Diploma Plc · LSE:DPLM
Diploma — H1 2025 Earnings Presentation
32 slides from Diploma's earnings presentation, May 20, 2025
Slide 1: Strong H1 Performance, Full Year Upgrade
HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2025 20 MAY 2025 STRONG H1 PERFORMANCE FULL YEAR UPGRADE
Slide 2: Agenda
AGENDA 01 OVERVIEW 02 FINANCIAL PERFORMANCE 03 STRATEGY AND BUSINESS REVIEW 2 DIPLOMA PLC H1 25 RESULTS
Slide 3: Overview
01 OVERVIEW
Slide 4: Sustainable Quality Compounding
01 OVERVIEW SUSTAINABLE QUALITY COMPOUNDING • Very strong performance building on long-term track record • Organic growth of 9%, demonstrating quality of portfolio • Balancing ambition with discipline: EPS up 23%, return on capital1 of 19.1% • Healthy acquisition pipeline: executed with discipline •
Slide 5: Strong H1 Performance
01 OVERVIEW STRONG H1 PERFORMANCE Organic Revenue Adjusted operating Adjusted revenue growth growth profit margin EPS growth 9% 14% 21.5% 23% H1 24: 5% H1 24: 10% H1 24: 19.6% H1 24: 10% Free cash flow Return on capital1 Leverage Dividend growth conversion 78% 19.1% 1.1X 5% H1 24: 76% H1 24: 18.0% H
Slide 6: People and Culture
01 OVERVIEW PEOPLE AND CULTURE • Talk about Sales Excellence event…. 6 DIPLOMA PLC H1 25 RESULTS
Slide 7: Financial Performance
02 FINANCIAL PERFORMANCE
Slide 8: Revenue Growth
02 FINANCIAL PERFORMANCE REVENUE GROWTH Six months ended 31 March Organic growth: 9% £728m FX +16% 0% +6% Life Net Seals Sciences acquisitions £638m Controls H1 24 14% reported revenue growth H1 25 Very strong organic growth 8 DIPLOMA PLC H1 25 RESULTS
Slide 9: Operating Margin Expansion
02 FINANCIAL PERFORMANCE OPERATING MARGIN EXPANSION Six months ended 31 March Value-add Margin formula £157m FX £125m Opex Net Inflation Volume Pricing reinvestment acquisitions H1 24 25% adjusted operating profit growth H1 25 19.6% 21.5% 190bps operating margin expansion All profit metrics are adju
Slide 10: Compounding EPS Growth
02 FINANCIAL PERFORMANCE COMPOUNDING EPS GROWTH Six months ended 31 March 25.3 (2.9) (5.5) Interest (1.8) 80.2p Tax FX 65.1p Operating profit growth H1 24 23% adjusted EPS growth H1 25 Continuing long-term track record All profit metrics are adjusted and stated before acquisition related and other c
Slide 11: Strong Cash Conversion
02 FINANCIAL PERFORMANCE STRONG CASH CONVERSION Six months ended 31 March £m 156.9 £83.8m Free cash flow (10.9) (56.5) (13.7) 29.7 FX (41.4) 23.8 (37.7) Other Depreciation Net Dividend (4.1) Interest acquisitions Adjusted & tax operating Net Working Profit capex capital FY 24 H1 25 Net debt Net debt
Slide 12: Disciplined Stewardship of Capital
02 FINANCIAL PERFORMANCE DISCIPLINED STEWARDSHIP OF CAPITAL Return on capital1 (%) CAPITAL ALLOCATION PRIORITIES 5 year average: 18% i ii iii iv 19.1 19.1 19.1 17.4 17.3 18.1 Investment for Targeted Returns to Balance sheet organic growth acquisitions shareholders prudence to drive future organic gr
Slide 13: Well-Positioned Against Tariff Backdrop
03 STRATEGY AND PERFORMANCE WELL-POSITIONED AGAINST TARIFF BACKDROP US businesses 52% of Group revenue US sourced US generated revenue RESILIENT MODEL • Diversified portfolio • Value-added solutions >80% >85% • Low cost, critical components • ‘Local for local’ supply chains Non-US businesses 48% of
Slide 14: Upgrading FY25 Guidance
02 FINANCIAL PERFORMANCE UPGRADING FY25 GUIDANCE Organic revenue growth Confidence in our model Consistent delivery 8% (up from 6%) Operating margin c.22% Strong first half performance (up from c.21%) Momentum into H2 Net acquisition revenue growth across all Sectors 2% (unchanged) Positive outlook
Slide 15: Strategy and Business Review
03 STRATEGY AND BUSINESS REVIEW
Slide 16: A Clear Strategy for Growth
03 STRATEGY AND PERFORMANCE A CLEAR STRATEGY FOR GROWTH Organic growth in 3 buckets: GROW 1 END MARKETS 2 GEOGRAPHIC 3 PRODUCT PENETRATION EXTENSION Complementary acquisitions to drive future organic growth SCALE Value-add business model at scale Powerful decentralised Group at scale Deliver Value R
Slide 17: Sustainable Quality Compounding: Ambitious Organic Growth
03 STRATEGY AND PERFORMANCE SUSTAINABLE QUALITY COMPOUNDING: AMBITIOUS ORGANIC GROWTH 7% GROWTH EXECUTION: OPPORTUNITY SALES EXCELLENCE 5% • Fantastic growth • Share of wallet: opportunities for excellent customer all businesses service and relationships • Increasing exposure to structurally growing
Slide 18: Sustainable Quality Compounding: Disciplined Returns
03 STRATEGY AND PERFORMANCE SUSTAINABLE QUALITY COMPOUNDING: DISCIPLINED RETURNS EFFECTIVE CAPITAL DEPLOYMENT HEALTHY ACQUISITION PIPELINE £2.0bn Long term Active Average size opportunities by enterprise value capital deployed pipeline >3,500 >60 c.£25m ( from >3,000 at FY24 ) (from >50 at FY24) (co
Slide 19: Sustainable Quality Compounding: Consistent Delivery
03 STRATEGY AND PERFORMANCE SUSTAINABLE QUALITY COMPOUNDING: CONSISTENT DELIVERY DIVERSIFIED DIFFERENTIATED PORTFOLIO BUSINESS MODELS • Broad end-market exposure • Value-add solutions • Attractive geographical • Low cost components funded footprint from customers’ opex • Diverse specialised • Critic
Slide 20: Controls: Excellent Performance
03 STRATEGY AND PERFORMANCE CONTROLS: EXCELLENT PERFORMANCE H1 25 H1 24 Change PERCENTAGE OF GROUP REVENUE* Revenue £391.3m £288.1m +36% 54% Organic growth +16% +7% Adjusted operating profit £114.4m £69.9m +64% SECTOR REVENUE MIX Adjusted operating margin 29.2% 24.3% +490bps 43% Wire & cable 34% Spe
Slide 21: Peerless: A Great First Year
03 STRATEGY AND PERFORMANCE PEERLESS: A GREAT FIRST YEAR Return on capital in year one >20% STRONG AEROSPACE CRITICAL ROLE BRILLIANT EXCELLENT MARKET DEMAND IN SUPPLY CHAIN TEAM PERFORMANCE • New build backlog • Quality product/service • Strong leadership • Great first year • Active refurbishment •
Slide 22: Seals: Resilient Performance
03 STRATEGY AND PERFORMANCE SEALS: RESILIENT PERFORMANCE H1 25 H1 24 Change PERCENTAGE OF GROUP REVENUE* Revenue £226.7m £241.2m (6%) 31% Organic growth 0% +1% Adjusted operating profit £42.4m £44.3m (4%) SECTOR REVENUE MIX Adjusted operating margin 18.7% 18.4% +30bps 43% Seals 25% H1 25 highlight G
Slide 23: Life Sciences: Strong Performance
03 STRATEGY AND PERFORMANCE LIFE SCIENCES: STRONG PERFORMANCE H1 25 H1 24 Change PERCENTAGE OF GROUP REVENUE Revenue £110.5m £109.0m +1% 15% Organic growth +6% +5% Adjusted operating profit £21.9m £21.6m +1% SECTOR REVENUE MIX Adjusted operating margin 19.8% 19.8% - 34% IVD H1 25 highlights 60% Medt
Slide 24: Sustainable Quality Compounding
03 STRATEGY AND PERFORMANCE SUSTAINABLE QUALITY COMPOUNDING 1 2 3 4 5 6 CONSISTENT COMPOUNDING SUSTAINABLE CONSISTENT HIGH RESILIENCE STRONG ORGANIC ACQUISITIONS HIGH MARGINS STRONG CASH ROATCE GROWTH CONVERSION ✓ ✓ ✓ ✓ ✓ ✓ • Very strong performance building on long-term track record • Organic growt
Slide 25: Appendix
04 APPENDIX
Slide 26: Our Track Record
04 APPENDIX OUR TRACK RECORD FY19-24 FY19-24 Reported revenue (£m) Adjusted EPS (pence) CAGR: CAGR: 20% 18% FY09-18 FY09-18 CAGR: CAGR: 13% 16% 145.8 1,363 160 14.8 15-year revenue CAGR: 15% 15-year EPS CAGR: 16% 26 DIPLOMA PLC H1 25 RESULTS
Slide 27: Financial KPIs
04 APPENDIX FINANCIAL KPIS Five-year trends 5yr average 2024 2023 2022 2021 2020 Reported revenue growth 20%1 +14% +19% +29% +46% (1%) Organic revenue growth 7% +6% +8% +15% +12% (7%) Adjusted operating margin 19% 20.9% 19.7% 18.9% 18.9% 16.2% Adjusted EPS growth 18%1 +15% +18% +26% +51% (12%) Free
Slide 28: Significant White Space
04 APPENDIX SIGNIFICANT “WHITE SPACE” US CANADA UK&I GERMANY FRANCE SPAIN OTHER EU ANZ CURRENT Controls Wire & Cable Addressable Market Interconnect Specialty fasteners Specialty adhesives Industrial automation Seals Seals Gaskets Hoses & fittings Pumps & valves Life IVD Sciences Medtech Scientific
Slide 29: Income Statement
04 APPENDIX INCOME STATEMENT Six months ended 31 March £m H1 25 H1 24 Change Revenue 728.5 638.3 +14% Adjusted operating profit 156.9 125.4 +25% Operating margin (%) 21.5% 19.6% Financial expense, net (14.1) (10.2) Profit before tax 142.8 115.2 +24% Effective tax rate 24.5% 24.0% Adjusted earnings 1
Slide 30: Sector Revenue and Profit
04 APPENDIX SECTOR REVENUE AND PROFIT Revenue Organic growth H1 25 H1 24 H1 25 H1 24 £m £m Change % % Controls 391.3 288.1 +36% +16 +7 Seals 226.7 241.2 (6%) +0 +1 Life Sciences 110.5 109.0 +1% +6 +5 Group 728.5 638.3 +14% +9 +5 Adjusted operating profit Adjusted operating margin H1 25 H1 24 H1 25 H
Slide 31: Balance Sheet
04 APPENDIX BALANCE SHEET £m, as at 31 March H1 25 H1 24 Goodwill and acquisition intangible assets 1,039.3 919.6 Tangible and other intangible assets 62.0 62.5 Net lease liabilities (3.7) (6.6) Net working capital 291.5 237.3 Trading capital employed - reported 1,389.1 1,212.8 ROATCE 19.1% 18.0% Re
Slide 32: Ample Capacity for Growth
04 APPENDIX AMPLE CAPACITY FOR GROWTH • £555m RCF Funding facilities (£m) 1,000 • USPPs: €250m + $150m USPP RCF RCF extension option • c.£500m cash and undrawn 800 facilities at 31 March • All-in blended rate @ 5.3%1 600 • Average maturity of drawn 400 debt 7.4 years • Covenants: leverage <3.5x, 200