Interim Results

FROM HUDSON SANDLER FOR

BRAMMER

PRESS RELEASE:

29 July 2014

Brammer plc

("Brammer" or the "Group")

2014 INTERIM RESULTS

CONTINUED market share gains through organic growth AND STRATEGIC acquisitions

Delivered £25.9 million of signed off cost savings to our customers in 2014 to date

Brammer, the leading pan-European added value distributor of industrial maintenance, repair and overhaul products, today announces its interim results for the six months ended 30 June 2014.

Financial Highlights

· Total Group revenue up by 10.9% to £364.1 million (2013: £328.4 million). At constant currency total revenue increased by 13.1%.

· Gross margin up 60 basis points to 31.3% (2013: 30.7%).

· Underlying* operating profit up by 19.8% to £20.6 million (2013: £17.2 million).

· Underlying* operating margin up by 50 basis points to 5.7% (2013: 5.2%) despite significant investment in Tools and General Maintenance and Vending.

· Underlying* profit before tax up by 15.1% to £17.5 million (2013: £15.2 million).

· Profit before tax down by £3.0 million to £11.6 million (2013: £14.6 million), operating profit down by £1.9 million to £14.7 million (2013: £16.6 million), reflecting £5.3 million of acquisition related costs and exceptional items.

· Successful share placing, raising £52.4 million net to support ongoing acquisition strategy.

· Underlying* basic EPS up by 10.2% to 10.8p (2013: 9.8p).

· Reported basic EPS down by 24.5% to 7.1p (2013: 9.4p).

· Interim dividend up 5.9% to 3.6p (2013: 3.4p) reflecting the Board's confidence in the outlook for the business.

Operational Highlights**

· Major acquisition of Lönne Holdings AS ("Lönne") completed in January expanded the Brammer footprint into the Scandinavian region. Lönne has been performing in line with expectations.

· Six further bolt-on acquisitions completed in the period with annualised revenues of €31 million and total consideration of €9.5 million, with the acquisition pipeline remaining strong.

· Organic+ sales per working day ("SPWD") increased by 5.4% overall.

· Continued successful execution of organic growth strategy:

- Further market share gains in tough markets.

- Group SPWD growth rate accelerating for the sixth consecutive quarter.

- Key Account SPWD up 9.8% with pan-European Key Account sales growing 28.2%. Total Key Account sales represent 52.9% of total revenues (2013: 53.1%).

- InsiteTM sales growth of 12.3% (2013: 8.6%) with a net 13 new locations established.

- Strong revenue growth of 50.9% in Tools and General Maintenance in continental Europe, with 4.7% overall Tools and General Maintenance growth.

- Increased headcount in our European Tools and General Maintenance division to drive further growth in the €50 billion tools and maintenance market.

- In addition, we have significantly invested in our vending operations, with 107 staff deployed, and we expect this to drive growth in 2015 and beyond.

* pre amortisation of acquired intangibles, acquisition related costs and exceptional items

** at constant currency

+ including incremental growth from Lönne

Ian Fraser, Chief executive said:

"In 2014 we have continued to demonstrate our resilience whilst expanding our European footprint into Scandinavia. Despite market conditions remaining challenging, we have seen improving growth rates in the last six quarters (excluding the benefit from the acquisition of Lönne) as our strategy of focusing on Key Accounts, Insites™ and cross-selling initiatives continues to deliver results out-performing the market. We are mindful of the recent uncertainties regarding growth rates in our European markets in the second half of 2014, but we remain confident our proven strategy will help us continue to gain market share."

BRAMMER PLC

2014 INTERIM RESULTS

INTERIM STATEMENT

Trading

Despite only modest improvements in economic conditions across Europe, Brammer has continued to demonstrate a resilient performance in our underlying businesses. Our revenue growth rate in constant currency of 13.1% reflects the continued progress made against our growth strategy of focusing on Key Accounts, Insites™ and cross-selling, together with a contribution from the strategic acquisition of Lönne in January 2014. We have continued to achieve market share gains and have established a strong presence in the Scandinavian market.

For the six months to 30 June 2014 sales at actual exchange rates were £364.1 million which represents an increase of 10.9% over the previous year. On a constant currency basis organic SPWD growth (including incremental growth in Lönne) was 5.4%. All of the key growth drivers contributed to this good result. Key Accounts grew by 9.6%, with 4 new pan-European accounts signed in the period and the prospects for further wins remain excellent. There was further growth in Insites™ with 13 (net) new Insites™ established and sales growth of 12.3% to £95.3 million. Cross-selling also contributed, with non-bearing sales growing by 16.9%. Bearing sales grew by 0.7%, reflecting weak markets. Our base business revenues (excluding Lönne) grew 0.8% in SPWD, a significant improvement on 2013.

Despite market conditions remaining challenging, we have seen improving growth rates in the last six quarters (excluding Lönne's results) as our strategy of focusing on Key Accounts, Insites™ and cross-selling initiatives continues to deliver results out-performing the market.

Gross profit margin increased by 60 basis points compared to the previous period, reaching 31.3%, a new high for the Group in the first half.

Sales, distribution, and administrative costs ("SDA") (excluding amortisation, acquisition related costs and exceptional items) increased by £9.8 million to £93.4 million (2013: £83.6 million), with underlying SDA at constant currency increasing by 5.1%.

Underlying operating profit increased to £20.6 million (2013: £17.2 million), including £1.6 million contribution from Lönne with a resulting return on sales of 5.7%, 50 basis points above the previous year.

Underlying pre-tax profit increased by 15.1% to £17.5 million (2013: £15.2 million) with underlying basic earnings per share up 10.2% to 10.8 pence per share (2013: 9.8 pence per share).

Our Market

Brammer is the leading pan-European added value distributor of high quality industrial maintenance, repair and overhaul products. We are the authorised distributor of many of the world's leading engineering component manufacturers, supplying bearings, mechanical power transmission components, fluid power, and tools and general maintenance products, together with engineering and associated industrial services, to the maintenance repair and overhaul ("MRO") market across Europe.

We estimate the European bearings market to be worth around €2 billion annually and we have approximately 10% share of that market making us the clear European market leader.

In Mechanical Power Transmission we have approximately 3% of an estimated €5 billion market. In Fluid Power we have just over 1% of an estimated €10 billion European market and in our developing product range of Tools and General Maintenance we have less than 1% of what we now estimate to be a market worth at least €50 billion across Europe.

Overall we estimate the market for our entire range of products to be worth in excess of €65 billion, of which we currently have a market share of just over 1% despite our leadership position. We estimate our existing customer base spends around €6.5 billion on our defined product range. Our share of our customers' total spend is, therefore, around 10%, representing an opportunity to achieve significant growth through cross-selling. Consequently our market share will not be a constraint to growth for many years to come.

Growth and Synergies

Our growth drivers have served us well over the past ten years; in 2014 we have continued to invest in, and benefit from, our growth strategy, prioritising Key Accounts, Product Range Extension, Insites™ and segment-based marketing, and continue to achieve growth well ahead of the market.

Product Range Extension and Growth Drivers

The recent launch of the European MRO catalogue, incorporating the bearings, mechanical power transmission, and fluid power product ranges will help support further growth through product range extension. This is the first time that a single publication has been produced for all of our MRO businesses across continental Europe, complementing our existing European Tools and General Maintenance catalogue. Over 50,000 copies have been printed and distributed across 19 countries, including the recently entered Scandinavian region.

In 2013 we introduced a new pan-European tools brand to market - "Roebuck". This brand is available across all of our European businesses and is exclusively distributed by Brammer. Sales have been encouraging and approximately 2,600 customers have purchased Roebuck products since launch. To build on this success, the Roebuck product range is being significantly expanded in 2014, supported by a product catalogue due to be launched in the second half of the year.

Another major growth driver, our Insite™ concept, is now supported by our new Insite™ video and Insite™ brochure, intended to raise awareness of our offering, and enabling our European sales team to identify opportunities to offer more Insite™ solutions.

Customer service

Targeting substantial cost savings for our customers is fundamental to the Brammer Value Proposition and we have delivered over 3,300 individual customer validated cost saving actions providing £25.9 million of signed off cost savings to our customers in the first half .

Our fourth annual Europe-wide customer satisfaction survey was conducted in May. Customer satisfaction remains high, and has increased in several territories. The survey results enable us to continue to improve the customer journey and help us in our pursuit of excellence in customer service. 

To complement the survey results, the recent launch of the Brammer Way of Excellence in Customer Service provides a set of process and review tools in a consistent framework to enable our customer facing personnel to deliver continuous improvements in the way they interact with our customers.

Our segmentation approach continues with the expansion of our range of segment specific brochures, now including Paper and Packaging, Glass and Canning.

+including incremental growth of Lönne.

Key Accounts

On a constant currency basis, Key Accounts' sales grew by 9.6%, significantly above the organic group growth rate of 5.4%. The four new Key Accounts won during the period represent potential annual revenues of up to €12 million. Key Accounts now represent 52.9% of the group's total sales and 57.0% excluding Lönne. The overall Key Account growth rate has, however, moderated through the period from 10.7% in quarter one to 8.6% in quarter two. This slowing is due to several national UK Key Account contracts having delayed maintenance programmes during the first half due to continued uncertainty in the market. Therefore, whilst the national contract tier of Key Accounts declined 0.6% in the period (2013: growth of 3.7%), the main tier of pan-European Key Accounts reflected significant growth rates of 28.2% in the period (2013: growth of 12.5%).

Our Key Account contracts with Alcoa and Ma'aden Aluminium continue to perform well, and our InsiteTM in Saudi Arabia has delivered impressive growth following the operational setup process during 2013. Our Key Account pipeline remains strong and the prospects for further wins remain excellent.

Insites™

On a constant currency basis, Insite™ sales grew by 12.3%, with a further net 13 new locations established. The Group now operates a total of 396 Insites™. The value-added services provided by the Insite™ model, inventory optimisation, cost-saving projects and ready access to Brammer's product specialists, continues to be an attractive proposition for our customers and several Insite™ projects are already in progress in our new Scandinavian markets.

Cross-selling

We continue to extend the product offering to reflect the full Brammer range in every territory, and

cross-selling contributed strongly to the group's growth; non-bearings sales grew by 16.9% in total and Tools and General Maintenance sales grew by 50.9% in continental Europe. Bearings sales grew by 0.7% reflecting relatively weak market demand and our high market share in this product range.

Our evaluation of the potential growth opportunity from industrial vending continues in the UK, Germany, France, Spain and Poland. We are now also operating in the Netherlands, thus testing the scalability of our processes. The rate of machine installations has continued to accelerate and at June 2014, 371 machines had been installed. We continue to remain cautiously optimistic that the vending concept will provide good future growth opportunities.

Acquisitions

In January 2014, Brammer announced the acquisition of Lönne which provides a substantial extension to our existing footprint in Norway and gives us a major presence in all of the key Scandinavian markets. The acquisition provides Brammer with cross-selling opportunities particularly in Tools and General Maintenance, and a significant opportunity to service existing Key Accounts in the Scandinavian region. Our footprint in Sweden has since been significantly expanded through four bolt-on acquisitions to gain critical mass in this key market.

In April, Brammer placed 11.3 million shares at a price of 475p per share, representing 2.66% discount to the prevailing market price. The placing was significantly oversubscribed and raised a net £52.4 million after expenses to provide the group with the capability to pursue value enhancing acquisition opportunities.

In total, six small acquisitions were completed in the half, with total annualised revenues of €31 million for a total consideration of €9.5 million. Our acquisition pipeline remains strong as, in these challenging markets, many of our competitors are finding business increasingly difficult. We continue to identify opportunities to acquire businesses which will complement and enhance Brammer's range and since the period end we have completed a further two bolt-on acquisitions, of a Tools and General Maintenance specialist in Spain, and a Fluid Power specialist in Italy.

Synergies

As previously reported, we exceeded the planned synergy benefits from the Buck & Hickman business acquired in September 2011, achieving our target a year ahead of time. Additionally, in June 2014 a proposal to merge the logistics and administrative functions of Buck & Hickman with the legacy Brammer UK business was announced. The proposal, entailing the closure of the National Distribution Centre ("NDC") in Coventry for the legacy Buck & Hickman business, represents one of the final elements of the integration programme and would deliver further synergies and cost savings. Consultations are underway with a final decision expected in the next few weeks.

Costs and Capabilities

Sales distribution and administrative expense ("SDA") remains tightly controlled. The underlying operating costs of the business increased by 5.1% at constant currency. This rate of growth compared to revenue growth is higher than normal as we have continued to invest in the development of our Tools and General Maintenance, PPE business, and Vending. We have increased headcount in the Tools and Maintenance product division to 30, and have recruited 26 Tools experts within our businesses. In addition, we now have a total of 107 individuals supporting our vending operations. In the short-term these significant investments have had a moderating effect on the first half trading profit; however, we expect these investments to drive increased revenue growth rates during the rest of the year and in 2015 and beyond.

A pre tax exceptional charge of £3.7 million has been recognised relating to costs associated with the integration of recent acquisitions, and the associated restructuring activities. A charge of £2.0 million has been recognised in relation to the proposed integration of the logistics and administrative functions of Buck & Hickman with the legacy Brammer UK business, mainly reflecting headcount reduction and property costs related to the proposed closure of the Buck & Hickman NDC and administrative functions. Further restructuring costs totalling £1.7 million have been charged, mainly associated with the integration of current year bolt-on acquisitions, notably in Germany and France.

Technology

Our digital channels are becoming increasingly important to our customers. We are experiencing significant growth (70% in places) across a broad range of customers, industrial sectors and product groups. In response to this we are strengthening our digital capability and providing a stream of new services and capabilities to our customers on a pan-European basis. Building on the technical platform put in place over the last two years we will by the end of this year be providing much more choice to our customers than ever before over how, where and when they transact with us. These digital channels offer the customer convenience and cost efficiencies whilst for us they provide opportunities to grow and extend our customer presence and the product range offered to customers in an efficient and cost effective way.

This time last year we reported one of the Group's most significant technical developments of the last seven years, delivery of the new MDM system which gives us control over data quality. This delivery is part of our Trading Platform Programme which covers and connects: e-commerce, system integration and data management. This programme allows us to deliver a modern e-commerce platform regardless of the age or type of underlying ERPs. Since delivery, the MDM data base has been extended as planned to provide a fully integrated single point of truth over all aspects of our product data, including sales analytics. During the course of 2015 we expect this database to be at the heart of new propositions and services to customers.

Our People

We are committed to recruiting and retaining the best people. We continue to develop our Distributed Learning programme (e-learning), new product training modules and enhanced functionality to provide a better learning experience in nine languages. This training is a key element of Brammer's employee induction programme. Tailored sales training was rolled out to a record number of participants during the period.

The 2014 employee survey again provided positive feedback for management and identified areas to focus upon in order to increase employee engagement; Brammer already has best in class employee engagement levels and seeks to improve this year on year.

During 2013, the company undertook a second graduate recruitment programme, building upon the success of the prior year. 2014 will see this programme extended further with an additional intake of graduates into the business. All members of the 2012 graduate cohort were offered full time permanent positions within the group. This highlights our commitment to develop our people to ensure that excellence comes as standard across all areas of the business and that the delivery of best in class customer service remains a primary factor.

Post the period end Andrea Abt was appointed as Non-Executive Director. Andrea brings significant sector experience having been Head of Supply Chain Management & CPO of Sector Infrastructure & Cities at Siemens AG, since 2011. On behalf of the Board I would like to welcome her to the Brammer group.

Key Performance Indicators and other measures

*before amortisation, acquisition related costs and exceptional items

**at constant currency

+ including incremental sales of Lönne

Amortisation of acquired intangibles and acquisition related costs

Amortisation of acquired intangibles was flat year on year at £0.6 million. Acquisition related costs of £1.6 million have been incurred in 2014 primarily in respect of the acquisition of Lönne completed on 14 January 2014, along with several other bolt-on acquisitions.

Financing and cashflow

In January, the remaining portion of our $100 million (or currency equivalent) private shelf facility was drawn down with a further issue of €35.4 million private placement notes with a term of seven years maturing in January 2021.

In April, the company placed 11.3 million shares at a price of 475 pence per share, raising a net £52.4 million after expenses to provide the group with the capability to pursue value enhancing acquisition opportunities.

During the period £36.5 million (net of cash acquired) was incurred related to the acquisition of businesses, together with the assumption of £10 million of loans taken on as part of the businesses acquired. A net £28.1 million repayment of loans was made.

Net debt

Net debt at £69.2 million is £16.3 million higher than at 31 December 2013. This increase is after £8.4 million (2013: £3.1 million) of capital expenditure as investment in significant strategic projects continues, and £27.9 million working capital outflow (2013: £9.1 million outflow) which largely reflects the increasing growth trend in sales amplified by the impact of seasonality and the mix of sales by territory.

Click or paste the following link into your web browser to view the associated PDF document. Refer to page 9 for the relevant chart.

http://www.rns-pdf.londonstockexchange.com/rns/5525N_-2014-7-28.pdf

Dividend

The Board proposes to increase the interim dividend by 5.9% to 3.6 pence per share, reflecting the Board's confidence in Brammer's long term growth prospects. The interim dividend will be paid on 6 November 2014 to shareholders on the register at 10 October 2014.

Operating Segments Review

* operating profit before intangible amortisation, acquisition related costs and exceptional items.

** sales per working day.

*** to reconcile results and analysis to actual exchange rates for 2014 and 2013.

Lönne reports its operations to the Board. Accordingly, the segmental analysis above includes an additional segment named Scandinavia, reflecting Lönne's activities in Norway, Sweden, Finland and Denmark.

UK (including Iceland, and Norwegian Insites)

* Includes Buck & Hickman

Revenues in SPWD for the UK decreased by 1.4%, with operating profit down 3.5% to £8.2 million.

Key Account sales increased by 1.4%, a lower growth rate than historically experienced in the UK, where the Brammer strategy is most advanced. The moderation in growth rate is largely due to several specific national Key Account contracts who have delayed maintenance programmes during the first half. Therefore, whilst the National Contract tier of Key Accounts declined 4.6% in the period, the main tier of pan-European Key Accounts reflected more typical growth rates of 10.9% in the period. InsiteTM sales and Tools and General Maintenance sales have therefore also declined although we anticipate growth will recover somewhat in the second half.

The proportion of turnover which is Key Accounts has increased by 2.9 percentage points and now represents 74.5% of turnover. Our value proposition continues to be attractive to new customers and we continued to win new Key Accounts including Honeywell Technologies, Smurfit Kappa and Tarmac.

The number of full time and part time Insites™ now totals 195, four more than last year. Twelve new Insites™ opened in the period, including ten relating to Tools and General Maintenance customers.

Bearing sales declined 4.3% reflecting a challenging market, as some customers restrict discretionary spend, but our ongoing cross-selling initiatives delivered improvements in Tools and General Maintenance and Fluid Power sales as a proportion of total sales.

The integration of the Buck & Hickman business has been extremely successful and ongoing synergy benefits continue to be ahead of our original expectations. The proposal to merge the logistics and administrative functions of Buck & Hickman and Brammer UK during the second half of the year represents a further opportunity to drive efficiency and would provide a large step towards the full integration of the businesses.

Germany

SPWD returned to growth in 2014, increasing by 7.7% in the period and trading profit increased by 27.6% to £3.7 million.

Bearings sales declined 2.6% in the year reflecting a challenging market, but the rate of decline significantly reduced compared to the 10.6% decline experienced in the full year 2013. Our focus on product range extension saw a 9.9% growth in non-bearings products, including the bolt-on acquisition of a small tools and general maintenance specialist during the period. This has helped growth in Tools and General Maintenance accelerate to 62.4% compared to the 2013 full year reflecting an important step change in this key product range.

Key Accounts growth continued into the fifth consecutive year, at 10.6% and we continued to win new Key Accounts including St Gobain and Daimler. The number of Insite™ locations continues to increase and now totals 55 with seven InsitesTM opening during the period and six others closing. Despite a similar number of InsitesTM to 2013, InsiteTM sales growth accelerated by 6.3 percentage points to 18.4%.

France

SPWD grew by 3.9% with a growth of 21.4% in operating profit to £1.7million. In the face of continuing difficult conditions in the market, bearings sales declined by 5.5%, but Key Account growth accelerated to 5.7%. We won new contracts including Rio Tinto, Massily, Polyrey, Safran and Fleury Michon, and Key Accounts now represent 44.2% of sales.

A small bolt-on acquisition made in the second quarter will contribute to future Fluid Power growth. Sales of Tools and General Maintenance product grew at 39.2%. Although this is a similar growth rate to the full year 2013, quarter on quarter growth rates are accelerating this year.

We opened five Insites™ in the first half, only one fewer than the six in the full year of 2013 and there is a healthy pipeline of future contracted InsiteTM agreements.

Spain

SPWD growth accelerated by 10.2 percentage points compared to the full year 2013, achieving 14.0% growth, as strong exit rates in 2013 continued into 2014. Operating profit improved by 27.8% to £2.3 million, representing continued progress in all of our growth drivers. Key Account revenues now represent 47.0% of sales, growing by 32.9% as our contract with Alcoa gains traction. Insite™ sales growth of 64.9% reflects significant growth in existing InsitesTM including Alcoa and but also reflecting the contribution from new InsitesTM won last year. Two additional new Insites™ were established, bringing the total, after one closure, to 39.

Excellent progress continued in product range extension. Sales of the Tools and General Maintenance range grew 78.8%, Fluid Power by 30.6% and Mechanical Power Transmission by 10.4%.

Benelux

SPWD in the Benelux countries increased by 7.7% and operating profit has increased by 18.2% to £1.3 million. Key Accounts growth contributed significantly and has continued to accelerate to 9.9% year on year growth. Key Accounts now represents 35.6% of total sales. Growth in Key Accounts is weighted towards the Netherlands (growth: 16.8%) while Belgium's growth was more modest at 2.3% although new contract wins with Unilever, Solvay and Akzo Nobel amongst others provide good growth opportunities. InsiteTM sales grew 18.6% with a further four InsitesTM opened in the period with a net change of two InsitesTM.

Our focus on Tools and General Maintenance and Fluid Power has led to an increase in their share of total sales. There has been a continued acceleration in Tools and General Maintenance product sales growth and the recent appointment of a product specialist should continue to support this momentum.

Scandinavia

This new segment currently represents Lönne, along with the four Swedish bolt-on acquisitions acquired late in the first half. This segment contributed £26.3 million to Group turnover and £1.5 million to trading profit in the period. The small bolt-on acquisitions expand our MRO footprint in Sweden, which will provide the infrastructure and customer base on which to leverage the development of our growth drivers in this key market.

Lönne has no Key Accounts or InsitesTM sales to date, although significant opportunities have already been identified. Good progress has already been made, with interest from several of Brammer's existing Key Accounts customers with facilities in the Scandinavian region. Two InsitesTM have recently opened servicing two existing customers and the potential for significant future growth is clear.

Commercial integration projects are in progress to identify opportunities and realise synergies for the existing Brammer group. Brammer Scandinavia is already trading on the 'Brammer Inline' intercompany trading system to efficiently utilise the group's existing stock holdings as opportunities for product range extension arise. As over half of Lönne sales are currently motors and gearboxes, there are significant cross selling opportunities for the rest of the Brammer product portfolio.

Eastern Europe and Other

In Eastern European and other businesses (comprising Poland, the Czech Republic and Slovakia, Hungary Italy and our InsiteTM operation in Saudi Arabia) total SPWD increased by 27.7% and operating profit increased to £1.6 million. This segment benefited from a strong result from the Alcoa InsiteTM in Saudi Arabia in its first full year of operation. Consequently Key Account sales were up by 86.0% and InsiteTM sales up by 235.6%. Key Accounts now represents nearly half of total sales and Insite™ turnover is now 26.8% of total sales.

Ten new Insites™ opened in the period although a further ten closed, leaving the total number of InsitesTM unchanged at 38. However, the InsiteTM additions represent significant opportunities for Brammer and Italian InsiteTM sales have increased more than 2.5 times, despite exiting four locations in the period.

Bearings sales continued to decline, albeit at a substantially slower rate than in 2013, while non -bearings sales reflected significant year on year growth. All countries continued to show high growth rates in Tools and General Maintenance sales, benefiting from the continued support from the European Product Division.

The Future

Brammer is the leading pan-European supplier of technical components and related services to the MRO market and with only a small market share there is the opportunity for considerable further growth. We have continued to gain market share, driven by the provision of exceptional value and service to our customers and further investment in our long-term growth strategy. Our European Key Account, Insite™ and cross-selling initiatives continue to produce significant growth, against a challenging market backdrop.

We have expanded our geographical footprint through strategic acquisitions and remain well placed to grow future sales and realise profitable synergies through the introduction of our established growth drivers and the support of our proven infrastructure. We are well placed to take advantage of further opportunities to make suitable acquisitions which complement our strategy.

In 2014 we have continued to demonstrate our resilience whilst expanding our European footprint into Scandinavia. Despite market conditions remaining challenging, we have seen improving growth rates in the last six quarters (excluding the benefit from the acquisition of Lönne) as our strategy of focusing on Key Accounts, Insites™ and cross-selling initiatives continues to deliver results out-performing the market. We are mindful of the recent uncertainties regarding growth rates in European markets in the second half of 2014, but we remain confident our proven strategy will help us continue to gain market share.

Ian Fraser

29 July 2014

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors confirm that this consolidated interim financial information has been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the European Union and that the interim management report includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R , namely:

§ an indication of important events that have occurred during the first six months of the financial year and their impact on this consolidated interim financial information; and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

§ material related party transactions in the first six months and any material changes in the related party transactions described in the last Annual Report.

The directors of Brammer plc and their respective responsibilities are as listed in the Brammer plc 2013 Annual Report, except for the appointment on 23 July 2014 of Andrea Abt as a non-executive director.

On behalf of the Board

Ian Fraser

Chief executive

Paul Thwaite

Finance director

29 July 2014

Brammer CONSOLIDATED INCOME STATEMENT

The notes on pages 22 to 33 form an integral part of this consolidated interim financial information.

Brammer CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Items in the statement above are disclosed net of tax.

The notes on pages 22 to 33 form an integral part of this consolidated interim financial information.

Brammer CONSOLIDATED BALANCE SHEET

The notes on pages 22 to 33 form an integral part of this consolidated interim financial information.

Brammer CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

*Ordinarily, the excess of the net proceeds over the nominal value of the share capital issued would be credited to a non-distributable share premium account. However, the placing of shares completed in April 2014 was effected through a structure which resulted in the creation of a reserve of £50.1 million that was credited to retained earnings under section 612 of the Companies Act 2006. Of this £4.7 million is considered to be non-distributable.

Retained earnings as disclosed in the Balance Sheet on page 19 represent the retained earnings and treasury shares balances above.

The notes on pages 22 to 33 form an integral part of this consolidated interim financial information.

Brammer CONSOLIDATED CASH FLOW STATEMENT