Slide 1: Essentra plc Full Year Results 2023
Essentra plc Full Year Results 2023 19 March 2024 , E JESSENTRA
Slide 2: Welcome and Overview
Welcome and Overview a Scott Fawcett CEO 5 E JESSENTRA 2
Slide 3: Agenda
Agenda 1 2023 highlights 2 Financial performance 3 Strategic update 4 Outlook 5 Q&A 5 E JESSENTRA
Slide 4: 2023 highlights
• • • • • • • • • • • 1. Excludes the impacts of foreign exchange 2. On a continuing operations basis, before amortisation of acquired intangible assets and adjusting items 3. Including lease liabilities 4
Slide 5: Financial Performance
Financial Performance E Jack Clarke CFO 5 E JESSENTRA 5
Slide 6: Financial summary
1. On a continuing operations basis, before amortisation of acquired intangible assets and adjusting items 2. Presented including lease liabilities. The ratio of net debt to adjusted EBITDA excluding lease liabilities was 0.5x (2022: net funding surplus 3.3x). 3. ROIC adjusted for the acquisition of
Slide 7: Revenue bridge
Revenue bridge -4.4% constant currency, -6.4% reported £337.9 -8.2% »¥ -2.09 | | +3.8% 2.0% $516.3 £301.7 £255.0 FY2020 FY2021 FY2022 Organic Acquisitions FX FY2023 5 E JESSENTRA
Slide 8: Income statement
• • • • • 1. Prior year numbers re-presented on a continuing operations basis 2. Adjusted to exclude intangible amortisation of £11.3m and an adjusting items pre-tax charge of £21.0m along with associated tax impact 8
Slide 9: Adjusting items
1. £1.2m acquisitions costs incurred in the year, offset by a credit of £2.2m for the earn-out payment related to Wixroyd 2. Incurred in relation to defined benefit pension scheme charges which, following the outcome of the strategic review, no longer pertain to the continuing operations of the Grou
Slide 10: Cash flow
1. Adjusted to exclude intangible amortisation and adjusting items 2. Being depreciation and amortisation of £14.0m, right-of-use asset depreciation of £5.9m, Share Option Expense of £0.9m 3. Tax paid excludes the tax received on business acquisitions/disposals 10
Slide 11: Net debt and liquidity
• • • • • • 1. Including IFRS-16. (Pre-IFRS16: 0.5x) 2. Group’s liquidity position defined as the headroom available under the banking facilities plus cash resources 3. As of 31 December 2023, the Rolling Credit Facility was £15.2m drawn 11
Slide 12: Returning capital to shareholders
Returning capital to shareholders Ordinary dividend Final recommended ordinary dividend of 2.4p per share 9% increase in full year dividend for 2023 to 3.6p To be paid on 5 July 2024. Ex-dividend date 16 May 2024 Progressive dividend policy unchanged - maintaining dividend cover in the order of thre
Slide 13: A consistent capital allocation policy
A consistent capital allocation policy ORGANIC GROWTH Capital investment remains core to strategic growth Capex to be maintained between 4-5% of sales Sustainable new product development and propositions INNOVATION eo F ° Digitalising the customer experience * Strong pipeline of potential acquisitio
Slide 14: Numbers presented on a constant currency basis
Numbers presented on a constant currency basis 14
Slide 15: Regional Performance
Regional Performance E Scott Fawcett CEO 5 E JESSENTRA 15
Slide 16: Our Executive Management team has strengthened
Our Executive Management team has strengthened Hugues Delcourt Managing Director EMEA Began career at Moss Plastics (Essentra) 2004 moved to Coats Plc became Global Commercial Director 2019 returned to Essentra as Managing Director EMEA Appointed to Group Executive Committee in 2023 Chris Brooks Pre
Slide 17: Regional results: Gross Margin and Gross Profit
• Revenue Gross Profit Gross Margin • £170.8m 51.2% £87.5m 50.6% • £84.5m £167.0m • 2022 2023 2022 2023 2022 2023 Year on year % movement is presented on a constant currency basis Like-for-like revenue growth % excludes the impacts of acquisitions • 17
Slide 18: Regional results: Gross Margin and Gross Profit
• Revenue Gross Profit Gross Margin • £123.4m £47.2m 38.2% 37.9% • £106.2m £40.3m • 2022 2023 2022 2023 2022 2023 Year on year % movement is presented on a constant currency basis • • 18
Slide 19: Regional results: Gross Margin and Gross Profit
• Revenue Gross Profit Gross Margin • 35.6% £47.5m £16.5m 34.7% • £39.3m £14.0m • 2022 2023 2022 2023 2022 2023 Year on year % movement is presented on a constant currency basis • 19
Slide 20: Strategic Update
Strategic Update NU E JESSENTRA 20
Slide 21: Our vision: 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 22: Revenue by product and end market
• • • • Medical Device Other Renewable 11% Energy 4% Protective Caps & 5% Security Seals Plugs 5% 22% Telecoms 7% Other Industrial Equipment Electronics 35% Hardware ConAgg 8% 10% Plastic Access Hardware Fasteners 18% 10% Auto 11% Other Hardware 12% Cable Consumer Management Automation Electronics 1
Slide 23: Delivering on M&A
Delivering on M&A Wixroyd §f a || i Wixroud ‘AN ESSENTRA COMPANY en Pit Performing to management expectations Targets new product adjacencies Accelerating and supporting organic growth a nS Continental Europe cross-selling opportunities are gaining traction Y Strong profit margins BMP TAPPI AN ESSEN
Slide 24: Investing in our global footprint
Investing in our global footprint, with capacity for growth EMEA * Acquisition of BMP TAPPI in Italy, increasing manufacturing capabili * Wixroyd in UK unlocking and delivering on cross-sell opportunities Americas * Expansion of manufacturing and distribution in Mexico, accelerating near-shoring opp
Slide 25: Strong delivery on our service metrics
Strong delivery on our service metrics Strong and improving customer sentiment, combined Employee Engagement . . 83% with employee engagement above industry average 52% 79% 78% * We have continued to enhance our product offering, il focussing on delivering our hassle-free proposition 2019 2020 «-202
Slide 26: We continue to invest in our digital journey
We continue to invest in our digital journey ERP progress . 5 sites live in Eastern Europe in January 2024 8 sites now live across the Group Focus remains on European roll out in 2024 Measured approach, providing greater delivery assurance The costs in 2023 were £10.8m in line with guidance, and in
Slide 27: Excellent sustainability progress across our five pillars
Excellent sustainability progress across our five pillars Our Components Customers Our Culture Gained SBTi approval for our near and long term science based emissions reduction targets Two on site solar projects in Thailand and China 38% reduction in scope1and2 emissions since 2019. Target: 50% by 2
Slide 28: Pro-forma operating profit
1. In 2022, a pro-forma operating profit measure was reported as an additional alternative performance measure, used to represent the components business on a standalone basis after the strategic review 28
Slide 29: Outlook
Outlook Oy enn EEEEEED E JESSENTRA 29
Slide 30: Outlook
Outlook Greater stability and orderbook momentum Board expectations for 2024 are unchanged 2023: + European soft macro-economic environment but with sequential improvement quarter on quarter * Americas showing notable improvements, and destocking behaviour is stabilising * APAC continues to show qua
Slide 31: Essentra is well-positioned to return to growth
Essentra is well-positioned to return to growth Global footprint with breadth and depth of offer * Unique manufacturing and distribution business model, with capacity for growth ° Wide range of product capabilities and end-markets with increasing exposure to high growth markets * M&A is unlocking cr
Slide 32: Q&A
Q&A FE SESSENTRA ESSENTRA 32
Slide 33: Essentra plc Full Year Results 2023
Essentra plc Full Year Results 2023 19 March 2024 , E JESSENTRA
Slide 34: Appendices
Appendices Dp ES ennenennEneEnee E JESSENTRA 34
Slide 35: The breadth and depth of our offering is a key differentiator
The breadth and depth of our offering is a key differentiator =) © @ 8) © customers Dp ES ennenennEneEnee E JESSENTRA 35
Slide 36: Multiple product expertise and a broad range of customer categories
Multiple product expertise and a broad range of customer categories Typical product CUSTOMER CATEGORY range to unloc! target category CONSUMER MANUFACTU! INDUSTRIAL MANUFACTURING SME seeeee * After customer = (A) @ = bel is unlocked, VAY @ ( iS ) Ay) © e can cross-sell = Auto Consumer Telecoms/ Con-
Slide 37: 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 * Our focus remains on bolt-on acquisitions * Targeting new product capabilities that can be cross-sold, including existing suppliers of . . sourced pr
Slide 38: Income Statement — Reported basis
Income Statement — Reported basis £m £m Adjusted operating profit 43.2 25.1 Intangible amortisation (11.3) (10.4) Adjusting items (26.0) Reported operating profit (11.3) Net finance charge (17.8) Profit / (loss) before tax og (29.1) Taxation (expense) /credit (2.0) Net income/ (loss) . (31.1) Net lo
Slide 39: Net debt reconciliation
Net debt reconciliation As of 31 December 2023: net (debt) (62.5) As of 1 January 2023: net funding surplus 113.8 Free cash flow 37.3 Shareholder capital return (113.8) Dividends (6.5) Acquisitions less cash acquired (33.3) Adjusting items (23.6) Cash flow from discontinued businesses including (21.
Slide 40: ESG Framework
ESG Framework Planet Driving resource and energy efficiency, reducing emissions and embracing renewables Culture Asafe, supportive work environment that champions equality and celebrates diversity Communities Working with suppliers to ensure ethical practices and contribute to equitable economies Vo
Slide 41: DISCLAIMER: Important legal notice
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Slide 42: Essentra plc Full Year Results 2023
Essentra plc Full Year Results 2023 19 March 2024 , E JESSENTRA