2015 Half Year Results August 2015 Agenda 1 Philip Rogerson, - PDF document

2015 Half Year Results August 2015

Agenda 1 Philip Rogerson, Chairman: Welcome 2 Brian May, FD: Financial Results 3 Michael Roney, CEO: Business Review 4 Q&A 1 2015 Half Year Results

Highlights Consistent £241m spent Good set of and proven ytd on 14 results strategy acquisitions Adjusted Dividend earnings per up 7% share* up 6% † * Before intangible amortisation and acquisition related costs † At constant exchange rates 2 2015 Half Year Results

Financial results Brian May, FD 3 2015 Half Year Results

Growth % Income Constant statement £m Jun 15 Jun 14 Reported Exchange Revenue 2,938.7 7 5 3,135.2 Adjusted operating profit* 197.2 6 5 208.4 Net finance cost (20.6) (21.4) Adjusted profit before tax* 176.6 6 6 187.0 Operating margin* 6.7% 6.6% Effective tax rate 28.0% 27.5% Adjusted earnings per 39.0p 6 6 41.4p share* Dividend per share 11.00p 7 11.75p * Before intangible amortisation and acquisition related costs – see Appendix 2 4 2015 Half Year Results

Dividend per share (p) 35.5 CAGR >10 % Consistently 22 years of growth strong dividend growth 4.0 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 5 2015 Annual Results

Balance Intangibles £m Jun 15 Dec 14  Additions of £176.5m from sheet Intangibles 1,478.8 acquisitions partially offset by 1,546.8 amortisation and foreign exchange translation Tangibles 119.2 122.8 Working capital Working capital 557.4 621.6  Increases primarily from acquisitions, partially offset by Other liabilities (223.8) (301.2) exchange rate movements Pensions deficit 1,931.6 1,990.0  Deficit decreased by £10.5m mainly due to higher discount Pension deficit (70.3) (59.8) rates Net Debt* (877.4) (1,067.3) Return on average operating capital Equity 983.9 862.9  Underlying return increased by 20bp, offset by the impact of acquisitions Net Debt/EBITDA 1.9x 2.1x Return on average 57.7% 56.9% operating capital * See Appendix 3 6 2015 Half Year Results

Cash flow £m Jun 15 Jun 14 Operating cash flow* 200.2 199.7 Interest (19.7) (20.0) Tax (47.1) (45.5) Free cash flow 133.4 134.2 96% Dividends (32.6) (36.0) Acquisitions (118.7) (263.1) cash conversion over target Employee share schemes (34.7) (45.0) threshold of 90% Net cash flow (52.6) (209.9) Operating cash flow* to adjusted operating profit † 102% 96% * See Appendix 4 † Before intangible amortisation and acquisition related costs 7 2015 Half Year Results

Cash 110% conversion 103% 102% 102% 96% 95% 95% 93% 93% 92% 92% 93% 90% High cash conversion funds growing dividend and acquisitions Average cash conversion* 97% 04 05 06 07 08 09 10 11 12 13 14 H1 15 * Operating cash flow before acquisition related costs to adjusted operating profit 04 - 05 continuing operations only 8 2015 Half Year Results

Uses of cash since 2004  Dividend per share CAGR >10% Dividends (2004 - 2014) £798 m  Stable dividend cover – c.2.5x Acquisitions  110 acquisitions since 2004 (to 30 June 2015) £2.1 bn  Self funded 9 2015 Half Year Results

Financial Capital ROACE Cash Acquisition summary conversion** spend ytd management and Cash flow 56.9 % 96 % £241 m  20bpunderlying †  Revenue Adjusted Operating Revenue and operating margin* Operating profit profit* 6.6 %  5 % †  5 % † In line with 2014 † Adjusted Dividend EPS and EPS* per share Dividend  6 % †  7 % † At constant exchange rates  Excluding the impact of acquisitions * Before intangible amortisation and acquisition related costs ** Operating cash flow before acquisition related costs to adjusted operating profit 10 2015 Half Year Results

Business review Michael Roney, CEO 11 2015 Half Year Results

Business review 1 Operations review 2 Strategy 3 Prospects 12 2015 Half Year Results

Revenue growth £m 3,500 3.5% 4.7% 1.2% 3,000 106 35 2,500 3,135 2,000 2,994 1,500 1,000 Revenue Organic Acquisitions Revenue HY14 HY15 (FX adjusted) 13 2015 Half Year Results

Revenue by Healthcare Other customer markets 3% 7% 28% 10% Retail Foodservice 12% Safety 13% 27% Grocery Cleaning & hygiene 2015 HY Revenue 14 2015 Half Year Results

Business area analysis NORTH AMERICA CONTINENTAL EUROPE Well diversified by Revenue 57 % Revenue 18 % geography and Adjusted operating Adjusted operating 50 % sector 23 % profit* profit* UK & IRELAND REST OF WORLD 17 % Revenue 8 % Revenue 17 % Adjusted operating Adjusted operating 10 % profit* profit* 2015 HY * Before intangible amortisation and acquisition related costs and corporate costs 15 2015 Half Year Results

Overview  Significant acquisition spend year to date of £241m on 14 businesses with entry into two new countries  North America – Revenue increase from recent acquisitions and organic growth, partially offset by some lost business and price declines in plastic products  Continental Europe – Strong profit growth † with operating margin up 50bp to 9.2% Good overall  UK & Ireland – 11% growth in adjusted operating profit*, with performance operating margin up 40bp to 7.0%  Rest of the World – Adjusted operating profit* down 7% † due to challenging macroeconomic conditions and negative exchange transaction impact † At constant exchange rates * Before intangible amortisation and acquisition related costs 16 2015 Half Year Results

North Growth % America Constant £m June 15 June 14 Reported Exchange Revenue 1,590.1 13 4 1,792.6 Adjusted operating profit* 97.4 12 3 109.1 Operating margin* 6.1% 6.1% Return on operating capital 61.2% 58.9% Revenue increase from recent acquisitions and  organic growth with operating margin* stable at 6.1% Grocery and redistribution businesses impacted by  some lost business and price declines in plastic products Revenue and profit growth in businesses serving  other sectors Three safety acquisitions (Tillman, Cordova and  Steiner) significantly enhance growing portfolio of own brand products Recent acquisition activity in Canada creates  national distribution platform in cleaning & hygiene * Before intangible amortisation and acquisition related costs 17 2015 Half Year Results

Continental Growth % Europe Constant £m June 15 June 14 Reported Exchange Revenue 573.3 (5) 5 545.6 Adjusted operating profit* 50.1 0 10 50.2 Operating margin* 8.7% 9.2% Return on operating capital 49.6% 53.7% Strong constant exchange profit growth with  operating margin* up 50bp to 9.2% Impact of lower sales in France offset by continued  cost reduction measures Good growth in the Netherlands driven by  acquisitions and progress in the safety, healthcare, retail and food processor sectors Significant profit growth in Denmark  Further improvement in Spain and Central Europe  Entry into two new countries, Turkey and Austria  * Before intangible amortisation and acquisition related costs 18 2015 Half Year Results

UK & Ireland Growth % Constant £m June 15 June 14 Reported Exchange Revenue 507.8 5 6 535.1 Adjusted operating profit* 33.7 11 11 37.3 Operating margin* 6.6% 7.0% Return on operating capital 107.5% 106.8% Strong profit growth with operating margin* up 40bp  to 7.0% Significant profit increase in safety led by acquisitions  and expanded own label product ranges Well positioned to support customers in challenging  grocery and retail sectors Hospitality continues to grow well and further  development of own label products ranges Good growth in healthcare despite increased  customer focus on cost reductions Ireland continues to improve with the economic  recovery, notably in hospitality * Before intangible amortisation and acquisition related costs 19 2015 Half Year Results

̶ ̶ ̶ ̶ Rest of the Growth % World Constant £m June 15 June 14 Reported Exchange Revenue 267.5 (2) 7 261.9 Adjusted operating profit* 26.1 (16) (7) 22.0 Operating margin* 9.8% 8.4% Return on operating capital 45.5% 37.6% Margins under pressure due to challenging  macroeconomic conditions and currency weakness affecting product purchase prices Latin America  Weaker performance at Brazil safety and cleaning & hygiene Other businesses trading broadly in line with expectations Australasia  Industrial and safety adversely impacted by slowdown in resources sector Market position further consolidated in consumables * Before intangible amortisation and acquisition related costs 20 2015 Half Year Results

Rest of the Brazilian real : US dollar Australian dollar : US dollar World 0.50 1.00 currency depreciation 0.45 0.90 0.40 0.80 50%+ 0.35 0.70 Rest of the World purchases are imported 0.30 0.60 Brazilian real Australian dollar 37% 22% 0.25 0.50 depreciation vs. depreciation vs. US dollar* US dollar* 0.20 0.40 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 * 1 Jul-14 to 13 Aug-15 21 2015 Half Year Results