Slide 1: Preliminary Results Presentation, Year Ended 31 December 2017
PRELIMINARY RESULTS PRESENTATION | YEAR ENDED 31 DECEMBER 2017
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: Presenting Today
PRESENTING TODAY Kevin Sims Wayne Sheppard CFO CEO 3
Slide 4: Agenda
AGENDA Overview Financial review Operating review Outlook Q&A Wayne Sheppard Kevin Sims Wayne Sheppard Wayne Sheppard 4
Slide 5: Overview
OVERVIEW Financial Overview – year ended 31 December 2017 Final ordinary dividend Group revenue Adjusted Net debt to Continued strong of 6.5p per share up 4% to EBITDA up 7% EBITDA at 1.0x underlying cash (FY 2017 ordinary dividend £452m to £120m generation 9.1p per share ) Operational Overview – ye
Slide 6: Capital Allocation
CAPITAL ALLOCATION Prioritisation Organic growth, Supplementary Ordinary dividends pay maintenance and Selective M&A when dividends when out ratio of 40% - 50% improvement capital opportune appropriate on a of adjusted profit 1 expenditure discretionary basis Supplementary Dividend policy Maintain a
Slide 7: Agenda
AGENDA Highlights & Overview Financial review Operating review Outlook Q&A Wayne Sheppard Kevin Sims Wayne Sheppard Wayne Sheppard 7
Slide 8: Financial Highlights Year Ended 31 December 2017
FINANCIAL HIGHLIGHTS YEAR ENDED 31 DECEMBER 2017 Revenue £452m 4% Adjusted EBITDA1 £120m 7% EBITDA margin % 26% ◀ ROCE2 18% 1%pt Cash conversion3 88% ◀ Net Debt to EBITDA 1.0x 0.2x Final ordinary dividend 6.5p 23% Note (1) Adjusted EBITDA is earnings before interest, taxation, depreciation and amort
Slide 9: P&L Reconciliations Year Ended 31 December 2017
P&L RECONCILIATIONS YEAR ENDED 31 DECEMBER 2017 Adjusted EBITDA to Statutory profit (£m) Adjusted EBITDA (£m) to Adjusted EPS Adjusted EBITDA 2017 120 Adjusted EBITDA 2017 120 Exceptional items1 (5) Depreciation (20) Interest - cash2 (4) Amortisation (6) Interest - non-cash (1) Fair value depreciati
Slide 10: Revenue & EBITDA Bridges
REVENUE & EBITDA BRIDGES Revenue bridge (in £m) Adj EBITDA bridge (in £m) +£17.0m (4%) +£8.0m (7%) 7.6 (1.5) 1.4 119.6 6.7 (5.3) 451.6 0.5 3.7 11.9 434.6 111.6 2016 2017 UK Clay UK Concrete US FX PLC 2016 2017 UK US FX US $ average exchange rate used in 2017 is 1.29 (2016: 1.35) 10
Slide 11: Highly Cash Generative
HIGHLY CASH GENERATIVE Year ended 31 December (£m) 2017 2016 Change % change • Working capital reflects stock reductions in brick Adj. EBITDA 120 112 +8 +7% • Cash tax reflects continued phased benefit of lump Share-based payments 2 2 - sum pension contribution in 2015 Capex (excl major projects) (1
Slide 12: Financial Management
FINANCIAL MANAGEMENT New debt Refinanced in New £250m RCF facility blended interest rate No fixed debt Comfortably within March 2017 Revolving Credit 150 bps at leverage <1.75x repayments and covenants (interest cover (5 year term) Facility includes accordion 4.0x and debt leverage 3.0x (125bps at <
Slide 13: Financial Management: Disposal of Surplus Property Assets
FINANCIAL MANAGEMENT Disposal of surplus property assets Surplus property Land values are enhanced Anticipated total sales proceeds of Anticipated total profit on assets no longer in use by changes to planning c£25m by the end of 2019. Precise disposals of c£20m expected or required for the permissi
Slide 14: Agenda
AGENDA Highlights & Overview Financial review Operating review Outlook Q&A Wayne Sheppard Kevin Sims Wayne Sheppard Wayne Sheppard 14
Slide 15: Operating Segment Review - UK
OPERATING SEGMENT REVIEW - UK 2017 2016 % Growth Revenue £363m £344m 5% Adjusted EBITDA1 £111m £103m 7% Adjusted EBITDA margin1 30.5% 29.8% Clay brick performance Overall energy Housebuilding Stocks Soft mud Low single digit and emissions Good Overall UK continues to reduced with capacity price incr
Slide 16: Major Project: New Brick Factory, Ibstock Leicestershire
MAJOR PROJECT New brick factory – Ibstock Leicestershire Capex Addition of Anticipate Process sales at c50% project 100m flexibility to of capacity in soft mud brick manufacture High volume Commissioning capacity Most modern 2018 existing factory with and efficient process (13% of current expansion
Slide 17: Major Project: New Brick Kiln, Lodge Lane
MAJOR PROJECT New brick kiln – Lodge Lane (Cannock in Staffordshire) Capex improvement project Lodge Lane Niche product factory range with Commissioning manufactures distinct visual process well ‘blue bricks’ aesthetics advanced Replacement Maintains kiln reduces Ibstock’s leading costs and position
Slide 18: Major Project: SL8 Concrete Roof Tile Line
MAJOR PROJECT SL8 concrete roof tile line – Leighton Buzzard Project complete 18
Slide 19: Operating Segment Review - US
OPERATING SEGMENT REVIEW - US 2017 2016 % Growth ($) Revenue $115m (£89m) $122m (£91m) (6%) Adjusted EBITDA $15m (£12m) $17m (£13m) (12%) Adjusted EBITDA margin 13.1% 13.8% High single Modest price Double digit • Market volumes • New President digit volume increases energy cost declined in our prima
Slide 20: Agenda
AGENDA Highlights & Overview Financial review Operating review Outlook Q&A Wayne Sheppard Kevin Sims Wayne Sheppard Wayne Sheppard 20
Slide 21: Outlook
OUTLOOK Expectations for UK Clay - good UK Concrete Long term benefiting from new another year of activity levels fundamentals roof tile capacity progress are anticipated for 2018 supporting UK new and a strong housing maintained with margin build housing remain market (subject to political and impr
Slide 22: Agenda
AGENDA Highlights & Overview Financial review Operating review Outlook Q&A Wayne Sheppard Kevin Sims Wayne Sheppard Wayne Sheppard 22
Slide 23: Appendix | Additional Financial Information
APPENDIX | ADDITIONAL FINANCIAL INFORMATION
Slide 24: Income Statement Year Ended 31 December 2017
INCOME STATEMENT YEAR ENDED 31 DECEMBER 2017 Income statement Year ended Year ended Year ended 31 December 2017 31 December 2016 31 December 2015 £m £m £m Revenue 452 435 413 Operating profit pre-exceptional 93 86 81 Add net exceptional income1 2 28 75 Operating profit 95 114 156 Net finance costs2
Slide 25: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION Income statement Year ended Year ended Year ended 31 December 2017 31 December 2016 31 December 2015 £m £m £m Adjusted EBITDA 120 112 107 Add exceptional income1 1 28 75 Less depreciation & amortisation (26) (26) (26) Operating profit per statutory FS 95 114 156 Less i
Slide 26: Balance Sheet as at 31 December 2017
BALANCE SHEET AS AT 31 DECEMBER 2017 Balance Sheet 31 Dec 2017 31 Dec 2016 31 Dec 2015 £m £m £m Assets PP&E 400 392 347 Intangible 116 123 128 Non-current assets 516 515 475 Inventories 91 89 83 Trade receivables 53 52 59 Other 6 3 1 Current assets 150 144 143 Total assets 666 659 618 Payables (85)
Slide 27: Introduction to the Group
BSTOCK Siam INTRODUCTION TO THE GROUP eee |
Slide 28: Key Investment Highlights
KEY INVESTMENT HIGHLIGHTS Market Structural Industry High barriers Strong Multiple Long-standing Outstanding leadership demand structure to entry customer growth management financial positions growth service ethic options team performance Three UK brick Vertically Strong household High quality, broa
Slide 29: A Leading Provider of Clay and Concrete Building Products
A LEADING PROVIDER OF CLAY AND CONCRETE BUILDING PRODUCTS UK US Revenue (FY 17) £265m £54m £44m £89m % of Group 58% 12% 10% 20% A leading clay UK #1 in clay bricks UK #1 in fencing Market leader in Market brick manufacturer position1 and lintels cast stone and in Northeast and innovative roof Midwes
Slide 30: A Leading Provider of Clay and Concrete Building Products
A LEADING PROVIDER OF CLAY AND CONCRETE BUILDING PRODUCTS End market Sales channel A whole house product range & more Group revenue by UK (FY 17)1 end market (FY 17) Infrastructure Others 2% New build 2% Other Merchants housing Factors new build 46% 57% 23% 15% RMI 26% Housebuilders direct 29% Key s
Slide 31: Well Positioned in Structurally Attractive Markets
WELL POSITIONED IN STRUCTURALLY ATTRACTIVE MARKETS UK Brick Market Ibstock Forterra Wienerberger Other 2.6 Imports (billions of bricks) UK brick capacity (billions) 2.1 2.0 0.3 0.1 0.9 0.8 0.9 2007 2016 2018 MAT Dec 2017 '98 - '07 Avg. Import volumes Imports have higher Availability is partly a Exis
Slide 32: UK Fundamentals Remain in Place
UK FUNDAMENTALS REMAIN IN PLACE UK Housing Dynamics Strong demand for new housing 273 264 206 230 226 265 266 261 Continued shortage of new housing from long term 181 183 188 136 130 140 165 164 underbuilding 130 135 Mortgage availability remains good Government committed to increasing housing suppl