Slide 1: Return to Growth strategy on track
Return to Growth strategy on track Full year 2020 results 25 March 2021 Return to Growth strategy on track 1
Slide 2: Today's presenters
Today’s presenters Steve Francis Ian Ashton Chief Executive Officer Chief Financial Officer Return to Growth strategy on track 2
Slide 3: FY20 Finals - Agenda
FY20 Finals - Agenda FY20 Results 2020 Progress: Plans on track 2021 Plans & current trading Summary Return to Growth strategy on track 3
Slide 4: Return to Growth strategy on track
Return to Growth strategy on track FY20 Results 2020: Extraordinary year of change • new leadership, new strategy, new investors • successful refinancing in July Strategy delivering to plan • Return to Growth strategy in tune with well-established strengths • UK business rebuilt; strong performance
Slide 5: FY20 Finals - FY20 Results
FY20 Finals FY20 Results • Key financials FY20 Results • COVID-19 impact 2020 Progress: Plans on track • Guidance 2021 Plans & current trading Summary Return to Growth strategy on track 5
Slide 6: Key financials
Key financials FY20 Results £m H1 2020 H2 2020 FY 2020 FY 2019 Revenue 839 1,034 1,873 2,143 LFL sales (24.1)% (2.2)% (13.3)% (7.4)% Gross profit 209 261 470 555 Gross margin 24.9% 25.2% 25.1% 25.9% Underlying operating (loss)/profit (43) (10) (53) 43 Operating margin (5.1)% (1.0)% (2.8)% 2.0% Finan
Slide 7: Revenue change by business unit
Revenue change by business unit FY20 Results £213m £22m £29m £29m £16m £13m £3m £2,143m Above figures include estimated COVID-19 impacts of: £113m £46m £12m £11m £1,873m 2019 UK France Germany and Ireland Poland FX 2020 underlying* Benelux underlying Return to Growth strategy on track * Underlying r
Slide 8: Impact of COVID-19
Impact of COVID-19 FY20 Results Revenue Operating loss Gross cash £(13)m £(182)m £(37)m £(53)m £(40)m £2,055m £272m £1,873m £235m Excluding Actual Excluding Actual Excluding Actual C-19 impact underlying C-19 impact underlying C-19 impact underlying • Significant revenue impact of approximately £182
Slide 9: Group revenues – back to growth
Group revenues – back to growth FY20 Results Sales per working day vs prior year 10% 4% (0)% (8)% (6)% (11)% (12)% (11)% (14)% (24)% (31)% (56)% Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 • As reported at mid-year, significant COVID-19 impact in March and Apr
Slide 10: Gross margin and operating costs
Gross margin and operating costs FY20 Results Gross margin • Full year gross margin of 25.1%, 80bps lower than 2019 25.9% • Gross margin decline principally due to abnormally low sales 25.1% volumes in key markets driving lower levels of rebates • Improved sales in H2 led to 30bps improvement vs H1
Slide 11: Operating profit/loss
Operating profit/loss FY20 Results £43m £67m £6m £(53)m £16m £7m 2019 Volume Volume Lower Operating 2020 Operating impact H1 impact H2 supplier rebate costs Operating profit thresholds loss • Gross profit reduction of £89m (excluding FX), driven by lower sales volumes. Gross margin also negatively i
Slide 12: Other items – continuing operations
Other items – continuing operations FY20 Results PBT Impact Cash Impact £m H1 H2 FY FY 2020 2020 2020 2020 Amortisation of acquired intangibles (2.8) (2.8) (5.6) - Impairment charges (42.8) (33.3) (76.1) - Impairment of Goodwill and write off of capitalised IT Costs (SAP 1HANA) Disposals/exits 1.5 (
Slide 13: Cash flow
Cash flow FY20 Results £'m H1 2020 H2 2020 FY 2020 FY 2019 Total operating loss* (102) (65) (167) (83) Depreciation and non-cash items 80 75 154 178 Working Capital: Working capital and provisions (7) (24) (31) 71 • FY 2020 affected by unwinding of Interest and tax (14) (18) (32) (35) historic mid-y
Slide 14: Guidance
Guidance FY20 Results • UK and Group expected to be back to profit and cash generation in H2 2021 • Cash outflow in H1 due to usual seasonality in working capital • Capex c£30m in 2021 in line with medium term expectations • Tax rate • EU operations expected to continue on prevailing local rates • U
Slide 15: 2020 Progress: Plans on track
2020 Progress: 2020 Progress: Plans on track Plans on track • Robust market fundamentals, with solid positions intact FY20 Results • SIG built upon strong foundations across all markets despite COVID-19 challenges 2020 Progress: Plans on track • Revenues passed point of inflexion – back to broad-bas
Slide 16: Medium term goals confirmed
2020 Progress: Medium term goals confirmed Plans on track In the medium term, post 2021, the Group has the following key financial goals: • Group operating margin of approximately 3%, trending towards approximately 5% in the longer-term Margin • Underpinned by a target operating margin of approximat
Slide 17: Long term structural growth drivers
2020 Progress: Long term structural growth drivers Plans on track Impact of COVID-19 on the construction sector has been widespread, but structural drivers remain • Construction potentially a prime direct area of fiscal stimulus for UK and EU Governments' post COVID-19 Fiscal • Post COVID-19 nationa
Slide 18: Return to Growth strategy: Key milestones
2020 Progress: Return to Growth strategy: Key milestones Plans on track 2020 2021 2022 2023 Q1 Q2 EBIT margin 3%+; Cash conservation Return to YOY growth Return to profit Return to cash generation & dividend superior growth New era Phase 1 begins complete: stabilised & New strategy, growing Fine-tun
Slide 19: Group returns to sales growth vs prior year
2020 Progress: Group returns to sales growth vs prior year Plans on track Losing share; COVID-19 Return to Growth old strategy; pre-COVID-19 lock-down strategy #1 • Strong demand in exteriors/RMI markets • UK Distribution +ve from December • 1st growth in 9 quarters • COVID-19 subdued demand • Weak
Slide 20: Rebuilt UK business in six months
Rebuilt UK business in six months 2020 Progress: Plans on track • Reorganisation of senior management under Phil Johns’ leadership • new board in place; 5 of 7 market-facing UK Directors joined in 2020 with an average 27 years’ industry experience - all but 1 are SIG alumni • UK merger and reduction
Slide 21: Strategic pillars
Strategic pillars Constructing the future Our strategy: To continuously grow our leadership positions and market share through expertise, service and proximity 1. 2. 3. 4. 5. 6. 7. Responsible Winning Superior Specialist Valuable Highest Focused actions branches service expertise partnerships produc
Slide 22: Strategic pillars
2020 Progress: Strategic pillars Plans on track Constructing the future Our strategy: To continuously grow our leadership positions and market share through expertise, service and proximity 1. 2. 3. 4. 5. 6. 7. Responsible Winning Superior Specialist Valuable Highest Focused actions branches service
Slide 23: Strategic pillars
2020 Progress: Strategic pillars Plans on track Constructing the future Our strategy: To continuously grow our leadership positions and market share through expertise, service and proximity 1. 2. 3. 4. 5. 6. 7. Responsible Winning Superior Specialist Valuable Highest Focused actions branches service
Slide 24: 2021 Plans and current trading
2021 Plans & 2021 Plans and current trading current trading • Actions and targets FY20 Results • UK EBIT uplift 2020 Progress: Plans on track • Current trading on plan 2021 Plans & current trading Summary Return to Growth strategy on track 24
Slide 25: 2021 Plans
2021 Plans & 2021 Plans current trading • Continue to upgrade sales teams/branches; revised incentives; enhanced sales tools 2021 Actions • Deepen expertise; enhance service; build trust • Work more closely with key suppliers • Continue to build decentralised/disciplined branch franchise model (CRM,
Slide 26: UK EBIT uplift – 2021
UK EBIT uplift – 2021 2021 Plans & current trading Reorganisation • UK back to profit; Group back to cash generation in and Efficiency 17% H2 2021 • Market share gains through winning branches and Share gain customer focus and Sales Supplier effectiveness • Gross margin recovery; partnering and enri
Slide 27: Current trading: on plan with encouraging trends
Current trading: on plan with encouraging trends 2021 Plans & current trading • Sales and profit continue to be on plan • Remain cautious due to: • COVID-19 • Supply chain challenges due to increase in material shortages • Rising input costs • Q1: • Strong RMI • Trading picking up since February • U
Slide 28: 2021 Plans and current trading Summary
2021 Plans and current trading Summary FY20 Results 2020 Progress: Plans on track 2021 Plans & current trading Summary Return to Growth strategy on track 28
Slide 29: Summary: Return to Growth strategy on track
Summary: Return to Growth strategy on track Summary • Our teams continue to show great resilience and commitment in the face of COVID-19 • Return to Growth strategy on track • UK business rebuilt and relaunched • strategy in tune with well-established strengths • reconnected with customers, supplier
Slide 30: Questions
Questions Return to Growth strategy on track 30
Slide 31: Appendix
Appendix Return to Growth strategy on track 31
Slide 32: Underlying financials by segment
Underlying financials by segment Gross Operating Operating Revenue Change LFL Change Change Change margin (loss)/profit margin UK Distribution £357m (33.1)% (33.4)% 22.5% (370)bps £(45.4)m £(53.3)m (12.7)% (1,420)bps UK Exteriors £310m (10.5)% (11.1)% 27.3% (100)bps £(7.4)m £(19.2)m (2.4)% (580)bps
Slide 33: Capital structure
Capital structure Debt structure Structure Draw down Date of 30 Jun 31 Dec 30 Jun 31 Dec Covenant in £'m Covenant effect from £'m expiry Denomination 2020 2020 2020 2020 Jan 2021 to Private placement notes 2023 - 2026 EUR/USD 187 136 187 136 Net debt (maximum) 200 Dec 2022 Old RCF (£233m) 27 May 202
Slide 34: Net debt walk
Net debt walk £176m IFRS 16 impact: £292m £33m £12m £455m £152m £32m £15m £10m IFRS 16 £21m £238m impact: £16m £28m £234m £163m £4m Opening Post IFRS 16 Acquisitions/ Net proceeds Cash inflow Cash outflow Working Reduction in Capex** Interest and Movement of FX/ Post IFRS 16 Closing net debt opening
Slide 35: Impact of businesses identified as non-core
Impact of businesses identified as non-core Underlying Underlying revenue PBT As reported at FY 2019 results £2,084.7m £15.6m Businesses identified as non-core in 2019: Building Solutions (National) Ltd £58.3m £2.1m Restated at FY 2020 results £2,143.0m £17.7m Note: Data represents underlying perfor
Slide 36: Number of trading sites in 2020
Number of trading sites in 2020 31 Dec Closed/ 31 Dec Acquired 2019 merged 2020 UK Distribution 44 - (1) 43 UK Exteriors* 117 1 (2) 116 Total UK 161 1 (3) 159 France Distribution 38 - - 38 France Exteriors 108 - (2) 106 Total France 146 - (2) 144 Germany 51 - - 51 Benelux 15 - - 15 Total Germany and
Slide 37: Disclaimer
Disclaimer This presentation may include certain forward-looking statements, beliefs or opinions, including statements with respect to SIG plc’s business, financial condition and results of operations. These forward-looking statements can be identified by the use of forward-looking terminology, incl