Travis Perkins PLC — Earnings Release 2018

Oct 23, 2018

23-Oct-2018 / 08:00 CET/CEST

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23 October 2018

Travis Perkins plc

Third quarter 2018 trading update - "Solid trading performancein line with marketexpectaons"

Highlights

• Q3 Group total salesgrowth of 3.9% and like-for-like salesgrowth of 4.1%
• Combined Merchant businesses (includingthe General Merchan"ng, Contractsand Plumbing & Hea"ng divisions) achieved like-for-like growth of 7.0%
• Challenging UK DIYmarket environment con"nues for the Wickes business,although pricing pressure has begun to moderate
• Good progress on cost reduc"on ac"vi"es,an"cipate full-year performance in line with market expecta"ons

John Carter, ChiefExecu"ve, commented:

"The Group delivered a solid Q3 trading performance, in line with expectaons. Our trade-focused businesses delivered good sales growth against ^a challenging market backdrop, including successful recovery of cost price inflaon . The UK DIY market connues to be very challenging for Wickes, wheresignificant price pressure and weak consumerconfidenceis providing ^a tough trading backdrop.

Across the Group, we are making good progress with the cost reducon acvies that were highlighted in July, and these acons are generang posiveresults and underpin ourconfidencethat our full-year performanceis on track and in line with marketexpectaons (1) ."

Q3 2018 sales growth	(2) General Merchan ng	(2) Plumbing & Hea ng	(2) Contracts	(3) Consumer	Group
Like-for-like sales	1.3%	14.8%	8.9%	(4.2)%	4.1%
Net new space and acquisi"ons	(0.4)%	(4.4)%	0.3%	2.4%	(0.2)%
Total sales	0.9%	10.4%	9.2%	(1.8)%	3.9%
Two-year like-for-like	3.7%	21.0%	17.3%	(1.9)%	8.4%
Y TD 2018 sales growth	(2) General Merchan ng	(2) Plumbing & Hea ng	(2) Contracts	(3) Consumer	Group
Like-for-like sales	0.9%	18.2%	6.4%	(4.2)%	4.2%
Net new space and acquisi"ons	0.1%	(4.5)%	0.9%	2.3%	0.1%
Total sales	1.0%	13.7%	7.3%	(1.9)%	4.3%

Total Group sales grew by 3.9% in the third quarter, with like-for-like sales growth of 4.1%, in line with the first half of the year. Sales price infla"on reduced modestly in Q3 to 1.9% and was primarily driven by the successful pass through of commodity-price infla"on in the tradefocused businesses, par"ally offset by Wickes, which as previously highlighted, experienced significant pricing pressure in the UK DIY market. The combined Merchan"ng businesses (General Merchan"ng, Plumbing & Hea"ng and Contracts) achieved like-for-like growth of 7.0% (7.1% YTD).

The like-for-like growth rate in General Merchan"ng so?ened modestly compared to the second quarter of 2018 as the business cycles strong compara"ve growth rates from Q3 2017. The two-year like-for-like growth rate increased to 3.7% (Q2 2018: 3.3%). Cost reduc"on ini"a"ves to streamline above-branch costs were completed as planned by the end of September, with ac"ons to reduce waste and improve efficiency within the business con"nuingthroughout the remainder of the year.

The Plumbing & Hea"ng division maintained its posi"ve salesgrowth momentum from the first half of 2018, con"nuingits outperformance of the market. Sales growth was strong across the division, including the wholesale business, branch network and specialist online channels, primarily driven by enhancements to customer proposi"ons.The rate of growth is expected to moderate through Q4 as the division annualises the strong performance improvementachieved in Q4 2017.

In the Contracts division, al l three businesses con"nued to demonstrate good growth and are outperformi ngtheir markets. The impact of commodity-price infla"on moderated in Q3, with sales price infla"on of 3.8%, down from 6.0% in the first half of 2018.

Toolsta"on con"nued its strong like-for-like and total sales growth, underpinned by successful range extensions helping to increase sales density,and the con"nued expansion of the store network. We remain on track to open 40 stores in 2018.

The market environment in UK DIY remains challenging, resul"ng in con"nued volume declines in Wickes in both core DIY and Kitchen & Bathroom showroom categories. Significant pricingcompe""on across the sector has prevented the recovery of cost price infla"on,albeit pricing pressure has begun to moderate in recent weeks,and K&B order ac"vity has shown some early signs of recovery. Cost reduc"on ac"vi"es are progressingas planned, with reduced distribu"on costsand "ght control of overhead costs.

Lead indicators such as secondary housingtransac"ons, house prices and consumer confidence con"nue to painta mixed picture, and as such the Group remains cau"ous on the near-term market outlook. In light of this the Group con"nues to focus on managing its underlyingcost base, which underpins the Group's confidence that full-year performance is on track,and in line with market expecta"ons (1) .

Enquiries

Investor / analystenquiries

Graeme Barnes| +44 7469 401819 |graeme.barnes@travisperkins.co.uk

Zak Newmark| +44 7384 432560 |zak.newmark@travisperkins.co.uk

The Travis Perkins ManagementTeam will be hos"nga Capital Markets Day on 04 December 2018.

Footnotes

• 1. Companycompiled market consensusfor FY 2018 Group EBITA, as of 22 October 2018, of £363m (range of £356m to £368m) .
• 2. Like-for-likesales growth for thethree month period ended 30 September 2018 compared to thethree month period ended 30 September 2017. Total sales growth for thethree month period ended 30 September 2018 compared to thethreemonth period ended 30 September 2017.
• 3. Wickeslike-for-like growth for the 13 week period ended 29 September 2018 compared to the 13 week period ended 30 September 2017. Wickestotal sales growth for the 91 day period ended 29 September 2018 compared to the 91 day period ended 30 September 2017.

ISIN: GB0007739609 Category Code: QRT TIDM: TPK LEICode: 2138001I27OUBAF22K83 OAM Categories:3.1.Additional regulated information required to be disclosed under the laws of a Member State Sequence No.: 6287 EQS News ID: 736339

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