Slide 1: 2022 Full Year Results
2022 FULL YEAR RESULTS 8 March 2023 Ibstock Employees, Eclipse Factory, Leicester
Slide 2: Disclaimer
Disclaimer The information contained in this presentation has not been independently verified and this presentation contains various forward-looking statements that reflect management’s current views with respect to future events and financial and operational performance. The words “growing”, “scope
Slide 3: Agenda
Agenda Overview Joe Hudson Financial review Chris McLeish Market update Joe Hudson Strategic progress Joe Hudson Summary & outlook Joe Hudson Q&A 3
Slide 4: Overview
Overview Strong performance for the year with EBITDA up 36% and EPS up 63% Growth, margin and return measures all showed substantial progress towards our medium-term targets Excellent operating cash flow performance funded significant growth investments alongside £30m share buy back Continued strong
Slide 5: Financial Review
FINANCIAL REVIEW Project name: 79 Fitzjohn’s Avenue, London Product used: Olde English Grey bricks
Slide 6: Financial summary
Financial summary Strong performance across all key financial metrics Group Revenue Adjusted EBITDA EBITDA Margins £513m £140m 27.2% FY 2021: £409m (+26%) FY 2021: £103m (+36%) FY 2021: 25.2% (+200bps) Return on Adjusted EPS EBITDA: Net debt Capital Employed Dividend per share 22.7p 0.4x 23.4% 8.8p
Slide 7: Revenue bridge
Revenue bridge Revenues increased by 26% vs FY 2021 +£104m (+26%) £600m £513m Strong performance with Group revenues increasing £500m £16m 26% on FY 2021 £89m £409m £144m £400m Clay revenues up 32% driven by strong pricing benefit, with volumes in line with prior year; £4 million £128m generated fro
Slide 8: Clay
Clay Performance was materially above FY 2021, and ahead of expectations set at the start of the year Year ended 31st December 2022 (£m) 2022 2021 Total Revenue 369 280 Adjusted EBITDA 127 91 Margin 34.3% 32.3% Revenue increased by 32% year-on-year Volumes in line with prior year Strong commercial p
Slide 9: Concrete
Concrete EBITDA margin % moved towards our medium-term ambition for the division during H2 Year ended 31st December 2022 (£m) 2022 2021 Total Revenue 144 128 Adjusted EBITDA 24 22 Margin 16.4% 16.9% Revenue increased by £16m, up 12% on FY 2021 Volumes modestly down versus comparative period Growth i
Slide 10: Disciplined working capital management
Disciplined working capital management Tight focus on working capital delivered strong performance against comparators Trade working capital days analysis 225 24% Strong working capital focus during the year 175 120 101 22% 21% 99 106 Working capital as percentage of sales remained at 18%, 125 20% d
Slide 11: Strong cash flow performance
Strong cash flow performance Adjusted operating cash flow £32m (42%) ahead of 2021 Year ended 31st December 2022 2022 2021 Adjusted EBITDA 140 103 Continued strong focus on working capital Δ in net working capital (2) 6 Improvement in cash collections drove DSO lower Net interest (4) (6) Initial inv
Slide 12: Continued balance sheet strength
Continued balance sheet strength Net debt increased modestly in the period after significant growth investments and shareholder returns Strong leverage position (staying at 0.4x), after investing Closing net debt increased to £46m at 31 December 2022 £59m in capital and returning £30m to shareholder
Slide 13: De-risked pension scheme
De-risked pension scheme Fully insured pension scheme liabilities in December 2022, with Group funding contributions to cease • Transaction premium paid from Scheme assets (not by Group) c.£180M PREMIUM FUNDED BY SCHEME • Attractive pricing achieved with trusted and supportive counterparty In Decemb
Slide 14: Long-term facilities secured at competitive rates
Long-term facilities secured at competitive rates £225m facilities provide an efficient, long-term funding platform to support the Group's investment for growth, at attractive rates 250 2021 Refinancing £125m unsecured RCF - 1.6% initial margin 200 £100m US Private Placement – 2.19% average coupon 2
Slide 15: Technical guidance
Technical guidance Adjusted income statement Revenue from Futures operating businesses to approach £20m (2022: £4m) Energy cover: over 80% fixed for H1; 65% covered for 2023 year Futures and research operating investment of around £5m (in line with 2022) Underlying depreciation to increase to around
Slide 16: Market Update
MARKET UPDATE Project name: Gardenmore Green, Belfast Product used: Ivanhoe Cream and Staffordshire Blue bricks
Slide 17: A leading provider of clay and concrete building products
A leading provider of clay and concrete building products RMI Specialised c.30% distributors c.20% New build Merchants and End housing Sales other market c.60% channel c.50% Infrastructure Housebuilders and other direct new build c.30% c.10% Opportunity to RMI exposure Key supplier to the Complement
Slide 18: Core markets update
Core markets update We are well positioned in markets with positive long term fundamental drivers Our markets End consumer demand Imports Low domestic inventory levels New housing market Imports vs domestic market Inventory levels 450 25% 2,454 2,506 2,392 Housebuilders have seen site 2,500 30.0% 40
Slide 19: Diversified markets
Diversified markets We are well positioned to capitalise upon opportunities across the diversified markets in which we operate Modern Methods of Construction (MMC) is driving capacity and efficiency Build to rent (BTR) continues to be a driver of growth within the mid to high rise market MMC address
Slide 20: Sustainable construction
Sustainable construction At the forefront of the accelerating trend towards a sustainable built environment Regulation and data reporting driving change faster than ever before: Future Homes Standard 2025 Future Homes Hub Implementation Plan 2023 – 2025 Ibstock at the heart of the solution: Evolutio
Slide 21: Strategic Progress
STRATEGIC PROGRESS Ibstock Employees at the I-STUDIO, London
Slide 22: A stronger platform for growth
A stronger platform for growth Positioned well to navigate short term challenges and deliver strong growth CULTURE CAPITAL INVESTMENT STRATEGY LEADERSHIP • Resilience and innovation in core AND ALLOCATION IN ASSETS • Growth in core and diversified markets IN ESG CAPABILITY AND RETURNS Our strategy h
Slide 23: Medium term targets
Medium term targets On track to deliver strong growth and returns over the period to 2026 Revenue growth target 2022 revenue showed strong progress towards 2026 ambitions 1. Target to grow revenues to >£600m by 2026 with an ambition to grow beyond this £513m >£600m 2. Medium term profitability targe
Slide 24: Grow
Grow Multiple initiatives will drive near-term performance and underpin our medium term progress Atlas & Aldridge Concrete growth Clay incremental volume and Pipeline of (add >10% clay network through automation and Brick slips investments margin enhancement Ibstock Futures investments capacity from
Slide 25: Grow
Grow Huge potential to unlock more growth, across sustainable building and the industrialisation of the construction industry Leveraging our unrivalled clay reserves to create more sustainable building materials for the UK construction industry: Expanded Clay Calcined Clay Pioneering the use of more
Slide 26: Sustain and Innovate
Sustain and Innovate Our relentless focus on sustainable performance and innovation has built a more resilient and efficient business FIXED COST & INNOVATIVE OPERATIONAL FACTORY ENVIRONMENTAL CUSTOMER PRODUCTS EXCELLENCE FOOTPRINT EFFICIENCY EXPERIENCE & PARTNERSHIPS IMROVEMENTS 26 *Appendix for 202
Slide 27: Summary & Outlook
SUMMARY & OUTLOOK Ibstock Apprentices, Make UK, Birmingham
Slide 28: Summary & Outlook
Summary & Outlook Strong performance of the business reflects the strategic progress we have made over recent years Our balance sheet provides resilience and optionality to invest further for growth and return additional capital to shareholders Core business will commission Atlas and Aldridge factor
Slide 29: Q&A
Q&A Architects discuss an Ibstock Glazed brick for their project
Slide 30: Appendices
APPENDICES Solar Park for our Leicester Factory
Slide 31: Ibstock at a glance
Ibstock at a glance Ibstock plc is a leading UK manufacturer of clay and concrete building products and solutions Key facts Our business Our brands lbstock comprises of two core business 200 Over 200 years of experience 40 Manufacturing sites across the UK divisions, lbstock Clay and lbstock Concret
Slide 32: Building from a strengthened platform
Building from a strengthened platform Our Business Strategy Pillars Investment Levers Accelerating Megatrends Investment driven growth through Sustainability Sustain two areas of focus: ESG GROW DIVERSIFIED CORE GROWTH Strong, advantaged core business: Sustain Sustainable performance Industrialisati
Slide 33: Strategy in action
Strategy in action Continued momentum in strategic delivery in 2022 Sustain Innovate Grow Health, safety & wellbeing: Product Innovation: Grow the core business: • Further progress on safety roadmap, with delivery of several • A focus on dematerialisation of projects (voids), a new • Targeted invest
Slide 34: ESG progress
ESG progress Progress against our ESG 2030 strategy 2030 ESG Strategy KPls 2022 Target 13% 40% by 2030 % Absolute carbon reduction Tonnes CO2 (relative to 2019 baseline) Climate Change Net Zero by 2040 Addressing Carbon (Scope 1 and 2) % reduction in CO2 per tonne of production (relative to 2019 bas
Slide 35: Brick market dynamics
Brick market dynamics Balancing supply and demand Brick Consumption (billions of bricks) Brick Production and Stock (billions of bricks) Domestic Despatches Imports Production Stock 2.1 2.0 2.0 1.9 1.9 1.9 0.5 1.8 1.8 0.4 0.5 0.6 0.3 1.6 1.6 0.3 0.2 1.5 0.3 1.4 1.4 0.1 0.3 1.3 0.1 0.1 0.1 0.1 0.9 2.
Slide 36: Core residential markets update
Core residential markets update Falling demand in new build and RMI markets Since the end of 2022, mortgage rates have eased and remain Private Housing Starts (‘000s) affordable relative to long-term trend 200 158 162 164 146 141 144 150 Elevated household energy bills driving preference for more 11
Slide 37: Concrete revenue analysis
Concrete revenue analysis Lintels £9m Walling £12m Concrete delivered a solid performance in 2022, Roofing £32m despite macroeconomic uncertainty with slowing markets and contraction in economic activity towards the end of the year The division continued to benefit from strong commercial execution C
Slide 38: Income statement
Income statement Strong growth in performance with EPS up by 63% Year ended 31st December 2022 2022 2021 Revenue £513m £409m Adjusted EBITDA £140m £103m Normal depreciation (£26m) (£28m) Adjusted profit before interest and tax £113m £75m Cash interest (£4m) (£6m) Adjusted profit before tax £109m £69
Slide 39: Adjusted income statement reconciliation
Adjusted income statement reconciliation Depreciation and Exceptional Non-cash Deferred tax Year ended 31st December 2022 Adjusted Reported amortisation items interest rate change Revenue £513m - - - - £513m Costs (£373m) (£39m) £6m - - (£405m) EBITDA £140m (£39m) £6m - - £107m Depreciation and amor
Slide 40: Balance sheet
Balance sheet Year ended 31st December 2022 2022 2021 Property, plant and equipment £409m £376m Right of Use assets £31m £25m Intangible fixed assets & Goodwill £90m £95m Non-current assets £531m £496m Inventories £94m £73m Trade and other receivables £66m £65m Assets held for sale £0m £1m Current a
Slide 41: Cash flow
Cash flow Year ended 31st December 2022 2022 2021 Cash flow from operating activities £138m £101m Cash generated from operations Interest paid (£3m) (£3m) Other interest paid - lease liabilities (£1m) (£1m) Tax paid (£12m) (£10m) Net cash flow from operating activities £122m £87m Cash flows from inv
Slide 42: Total cash flows since IPO
Total cash flows since IPO The Group has returned £265m to shareholders since IPO 2016 2017 2018 2019 2020 2021 2022 Total Adjusted operating cash flow £96m £97m £84m £72m £50m £76m £108m £584m Capital invested (£59m) (£38m) (£31m) (£39m) (£24m) (£25m) (£58m) (£274m) Adjusted free cash flow £38m £59
Slide 43: ROCE - delivering on our medium-term target
ROCE - delivering on our medium-term target Strong 2022 return on capital employed (ROCE) ahead of internal hurdle rate of 20% Clay Concrete Group £99.1m +58% £12.9m +12% £101.1m +56% Adjusted EBIT 2022 £99.1m 2022 £12.9m 2022 £101.1m 2021 £62.7m 2021 £11.5m 2021 £64.7m 2020 £18.8m 2020 £3.9m 2020 £