Slide 1: Acquisition of Windy City Wire
Acquisition of Windy City Wire September 2020
Slide 2: Acquisition of Windy City Wire
Acquisition of Windy City Wire Proposed acquisition of leading Controls business in US for up to £357m Consistent with Diploma’s value-add business model and strategy Strong management, customer proposition, and performance track record Scalable platform with exciting organic growth potential Year 1
Slide 3: Diploma strategy: Consistently delivering value
Diploma strategy: Consistently delivering value Value-add distribution model Decentralised structure Significant growth runway in attractive developed markets Developing scalable businesses in key geographies and products Evolving core competencies and capability to deliver at scale Strong balance s
Slide 4: Transaction overview
Transaction overview • A leading value -add distributor of premium quality low voltage cable and wire Highly attractive, • Scalable platform in the US with exciting growth potential scalable Controls • Strong and established management team who will remain with the business business in the US • Majo
Slide 5: Strategic rationale
Strategic rationale Expands presence in the US, a key industrials market Enhances our position in Controls, with a core product we understand Value-add customer proposition with attractive margins Significant organic growth potential Strong financial returns, whilst maintaining a solid balance sheet
Slide 6: Windy City Wire overview
Windy City Wire overview Leader in Highly Full suite of High value- premium experienced trademarked add customer quality low- management brands and service voltage wire team and patented proposition and cable strong culture products market Highly Vertically Attractive Track record diverse and integr
Slide 7: Value-add customer proposition
Value-add customer proposition Value added packaging innovation • Flagship family of low- Essential product for customers SmartWire® voltage wire and cable with Glide products • Clear length markings Technology with differentiated Convenience: glide technology to colours for easy facilitate user exp
Slide 8: Diversity and stickiness of customer base
Diversity and stickiness of customer base • High level of customer and end market diversity • Large national account base: 9,300 active customers across all 50 states • No account more than 2% of sales; majority of customer orders <$10,000 • Customer retention high based on convenient proposition •
Slide 9: Excellent track record of performance delivery
Excellent track record of performance delivery Consistent REVENUE ($m) OPERATI NG CASH FLOW($m) $193m double digit $29m revenue growth EBITDA margins grown to c.20% 09 10 11 12 13 14 15 16 17 18 19 17 18 19 over 10 years Strong cash EBI TDA ($m) Organic ROATCE (%) flow $38m 21% generation 19% Signif
Slide 10: Strong platform for future growth
Strong platform for future growth National presence with 19 Network of facilities warehouse locations • National scale and critical mass • High service focus • First class, well invested base in Bolingbrook, IL • Truly scalable platform Unified systems and controls • Integrated systems across WCW fo
Slide 11: Strong management and culture
Strong management and culture Rich Galgano Dave DeNeve Dan Hughes Bobby Jose Michael Martin Chief Executive Chief Financial Officer Chief Sales Officer Chief Information Officer Plant Manager Officer/Founder Co-founded Windy City Joined Windy City Wire in Joined Windy City Wire Joined Windy City Wir
Slide 12: Significant future growth opportunities
Significant future growth opportunities Increasing market share in current Digital infrastructure driving wiring structural growth markets demand and future opportunity Building automation MARKET SIZE & GROWTH Data centres • Cloud-based services 9% CAGR ➢ Growing demand for cloud applications • Netw
Slide 13: Current trading and outlook
Current trading and outlook • Resilient trading performance • Resilient trading through COVID-19 through COVID-19 pandemic • Expect to maintain revenues and • Strong profit and margin grow profitability in FY20 performance in crisis months • Strong balance sheet and liquidity • Structural growth mar
Slide 14: Valuation and transaction structure
Valuation and transaction structure Compelling valuation Transaction structure • Consideration of up to £357m ($465m), Equity including deferred payment of up to • 10% placing of issued share capital raising c.£12m ($15m)¹ approximately £200m • Transaction multiple of c.10.5x FY20 • New shares to be
Slide 15: Strong balance sheet maintained
Strong balance sheet maintained Maintain balance sheet strength Net debt/EBITDA of combined group expected to be c.1x by end FY21 Rapid deleveraging profile Liquidity for dividends and future bolt-ons Conservative approach to leverage remains unchanged 15
Slide 16: Summary: exceptional business for Diploma's future
Summary: exceptional business for Diploma’s future Expands presence in the US, a key industrials market Enhances our position in Controls, with a core product we understand Value-add customer proposition with attractive margins Significant organic growth potential Strong financial returns, whilst ma
Slide 17: Strictly confidential disclaimer
THIS PRESENTATION AND ITS CONTENTS ARE STRICTLY CONFIDENTIAL AND ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE O R IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES, AND THE DISTRICT OF COL
Slide 18: Information not independently verified
The information in this presentation has not been independently verified and speaks as of the date hereof only and is subject to updating, revision, and amendment without notice. Neither the Company, the Banks nor any of their Representatives is under any obligation to update o r keep current the in