FU FULL LL-YEAR YEAR R RESU ESULTS TS. 201 2015 Full ull-Year R r Results ults. 20 2015 1
Agen Agenda Gr Grou oup hi highl hlight hts John Car hn Carter p3 Financi nancial al r review Ton ony B Buffin in p7 Str trate tegy upd update te John Car hn Carter p20 Appen endices es p29 Full ull-Year R r Results ults. 20 2015 2
20 2015 5 key key mes messages ges • Good volume growth and share gains by the majority of businesses Co Continued ma marke ket 1 • TP, Benchmarx, CCF, Keyline, Toolstation and Wickes outperformance outper tperform rmance • P&H restructuring complete providing platform for growth • Increased capex to £293m, reflecting long-term return opportunities Invest sting i in 2 • Continued branch expansion with deep pipeline provided by freehold investment su sust stainable le g growth • 2 years into the plan, progress in line with our expectations • Majority of our markets remain fragmented Growth wth driv driven b en by • Businesses are building strong customer propositions & structural advantages 3 se self lf-help lp p programme me • Remain judicious in cost and capital management Inve In vesting ing to o drive ive sustain inable gr growt wth in in earnin ings gs and TSR TSR Full ull-Year R r Results ults. 20 2015 3
Gr Group p per erforma rmance e high ighli ligh ghts ts Rev even enue e • Continued sales growth outperformance growth th of of 6.5% to % to £5.9b .9bn 8. 8.7% • Good underlying profit growth EBIT BITA A gr growth ( h (ex ex- prope pr operty) ty) Growth Gr h capex ca • Investing for long-term growth incr ncrea eased to £134m to £134 LAROCE ROCE • Growth in return on capital incr ncrea eased to 10.5% to 10 Divid ividend • Dividend growth underpinning TSR growth th of of 16% to 16 to 44p 44p Definitions disclosed in Appendix VI Full ull-Year R r Results ults. 20 2015 4
Lever Levers of va valu lue c e crea eati tion Portf tfolio lio Sc Scale le manag anagement nt advant ad antag age Op Optim timis isin ing • Streamlined central netw twork rk • Supply chain functions Custo Cu tomer r investment • TP expansion & • Devolved innovatio in vation modernisation • Leverage property management capability responsibility • Improved value • Wickes national footprint • Group sourcing • Disciplined planning • Extended range • Plumbing & Heating benefits & capital allocation format clarity • Product development • Shared technology • Regular market • Implants intensify returns • Format renewal investment updates • Trade parks • Technology enabled • Multi-channel Enab nabled t d thr hroug ough pe h peop ople & e evolut ution on of of uni unique que cul cultur ure Full ull-Year R r Results ults. 20 2015 5
Go Good p progr gres ess with th i inves vestmen tment t pr progr gramme mme Portf tfolio lio Sc Scale le manag anagement nt Op Optim timis isin ing advant ad antag age Cu Custo tomer r Division management teams netw twork rk • in innovatio vation Lightside network delivered strengthened • Repurposed sites to best with capacity to >2020 • More competitive • More responsibility & • brand to optimise returns merchanting price structures Unique heavyside range accountability in business • Accelerated organic • centre model developed units Wickes enhancing leading • expansion of TP value position Half-way through freehold / Enhanced planning & capital • • Wickes network growth leasehold rebalancing • allocation process TP range expanded through • supply chain infrastructure National footprints in Property asset recycling • Disciplined approach to • • Contracts businesses funding expansion acquisitions & disposals Wickes range extended online • Plumbing & Heating network • Better consolidation of Stronger financial market • Wickes format trials • • re-segmentation completed common sourced products communications generating strong uplift 200 new stores including Development of own-brands • • 1hr Click & Collect available • 100 implants & concessions (e.g. iflo & Scruffs) in Toolstation & Wickes Trade Park model delivering On track with merchanting • • Group online sales now over • attractive returns core systems upgrade £200m Full ull-Year R r Results ults. 20 2015 6
FINANCIAL FINANCIAL REVIEW REVIEW. TONY BU NY BUFFIN FFIN Full ull-Year R r Results ults. 20 2015 7
Gr Group p per erforma rmance e summa mmary Ye Year-on on-ye year 2015 2014 Ye Year ende nded 3 d 31 1 De Dece cembe ber 20 20 cha hang nge Revenue £5,942m £5,581m 6.5% Like Li ke-fo for-li like sal sales g es growth 3. 3.8% 7.3% .3% (3.5) .5)ppt ppt Adj djust sted EBI EBITA £413 £4 13m £3 £384m 7.6% 7. Adjusted EBITA excluding property profits £389m £358m 8.7% Adjusted net profit after tax £307m £291m 5.5% Free cash flow £317m £255m 24.3% Adj djust sted ear d earni ning ngs pe s per shar share 124.1p 12 1p 119.0p 119 4.3% 4. Di Divide dends nds pe per sha share 44.0p .0p 38 38.0p .0p 15. 5.8% Lease ase adj adjust sted R d ROCE ( E (pr pre-im impairm airment) t) 10.5% .5% 10 10.4% 10bp 10 bps Definitions disclosed in Appendix VI Full ull-Year R r Results ults. 20 2015 8
Furth ther er sales les gr growth th outp tper erforma rmance Group reven Gr enue gr e growth • Good volume growth, outperforming our markets 2.7% .7% £5, 5,942m 42m 4.3% 4. (0 (0.5)% )% £5, 5,58 581m • Low inflation as expected 6. 6.5% 5% • New branches & businesses 2014 14 Volum lume Pr Price / m / mix New si sites & s & 2015 15 contributing 2.7% (2014: 1.1%) ac acquis isiti tion ons • Slower growth in H2 given Q1 Q2 Q3 Q4 Ful ar LFL sales growth Q1 Q2 Q3 Q4 ull-year market weakness 2014 12.7% 8.1% 5.7% 3.5% 7.3% 2015 5.1% 6.3% 2.6% 1.4% 3.8% • Encouraging start to 2016 2-year ar growth wth 18 18.4 .4% 14.9 14 .9% 8. 8.4% 4.9 .9% 11.4% 11.4 Definitions disclosed in Appendix VI Full ull-Year R r Results ults. 20 2015 9
Oper erati ting ma g margin ma mainta tained ed General Ge Plumbi Pl bing ng Co Contr trac acts ts Consu nsumer Group Merchant hanting ng & H Heatin ting 2014 EBITA margin 9.8% 4.8% 6.7% 6.0% 6. 6.9% Gross margin 0.1% 0.1% (0.8)% 1.0% 0. 0.2% Operating costs* 0.1% (0.8)% 0.6% (0.3)% (0 (0.1)% )% 2015 EBITA before ∆ in property profits 10.0% 4.1% 6.5% 6.7% 7.0% .0% Property profits 0.1% (0.8)% 0.4% 0.1% (0 (0.1)% )% 2015 15 EBI EBITA mar argin 10.1% 10 1% 3.3% .3% 6. 6.9% 6. 6.8% 6.9% 6. • Mix of business growth changing margin • TP sector leading margins maintained structure of Contracts Division • P&H network reconfiguration impacting • Good growth in underlying Consumer reported margins (disruption impact) margins (30bps ex property & TS Europe) * Includes Toolstation Europe impairment reversal of £6m in Consumer Definitions disclosed in Appendix VI Full ull-Year R r Results ults. 20 2015 10 10
Gener Gen eral Mer l Merchanti ting g per erforma rmance e summa mmary ∆ 2015 2014 20 20 Yea ear ended ended 31 D 1 Decem ecember ber • Outperformed the market Revenue £1,972m £1,873m 5.3% • Good cost price management & Like-for-like growth 3.9% 12.9% (9.0)ppt disciplined overhead control Adj djust sted EBI d EBITA £199m 99m £183m £18 8.7% 8. EBITA margin 10.1% 9.8% 30bps • Strong Benchmarx growth Underlying EBITA (ex-property profit) £182m £169m 7.7% Underlying EBITA margin 9.2% 9.0% 20bps following showroom upgrades Lease ase adj adjust sted R d ROCE 16% 6% 16% 6% - • Investment in heavy & lightside supply chain infrastructure Definitions disclosed in Appendix VI Full ull-Year R r Results ults. 20 2015 11 11
Plu lumb mbing g & H Hea eati ting g per erforma rmance s e summa mmary • Continued market headwinds ∆ 2015 2014 20 20 Yea ear ended ended 31 D 1 Decem ecember ber Revenue £1,371m £1,353m 1.3% • Network re-segmentation Like-for-like growth (1.4)% (1.9)% 0.5ppt complete Adj djust sted EBI d EBITA £46 £46m £65 65m (29.2)% (2 )% EBITA margin 3.3% 4.8% (150)bps • Underlying EBITA broadly Underlying EBITA (ex-property profit) £46m £48m (4.2)% maintained despite re- Underlying EBITA margin 3.3% 3.5% (20)bps Lease ase adj adjust sted R d ROCE 6% 6% 9% 9% (3)ppt (3 ppt segmentation disruption LAROCE post-impairment 8% 11% (3)ppt • PTS and F&P non-cash impairment of £141m Definitions disclosed in Appendix VI Full ull-Year R r Results ults. 20 2015 12 12
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