Slide 1: Norcros plc Preliminary Results Year ended 31 March 2015
Norcros plc Preliminary Results 1 Year ended 31 March 2015
Slide 2: Introduction
Introduction Martin Towers Chairman 1
Slide 3: Highlights
Highlights Revenue1 £222.1m +5.0% Sixth consecutive year of growth Underlying operating profit Strong cash generation - underlying operating cash flow £17.0m +5.8% 12.8% higher at £22.9m Underlying operating cash Significant improvement in South African performance £22.9m +12.8% Good progres
Slide 4: Financial Review
Financial Review Martin Payne Group Finance Director 1
Slide 5: Income Statement – continuing operations
Income Statement – continuing operations 2015 2014 +/- +/- £m £m Reported Constant Currency Revenue 222.1 218.7 +1.5% +5.0% Underlying1 operating profit 17.0 16.1 +5.8% +7.5% Margin 7.6% 7.3% Finance charges – cash (1.2) (1.5) (17.9%) Underlying1 PBT 15.8 14.6 +8.1% Exceptional operating items3 (2.5
Slide 6: Income Statement – key bridges
Income Statement – key bridges Revenue 1 Underlying operating profit 9.6 7.3 £m 1.6 1.1 222.1 17.0 0.3 218.7 £m 16.1 0.4 2014 Currency UK SA 2015 2014 Currency UK SA 2015 Revenue 1 Underlying operating profit / ROS% 7.6% 7.3% 17.0 9.6% 9.2% 16.1 222.1 211.4 14.2 13.8 148.0 149.1 £m £m 1 4.4% 73.0 63
Slide 7: Tax, Earnings and Dividends
Tax, Earnings and Dividends Underlying1 Reported Diluted underlying EPS (pence) Effect of Deferred Tax recognition 0.7 2015 2014 2015 2014 £m £m £m £m 2.8 Profit before Tax 15.8 14.6 11.0 5.8 1.8 2.1 2.1 Tax (2.8) 2.4 (2.9) 4.3 2013 2014 2015 (charge)/credit Dividend per share (pence) Earnings 13.0
Slide 8: Cash Flow
Cash Flow 2015 2014 £m £m Underlying EBITDA 23.0 22.0 Underlying Operating Cash Flow / Underlying EBITDA Working Capital (1.5) (2.6) Other 1.4 0.9 92% 100% Underlying operating cash 22.9 20.3 57% Capital Expenditure (7.0) (4.2) Sheffield freehold purchase (0.9) - 2013 2014 2015 Proceeds from propert
Slide 9: Balance Sheet
Balance Sheet £m Net debt (IFRS) Strong cash generation reduces debt to £14.2m 30.7 26.9 Leverage 0.6x underlying EBITDA 14.2 2013 2014 2015 Refinanced July 2014 times Leverage - Net debt (IFRS) to • £70m RCF plus £30m accordion EBITDA • 5 years to July 2019 1.4 • Improved terms 1.2 ROCE abo
Slide 10: UK Pension Scheme
UK Pension Scheme Super-mature scheme UK Pension IAS 19R Assets & Liabilities • 8,492 members. 64% pensioners with average age 77 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 500 • Reduced by 993 during year • Annual pensioner payroll near peak at c. £20m per annum 450 Actions taken to date 400 • April 20
Slide 11: Other Legacy issues
Other Legacy issues Geographic Focus Disposal of non core Australian tiles business in May 2014 for £3.8m Property Leases Lease exit and acquisition of freehold at Sheffield • Purchased from landlord for £3.4m on November 2014 • £2.5m exceptional P+L charge Drakes Way, Swindon-lease ended
Slide 12: Operating Review
Operating Review Nick Kelsall Group Chief Executive 12 1
Slide 13: Business Overview
Business Overview UK SA Group Group Revenue (continuing operations): £ 222.1m £ 149.1m £ 73.0m £ 222.1m Johnson Tiles £ 59.7m Triton £ 52.1m Vado £ 30.5m Adhesives £ 6.8m Tile Africa £ 45.5m TAL £ 17.2m 1 Johnson Tiles £ 10.3m Revenue Growth (constant currency): +0.7% +15.1% +5.0% 13
Slide 14: Triton – Robust performance in challenging UK market
Triton – Robust performance in challenging UK market Overall Revenue + 0.4% • UK - 2.1% • Exports + 17.3% Overall UK market volumes marginally up Maintained high share with gains in electric Triton share of retail retained Gain in share of trade electrics Strong performance in Ireland dr
Slide 15: Vado – Continued growth momentum
Vado – Continued growth momentum Overall Revenue + 4.7% • UK + 19.8% • Exports - 15.8% Strong performance in UK retail and trade: • Further traction with Vado partnership programme 15 • New developers added (Avant Homes & Lovell) Export performance impacted by project delays & customer destock
Slide 16: Johnson Tiles – performance to benefit from improving consumer confidence
Johnson Tiles – performance to benefit from improving consumer confidence Overall Revenue - 3.2% • UK - 2.8% • Exports - 5.5% UK market; trade outperforming retail UK trade +9.6%; growth across all sectors reflecting focused marketing efforts UK retail -11.9%; key account performance and red
Slide 17: Norcros Adhesives – Continued growth momentum
Norcros Adhesives – Continued growth momentum Overall Revenue + 28.4% Increase in share – strong progress in UK retail and trade Further penetration of DIY and distribution Multi-brand strategy with further investment in retail brand and marketing support material (website/CPD) New product
Slide 18: UK Operations - Robust performance in challenging markets
UK Operations - Robust performance in challenging markets Revenue Underlying operating profit 14.5 12.0% £122.8m £148.0m £149.1m 14.0 29.1 30.5 10.0% 4.4 13.5 5.3 6.8 8.0% 13.0 18 67.3 61.7 59.7 12.5 6.0% £m 12.0 4.0% 11.5 51.1 51.9 52.1 2.0% 11.0 1 10.5 0.0% 2013 2014 2015 2013 2014 2015 Profit 11.
Slide 19: JTSA – Strong progress driven by share gain
JTSA – Strong progress driven by share gain Significant improvement in performance – business at breakeven Overall revenue + 9.5% at cc Good growth in smaller independents + exports Growth driven through NPD - product well received Successful commissioning of second inkjet printer Core m
Slide 20: TAL – Strong progress driven by share gain
TAL – Strong progress driven by share gain Overall revenue + 11.7% at cc Share gain in domestic market + strong export growth Growth driven by focus on rapid set products despite tight market 20 Building and construction products performed well Export growth continues - Zimbabwe and Namibi
Slide 21: Tile Africa – Strong progress driven by share gain
Tile Africa – Strong progress driven by share gain Overall revenue + 17.8% at cc Improved in-store stock levels Consistent product ranging in stores 21 Continued success of store upgrade model New CX store format launched - bathroom store-within-store improving customer experience Purcha
Slide 22: SA Operations – Strong progress driven by share gain
SA Operations – Strong progress driven by share gain Revenue1 Underlying operating profit 3.5 5.0% £73.0m 4.5% 3.0 £63.4m 10.3 4.0% £58.2m 9.4 2.5 3.5% 8.5 17.2 3.0% 15.4 2.0 14.6 2.5% 22 £m 1.5 2.0% 45.5 1.5% 38.6 1.0 35.1 1.0% 0.5 0.5% 2013 2014 2015 0.0 0.0% 2013 2014 2015 Profit 0.9 1.9 3.2 1 Ti
Slide 23: Group Outlook & Strategy
Group Outlook & Strategy Nick Kelsall Group Chief Executive 1
Slide 24: Lead UK indicators are stable
Lead UK indicators are stable Mortgage Loan Approvals (seasonally adjusted) 80,000 60,000 Marginal upturn in recent 40,000 months but remains below 20,000 2013 peak 0 Sep-12 Sep-13 Sep-14 Housing Transactions 160,000 120,000 Transactions 30% below peak and remain flat but cautious 80,000 signs of gr
Slide 25: Lead SA indicators – medium term growth & stabilising Rand
Lead SA indicators – medium term growth & stabilising Rand GDP and Construction GDP % change 18 16 14 12 GDP downgraded in the short term due to 10 labour and energy uncertainty. Medium 8 term forecasts remain positive 6 4 GDP Growth % 2 Construction GDP Growth % 0 2012 2013 2014 2015 2016 2017 2018
Slide 26: Group Strategy – Key Targets
Group Strategy – Key Targets Growth Target Organic Acquisition • Double revenues to £420m by 2018 Returns Target • Organic and acquisition • Market leading positions • Complementary • Maintain 50% revenue derived industry segments/ 26 • Sustainable pre-tax from overseas • Strong trade and geographic
Slide 27: Group Strategy - Update
Group Strategy - Update Clear, consistent, and focused growth strategy Organic strategies gaining pace Trade and specification remains a key focus Momentum in acquisition pipeline Non-core legacy matters largely resolved 1 Sixth year of revenue and profit growth 27
Slide 28: Summary
Summary Clear & Focused Growth Strategy Medium Term Indicators Favourable Focused Pipeline of Acquisition Opportunities Organic Growth Opportunities Solid Full 1 Year Results 28
Slide 29: Appendices
Appendice oo JOHNS norcros - AFRICA &
Slide 30: Positioned for Growth
Key growth drivers for Norcros markets 30 1 Positioned for Growth 30
Slide 31: Exceptional items and acquisition related costs
Exceptional items and acquisition related costs 2015 2014 £m £m Exceptional operating items Pension settlement gain 1.7 - Exit of Sheffield lease (2.5) - Loss on disposal of freehold property portfolio (1.5) - Business unit restructuring (0.3) (1.5) Profit on disposal of residual property at Braintr
Slide 32: Net debt reconciliation
Net debt reconciliation 2015 2014 £m £m Net debt (IFRS) – opening (26.9) (30.7) Net cash flow 12.7 5.0 Other non cash movements 0.1 (0.4) Foreign exchange (0.1) (0.8) Net debt (IFRS) - closing (14.2) (26.9) 1 32