Slide 1: 2022 Interim Results
LUCECO BRINGING POWER TO LIFE 2022 INTERIM RESULTS SEPTEMBER 2022 w.lucecoplc.com
Slide 2: Agenda
LUCECO Agenda Highlights Financial Review Business Review Outlook Q&A John Hornby Matt Webb CEO CFO Luceco ple 2022 Interim Results Presentation 2
Slide 3: Highlights
Highlights * H12022 results in line with July Trading Update: - Revenue: £106.4m - Adjusted Operating Profit: £11.5m * Results reflect some normalisation following record 2021 results: - Slowdown in DIY demand post-lockdown - Significant but temporary headwind from distributor customer destocking *
Slide 4: Highlights (continued)
Highlights (continued) * Well positioned for uncertain macroeconomic conditions: - Market demand for products better than results suggest - Cost inflation passed through: o now reversing © gross margin building - Successful entry into EV charge point market - Acquisition integration progressing well
Slide 5: Financial Review
LUCECO FINANCIAL REVIEW MATT WEBB CFO ii tal} 2 Oa ii ge: Ee | be 22 772 Gogo Oe § te Sa
Slide 6: Financial highlights
LUCECO Financial highlights . . Adjusted Revenue Operating Profit Operating Profit £106.4m £10.0m £11.5m -2% +29% -47% +43% -40% +60% vs H1 2021 vs H1 2019 vs H1 2021 vs H1 2019 vs H1 2021 vs H1 2019 (pre-COVID) (pre-COVID) (pre-COVID) Adjusted Operating Margin Adjusted EPS Dividend 10.8% 5.8p 1.6p
Slide 7: Income statement
Income statement Adjusted £m H1 2022 H1 2021 H1 2019! Revenue 106.4 108.2 82.7 * Revenue of £106.4m: - 1.7% lower than H1 2021 Gross profit 36.2 41.7 28.9 - 28.7% higher than H1 2019 Gross margin % 34.0% 38.5% 35.0% - Market share gained during the pandemic Overhead costs (24.7) (22.5) (21.7) + Gros
Slide 8: Revenue bridge
Revenue bridge vs H1 2021 (£m) * Revenue significantly impacted by customer stock changes: - Stocked up in H1 2021 - Stocked down in H1 2022 - Drove the majority of the like-for- 2A Acquisitions/ like CLFL’) decline murray | closes LEL - Only modest decline absent 2.2% , (16.5%) customer stock movem
Slide 9: Market growth
Market growth % of Group Change Market growth (value) revenue! vs H1 20212 Residential RMI - DIY 35% (14.0%) Residential RMI - Professional 30% - Residential New 5% 5.0% Non-residential RMI 20% 10.0% Infrastructure 10% 14.0% Addressable market growth 100% (2.0%) 1. Like-for-like weighting excluding
Slide 10: Adjusted Operating Profit bridge
Adjusted Operating Profit bridge vs H1 2021 (£m) 01 Currency Acquisitions/ movements, closures (6.1) (8.9%) 0.5% LFL (31.8%) 11.5 H1 2021 H1 2022 vs H1 2019 (£m) LFL 81.9% Currenc movements Acausitions/ (19.4%) (2.8%) (1.4) um 2 115 H1 2019 Luceco ple 2022 Interim Results Presentation H1 2022 * Cust
Slide 11: Input cost inflation
Input cost inflation Inflation by type - Total annualised impact vs 2019 (£m) £25.0m £21.5m 8.7 KP Overheads FX 7.6 Other commoditias 7 Copper ¢ Freight Previous Latest estimate estimate Inflation and selling price increase impact by year (£m) £22.5m £21.5m 1.7 - SFY 2023. +£0.8m FY 2022 +£9.7m _ Ne
Slide 12: Cash flow and debt leverage
Cash flow and debt leverage Covenant Working capital management during COVID Covenant Net Debt (£m) leverage -———> 1.4x @ Excluding acquisitions 53.9 @ Sync EV purchase © DW Windsor purchase = > 0.7x 87 a @ 12022 30.6 @ 2021 ® 2020 2019 Average supplier Inventory cover Debtor days lead time (days) (
Slide 13: Business Review
LUCECO BUSINESS JOHN HORNBY CEO REVIEW
Slide 14: Review of recent progress - vs 2019
Review of recent progress - vs 2019 Financial progress (vs pre-COVID H1 2019)' Strategic progress +29% +2.1ppts 1. All metrics are Adjusted Luceco ple 2022 Interim Results Presentation
Slide 15: Long-term market growth drivers
Long-term market growth drivers Driver Impact Driver * Consumers demand more technology and increased functionality * New UK Wiring +110% + Installers demand technologies that Regulations every increase in sales price of simplify installation c. 2 years UK consumer unit since i i * Both drive up pro
Slide 16: Review of recent progress - vs 2019
Review of recent progress - vs 2019 Channel revenue as H1 HI + New business wins % of Group 2019 2022 Change CS MEX - Overweight with Retail 33.5% 31.2% (2.3%) growing distributors Hybrid 20.1% 17.9% (2.2%) + M&A resumed Professional Wholesale 28.2% 24.7% (3.5%) Professional Projects 18.2% 26.2% 8.0
Slide 17: Review of recent progress - vs 2019
Review of recent progress - vs 2019 Inputs Example outputs Contractor focus groups Retailer / distributor engagement Sales team feedback Customer service calls Social media interactions Luceco ple 2022 Interim Results Presentation BG Fortress 8 Nexus Storm Development plan Examples of Luceco R&D and
Slide 18: Review of recent progress - vs 2019
Review of recent progress - vs 2019 * Renewed investment in + Now operationally carbon neutral contractor training: - Recognition of the next generation via Top 30 * Lowest carbon intensity in our sector’: 202% operational emissions Under 30 Awards: >1,000 89 per £m revenue (tCO,/£m) applicants 46 -
Slide 19: Update on DW Windsor acquisition
LUCECO Update on DW Windsor acquisition Background + Acquired in October 2021 * Designer and manufacturer of specified public-realm outdoor lighting * 14% share of £300m market + Highly complementary with our Kingfisher Lighting business * £16.3m paid on cash and debt-free basis, 7.0x EBITDA * Pre-a
Slide 20: Update on Sync EV acquisition
LUCECO Update on Sync EV acquisition Luceco ple 2022 Interim Results Presentation Background + Acquired in two stages: 20% in August 2021 and 80% in March 2022 * Designer and distributor of “destination” EV charge points * 2% share of £150m market, growing to £500m by 2025 * £10.3m paid on cash and
Slide 21: Outlook
LUCECO OUTLOOK JOHN HORNBY CEO
Slide 22: 2022 market trends
LUCECO 2022 market trends Residential - DIY (c.30% of Group) x Residential - Pro (c.30% of Group) => vs 2019 vs 6 months vs 2019 vs 6 months Indicator (pre-COVID) ago Indicator (pre-COVID) ago Barclaycard Consumer ONS Construction Output 5 Spend Report +18.2% | -3.3ppts ~ Residential RMI Growth “BES
Slide 23: Outlook
LUCECO Outlook FY 2022: * Trading since end of H1 in line with expectations * Consumer/DIY activity expected to continue to slow * Professional contractor activity expected to remain broadly stable * Improving gross margin and increasing contribution from EV chargers + Expect full year earnings in l
Slide 24: Q&A
Slide 25: Appendix
Slide 26: Company overview
Company overview Our purpose Sur strategy To help people harness power . . . We operate in Grow Customer-driven sustainably in everyday life mttractivelmarets Innovate Team-focused O2 We have an advantaged What we sell business model Sustain Bold and innovative + Designer and manufacturer of 03 We d
Slide 27: Performance by segment
Performance by segment Strong growth in each segment Wiring Accessories vs vs H1 2021 H12019 Revenue growth -32% +7% Profit growth -48% +34% 35% of Group revenue #2 in UK (rs) NEXUS Luceco ple 2022 Interim Results Presentation LED Lighting vs vs H1 2021 H12019 Revenue growth +52% +59% Profit growth
Slide 28: What we sell - Wiring accessories, British General
What we sell Wiring accessories - British General UK market size Established 1941 UK market position / approx marketshare #2 /15% Revenue as % of Group total’ 35% Revenue 3-year CAGR %& 17% Operating margin! 22% Product categories Switches and sockets, Circuit protection, Weatherproof, Junction boxe
Slide 29: What we sell - Commercial power, Nexus
What we sell Commercial power - Nexus UK market size c.£200 m Established 2021 UK market position / approx marketshare _ Recently established Product categories Decorative power & data modules, Cable management, Cables and connectors, Power distribution, Energy & user data management, Ergonomic acce
Slide 30: What we sell - LED lighting, Luceco
What we sell LED lighting - Luceco Luceco ple 2022 Interim Results Presentation UK market size c£700m Established 2013 UK market position / approx marketshare Top 10 /4% Revenue as % of Group total'= 38% Revenue 3-year CAGR %2* 6% (4% organic) Operating margin’? 3% Product categories Residential int
Slide 31: What we sell - LED lighting, Kingfisher
What we sell LED lighting - Kingfisher +f. ATR ii a LUCECO UK market size c £100m Established 1988 UK market position / approx market share UK #4 /15% Revenue as % of Group total! 38% Revenue 3-year CAGR %&5 6% (4% organic) Operating margin’ 3% Product categories Private realm exterior lighting 1. H
Slide 32: What we sell - LED lighting, DW Windsor
What we sell LED lighting - DW Windsor Luceco ple 2022 Interim Results Presentation LUCECO UK market size c £300m Established 1975 UK market position / approx marketshare UK #4/13% Revenue as % of Group total! 38% Revenue 3-year CAGR %* 6% (4% organic) Operating margin’ 3% Product categories Public
Slide 33: What we sell - Portable Power
What we sell Portable Power - Masterplug and BG Sync EV Luceco ple 2022 Interim Results Presentation LUCECO UK market size c£250m Established? 1988 UK market position / approx market share’ UK #1/ 40% Revenue as % of Group total’ 27% Revenue 3-year CAGR %5 9% Operating margin! 8% Product categories
Slide 34: Who we sell to
Who we sell to Retail Hybrid Professional Wholesale Professional Projects Luceco ple 2022 Interim Results Presentation DIY chains Pure play online Retail Grocers Chains selling to both professionals and consumers Chains selling to professionals only Sale agreed direct with professionals Example cust
Slide 35: Who we sell to
Who we sell to Product segmental sales by sales channel (as % of total) - H1 2022 2% 1% 15% 25% 66% 31% 9 21% 15% Wiring LED Portable Total Accessories Lighting Power Luceco ple 2022 Interim Results Presentation © Professional Products @ Professional Wholesale @ Hybrid @ Retail 35
Slide 36: Where we operate
Where we operate Distribution Sourcing to market 9 5% 1% © Europe @ Sold in end market @ UK @ Collected in China @ China- OEM @ China - manufactured 49% —) 45% a) Selling markets 4% 3% 2% @ Americas @ Asia Pacific @ Middle East and Africa © Europe @ UK Group revenue Group revenue by product origin b
Slide 37: Three reasons to invest
Three reasons to invest LUCECO We operate in attractive markets Strong positions... UK market position Segment Wiring Accessories LED Lighting Portable Power ...in attractive markets Increasing attractiveness Attractiveness drivers * Premium for ease of installation products + Technology changes (Sm
Slide 38: Three reasons to invest: advantaged business model
Three reasons to invest 02 We have an advantaged business model + Agile supply chain + High inventory availability 4 FULFIL in-country + Best-in-class warehouse IT + Able to offer products as part of design solution Luceco ple 2022 Interim Results Presentation All products designed in-house * c. 80
Slide 39: Three reasons to invest
Three reasons to invest O03 We deliver consistent and compelling financial outcomes 2019 2020 2021 Component Metric Target! Results Results Results Revenue Total revenue growth >5% 5.0% 2.4% 29.5% Profit Adjusted Operating Margin % >15% 10.5% 17.0% 17.1% Cash Adjusted Operating Cash Conversion % >10
Slide 40: Group history
Group history The group has developed through business combinations and organic expansion into new products and territories Kingfisher Lighting 52,50 to 52,500m Acquisition Sales offi of Kingfisher Spain and HK Lighting Masterplug Transition to ra Sales offices portable power subcontracted uring and
Slide 41: Capital allocation policy
Capital allocation policy 01 Dividends 40-60% payout 02 Capex 3-4% of annual revenue Progressive Product development Manufacturing capacity <3 year payback Conservative leverage 1.0x - 2.0x Adjusted EBITDA M&A DOCS” O4 Buybacks / Special Dividends Product adjacency Customer acquisition Clear synergy
Slide 42: 2013 to 2021 financials
2013 to 2021 financials Adjusted metrics Income Statement £m 2013 2014 2015 2016 2017 2018 2019 2020 2021 Revenue 65.6 82.3 103.1 133.7 167.6 163.9 172.1 176.2 228.2 Growth % 25.5% 25.3% 29.7% 25.4% (2.2%) 5.0% 2.4% 29.5% Gross Profit 18.3 25.1 33.8 40.5 48.4 50.6 62.3 70.2 84.7 Gross Margin % 27.9%
Slide 43: 2013 to 2021 financials continued
2013 to 2021 financials continued Adjusted metrics Balance Sheet £m 2013 2014 2015 2016 2017 2018 2019 2020 2021 Fixed assets 22.4 24.6 27.5 33.5 47.2 448 42.6 43.9 68.4 Inventory 14.0 23.8 26.2 35.4 44.2 32.8 32.2 37.2 $7.3 Trade receivables 10.5 71 20.4 26.5 33.4 39.5 42.8 70.1 67.9 Trade payables
Slide 44: 2013 to 2021 financials continued
2013 to 2021 financials continued Adjusted metrics Cash flow statement £m 2013 2014 2015 2016 2017 2018 2019 2020 2021 Operating Profit 5.9 8.4 1S 14.5 14.7 8.5 18.0 30.0 39.0 Depreciation & amortisation 14 19 26 3.2 44 6.5 7.9 61 6.7 EBITDA 7.31 0.3 14.1 17.7 19.1 15.0 25.9 36.1 45.7 Working capita
Slide 45: Disclaimer
Disclaimer This presentation and information communicated verbally to you may contain certain projections and other forward-looking statements with respect to the financial condition, results of operations, businesses and prospects of Luceco plc. These statements are based on current expectations an