Slide 1: Norcros plc Preliminary Results Year ended 31 March 2008
Norcros plc Preliminary Results Year ended 31 March, 2008
Slide 2: Introduction
Introduction John Brown Chairman 2
Slide 3: 2008: Highlights
2008 : Highlights Revenue growth +3.4% Solid increase in trading profit +4.6% Profit before tax and exceptionals of £13.0m Strong operating cash generation of £13.7m Continue to invest to benefit future performance Net debt tightly controlled at £46.5m Final dividend of 2.66p; total 3.22p since list
Slide 4: Financial Review
Financial Review Nick Kelsall Group Finance Director 4
Slide 5: Financial Highlights
Financial Highlights Solid revenue and profit growth – Revenue of £167.9m, +5.2% at constant currency (2007: £159.6m) – Trading profit of £16.0m, +6.7% at constant currency (2007: £15.0m) Profit before tax, exceptional and legacy PE finance costs; £14.1m Strong cash generation – Cash generated from
Slide 6: Summary Income Statement
Summary Income Statement 2008 2007 £m £m Change £m % Revenue 167.9 162.4 +5.5 +3.4 Group trading profit 16.0 15.3 +0.7 +4.6 Exceptional operating items 0.7 (1.5) Other operating income 0.1 0.3 Group operating profit 16.8 14.1 2.7 +19.1 Share of results from associates (0.2) 0.4 Net finance costs (1.
Slide 7: Revenue Growth
Revenue Growth RoW £6.4m (£5.4m) SA £53.8m Revenue growth across all segments (£51.2m) UK £107.7m (£105.8m) Underlying growth in constant currency As reported + 3.4% – UK +£1.9m; +1.8% RoW £6.4m (£5.8m) – SA +£5.8m ; +12.1% – RoW +£0.6m ; +10.3% SA £53.8m (£48.0m) UK £107.7m (£105.8m) At constant cu
Slide 8: Analysis of Revenue Growth
Analysis of Revenue Growth £167.9m +£5.5m +3.4% Price/Mix +£2.5m +1.6% £5.5m Volume +£5.8m +3.6% £162.4m £162.4m -£2.8m Currency -1.8% 2007 2008 8
Slide 9: Trading Profit Bridge
Trading Profit Bridge 0.5 (0.1) (0.3) 0.3 (0.4) £16.0m 0.9 (0.2) £15.3m UK UK £12.1m £13.7m SA £4.0m SA RoW £2.6m £(0.8)m £(0.3)m RoW FY 2007 Benefits SA SA Energy Reduction Other P&L Exchange FY 2008 of SA Expansion Store Costs RoW changes Property Disposal Losses 9
Slide 10: Summary Cash Flow
Summary Cash Flow 2008 2007 £m £m Cash generated from operations 13.7 14.1 Capex – Purchase of SA leaseholds (3.8) (1.4) Capex – other (6.6) (4.8) Net asset disposals & Div’s rec’d 0.1 0.6 Free cash flow, pre financing 3.4 8.5 Interest and tax (4.5) (7.9) Dividends paid (0.8) - Share issues 72.2 - N
Slide 11: Cash conversion
Cash conversion 2008 2007 £m £m Cash generated from operations 13.7 14.1 Trading profit 16.0 15.3 Cash conversion 86% 92% 11
Slide 12: Capex 2008
Capex 2008 RoW (£0.1m, 1%) Highlights – Purchase of SA stores previously leased - £3.8m UK (£3.1m, 30%) – Fit out costs new & refurbished SA stores – Hot melt adhesive plant commissioned in SA SA – Investment in new product tooling & efficiency (£7.2m, 69%) improvements – Powder adhesive & grout fac
Slide 13: Balance Sheet Highlights
Balance Sheet Highlights 2008 2007 £m £m Capex *1 6.6 4.5 Depreciation 5.5 5.6 Capex / Depreciation *1 1.2x 0.8x *1 Excludes strategic purchase of SA leaseholds Net bank debt (£m) 46.5 77.0 Net bank debt/ Ebitda 2.2x 3.7x Pension scheme surplus 10.4 18.3 - UK scheme remains in surplus using prudent
Slide 14: Summary
Summary Revenue growth +3.4% (+5.2% at constant currency) Increase in trading profit +4.6% (+ 6.7% at constant currency) Strong financial position £80m of committed bank facilities to 2012 Good cash generation Final dividend of 2.66p; total 3.22p for period since listing 14
Slide 15: Operating Review
Operating Review Joe Matthews Group Chief Executive 15
Slide 16: UK: Market Update
UK: Market Update Nominal Construction Output (%) Private Housing RMI Overall construction output is projected to suffer a 30.00% modest decline in 2009 New Build Private Housing Sharpest decline in new build private housing: 25.00% Total RMI – Norcros has very limited exposure to this sector Total
Slide 17: UK: Triton Showers
UK: Triton Showers End Use Application Total revenues +1.8% YoY: – H2 flat v H1 +4.0% 15% – UK +4.5%. H2 +2.2% v H1 +7.0% – Exports (mainly Ireland) -8.5% H2 -10.2% v H1 -6.8% 6% UK driven by volume growth in trade and retail 51% Overall market share increased Triton strengths provide resilience in
Slide 18: UK: Johnson Tiles and Adhesives
UK: Johnson Tiles and Adhesives Johnson Tiles growing market share: Tiles Demand – Public / Private sector specifications – DIY market 20% – House builders Total tile revenues +0.6% YoY: – H2 -1.2% v H1 +2.5% – Domestic revenues +5.8%. H2 +3.9% v H1 8% +7.9% – Exports -24.1%. H2 -28.9% v H1 -20.0% 6
Slide 19: South Africa: Market Update
South Africa: Market Update South African Tile Market v. Economic Variables SA tile market shows close correlation with GDP growth 20 Construction growth major driver South African Tile Market Growth % 15 GDP Growth (%) GDP growth slowing and uncertainty factor high: Construction Growth (%) – Intere
Slide 20: South Africa: Revenue and Profit performance
South Africa: Revenue and Profit performance Overall sterling revenues +5.1%. Constant currency +12.1%: – H2 +9.2%* v H1 +15.0%* Tile Africa revenues +11.4%*. LFL +7.3%*: – H2 +5.5%* v H1 +17.5%* LFL -2.6%* v +17.7%* Good progress, store expansion / refurbishments: – 4 New stores. Rivonia (Aug), P.
Slide 21: Growth Drivers
Growth Drivers UK SA Demographics: Real GDP growth > 4% – Population growth – Household formation Strong growth in housing and tourism and commercial development Large scale development: – Olympics, London Underground, Norcros growth Existing store refurbishment Thames Gateway New store opening prog
Slide 22: Product Development Price / Cost Initiatives
Product Development Price / Cost Initiatives Triton Triton Safeguard T100. Innovative care product (May 2008) Price increase April 2008 Inscriptions. Inspired designs. Affordable prices (May Further price increase planned October 2008 2008) Agency labour reduced Commercial Mixer Range (July 2008) On
Slide 23: Outlook
Outlook Priorities reflect tougher market outlook Decisive cost reduction and cash management Aim to continue to grow market share, reduce costs, protect margins Market leading businesses, with broad customer base Opportunities for growth: - RMI, Care and Commercial sectors, Specifications, Adhesive
Slide 24: Q&A
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