Howden Joinery Group Plc · LSE:HWDN

Howden Joinery — FY2023 Earnings Presentation

113 slides from Howden Joinery's earnings presentation, Feb 29, 2024

1. Slide 1: 2023 Full Year Results

   2023 Full Year Results 29th February 2024

2. Slide 2: Andrew Livingston, Chief Executive Officer

   Andrew Livingston Chief Executive Officer

3. Slide 3: Resilient performance in a more challenging marketplace

   Resilient performance in a more challenging marketplace Sales and profit for the year met our expectations  Group Sales in line with 2022 and +46% v 2019  Gained market share, mitigating decline in size of UK kitchen market  Entry level kitchens accounted for more of the kitchens we sold  “Joine

4. Slide 4: Net Zero plan submitted, SBTi approved 2030 target

   Net Zero plan submitted, and SBTi have now approved our 2030 emissions reduction target Direct emissions halved by 2030 and net zero by 2050 4

5. Slide 5: Performance demonstrates strength of our in-stock model

   Performance demonstrates strength of our in-stock model founded on local relationships  Reflects combination of strong product line-up, high stock availability, industry leading service levels and a very engaged team  Benefits of ongoing investment in customer focused strategic initiatives  Recor

6. Slide 6: Robust business model in markets with significant growth opportunities

   Robust business model in markets with significant growth opportunities  Expecting 2024 market conditions to be broadly unchanged from those in 2023  Well-prepared for such market conditions  Model capable of delivering sustainable market share gains  Addressable UK markets in which we have an es

7. Slide 7: Initiatives to increase market share and profits

   Initiatives to increase market share and profits Depot Evolution Range and Supply Management Digital Development International

8. Slide 8: Financial Review - Paul Hayes

   FINANCIAL REVIEW Paul Hayes Chief Financial Officer

9. Slide 9: Financial highlights

   Financial highlights Performance in line with expectations with further market share gains % change £m 2023 2022 % change vs 2019  Further market share gains highlights attractive Revenue 2,310.9 2,319.0 -0.3% +45.9% business model Gross profit 1,403.9 1,411.2  Maintained sector leading margins in

10. Slide 10: Revenue

    Revenue Revenue in line with last year’s record performance in challenging markets UK (£m) 2023 2022 change  Markets more challenging in 2023 with household budgets under pressure Revenue 2,241.1 2,256.1 -0.7% Same depot basis1 2,195.3 2,232.8 -1.7%  Disciplined approach to balancing pricing and v

11. Slide 11: Profit before tax

    Profit before tax Continued investment in our strategic initiatives to drive future growth £m Price Volume  Disciplined pricing broadly offset lower volumes (revenue) / mix Product cost pressure /  Expanded manufacturing capabilities including solid saving etc. Operating Change worksurfaces, new s

12. Slide 12: Operating expenses

    Operating expenses Inflationary costs more than offset by efficiency savings protecting investments in strategic initiatives Investment includes: £m Change £68m  63 new UK depots since start of FY 2021 Existing International UK 53rd week*  Warehousing and transportation includes full roll out of X

13. Slide 13: Cashflow

    Cashflow Strong cash generation supports investments and returns to shareholders £m 2023 2022 Opening cash 308.0 515.3  £164m of returns to shareholders in dividends and buy backs Operating cash flows1 470.8 548.5 Working capital increase (35.0) (51.7)  Working capital movements including inflatio

14. Slide 14: Earnings per share and dividends

    Earnings per share and dividends Delivering progressive dividend growth and returning surplus capital 2023 2022 change Basic earnings per share (p per share) 46.5p 65.8p -29.3% Share buybacks (£m) £50m £250m  Earnings per share of 46.5 pence per share in the year  Proposed final dividend of 16.2p

15. Slide 15: Technical guidance in 2024

    Technical guidance in 2024 Income statement Impact Effective tax rate 23% Patent box impact on Group effective tax rate: c.3% lower Foreign exchange sensitivity: +/- €0.01 = £1.8m +/- $0.01 = £0.8m Re-routing of freight (Red Sea disruption): c.£5m higher Cashflow Capital investment: c.£125m Timing o

16. Slide 16: Summary

    Summary  Strong balance sheet and cash generation supports our investment in Howdens’ strategic initiatives  Ongoing productivity and efficiency savings in a challenging market  Confident in our plans for the business and Group on track with its outlook for 2024 16

17. Slide 17: Andrew Livingston, Chief Executive Officer

    Andrew Livingston Chief Executive Officer

18. Slide 18: Initiatives to increase market share and profits

    Initiatives to increase market share and profits Depot Evolution Range and Supply Management Digital Development International

19. Slide 19: Initiatives to increase market share and profits

    Initiatives to increase market share and profits Depot Evolution Range and Supply Management Digital Development International

20. Slide 20: Extending the UK footprint

    Extending the UK footprint High service levels valued by customers  Modern working and trading environment  Cost effective updated format  33 depots opened in 2023  840 trading at year-end  Scope for around 1,000 depots in the UK  Plan to open c. 30 new depots in 2024 20

21. Slide 21: Converting more depots to the updated format

    Converting more depots to the updated format  Positive feedback from depot teams and customers 89 Revamps in 2023, nine more than initial target ~54% 52% 274 depots reformatted by end of 2023 of depots opened in the old format  Investment to be recouped in less than four years revamped by end of 2

22. Slide 22: Initiatives to increase market share and profits

    Initiatives to increase market share and profits Depot Evolution Range and Supply Management Digital Development International

23. Slide 23: Market leading and competitively priced product is a key feature of our model

    Market leading and competitively priced product is a key feature of our model 23 new kitchen ranges in 2023 • Making more popular styles accessible to all budgets • Continued development of premium kitchens including new paint to order service  Enhanced worktops offering  Refreshed line-up in othe

24. Slide 24: Sales of new product make a significant contribution

    Sales of new product (“NPI”) make a significant contribution to our performance  Upgraded new product programme in recent years 22% of total UK sales were of new product introduced in 2022 & 2023 32% of total UK sales were of new product introduced in 2021 to 2023 34% increase in sales of product l

25. Slide 25: Efficient range management for best availability and profitability

    Efficient range management for best availability and profitability  Re-organised range architecture and removed duplications in recent years  Improved the balance between introductions and discontinuations  More efficient NPI testing enables us to bring more proven colours and styles to market mo

26. Slide 26: Market leading and competitively priced product is a key feature of our model

    Market leading and competitively priced product is a key feature of our model  Price featured prominently in 2023 and expect it to do so again in 2024  As enhanced by 2024 NPI, well positioned in all product categories  Emphasis on value for money and choice at all price points  New kitchens aim

27. Slide 27: Colours for our entry level ranges

    2024: Colours for our entry level ranges Greenwich Marine Blue 27

28. Slide 28: Colours for our entry level ranges

    2024: Colours for our entry level ranges Witney Reed Green 28

29. Slide 29: Best-selling paint to order colours added to Halesworth family

    2024: Best-selling paint to order colours added to Halesworth family Halesworth Antique Rose 29

30. Slide 30: Best-selling paint to order colours added to Halesworth family

    2024: Best-selling paint to order colours added to Halesworth family Halesworth Seafoam 30

31. Slide 31: Colours for mid-level ranges

    2024: Colours for mid-level ranges Bridgemere Linen 31

32. Slide 32: Colours for mid-level ranges

    2024: Colours for mid-level ranges Bridgemere Sage Green 32

33. Slide 33: New paint to order service for premium kitchens

    New paint to order service for premium kitchens  Favourable reception since launch in 2nd Half of 2023  Priced at a premium to colours available from stock  Starting 2024 with 15 Paint to order colour choices + nine from stock  More bespoke look, competitively priced  Available on a short lead

34. Slide 34: Developing a market leading solid work surface capability

    Developing a market leading solid work surface capability  Solid worktops often associated with sales of higher priced kitchens and a growing market segment  Our manufacturing capacity for these products is now amongst the largest in UK  Orders increased significantly in 2023  Industry leading t

35. Slide 35: Innovating in other product categories

    2024: Innovating in other product categories Herringbone Timeless Oak Granite Composite Sink Dark Grey Karndean Coastal Fog Howdens Black 5 Panel Pre-Finished Tinted Glazed door Lamona Built In Bean to Cup Black Coffee Machine 35

36. Slide 36: Fitted bedroom ranges trialled and now available nationwide

    2024: Fitted bedroom ranges trialled and now available nationwide  Suits skills of customers who fit kitchens  High cabinetry content, matching our manufacturing capabilities Bridgemere Greenwich Navy Dove Grey  Ranges developed in-house utilising existing manufacturing and supply infrastructure

37. Slide 37: Reinforced focus on price and promotions

    2023: Reinforced focus on price and promotions which demonstrate the value we offer and promotes footfall 37

38. Slide 38: High stock availability is a key component of our offer

    High stock availability is a key component of our offer; our service level from primary to UK depots reached 99.96% in 2023 38

39. Slide 39: Enhancing customer service levels through Daily Traders initiative

    Enhancing customer service levels through “Daily Traders” initiative  Daily Traders initiative trialled at the end of 2022 and subsequently rolled out to all UK depots  Initiative to improve customer service levels and sales  By optimising in-depot stock holdings of best-selling New stock managem

40. Slide 40: Using XDCs to facilitate high stock availability

    Using 12 XDCs to facilitate high stock availability 40 40

41. Slide 41: Rebalancing stock levels and delivery pattern of some lines

    Rebalancing stock levels and the delivery pattern of some lines for best availability  Depots can hold deeper stocks of faster selling lines  Simpler and more efficient for depots to:  deliver superior service  improve availability of all products  Frees up time and resources spent on stock man

42. Slide 42: Increased manufacturing capacity and broader capability

    2023: Increased manufacturing capacity and broader capability Production on the new lines at Howden site totalled c.600,000 pieces with full year capacity of c.2m pieces going forward  Ability to make a variety of kitchen furniture  Same quality as externally sourced product  Lower cost and reduc

43. Slide 43: New paint to order capability

    2023: New “paint to order” capability  Investment in two new lines  Facilitates our paint to order initiative for our premium kitchens  Located in purpose - built facility  Industry leading capability for these products 43

44. Slide 44: Initiatives to increase market share and profits

    Initiatives to increase market share and profits Depot Evolution Range and Supply Management Digital Development International

45. Slide 45: Increased usage of on-line trade account facilities

    2023 Increased usage of on-line trade account facilities which are valued by customers & depots 75,000 new account registrations 48% of customers had an online account at year-end  Total user views of trade platform + 7%  c. 75% of users looking at their confidential prices  Online account holder

46. Slide 46: High levels of engagement with our web platform and social media

    2023 High levels of engagement with our web platform and growing social media presence 19.6m site visits #1 for fitted kitchen site visits Page view metrics at consistently high levels 554,000 followers across social media sites  + 16% on 2022  c.5.4m monthly engagements 46

47. Slide 47: Higher brand awareness amongst end-users

    Higher brand awareness amongst end-users 47

48. Slide 48: New digitised in-stock management system, Live-Stock

    New digitised in-stock management system, “Live-Stock” Record and pick deliveries, check allocations and determine depot stock levels A Frees up time for depots to use more productively (amongst other benefits) System now being rolled-out to all UK depots 48

49. Slide 49: Click and Collect capability being upgraded significantly

    2024 “Click and Collect” capability being upgraded significantly Click and Collect service now being rolled out alongside digitised in–depot stock management  This and other initiatives provide the stock surety to introduce “Live Stock” Available to all online account holders by mid 2024  Real tim

50. Slide 50: Initiatives to help end-users interact with Howdens

    2023 Initiatives to help end-users interact with Howdens at each stage of their buying decision are contributing to an increase in digitally sourced contacts for depots Digital depot contacts of all types increased by 22% in 2023 A source of high-quality leads for depots and customers including for

51. Slide 51: Initiatives to increase market share and profits

    Initiatives to increase market share and profits Depot Evolution Range and Supply Management Digital Development International

52. Slide 52: Operations based in France increased sales in a challenging market

    Operations based in France increased sales in a challenging market  C.€4bn kitchen market*  City-based approach adopted from 2019  60 depots trading at end of 2022 (twice the 2020 total)  Opened five more at the end 2023  Rate of openings means many depot managers are relatively inexperienced i

53. Slide 53: Opened more depots in the Republic of Ireland

    Opened more depots in the Republic of Ireland and will open some more in 2024  Opened for business in 2022, using a similar location strategy to France  Supported by UK infrastructure and group digital platform Re do with five new  Opened five depots around Dublin in 2022 Dublin  Opened five in

54. Slide 54: Well planned on our strategic initiatives across all price points

    Well planned on our strategic initiatives as we deliver value to customers across all price points  Continued use of stock policies (at 2023 levels) to protect high availability  All new kitchen ranges confirmed for 2024 in stock by end June  Rooster promotional activity and other price initiativ

55. Slide 55: Encouraging start to 2024 and on track to meet expectations

    2024: Encouraging start to 2024 and we are on track to meet our expectations for the business this year  We expect market conditions will be broadly unchanged from those in 2023  Well prepared for the challenges and opportunities that such market conditions may present  Aim to retain a profitable

56. Slide 56: Questions & Answers

    w t™ © = a = < | w = 2 =] w ® s r=) 56

57. Slide 57: The UK's #1 Specialist Kitchen and Joinery Supplier

    Appendix The UK’s #1 Specialist Kitchen and Joinery Supplier An introduction to Howdens February 2024

58. Slide 58: We are the UK's leading specialist trade-only kitchen and joinery supplier

    We are the UK’s leading specialist trade-only kitchen and joinery supplier 2023 FINANCIAL HIGHLIGHTS ATTRACTIVE END MARKETS % Howdens revenue £2.3bn £340m 60.8% 90% 95% Revenue Operating profit Gross margin Repair Maintenance Residential & Improvement (RMI) 46.5p 21.0p £283m 10% Non-residential 5% N

59. Slide 59: Our business is about helping our trade customers achieve exceptional results

    Our business is about helping our trade customers achieve exceptional results CORE STRENGTHS Empowered depot teams support the needs of the local builder  Trade only focus and the best local prices.  Local delivery model – 85% of customers are less than 5 miles from a Howdens depot. 915 Local depo

60. Slide 60: A unique business model focused on long-term customer relationships

    A unique business model focused on long-term customer relationships and exceptional service Market leading Kitchen Trade only: An empowered, depot-led business, close and Joinery product ranges focused on our customers’ needs to the trade Products immediately Competitive Knowledgeable depot teams av

61. Slide 61: Our markets are large and attractive with significant future growth potential

    Our markets are large and attractive with significant future growth potential UK market by revenue1 UK market revenue by vendor category1 Contract Trade specialists specialists 24% 10% 34% 32% Independents Retail Bedrooms Howdens Kitchens £2.2bn Joinery £6.6bn £5.4bn £1.2bn £12bn* NEW + in 2024 * Es

62. Slide 62: The long-term drivers of the kitchen and joinery market support continued growth

    The long-term drivers of the kitchen and joinery market support continued growth Structural drivers Recent trends  Population growth (by 2030 UK population will grow by 5%  Post-pandemic UK hybrid working up to 5 times the level and will have 2m new citizens – ONS). pre-pandemic (McKinsey) leads t

63. Slide 63: We have identified the major steps to achieve net zero emissions

    We have identified the major steps to achieve net zero emissions 63

64. Slide 64: Consistent revenue growth and sector leading margins

    We’ve delivered consistent revenue growth and sector leading margins Revenue £2.3bn Return on sales (%) Gross margin (%) 60.8% £0.8bn 56.2% £340m 14.7% £80m 10.3% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 64

65. Slide 65: Sales performance has been robust in downturns

    Sales performance has been robust in downturns Year over year revenue growth (%) 35% 35% Howdens had greater resilience …and during versus peers during the COVID-19 21% 19% 17% the GFC… pandemic 17% 14% 14% 14% 14% 13% 13% 11% 11% 12% 10% 11% 9% 10% 8% 8% 7% 7% 8% 7% 8% 6% 5% 6% 5% 5% 6% 4% 5% 4% 2%

66. Slide 66: Strong track record of cash generation, investment, and capital returns

    We have a strong track record of cash generation, investment, and capital returns Over the past 10 years: £496m £3bn £730m Generated in Invested in capex operating cashflow £704m £674m £273m £283m Returned in ordinary Returned in buybacks dividends and special dividends £184m £187m £175m £164m £151m

67. Slide 67: Initiatives to increase market share and profits

    Initiatives to increase market share and profits Depot Evolution Range and Supply Management Digital Development International 67

68. Slide 68: Extending the UK footprint

    Extending the UK footprint  Modern working and trading environment  Cost effective updated format  Scope for around 1,000 depots in the UK  versus the 840 trading at year-end  Plan to open around 30 new depots in 2024 In 2018, Howdens developed an updated depot format and have been rolling it o

69. Slide 69: Converting more depots to the updated format

    Converting more depots to the updated format  Positive feedback from depot teams and customers 54% 274 depots reformatted by end of 2023 of depots opened in the old format  Investment to be recouped in less than four years revamped by end of 2024  Depots motivated to deliver incremental sales (lo

70. Slide 70: A significant opportunity to win market share in kitchens

    A significant opportunity to win market share in kitchens Howdens Relative Market Share in Kitchens by Price Band ‘Good’ Entry level (0-£4k) ‘Better’ Mid-ranges (£4-8k) ‘Best’ Higher price £8k+ HIGH MED LOW RMS* RMS* RMS* Greenwich Hockley Chelford Clerkenwell ~£1.5bn market value ~£3.0bn market val

71. Slide 71: New colours for our entry level ranges

    GOOD (£0-4k) New colours for our entry level ranges Witney Pebble 71

72. Slide 72: Refreshed look for best-selling shaker family

    B E T T E R ( £ 4 k - £8 k ) Refreshed look for best-selling shaker family Halesworth Charcoal 72

73. Slide 73: New market-leading colours for premium kitchens

    BEST (£8k+) New market-leading colours for premium kitchens Chilcomb Marine Blue 73

74. Slide 74: Premium kitchen paint to order capability

    New: Premium kitchen paint to order capability  Investment in two new lines, now operational  Facilitates our paint to order initiative for our premium kitchens  Located in purpose-built facility  Industry leading capability for these products  Range of 15 colour choices with a short delivery l

75. Slide 75: Bedroom ranges now stocked in all UK depots

    New: Bedroom ranges now stocked in all UK depots Bridgemere Navy 75 75

76. Slide 76: We are investing in manufacturing and more vertical integration

    We are investing in manufacturing and more vertical integration  Increased manufacturing volume (as % COGS) from Distribution Raunds: 144k pallets 35% in 2023 15k SKUs 44m pieces  Investment in additional capacity including door frontals, laminated worktops, skirting and architraves Runcorn: 6.2k

77. Slide 77: Rebalancing stock levels and delivery pattern of some lines

    Rebalancing stock levels and the delivery pattern of some lines for best availability  Depots can hold deeper stocks of faster selling lines  Simpler and more efficient for depots to:  deliver superior service  improve availability of all products  Frees up time and resources spent on stock man

78. Slide 78: Online services valued by customers and depots

    Online services valued by customers and depots  75,000 new account registrations in 2023  48% of customers have an online account  Weekly trade platform logins +7%  c.75% of users looking at their confidential prices  Online account holders trade more frequently  And spend more across more cat

79. Slide 79: International continues to make progress

    International continues to make progress  France: €3.9bn kitchen market*  City-based approach adopted from 2019  Rapid expansion: 65 depots trading  Increased recognition of our model’s advantages  Scale benefits as 90% of range common to UK  Focusing on trading existing depots and expanding f

80. Slide 80: Strong balance sheet and clear capital allocation priorities

    We have a strong balance sheet and clear capital allocation priorities Invest in organic Grow a progressive expansion in line and sustainable with the strategy ordinary dividend 1 2 through the cycle Significant shareholder value creation Return surplus cash 1 to shareholders Invest selectively in -

81. Slide 81: Tax – patent box claim

    Tax – patent box claim  Patented cabinet leg is unique to the market and meets builders’ needs in three ways:  Strength: will withstand a lifetime fully laden and cabinet can be moved around across uneven flooring on legs  Speed: quick to install and adjust tool free  Ease: back legs adjustable

82. Slide 82: Group pension scheme in deficit at December 2023

    Group pension scheme in deficit at 30 December 2023* Change IAS19 basis £29m £m Dec 2022 Contribution Dec 2023 Asset returns Net discount rate Admin cost * Scheme & interest returned to small surplus at 31/1/2024 (on a technical provisions basis) 82

83. Slide 83: Howdens' investment case

    Howdens’ investment case Sustainable growth, sector leading margins and strong cash generation A differentiated business model with benefits of scale and local trade relationships A well-established strategy to deliver profitable growth Leading positions in attractive markets with opportunities to g

84. Slide 84: Results summary

    29 February 2024 Performance in line with expectations, with further market share gains. Investing to drive future growth. Results summary 20231 20221 Change Change £ millions (unless stated) vs 2022 vs 2019 Group revenue 2,310.9 2,319.0 -0.3% +45.9% - UK 2,241.1 2,256.1 -0.7% +44.6% - International

85. Slide 85: Operational developments, outlook and technical guidance

    29 February 2024 Operational developments in the year - Opened 33 new depots, bringing the total in the UK to 840. Revamped 89 older depots during the year, including relocations, having now upgraded 274 of the 670 UK depots opened in the old format. - Opened 10 international depots with 65 trading

86. Slide 86: For further information please contact Howden Joinery Group Plc

    29 February 2024 For further information please contact Howden Joinery Group Plc Media Enquiries Paul Hayes, CFO Nina Coad, David Litterick (Brunswick) Tel: +44 (0) 207 535 1162 Tel: +44 (0) 207 404 5959 Mark Fearon, Director of IR and Communications Mobile: +44 (0)7711 875070 Results presentation:

87. Slide 87: Financial review

    29 February 2024 Financial review Financial results for 20231 Revenue £m (unless stated) 2023 2022 Change # of depots 2023 UK depots - same depot basis2,4 2,195.3 2,232.8 -1.7% 777 UK depots opened in previous two years 45.8 23.33 63 Total - UK depots 2,241.1 2,256.1 -0.7% 840 Total - International

88. Slide 88: Tax, profit after tax, cash and capital allocation

    29 February 2024 2023 and £12m on international depots opened in the period and prior year. We also invested £25m in warehouse and transportation initiatives including the full year impact of our investment in our regional cross docking facilities (XDCs). The net interest charge was £12.6m (2022: £9

89. Slide 89: Operational Review: Pensions

    29 February 2024 Pensions At 30 December 2023, the defined benefit pension scheme was in a deficit position of £12.6m on an IAS 19 basis compared to a deficit of £41.5m on 24 December 2022. The scheme is closed for future accrual. The triennial actuarial valuation of the scheme was conducted as at 3

90. Slide 90: Evolving our depot model and range management

    29 February 2024 2. Improving our range and supply management to help customers’ buying decisions, to improve service and choice and to enhance productivity in our manufacturing, sourcing, and supply chain activities. 3. Developing our digital platforms to raise brand awareness, support the business

91. Slide 91: Manufacturing and supply chain; digital platform

    29 February 2024 - This year, ahead of our peak trading period, we also developed an in-house manufactured fitted bedroom range, testing the concept in 200 depots nationally. Initial uptake has been encouraging and the fitted bedrooms are now available in all UK depots in four styles drawn from our

92. Slide 92: Environment, social and governance (ESG)

    29 February 2024 which has nearly tripled since 2019, and we see the potential to raise awareness to higher levels. We ended the year with 554,000 followers across the major social media platforms. Developing our international operations Our international operations, predominantly based in France, c

93. Slide 93: Wellbeing and environment

    29 February 2024 across the business. We have a calendar of wellbeing events throughout the year to ensure we give these issues appropriate focus amongst our employees. Environment Our focus remains on: - reducing direct emissions in our own manufacturing and logistics operations. - working closely

94. Slide 94: Going concern

    29 February 2024 GOING CONCERN The Directors have adopted the going concern basis in preparing the financial statements and have concluded that there are no material uncertainties leading to significant doubt about the Group’s going concern status. The reasons for this are explained below. Going con

95. Slide 95: Long-term prospects and viability

    29 February 2024 Borrowing facility and covenants The Group has a five-year, committed, multi-currency revolving credit facility of up to £150m, which expires in September 2027 and which was not drawn at the period end. As part of the scenario modelling described above, we have tested the borrowing

96. Slide 96: Assessment of viability; principal risks and uncertainties

    29 February 2024 ASSESSMENT OF VIABILITY Time period and scenario modelling The Directors’ review of the Group’s long-term viability used a three-year period to December 2026. This was considered to be the most suitable period as it aligns with the Group’s strategic planning process. The financial m

97. Slide 97: Market conditions, maximising growth, people

    29 February 2024 1. Market Conditions Risk and impact We sell our products to small builders who install them in different types of housing. Our sales depend on the demand for repair, maintenance, and improvement services. If activity falls in these areas, it can affect our sales. Mitigating factors

98. Slide 98: Supply chain, health & safety, cyber security

    29 February 2024 4. Supply Chain Over 2023, the scoring of this risk has decreased as our supply base continues to improve and return to a more pre-pandemic environment. While further escalation of the conflict in the Middle East could have a knock-on impact for shipping transit times and freight co

99. Slide 99: Business model and culture, product, business continuity

    29 February 2024 Risk appetite We have a very low appetite for cyber security risk and manage IT security closely to secure the confidentiality, integrity, and availability of our systems. 7. Business Model and Culture Risk and impact If we lose sight of our values, model, or culture we will not suc

100. Slide 100: Cautionary statement; directors' responsibility statement

     29 February 2024 CAUTIONARY STATEMENT Certain statements in this Full Year results announcement are forward-looking. Although the Group believes that the expectations reflected in these forward-looking statements are reasonable, we can give no assurance that these expectations will prove to have bee

101. Slide 101: Consolidated income statement

     29 February 2024 Consolidated income statement 53 weeks to 52 weeks to 30 December 24 December 2023 2022 Notes £m £m Continuing operations: Revenue 2 2,310.9 2,319.0 Cost of sales (907.0) (907.8) Gross profit 1,403.9 1,411.2 Operating expenses (1,063.7) (996.0) Operating profit 3 340.2 415.2 Finance

102. Slide 102: Consolidated balance sheet

     29 February 2024 Consolidated balance sheet 30 December 2023 24 December 2022 Notes £m £m Non-current assets Intangible assets 43.5 35.9 Property, plant and equipment 456.9 398.7 Lease right-of-use assets 647.9 614.3 Deferred tax asset 15.6 35.9 Prepaid credit facility fees 0.8 1.0 1,164.7 1,085.8 C

103. Slide 103: Consolidated statement of changes in equity

     29 February 2024 Consolidated statement of changes in equity ESOP and Capital Share share- Share redemption premium based Treasury Retained capital reserve account payments shares earnings Total £m £m £m £m £m £m £m At 25 December 2021 59.8 5.4 87.5 5.9 (27.1) 860.0 991.5 Accumulated profit for the

104. Slide 104: Consolidated cash flow statement

     29 February 2024 Consolidated cash flow statement 53 weeks to 52 weeks to 30 December 24 December 2023 2022 Notes £m £m1 Profit before tax 327.6 405.8 Adjustments for: Finance income (5.5) (3.8) Finance costs 18.1 13.2 Depreciation and amortisation of owned assets 50.8 44.0 Depreciation, impairment

105. Slide 105: Notes to the consolidated financial statements

     29 February 2024 Notes to the consolidated financial statements 1 General Information Accounting period The Group’s accounting period covers the 53 weeks to 30 December 2023. The comparative period covered the 52 weeks to 24 December 2022. Statement of compliance and basis of preparation The Group f

106. Slide 106: Operating profit

     29 February 2024 The following is an analysis of the carrying amount of assets, and additions to property, plant and equipment and intangible assets, analysed by the geographical area in which the assets are located. Carrying amount of assets 30 December 2023 24 December 2022 £m £m UK 1,935.6 1,903.

107. Slide 107: Current tax

     29 February 2024 4 Current tax (a) Tax in the income statement 53 weeks to 52 weeks to 30 December 2023 24 December 2022 £m £m Current tax: Current year 64.7 77.2 Adjustments in respect of previous periods (8.2) (33.6) Total current tax 56.5 43.6 Deferred tax: Current year 14.9 2.1 Adjustments in re

108. Slide 108: Earnings per share

     29 February 2024 (c) Reconciliation of the total tax charge The total tax charge for the period can be reconciled to the result per the income statement as follows: 53 weeks to 52 weeks to 30 December 2023 24 December 2022 £m £m Profit before tax 327.6 405.8 Tax at the UK corporation tax rate of 23.

109. Slide 109: Dividends; retirement benefit obligations

     29 February 2024 6 Dividends 53 weeks to 52 weeks to Amounts recognised as distributions to equity holders in the 30 December 2023 24 December 2022 period: £m £m Final dividend for the 52 weeks to 25 December 2021 - - 88.9 15.2p/share Interim dividend for the 52 weeks to 24 December 2022 - - 26.1 4.

110. Slide 110: Other information – defined benefit pension plan

     29 February 2024 (b) Other information – defined benefit pension plan 53 weeks to 52 weeks to Key assumptions used in the valuation of the plan 30 December 2023 24 December 2022 Discount rate 4.55% 4.70% Inflation assumption - RPI 3.05% 3.15% Inflation assumption - CPI 2.60% 2.70% Rate of increase o

111. Slide 111: Balance sheet

     29 February 2024 30 December 2023 24 December 2022 No quoted No quoted Quoted market market price in Quoted market market price in price in an an active price in an an active active market market active market market Analysis of plan assets £m £m £m £m LDI* - - - fixed income 282.9 270.0 - derivativ

112. Slide 112: Movements in defined benefit obligations

     29 February 2024 Movements in the present value of defined benefit obligations were as follows: 53 weeks to 52 weeks to 30 December 2023 24 December 2022 £m £m Present value at start of period 930.5 1,512.5 Administration cost 2.3 2.4 Interest on obligation 42.8 28.3 Actuarial losses/(gains): - chan

113. Slide 113: Income statement

     29 February 2024 Income statement Amounts recognised in the income statement arising from the Group's obligations in respect of the defined benefit plan are shown below. 53 weeks to 52 weeks to 30 December 2023 24 December 2022 Amount charged to operating profit: £m £m Current service cost - – Admin

Howden Joinery Group — FY2023 Earnings Presentation on 6ix