Slide 1: Healthy air, sustainably
Healthy air, sustainably Volution Group plc Interim results to 31 January 2024
Slide 2: Agenda
Agenda 01. Overview 02. Financial Review 03. Business Review Ronnie George Chief Executive Officer 04. Summary and Outlook 05. Q&A Andy O’Brien Chief Financial Officer Cover image: New Breathing Buildings NVHRe Volution Group plc Interim results to 31 January 2024 1
Slide 3: Overview
Overview Interim results to 31 January 2024 Image: New Vent-Axia Sentinel Econiq
Slide 4: Strong progress in the first half of the year
Strong progress in the first half of the year Revenue up 6.3% (8.7% cc) with organic (+0.9%) and inorganic (+7.8%) Operational excellence and pricing discipline enabled further margin progression (22.4% operating margin) Strong cash generation, leverage lowest in Group’s history (0.7x) providing sig
Slide 5: Delivering on our strategy
Delivering on our strategy Organic growth Value-adding acquisitions Operational Excellence • Organic revenue growth of • Inorganic revenue growth 7.8% • Adjusted operating margin 0.9% cc, was underpinned by with a strong performance expansion of 130 bps to 22.4% continuing strength in our UK from I-
Slide 6: Driving sustainable solutions
Driving sustainable solutions Product Planet People • 70.5% of revenue from low-carbon, energy • 77.0% of plastic used in own manufacturing • Reportable accident frequency rate of 0.21 saving products (H1 2023: 69.4%). facilities from recycled sources (H1 2023: 76.4%). per 100,000 hours worked (FY23
Slide 7: Financial Review
Financial Review Interim results to 31 January 2024 Image: Heat cell design, ERI, Bitola, North Macedonia
Slide 8: Financial highlights
Financial highlights Revenue £m Adjusted operating profit £m Adjusted operating profit margin % £172.5m £38.6m 22.4% +6.3% +8.7% cc +12.9% +130 bps 2024 172.5 2024 38.6 2024 22.4 2023 162.3 2023 34.2 2023 21.1 2022 149.6 2022 31.9 2022 21.3 2021 131.7 2021 27.7 2021 21.1 2020 118.8 2020 21.8 2020 18
Slide 9: Revenue
Revenue Revenue up 6.3% (+8.7% cc) to £172.5 million £12.6m +7.8% £172.5m £4.2m £(3.9)m +2.6% £0.3m -2.4% +0.2% £162.3m £(3.0)m -1.9% Organic growth £1.5m, (+0.9% cc) H1 FY23 UK Continental Australasia Inorganic FX H1 FY24 Europe Volution Group plc Interim results to 31 January 2024 8
Slide 10: Group adjusted operating profit
Group adjusted operating profit Adjusted operating profit up 12.9% to £38.6 million Adjusted operating margin up 130 bps to 22.4% £2.4m £3.0m £38.6m £34.2m £(1.0)m H1 FY23 Organic Inorganic FX H1 FY24 Target 20% 24.3% 24.2% 24.0% 23.9% H1 2024 22.4% 22.6% 21.2% H1 2023 21.1% Group H1 2022 21.3% 21.1
Slide 11: Net debt and cash flow
Net debt and cash flow Cash conversion 98% (H1 2023: 88%) Leverage 0.7x (H1 2023: 0.8x) Available liquidity £95.8m (H1 2023: £94.1m) Net debt (excluding lease liabilities) 0 £43.9m £(2.5)m £(3.5)m £(1.8)m £(2.8)m £(7.2)m £(10.9)m £(2.6)m £(8.7)m £(54.2)m1 £(58.1)m 1 Aug 23 Adjusted Working CAPEX Lea
Slide 12: Returns on invested capital (ROIC)
Returns on invested capital (ROIC) H1 2024 FY 2023 H1 2023 • Very strong ROIC of 27.7%, significantly AVERAGE NET ASSETS 1 223.8 216.3 204.9 ahead of Group WACC (estimated to be Add/(deduct) c. 10%). + Acquisition related liabilities 18.5 15.6 14.7 • Acquisitions will be dilutive at point of entry.
Slide 13: Strong performance against our key financial metrics
Strong performance against our key financial metrics Revenue growth Organic revenue growth (cc) Adjusted operating margin % +6.3% p.a. +0.9% p.a. 22.4% Target: 10% p.a. Target: +3 to 5% p.a. Target: >20% Adjusted operating Return on invested capital (ROIC) Adjusted EPS cash flow conversion 98% 27.7%
Slide 14: Business Review
Business Review Interim results to 31 January 2024 Image: 3D printing, Inventer, Löberschütz, Germany
Slide 15: Volution at a glance
Volution at a glance % of Group revenue £77.8m £68.5m £26.2m n Residential 72% n Commercial 28% UK Continental Europe Australasia % of Group revenue 45.1% of Group revenue 39.7% of Group revenue 15.2% of Group revenue 39.4% UK customers 5.7% Export customers n RMI 70% UK Residential 28.7% Australasi
Slide 16: UK: Strong revenue growth and significant margin expansion
45.1% % of Volution Group plc revenue UK: Strong revenue growth and significant margin expansion H1 2024 H1 2023 Growth £m £m % • Revenue up by 5.6% to £77.8 million with adjusted operating profit at £18.9 million. UK revenue 77.8 73.7 5.6 • Pricing, procurement, good factory performance and an enha
Slide 17: Continental Europe: Recent acquisitions delivering well
39.7% % of Volution Group plc revenue Continental Europe: Recent acquisitions delivering well H1 2024 H1 2023 Growth Growth (cc) £m £m % % • Revenue in Continental Europe was £68.5 million, with growth of £4.2 million, Continental Europe revenue 68.5 64.3 6.5 9.0 an increase of 6.5% (9.0% cc). • Org
Slide 18: Australasia: Margin expansion continued
15.2% % of Volution Group plc revenue Australasia: Margin expansion continued H1 2024 H1 2023 Growth Growth (cc) £m £m % % • Revenue in Australasia was £26.2 million and grew by 7.8% (16.9% cc), helped by Australasia revenue 26.2 24.3 7.8 16.9 the acquisition of DVS, with organic revenue growing by
Slide 19: Summary and Outlook
Summary and Outlook Interim results to 31 January 2024 Image: i-Vent, Ljubljana, Slovenia
Slide 20: Strong progress in the first half of the year
Strong progress in the first half of the year Revenue up 6.3% (8.7% cc) with organic (+0.9%) and inorganic (+7.8%) Operational excellence and pricing discipline enabled further margin progression (22.4% operating margin) Strong cash generation, leverage lowest in Group’s history (0.7x) providing sig
Slide 21: Our clear compounding growth model
Our clear compounding growth model Structural growth drivers underpinning long-term growth Structural Increased Drive for energy IAQ health Upsell undersupply regulation efficiency awareness of homes Differentiated business model aligned to lead in chosen markets Leading product Strong brands Divers
Slide 22: Outlook
Outlook Our strong performance in the first half, together with the tailwind from our three recent acquisitions, gives the Board confidence in delivering adjusted earnings per share for the current financial year slightly ahead of consensus. With our diversified geographic and end-market positioning
Slide 23: Thank you Q&A
Thank you Q&A Interim results to 31 January 2024 Image: New Product Development, Crawley, UK
Slide 24: Appendix
Appendix Interim results to 31 January 2024 Image: New Vent-Axia Apex Heat Recovery Unit
Slide 25: Operating segments
Operating segments % of Volution Group % of Volution Group plc revenue (by sector) plc revenue OEM Export 2.4% OEM UK 1.9% UK Export 3.3% UK Nordics Commercial 14.7% 8.8% Central Europe Continental Europe: 39.7% 25.0% Australasia: 15.2% UK: 45.1% UK Residential 28.7% Australasia 15.2% Volution Group
Slide 26: Our markets benefit from long-term structural growth drivers
Our markets benefit from long-term structural growth drivers Impact on End markets New Build Private RMI Public RMI Growth Drivers Residential Residential Residential Commercial Structural undersupply of new homes Regulation drives adoption of energy efficient, higher unit value solutions Energy eff
Slide 27: Financial summary
Financial summary H1 2024 H1 2023 Movement Revenue (£m) 172.5 162.3 6.3% Revenue (cc) (£m) 176.4 162.3 8.7% Gross margin (%) 50.8 47.4 3.4pp Adjusted operating profit (£m)1 38.6 34.2 12.9% Adjusted operating margin (%)1 22.4 21.1 1.3pp Adjusted profit before tax (£m) 1 35.0 31.8 9.9% Adjusted basic
Slide 28: Reconciliation of adjusted to reported profit
Reconciliation of adjusted to reported profit H1 2024 H1 2023 Movement • Acquisition related costs: £m £m £m • £0.1 million (H1 2023: £0.2 million) Adjusted profit before tax 35.0 31.8 3.2 of professional fees and due diligence related costs in respect of the business Items excluded from adjusted me
Slide 29: Consolidated statement of financial position summary
Consolidated statement of financial position summary 31 January 2024 31 July 2023 £m £m Non-current assets Property, plant and equipment 30.2 29.4 Right-of-use assets 28.8 29.9 Intangible assets – goodwill 173.9 164.9 Intangible assets – others 82.7 83.9 315.6 308.1 Current assets Inventories 57.3 5
Slide 30: Cash flow/net debt
Cash flow/net debt 31 January 2024 31 January 2023 Movement Movement £m £m £m % Adjusted EBITA (A) 39.4 34.9 4.5 12.9% Depreciation 4.5 3.8 Adjusted EBITDA 43.9 38.7 5.2 13.4% Movement in working capital (2.5) (5.0) Share-based payments 0.9 1.0 Net investment in fixed assets (3.5) (4.1) Adjusted ope
Slide 31: Cautionary statement
Cautionary statement This document may contain forward-looking statements which are made in good faith and are based on current expectations or beliefs, as well as assumptions about future events. You can sometimes, but not always, identify these statements by the use of a date in the future or such