Slide 1: Healthy air sustainably
Healthy air sustainably Volution Group plc Full year results to 31 July 2020
Slide 2: Agenda
Agenda Introduction Financial Review Operational Review Summary and Outlook Q&A Ronnie George Andy O’Brien Chief Executive Officer Chief Financial Officer Lee Nurse Business Development Director Volution Group plc Full year results to 31 July 2020 1
Slide 3: Introduction
Ronnie George – CEO Introduction Full year results to 31 July 2020
Slide 4: Response to COVID-19
Response to COVID-19 COVID-19 •• Our priority is protecting employees, customers and stakeholders •• Awarded essential services status by UK Government •• We were proud to provide ventilation solutions at the rapidly converted Nightingale Hospital at the ExCeL, as well as several other similar proje
Slide 5: Healthy air, sustainably
Page title Healthy air, sustainably “Our purpose is to provide healthy indoor air, sustainably. This commitment is integral to everything we do. It shapes our values, steers our strategy and informs our capital allocation. We are closely aligned with environmental, health, regulatory and consumer de
Slide 6: Financial Review
Andy O’Brien – CFO Financial Review Full year results to 31 July 2020
Slide 7: Financial highlights
Financial highlights Revenue £m Adjusted operating profit £m Adjusted operating profit margin % £216.6m £33.7m 15.6% 2020 216.6 2020 33.7 2020 15.6 2019 235.7 2019 42.1 2019 17.8 2018 205.7 2018 37.1 2018 18.0 2017 185.1 2017 35.6 2017 19.3 2016 154.5 2016 32.5 2016 21.0 Adjusted EPS pence Adjusted
Slide 8: Financial summary: Excellent cash generation
Financial summary Excellent cash generation 2020 2019 Movement •• Revenue – 7% constant currency decline, with 5% constant currency growth in H1 Revenue (£m) 216.6 235.7 (8.1)% followed by contraction of 18.5% in H2 Revenue (cc) (£m) 219.1 235.7 (7.0)% due to the impact of the pandemic Gross margin
Slide 9: Reconciliation of adjusted to reported profit
Reconciliation of adjusted to reported profit 2020 2019 Movement £m £m £m Adjusted profit before tax 31.2 39.9 (8.7) Items excluded from adjusted measures: •• No exceptional operating costs in the year (2019: £1.8 million) Exceptional operating costs — (1.8) 1.8 Former CFO compensation (0.4) (0.2) (
Slide 10: Adjusted profit after tax and EPS bridge FY19 to FY20
Adjusted profit after tax and EPS bridge FY19 to FY20 £m 35.0 31.7 30.0 3.4 1.8 23.9 25.0 (1.7) (0.9) (8.6) (1.5) (0.3) 20.0 15.0 10.0 5.0 0 FY19 actual Volume impact Furlough income Loss of recovery Restructuring costs Interest cost Tax effect loss Tax effect FY20 actual adjusted profit after tax o
Slide 11: Adjusted operating margin
Adjusted operating margin Target 20% 22.0% 21.6% 21.1% 18.9% 19.0% 18.7% 18.1% 18.3% 18.2% 17.6% 17.4% 15.9% 15.5% 14.9% 12.2% 7.3% H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 FY19 FY19 FY20 FY20 FY19 FY19 FY20 FY20 FY19 FY19 FY20 FY20 FY19 FY19* FY20 FY20 Group UK Continental Europe Australasia
Slide 12: Cash and liquidity management during COVID-19
Cash and liquidity management during COVID-19 Cash conversion (%) •• Operating cash flow of £43.4 million, representing a cash conversion of 124% (116% on like-for-like IAS 17 basis) 2020 124% •• Continues the Group’s strong record of cash generation, 2019 85% with a five-year average cash conversio
Slide 13: Returns on acquisition investment (ROAI)
Returns on acquisition investment (ROAI) Investment OP 2020 •• Returns on our acquisitions in Nordics £m £m % and Central Europe remain very strong Nordics 26.4 7.9 29.8% •• Central Europe improving 1.8pp in the year Central Europe 32.3 7.4 23.0% principally due to the strong performance in Germany
Slide 14: Operational Review
Ronnie George – CEO Operational Review Full year results to 31 July 2020
Slide 15: Operating segments
Operating segments United Kingdom Continental Europe Australasia •• Residential New Build, RMI (Public and •• Nordics, Germany, Belgium and •• New Zealand and Australia Private), Commercial, Export and OEM the Netherlands •• Residential New Build and RMI •• Residential New Build, RMI and Commercial
Slide 16: Geographic market diversification
Geographic market diversification 20+15+1414.4101344.5Q OEM 35+ Q 51 + 14 •• We remain confident in the long-term OEM UK prospects of the Group due to our Export 4.7% geographical diversification 4.7% Nordics 19.2% •• UK revenue by customer destination UK Export reduced from 48.4% in 2019 to 42.8% 4
Slide 17: UK
UK 48+52+M Total 2020 2019 growth (cc) £m £m % 51.5% of Group UK revenue 111.5 135.5 (17.6) revenue Residential RMI 33.4 39.4 (15.2) Residential New Build 21.9 27.8 (21.0) Commercial 27.3 34.8 (21.8) Export 8.6 9.9 (12.8) OEM 20.3 23.6 (13.6) Adjusted operating profit 15.6 24.1 (35.1) Adjusted opera
Slide 18: Continental Europe
Continental Europe 35+65M Total 2020 2019 growth (cc) £m £m % 34.5% of Group Continental Europe revenue 74.7 78.0 (2.7) revenue Nordics 41.6 47.0 (9.4) Central Europe 33.1 31.0 7.5 Adjusted operating profit 15.3 16.7 (7.9) Adjusted operating profit margin % 20.5 22.7 (2.4)pp •• Nordics decline of 11
Slide 19: Australasia
Australasia Australasia revenue 2020 £m 30.4 £m 22.2 Total 2019 growth (cc) % 42.6% 8614+M 14.0% of Group revenue Adjusted operating profit 4.6 3.9 22.3% Adjusted operating profit margin % 15.2% 17.7% (2.5)pp •• Australasia growth of 37.3% (42.6% at cc) as a result of the acquisition in Ventair, in
Slide 20: Operational Excellence – operating margin >=20%
Operational Excellence – operating margin >=20% Reading factory performance OEM sourcing and efficiency Streamlining and indirect cost Packaging and waste elimination Innovation, cross-selling, upselling Value engineering and procurement H1’20 H2’20 H1’21 H2’21 ~18% On track to deliver our operating
Slide 21: Sustainability Strategy
Sustainability Strategy Full year results to 31 July 2020
Slide 22: Sustainability strategy: Product, Planet, People
oductNew Planet sustainability Peoplestrategy Product Product Planet People Engineer sustainable Our ambition Our ambition Our ambition solutions •• To champion the energy •• Reduce our environmental •• To continue to develop an saving potential of our impact by improving engaging and inclusive Plan
Slide 23: Targets and measurement
KPIs Targets and measurement Focus area Ambition KPI In support of the United Nations Sustainable Development Goals Increase the low-carbon Target 70% of our sales credentials in our revenue from low-carbon Product products portfolio products¹ by the end of FY25 (currently 59% and was 43% in FY14) O
Slide 24: Key regulatory trends in our regions
Key regulatory trends in our regions United Kingdom: Continental Europe: Australasia: Ambitious National and New minimum energy targets EU‑wide change standards The UK Government is committed to achieving The EU Energy Performance of Buildings The Government of New Zealand has recently net zero emis
Slide 25: Summary and Outlook
Summary and Outlook Full year results to 31 July 2020
Slide 26: Summary and Outlook
Summary Outlook •• Adjusted operating cash generation of £43.4 million, the highest We have seen 7% organic revenue growth in the first two months of recorded in the Group’s history, benefiting from geographic the new financial year, driven by our geographic diversity, structural diversity and asset
Slide 27: Thank You Q&A
Thank You Q&A Full year results to 31 July 2020
Slide 28: Appendix
Appendix Full year results to 31 July 2020
Slide 29: Consolidated statement of financial position summary
Consolidated statement of financial position summary 31 July 2020 31 July 2019 £m £m Non-current assets Property, plant and equipment 21.5 23.8 Right-of-use assets 22.1 — Intangible assets – goodwill 116.8 118.2 Intangible assets – others 79.8 95.1 240.2 237.1 Current assets Inventories 31.8 35.6 Ri
Slide 30: Cash flow/net debt
Cash flow/net debt IFRS 16 IAS 17 2020 2020 2019 Movement Movement £m £m £m £m % Adjusted EBITA (A) 34.5 35.0 43.2 (8.2) (19.1)% Depreciation 3.4 6.4 3.3 3.1 Adjusted EBITDA 37.9 41.4 46.5 (5.1) (10.9)% Change in net working capital 6.1 6.1 (4.7) 10.8 Share-based payments 0.2 0.2 0.9 (0.7) Net inves
Slide 31: Significance for Volution
Strategic Report Sustainability Healthy indoor air, Strategic Report sustainably A purpose-led approach Our sustainability strategy UN Sustainable development goals At Volution, we know we have a role to play in the future of our planet. Delivering healthy indoor air, sustainably, we want to acceler
Slide 32: Sustainability: Product
Strategic Report Sustainability continued Product Strategic Report Our ambition To champion the energy saving potential of our products and solutions Measuring our approach and support the net-zero ambitions of the countries in which we operate. To continue to develop clean air solutions that protec
Slide 33: Sustainability: Planet
Strategic Report Sustainability continued Planet Strategic Report Our ambition Reduce our environmental impact by improving business efficiencies Measuring our approach and minimising our impact on the climate. Focus on the quality of materials we use to support the creation of a Optimise recycled p
Slide 34: Sustainability: People
Strategic Report Sustainability continued People Strategic Report Our ambition To continue to develop an engaging and inclusive workforce Measuring our approach where our employees feel valued and can fulfil their potential. Build relationships with the local community, provide support Our ongoing g
Slide 35: Cautionary statement
Cautionary statement This document may contain forward-looking statements which are made in good faith and are based on current expectations or beliefs, as well as assumptions about future events. You can sometimes, but not always, identify these statements by the use of a date in the future or such