#1DIPLOMA PLC Consistently delivering value Diploma PLC Half Year Ended 31 March 2022 16 May 2022 81 0.4 96 3885 6#202 Diploma PLC Half Year 2022 Results AGENDA 1 Overview 2 Financial Performance 3 Business Review 4 Q&A DIPLOMA PLC#3Overview Johnny Thomson Chief Executive Officer OO DIPLOMA PLC#404 Diploma PLC Half Year 2022 Results Successfully executing our strategy Building high quality, scalable businesses for organic growth ● • Revenue diversification initiatives delivering organic growth, building scale and increasing resilience ● • Increased operating margin: value-add model supports management of supply chain challenges, labour pressures and inflation ● ● Strong H1 performance: confident in materially upgraded full year guidance in April Three strategically important acquisitions Developing structures and management capability for scale Delivering Value Responsibly gaining momentum Great strategic progress and financial performance DIPLOMA PLC#505 Diploma PLC Half Year 2022 Results Results Reported revenue growth 23% Free cash flow conversion 64% Underlying revenue growth 16% Net debt / EBITDA 1.2× Adjusted operating margin 18.4% ROATCE 17.5% A strong performance Adjusted EPS growth 22% Dividend growth 20% DIPLOMA PLC#606 Diploma PLC Half Year 2022 Results Prioritising our Colleagues Valuing our People Wellbeing: prioritising physical and mental health ● ● ● ● ● Engagement: excellent ongoing engagement scores and activity • Cost of living: continuous compensation reviews Ukraine ● Management development Community: collaboration around social and environmental causes Supporting colleagues affected Fundraising for disaster relief No direct business exposure Please Keep Safe Maintain 2m Distance We want to build a company Proud of the way we treat e Proud of the Proud of the om this w treat treat INTRODOT €19 HR WHERS Let's all choose to challenge N POLER #IWD2021 A #ChooseToChallenge DIPLOMA PLC#7Financial Performance Barbara Gibbes Chief Financial Officer DOWN DIPLOMA PLC#808 Diploma PLC Half Year 2022 Results Financial Highlights Strong financial performance Revenue £448.5m H1 2021: £365.2m Underlying growth: 16% Free cash flow conversion 64% H1 2021: 72% Adjusted operating profit £82.5m H1 2021: £66.6m Net debt/EBITDA 1.2× FY 2021: 1.1x ↑ +24% Adjusted operating margin 18.4% H1 2021: 18.2% ROATCE 个 +20bps 17.5% H1 2021: 16.5% ㅈ DIPLOMA PLC#909 Diploma PLC Half Year 2022 Results Revenue Half Year ended 31 March £365.2m H1 2021 Group Underlying Growth: 16% +28% Controls +15% Seals -7% Life Sciences Acquisitions & disposals 23% reported revenue growth +7% 16% underlying growth in H1 £448.5m H1 2022 DIPLOMA PLC#1010 Diploma PLC Half Year 2022 Results Adjusted operating profit Half Year ended 31 March £66.6m H1 2021 18.2% Value-add Pricing Inflation Volume Growth Acquisitions Opex 20bps margin increase reinvestment Sustaining high margins Other £82.5m H1 2022 18.4% DIPLOMA PLC#1111 Diploma PLC Half Year 2022 Results Income statement Half Year ended 31 March Revenue Adjusted operating profit Adjusted operating margin (%) Interest expense Adjusted profit before tax Adjusted effective tax rate Adjusted profit after tax Adjusted earnings per share Interim dividend per share H1 2022 £m 448.5 82.5 18.4% (3.9) 78.6 25% 58.8 47.0p 15.0p H1 2021 £m 365.2 66.6 18.2% (3.4) 63.2 24% 48.0 38.4p 12.5p Change +23% +24% +20bps +24% +23% +22% +20% 20%+ growth in revenue, operating profit and EPS DIPLOMA PLC#1212 Diploma PLC Half Year 2022 Results Net debt and cashflow £m 181.4 59 Adjusted profit after tax Net debt at 30 Sept 2021 1.1x EBITDA (6) Capex (20) Inventory (8) Other Depreciation, working tax, interest & capital other Free cash flow: £37.7m +10% Free cashflow conversion: 64% 13 (29) M&A Resilient cash flow generation (38) Dividend 1 Other 209.5 Net debt at 31 March 2022 1.2x EBITDA DIPLOMA PLC#1313 Diploma PLC Half Year 2022 Results M&A: disciplined portfolio development M&A year to date ● £100m R&G FLUID POWER GROUP £21m LJR £51m 1.9 Accuscience- A Pharmed Group Company ‒‒‒‒‒ Average acquisition multiple ca. 9x Strong and improving returns: ROATCE +100bps Acquisitions annualised revenues over £100m Two small non-core disposals - annualised revenues ca. £35m ROATCE 17.5% H1 2021: 16.5% DIPLOMA PLC#1414 Diploma PLC Half Year 2022 Results Current trading and guidance Current trading Mindful of macro economic uncertainties ● ● ● Confident in materially upgraded April guidance • Low double-digit underlying revenue growth; expect underlying growth to moderate in Q3 Reported revenue growth a little over 20% • Accuscience expected to deliver annualised revenue of ca. £35m Adjusted operating margin at top end of the 18-19% range Cash conversion in line with financial model (ca. 90%) • Net debt/EBITDA currently expected to be ca. 1.5x by year end ● ● Actively managing supply chain, inflation and labour pressures The second half has started well ● DIPLOMA PLC#15CEO Review Johnny Thomson Chief Executive Officer a DIPLOMA PLC#1616 Diploma PLC Half Year 2022 Results Strategy: Building high quality, scalable businesses for organic growth Organic Growth Portfolio Development Value-Add Delivering Value Responsibly £ • Drive organic growth: high growth end markets, geographic penetration, product extension Build scale Increase resilience ● • ● ● ● ● ● Focus on scalable businesses Acquisitions to complement our organic growth strategy Selective disposals Developing our business model Core Competencies to maintain high margins Incremental investment in talent, technology and facility Build capability, structures and culture to sustain the model ESG programme at the centre of our strategy DIPLOMA PLC#1717 Diploma PLC Half Year 2022 Results Organic growth driven by business revenue diversification High growth end markets Geographic penetration Product range extension Positioning to take advantage of structurally growing end markets, for example: ✓ WCW: datacentres, digital ✓ Seals: infrastructure, renewable energy ✓ Life Sciences: diagnostics, elective surgical backlogs Increasing our penetration of core developed economies, for example: ✓ Expansion in the US: LJR/Interconnect acquisition and Louisville/Seals ✓ Scale in UK Seals: R&G Fluid Power Group ✓ Building out Life Sciences' European pillar: Accuscience Extending our product ranges to expand addressable markets, for example: ✓ R&G: broadens Seals' product capability in hydraulics, pneumatics New adhesives business line growing very strongly within Controls ✓ Product pipeline management in Life Sciences Revenue diversification driving growth, scale and resilience DIPLOMA PLC#1818 Diploma PLC Half Year 2022 Results Portfolio development Acquisitions to accelerate organic growth CHARACTERISTICS > VALUE DRIVERS PORTFOLIO FIT > £100m R&G FLUID POWER GROUP O ✓ UK value-add aftermarket distributor ✓ Extensive UK reach ✓ Fluid Power product range Organic growth ✓ Continued 'buy & build' ✓ Streamline operations to improve margin ✓ Scale in core UK market Product diversification for global Seals £21m LJR ✓ US value-add distributor ✓ Electrical interconnect products Ohio, US ✓ Organic growth Synergies with existing US business ✓ Introduce more value-add processes ✓ US scale for Interconnect £51m Accuscience- A Pharmed Group Company I ✓ Market-leading life sciences distributor ✓ Scaled across island of Ireland Organic growth ✓ Access to fast-growing diagnostics Strong product pipeline ✓ Scale in Ireland and Europe ✓ Product diversification ✓ Access to new segments ● Disciplined portfolio > Disposals: Kentek in Seals (November '21) and al-envirosciences management in Life Sciences (May (22) DIPLOMA PLC#1919 Diploma PLC Half Year 2022 Results Value-add: operational execution Sustaining our margins at scale Product Supply chain management Talent VALUE ADD Operational excellence VALUE ADD Route to market Technology Commercial discipline Facility End markets DIPLOMA PLC#2020 Diploma PLC Half Year 2022 Results Controls Revenue £224.0m +47% y/y +28% underlying Operating profit £47.0m Margin: 21.0% +51% y/y +60bps International Controls: Underlying growth 17% Diversifying end market and geographic revenues ● ● Windy City Wire: • Underlying growth 42% • Strong double-digit volume growth: continued market share gains in high growth technology end market Margin +60 bps: Margins higher at both International Controls and WCW ● Operational leverage more than offsetting copper pass through, investment in growth DIPLOMA PLC#2121 Diploma PLC Half Year 2022 Results Seals Revenue £137.4m +15% underlying +11% y/y Operating profit £25.8m +25% y/y Margin: 18.8% +210bps North American Seals: Underlying growth 19% • Accelerated Aftermarket growth ● International Seals: Underlying growth 8% after a resilient 2021 • Well diversified end market exposure ● Margin +210 bps: Significant step up in Aftermarket margin as expected Louisville: dual running costs end • Positive operating leverage Disposal of Kentek is margin accretive ● ● DIPLOMA PLC#2222 Diploma PLC Half Year 2022 Results Life Sciences Revenue £87.1m -7% underlying -2% y/y Operating profit £19.6m Margin: 22.5% -8% y/y -150bps Underlying revenue: +2% excluding 2021 one-off COVID-related revenue • Canadian/Australian lockdowns affected 2022 • Not yet seeing catch-up in surgical backlog Strength in diagnostics Expect return to growth during H2 ● ● Margin -150bps: Very high margin maintained • H1 2021 benefited from one-off COVID- related sales ● Controlled return of variable costs post- pandemic DIPLOMA PLC#2323 Diploma PLC Half Year 2022 Results Delivering Value Responsibly: Building momentum Positive progress in H1 Embedding ESG in our commercial strategy Businesses implementing improvement initiatives ● ● • Positive impact revenue initiatives an important component of our growth Engaging with supply chain and rolling out Supplier Code ● Next steps: Defining our numbers in FY 2022 Set targets for FY 2023 ● ● ● Define pathway and timeline to net zero Drive business activity/performance Our Colleagues Engagement & communication Learning & development Health & Safety Potential hazard reporting ✓ Training inc. mental health first aiders Diversity, Equity & Inclusion Training and awareness Supply Chain ✓ Rolling out Supplier Code Environment Waste reduction in focus Energy efficiency, inc. new facilities DIPLOMA PLC#2424 Diploma PLC Half Year 2022 Results Concluding remarks The Half... . Good results ● ● ● ● The Future Tougher trading environment ahead? Resilient business model Decentralised and agile Positive outlook: H2 started well and confident in upgraded April guidance ● Significant strategic progress Business revenue diversification strategy delivering double-digit underlying growth Value-add model and pricing activity sustaining strong margins ● Well-positioned for long-term growth at sustainably high margins DIPLOMA PLC#25Appendix DIPLOMA PLC#2626 Diploma PLC Half Year 2022 Results Value-add servicing supports differentiation Essential Products Critical to customers needs Opex budgets Range of end markets Growth, scalable, resilient Essential Solutions Responsive customer service Deep technical support Added value services Value-add solutions differentiate us and support sustainably high margins Essential Values Decentralised model Customer-orientated Accountable for performance execution Empowered management teams DIPLOMA PLC#2727 Diploma PLC Half Year 2022 Results Delivering Value Responsibly 8 DECENT WORK AND ECONOMIC GROWTH 3GOOD HEALTH AND WELL-BEING W 8 DECENT WORK AND ECONOMIC GROWTH Health & Safety Our mission is to keep everyone safe and well with the support of a strong health & safety culture. Colleague Engagement Our mission is to retain great talent and drive performance by engaging colleagues throughout the Group. GENDER 5 EQUALITY 10 INEQUALITIES Diversity, Equity & Inclusion Our mission is for all our colleagues to feel able to bring their full selves to work, fulfil their potential and benefit from working as part of a diverse team. 8 DECENT WORK AND ECONOMIC GROWTH M Delivering Value Responsibly Supply Chain Our mission is to ensure an ethical and resilient supply chain that underpins value for our customers. REDUCED 10 INEQUALITIES Positive Impact Revenue Positioning ourselves for commercial growth with a positive impact on society and the environment CLIMATE 13 ACTION Environment Our mission is to be a growing business with a shrinking environmental impact. CLIMATE 13 ACTION DIPLOMA PLC#2828 Diploma PLC Half Year 2022 Results Sector revenue and profit Half Year ended 31 March Controls Seals Life Sciences Group Controls Seals Life Sciences Central costs Group H1 2022 £m 224.0 137.4 87.1 448.5 Revenue H1 2022 £m 47.0 25.8 19.6 (9.9) 82.5 H1 2021 £m 152.8 123.8 88.6 365.2 Change +47% +11% (2)% Adjusted operating profit H1 2021* £m 31.2 20.7 21.3 (6.6) 66.6 +23% Change +51% +25% (8)% +50% +24% Underlying growth H1 2022 % +28% +15% (7)% +16% * Re-presented to show central corporate costs separately in line with current year presentation H1 2022 % 21.0 18.8 22.5 H1 2021 % Adjusted operating margin H1 2021* % 20.4 16.7 24.0 18.4 (1)% (2)% +14% +2% 18.2 Change +60bps +210bps (150)bps +20bps DIPLOMA PLC#2929 Diploma PLC Half Year 2022 Results Balance sheet Half Year ended 31 March Goodwill and acquisition intangible assets Tangible and other intangible assets Net lease liabilities Net working capital Assets held for sale Trading capital employed - reported Working capital as % of revenue ROATCE Retirement benefit obligations Acquisition liabilities Net debt Minority interests and deferred tax, net Total shareholders' funds (excluding minority interests) 2022 £m 612.1 39.9 (6.5) 153.4 2.9 801.8 17.7% 17.5% (4.9) (17.7) (209.5) (22.0) 547.7 2021 £m 564.4 47.3 (2.9) 122.6 731.4 16.0% 16.5% (12.5) (11.3) (191.1) (20.3) 496.2 DIPLOMA PLC#3030 Diploma PLC Half Year 2022 Results Financial KPIs Five year trends Revenue Total growth Underlying growth Adjusted operating margin Working capital (% revenues) Free cash flow Free cash conversion ROATCE Average over five years: CAGR revenue growth 16% p.a. 2021 £787.4m +46% +12% 18.9% 15.8% £108.8m 103% 17.4% 2020 £538.4m (1)% (7)% 16.2% 16.0% £72.5m 113% 19.1% Adjusted operating margin 17.5% 2019 £544.7m +12% +5% 17.8% 16.5% £56.5m 78% 22.9% ROATCE 22% 2018 £485.1m +7% +7% 17.5% 15.1% £60.5m 95% 24.5% 2017 £451.9m +18% +7% 17.3% 15.0% £55.7m 99% 24.0% Free cash flow conversion 97% DIPLOMA PLC