Headlam Group Plc · LSE:HEAD
Headlam — H1 2021 Earnings Presentation
19 slides from Headlam's earnings presentation, Sep 2, 2021
Slide 1: Interim Results Presentation for Six Months Ended 30 June 2021
INTERIM RESULTS PRESENTATION FOR SIX MONTHS ENDED 30 JUNE 2021 2 September 2021
Slide 2: Presentation Team and Agenda
PRESENTATION TEAM AND AGENDA Steve Wilson Chris Payne Chief Executive Chief Financial Officer 2 Headlam Overview and COVID-19 3 H1 21 Financial Performance 11 H1 21 Operational Performance Multiple projects now being delivered… 16 Dividends and Capital Allocation 17 Board Appointments 18 Current Tra
Slide 3: Headlam Overview and COVID-19
HEADLAM OVERVIEW AND COVID-19 Key competitive advantages: • Market leader (+6x nearest peer) • Scale and national coverage 29 21 • Broadest product range • Financial strength 66 54 • Nationwide delivery, and collection service • Great people, with huge loyalty and industry experts 24,830 363 Strong
Slide 4: H1 21 Financial Performance
H1 21 FINANCIAL PERFORMANCE 3
Slide 5: H1 21 Financial Overview
H1 21 FINANCIAL OVERVIEW H1 21 Revenue • Total revenue of £329.9m, in-line with H1 19, and +45.2% H1 20 (continuing operations only following disposal of Swiss business Belcolor) • Residential sector showed strength throughout (+4.7% H1 19), with weak commercial sector (-12.8% H1 19) • Gross margin
Slide 6: UK Distribution Daily Sales
UK DISTRIBUTION DAILY SALES* £ 2,550k 2,050k 1,550k 1,050k 550k 050k Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2017 2018 2019 2020 2021 * Calculated on a like-for-like basis, being based on activities and businesses that made a full 5 contribution in both the current and previous year and adju
Slide 7: H1 21 Income Statement
H1 21 INCOME STATEMENT Income Statement H1 2021 H1 2020 re-presented H1 2019 re-presented Continuing Operations £M % £M % £M % Revenue 329.9 100.0% 227.2 100.0% 335.0 100.0% Cost of sales (222.0) (67.3)% (153.8) (67.7)% (226.6) (67.6)% Gross profit 107.9 32.7% 73.4 32.3% 108.4 32.4% Distribution cos
Slide 8: Revenue and Profit Bridges
REVENUE AND PROFIT BRIDGES Revenue Operating Profit Underlying Non-underlying Total £M % £M % Continuing Operations £M £M £M H1 2019 revenue: H1 2019 operating profit 17.9 (1.0) 16.9 UK 294.5 84.5 Gross margin changes: Continental Europe 54.2 15.5 Volume (3.0) - (3.0) 348.7 100.0 Mix 0.4 - 0.4 UK in
Slide 9: H1 21 Cash Flow Movement
H1 21 CASH FLOW MOVEMENT Cash Flow H1 2021 H1 2020 H1 2019 £M £M £M EBITDA 31.0 9.5 28.1 Change in inventories (11.5) 14.5 (9.7) Change in receivables (12.0) 36.2 (6.9) Change in payables 9.5 (76.7) 11.8 Share-based payments and profit on sale of PPE (9.2) 0.1 0.8 Cash generated from operations 7.8
Slide 10: Balance Sheet as at 30 June 21
BALANCE SHEET AS AT 30 JUNE 21 Balance Sheet June 2021 June 2020 £M £M Property, plant and equipment 115.9 120.5 Intangibles 19.0 27.5 Inventories 120.6 119.7 Trade and other receivables 109.6 89.1 Cash 62.7 30.7 Trade and other payables (176.9) (102.5) Borrowings (8.8) (53.1) Other assets and liabi
Slide 11: UK Sterling Net Funds Daily Balances
01-Jan 08-Jan 15-Jan 22-Jan 29-Jan 05-Feb 12-Feb 19-Feb 26-Feb 04-Mar 11-Mar 18-Mar 25-Mar 01-Apr DAILY BALANCES 08-Apr 15-Apr 22-Apr 29-Apr 06-May UK sterling bank balance 2019 13-May 20-May 27-May 03-Jun UK STERLING NET FUNDS 10-Jun 17-Jun 24-Jun 01-Jul Date 08-Jul 15-Jul 22-Jul 29-Jul UK sterling
Slide 12: H1 21 Operational Performance
H1 21 OPERATIONAL PERFORMANCE 11
Slide 13: H1 21 Operational Performance Key Features
H1 21 OPERATIONAL PERFORMANCE KEY FEATURES • Adjusted working practices to operate effectively throughout despite lockdowns • Customer base resilient and managing to trade successfully throughout despite UK non-essential retail being closed Jan to April 21 • Industry-wide issues of HGV driver shorta
Slide 14: Operational Improvement Programme Designed To
OPERATIONAL IMPROVEMENT PROGRAMME DESIGNED TO • Improve the service propositions for each customer segment • Capture a larger share of the overall £3 billion UK market* • Increase operational efficiencies and remove complexity within the group • Modernise process and systems, additionally improving
Slide 15: Operational Improvement Programme Key Accomplishments in H1 21
OPERATIONAL IMPROVEMENT PROGRAMME KEY ACCOMPLISHMENTS IN H1 21 Multiple projects being delivered: Transport Network Trade Counters Ecommerce/ Sales Force Customer Other incl. Integration Consolidation Digitalisation Effectiveness Propositions Stockholding, / Multiple Supplier Retailers engagement Pr
Slide 16: Corporate Governance
CORPORATE GOVERNANCE unity unity {SEeC SErT
Slide 17: Dividends and Capital Allocation
DIVIDENDS AND CAPITAL ALLOCATION Capital Allocation Priorities (in order): • Maintain strong balance sheet • Investment in core distribution business • Paid out of cash • Ordinary dividend payments • Total annual payout equivalent to 2x earnings cover ratio for FY (statutory) • Consideration of acqu
Slide 18: Board Appointments
BOARD APPOINTMENTS Simon King Stephen Bird Independent Non-Executive Director Independent Non-Executive Director • Appointed May 21 • Appointed Sept 21 • Former CEO of Wickes, and NED of SIG • Group Chief Executive of Vitec Group plc (LSE: SHI) since 2020 (LSE: VTC) • Direct relevant skills and expe
Slide 19: Current Trading and Summary
CURRENT TRADING AND SUMMARY • July & Aug 21 - subdued commercial sector, although with regional variations, and residential sector pleasing • Continuing to trade in-line with market expectations which were significantly upgraded in July 21 • Positive on prospects despite industry- wide headwinds, an