Slide 1: 2021 Full Year Results
LUCECO BRINGING POWER TO LIFE am 2021 FULL YEAR RESULTS MARCH 2022
Slide 2: Agenda
LUCECO Agenda Highlights Financial Review Business Review Outlook Q&A John Hornby Matt Webb CEO CFO Luceco ple 2021 Full Year Results Presentation 2
Slide 3: Highlights
Highlights * Strong financial performance, with growth outperforming the market - Revenue +30%, Adjusted Operating Profit +30%, with profit more than doubled in two years - Total dividend per share 8.1p, +31% * Business model enabled market outperformance and profitable growth: - Vertical integratio
Slide 4: Financial Review
LUCECO FINANCIAL REVIEW MATT WEBB CFO mE LB atest. in) ga w OO) 1 WE Fao GBT SF, ae Se
Slide 5: Financial highlights
LUCECO Financial highlights Adjusted Revenue Operating Profit Operating Profit £228.2m £35.3m £39.0m 2020: £176.2m 2020: £29.6m 2020: £30.0m Adjusted Operating Margin Adjusted EPS Dividend Per Share 17.1% 20.2p 8.1p 2020: 17.0% 2020: 15.5p 2020: 6.2p Luceco ple 2021 Full Year Results Presentation 5
Slide 6: Income statement
Income statement Adjusted £m 2021 2020 2019 Revenue 228.2 176.2 1721 Revenue growth % 29.5% 2.4% 5.0% Gross profit 84.7 70.2 62.3 Gross margin % 37.1% 39.8% 36.2% Overhead costs (45.7) (40.2) (44.3) Operating profit 39.0 30.0 18.0 Operating margin % 17.1% 17.0% 10.5% Net finance expense (1.6) (1.3)
Slide 7: Performance vs the market
Performance vs the market Revenue by end market 80% RMI Performance drivers +£27.5m Annualised sales value of business wins in 2021 @ 65% Residential RMI (DIY and Pro) @ 15% Non-Residential RMI © 10% Infrastructure @ 10% New construction +16% Improvement in On Time In Full Delivery % Luceco ple 2021
Slide 8: Performance by segment
Performance by segment Strong growth in each segment Wiring Accessories LED Lighting Portable Power Revenue growth +29% Profit growth +27% 46% 28% 26% Revenue growth +28% Profit growth +21% Revenue growth +33% Profit growth +52% of Group revenue of Group revenue of Group revenue #2 in UK Top 10 in U
Slide 9: Cost inflation
Cost inflation Inflation by type - annualised impact @ £7.0m Freight £25m @ £5.0m Copper © £4.3m Other commodities @ £8.7m FX Annualised impact Inflation by year £25.0m @ 2023+ @ 2022 @ 2021 Cost inflation Luceco ple 2021 Full Year Results Presentation * Estimated impact of annualised cost inflation
Slide 10: Profit bridge
Profit bridge Adjusted Operating Profit (£m) Manufacturing Acquisition leverage on efficiency gain 10.0: i ) Currency 19 Operating movements Input cost (3.6) sales growth inflation Selling price increases 2020 Luceco ple 2021 Full Year Results Presentation Total input cost headwind of £13.6m £7.0m p
Slide 11: Inflation outlook
Inflation outlook USD/RMB (2021: £80m income - hedged) RMB 7.40 7.20 7.00 2020 average 15 lo Ba Serees C PrnSeSSSSSSSSSET SOSSSSS_ SSS COTSSSSSESSOSSSSSSSSS. TOSSSSELOSSSSSSLOOSSST FY17 - FY19 6.60 average Gedo. retttettelesesNeosggfecccssssseneeseee soacgge he: 6.20 6.00 T T T T T 2017 2018 2019 20
Slide 12: Overhead evolution during COVID
Overhead evolution during COVID Revenue growth (£m) Overheads (£m) 224.6 Windsor (0.3) | Organic 44.0 DW change Windsor Organic change 2019 2021 2021 2019 2021 2021 excluding Total excluding Total DW Windsor DW Windsor 2021 Adjustments Total Expected Profit cash annual . pa 4 P £m impact impact _ be
Slide 13: Cash flow and debt leverage
Cash flow and debt leverage Adjusted Free Cash Flow by half year £m 15.4% 14.2% 12.0% £12m Extra . inventory Margin, 6.2% H1 H2 H1 H2 H1 H2 2019 2019 2020 2020 2021 2021 Working capital management during COVID @ 2021 @ 2020 © 2019 Average supplier lead time (days) Inventory cover (days) Debtor days
Slide 14: Balance sheet
Balance sheet £m 2021 2020 Change : | co. | Intangible assets 32.9 21.5 53.0% . tent orking coblalli byes ne Duin Financial assets held for trading 4.3 1.4 207.1% ~ Maintained customer service Tangible assets 29.0 20.5 41.5% - Mitigated inflation Other items aa 05 340.0% + Return on capital invested
Slide 15: Performance vs targets
Performance vs targets 2019 2020 2021 New Component Metric Target! Results Results Results Target? Revenue Total revenue growth 5 to 10% 5.0% 2.4% 29.5% >5% Profit Adjusted Operating Margin % 15 to 20% 10.5% 17.0% 17.1% >15% Cash Adjusted Operating Cash Conversion % >100% 151.1% 113.7% 89.7% >100% A
Slide 16: Long-term track record
Long-term track record @ Revenue £m 228.2 O Adjusted Operating Profit £m 2009 = 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Luceco ple 2021 Full Year Results Presentation 16
Slide 17: Business Review
LUCECO BUSINESS REVIEW JOHN HORNBY CEO
Slide 18: Our investment case
Our investment case Our investment case Our strategy We have an advantaged business model We deliver consistent and compelling financial outcomes Luceco ple 2021 Full Year Results Presentation 18
Slide 19: We operate in attractive markets
LUCECO We operate in attractive markets Size Attractiveness Increasing attractiveness Attractiveness drivers Electrical + Premium for ease of installation products * Technology changes (eg Smart Home & EV) Electrical + Regulatory change construction + Decarbonisation of energy * Ageing housing stock
Slide 20: Grow strategy - seizing our market opportunity
LUCECO Grow strategy - seizing our market opportunity New products to existing customers New sales to 2014 customers: +£26m +£20m LED Circuit Lighting Protection +£16m 50% USB % of revenue from Sockets products launched in last 3 years £500M inarvct by 2025 Luceco ple 2021 Full Year Results Presenta
Slide 21: Grow strategy - acquisition of DW Windsor
LUCECO Grow strategy - acquisition of DW Windsor Luceco ple 2021 Full Year Results Presentation DW Windsor acquired in October 2021 £16.3m paid on cash and debt-free basis, 7.0x EBITDA Pre-acquisition performance: — Revenue of £23.9m - Operating profit of £1.9m Designer and manufacturer of specified
Slide 22: Our investment case
Our investment case Our investment case Our strategy We operate in attractive markets We deliver consistent and compelling financial outcomes Luceco ple 2021 Full Year Results Presentation 22
Slide 23: We have an advantaged business model
02 We have an advantaged business model Actions taken to maintain advantage in 2021 Innovate DESIGN > 4. FULFIL %,scoupa sustain LUCECO 1 ACADEMY Luceco ple 2021 Full Year Results Presentation 23
Slide 24: Advantaged business model continued: Sustainability
LUCECO We have an advantaged business model continued Sustainability Our opportunity Our response Carbon neutral operations in 2021 % of revenue from customers with published climate goals £500bn Cost of decarbonizing Will join SBTi 2022 UK residential energy £500m £100m Expected size of the of reve
Slide 25: Our investment case
Our investment case Our investment case Our strategy We operate in attractive markets We have an advantaged business model Luceco ple 2021 Full Year Results Presentation 25
Slide 26: Outlook
LUCECO OUTLOOK JOHN HORNBY CEO
Slide 27: 2022 outlook
LUCECO 2022 outlook * 2021 saw outstanding progress: + Expect H1 2022 revenue to be broadly in line with - Testament to our business model and culture H1 2021 - Generally favourable market conditions * Recent geopolitical events may make progress harder during the year * Creates a challenging compar
Slide 28: Q&A
Slide 29: Appendix
Slide 30: Company overview
Company overview Our purpose Sur strategy To help people harness power . . . We operate in Grow Customer-driven sustainably in everyday life mttractivelmarets Innovate Team-focused Q2 We have an advantaged What we sell business model Sustain Bold and innovative + Designer and manufacturer of 03 We d
Slide 31: What we sell - Wiring accessories, British General
What we sell Wiring accessories - British General UK market size Established 1941 UK market position / approx marketshare #2 /15% Revenue as % of Group total’ 46% Revenue 3-year CAGR %& 17% Operating margin! 28% Product categories Switches and sockets, Circuit protection, Weatherproof, Junction boxe
Slide 32: What we sell - Commercial power, Nexus
What we sell Commercial power - Nexus UK market size c.£200 m Established 2021 UK market position / approx marketshare _ Recently established Product categories Decorative power & data modules, Cable management, Cables and connectors, Power distribution, Energy & user data management, Ergonomic acce
Slide 33: What we sell - LED lighting, Luceco
What we sell LED lighting - Luceco 1, 2021 2, 2018 to 2021 in constant currency 3. For total LED Lighting segment (Luceco, Kingfisher Lighting and DW Windsor) Luceco ple 2021 Full Year Results Presentation UK market size c£700m Established 2013 UK market position / approx marketshare Top 10 /4% Reve
Slide 34: What we sell - LED lighting, Kingfisher
LUCECO What we sell LED lighting - Kingfisher UK market size c £100m Established 1988 UK market position / approx market share UK #4 /15% Revenue as % of Group total! 28% Revenue 3-year CAGR%?* 6% (4% organic) Operating margin’? 5% Product categories Private realm exterior lighting 5 oo to 2021 in c
Slide 35: What we sell - LED lighting, DW Windsor
LUCECO What we sell LED lighting - DW Windsor UK market size c £300m Established 1975 UK market position / approx market share+ UK #4 /13% Revenue as % of Group total! 28% Revenue 3-year CAGR %&5 6% (4% organic) Operating margin’ 5% Product categories Public realm exterior lighting 1. 2021 vy DW 2.
Slide 36: What we sell - Portable Power, Masterplug
What we sell Portable Power - Masterplug LUCECO UK market size c £100m Established 1988 UK market position / approx market share UK #1/ 40% Revenue as % of Group total’ 26% Revenue 3-year CAGR %& 9% Operating margin! 11% Product categories Extension leads, Cable reels, Adaptors and accessories, EV C
Slide 37: Wiring Accessories
Wiring Accessories Growth Growth Adjusted £m 2021 2020 vs 2020 vs 2019 Revenue 104.5 81.3 28.5% 48.1% Contribution profit 36.3 29.5 23.1% 85.2% Contribution margin % 34.7% 36.3% (1.6ppts) 6.7ppts Operating profit 29.2 23.0 27.0% 129.9% Operating margin % 27.9% 28.3% (O.4ppts) 9.8ppts Revenue Growth
Slide 38: LED Lighting
LED Lighting Growth Growth Adjusted £m 2021 2020 vs 2020 vs 2019 Revenue 63.2 49.5 27.7% 16.6% Contribution profit 7.4 5.7 29.8% 45.1% Contribution margin % 11.7% 11.5% O.2ppts 2.3pts Operating profit 3.4 2.8 21.4% 183.3% Operating margin % 5.4% 5.7% (O.3ppts) 3.2ppts Revenue Growth Analysis % of se
Slide 39: Portable Power
Portable Power Growth Growth Adjusted £m 2021 2020 vs 2020 vs 2019 * Strong progress during COVID driven by Revenue 60.5 45.4 33.3% 26.6% ten retail business wins in Europe and Contribution profit 10.3 75 37.3% 18.4% a . . . . Contribution margin % 17.0% 16.5% O.5ppts (1.2ppts) . ae SSCS ST Operatin
Slide 40: Who we sell to
Who we sell to Sales channel Description Example customers Retail Hybrid Professional Wholesale Professional Projects DIY chains amazon Pure play online Wickes Sainsburys “SF Retail Grocers HORNBACH)/ Ma )u:cbid , castorama~= Chains selling to both professionals and =, consumers SCREV: 1X oorstanion
Slide 41: Who we sell to - sales by channel
Who we sell to Product segmental sales by sales channel (as % of total) - 2021 2% 10% 25% 74% 35% 21% 19% Wiring LED Portable Total Accessories Lighting Power Luceco ple 2021 Full Year Results Presentation © Professional Products @ Professional Wholesale @ Hybrid @ Retail 4
Slide 42: Where we operate
Where we operate Distribution Sourcing to market 9 5% 1% © Europe @ Sold in end market @ UK @ Collected in China @ China- OEM @ China - manufactured 49% —) 45% a) Selling markets 5% 35, 2% @ Americas @ Asia Pacific @ Middle East and Africa © Europe @ UK Group revenue Group revenue by product origin
Slide 43: Three reasons to invest: attractive markets
Three reasons to invest LUCECO We operate in attractive markets Strong positions... UK market position Segment Wiring Accessories LED Lighting Portable Power ...in attractive markets Increasing attractiveness Attractiveness drivers * Premium for ease of installation products * Technology changes (Sm
Slide 44: Three reasons to invest: advantaged business model
Three reasons to invest 02 We have an advantaged business model + Agile supply chain + High inventory availability 4 FULFIL in-country + Best-in-class warehouse IT + Able to offer products as part of design solution Luceco ple 2021 Full Year Results Presentation All products designed in-house * c. 8
Slide 45: Three reasons to invest: consistent financial outcomes
Three reasons to invest O03 We deliver consistent and compelling financial outcomes 2019 2020 2021 New Component Metric Target’ Results Results Results Target? Revenue Total revenue growth 5 to 10% 5.0% 2.4% 29.5% >5% Profit Adjusted Operating Margin % 15 to 20% 10.5% 17.0% 17.1% >15% Cash Adjusted
Slide 46: Group history
Group history The group has developed through business combinations and organic expansion into new products and territories GENERAL Kingfisher - , a Jiaxing exp Lighting British General ong to 52,500m? wiring Acquisition of Sales offi Kingfisher Spain and HK Lighting Masterplug Transition to d Sales
Slide 47: Capital allocation policy
Capital allocation policy 01 Dividends 40-60% payout 02 Capex 3-4% of annual revenue Progressive Product development Manufacturing capacity <3 year payback Conservative leverage 1.0x - 2.0x Adjusted EBITDA M&A DOC IES” O4 Buybacks / Special Dividends Product adjacency Customer acquisition Clear syne
Slide 48: 2013 to 2021 financials
2013 to 2021 financials Adjusted metrics Income Statement £m 2013 2014 2015 2016 2017 2018 2019 2020 2021 Revenue 65.6 82.3 103.1 133.7 167.6 163.9 172.1 176.2 228.2 Growth % 25.5% 25.3% 29.7% 25.4% (2.2%) 5.0% 2.4% 29.5% Gross Profit 18.3 25.1 33.8 40.5 48.4 50.6 62.3 70.2 84.7 Gross Margin % 27.9%
Slide 49: 2013 to 2021 financials continued
2013 to 2021 financials continued Adjusted metrics Balance Sheet £m 2013 2014 2015 2016 2017 2018 2019 2020 2021 Fixed assets 22.4 24.6 27.5 33.5 47.2 448 42.6 43.9 68.4 Inventory 14.0 23.8 26.2 35.4 44.2 32.8 32.2 37.2 Sy) Trade receivables 10.5 71 20.4 26.5 33.4 39.5 42.8 70.1 67.9 Trade payables
Slide 50: 2013 to 2021 financials continued
2013 to 2021 financials continued Adjusted metrics Cash flow statement £m 2013 2014 2015 2016 2017 2018 2019 2020 2021 Operating Profit 5.9 8.4 1S 14.5 14.7 8.5 18.0 30.0 39.0 Depreciation & amortisation 14 19 26 3.2 44 6.5 7.9 61 6.7 EBITDA 7.31 0.3 14.1 17.7 19.1 15.0 25.9 36.1 45.7 Working capita
Slide 51: Disclaimer
Disclaimer This presentation and information communicated verbally to you may contain certain projections and other forward-looking statements with respect to the financial condition, results of operations, businesses and prospects of Luceco plc. These statements are based on current expectations an