2015 Half yearly report

August 2015

AGENDA

Patrick BatemanChief Executive Officer

Matthew EdwardsChief Financial Officer

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Introduction and headlines Financial performance Group strategy and growth opportunities Current trading and outlook Eurocell at a glance

Introduction and headlinesPatrick Bateman, Chief Executive Officer

INTERIM FINANCIAL HIGHLIGHTS

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Adjusted EBITDA up 14% to £13.0m (2014: £11.4m)

Adjusted PBT up 35% to £9.6m (2014 £7.1m)

Adjusted EPS up 46% to 7.6pps (2014 5.2pps)

Revenue performance in-line with RMI Market and outperforming new build market Underlying operating cash flow up £3.1m, conversion 93% (+13.8 percentage points) Gross margin improvement (4.2 percentage points) from cost reduction

Interim dividend of 2.7 pence per share

Adjusted PBT represents profit before tax and non-recurring costsAdjusted EBITDA represents earnings before interest, tax, depreciation, amortisation and non-recurring costsAdjusted EPS excludes non-recurring costsOperating cash flow is before capital expenditure, taxation and non-recurring costs

Strong financial performance

OPERATIONAL HIGHLIGHTS

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New branch roll-out 10 new (6 in H1, 10 YTD), 25 refurbished

New products In progress

Cross-selling Branch sales +4% on manufactured

Resin contract Benefits being realised

Logistics outsourcing Results as expected

Acquisitions 1 bolt-on completed post period end

Operational factory performance Scrap down 6% and OEE up 2%

Operational improvements and initiatives are positive

MARKET BACKDROP Market forecasts indicate improved market conditions for the remainder of 2015

Eurocell revenue is derived primarily from the RMI and New Build markets

RMI (84% of total revenue)

– H1 down 0.7%: Private (-0.9%) and Public (-0.2%) – Full year forecast is growth of 5% and 1% for private / public

New build (12% of total revenue)

– H1 completions up 9.7%: Private (+11.4%) and Public (-1.9%) – Full year forecast is growth of 10% for private and 3% for public

Source: ONS, output in the construction industry, May 2015 - release: 10 July 2015Construction Products Association forecast for 2015

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Public Private

Financial performanceMatthew Edwards, Chief Financial Officer

SUMMARY INCOME STATEMENT

Improvements in gross margin % has been translated into higher operating profit due to control of overheads

Revenues reflect 0.9% fall in RMI market and timing between client losses and wins

Gross margin improvements during the period driven by – New resin contract and lower resin prices – Other raw material savings – Increased use of post consumer material in manufacturing – Formulation changes reducing material usage – Shift in mix towards products manufactured by Eurocell

Improved production has also supported the performance of the business with savings achieved in production labour

Overhead increase reflects investment in headcount and ongoing costs incurred post IPO

Improvements in gross margin % has been translated into higher operating profit due to control of overheads

Non-recurring costs in the current period relate to the IPO and re-financing in March 2015

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Source: Company information(1) Operating profit before non-recurring costs

Adjusted EBITDA increased by 17% (pre plc costs)EBITDA BRIDGE (£M)

Revenue in line with RMI market (-0.9%)

Resin contract savings in line with expectations supported by lower market prices

Other margin benefit from improved raw material procurement and use (see Profiles segment review)

Distribution savings from outsourcing. Savings remain on track and will increase in the second half of 2015

Headcount growth mainly due to investment in Building Plastics structure 8

13.8% margin

15.8% margin

SUMMARY CASH FLOW

Strong operating cash flow as a result of efficient working capital management and increased profitability

History of strong operating cash conversion, demonstrating ability to manage working capital – Better receivables management and stock optimisation – Improved payment terms with key supplier

Working capital increase in the first half of the year driven by payment of annual bonuses; working capital typically reduces during the second half of the year

Change in timing of tax payment from 2014 to 2015 (£2.2m), non-recurring costs being in respect of the IPO

Continued investment in new extruders and recycling capability and capacity (on track full year)

Cash flow available for debt service lower due to payment of corporation tax and IPO costs

Finance expense relates to the payment of rolled up interest on shareholder loans

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Source: Company information. (1) Disclosed as cash generated from operations in the half year report(2) Exceptional items removed from working capital (since they are not included within adjusted EBITDA)(3) Underlying operating cash conversion is operating cash flow as a % of adjusted EBITDA

SUMMARY BALANCE SHEET

Net asset increase (Dec 2014) due to: – Net profit of £4.5m – Issue of shares on IPO (£1.9m)

Working capital increase from new branches of £0.6m; underlying reduction therefore £1.4m

Cash required in July for acquisition (£2.3m), corporation tax payment on account (£0.9m) and VAT quarterly payment (£1.5m)

Current borrowings are under a £45m 5 year facility from Santander and Barclays

Facility headroom of £11.7m

Covenants in place: – Leverage: must be less than 3 – Interest cover: minimum level of 4

Interest currently charged at LIBOR plus 1.5% and varies depending on leverage

Source: Company information(1) Leverage is net debt divided by adjusted EBITDA for the preceding twelve months(2) Interest cover is adjusted EBITDA divided by net interest payable for the preceding twelve months

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SEGMENTAL REVIEW

L4L business up 3% v last year driven by new business with existing customers (moving to sole supplier arrangements)

Resin: Permanent savings due to new resin contract; lower market prices

In production use of post-consumer materials up 45%, scrap 6% lower and improved OEE of 2%

Bolt-on acquisitions: Injection moulding business acquired in July 2015. Growth in existing business and limited insourcing provides return above WACC

Equinox tiled roof system successfully manufactured in-house with continually increasing sales

Capital expenditure up £1.2m to £3.2m – continued investment in tooling and production

Profiles

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SEGMENTAL REVIEW Building Plastics

Eurocell manufactured products up 4% including 11% increase in made-to-order products (such as Skypod and Equinox)

L4L Business (121 branches): 1.1% decline on a per trading day basis, includes no price increase

– Similar to RMI market decline

– Greater initial sales dilution from increased Branch openings

Continued investment in branch network:

– 10 new branches open and trading YTD (6 in H1)

– 141 branches expected by December 2015

(13 new in total)

– 25 branch refurbishments

– Potential acquisitions of independent branches

Further investments in people to support branch network expansion

– Two new Divisional Directors (splitting the country)

– Introduction of relief managers

– Focus on improved recruitment

Specific management development programmes introduced and ‘e’ based Branch learning

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Group strategy and growth opportunitiesPatrick Bateman, Chief Executive Officer

GROUP STRATEGY & GROWTH OPPORTUNITIES

The overall strategy remains unchanged, to continue to grow sales and profits above market growth through leadership in products, operations, sales, marketing and distribution. With focus on:

Sales growth Key targeting of new profile customers

Improving the support for branch operations

Continuing to roll out branches in the UK (organic and acquisition)

Positive outlook for private new build

Margin enhancing operational improvements Further use of recycled product

Continual improvement in scrap and OEE

Increase mix in high value own produced items

Improved portfolio selling

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Current trading and outlookPatrick Bateman, Chief Executive Officer

CURRENT TRADING & OUTLOOK

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Performance in the first seven weeks of H2 2015 (compared to 2014)

Total sales up 1.8%

Year on year growth in the first seven weeks is improved over H1

Resin price stable in July and August

Outlook

Launch of a new product planned for September

Total branches of 141 by December 2015

Acquisition of S&S Plastics

Current year profitability and dividend in line with expectation

SUMMARY

On track to deliver against expectations

Strong single brand, B2B-focused

Strategically invested,

experienced management, clear growth

strategy

Proven, self-funded, branch

roll-out strategy

Profitable growth, strong

cash generation, high ROCE,

robust margins

Vertically integrated

business model

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Eurocell at a glancePatrick Bateman, Chief Executive Officer

EUROCELL AT A GLANCE

Leading B2B, single brand supplier of PVC building

products with own distribution network

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EUROCELL AT A GLANCE

Profiles – £72.7m(1)

c. 12%

MARKET SHARE 2013

Ranked #3 in the market (window profiles)

Manufactures and sells: Window, door and conservatory profiles to fabricators

Network of 300 fabricators: Fabricators supply final products to installers, retail outlets and house-builders

Main customers: fabricators

Source: D&G, company information (unaudited)Note (1): FY14A revenue

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EUROCELL AT A GLANCE

Building Plastics – £100.4m(1)

Ranked #1 PVC building products specialist outlet

Sells and distributes A range of Eurocell branded roofline and third-party related products

Nationwide network of 138 branches

Main customers: Installers, small builders and roofing contractors

c. 20%

MARKET SHARE 2013

Source: D&G, company information (unaudited)Note (1): FY14A revenue

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DIFFERENTIATION

Single brand B2B supplier of innovative PVC building products

Vertically integrated business model

Recycling, manufacturing and own branch network

Clear strategyBranch roll-out, new

product development, operational efficiency, bolt-on acquisitions

2015 flotationFresh focus,

with new horizons

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A COMPLETE PRODUCT RANGE

modus windows and doors skypod pitched skylights aspect bi-folding doors

Conservatories & equinox tiled roofs Fascias, soffits and guttering Traded goods

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ROUTES TO MARKET Focus on creating pull-through demand from end-users through multiple channels

FABRICATOR INSTALLER CONSUMER INFLUENCER

Private homeowner

SMEsProvide windows and installation services to

homeowners

SMEsFabricators cut profiles to size, add glass, locks etc

to create end product

DISTRIBUTOR

BuildersProvide windows, roofline products and installation

services

KEY SALES INFLUENCE BRANCH SALES PROFILES SALES TEAM BUSINESS DEVELOPMENT TEAM

PROFILES£72.7m(1)

Window products

BUILDING PLASTICS£100.4m(1)

Roofline products

Third-party products

Building merchants & independent stockists

C. 90%

C.10%

KEY Direct customer Indirect customer

Entity | Focus

branch network

Recycling and manufacturing

Note (1): FY14A revenue

Government / Local Authorities

– Recycling– Service

Architects

– Construction– Energy efficiency

New house builders

– Construction– Energy efficiency

Facilities management companies

– Energy efficiency

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LOCATIONS Recycling and manufacturing

Extrusion centre140,000 sq ft45 extruders

Secondary operations

120,000 sq ft6 extruders

Recycling factory

55,000 sq ft12 extruders

Warehousing260,000 sq ft

Centrally locatedHQ, Manufacturing, Warehousing and

Recycling

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LOCATIONS

138 branches nationwide

+ 3 more for 2015

Nationwide branch network

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