Travis Perkins Plc · LSE:TPK
Travis Perkins — FY2021 Earnings Presentation
29 slides from Travis Perkins's earnings presentation, March 2022
Slide 1: Full Year Results March 2022
Full Year Results March 2022 1
Slide 2: Agenda
Agenda Full Year Results March 2022 2
Slide 3: Agenda
Agenda Full Year Results March 2022 3
Slide 4: A year of great progress, well positioned for the future
A year of great progress Well positioned for the future Teams re-energised and Deepening customer relationships empowered through digital enablement, network Group expansion and collaboration initiatives Merchants refocused simplified and driving growth and trade Elevating customer relationships foc
Slide 5: Agenda
Agenda Full Year Results March 2022 5
Slide 6: Key financial highlights
Key financial highlights Year ended 31 December 2021 Year-on-year 2021 2020* (£m unless otherwise stated) change Revenue 4,587 3,698 24.0% Adjusted EBITA 353 128 175.8% Adjusted earnings per share (pence) 107.3p 21.0p 411.0% Adjusted ROCE excluding property profits 12.1% 4.9% 7.2ppt Net debt / adjus
Slide 7: Strong revenue performance; 10.6% ahead of 2019
Strong revenue performance; 10.6% ahead of 2019 +10.6% Strong revenue performance enabled by management actions and rapid recovery in key markets Upside versus 2019 driven by volume (+7%), pricing (+7%) and net space reduction (-3%) from 2020 restructuring Full Year Results March 2022 7
Slide 8: Volume recovery and cost discipline drive profit growth
Volume recovery and cost discipline drive profit growth Strong profit recovery with EBITA +19% vs 2019 and operating margin +60bps COGS inflation recovered through pricing activity; gross margin improvement of 110bps Operating margin improvement driven by disciplined management of overhead base Full
Slide 9: Merchanting driving growth and operating leverage
Merchanting driving growth and operating leverage Excellent performance driven by strong operational delivery underpinned by broad- based, RMI-led recovery Inflation and supply chain challenges navigated well 2021 2020 Change Improvement of 60bps in operating margin and 3.2ppt in ROCE vs 2019 driven
Slide 10: Toolstation - continued outperformance
Toolstation - continued outperformance 2021 2020 Change UK revenues up 19% vs PY and 54% ahead of 2019 Total revenue £761m £633m 20.2% UK operating margin progressed to 6.3%, in Like-for-like growth 12.3% 22.2% line with management expectations Adjusted operating profit* £22m £8m 175.0% UK sales mix
Slide 11: Working capital rebuilt as trading recovered
Working capital rebuilt as trading recovered Free cash flow generation of £65m as working capital rebuilt to reflect trading recovery Working capital increase of £152m driven by increase in debtor book as sales recovered. Credit continues to be well managed with record low overdues as % of credit sa
Slide 12: Disciplined capital allocation
Disciplined capital allocation Strategic capex driven by Toolstation expansion, £m 2021 2020 TPGM branch investment and purchase of tool Strategic 66 42 hire assets Maintenance 20 34 Maintenance capex lower due to redeployment IT 9 11 of vehicles from 2020 restructuring. Expected to Base capital exp
Slide 13: Strong balance sheet provides capacity for both future investment and returns
Strong balance sheet provides capacity for both future investment and returns Demerger of Wickes and disposal of P&H has transformed the balance sheet £m 31 Dec 2019 31 Dec 2021 Medium term leverage target of 1.5 - 2.0x Covenant Net Debt 344 87 Year end leverage of 1.2x (c. 1.5x pro-forma IFRS16 Lea
Slide 14: Guidance for 2022
Guidance for 2022 Outlook: Outlook Lead indicators support continued strength in RMI and housebuilding Commercial recovering well; infrastructure outlook positive Adept at recovering input cost inflation and managing availability Positive start to the new year; confident of making further progress i
Slide 15: Agenda
Agenda Full Year Results March 2022 15
Slide 16: The Group is well positioned for the future
The Group is well positioned for the future Requirement to decarbonise UK built environment creates end market opportunities Need for new and affordable housing Investment required in retrofitting existing residential and commercial buildings Need to modernise public sector assets Policy environment
Slide 17: Focus is on customer relationships
Focus is on customer relationships Elevating relationships by the addition of services and new areas of value add Deepening relationships to earn a greater share of spend Full Year Results March 2022 17
Slide 18: Enhancing our branch experiences
Enhancing our branch experiences Deepening relationships Opening “destination” Merchant branches Offering integrated services with tool hire, Benchmarx and TF Solutions Toolstation rollout continues at pace with 117 new branches. Now 653 branches across UK and Europe Stronger Toolstation proposition
Slide 19: Best in class digital experience
Best in class digital experience Deepening relationships Improved digital channels gaining share of wallet; AOV +25% Digital onboarding for Toolstation trade credit 1 hour heavyside Click & Collect offer through TP App / website Digitising the branch experience for both customers and colleagues Opti
Slide 20: Building long term partnerships with added value services
Building long term partnerships with added Elevating relationships value services Combining leading branch network and technology to create local fulfilment hubs Providing training on low carbon materials and alternative heating systems to support decarbonisation Optimising use of mobile technology
Slide 21: Delivering new capabilities with Staircraft
Delivering new capabilities with Staircraft Elevating relationships Acquisition completed Q4 Design led timber engineering capability for complex / structural elements Applying AI to new builds Supplying five major housebuilders Reducing cost, waste and complexity “Modernising construction through d
Slide 22: Excellent progress on achieving our purpose
Excellent progress on achieving our purpose Scope 1 & 2 and new Scope 3 carbon targets were approved by “SBTi” as being in line with a 1.5˚ pathway Recruited over 400 under-25 colleagues via the Kickstart scheme Delivered nearly 1,000 apprenticeships; 340 with new starters Upgraded and progressive f
Slide 23: Repeatable model focused on delivering sustainable TSR
Repeatable model focused on delivering sustainable TSR Merchanting leadership and Toolstation expansion Attractive earnings growth driving above market growth Strong cash conversion from disciplined Robust working capital Ordinary dividend balance sheet management (30 – 40% FY adjusted earnings) and
Slide 24: We're here to help build better communities and enrich lives
We’re here to help build better communities and enrich lives Purpose We’re here to help build better communities and enrich lives We have a differentiated Ambition and clear purpose with a Leading Partner to the Construction Industry stretching ambition Collaborating to add value Our combination of
Slide 25: Agenda
Agenda Full Year Results March 2022 25
Slide 26: I - Definitions
I - Definitions Metric Definition Operating profit Profit before tax, financing charges and income Earning per share (“EPS”) Ratio of net profit after taxation adjusted for minority interests to weighted number of ordinary shares outstanding Adjusted operating profit / Operating profit / EPS before
Slide 27: II - Sales drivers by reporting segment
II - Sales drivers by reporting segment Like for like revenue Total revenue Total revenue Merchanting Toolstation Group 2021 vs 2020 2021 vs 2019 2021 vs 2020 2021 vs 2019 Q1 15.7% 5.8% 5.7% (2.6)% Q2 94.1% 16.1% 87.8% 6.4% Volume 18.9% 9.2% 17.2% H1 47.3% 11.0% 37.5% 1.9% Merchanting Q3 15.2% 11.7%
Slide 28: III - Branch Numbers
III - Branch Numbers 1 Jan 21 Openings Closures 31 Dec 21 Travis Perkins 556 7 (6) 557 Benchmarx 150 5 (4) 151 Keyline 44 (1) 43 CCF 35 3 (1) 37 BSS & TF Solutions 61 5 66 Merchanting 846 20 (12) 854 Toolstation 460 77 (7) 530 Toolstation Europe 83 40 123 Toolstation 543 117 (7) 653 Group 1,389 137
Slide 29: Investor relations contacts
Agenda Matt Worster | +44 7990 088 548 matt.worster@travisperkins.co.uk Heinrich Richter | +44 7392 125 417 heinrich.richter2@travisperkins.co.uk Full Year Results March 2022 29