Slide 1: Norcros plc Preliminary Results Year ended 31st March 2012
Norcros plc Preliminary Results Year ended 31st March 2012
Slide 2: Introduction
Introduction John Brown Chairman
Slide 3: 2012 Highlights
2012 Highlights Page 3 Page 3 Strong performance from UK operations and Revenue1 South African retail & adhesive businesses £200.3m +5.6% Self help continuing to drive profits forward in difficult markets Underlying2 operating profit1 Good progress on key legacy property £12.1m +5.7% issues
Slide 4: Financial Review
Financial Review Martin Payne Group Finance Director
Slide 5: Income Statement
Income Statement Page 5 Page 5 2012 2011 +/- +/- £m £m LFL CC Revenue 200.3 196.1 +2.1% +5.6% Underlying1 operating profit 12.1 11.7 +3.5% +5.7% Margin 6.0% 6.0% Finance charges – cash (1.4) (1.5) - 6.7% Underlying1 PBT 10.7 10.2 +5.3% +8.1% Exceptional – operating items - (1.1) Exceptional – financ
Slide 6: Income Statement – Key Bridges
Income Statement – Key Bridges Page 6 Page 6 Revenue Underlying operating profit £m 13.0 200 (0.7) (0.6) 12.0 1.1 0.2 6.5 (0.3) 195 (6.5) 11.0 200.3 4.9 12.1 11.7 196.1 190 10.0 185 9.0 2011 Currency/Extra UK SA RoW 2012 2011 Currency/Extra UK SA RoW 2012 Week Week
Slide 7: Tax, Earnings & Dividends
Tax, Earnings & Dividends Page 7 2012 2011 Page 7 £m £m Diluted underlying EPS (pence) 2.0 PBT as reported 9.4 7.5 1.5 1.9 1.6 Taxation - (0.8) 1.0 1.2 0.5 Effective tax rate - 10.7% 0.0 2010 2011 2012 Earnings as reported 9.4 6.7 Dividend per share (pence) 0.40 0.42 0.30 0.36 0.20 Effective tax r
Slide 8: Cash Flow
Cash Flow Page 8 2012 2011 Page 8 £m £m EBITDA pre exceptional 18.0 18.4 Operating cash flow to EBITDA pre exceptional Working Capital (0.3) (1.0) 15 0 % Operating cash flow 17.7 17.4 10 0 % 114 % Capex (6.7) (6.3) 50% 95% 98% Pension deficit recovery (1.0) (1.0) 0% 2 0 10 2 0 11 2 0 12 Tax & Other
Slide 9: Balance Sheet
Balance Sheet Page 9 Page 9 £m Net debt before prepaid finance costs 20 Net debt well within 3x leverage covenant 15 18.9 18.5 10 12.4 £51m bank re-financing through to Oct 2015 5 0 Pension deficit increased 2010 2011 2012 t im e s Liabilities still 95% funded Leverage ( Net Debt to EBITDA)
Slide 10: Operating Review
Operating Review Nick Kelsall Group Chief Executive
Slide 11: Business Overview
Business Overview Page 11 Supplier of high quality and innovative showers, ceramic wall and floor tiles and Page 11 adhesive products Three complementary UK businesses: • Triton Showers Market leader in the manufacture and marketing of showers in the UK • Johnson Tiles Leading manufacturer o
Slide 12: UK Operations – Strong performance in challenging markets
UK Operations – Strong performance in challenging markets Page 12 Page 12 • Overall revenues -0.9%¹ - UK -0.8%¹; Exports -1.2%¹ • Growth in UK retail; increased share in key accounts • Market share gain in electric segment, success of thermostatic offer • UK market decline estimated to be c. 1% • Ex
Slide 13: UK Operations – Strong performance in challenging markets
UK Operations – Strong performance in challenging markets Page 13 Page 13 • Overall revenues +8.7%¹ - UK +10.2%¹; Exports -1.9%¹ • Strong revenue growth despite market decline • UK market share gains across all sectors, particularly retail • Exports – supply issues in H1 largely resolved; H2 perform
Slide 14: UK Operations – Strong performance in challenging markets
UK Operations – Strong performance in challenging markets Page 14 Page 14 • Overall revenues +17.3%¹ - Full year effect of key accounts gained in H2 10/11 - Growth in commercial refurbishment projects - National contract specification gains - Initial benefits of increased investment in new products
Slide 15: UK Operations – Strong performance in challenging markets
UK Operations – Strong performance in challenging markets Page 15 Page 15 Revenue1 Underlying operating profit 12.8 12.0% +4.3% 10.0% 12.4 8.0% 12.0 6.0% £m 11.6 4.0% 11.2 2.0% 10.8 0.0% 2010 2011 2012 2010 2011 2012 Profit 11.6 11.6 12.5 Triton Johnson Tiles Norcros Adhesives ROS% 11.3% 10.2% 10.7%
Slide 16: South Africa – Revenue and market share growth driven by sector focus
South Africa – Revenue and market share growth driven by sector focus Page 16 Page 16 • Overall revenues +4.8%¹ • LFL same store retail sales +6.7%¹ • Focused product offer and benefits from store refit programme • 20 of our 31 owned stores now upgraded to Lifestyle format • 2 new franchise stores
Slide 17: South Africa – Revenue and market share growth driven by sector focus
South Africa – Revenue and market share growth driven by sector focus Page 17 Page 17 • Independent sector revenues +14.1%¹ • Strong growth in Tile Adhesives and Building Products segments • New products and new listing in key accounts • Strong export growth into sub-Saharan countries • New tile adh
Slide 18: South Africa – Revenue and market share growth driven by sector focus
South Africa – Revenue and market share growth driven by sector focus Page 18 Page 18 • Independent sector revenues +34.7%¹ • Continued success of sector focused sales resource • Increased investment in new product development • Trading loss higher than last year - Manufacturing change programme imp
Slide 19: South Africa – Revenue and market share growth driven by sector focus
South Africa – Revenue and market share growth driven by sector focus Page 19 Page 19 Revenue1 Underlying operating profit +9.7% 1.0% 0.5 0.0% -0.5 (1.0%) (2.0%) -1.5 (3.0%) £m -2.5 (4.0%) (5.0%) -3.5 (6.0%) -4.5 (7.0%) 2010 2011 2012 2010 2011 2012 Profit (3.7) 0.2 (0.5) Tile Africa TAL Johnson Til
Slide 20: Strategy
Strategy Page 20 Deliver organic growth Page 20 Drive further operational improvements in SA tile manufacturing Continued investment in innovative new product, brand development and service offer Increase share of UK and SA market and continue to develop export markets Expand SA product of
Slide 21: Summary & Outlook
Summary & Outlook Page 21 Page 21 Strong trading performance; revenue and profits ahead and margins maintained ; operating cash flow strong Strong financial position and new bank facility secured to October 2015 Final dividend increased 16.7% to 0.28p / share Group revenue for first 2 months
Slide 22: Appendices
Appendices Page 22 NOFcros
Slide 23: Analysis of Exceptional Items
Analysis of Exceptional Items Page 23 Page 23 Exceptional operating Items 2012 2012 2011 2011 £m£m £m£m Profit on disposal of investment (Beaumont Tiles) - 2.7 IAS 19 past service credit (UK Pension Scheme) - 0.4 Increase in legacy leasehold provision – Springwood Drive - (2.0) Increase in legacy le
Slide 24: UK Pension Scheme
UK Pension Scheme Page 24 Assets under management - £368m Page 24 UK Pension surplus / (deficit) Mature Scheme; 10,229 members • Pensioners (62%), Deferred (34%), Actives 10.0 (4%) • Average age of pensioners is 76 0.0 Investment Strategy • Conservative asset allocation; 40% absolute return fu
Slide 25: Legacy Leasehold Obligations
Legacy Leasehold Obligations Page 25 Page 25 Swindon – Light Industrial Units • Lease expiry 2014 • Occupied to lease expiry • Current cash shortfall against rental income c. £0.5m p.a. Swindon – Warehousing / Distribution Unit • Lease expiry 2022 • Vacant • Cash shortfall c. £0.9m p.a. Sheffi
Slide 26: Net Debt Reconciliation
Net Debt Reconciliation Page 26 Page 26 2012 2012 2011 2011 £m£m £m£m Net debt – statutory basis (17.8) (10.6) Prepaid finance costs (0.7) (1.8) Net debt before prepaid finance costs (18.5) (12.4) 2012 2012 2011 2011 £m£m £m£m Net debt before prepaid finance costs - opening (12.4) (18.9) Net cash fl
Slide 27: Re-financing – September 2011
Re-financing – September 2011 Page 27 Page 27 New £51m revolving credit facility secured to October 2015 Flexible and lower cost terms • Leverage < 3x EBITDA, reducing to 2.75x from March 15 onwards • Interest cover > 4x EBITDA • Semi annual testing • £0.5m p.a. lower borrowing costs on like for