Travis Perkins Plc · LSE:TPK
Travis Perkins — H1 2024 Earnings Presentation
30 slides from Travis Perkins's earnings presentation, August 2024
Slide 1: 2024 Half Year Results Presentation
2024 Half Year Results Presentation August 2024 Leading partner to the construction industry 1
Slide 2: Agenda
2024 Half Year Results Introduction Financial review Presentation Nick Roberts Duncan Cooper August 2024 3-4 5-15 Operational update Questions Nick Roberts 16-24 25 Appendices Contacts 26-29 30 2
Slide 3: Introduction
2024 Half Year Results Presentation August 2024 Introduction Nick Roberts Chief Executive Officer 3
Slide 4: Introduction: good progress but challenging market conditions
Introduction Good progress on business …but challenging market improvement actions… conditions persist Financial Review Overheads reduced YoY by £19m with cost Weak demand continues across the inflation absorbed Group’s end markets Operational Update Enhanced cash generation with net debt Gross marg
Slide 5: Financial review
2024 Half Year Results Presentation August 2024 Financial review Duncan Cooper Chief Financial Officer 5
Slide 6: Financial overview
Financial overview Introduction Financial Review 6 months ended 30 June 2024 H1 2024 H1 2023 Change Revenue (£m) 2,362 2,472 (4.4)% Operational Update Adjusted operating profit (£m) 75 112 (33.0)% Adjusted earnings per share (pence) 15.9p 30.5p (47.9)% Questions Net debt / adjusted EBITDA 2.7x 2.1x
Slide 7: Revenue impacted by price deflation and weak volumes
Revenue impacted by price deflation and weak volumes Introduction Financial Review Operational Update Questions Appendices Trading volumes lower due to continued RMI weakness, reduced housebuilding and public sector projects Pricing impacted by commodity product deflation and focus on maintaining ma
Slide 8: Further overhead reductions partially mitigate weak market dynamics
Further overhead reductions partially mitigate weak market dynamics Introduction Financial Review Operational Update Questions Appendices Gross profit decline driven by impact of commodity deflation and competitive pressures Good progress on cost reduction both from restructuring and lower discretio
Slide 9: Adjusting items
Introduction Adjusting items Financial Review Closure of five supply chain assets £m Further Group restructuring actions and Operational Update Supply chain consolidation 15.0 centralisation of procurement Group restructuring / procurement Closed 39 standalone Benchmarx sites in Feb 24 8.9 centralis
Slide 10: Gross margin pressure impacting on Merchanting margins
Gross margin pressure impacting on Merchanting margins Introduction Financial Review Gross margin pressure from commodity Operational Update H1 2024 H1 2023 Change deflation and competitive environment Revenue £1,942m £2,062m (5.8)% Reduced housebuilding activity Adjusted operating profit £91m £130m
Slide 11: Good profitability progression in Toolstation UK
Good profitability progression in Toolstation UK Introduction Financial Review Solid sales performance driven by H1 2024 H1 2023 Change further market share gains and Operational Update Revenue £420m £410m 2.4% maturity benefits Like-for-like growth 0.7% 5.9% 130bps expansion in Toolstation UK Adjus
Slide 12: Disciplined approach to capital expenditure
Disciplined approach to capital expenditure Introduction Financial Review Tighter controls on capital expenditure £m H1 2024 H1 2023 Operational Update Strategic 10 29 Maintenance capex broadly held to protect asset quality Maintenance 15 19 IT 4 1 Strategic capex reduced by £(19)m reflecting market
Slide 13: Strong cashflow conversion driven by working capital actions
Strong cashflow conversion driven by working capital actions Introduction Financial Review Cashflow conversion of 204% driven by working capital benefit and reduced capex Operational Update Stock reduction of £58m from increased focus on working capital and supply chain consolidation Questions Targe
Slide 14: Good progress on net debt reduction
Introduction Good progress on net debt reduction Financial Review 30 Jun 2024 31 Dec 2023 Change Covenant Operational Update Net debt £868m £922m £54m Net debt / adjusted EBITDA 2.7x 2.6x (0.1)x <4.0x Net debt before leases £233m £314m £81m Questions Net debt before leases / adjusted EBITDA 0.7x 0.8
Slide 15: Outlook and guidance
Introduction Outlook and guidance Outlook FY24 Guidance Financial Review Focus remains on what the Group can control Base capital expenditure of £80m ● Ongoing overhead discipline Expect ETR of around 29% on UK Operational Update ● Positioned for a strong recovery generated profits Market to remain
Slide 16: Operational update
2024 Half Year Results Presentation August 2024 Operational update Nick Roberts Chief Executive Officer 16
Slide 17: Near-term challenges remain but outlook improving
Near-term challenges remain but outlook improving Introduction Financial Review Market expected to remain weak in 2024 Improving outlook into 2025 Operational Update Conditions set for a pick up in Inflation stabilised and interest rate cuts Questions housebuilding activity but RMI underway demand r
Slide 18: Initial actions focused on four key areas
Introduction Initial actions focused on four key areas Financial Review Simplified Technology structures with Operational Update enablement shared procurement capability Questions Appendices Addressing Supply chain loss-making consolidation activities 2024 Half Year Results - August 2024 18
Slide 19: Technology enablement
Introduction Technology enablement Financial Review New ERP system implemented - Oracle Financials Operational Update Cloud-based technology with future Oracle upgrade roadmap Questions Standardised processes and new financial controls Enhanced stock visibility and reporting Appendices Capability an
Slide 20: Simplified structures with shared procurement capability
Introduction Simplified structures with shared procurement capability Financial Review Operational Update Building Leveraging Developing Eliminating Management Questions category purchasing Group-wide tasks and consolidation expertise and scale to drive digital & duplication, in CCF & relationships
Slide 21: Supply chain consolidation
Introduction Supply chain consolidation Financial Review Operational Update Questions Pineham benefits Three Merchanting Further Appendices driven by closure supply chain assets opportunities of Bridgwater closed to through lightside and Daventry DCs deliver efficiencies collaboration 2024 Half Year
Slide 22: Addressing loss-making activities: Toolstation France
Introduction Addressing loss-making activities: Toolstation France Financial Review Expectation that the Group will exit Toolstation France by the end of 2024 Operational Update Consultation process with the works council in France has concluded Planning for a solvent exit in the event a buyer for a
Slide 23: Addressing loss-making activities: Toolstation Benelux
Introduction Addressing loss-making activities: Toolstation Benelux Benelux strategic review concluded - focus on accelerated path to profitability Financial Review Operational Update Strategic review re-affirmed the long-term potential of the business Benelux shorter maturity curve than France; cus
Slide 24: Summary
Introduction Summary Financial Review Operational Update Questions Challenging H1 market conditions expected to persist into H2 Good progress being made on overheads, working capital and cash generation Appendices Decisive policy action and economic stability create positive outlook Management actio
Slide 25: Questions
2024 Half Year Results Presentation August 2024 Questions 25
Slide 26: Appendices
2024 Half Year Results Presentation August 2024 Appendices 26
Slide 27: I - Definitions
I - Definitions Introduction Metric Definition Financial Review Operating profit Profit before tax, financing charges and income Earning per share (“EPS”) Ratio of net profit after taxation adjusted for minority interests to weighted number of ordinary shares outstanding Adjusted operating profit /
Slide 28: II - Sales drivers by reporting segment
II - Sales drivers by reporting segment Introduction Financial Review Total revenue Like-for-like revenue 2024 2023 2024 2023 Merchanting Toolstation Group Q1 (6.0)% (3.2)% (4.2)% (4.2)% Operational Update Price and mix (3.6)% 2.1% (2.6)% Merchanting Q2 (5.7)% (5.6)% (7.9)% (5.2)% Like-for-like volu
Slide 29: III - Branch Numbers
III - Branch Numbers Introduction 31 Dec 23 Openings Closures 30 Jun 24 Financial Review Travis Perkins General Merchant 552 2 (8) 546 Benchmarx* 70 (39) 31 Operational Update Keyline 42 42 CCF 36 1 37 BSS & TF Solutions 69 69 Questions Merchanting 769 3 (47) 725 Toolstation 570 8 578 Appendices Too
Slide 30: Contact
2024 Half Year Results Presentation August 2024 Contact Matt Worster | +44 (0) 7990 088 548 [email protected] 30