Slide 1: Half Year Results
Half Year Results Half Year Ended 31 March 2021 17 May 2021 Consistently delivering value
Slide 2: Agenda
Agenda 01 Overview 02 Financial results 03 Business review 04 Summary and outlook 05 Q&A 2
Slide 3: Great progress again in H1 2021
Great progress again in H1 2021 Building high quality, scalable businesses for sustainable growth Organic growth initiatives delivering across all Sectors Windy City Wire significantly outperforming expectations Strong H1 performance with exciting momentum Strong balance sheet and active acquisition
Slide 4: Our people: making a difference
Our people: making a difference Brilliant leadership Accountability and agility to navigate the pandemic successfully Colleague dedication Supporting our teams with physical Making a and mental wellbeing Difference Customer servicing Continued dedication to supporting our customers’ objectives Thank
Slide 5: Half year results
Half year results Reported Underlying Operating Free cash Dividend revenue revenue margin flow per share growth growth progression (DPS) growth +29% +2% +60bps +57% +25% Very strong performance – ahead of expectations 5
Slide 6: Financial Results
Financial Results Consistently delivering value 6
Slide 7: Financial Highlights
Financial Highlights Strong financial performance Revenue Adjusted Adjusted operating profit operating margin £365.2m £66.6m 18.2% 2020: £283.6m 2020: £49.9m 2020: 17.6% +29% +33% +60bps Free Net debt ROATCE cash flow £34.3m £191.1m 16.5% 1.3x EBITDA 2020: 22.0% 2020: £21.8m +57% 7
Slide 8: Revenue
Revenue Half Year ended 31 March +29% £365.2m -2% Group underlying revenue growth +2% +14% £283.6m -2% 29% reported -1% revenue growth H1 2020 Controls Life Sciences Seals Acquisitions FX H1 2021 8
Slide 9: Current underlying trading
Current underlying trading Underlying growth rate trajectory very encouraging Underlying Underlying Underlying Underlying April 2020 Sept 2020 April 2021 April 2021 Ex. Acquisitions Incl. Acquisitions Controls -34% -18% +33% +45% Life Sciences -39% +2% +69% +121% Seals -16% -4% +16% +16% Group -28%
Slide 10: Acquisitions
Acquisitions High quality businesses that drive organic growth and scale • Acquisitions support our strategy of building scale in core markets and Acquired for geographies £348m ca. • Exceptional underlying revenue and profit contribution from acquisitions in H1 2021 Acquired for • WCW performance w
Slide 11: Operating Margin
Operating Margin Half Year ended 31 March H1 2021 H1 2020 Controls 18.7% 17.9% Life Sciences 21.1% 19.3% Seals 15.6% 16.3% Group 18.2% 17.6% 11
Slide 12: Income statement
Income statement Half Year ended 31 March 2021 2020 £m £m Revenue 365.2 283.6 +29% Adjusted operating profit 66.6 49.9 +33% Adjusted operating margin (%) 18.2% 17.6% +60bps Interest expense (3.4) (1.5) Adjusted profit before tax 63.2 48.4 +31% Tax (15.2) (11.6) Adjusted profit after tax 48.0 36.8 +3
Slide 13: Net debt and cash flow
Net debt and cash flow Half Year ended 31 March 2021 2020 £m £m Adjusted operating profit 66.6 49.9 Working capital movements (14.5) (13.1) Other 3.4 6.2 Operating cash flow 55.5 43.0 Interest paid, net (2.3) (0.7) Tax paid (12.5) (13.1) Capital expenditure (2.6) (6.4) Other (3.8) (1.0) Free cash fl
Slide 14: Guidance
Guidance Trading momentum into the second half Better than expected H1 2021 performance Improving momentum into H2 2021 across all Sectors FY2021 reported revenues slightly better than 40% ahead of FY2020 Increase in operating margin towards 19% Net debt expected at less than 1x EBITDA for FY2021 14
Slide 15: Business Review
Business Review Consistently delivering value 15
Slide 16: Diploma strategy
Diploma strategy Consistently delivering value Focus Strengthen Develop our our growth our core organisational competencies capability • High quality scalable Five core competencies Building the capabilities businesses to operate value-add model to execute at scale at scale • Attractive, developed m
Slide 17: Delivering value responsibly
Delivering value responsibly Group approach Colleague engagement Health and safety Diversity, equity & inclusion • Colleague code of conduct • Refreshed health and safety • Group-wide data collection policy (updated metrics & exercise • Wellbeing workshops increased reporting) • Steering and listeni
Slide 18: Controls
Controls More diversified business, strong recovery Sector performance Macro trends Half year ended 31 March 2021 2020 • Improving end market activity Revenue £152.8m £88.2m +73% • US technology infrastructure spend underpins WCW structural growth drivers Adjusted operating profit £28.6m £15.8m +81%
Slide 19: Windy City Wire
Windy City Wire Exceptional H1 performance • Delivering on structural growth opportunities • Market share gains from differentiated proposition and control of supply chain • Well invested operating platform • Exceptional H1 performance, well ahead of plan REVENUE EBI T +9% +55% H1 20 H1 21 H1 20 H1
Slide 20: Life Sciences
Life Sciences Exciting structural and strategic tailwinds Sector performance Macro trends Half year ended 31 March 2021 2020 • Pent up demand of elective surgeries yet to accelerate Revenue £88.6m £72.4m +22% • Expected step change in clinical diagnostics investment Adjusted operating profit £18.7m
Slide 21: Seals
Seals Structural tailwinds, strategic progress, encouraging momentum Sector performance Macro trends Half year ended 31 March 2021 2020 • Increasing infrastructure spend in US • Positive momentum in core Revenue £123.8m £123.0m +1% economies Adjusted operating profit £19.3m £20.1m -4% Adjusted opera
Slide 22: Core to strategy: ESG initiatives in action
Core to strategy: ESG initiatives in action Green revenue – Seals Emissions reduction – Louisville • Leading provider of seals for wind turbines • State-of-the-art, high density • Collaborations with global facility with low carbon footprint manufacturers on bespoke solutions • Automation and effici
Slide 23: Summary and Outlook
Summary and Outlook Very strong H1 performance Momentum across all Sectors with exciting organic growth prospects ahead Strong contribution from acquisitions Strong balance sheet and active acquisition pipeline ESG activity intensifying Significant upgrade to FY 2021 performance expectations 23
Slide 24: Q&A
Q&A Consistently delivering value
Slide 25: Appendix
Appendix Consistently delivering value 25
Slide 26: Value-add proposition
Value-add proposition Essential Products Essential Solutions Essential Values Critical to Responsive Decentralised model customers needs customer service Deep technical Opex budgets Customer-orientated support Added value Accountable for Range of end markets services performance execution Sustainabl
Slide 27: Balance sheet
Balance sheet 2021 2020 £m £m Goodwill and acquisition intangible assets 564.4 254.6 Tangible and other intangible assets 47.3 31.1 Net lease liabilities (2.9) (1.6) Net working capital 122.6 113.8 Trading capital employed - reported 731.4 397.9 Working capital as % of revenue 16.0% 17.6% ROATCE 16.
Slide 28: Financial KPIs
Financial KPIs Five year trends 2020 2019 2018 2017 2016 Revenue £538.4m £544.7m £485.1m £451.9m £382.6m Total growth -1% +12% +7% +18% +15% Underlying growth -7% +5% +7% +7% +3% Adjusted operating margin 16.2% 17.8% 17.5% 17.3% 17.2% Working capital (% revenues) 16.0% 16.5% 15.1% 15.0% 16.6% Free c
Slide 29: Consistently delivering value
Johnny Thomson Chief Executive Officer Barbara Gibbes Chief Financial Officer Tel: +44 (0) 20 7549 5700 Email: investors@diplomaplc.com Web: www.diplomaplc.com Consistently delivering value 12 Charterhouse Square London EC1M 6AX Tulchan Communications Martin Robinson Olivia Peters Tel: +44 (0) 20 73