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TA EN DIPLOMA PLC THES USLE RENCE DIPLOMA DELIVERS 15 May 2023 TREATED ELLER JANRAIN AMENONA CIT Half year ended 31 March 2023 LILA#22 Diploma PLC Half Year 2023 Results AGENDA 1 Overview 2 Financial Performance 3 Business Review 4 Q&A DIPLOMA PLC#3Overview Johnny Thomson Chief Executive Officer wewe 12 13 14 15 DIPLOMA PLC#44 Diploma PLC Half Year 2023 Results Strong first half, upgrading full year guidance Another strong performance, building on our long term compounding track record • Revenue diversification driving continued strong volume-led organic revenue growth in H1 • Focused portfolio development: eight high quality acquisitions, one disposal Continued scaling of our value-add model underpinning margin improvement Upgrade to full year guidance underscores our resilience Strong balance sheet and encouraging acquisition pipeline Delivering Value Responsibly (DVR): net zero targets submitted to SBTi for validation ● ● ● ● Continued quality compounding DIPLOMA PLC#55 Diploma PLC Half Year 2023 Results Strong results Organic revenue growth 10% Model: 5% Free cash flow conversion 70% H1 2022: 64% Revenue growth 30% Model: 10%+ Net debt / EBITDA 0.7x Model: <2.0x Adjusted operating profit margin 18.8% Model: 17%+ ROATCE H1 2022: 18.4% 17.8% H1 2022: Model: High teens 17.5% Adjusted EPS growth 26% Model: 15% Dividend per share (DPS) growth 10% Interim dividend: 16.5p Compounding double-digit growth at attractive returns DIPLOMA PLC#69 Diploma PLC Half Year 2023 Results Track record of compounding Reported revenue (£m) 141 172 160 184 231 2007-18 CAGR: 12% 260 286 306 334 383 452 485 545 2019-22 CAGR: 23% 15 year revenue CAGR: 14% 538 787 1,013 Adjusted EPS (pence) 14.0 16.4 14.8 18.9 27.9 2007-18 CAGR: 14% 33.1 34.8 36.1 38.2 41.9 49.8 56.4 15 year EPS CAGR: 15% 2019-22 CAGR: 19% 64.3 56.4 85.2 107.5 DIPLOMA PLC#77 Diploma PLC Half Year 2023 Results Colleagues and culture Brilliant colleagues • Excellent levels of employee engagement (79%) Constant focus on wellbeing: mental health, flexibility, community activity ● Strength of decentralised culture as we scale Preserving the local culture Common Diploma Identity: purpose and values Managing effectively through lean structures ● ● ● Promoting a more diverse and inclusive environment: leadership gender diversity increased to 28% (2019: 20%) ● Building management capability through internal development programs Creating networks of best practice Clarendon Codie Whadcock Motorsport Technical Sales Apprentice Apprenticeship development programmes STRESS AWARENESS MONTH Employee wellness initiatives Lucy Nash Purchasing Administrator Apprentice Danya Parks Industrial Sales Apprentice Meet the Apprentices DIPLOMA PLC#8Financial Performance Chris Davies Chief Financial Officer F CE CAT 2018 DIPLOMA PLC#99 Diploma PLC Half Year 2023 Results Revenue Half Year ended 31 March £448.5m H1 2022 Organic Growth: 10% +13% Controls +8% Seals +4% Life Sciences +12% Acquisitions 30% reported revenue growth +8% FX Revenue diversification driving very strong organic growth £582.8m H1 2023 DIPLOMA PLC#1010 Diploma PLC Half Year 2023 Results Adjusted operating profit Half Year ended 31 March £82.5m H1 2022 18.4% Value-add Pricing Inflation Margin formula Scale + Performance Opex reinvestment Acquisitions 33% reported operating profit growth FX Value-add driving strong operating margin, up 40bps £109.7m H1 2023 18.8% DIPLOMA PLC#1111 Diploma PLC Half Year 2023 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 earnings Adjusted earnings per share Total dividend per share H1 2023 £m 582.8 109.7 18.8% (11.0) 98.7 25% 74.1 59.1p 16.5p H1 2022 £m 448.5 82.5 18.4% (3.9) 78.6 25% 58.5 47.0p 15.0p Change +30% +33% +26% +27% +26% +10% Continuing our long track record of double-digit earnings growth DIPLOMA PLC#1212 Diploma PLC Half Year 2023 Results Net debt and cash flow Half Year ended 31 March Free cash flow conversion H1 2022: 70% 64% Leverage 0.7x FY 2022 Net debt £329m 75 Adjusted profit after tax (10) Capex (23) Working capital (76) Net M&A (49) Dividends 25 Other Highly cash generative with a strong balance sheet 233 Placing HY 2023 Net debt £154m DIPLOMA PLC#1313 Diploma PLC Half Year 2023 Results Financial Capacity Half Year ended 31 March Current Facilities Currency USD USD GBP Multi Type Term Loan Term Loan Term Loan RCF Total Facilities at 31.03.23 Cash & undrawn facilities: Amount $110.5m $66.0m Headroom to leverage covenant: GBP equivalent £89.3m £53.3m £45.3m £359.7m £547.6m £390m £555m ● Facility maturities extended to December 2025 ● Reviewing longer-term financing structure Pension in surplus • 70% of drawn debt interest hedged (blended 3% + spread) • 24 month rolling FX hedging programme (6 months 100% hedged) Prudent balance sheet management DIPLOMA PLC#1414 Diploma PLC Half Year 2023 Results Disciplined portfolio development Strong track record Total investment since FY19 £840m Average organic growth since acquisition 15% Average ROATCE >16% and growing Group ROATCE 17.8% Up 30 bps Year-to-date Acquired TIE for £76m • Entry to strategically important Industrial Automation end market in the US Continued small bolt-ons to our core business lines • Completed seven for £23m Strong organic growth potential at accretive operating margins ● Average EBIT multiple under 5x £24m of annual revenue Accretive EBIT margins and 20% year one ROATCE Continued portfolio management discipline Disposal of non-core business for £23m ● Acquisitions accelerating organic growth DIPLOMA PLC#1515 Diploma PLC Half Year 2023 Results Increasing full year guidance CURRENT TRADING Positive start to H2 Resilient, diversified business Confident in another strong FY performance UPGRADED FY 2023 GUIDANCE Double digit revenue growth: Organic growth: c.7% Acquisitions: c.7% ● ● ● Operating margin at top of guided range, c.19% Free cash flow conversion of c.90% Year-end leverage < 0.4x before further acquisitions Continued strong growth + increasing resilience = FY upgrade DIPLOMA PLC#16CEO Review Johnny Thomson Chief Executive Officer CEL C200 DIPLOMA PLC#1717 Diploma PLC Half Year 2023 Results Building high quality, scalable businesses for sustainable organic growth GROW KI SCALE Revenue diversification to drive organic growth Growing end segments Geographic expansion • Targeted acquisitions to accelerate organic growth ● Product extension Develop businesses' operating models to deliver great customer proposition at scale Develop the Group: structure, capability and culture for scale Deliver Value Responsibly DIPLOMA PLC#1818 Diploma PLC Half Year 2023 Results Controls % of Group revenue 48% Sector revenue mix* O Windy City Wire Wire & Cable (UK) Interconnect Fasteners Adhesives Automation * Pro forma revenues adjusted for acquisitions and disposals completed during the year 49% 8% 23% 11% 3% 6% Revenue Organic growth Adjusted operating profit Adjusted operating margin ● ● ● H1 2023 £278.8m +13% £64.3m 23.1% H1 2023 highlights • WCW organic +10%: sustained double-digit growth against strong prior year comparator Excellent performance in International Controls with organic growth +15%: Market share gains in recovering civil aerospace markets Structural tailwinds in defence and energy markets Strong footholds in Europe/US across established end markets and growing well Portfolio development - Adhesives: strong organic growth, two bolt-on acquisitions Industrial Automation market entry with TIE - Disposal of non-core Hawco business Margin +210bps: H1 2022 £224.0m +28% £47.0m 21.0% Scale benefits and performance Disposal of Hawco will be margin accretive to the Sector Change +24% +37% +210bps DIPLOMA PLC#1919 Diploma PLC Half Year 2023 Results Acquisition of TIE 2 AULLE Differentiated, value-add proposition • Very strong aftermarket capability ● • Deep technical expertise, speed to market Circular economy: refurb & lifecycle support ● Exciting Industrial Automation end market Attractive end segment • Onshoring US manufacturing Growing aging base of CNC machines/robots ● TIE Excellent growth prospects and track record Track record of strong growth at accretive margins Geographic and product growth potential • Benefits of being part of the Diploma Group ● Growth, margin and earnings enhancing in FY 2023 DIPLOMA PLC#2020 Diploma PLC Half Year 2023 Results Seals % of Group revenue 34% Sector revenue mix C UK Aftermarket European OEM Australia * NA Aftermarket US OEM US MRO * Pro forma revenues adjusted for acquisitions and disposals completed during the year 24% 14% 10% 23% 16% 13% Revenue Organic growth Adjusted operating profit Adjusted operating margin H1 2023 highlights • International Seals +12% organic: ● ● - Excellent trading performance in R&G - Strong performance in water management segment in Australia • North American Seals +4% organic against strong comparator (H1 2022: +19%) Strong double-digit growth in North American Aftermarket and MRO Softer performance in US Industrial OEM this half - Portfolio development - H1 2023 £198.4m +8% £35.7m 18.0% Two bolt-ons in North American Seals Three bolt-ons in R&G H1 2022 £137.4m +15% £25.8m 18.8% Margin -80bps: Change +44% +38% -80bps R&G first year dilution R&G improving margin plus Sector scale/performance benefits see margins improve in H2 DIPLOMA PLC#2121 Diploma PLC Half Year 2023 Results Life Sciences * % of Group revenue Sector revenue mix* O 44% 38% 18% Canada Europe Australia Pro forma revenues adjusted for acquisitions and disposals completed during the year 18% Revenue Organic growth Adjusted operating profit Adjusted operating margin H1 2023 highlights • 4% organic growth H1 2023 £105.6m +4% £20.9m 19.8% H1 2022 £87.1m -7% £19.6m 22.5% Momentum accelerating in Q2 Continued recovery in surgical and operating room procedures Normalising healthcare development investment post-pandemic - Strong diagnostic performance Well positioned for continued growth Elective surgical backlogs Rising diagnostics investment - Increasing funding approvals into medical equipment Change +21% +7% -270bps Margin -270bps: Accuscience first year acquisition dilution impact, lapped in H2. Mix: more capital this half / more consumable roll-off thereafter at higher margin DIPLOMA PLC#2222 Diploma PLC Half Year 2023 Results Acquisitions to accelerate organic growth Active medium term pipeline Strategic and structured approach Aligned to our organic growth strategy Spread across all Sectors/core geographies High-quality, value-add businesses Strict financial criteria Average size of c.£20m, Diploma sweet- spot c.50 active opportunities c.£1bn combined EV Established team, structured process, quality pipeline DIPLOMA PLC#2323 Diploma PLC Half Year 2023 Results Delivering Value Responsibly (DVR) 8 DECENT WORK AND ECONOMIC GROWTH GOOD HEALTH AND WELL-BEING 8 DECENT WORK AND ECONOMIC GROWTH M 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. 5 QUALITY REDUCED 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. Delivering Value Responsibly DECENT WORK AND ECONOMIC GROWTH Positive Impact Revenue Positioning ourselves for commercial growth with a positive impact on society and the environment 10 REDUCED Supply Chain Our mission is to ensure an ethical and resilient supply chain that underpins value for our customers. NEQUALITIES 13 CLIMATE ACTION Environment Our mission is to be a growing business with a shrinking environmental impact. 13 CUMATE ACTION Significant commercial potential Building momentum • Performance plans in place and delivering improvements • Net zero plans submitted to SBTI (2045 across full value chain) Huge positive impact opportunity • New Sustainability Director DIPLOMA PLC#2424 Diploma PLC Half Year 2023 Results Concluding remarks. Strong performance across all our metrics. Upgraded guidance for the year, demonstrating our resilience. • Massive potential for organic growth. Great acquisitions delivering, with an active medium term pipeline. Scaling the Businesses and the Group for sustainable delivery. ● ● ● ● Continued Quality Compounding DIPLOMA PLC#25Appendix Fre DIPLOMA PLC#2626 Diploma PLC Half Year 2023 Results Fifteen year track record Organic growth 15 year average: 5.7% 8% 8% ylvanill 7% 7% 6% 4% 1% 3% FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY08 FY09 -12% FY08 16.4 14.8 11% Adjusted EPS (pence) 15 year CAGR: 15% 17% 18.9 27.9 33.1 34.8 41.9 38.2 36.1 49.8 56.4 5% 64.3 FY20 -7% 56.4 12% 15% FY21 FY22 85.2 107.5 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 Reported revenue (£m) 15 year CAGR: 14% 172 160 71 184 231 86 260 TSR growth 15 year CAGR: 20% 286 306 265 334 383 375 406 401 452 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 543 485 672 545 912 538 1092 787 1462 1,013 1923 1598 148 172 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 DIPLOMA PLC#2727 Diploma PLC Half Year 2023 Results Sector revenue and profit Controls Seals Life Sciences Group Controls Seals Life Sciences Central costs Group H1 2023 £m 278.8 198.4 105.6 582.8 Revenue H1 2023 £m 64.3 35.7 20.9 (11.2) 109.7 H1 2022 £m 224.0 137.4 87.1 448.5 Adjusted operating profit H1 2022 £m 47.0 25.8 19.6 (9.9) 82.5 Change +24% +44% +21% +30% Change +37% +38% +7% +13% +33% Organic growth H1 2023 % +13% +8% +4% +10% H1 2023 % 23.1 18.0 19.8 H1 2022 % Adjusted operating margin H1 2022 % 21.0 18.8 22.5 18.8 +28% +15% (7)% +16% 18.4 Change +210bps -80bps -270bps +40bps DIPLOMA PLC#2828 Diploma PLC Half Year 2023 Results Balance sheet As at 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 assets/(obligations) Acquisition liabilities and assets, net Net bank debt Minority interests and deferred tax, net Total shareholders' funds (excluding minority interests) H1 2023 £m 826.1 53.4 (7.0) 195.5 1,068.0 17.1% 17.8% 8.8 (23.1) (154.0) (43.0) 856.7 H1 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 DIPLOMA PLC#2929 Diploma PLC Half Year 2023 Results Financial KPIs Five year trends Revenue Total growth Organic growth Adjusted operating margin Working capital (% revenues) Free cash flow Free cash conversion (%) ROATCE Average over five years: Organic revenue growth 6.4% 2022 £1,012.8m +29% +15% 18.9% 15.6% £120.4m 90% 17.3% 2021 £787.4m +46% +12% 18.9% 15.8% £108.8m Adjusted operating margin 17.9% 103% 17.4% 2020 £538.4m ROATCE -1% -7% 16.2% 16.0% £72.5m 113% 19.1% 20.2% 2019 £544.7m +12% +5% 17.8% 16.5% £56.5m 78% 22.9% 2018 £485.1m Free cash flow conversion 96% +7% +7% 17.5% 15.1% £60.5m 95% 24.5% DIPLOMA PLC