Slide 1: 2023 Full Year Results
2023 Full Year Results March 2024 www.lucecoplc.com
Slide 2: Agenda
Agenda Highlights Financial Review Business Review Outlook Q&A Note: ‘Adjusted’ has been used throughout this presentation and is defined in note 1 of the consolidated financial statements 2 Luceco plc 2023 Full Year Results Presentation
Slide 3: Highlights
Highlights Adjusted Adjusted Revenue Operating profit Operating Profit Operating Margin £209.0m £22.2m £24.0m 11.5% +1.3% +62.0% +9.1% +0.8ppts vs 2022 vs 2022 vs 2022 vs 2022 Adjusted Covenant Adjusted EPS Dividend Free Cash Flow Net Debt Ratio £18.0m 0.6x 11.1p 4.8p -£12.7m -0.2x - +0.2p vs 2022 v
Slide 4: Highlights (continued)
Highlights (continued) • Innovation and channel mix aiding growth, markets challenging: – Secured market share gains and revenue growth despite weak markets – Performance supported by our key strategic positions in Hybrid channel – Outstanding growth in our LED Lighting projects – Channel and produc
Slide 5: Financial Review
Financial Review Will Hoy CFO
Slide 6: Income statement
Income statement Adjusted £m 2023 2022 Change (%) Revenue 209.0 206.3 +1.3% • Revenue of £209.0m: Gross profit 82.3 74.3 +10.8% – 1.7% like for like growth despite challenging market conditions Gross margin % 39.4% 36.0% +3.4ppts – Hybrid and Professional projects particularly strong in the year Ove
Slide 7: Revenue bridge
Revenue bridge £m • Revenue increase of 1.3% 3.6 – Like-for-like increase of 1.7% – Acquisitions/closures change due to closure of 0.5 (1.4) Germany in 2022 Currency (5.0%) movements Acquisitions/ LFL 209.0 • Currency favourable for USD revenue in year: +0.2% closures +1.7% 206.3 (0.7%) – However, h
Slide 8: Adjusted Operating Profit bridge
Adjusted Operating Profit bridge £m • Strong underlying operating profit improvement 3.5 – Like-for-like increase of 15.9% – Driven by returning efficiency in factory and (2.1) lower material and freight costs (5.0%) 0.6 24.0 LFL • Currency headwinds in 2023 22.0 Currency Acquisitions/ +15.9% – 9.5%
Slide 9: Improving momentum in 2023
Improving momentum in 2023 2022 2023 Change 2023 v 2022 Adjusted £m H1 H2 H1 H2 H1 H2 Revenue 106.4 99.9 101.1 107.9 (5.3) +8.0 Gross profit 36.2 38.1 39.8 42.5 +3.6 +4.4 Gross margin % 34.0% 38.1% 39.4% 39.4% +5.4ppts +1.3ppts Overhead costs (24.7) (27.6) (29.0) (29.3) (4.3) (1.7) Operating profit
Slide 10: Operating segment review
Operating segment review Revenue Bridge (£m) 8.9 (2.4) • Wiring Accessories (3.8) LED – Strong growth of revenue despite market Lighting – Good operating profit drop-through from additional (1.2%) Portable revenue Power Wiring (1.8%) 209.0 Accessories 206.3 • LED +4.3% – LED lighting revenue in decl
Slide 11: Free Cash and Covenant Net Debt
Free Cash and Covenant Net Debt Working capital management Covenant Net Debt / (Cash) (£m) 147 140 FY 2023 Excluding Sync EV 132 56.6 FY 2022 Sync EV purchase 112 112 1.3x 47.5 40.8 92 FY 2021 37.2 81 81 76 77 0.7x 37.6 Covenant 32.2 FY 2020 0.8x leverage FY 2019 30.6 10.3 2.1 0.6x 23.8 18.4 10.3 Av
Slide 12: Business Review
Business Review John Hornby CEO
Slide 13: Underlying demand
Underlying demand Barclays Consumer Spending year-on-year UK residential property transactions (‘000s) 15% Home Improvements 100 UK (seasonally adjusted) Non-essential Spend Best fit (UK (seasonally adjusted)) 10% 95 5% 90 - 85 (5%) 80 (10%) 75 (15%) 70 Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct No
Slide 14: To help people harness power sustainably
Strategic review Our Strategy Our purpose To help people harness power sustainably in everyday life 14 Luceco plc 2023 Full Year Results Presentation
Slide 15: Innovate: Functionality our customers need
Innovate: Functionality our customers need Why we Innovate Key achievements 1. Drives growth of the business 1. EV Chargers • £13.7m revenue in 2023 from new products • Released our second series of EV chargers 2. Sustains our competitive advantage • x3 times faster charging for commercial settings
Slide 16: Grow: Above market organic growth
Grow: Above market organic growth Market growth drivers 1. Regulatory change and new technology 2. Investment in the built environment • New UK Wiring Regulations every c. 2 years • 4 million UK homes below Decent Homes Standard • +60% Increase in Luceco consumer unit sales 3. Climate emergency duri
Slide 17: Grow: Investment and M&A opportunities
Grow: Investment and M&A opportunities D-Line • 29 February 2024, acquisition of D-line for £8.6m initial cash consideration and up to £3.8m of contingent consideration • Supplier of cable management solutions consisting of decorative cable trunking and accessories, fire-rated cable supports, floor
Slide 18: Sustain: Maintaining our competitive advantage
Sustain: Maintaining our competitive advantage Investing in our business Investing in people 1. Kingfisher Lighting investment 1. Contractor training and development • £2.5m investment to purchase Kingfisher • 47 CPD training events held in 2023 lighting an enhanced manufacturing facility • Training
Slide 19: Net zero pathway: Our interconnected strategy
Net zero pathway: Our interconnected strategy Sustain • £40bn annual investment required for UK to meet net zero • Future Homes Standard effective in 2025 • 1 million homes per year to be converted to low carbon electric heating solutions Innovate • Broad, high quality and electrified core product r
Slide 20: Capital allocation policy
Capital allocation policy 1. Dividends 2. Capex 40-60% payout 2-4% of annual revenue Progressive Product development Manufacturing capacity <3 year payback Conservative leverage 1.0x – 2.0x Adjusted EBITDA 4. M&A 3. Buybacks / Product adjacency Special Dividends Customer acquisition Considered at th
Slide 21: Outlook
Outlook John Hornby CEO LUCE TO pe
Slide 22: Market outlook
Market outlook Residential RMI – DIY (c.30% of Group) Residential RMI & New – Pro (c.30% of Group) Indicators Overall Indicators Overall Barclays Consumer CPA 2024 Forecast -2.7% Spending Index -8.6% – Residential RMI – Last three months Housing Transactions FMB State of Trade Survey -23 -20.3% – Co
Slide 23: Outlook
Outlook • Our strong 2023 performance has continued into the start of 2024 and we are achieving further growth • Our order book, especially in the Retail and Trade channels, is ahead of where it was this time last year • We are monitoring the situation in the Red Sea, the headwind we are seeing from
Slide 24: Q&A
Q&A John Hornby CEO Will Hoy CFO
Slide 25: Appendix
Appendix LUCECO pc
Slide 26: Group Overview
Group Overview Our purpose 3 reasons to invest in us Our strategy Our culture To help people harness power 01 We operate in Innovate Customer-driven attractive markets sustainably in everyday life Grow Team-focused 02 We have an advantaged business model Sustain Bold and innovative What we sell 03 W
Slide 27: What we sell: Wiring Accessories - British General
What we sell Wiring Accessories - British General Established 1941 Revenue as a % of Group total 39% Revenue 4-year CAGR %1 4% Operating margin 18.2% Switches and sockets, Circuit protection, Weatherproof, Junction Product Categories boxes, Cable management 1. 2019 to 2023 in constant currency 27 Lu
Slide 28: What we sell: Commercial Power - Nexus
What we sell Commercial Power - Nexus Established 2021 Decorative power & data modules, Cable management, Cables and Product Categories connectors, Power distribution, Energy & user data management, Ergonomic accessories, Task lighting 28 Luceco plc 2023 Full Year Results Presentation
Slide 29: What we sell: LED Lighting - Luceco
What we sell LED Lighting - Luceco Established 2013 Revenue as a % of Group total1 38% Revenue 4-year CAGR %1,2 9% (2% organic) Operating margin1 5.9% Residential interior, Residential exterior, Commercial interior, Product Categories Commercial exterior, Work & site lighting 1. For total LED Lighti
Slide 30: What we sell: LED lighting - Kingfisher
What we sell LED lighting - Kingfisher Established 1988 Product Categories Private realm exterior lighting 30 Luceco plc 2023 Full Year Results Presentation
Slide 31: What we sell: LED lighting - DW Windsor
What we sell LED lighting - DW Windsor Established 1975 Product Categories Private realm exterior lighting 31 Luceco plc 2023 Full Year Results Presentation
Slide 32: What we sell: Portable Power - Masterplug and BG Sync EV
What we sell Portable Power - Masterplug and BG Sync EV Established 1988 Revenue as a % of Group total 23% Revenue 4-year CAGR %1 -1% (-5% organic) Operating margin1 9.1% Product Categories Extension leads, Cable reels, Adaptors and accessories, EV Chargers 1. 2019 to 2023 in constant currency 32 Lu
Slide 33: Who we sell to
Who we sell to Product segmental sales by sales channel (as % of total) 2% 1% 24% 29% 41% Professional Projects 72% Professional Wholesale 23% 25% Hybrid Retail 39% 24% 52% 11% 8% 22% 18% 9% Wiring LED Portable Total Accessories Lighting Power 33 Luceco plc 2023 Full Year Results Presentation
Slide 34: Where we operate
Where we operate Distribution Selling Sourcing to market markets 1% 3% 5% 4% 4% 6% 45% Asia Pacific Europe 66% Sold in end market Middle East and Africa UK Collected in China Americas China – OEM Europe China - manufactured 83% UK 49% 34% Group revenue Column1 Group revenue Column2 Group revenue by
Slide 35: Group history
Group history The group has developed through business combinations and organic expansion into new products and territories Management Luceco LED Jiaxing expanded British General buyout of Management Jiaxing projects buyout backed to 52,500m2 wiring BG and facility sales team Acquisition accessories
Slide 36: Five year revenue progression
Five year revenue progression Revenue by operating segment £m 2019 2020 2021 2022 2023 Wiring Accessories 70.1 81.3 104.5 73.7 82.6 LED Lighting 54.2 49.5 63.2 81.4 79.0 Portable Power 47.8 45.4 60.5 51.2 47.4 Total Group 172.1 176.2 228.2 206.3 209.0 Revenue by geographical location of customer £m
Slide 37: Ten year financials: Income statement
Ten year financials Adjusted metrics Income Statement £m 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Revenue 82.3 103.1 133.7 167.6 163.9 172.1 176.2 228.2 206.3 209.0 Growth % 25.5% 25.3% 29.7% 25.4% (2.2%) 5.0% 2.4% 29.5% (9.6)% 1.3% Gross Profit 25.1 33.8 40.5 48.4 50.6 62.3 70.2 84.7 74.3
Slide 38: Ten year financials: Cash flow statement
Ten year financials Adjusted metrics Cash flow statement £m 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Operating Profit 8.4 11.5 14.5 14.7 8.5 18.0 30.0 39.0 22.0 24.0 Depreciation & amortisation 1.9 2.6 3.2 4.4 6.5 7.9 6.1 6.7 7.1 7.4 EBITDA 10.3 14.1 17.7 19.1 15.0 25.9 36.1 45.7 29.1 31.4
Slide 39: Ten year financials: Balance sheet
Ten year financials Adjusted metrics Balance Sheet £m 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Fixed assets 24.6 27.5 33.5 47.2 44.8 42.6 43.9 69.4 70.5 72.8 Inventory 23.8 26.2 35.4 44.2 32.8 32.2 37.2 56.6 47.5 40.8 Trade receivables 17.1 20.4 26.5 33.4 39.5 42.8 70.1 67.9 50.4 53.1 Trade
Slide 40: 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