Slide 1: Interim Results
INTERIM RESULTS 6 MONTHS TO 30 SEPTEMBER 2024 Thomas Willcocks Chief Executive Officer James Eyre Chief Financial Officer
Slide 2: Highlights
01 Thomas Willcocks Chief Executive Officer HIGHLIGHTS
Slide 3: Highlights
HIGHLIGHTS Market share growth in challenging demand environment: REVENUE¹ UNDERLYING • UK share gains (LFL revenue¹ +0.9%) – NPD and cross-selling OPERATING PROFIT • SA macro stabilised but sentiment remains subdued (LFL revenue¹ -1.7%) • Group LFL revenue +0.1%¹ in challenging market • Well-positi
Slide 4: UK Market Share Growth; SA Resilience
UK MARKET SHARE GROWTH; SA RESILIENCE UK & Ireland South Africa REVENUE REVENUE £131.3m +0.9% 1 £57.1m -1.7% 1 UNDERLYING OPERATING UNDERLYING OPERATING PROFIT PROFIT £17.8m £1.9m UNDERLYING OPERATING UNDERLYING OPERATING PROFIT MARGIN PROFIT MARGIN 13.6% 2023: 13.0% 3.3% 2023: 4.7% • Ahead of marke
Slide 5: The Sweet Spot – Mid-Premium Positioning (UK)
THE SWEET SPOT – MID-PREMIUM POSITIONING (UK) Focused on the UK Bathroom Products Market more resilient RMI/New Build/Commercial Share1 Quality/Price Point1 mid-premium market segments 7% Commercial 29% 30% Premium RMI + Economy New Build Norcros revenue 13% en t split, mirrors RMI2/ Residential sil
Slide 6: Financial Review
02 James Eyre Chief Financial Officer FINANCIAL REVIEW
Slide 7: Income Statement
INCOME STATEMENT H1 Sept H1 Sept Constant FY Mar 2024 2023 Reported v Currency 2024 £m £m 2023 % LFL4 v 2023 % £m Revenue 188.4 201.6 -6.5% +0.1% 392.1 Underlying¹ operating profit 19.7 21.4 -7.9% 43.2 Margin 10.5% 10.6% 11.0% Finance charges – cash (3.3) (3.3) (6.8) Underlying¹ PBT 16.4 18.1 -9.4%
Slide 8: Income Statement – Key Bridges
INCOME STATEMENT – KEY BRIDGES Revenue Underlying operating profit Base Up Down Base Up Down £201.6m £0.4m £21.4m – £(0.3)m £(0.6)m £(13.7)m £1.1m £(1.0)m £(0.8)m £188.4m £19.7m H1 Sept 2023 Currency Portfolio Development 3 UK SA H1 Sept 2024 H1 Sept 2023 Currency Portfolio Development 3 UK SA H1 Se
Slide 9: Earnings, Dividends and Tax
EARNINGS, DIVIDENDS AND TAX UNDERLYING¹ EPS DIVIDEND EFFECTIVE UNDERLYING EARNINGS PER SHARE TAX RATE £12.7m 14.1p 3.5p 22.6% (2023: £14.1m) (2023: 15.6p) (2023: 3.4p) (2023: 22.1%) DILUTED UNDERLYING EPS (PENCE) DIVIDEND PER SHARE (PENCE) H1 Sept 24 14.1 H1 Sept 24 3.5 H1 Sept 23 15.6 H1 Sept 23 3.
Slide 10: Cash Flow
CASH FLOW H1 Sept H1 Sept FY Mar TO DO 2024 £m 2023 £m 2024 £m Underlying EBITDA (pre-IFRS 16) 21.3 22.6 45.7 Working capital (9.6)3 1.3 3.3 Depreciation of right of use assets 2.6 2.2 4.7 Operating profit impact of IFRS 16 0.8 0.9 1.8 IFRS 2 charges/settlement of share options (0.3) 0.4 0.9 Underly
Slide 11: Strong Balance Sheet
STRONG BALANCE SHEET NET DEBT LEVERAGE PENSION SURPLUS £44.9m 1.0x 1 £16.5m 2 • Scale enabling investment in working • Sustained low leverage • Super-mature scheme - well managed capital and infrastructure • Facility of £130m RCF + £70m accordion • Significant liquidity and funding • 2024 triennial
Slide 12: UK Pension Scheme Update
UK PENSION SCHEME UPDATE UK Pension IAS 19R Assets and Liabilities UK Pension Data 500 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 Sep-24 400 Liabilities 467 448 428 411 416 368 285 275 265 Assets 404 400 396 362 398 388 300 292 282 300 (Deficit)/Surplus (63) (48) (32) (49) (18) 20 15 17
Slide 13: Strategic Progress
03 Thomas Willcocks Chief Executive Officer STRATEGIC PROGRESS
Slide 14: Accelerated Growth Drivers in Play
ACCELERATED GROWTH DRIVERS IN PLAY Successful and Significant opportunity Norcros scalable platform to develop and grow strategy • Market leading brands • Large, fragmented markets • M&A • Diversified products • Sustainability and care • Organic Growth and channels • Modernisation and synergies • Op
Slide 15: Strong Progress on Strategic Initiatives
STRONG PROGRESS ON STRATEGIC INITIATIVES STRATEGIC • Johnson Tiles (UK) disposal completed in May 2024 EXECUTION 1. Portfolio Development • Grant Westfield - cross-selling synergies DRIVING • Well-developed acquisition pipeline PROGRESS TO MID-TERM • New product launches – Cameo, ENVi®, Naturepanel
Slide 16: Portfolio Development
PORTFOLIO DEVELOPMENT Strong M&A track Target themes for M&A growth record and growth accelerator Fill gaps in the UK New capabilities New markets Disposal of Johnson Tiles UK aligned with portfolio Furniture, sanitaryware Sustainable products Europe/RoW development and margin progression Care/adapt
Slide 17: Organic Growth
ORGANIC GROWTH Group Growth Norcros Growth Accelerators Accelerators driving divisional organic market share growth New product development Key account management Cross-selling Customer service NORCROS INTERIM RESULTS TO 30 SEPTEMBER 2024 17
Slide 18: Organic Growth: New Furniture and Sanitaryware Range
ORGANIC GROWTH: NEW FURNITURE AND SANITARYWARE RANGE Cameo bathroom range launched in April 2024 Early wins in key retail and spec accounts In-house design Well-developed bathroom NPD pipeline Increased near-shore sourcing Organic development of new categories NORCROS INTERIM RESULTS TO 30 SEPTEMBER
Slide 19: Operational Excellence
OPERATIONAL EXCELLENCE Group scale Collaboration across 4 key themes allows us to drive efficiency and improved customer service Lean operations Coordinated logistics and warehousing Supply chain collaboration Data capabilities and efficiencies NORCROS INTERIM RESULTS TO 30 SEPTEMBER 2024 19
Slide 20: Operational Excellence: Warehouse Consolidation
OPERATIONAL EXCELLENCE: WAREHOUSE CONSOLIDATION UK footprint: 26 to 15 warehouses in 2024 Project 1: Vado consolidation in Bridgewater • Complete in April 2024 • 6 to 2 warehouses Project 2: Grant Westfield Distribution Centre • Complete in July 2024 • 10 to 4 warehouses • Sharing capacity and capab
Slide 21: ESG: Driving Competitive Advantage
ESG: DRIVING COMPETITIVE ADVANTAGE Key enablers Key areas of focus that drive our competitive People Product Planet advantage and growth Talent development NPD programme Net Zero Transition Plan DE&I Sustainable products Supply chain programme index development Deliver science-based targets by 2028
Slide 22: ESG: Sustainable Alternative to Tiles
ESG: SUSTAINABLE ALTERNATIVE TO TILES Launched premium brand and sustainable product range - May 2024 Lower carbon manufacturing than tiles Accelerating penetration of coverings market Wall panels moving out of bathroom Excellent market response NORCROS INTERIM RESULTS TO 30 SEPTEMBER 2024 22
Slide 23: Summary and Outlook
04 Thomas Willcocks Chief Executive Officer SUMMARY AND OUTLOOK
Slide 24: Resilient H1 & Well Positioned for Market Recovery
RESILIENT H1 & WELL POSITIONED FOR MARKET RECOVERY Resilient performance in challenging market Growing mid-premium RMI market share Well positioned for new build and RMI recovery Further progress on strategic initiatives Full year underlying operating profit expected to be in line with market expect
Slide 25: Q&A
NORCROS Q&A Thomas Willcocks Chief Executive Officer NORCROS INTERIM RESULTS TO 30 SEPTEMBER 2024 25
Slide 26: Appendix
05 APPENDIX
Slide 27: Norcros Investment Case
NORCROS INVESTMENT CASE NO. 1 01 02 BATHROOM MARKET LEADING BRANDS BENEFITS OF SCALE SUPPLIER Design-led, Driving organic IN THE UK sustainable product growth and development enabling operational Significant excellence opportunity to accelerate organic 03 04 and M&A growth and quality of RESILIENT M
Slide 28: Track Record of Sustained Performance
TRACK RECORD OF SUSTAINED PERFORMANCE REVENUE (£m) £m 500 UNDERLYING1 £m 50 47.3 441 OPERATING PROFIT 43.2 41.8 400 396 392 (£m) 40 UK 331 342 324 UK 34.4 32.3 33.8 300 South Africa 300 271 South Africa 30 27.4 236 23.8 219 222 21.3 Organic growth 200 Strong profit 20 16.1 17.0 enhanced by 100 post
Slide 29: What We Are
WHAT WE ARE UK’S NO.1 BATHROOM PRODUCTS Market leading GROUP Mid-premium bathroom & kitchen positioning products brands Differentiated by Capital light product design & & cash generative customer service NORCROS INTERIM RESULTS TO 30 SEPTEMBER 2024 29
Slide 30: Balanced and Diversified Business Portfolio
BALANCED AND DIVERSIFIED BUSINESS PORTFOLIO 3.6% 31% South Africa 5.3% 19.0% 6.1% a hA rf ic Revenue Sout 15.6% split by Regional brand 15.7% focus UK 4.4% 12.8% 7.1% 69% 10.3% UK excl. Johnson Tiles 1. Based on Norcros FY24 accounts excluding Norcros Adhesives and Johnson Tiles UK NORCROS INTERIM R
Slide 31: UK – Sustained Growth and Share Gains
UK – SUSTAINED GROWTH AND SHARE GAINS Norcros UK UK bathroom market dynamics • Strong heritage, market leading positions and strong brands • Large and fragmented bathroom products market • Businesses built on superior offering and customer service • Mid-to-premium RMI segment more resilient • Levera
Slide 32: Organic Growth – UK Share Gain Opportunity
ORGANIC GROWTH – UK SHARE GAIN OPPORTUNITY UK bathroom & kitchen – BRG assessment of selective markets @MSP1 £305m £252m £283m £285m £139m £395m2 £487m £381m 100 % • Market of c.£1.7bn in core Norcros product categories 80 • Additional c.£0.9bn in furniture and sanitaryware categories 60 • Wall cove
Slide 33: SA – Sustained Historic Performance
SA – SUSTAINED HISTORIC PERFORMANCE Norcros South Africa South African bathroom market dynamics • Strong heritage, market leading positions and strong brands • Large economy and business friendly environment • Business built on superior offering and customer service • Long-term socio-economic dynami
Slide 34: Organic Growth – SA Share Gain Opportunity
ORGANIC GROWTH – SA SHARE GAIN OPPORTUNITY SA bathroom – selective markets @MSP1 % £820m £140m £640m2 £1.6bn 100 • Sizeable market characterised by “long tail” of small independent competitors 80 • Norcros SA – business units have leading market positions 60 • Fragmented bathrooms and growing altern
Slide 35: Exceptional Items; Acquisition & Disposal Related Costs
EXCEPTIONAL ITEMS H1 Sept H1 Sept FY Mar 2024 £m 2023 £m 2024 £m Business restructuring costs1 (1.9) (1.4) (1.7) Investment property costs2 (0.2) – – Reversal of impairment – – 4.0 (2.1) (1.4) 2.3 1. H1 FY25 largely relates to depot consolidation costs at Grant Westfield 2. Site remediation and ongo
Slide 36: Net Debt Reconciliation
NET DEBT RECONCILIATION H1 Sept H1 Sept FY Mar 2024 £m 2023 £m 2024 £m Net debt – opening (37.3) (49.9) (49.9) Net cash flow (7.9) 4.3 14.3 Non-cash movements¹ (0.2) (0.3) (0.2) Foreign exchange 0.5 (0.7) (1.5) Net debt – closing (44.9) (46.6) (37.3) 1. Represents the movement in the costs of raisin
Slide 37: Effective Tax Rates
EFFECTIVE TAX RATES Effective tax rate – Underlying1 Effective tax rate – Reported H1 Sept H1 Sept FY Mar H1 Sept H1 Sept FY Mar 2024 £m 2023 £m 2024 £m 2024 £m 2023 £m 2024 £m Profit before tax 16.4 18.1 36.4 Result before tax (11.7) 11.7 32.6 Tax charge (3.7) (4.0) (7.6) Tax charge 3.1 (2.4) (5.8)
Slide 38: UK Pension Scheme – Cash Flows
UK PENSION SCHEME – CASH FLOWS Pension cash outflow close to peak at c.£22m Key: £m Actives past service 25 Deferreds Pensioners 20 15 10 5 0 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 NORCROS INTERIM RESULTS TO 30 SEPTEMBER 2024 38
Slide 39: The UK & Ireland's Number 1 Bathroom Products Group
THE UK & IRELAND’S NUMBER 1 BATHROOM PRODUCTS GROUP NORCROS INTERIM RESULTS TO 30 SEPTEMBER 2024 39
Slide 40: Cautionary Statement
CAUTIONARY STATEMENT Certain statements made in this presentation are forward-looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual events or results to differ materially from those expressed or implied by