2015 Interim Results For the six months ended 30 June 2015 Further market share gains in challenging markets
Agenda • Overview • Financial highlights • Market drivers • Growth Strategy – Key Accounts – Insites TM – Product range extension – Market segmentation – Vending • Current trading and outlook 2
Overview • We assume no growth in market demand over next two years • Group revenue up 0.4% and up 7.5% at constant currency** • Gross margin decline 80 basis points to 30.5% • Underlying profit* down 19.4% to £14.1 million • Exchange headwinds reduced reported revenue and profit but organic growth strategy and significant investment in growth drivers still delivering market share gains • Insite TM sales** up 6.8% to £100.7 million • Key Account sales** up 7.9% , representing 53.6% of total revenues • Vending concept proven and will become strongest growth driver • Underlying base business decline reflects difficult market conditions • Half year dividend held at 3.6 pence * Before amortisation of acquired intangibles, acquisition related costs and exceptional items ** Constant currency at € 1.3:£1 3
Customer validated cost savings Over 3,400 separate cost savings provided to our customers in 2015 We saved £24m for our customers, similar to H1 2014* 66.2 60.0 51.5 34.9 30.0 25.8 24.3 15.1 15.0 8.8 2.6 0.4 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 H1 2015 *on a constant currency basis £m 4
Financial highlights
Profit & Loss Constant Organic 6 months to 30 June 2015 2014 Change currency change*** change** Underlying* Sales £365.6m £364.1m +0.4% +7.5% 1.8% Operating profit £17.2m £20.6m -16.5% -12.5% -21.3% Profit before tax £14.1m £17.5m -19.4% -14.8% -25.4% EPS 8.1p 10.8p -25.0% Dividend per share 3.6p 3.6p - Return on operating capital employed 21.5% 26.6% Return on investment 11.7% 14.0% Reported Operating profit £12.2m £14.7m Profit before tax £9.1m £11.6m EPS 5.2p 7.1p * pre amortisation of acquired intangibles, acquisition related costs and exceptional items ** at constant currency *** at constant currency including incremental growth of acquisitions 6
Profit & Loss H1 2015 H1 2015 H1 2014 H1 2015 H1 2015 H1 2015 H1 2015 H1 2015 H1 2014 H1 2014 H1 2014 H1 2014 H1 2014 H1 2015 H1 2015 H1 2014 H1 2014 H1 2014 Group Acquisitions Organic * 2014 Group Acquisitions FX FX Group Group Group Organic * Acquisitions Acquisitions Acquisitions 2014 Organic * Organic * Organic * 2014 2014 2014 FX FX FX Constant currency at Constant currency at Reported Reported Reported Reported Reported € 1.3:£1** € 1.3:£1** Constant currency at € 1.3:£1** Constant currency at € 1.3:£1** at € 1.22:£1 at € 1.22:£1 at € 1.365:£1 at € 1.365:£1 Constant currency at € 1.3:£1** Constant currency at € 1.3:£1** Constant currency at € 1.3:£1** at € 1.22:£1 Turnover Turnover Turnover 375.5 375.5 375.5 349.2 19.9 355.6 349.2 355.6 355.6 349.2 349.2 (14.9) (14.9) 364.1 364.1 Turnover 365.6 365.6 375.5 (9.9) (9.9) 375.5 375.5 375.5 19.9 19.9 19.9 349.2 355.6 349.2 (14.9) 364.1 Gross margin 114.2 114.2 109.3 108.5 109.3 Gross margin Gross margin Gross margin 111.5 111.5 114.2 (2.7) 5.7 114.2 114.2 5.7 5.7 108.5 108.5 108.5 109.3 109.3 109.3 (4.7) (4.7) (4.7) 114.0 114.0 114.0 114.2 (2.7) 114.2 5.7 109.3 Gross % Gross % Gross % 30.4% 30.4% 31.3% 30.5% 31.3% 30.5% 30.5% 31.3% 31.3% 31.3% 31.3% Gross % 30.5% 30.5% 30.4% 28.5% 30.4% 30.4% 30.4% 28.5% 28.5% 28.5% 30.5% 31.3% 31.3% 30.4% 31.3% Sales, Distribution & Sales, Distribution & Sales, Distribution & Sales, Distribution & (96.7) (96.7) (89.3) (92.8) (92.8) (89.3) (89.3) 4.1 4.1 (93.4) (93.4) (94.3) (94.3) (96.7) 2.4 2.4 (3.9) (96.7) (96.7) (96.7) (92.8) (3.9) (3.9) (3.9) (89.3) (92.8) (89.3) 4.1 (93.4) (96.7) (89.3) Administrative Costs Administrative Costs Administrative Costs Administrative Costs Underlying operating Underlying operating Underlying operating Underlying operating 20.0 15.7 15.7 20.0 20.0 (0.6) (0.6) 20.6 20.6 17.2 17.2 17.5 17.5 (0.3) (0.3) 17.5 17.5 17.5 15.7 1.8 1.8 1.8 20.0 15.7 20.0 (0.6) 20.6 17.5 1.8 20.0 17.5 profit profit profit profit % % 4.7% 5.7% 4.4% 4.4% 5.7% 5.7% 5.7% 5.7% % 4.7% 4.7% 4.7% 4.7% 4.7% 4.7% 4.4% 9.0% 9.0% 9.0% 5.7% 4.4% 5.7% 5.7% % 4.7% 9.0% 4.7% 5.7% Interest Interest (3.1) (3.1) (3.1) (3.1) (3.1) (3.1) - - (3.1) (3.1) Interest (3.1) (3.1) (3.1) - - (3.1) (3.1) (3.1) (3.1) - - - (3.1) (3.1) (3.1) - (3.1) Interest (3.1) - (3.1) (3.1) Underlying profit after Underlying profit after Underlying profit after Underlying profit after 14.1 14.4 14.4 (0.3) 16.9 14.4 14.4 1.8 1.8 12.6 12.6 16.9 16.9 (0.6) (0.6) 17.5 17.5 14.4 1.8 12.6 16.9 14.1 (0.3) 14.4 1.8 12.6 16.9 (0.6) 17.5 14.4 16.9 interest interest interest interest *Including incremental growth from 2014 acquisitions ** Management rates for 2015 at € 1.3:£1 Note: Results are stated before amortisation of acquired intangibles, acquisition related costs and exceptional items Average number of working days for H1 2015 is 123 days (H1 2014:122.5 days) £m 7
Profit & Loss First Half First Half 2015 2014 Revenue by segment (£’m) Constant Constant Reported Reported currency* currency* UK 143.5 143.8 142.2 142.2 Germany 60.1 63.1 62.8 58.9 France 42.7 44.8 43.8 41.2 Spain 26.5 27.9 24.3 22.8 Benelux 26.1 27.4 27.3 25.6 Nordic 24.2 24.7 27.6 24.2 Eastern Europe & Other 42.5 43.8 36.1 34.3 Total Group 365.6 375.5 364.1 349.2 * Constant currency management exchange rates for 2015 at € 1.3:£1 8
Segments Eastern Continental UK Germany France Spain Benelux Europe & Nordic Total Europe Other Turnover 143.8 63.1 44.8 27.9 27.4 43.8 207.0 24.7 375.5 H1 2015 Underlying 6.1 3.5 1.4 2.5 1.7 2.3 11.4 - 17.5 operating profit Turnover 142.2 58.9 41.2 22.8 25.6 34.3 182.8 24.2 349.2 H1 2014 Underlying 8.2 3.6 1.6 2.2 1.3 1.8 10.5 1.3 20.0 operating profit Turnover 1.6 4.2 3.6 5.1 1.8 9.5 24.2 0.5 26.3 Change Underlying (2.1) (0.1) (0.2) 0.3 0.4 0.5 0.9 (1.3) (2.5) operating profit As reported at constant exchange rates € 1.3:£1 9
Segments Eastern Continental UK Germany France Spain Benelux Europe & Nordic Total Europe Other Turnover 143.5 60.1 42.7 26.5 26.1 42.5 197.9 24.2 365.6 H1 2015 Underlying 6.1 3.4 1.4 2.4 1.6 2.3 11.1 - 17.2 operating profit Turnover 142.2 62.8 43.8 24.3 27.3 36.1 194.3 27.6 364.1 H1 2014 Underlying 8.2 3.9 1.8 2.5 1.4 1.0 10.6 1.8 20.6 operating profit Turnover 1.3 (2.7) (1.1) 2.2 (1.2) 6.4 3.6 (3.4) 1.5 Change Underlying (2.1) (0.5) (0.4) (0.1) 0.2 1.3 0.5 (1.8) (3.4) operating profit As reported at statutory exchange rates of € 1.365:£1 (2014: € 1.22:£1) 10
Product Range Extension – by customer type 2015 2014 Change Organic 7 Acqns Total Total Total Organic 7 Total Group 355.6 19.9 375.5 349.2 7.5% 1.8% Base business Bearings 1 64.2 6.6 70.8 69.3 2.2% -7.4% Power transmission 2 34.5 1.8 36.3 38.3 -5.2% -9.9% Fluid Power 3 21.9 2.8 24.7 21.7 13.8% 0.9% Tools & General Maintenance 4 18.2 7.0 25.2 16.9 49.1% 7.7% General Consumables 5 15.7 1.7 17.4 16.7 4.2% -6.0% Total Base Business 154.5 19.9 174.4 162.9 7.1% -5.2% Key Accounts Bearings 1 44.7 - 44.7 41.9 6.7% 6.7% Power transmission 2 34.2 - 34.2 32.7 4.6% 4.6% Fluid Power 3 29.2 - 29.2 26.8 9.0% 9.0% Tools & General Maintenance 4 58.7 - 58.7 52.8 11.2% 11.2% General Consumables 5 34.3 - 34.3 32.1 6.9% 6.9% Total Key Accounts 201.1 - 201.1 186.3 7.9% 7.9% 1 Includes Linear Motion & Seals 2 Includes Gearboxes, Motors & Industrial Automation 3 Includes Process 4 Includes Personal Protective Equipment 5 Includes Fasteners, Chemicals, Services and other products 6 Constant currency at 2015 management rates of € 1.3:£ 7 Includes incremental sales growth from 2014 acquisitions 11
Revenue by product area General Consumables 380.0 T&GM 2.9 375.0 14.2 370.0 365.0 Fluid Power Power 5.4 360.0 Transmission Bearings (0.5) 355.0 4.3 350.0 345.0 340.0 335.0 330.0 349.2 375.5 H1 2014 H1 2015 Constant currency management exchange rates for 2015 at € 1.3:£1 £m 12
Gross profit • Gross profit margin declined 80 basis points 2014 Gross Margin % 31.3% • Mix effect from Key Account Mix effect - Key Account sales (0.1)% and T&GM sales growth • Mix effect - T&GM sales (0.1)% Half of margin erosion in base business results from Base business (0.6)% reduction in organic bearings sales 30.5% 2015 Gross Margin % • Margin decline showing an improving trend 13
Cash generation 30.0 Working capital H1 FY H1 Days 2014 2014 2015 Receivables 55.3 51.4 51.3 25.0 Inventories 84.0 97.0 97.0 3.0 Payables (58.4) (66.0) (64.1) 20.0 0.6 Inventories Share option Total 80.9 82.4 84.2 charges 4.2 15.0 Depreciation and 10.0 amortisation (16.8) 5.0 Receivables (4.0) 0.0 Payables 17.2 (4.7) (0.5) Operating profit Exceptional and -5.0 (before amortisation, Operating Cash Flow acquisition acquisition related costs related costs and exceptionals) £m As reported 14
Recommend
More recommend
