong performance in challenging markets
UK Operations – Strong performance in challenging markets Page 18 Revenue Underlying operating profit £122.8m 14.0 12.0% £114.0m £116.8m +5.1% 4.4 3.5 4.1 12.0 10.0% 10.0 67.3 8.0% 55.4 59.1 8.0 £m 6.0% 6.0 4.0% 4.0 55.1 53.6 51.1 2.0 2.0% 0.0 0.0% 2011 2012 2013 2011 2012 2013 Profit 11.6 12.5 11.9
Slide 19: South Africa – Revenue and market share growth driven by sector focus
South Africa – Revenue and market share growth driven by sector focus Page 19 Constant currency revenues +56.9% Growth in independent market in South Africa and exports Operating loss significantly reduced New sorting line, SA • New sorting lines installed without disruption • Significant impr
Slide 20: South Africa – Revenue and market share growth driven by sector focus
South Africa – Revenue and market share growth driven by sector focus Page 20 Revenue +41% higher on a like-for-like basis • Strong growth in the independent South African market • Good performance in export markets in Southern and Eastern Africa Exited lower margin small scale industrial adhesi
Slide 21: South Africa – Revenue and market share growth driven by sector focus
South Africa – Revenue and market share growth driven by sector focus Page 21 Constant currency revenues +11.7% Increased focus on imports to expand breadth of product offer New Tile Africa Klerksdorp Store, SA Investment in MIS to improve stock planning 21 stores now upgraded to the Lifesty
Slide 22: South Africa – Strong revenue growth & return to profit
South Africa – Strong revenue growth & return to profit Page 22 Revenue1 Underlying operating profit £77.6m 1.5 1.5% £65.0m +19.3% 11.3 £60.4m 1.0 1.0% 7.2 5.5 19.4 14.2 15.9 0.5 0.5% £m 0.0 0.0% 46.9 40.7 41.9 (0.5) (0.5%) (1.0) (1.0%) 2011 2012 2013 2011 2012 2013 Profit 0.2 (0.5) 1.0 Tile Africa
Slide 23: Group Strategy
Group Strategy Page 23 Nick Kelsall Group Chief Executive
Slide 24: Group Strategy – Strategy updated following comprehensive review
Group Strategy – Strategy updated following comprehensive review Page 24 Pursue faster & focused growth strategy to scale up size of Group organically and by acquisition Acquisitions to focus on complementary market/industry segments with attractive returns on capital Acquisition of Vado in Ma
Slide 25: Group Strategy – UK
Group Strategy – Strategy updated following comprehensive review UK Page 25 Established market leading businesses with strong brands • Triton – No 1 in showers • Johnson Tiles – No 1 supplier of ceramic and porcelain tiles • Vado – global supplier of bathroom controls including taps, showers, acce
Slide 26: Group Strategy – South Africa
Group Strategy – Strategy updated following comprehensive review South Africa Page 26 Capitalise on strong market positions in South Africa (established 1952) and growing presence in sub-Saharan Africa Leading market positions and strong brands in South Africa • No 1 in Ceramic Tile Adhesives –
Slide 27: Acquisition of Vado has compelling financial and strategic rationale
Acquisition of Vado has compelling financial and strategic rationale Page 27 Leading manufacturer and distributor of taps, mixer showers and bathroom accessories In Y/E 31st December 2012 revenue of £25.6m and EBITDA of £2.5m 16% CAGR in sales over the last 3 years Broad, well established cu
Slide 28: Acquisition of Vado has compelling financial and strategic rationale
Acquisition of Vado has compelling financial and strategic rationale Page 28 Acquisition price was attractive and the transaction earnings enhancing immediately Business operates in a sweet spot area for the Group in “bathroom controls” • UK market valued at £600m • Worldwide market £10bn • Oppo
Slide 29: Summary and Outlook
Summary and Outlook Page 29 Final dividend Strong trading increased by 8.9% to performance in 0.305p per share challenging markets Soweto Theatre, South Africa Strong financial position maintained Four Points Sheraton Dubai Hilton Park Lane, London The Shard, London Revenue and underlying New strate
Slide 30: Appendices
Appendices NOFCrOS page 30
Slide 31: Analysis of Exceptional Items
Analysis of Exceptional Items Page 31 2013 2012 £m £m Exceptional operating items Increase in legacy leasehold provision (3.0) - Write back of impairment of investment and associated costs in Greek associate - 0.5 Business unit restructuring (0.2) (0.5) Disposal of Nortec in TAL business (0.3) - VAD
Slide 32: Legacy Leasehold Obligations
Legacy Leasehold Obligations Page 32 Swindon – Light Industrial Units • Lease expiry 2014 • Occupied to lease expiry • Current cash shortfall against rental income c. £0.5m p.a. Swindon – Warehousing / Distribution Unit • Lease expiry 2022 • Vacant • Cash shortfall c. £1.0m p.a. Sheffield - Wa
Slide 33: Net Debt Reconciliation
Net Debt Reconciliation Page 33 2012 2011 2013 2012 £m £m £m £m Net debt (IFRS) – opening (17.8) (10.6) Net cash flow (12.8) (5.7) Other non cash movements - (1.1) Foreign exchange & other (0.1) (0.4) Net debt (IFRS) – closing (30.7) (17.8) Page 33