SIG plc | Preliminary Results for the year ended 31 December 2011

14 March 2012

2

2011 – Moving in the right direction

Sales up by 8% - continued market outperformance

Operating margin +40bps and PBT +27% to £81.7m

Increased focus on core markets after divestment of 3 businesses

Delivering additional efficiency savings

New branches performing strongly - sales > £100m

Presentation based on continuing operations, unless specifically stated.

Significant improvement in debt and ROCE +230bps

Financial Review

Doug Robertson | Group Finance Director

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Good progress on key financials

2011 2010 Change

Revenue* £2,744.8m £2,545.4m +7.8%

Gross margin* 25.6% 25.4% +20bps

Operating profit* £95.6m £77.8m +22.9%

Operating margin* 3.5% 3.1% +40bps

Profit before tax* £81.7m £64.2m +27.3%

Basic EPS* 9.4p 7.4p +27.0%

Dividend per share 2.25p - -

Net debt £115.9m £185.0m -37.4%

Return on Capital Employed (post-tax) 7.9% 5.6% +230bps

* On an underlying basis, excluding other items relating to the amortisation of acquired intangibles, impairment charges, restructuring costs, profit and loss arising on sale of businesses, trading profits and losses associated with disposed businesses and gains and losses on derivative financial instruments.

Significant improvement in operating profit

£m 2011FY

Change 2011H2

2011 H1

Revenue

Mainland Europe 1,543.8 +11.3% 791.6 752.2

UK & Ireland 1,201.0 +3.7% 609.5 591.5

Group 2,744.8 +7.8% 1,401.1 1,343.7

Operating profit*

Mainland Europe 53.5 +25.9% 29.3 24.2

UK & Ireland 49.6 +18.9% 26.5 23.1

Group** 95.6 +22.9% 52.1 43.5

* On an underlying basis, excluding other items relating to the amortisation of acquired intangibles, impairment charges, restructuring costs, profit and loss arising on sale of businesses, trading profits and losses associated with disposed businesses and gains and losses on financial instruments.

** Adjusted for parent company costs.

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NB: Continuing operations

6

Group revenues up by nearly 8%

% £m

Price 3.2 81.4

Volume 3.9 99.2

Constant currency

7.1 180.6

Exchange* 0.7 18.8

Total 7.8 199.4

2,744.8

2,545.4

18.899.281.4

2010 Revenue Price Volume Currency 2011 Revenue

£m

* Euro/£ conversion rate of 2011: 1.151 & 2010: 1.168.

NB: Continuing operations

64.2

81.7

(28.2)

(9.0)

(0.2)

0.7 3.0

46.2

5.0

2010 Profitbefore tax

Additionalgross profitfrom sales

Improvement ingross margin

Currency Cost savingbenefit

Variable costrelating tovolume

Operatingcosts

Interest 2011 Profitbefore tax

PBT growth driven by sales increase and improved gross margin

7

£m

Increased staff and fuel costs 16.7

Investment in organic growth 11.1

Other 0.4

£m

NB: Underlying PBT from continuing operations

8

Significant reduction in net borrowings

£m 2011 2010

Cash inflow from trading 113.7 92.1

(Increase)/reduction in working capital (17.6) 6.7

Cash inflow from operations 96.1 98.8

Interest and tax (25.0) (26.9)

Net capex (15.5) (12.0)

Free cash flow 55.6 59.9

Dividends (4.4) -

Proceeds from sale of businesses 30.6 -

Exchange and fair value movements (5.7) 12.1

Other (7.0) (2.5)

Decrease in borrowings 69.1 69.5

Opening debt (185.0) (254.5)

Closing debt (115.9) (185.0)

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Working capital at historic low Cash conversion ahead of target

2011 2010

Stock days 41 42

Debtor days 42 42

Creditor days 34 35

Working capital / sales 8.2% 8.6%

Cash conversion* 116% 155%

Medium term cash conversion* (last 3 years) 170% 150%

Working capital/sales ratio at historic low for the Group Continued tight control of bad & doubtful debt Well ahead of medium term cash conversion target of 100%

* Excludes cash costs on restructuring and one-off pension payments.

Strengthened balance sheet Leverage now less than 1x

255

185

116

1.6x

0.9x

2.0x

0

50

100

150

200

250

300

2009 2010 2011

Ne

t d

eb

t (£

m)

0.0

0.5

1.0

1.5

2.0

2.5

Le

ve

rag

e (

ne

t d

eb

t/E

BIT

DA

)

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Debt facilities and covenants

£250m revolving credit facility repayment March 2015

£234m private placement notes repayment in 2013/2016/2018

Covenant Actual

Interest cover >3x 7.2x

Leverage <3x 0.9x

Total facility of £484m

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Increasing returns on capital employed

7.9%

8.1%8.6%

8.2%

5.3%5.6%

0%

3%

5%

8%

11%

2009 2010 2011

SIG ROCE*

SIG WACC*

Targeting ROCE to exceed WACC

in 2012

ROCE is a key area of management focus and we are making good progress towards returning SIG to economic profitability

* post-tax

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2012 Financial objectives

Drive ROCE above WACC

Continue to improve operating margin

Contain growth in fixed costs c.2%

Maintain strong balance sheet and leverage < 1x

Ensure medium term cash conversion ahead of target

Restore progressive dividend policy

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Chris Davies | Chief Executive

Business Review and Outlook

Delivered on key objectives

Financial Improve operating margins and return on capital Strengthen the balance sheet Reinstate dividend

Operational To outperform the market, without sacrificing gross margin Leverage the network Drive efficiencies

Strategic Invest in organic growth Increased focus on three core markets, divesting non-core operations Restructure UK business consistent with Mainland Europe

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Trading highlights – Mainland Europe

Germany & AustriaFrance

Poland & Central Europe

Sales +14.5% to £605.2m (+12.9% cc)

Gross Margin +30bps

Good growth in residential market, particularly new-build

Non-residential market remained sluggish

All SIG divisions performed strongly

Sales +9.7% to £165.6m (+11.3% cc) Gross Margin -50bps Polish market grew strongly - SIG sales

+9.1% (+11.5% cc) and GM +20bps Consolidated Central Europe management

team so now operates as a single region

Sales +9.1% to £616.6m (+7.5% cc)

Gross Margin +20bps

Good growth in residential market

Also some pick up in non-residential activity

Both SIG divisions performed strongly

SIG is geographically well diversified and operates in the more resilient economies of Northern Europe

Benelux*

Sales +9.8% to £156.4m (+8.2% cc)

Gross Margin +10bps

Benelux remained challenging with market volumes declining

Good performance by SIG given economic conditions

* Including international air handling business, headquartered in the Netherlands.

Mainland Europe: Sales +11.3% to £1,543.8m (10.1% cc) & Gross Margin +20bps to 24.9%

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Trading highlights – UK & Ireland

United Kingdom

Sales +3.9% to £1,123.7m and Gross Margin +30bps

UK distribution sales +3.7% and +3.0% in H2

Residential market slightly positive

Non-residential broadly flat - commercial sector regionalised with London & South East robust, weaker elsewhere

Public sector starting to weaken towards end of 2011

SIG Energy Management - some improvement in H2 as Energy suppliers began to react to CERT requirements

Ireland

Sales +0.9% to £77.3m (-0.5% cc) and Gross Margin +10bps

Market conditions remain challenging

SIG made a small underlying operating profit in 2011

Majority of £5m efficiency savings

identified from closure of 15 branches in UK &

Ireland.

Initiatives currently being implemented - full benefit realised in

2013.

UK & Ireland: Sales +3.7% to £1,201.0m & Gross Margin +30bps to 26.5%

SIG outperformed the market by nearly 3% in 2011

18Source: company estimates.

SIG consistent market outperformance of c.3% p.a.

Two-thirds of outperformance attributed to existing sites; one-third new branches

Existing branches outperformance driven by new sales resources and increased cross-selling

3%

-9%

6%5%

-3%

6%

4%4%

8%

13%

8%

11%

7%

-1%

UK Ireland Germany &Austria

France Benelux Poland &CentralEurope

GROUP

Market growth SIG growth

Investment in organic growth

Investment in organic growth is a strategic priority for SIG

Carefully targeted branch opening programme - maintained even during recent downturn

Further 18 branches opened during 2011 14 in Mainland Europe, of which 7 were in France & 4 in Germany 4 in the UK, including 2 Builders Express branches

Going forward expect to open a further 15-20 new branches p.a. Flex depending on suitable opportunities and economic environment Focus on traditional formats in Mainland Europe and Builders Express in UK More targeted towards residential markets

Strategy working, with new branches opened 2008-10 performing strongly

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Performance of new branches

2008 2009 2010 2011

Pro

fit

co

ntr

ibu

tio

n o

f n

ew

bra

nc

he

s

New branches opened 2008-10 contributed > £100m sales

and c.4% RoS in 2011

With a typical branch taking on average 5-6 years to reach full maturity there is still significant growth to come

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New formats – Builders Express in the UK

Targeting new customers and filling gaps in SIG’s current coverage

Differentiation based on service, technical expertise and multi-specialist offering

c.85% of products sourced from SIG’s existing specialist range

Typical branch sales £1.5m – £2m p.a. at maturity

Targeting minimum six further sites in 2012, with a focus on London and South East England

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5 sites opened to date

Gloucester

Gatwick

Farnborough

BrentfordMaidstone

Restructured UK business and divested non-core operations

Insulation & Energy Management

SIG

Managed as one operating

unit

Mainland Europe UK & Ireland

Interiors

Exteriors

Insulation & Energy Management

Interiors

Exteriors

Scaffolding

Interiors Manufacturing

Safety & Workwear Divested

Managed as one operating

unit

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Benefits of new structure

SIG now has a clear strategic focus on its three core markets of insulation & energy management, interiors and exteriors

Divestments have reduced the Group’s risk profile and upgraded the business portfolio

UK & Ireland structure now consistent with Mainland Europe Simplified organisation - maximum of 3 business streams and 2 divisions per country

Improve cross-selling opportunities and help drive further synergy savings

Rebranding opportunities

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Pillars of profit recovery in current low growth environment

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Outstanding customer service

Sales outperformance

Gross margin enhancement

Technical expertise of employees

Availability/range of specialist stock

Speed/reliability/mode of

delivery

Improved customer

communications

Focus on core markets

Increased cross-selling

Expanding branch network/new

formats

UK national initiatives

Increasing residential exposure

Bolt-on acquisitions

Price management programmes

Control of mix

Use of better IT systems

Improved procurement

Operational efficiency

£3m savings 2011 £5m identified

2012

Further site sharing

Leveraging UK network

Continuous improvement programme

2012 cost inflation c.2%

Investment in growth

Focus on financial returns

Maintain focus on cash conversion &

working capital

Target annual RoS improvement in all

businesses

Target annual ROCE

improvement

Recent trading and outlook

Following recent initiatives SIG enters the year as a leaner, stronger and more focused organisation

Sales per day in constant currency so far this year c.1% ahead of strong comparators - despite severe weather across Mainland Europe in February

Current uncertainties in the macroeconomic environment persist

Consequently the Group continues to expect market volumes to be slightly down overall in 2012

Group has a solid platform on which to build and is targeting further market outperformance New branches expected to make a significant contribution to growth

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Summary

Organic growth strategy working well

Increased focus on core markets

Outperforming markets and delivering further efficiencies

Reinstated dividend

Good delivery on key objectives in 2011

Appendices

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Strong balance sheet

* On a total basis including divested businesses, excludes defined benefit pension liability and contingent consideration.

** Based on covenant calculation.

£m 2011 2010

Net Capex 15.5 12.0

Depreciation 29.4 36.0

Capex / Depreciation 0.53x 0.33x

Net working capital* 218.5 240.1

Net debt 115.9 185.0

Net debt / EBITDA ratio** 0.9x 1.6x

Interest cover** 7.2x 5.8x

Net debt reduced by £69m compared to 31 December 2010 Improving leverage and interest cover

Divested businesses

£m2011

(to date of disposal)

2010

(full year)

Revenue 63.6 122.6

Gross profit 24.1 46.3

Gross margin 37.9% 37.8%

Underlying operating profit / (loss) 0.3 (1.7)

Divested businesses were SIG’s Interiors Manufacturing, Safety & Workwear and Scaffolding; all based in the UK

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Other items

£m 2011 2010

Amortisation of acquired intangibles 24.6 28.5

Impairment charges 11.0 80.4

Net loss on sale of businesses 22.7 -

Operating (profit) / loss attributable to businesses divested in 2011

(0.3) 1.7

Restructuring costs* 12.0 21.8

Losses on derivative financial instruments 4.2 12.6

Total 74.2 145.0

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* Expected annualised cost savings of £5m

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Markets supplied by SIG

Source: Company estimates.

RMI: Repairs, Maintenance and Improvement

49%

41%

10%

2011

Industry (non-construction)

Residential

Non-residential

38% 62%

New Build RMI

48% 52%

51% 49%

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SIG Sales sector split 2011

32%

22%

46%

Insulation and Building Environments

(2010: 45%)

Interiors (2010: 23%)

Exteriors (2010: 32%)

Return on capital employed

• ROCE calculated on a post-tax basis as:

Underlying operating profit less tax

Average net assets plus average net debt

33

4.29.0

4.5

12.2

7.63.5

568.5

606.9

2010Operating

costs

Currencyimpact

Cost savings Variablerelated tovolume

Fuel inflation Staff costs Employees Newbranches

Other 2011Operating

costs

34

Operating cost movement 2010 v 2011

Investment in organic growth

£m

(3.0)

0.4

NB: Underlying operating costs from continuing operations

Trading sites movement

31 Dec

2010Closed/ merged

Opened Transfer Disposed31 Dec

2011

UK 350 (17) 4 - (19) 318

Ireland 14 (2) - - - 12

UK & Ireland 364 (19) 4 - (19) 330

France 181 - 7 1 - 189

Germany & Austria 82 - 4 - - 86

Benelux* 28 (1) 1 (1) - 27

Poland 63 (4) 1 - - 60

Central Europe 30 (8) 1 - - 23

Mainland Europe 384 (13) 14 - - 385

Group Total 748 (32) 18 - (19) 715

*Includes international air handling business, headquartered in the Netherlands.

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