Diploma Regulatory News (DPLM)

DIPLOMA PLC

12 CHARTERHOUSE SQUARE, LONDON EC1M 6AX

TELEPHONE: +44 (0)20 7549 5700

FACSIMILE: +44 (0)20 7549 5715

FOR IMMEDIATE RELEASE

30 August 2017

DIPLOMA PLC

TRADING UPDATE

Diploma PLC, the international group of businesses supplying specialised technical products and services, is today issuing a Trading Update for the year ending 30 September 2017.

Trading Summary

The Group has continued to trade well in the second half of the year and remains on track to report results for the full year in line with expectations.

Reported Group revenues for the year ending 30 September 2017 are expected to increase by ca. 17%. The addition to revenues from the depreciation in UK sterling will be ca. 9% and acquisitions completed during the last twelve months are expected to contribute ca. 2%, net of a small prior year disposal. On an underlying basis, after adjusting for the impact of acquisitions and currency effects, Group revenues for the year are expected to increase by ca. 6%.

In Life Sciences, underlying revenue growth for the full year is expected to be ca. 3%, helped by stronger second half capital equipment sales in the Healthcare businesses. Healthcare reported revenues have also benefited from a good contribution from Abacus, acquired in April this year. In Seals, as anticipated underlying revenue growth is likely to have increased to ca. 4% for the full year. Trading activity in North America benefited from solid revenues in the Aftermarket and a resumption of growth in the Industrial OEM businesses; International Seals revenue growth also improved in the second half of the year. In Controls, market conditions remained robust and despite tougher comparatives in the second half, underlying revenues are likely to be ca. 13% ahead for the full year, benefiting from new project activity and a strong focus on developing new sales opportunities.

The Group's operating margin remains in line with expectations and is likely to be similar to that reported in the first half of the year.

Acquisitions

Acquisitions remain an important part of the Group's growth strategy and new opportunities continue to be pursued. In the second half of the year the Group has invested ca. £19m in newly acquired businesses. In April, the Group completed the acquisitions of Abacus, a Healthcare business in Australia and New Zealand and PSP, a small bolt on acquisition to the Industrial OEM Seals business in North America. In June, the Group also acquired Edco, a small UK Industrial OEM business which will be managed as part of the M Seals business.

Financial Position

The Group has a robust balance sheet and a proven track record of strong cash generation which the Group continues to reinvest in acquiring new businesses to accelerate growth. At 30 September 2017, the Group's net cash funds are expected to be in excess of £20m and the Group retains access to a £60m revolving credit facility.

The Group's results for the year ending 30 September 2017 will be announced on Monday, 20 November 2017.

Notes:

1. This Trading Update, which is based upon unaudited management accounts, has been prepared solely to provide additional information to the shareholders of Diploma PLC. It should not be relied on by any other party, for other purposes. Certain statements made in this Statement are forward-looking statements. Such statements have been made by the Directors in good faith using information available up until the date that they approved this Statement. Forward-looking statements should be regarded with caution because of the inherent uncertainties in economic trends and business risks.

2. A copy of this Statement, together with further information about Diploma PLC, may be viewed on its website at www.diplomaplc.com

NOTE TO EDITORS:

Diploma PLC is an international group of businesses supplying specialised technical products and services to the Life Sciences, Seals and Controls industries.

Diploma's businesses are focussed on supplying essential products and services which are funded by the customers' operating rather than their capital budgets, providing recurring income and stable revenue growth.

Our businesses then design their individual business models to closely meet the requirements of their customers, offering a blend of high quality customer service, deep technical support and value adding activities. By supplying essential solutions, not just products, we build strong long term relationships with our customers and suppliers, which support attractive and sustainable margins.

Finally we encourage an entrepreneurial culture in our businesses through our decentralised management structure. We want our managers to feel that they have the freedom to run their own businesses, while being able to draw on the support and resources of a larger group. These essential values ensure that decisions are made close to the customer and that the businesses are agile and responsive to changes in the market and the competitive environment.

The Group employs ca. 1,700 employees and its principal operating businesses are located in the UK, Northern Europe, North America and Australia.

Over the last five years, the Group has grown adjusted earnings per share at an average of ca. 8% p.a. through a combination of organic growth and acquisitions. Diploma is a member of the FTSE 250 with a market capitalisation of ca. £1.2bn.

Further information on Diploma PLC can be found at www.diplomaplc.com

LEI: 2138000G17VY8FGR19