Slide 1: FY24 Results
FY24 Results Well positioned for market recovery 8 May 2025 1
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by Lords Group Trading plc (the "Company") solely for information and does not purport to contain all the information that may be necessary or desirable to fully and accurately evaluate the Company or its business prospects. For the purposes of this not
Slide 3: Agenda
Agenda Overview Shanker Patel, CEO Financial review Stuart Kilpatrick, CFO Strategy update Shanker Patel Outlook Shanker Patel Q&A 3
Slide 4: Overview
Overview ▪ Resilient performance despite challenging economic backdrop ▪ Strategic actions to protect profitability and cashflow ▪ Revenue 5.6% lower at £436.7m (2023: £462.6m) ▪ Merchanting LFL (3.6)% but recovering strongly in H2 to +2.3% ▪ P&H revenue down 10.2% in line with UK market for boiler
Slide 5: Financial Review
FY24 Results Financial Review 5
Slide 6: Financial Performance 2024
Financial Performance 2024 FY24 FY23 Change Revenue £436.7m £462.6m (5.6)% • Revenue 5.6% lower at £436.7m Adjusted EBITDA1 £22.4m £26.8m (16.5)% • Adjusted EBITDA resilient - £4.4m lower at Adjusted EBITDA excluding £22.4m £20.6m £26.6m (22.5)% property gains Operating expenses £64.6m £65.8m (1.8)%
Slide 7: Plumbing & Heating FY24
Plumbing & Heating FY24 FY24 FY23 EBITDA Bridge (£m) - P&H Margin Margin 14.0 £m £m 12.9 12.0 Revenue 222.4 247.7 10.0 (3.4 ) 0.4 8.0 8.0 Gross profit 27.9 12.6% 33.2 13.4% (1.9 ) 6.0 Operating expenses 19.9 20.3 4.0 2.0 Adjusted EBITDA 8.0 3.6% 12.9 5.2% 0.0 FY23 EBITDA Revenue Margin Overheads FY2
Slide 8: Merchanting FY24
Merchanting FY24 EBITDA Bridge (£m) - Merchanting FY24 FY23 16.0 Margin Margin 0.2 14.4 £m £m 14.0 14.0 1.5 3.3 12.0 Revenue 214.3 214.9 (2.2 ) 10.0 (2.4 ) Gross profit 57.3 26.7% 59.1 27.5% 8.0 6.0 Operating expenses 44.7 45.4 4.0 Property gains 1.8 0.3 2.0 0.0 Adjusted EBITDA1 14.4 6.7% 14.0 6.5%
Slide 9: Cash Flow
Cash Flow FY24 FY23 Free cash flow (£m) 25.0 £m £m 3.8 Net Debt b/f (28.5) (19.4) 20.0 4.2 Free cash flow 3.1 8.7 15.0 0.1 M&A (3.5) (12.3) 10.0 22.4 11.2 Dividends (2.7) (3.3) 5.0 Other (0.8) (2.2) 3.1 - Net Debt c/f (32.4) (28.5) Adjusted EBITDA WCAP movement Tax & Interest Net Capex Lease Payment
Slide 10: Balance Sheet & Facilities
Balance Sheet & Facilities 31.12.24 31.12.23 £m £m Tangible assets 14.1 20.2 • George Lines Colnbrook sale & leaseback released operating capital Inventories 49.3 49.3 Trade and other receivables 76.2 81.2 • Good progress in working capital in Merchanting; Plumbing and Heating payables accentuated i
Slide 11: Proforma Impact of Sale & Leaseback
Proforma Impact of Sale & Leaseback 2024 Impact of 2024 Reported transaction Proforma £m £m £m Adjusted EBITDA 22.4 2.0 24.4 ➢ £2.0m gain of disposal of properties Adjusted EBITDA excluding property gains 20.6 - 20.6 Adjusted Operating Profit 10.4 1.7 12.1 ➢ £2.0m gain less £0.3m ROU depreciation an
Slide 12: Strategy Update
FY24 Results Strategy Update 12
Slide 13: Strategic Pillars
Strategic Pillars Our strategy is a combination of margin accretive organic growth and selective M&A Strategic Progress • Exclusive distribution agreements with Clivet & Navien PRODUCT RANGE • Added Viessmann and Termo Teknik (radiators) EXPANSION • Cedral & PRB render in Merchanting have driven sal
Slide 14: Lords' Points of Difference
Lords' Points of Difference Customer service excellence focused on long term relationships Strong position in repair, maintenance & improvement (RMI) market Strong M&A track record in fragmented sector 14
Slide 15: Track Record of strategic execution
Track Record of strategic execution Revenue (Figures in £m) Adjusted EBITDA (Figures in £m) 500 35 450 5-year CAGR: 56% 5-year CAGR: 35% 30 400 350 25 300 20 250 200 15 150 10 100 5 50 0 0 2019 2020 2021 2022 2023 2024 2019 2020 2021 2022 2023 2024 • Strong growth since 2019 in revenue (CAGR: 35%) a
Slide 16: Merchanting
Merchanting • Merchanting market volumes o Pre-Covid market CAGR of 3.7% o Volumes in May 2024 were 25% lower than Covid peak and 19% lower than May 2019 • Specialist, Civils and General Merchanting focus to provide ‘total building solution’ to customers • Branch network o Expansion of branch networ
Slide 17: Plumbing & Heating
Plumbing & Heating • UK boiler volumes down by 10.3% (CAGR) since 2021; Heat pump CAGR + 20.4% • Research indicates: • Average boiler life extended from 10 to 12 years • Cost of living and annual repair contracts has resulted in increased spares and repairs rather than replacement • Impact of energy
Slide 18: Strategic Summary
Strategic Summary • Opportunity for volume recovery in Merchanting • Deliver operational gearing whilst tightly controlling costs • Increase P&H profitability • Improve margin mix through wider product range and driving higher margin brands • Further invest in renewables growth following Ultimate ac
Slide 19: ESG: Implementing our strategy
ESG: Implementing our strategy • Clear stance on how to address our most significant environmental impacts • 51% reduction in scope 3 emissions from waste diverted from landfill • Total emissions down 12.5% to 56.3kT, (2023: 64.3 kT) • Targeting net zero in scope I & II by 2035 and scope III by 2050
Slide 20: Outlook
FY24 Results Outlook 20
Slide 21: The Lords investment case
The Lords investment case • A leading, high-growth distributor of building materials in the UK Unique Consistently high Top 10 UK customer Management Feefo scores merchant first track record proposition Organic, Strong 3 new margin Cash flow financial branches accretive conversion of 71% profile gro
Slide 22: Outlook
Outlook • Navigated challenging conditions in 2024 to deliver a resilient performance • Consumer confidence remains weak in the UK but gradual recovery expected in RMI demand • Headwinds of increased payroll taxes and minimum wage from April 2025 • Medium term outlook is positive driven by prospect
Slide 23: Q&As
FY24 Results Q&As 23
Slide 24: Appendix 1 – Alternative Performance Measures
Appendix 1 – Alternative Performance Measures 2024 2023 2024 2023 £m £m £m £m Operating Profit 4.3 9.1 (Loss) / Profit before taxation (2.6) 3.0 Amortisation of acquired Exceptional items 0.6 2.8 3.3 3.5 intangibles Share based payments 0.8 0.5 Exceptional items 0.6 2.8 Amortisation of acquired inta
Slide 25: Appendix 2 – Income Statement
Appendix 2 – Income Statement 2024 2023 Adjusting Adjusting Adjusted Items Total Adjusted Items Total £'000 £'000 £'000 £'000 £'000 £'000 Revenue 436.7 - 436.7 462.6 - 462.6 Cost of sales (351.5) - (351.5) (370.2) - (370.2) Gross profit 85.2 - 85.2 92.4 - 92.4 Operating expenses (64.6) (1.3) (66.0)
Slide 26: Appendix 3 - Adjusting items
Appendix 3 - Adjusting items 31.12.24 31.12.23 • Items adjusting statutory results performance £m £m to derive Alternative Performance Measures Exceptional items: (APMs), giving a view of the underlying performance of the business Business acquisition/disposal (0.1) 0.9 Restructuring 0.8 0.6 ROU ass