Tyman : Financial Reporting Document

TYMAN PLC

RESULTS FOR THE YEAR ENDED 31 DECEMBER 2022

Tyman plc (TYMN.L) announces results for the year ended 31 December 2022.

Summary Group Results

£m unless stated	2022	2021	Change	LFL(1)
Revenue	715.5	635.7	+13%	+5%
Adjusted operating profit*	94.6	90.0	+5%	-3%
Adjusted operating margin*	13.2%	14.2%	-100bps	-100bps
Operating profit	70.7	73.1	-3%
Adjusted profit before taxation*	85.8	81.5	+5%
Profit before taxation	61.4	64.0	-4%
Adjusted EPS*	34.7p	32.1p	+8%
Basic EPS	24.6p	25.4p	-3%
Dividend per share	13.7p	12.9p	+6%
Leverage(2)	1.0x	0.9x	+0.1x
Return on capital employed*	13.3%	14.5%	-120bps

• Alternative performance measures. These "Adjusted" metrics are before amortisation of acquired intangible assets, impairment of acquired intangible assets, impairment of goodwill, and adjusting items. These measures provide additional information to shareholders on the underlying performance of the business and are used consistently through the statement. Further details can be found on page 39.

1. LFL = constant currency like-for-like (see APMs on page 40).
2. Leverage is calculated in accordance with the debt covenant methodology (see APMs on page 42).

Highlights:

• Performance at upper end of expectations despite challenging macroeconomic backdrop
• Revenue growth of 13%, with LFL growth of 5% reflecting successful pricing actions and share gains, partially offset by lower market volumes, including the exit from Russia
• Adjusted operating profit growth of 5%, with a LFL decline of 3% reflecting lower volumes, including the exit from Russia; operating profit decline of 3%
• Adjusted operating margin decline principally reflects the dilutive impact of the pass- through of cost inflation
• Good progress with our strategic initiatives:
• • Share gains, driven by innovation, market expansion and executing well with customers
  • Structural margin enhancement activities, including further footprint optimisation, ERP upgrade, factory automation and process enhancement projects
• Further external recognition of our sustainability credentials; 90% of funding now linked to sustainability performance following successful debt refinancing
• Full year dividend increase of 6%, reflecting growth in adjusted EPS of 8% and confidence in the Group's future growth prospects

1

Jo Hallas, Chief Executive Officer, commented: "The Group delivered a solid trading performance in 2022 against increasingly challenging market conditions. Our continued focus on share gains and improving our operational platform, together with successful implementation of pricing actions and strong cost control, enabled us to deliver full year adjusted operating profit at the upper end of market expectations.

We made further progress on our sustainability roadmap and the issuance of new sustainability- linked financing bolsters the Group's commitments to a more sustainable world. Pleasingly, this progress has been recognised by external agencies, most recently with Tyman's inclusion in the FTSE4Good UK Index.

In 2023, pricing carryover, self-help measures and benefits from strategic initiatives are expected to partially mitigate lower volumes and ongoing cost inflation as we navigate the near- term economic challenges. The underlying fundamentals of the markets the Group operates in remain strong. Building on our portfolio of differentiated products, market-leading brands, deep customer relationships and sustainability credentials, together with our agile and resilient business model, Tyman is well positioned to take advantage of the positive structural industry growth drivers as housing market conditions improve."

2 March 2023
Enquiries
Tyman plc	020 7976 8000
Jo Hallas - Chief Executive Officer	[e-mail]
Jason Ashton - Chief Financial Officer
Matt Jones - Head of Investor Relations
MHP	020 3128 8613
Reg Hoare / Rachel Farrington / Matthew Taylor	[e-mail]

Analyst and investor presentation

Tyman will host an analyst and investor presentation at 9.00a.m. today, Thursday 2 March 2023, at the offices of Numis Securities, 45 Gresham Street, London, EC2V 7BF.

The presentation will be webcast at: https://stream.brrmedia.co.uk/broadcast/63c11b57ddbb3277238ea92c

The audio conference call details are:
Number	[phone]
Confirmation code	7511641

Notes to editors

Tyman (TYMN: LSE) is a leading international supplier of engineered fenestration components and access solutions to the construction industry. The company designs and manufactures products that enhance the comfort, sustainability, security, safety and aesthetics of residential homes and commercial buildings. Tyman's portfolio of leading brands serve their markets through three divisions: Tyman North America, Tyman UK & Ireland and Tyman International. Headquartered in London, the Group employs approximately 3,700 people with facilities in 16 countries worldwide. Further information is available at www.tymanplc.com.

2

Overview of results

Performance in 2022

Tyman delivered a solid trading performance in 2022 against a strong comparative period and despite increasingly challenging market conditions. Revenue for the year of £715.5 million (2021: £635.7 million) grew by 13% compared to 2021, reflecting like-for-like (LFL) growth of 5% together with 8% growth from foreign exchange movements. LFL revenue growth reflected the benefit of pricing actions implemented to recover cost inflation, and share gains, partially offset by lower volumes. In addition, the Group discontinued business with Russia and Belarus from February 2022 in response to the war in Ukraine, and this impacted LFL revenue growth by 1 percentage point.

Underlying demand in most of the Group's major markets began the year strongly, driven by favourable structural industry trends and a continuation of the post-COVID rebound in RMI activity, some of which was supported by government fiscal stimulus. Whilst the positive long- term structural trends remain intact, underlying demand levels began to moderate in the summer of 2022 as sharp increases in consumer inflation fed through to rapid rises in interest rates, the combination of which has caused a cost-of-living crisis across most major economies and led to a reduction in residential RMI and housebuilding activity. This moderation in demand became significantly more pronounced during the latter part of the year. Nevertheless, our scale and agility enabled us to win market share, notably in our North American and International divisions.

Input cost inflation remained a challenge in 2022 as, whilst many commodity prices and freight rates moderated as the year progressed, the conflict in Ukraine put upwards pressure on energy prices and raw material conversion costs. In addition, labour markets have remained highly competitive for the past 18 months, especially in the US, which has resulted in wage inflation above long-term averages. We have reacted with agility to these challenges and successfully passed on rising input cost inflation to customers in the form of general price increases and temporary surcharges, although there is an inevitable lag in recovery due to the size and frequency of these increases, as well as some backward-looking customer pricing mechanisms.

The Group responded to the moderation in demand in the second half of the year with adjustments to production shifts, reductions in temporary labour and various tactical cost-saving actions. The improving supply chain environment allowed the Group to implement inventory reduction plans, although these have been constrained to some extent by lower shipments. We are continuing to closely monitor developments in our supply chains, especially given heightened geopolitical tensions in many parts of the world. The Group also progressed structural cost- saving initiatives, including the exit of three manufacturing facilities in the UK and Germany which will complete in early 2023 and deliver annualised benefits of c. £3 million.

The Group's self-help measures partially mitigated the lower volumes, including the impact of the exit from Russia and Belarus (these markets contributed £3 million to adjusted operating profit in 2021). Adjusted operating profit for the year of £94.6 million (2021: £90.0 million) grew by 5% on a reported basis compared to 2021, reflecting a LFL decline of 3% and foreign exchange benefit of 8%. The pass-through of input cost inflation had a dilutive effect on adjusted operating profit margins due to the higher revenue base. Inflation and foreign exchange movements, together with the marked reduction in volumes shipped towards the end of the year, had a significant impact on inventory levels, in turn leading to a reduction in return on

3

capital employed by 120bps to 13.3%. This also resulted in adjusted operating cash conversion of 64% (2021: 64%) remaining below the target average of 90%.

Health and safety

The health and safety of our people is the Group's top priority and is being embedded across our culture through our 'Safety is our First Language' programme. Pleasingly, the Group achieved a lost time incident frequency rate (LTIFR), excluding COVID-19 cases, of 1.4 in 2022, a 26% improvement on 2021 and a 71% improvement versus the 2018 baseline LTIFR of 4.8. Specific safety improvement plans were implemented at four locations with the highest incident rates in 2021; this led to lost time incidents and other recordables at these sites more than halving to 20 in 2022 (2021: 42).

Whilst the Group is yet to achieve its ambitious goal of a LTIFR of less than 1.0, the downward trend in work-related injuries and positively trending leading indicators give us confidence that the Group now has the solid foundations in place to deliver world-class levels of safety performance.

Strategic progress

The Group has continued to progress its Focus, Define, Grow strategy, which is underpinned by the three sustainability pillars of Sustainable Operations, Sustainable Culture and Sustainable Solutions.

The Focus activities seek to improve operational efficiency and structurally improve the cost base by optimising footprint, enhancing systems and processes and reducing complexity. Examples of such activity in 2022 included the exit of three manufacturing facilities in the UK and Germany, the optimisation of the distribution network for the western US market, investment in factory automation in Italy and the UK, and the continuation of a multi-year programme to roll out a global ERP template. The North American product portfolio harmonisation project made further progress, with work moving to the hinged patio door and casement product groups during the year. The Sustainable Operations activities included transitioning the Group's largest manufacturing facility in Europe to use 80% recycled aluminium content and installing solar panels at a major UK site. The Group has defined its Science Based Targets and submitted these to the SBTi for validation, with Scope 1 and 2 targets in line with a 1.5oC pathway and Scope 3 targets in line with a 'well below 2oC' pathway.

The Define strategic pillar, which aims to build cultural cohesion to facilitate ongoing synergy extraction, has continued to gain momentum through embedding the 'One Tyman' culture and expanding the 'Tyman Excellence System' for the development and deployment of best practice. Under Lean Excellence, the Group held its first cross-divisional Kaizen week at its Budrio site in Italy, creating stronger awareness and engagement with lean across site representatives from around the world, with more such events to be conducted in 2023. As part of the Sustainability Excellence work, a database was developed to facilitate groupwide sharing of best practice for reducing energy, water and waste, designing sustainable products, and transitioning to sustainable packaging. This has already helped to drive the development of sustainable packaging for retail customers seeking to eliminate single-use plastic.

Under Sustainable Culture, a groupwide employee engagement survey was conducted, followed up with focus groups to define local and cross-site action plans. An ethics leadership course was deployed to provide senior leaders with the skills to create an environment of psychological safety, further embedding the Group's Code of Business Ethics.

4

The Grow activities aim to deliver organic share gains through excellent customer service, new product development (NPD) and market expansion. In North America, there were net customer wins of c. US$9 million in 2022, in part reflecting the recent investment to expand Q-Lon capacity. In our international markets, strong progress was made with system houses, growing this channel by 26%, whilst in the UK there was further market penetration with innovative commercial access solutions products. The recent reduction in demand levels and moderation of supply chain disruption is enabling greater emphasis on innovation and NPD, and a series of new products were launched in 2022, with a strong pipeline of launches scheduled for 2023. In the US, shipments have begun from the new distribution centre in Phoenix which will enable greater market penetration in the western US, whilst new casement hardware designed for the Canadian market is aimed at strengthening share in 2023.

Enabling customers to innovate through more Sustainable Solutions is a key area of differentiation for the Group. Across Europe and the Middle East, sustainability is an enabler of share gains with system houses. In North America, the Group initiated high-level sustainability workshops with several of its largest customers during the second half of the year to understand their sustainability priorities and investigate ways to share insights and collaborate on new solutions. During 2023, the Group will be working with at least two of these customers to develop new returnable packaging solutions to eliminate transit packaging at their plants, enabling them to enhance their own sustainability credentials.

Tyman's commitment to achieving its sustainability targets is now linked to nearly 90% of its funding. During 2022 the Group successfully completed the refinancing of both US$75 million of US private placement notes and its syndicated revolving credit facility (providing £210 million of committed funding together with an accordion option of up to £100 million). In both cases, the financing included economic incentives for the achievement of sustainability performance targets which align with Tyman's sustainability roadmap.

It has been particularly pleasing that the Group's progress on its sustainability roadmap is leading to further external recognition. During 2022 MSCI awarded Tyman an "AA" leader rating and both S&P Global and Sustainalytics rank Tyman in the top 20% of building products peers globally. Tyman completed its first Carbon Disclosure Project (CDP) submission in 2022 and in December 2022 Tyman became a constituent of the FTSE4Good UK Index.

The Group is prepared for a disciplined return to M&A and has a good pipeline of targets that meet our commercial and strategic objectives. The strengthened platform and Tyman Excellence System should facilitate greater synergy extraction from acquired businesses in the future.

Outlook

The underlying fundamentals of the markets the Group operates in remain strong. For much of the last decade, housing supply has failed to keep pace with demand in most of the Group's key markets, causing a structural housing deficit. There are also positive structural growth drivers for residential RMI spending, including ageing housing stock, increased focus on the energy efficiency of buildings, strengthening building codes and a desire for greater comfort and flexibility of the home. Taken together, these factors are expected to provide an ongoing stimulus to the replacement and upgrade of windows and doors.

Nevertheless, the near-term outlook remains challenging, given high levels of inflation and interest rates are constraining housing market affordability and activity. The industry has limited forward visibility and it is difficult to quantify the amount of customer destocking that took place in the latter half of 2022, but the weakness in volumes experienced in the second half of 2022

5