Luceco Plc · LSE:LUCE
Luceco — H1 2018 Earnings Presentation
23 slides from Luceco's earnings presentation, September 2018
Slide 1: Half Year Results Presentation
HALF YEAR RESULTS PRESENTATION SEPTEMBER 2018
Slide 2: Agenda
Luceco plc | Half year results presentation 2018 AGENDA Introduction and highlights John Hornby Financial review Matt Webb Strategy John Hornby Questions 2
Slide 3: Introduction
Luceco plc | Half year results presentation 2018 INTRODUCTION Who we are Luceco is a manufacturer and distributor of high quality and innovative LED lighting products, wiring accessories and portable power products for a global Revenue Established customer base £75.1m UK and International – Luceco
Slide 4: Highlights
Luceco plc | Half year results presentation 2018 HIGHLIGHTS Operational Strong growth in strategically important areas Progress in LED Projects accelerated by Kingfisher Lighting Overall progress held back by slowdown in UK consumer-facing retail sales and FX headwind Actions already taken to
Slide 5: Financial Overview
Luceco plc | Half year results presentation 2018 FINANCIAL OVERVIEW 5
Slide 6: Income Statement (Unaudited)
Luceco plc | Half year results presentation 2018 INCOME STATEMENT (UNAUDITED) Adjusted1 Adjusted1 Adjusted1 Flat revenue a product of: £m H1 2018 H1 2017 2017 Revenue 75.1 75.3 167.6 – (5.3%) LFL decline due to UK Retail – (3.6%) currency headwind Growth % (0.3%) 25.5% 25.4% – 8.6% from Kingfisher
Slide 7: Revenue
Luceco plc | Half year results presentation 2018 REVENUE Revenue bridge Impact of destocking Sales to a Major Retailer - H1 2018 vs 2017 10.5% Sales In Sales Out (31.8%) Net LFL decline = (5.3%) £75.3m 0.5% (5.8%) 8.6% £75.1m £0.4m (£4.4m) Sales growth excl. UK Retail (3.6%) £6.5m 45.9% (£2.7m) 39.1
Slide 8: Growth in Higher Margin Areas
Luceco plc | Half year results presentation 2018 GROWTH IN HIGHER MARGIN AREAS As a % Group Revenue 2016 H1 2018 UK consumer-facing retail 36% 25% UK LED Trade and Projects 450 bps margin 12% 20% premium over UK retail International 14% 21% Other businesses 38% 34% Total Group 100% 100% 8
Slide 9: Gross Margin
Luceco plc | Half year results presentation 2018 GROSS MARGIN Gross margin bridge Copper price (USD per tonne) %% 35.1% (3.2%) 31.9% (1.1%) (1.0%) (1.2%) USD:RMB FX rate (1.3%) 27.3% 9
Slide 10: Currency Impact
Luceco plc | Half year results presentation 2018 CURRENCY IMPACT Impact on H1 2018 Income Statement Impact of hedging programme H1 impact by currency USD RMB Total Adjusted (Unaudited) H1 Constant H1 £m 2017 currency FX 2018 H1 2018 income/(expense) in local currency 21.5 (289.1) Average FX rate ver
Slide 11: Segmental Performance (Unaudited)
Luceco plc | Half year results presentation 2018 SEGMENTAL PERFORMANCE (UNAUDITED) LED Lighting Wiring Accessories £m H1 2018 H1 2017 Change Change % £m H1 2018 H1 2017 Change Change % Revenue 24.2 17.4 6.8 39.1% Revenue 31.4 35.1 (3.7) (10.5%) Adjusted operating (loss)/profit (1.4) - (1.4) - Adjust
Slide 12: Segmental Performance (Unaudited)
Luceco plc | Half year results presentation 2018 SEGMENTAL PERFORMANCE (UNAUDITED) Portable Power Ross & other £m H1 2018 H1 2017 Change Change % £m H1 2018 H1 2017 Change Change % Revenue 16.9 19.8 (2.9) (14.6%) Revenue 2.6 3.0 (0.4) (13.3%) Adjusted operating (loss) / profit (0.5) 2.2 (2.7) (122.7
Slide 13: Rebuilding Profitability
Luceco plc | Half year results presentation 2018 REBUILDING PROFITABILITY £m H1 2018 adjusted operating profit - Actions taken that benefit H2 2018 & beyond: Selling price updates 4.5 Currency hedging 1.4 Closure of US operations 0.8 Overhead reductions 0.4 Note: H2 2017 adjusted operating profit 5.
Slide 14: Balance Sheet (Unaudited)
Luceco plc | Half year results presentation 2018 BALANCE SHEET (UNAUDITED) H1 2018 Changes since FY2017 £m H1 2018 H1 20171 FY 20171 Movement Non-current assets Inventory reduced despite weak demand. Intangible assets 23.8 21.0 23.5 0.3 Targeting a further reduction by year-end Tangible assets 23.
Slide 15: Cash Flow (Unaudited)
Luceco plc | Half year results presentation 2018 CASH FLOW (UNAUDITED) £m H1 2018 H1 2017 Change FY 2017 Group remained operating cash flow positive, despite the challenging Cash from operations 1.3 10.2 (8.9) 20.3 environment, due to tight working capital Tax paid (1.4) (0.4) (1.0) (3.1) manageme
Slide 16: Strategy
Luceco plc | Half year results presentation 2018 STRATEGY 16
Slide 17: Strategy
Luceco plc | Half year results presentation 2018 STRATEGY Increased investment in support services as appropriate – Finance team / other back office software/process investment and improvement. Diversify into more technical, higher margin trade and project segments, especially within lighting. •
Slide 18: Outlook
Luceco plc | Half year results presentation 2018 OUTLOOK Outlook remains unchanged from the July Trading Update Actions taken during H1 2018 will deliver benefits: – Price updates – FX hedging – Overhead reductions – Closure of US operations UK Retail order book +30% in Q3 compared to Q2 Wel
Slide 19: Appendix
Luceco plc | Half year results presentation 2018 APPENDIX 19
Slide 20: Prior Year Restatement and Cost Reclassification
Luceco plc | Half year results presentation 2018 PRIOR YEAR RESTATEMENT AND COST RECLASSIFICATION Previously Three types of adjustment made to H1 2017 comparatives: reported Reclass Restated £m H1 2017 of costs H1 2017 – Correction of accounting errors in opening balance sheet Revenue 75.3 - 75.3
Slide 21: Prior Year Restatement
Luceco plc | Half year results presentation 2018 PRIOR YEAR RESTATEMENT 30 June 2017 Restatement 31 December 2017 Restatement Change to As previously opening balance Reclassification As previously Reclassification £m reported sheet of rebates As Restated reported of rebates As Restated Non-current a
Slide 22: Income Statement – Adjusted & Statutory
Luceco plc | Half year results presentation 2018 INCOME STATEMENT – ADJUSTED & STATUTORY Adjusted Reported Adjusted Reported The Group uses Alternative £m H1 2018 Adjs H1 2018 H1 2017 Adjs H1 2017 Performance Measures to provide a Revenue 75.1 - 75.1 75.3 - 75.3 more meaningful understanding of th
Slide 23: Disclaimer
Luceco plc | Half year results presentation 2018 DISCLAIMER This presentation and information communicated verbally to you may contain certain projections and other forward-looking statements with respect to the financial condition, results of operations, businesses and prospects of Luceco plc. Thes