Slide 1: Essentra plc Half Year Results 2024
Essentra plc Half Year Results 2024 30 July 2024 > ESSENTRA
Slide 2: Welcome and overview
Welcome and overview a Scott Fawcett CEO FE \ESSENTRA ESSENTRA 2
Slide 3: Agenda
Agenda 1 H1 2024 highlights 2 Financial performance 3 Strategic update 4 Outlook 5 Q&A Dp EeEnnEnEEeEenee E JESSENTRA
Slide 4: H1 2024 highlights
• • • • • • • • • • • 1. On a continuing operations basis, before amortisation of acquired intangible assets and adjusting items 2. Excluding the impacts of foreign exchange and the acquisition of BMP TAPPI, completed in October 2023 4
Slide 5: Financial performance
Financial performance Jack Clarke CFO FE \ESSENTRA jESSENTRA 5
Slide 6: Group financial summary
1. On a continuing operations basis, before amortisation of acquired intangible assets and adjusting items 2. Presented excluding lease liabilities. The ratio of net debt to adjusted EBITDA including lease liabilities is 1.4x (H1 2023: 0.2x) 3. ROIC adjusted for the acquisition of BMP TAPPI in Octob
Slide 7: Revenue performance
• • • 1. Like-for-like excluding the impacts of foreign exchange and the acquisition of BMP TAPPI, completed in October 2023 7
Slide 8: Earnings and adjusted items
• • • • 1. Adjusted to exclude intangible amortisation of £5.9m and an adjusting items pre-tax charge of £7.8m along with associated tax impact 8
Slide 9: Adjusting items
1. In relation to restructuring activities to right-size the continuing operations of the business 2. Costs incurred in the year related to the acquisition of BMP TAPPI 3. Incurred in relation to defined benefit pension scheme charges which, following the outcome of the strategic review, no longer p
Slide 10: Cash flow
1. Adjusted to exclude intangible amortisation and adjusting items 2. Being depreciation and amortisation of £6.0m, right-of-use asset depreciation of £3.0m, Share Option Expense of £0.9m 10
Slide 11: Returning capital to shareholders
Returning capital to shareholders Ordinary dividend Share buyback programme * Interim ordinary dividend of 1.25p per * £27m of £60m share buyback programme share, 4% increase deployed * To be paid on 25 October 2024. * 45% complete as at 30 June 2024 Ex-dividend date 19 September 2024 * The executio
Slide 12: A consistent capital allocation policy
A consistent capital allocation policy ORGANIC GROWTH * Sustainable new product development and customer proposition INNOVATION re F * Digitalising the customer experience Capital investment remains core to strategic growth Capex to be maintained between 4-5% of sales * Strong pipeline of potential
Slide 13: Net debt and leverage
1. Presented excluding lease liabilities. The ratio of net debt to adjusted EBITDA including lease liabilities is 1.4x All numbers presented on a constant currency basis 13
Slide 14: Regional performance
Regional performance E Scott Fawcett CEO FE \ESSENTRA ESSENTRA 14
Slide 15: Regional results: Americas
• • Revenue Gross Profit Gross Margin £47.2m 52.8% 50.3% • £89.8m £89.4m £45.2m • 2023 2024 2023 2024 2023 2024 Year on year % movement is presented on a constant currency basis • 1. Excluding the impacts of foreign exchange and the acquisition of BMP TAPPI, completed in October 2023 15
Slide 16: Regional results: EMEA
• • Revenue Gross Profit Gross Margin • £56.6m 38.0% 37.1% £21.0m £51.3m £19.5m • 2023 2024 2023 2024 2023 2024 Year on year % movement is presented on a constant currency basis • 16
Slide 17: Regional results: Asia-Pacific
• • Revenue Gross Profit Gross Margin £19.9m £19.0m • 38.9% £7.4m 34.2% £6.8m • 2023 2024 2023 2024 2023 2024 • Year on year % movement is presented on a constant currency basis • 17
Slide 18: Strategic Update
Strategic Update Dp EeEnnEnEEeEenee E JESSENTRA 18
Slide 19: Our vision is to be the world's leading responsible hassle-free supplier
Our vision is to be the world’s leading responsible hassle-free supplier of essential industrial components Clear strategy to High margin Market leader with a drive organic growth business with scope Strong returns and unique proposition and market share to expand through scale cash conversion in a
Slide 20: Volume performance
• • • • 1. Internal metric. Volume defined as existing customers, buying existing products. Excluding price, new customers, and new product sales. 20
Slide 21: Revenue by channel and end market
• • • External circle H1 2024 % of revenue Internal circle H1 2023 % of revenue 21
Slide 22: Areas of growth in H1 2024
• • • Data excludes distributors Areas of growth in H1 2024 v H1 2023 % of H1 2024 revenue low to high 22
Slide 23: BMP TAPPI update
BMP TAPPI update Deal rationale BMP v Expansion of a core product range v Expansion of European manufacturing footprint _TAPPI | Y Strong profit margins KN ESSENTRA COMPANY Progress in 2024 * Early cross-sell wins unlocked across a breadth of industries and product categories. Examples include: * Bu
Slide 24: Sustainability progress including commercial wins
Sustainability progress including commercial wins We continue to support our customers with their sustainability needs: Increasing number of new commercial wins and retaining existing business, based on sustainability criteria across our end-markets, including heating and ventilation, industrial tru
Slide 25: Outlook
Outlook Dp EeEnnEnEEeEenee E JESSENTRA 25
Slide 26: Outlook
Outlook Momentum building Sequential quarterly improvements in revenue through H1 Business returned to LFL growth in Q2 despite mixed end-market recovery Investing in growth initiatives, ensuring Essentra is well-positioned to take market share Balanced approach to cost control, driving operational
Slide 27: Q&A
Q&A > ESSENTRA 27
Slide 28: Essentra plc Half Year Results 2024
Essentra plc Half Year Results 2024 30 July 2024 > ESSENTRA
Slide 29: Appendices
Appendices ye E JESSENTRA 29
Slide 30: The breadth and depth of our offering is a key differentiator
The breadth and depth of our offering is a key differentiator AMERS 34% yy E JESSENTRA 30
Slide 31: FX sensitivity
FX sensitivity Currency H1 2024 H1 2023 Change average rate average rate USD 1.27 1.23 3.3% EUR 1.17 1.14 2.6% Impact on H1 2024 of 1 cent Adjusted operating profit movement (£m) increase in rates USD (0.1) EUR (0.1) yo EvEsseNTRA 31
Slide 32: Income Statement - Reported basis
Income Statement -— Reported basis H1 2024 H1 2023 £m £m Adjusted operating profit 21.8 23.0 Intangible amortisation (5.9) (5.7) Adjusting items (7.8) (7.0) Reported operating profit 8.1 10.3 Net finance charge (4.1) - Profit before tax 4.0 10.3 Taxation expense (1.5) (2.6) Net income 2.5 7.7 Net lo
Slide 33: Net debt reconciliation
Net debt reconciliation As of 1 January 2024: net debt 62.5 Free cash flow (12.5) Share buyback 3.1 Acquisitions less cash acquired 1.9 Adjusting items 6.2 Cash flow from discontinued businesses including 25.8 disposal costs FX including hedging derivatives 0.5 Lease liabilities 1.6 As of 30 June 20
Slide 34: A healthy pipeline of value-enhancing M&A
A healthy pipeline of value-enhancing M&A * We continue to apply a disciplined approach to deal rationale, our pipeline is healthy | Hundreds on radar * Targeting new product capabilities that can be cross-sold, including existing suppliers of sourced products * We are increasingly considering the i
Slide 35: ESG Framework
ESG Framework Plan Driving resource and energy efficiency, reducing emissions and embracing renewables Culture Asafe, supportive work environment that champions equality and celebrates diversity m © our Communities Communities Working with suppliers to ensure ethical practices and contribute to equi
Slide 36: DISCLAIMER: Important legal notice
DISCLAIMER: Important legal notice THIS DOCUMENT IS STRICTLY CONFIDENTIAL TO THE RECIPIENT AND HAS BEEN SUBMITTED TO YOU SOLELY FOR YOUR INFORMATION. THE RECIPIENT MAY NOT REPRODUCE OR REDISTRIBUTE ANY PART OF THIS DOCUMENT TO ANY PERSON IN ANY FORM. This document and the presentation to which it re
Slide 37: Essentra plc
Essentra plc Half Year Results 2024 30 July 2024 > ESSENTRA