Hill & Smith : Half Year Results Presentation 2023

H1 2023

Interim Results

9 August 2023	for the six months ended 30 June 2023

HIGHLIGHTS

Record H1 trading performance

• Reflects strong momentum in our US businesses
• Revenue +9%, operating profit +20% on an organic constant currency basis
• Operating margin +240bps to 14.9%

Value enhancing acquisitions

• £38.5m deployed on two acquisitions
• 2022/23 acquisitions performing well
• Continued progress on building M&A pipeline

Strong cash generation

• 87% cash conversion
• Covenant leverage: 0.7 times, substantial M&A firepower

Interim dividend of 15p

• 15% increase vs H1 2022

Positive outlook

• Supported by broad based US industrial growth drivers
• FY2023 operating profit expected to be modestly ahead of current market consensus*
• Full year expected to be first half weighted

	* The current company compiled analyst consensus expectation for FY23 is for underlying operating profit of	2
2023 Interim Results	£111.8m with a range of £110.2m-£112.8m

H1 2023 RESULTS

A RECORD FIRST HALF PERFORMANCE

				Constant
	2023	2022	Reported	Currency	OCC
Continuing Operations
Revenue	£420.8m	£349.9m	+20%	+17%	+9%
Operating profit	£62.5m	£43.6m	+43%	+38%	+20%
Operating margin	14.9%	12.5%	+240 bps
Profit before tax	£57.2m	£40.2m	+42%
Earnings per share	53.6p	38.7p	+39%
Total Group
Earnings per share	53.6p	43.2p	+24%
Dividend per share	15.0p	13.0p	+15%

2023 Interim Results

3

GROUP OVERVIEW

INCREASING IMPORTANCE OF US END MARKETS

By geography

	3%
			▪
41%	REVENUE		▪
	£420.8m	56%

▪

	2%
	25%
US	OPERATING
UK	PROFIT
£62.5m
Rest of World	73%

By division

24%			14%
▪
33%	Engineered	36% OPERATING
REVENUE		Solutions
▪		PROFIT
£420.8m	Galvanizing
£62.5m
		Services
43%	▪	Roads &	50%
	Security

20232023InterimInterimResultsResults	4

ENGINEERED SOLUTIONS

	2023		Constant
	2022	Currency	OCC
Revenue (£m)	181.7	136.5	+29%	+17%
Operating profit (£m)	30.9	14.1	+106%	+89%
Operating margin	17.0%	10.3%

Highlights

• Standout performance driven by US growth
• Operating margin +670bps reflecting volume growth and improved portfolio mix

US

• Composite business delivered record results
• Enduro Composites, recent acquisition, trading ahead of expectations
• Strong structural steel demand for electricity substation projects
• Outlook: positive, supported by grid modernisation, multi-year government spend and onshoring

UK

• Industrial Flooring delivered resilient performance
• Lower building product volumes offset by price and cost efficiency
• Outlook: mixed, some weakness expected to continue in UK construction/housebuilding

By geography

3%

US +27% OCC

25%

REVENUE	UK -4% OCC
£181.7m	India +56% OCC
	72%

By end market

		Electrical transmission
		& distribution
	29%	Bridges, rail &
41%		waterfront
REVENUE	UK residential
£181.7m
	7%	construction
		LNG, energy &
7%	16%	chemicals

Other construction & building infrastructure

2023 Interim Results	5