Michelmersh Brick Holdings PLC · LSE:MBH
Michelmersh Brick — FY2018 Earnings Presentation
31 slides from Michelmersh Brick's earnings presentation, March 2019
Slide 1: Full Year Results 2018
QP WiCHELMERSH Brick Holdings PLC FULL YEAR RESULTS 2018 “a!
Slide 2: Disclaimer
Disclaimer The information contained in this presentation document (the “presentation”, which term includes any information provided verbally in connection with this presentation document) does not constitute an offer or solicitation to hold, sell or invest in any security and should not be consider
Slide 3: Presentation Team; Britain's Brick Specialist
Presentation Team Frank Hanna – Joint CEO Stephen Morgan – Group Finance Director Britain’s Brick Specialist Michelmersh strives to be a well-invested, long term, sustainable and environmentally responsible business dedicated to delivering quality products to its long-term customer base. The Group a
Slide 4: Michelmersh Brick Holdings plc
Michelmersh Brick Holdings plc We are not the market....we ensure the right volume of the right product for the right sector ▪ Manufacturer of diverse premium brick products – 120 million + ▪ Three lifetime revenue sources – bricks, landfill, investment land ▪ Margin focus, not market share ▪ Strong
Slide 5: 2018 Financial Highlights
2018 Financial Highlights T URN O VER GRO S S MARGIN UN DERL Y IN G EB IT 22% 3.5% 45% UN DERL Y IN G EB IT DA REPO RT ED PB T B AS IC EPS 38% 93% 118% DIVIDEN D C AS H F L O W F RO M O PERAT IO N S N AV 49% 70% 7% 4
Slide 6: 2018 Corporate Highlights
2018 Corporate Highlights ▪ Full operational integration of the Carlton plant ▪ Successful restructure of operations at the Michelmersh plant ▪ Strong, balanced forward order book into Q1 2019 – 10.5% ahead of H1 2018 ▪ Contract signed for Carlton project targeting enhanced efficiency & output ▪ New
Slide 7: Award Winning
Award Winning Inspired Architecture. Enhancing the built environment BRICK AWARDS 2017 BDA BRICK AWARDS, RIBA AWARDS, NLA AWARDS 6
Slide 8: Income Statement 2018
Income Statement 2018 UNDERLYING ADJS 1 2018 2017 2018 £M £M £M £M Turnover 46.3 46.3 37.9 Gross profit 18.0 18.0 13.4 Gross margin 38.9% 38.9% 35.4% Central costs (10.1) 0.9 (11.0) (8.6) Other income 0.1 0.1 - Operating profit 8.0 7.1 4.9 EBITDA 10.9 10.0 7.3 Finance expense (0.6) (0.6) (0.3) Excep
Slide 9: Balance Sheet 31 December 2018
Balance Sheet 31 December 2018 2018 2017 31 DEC 31 DEC £M £M Intangible fixed assets 22.9 24.1 Tangible fixed assets 52.4 52.6 Net working capital 9.0 8.8 Net debt (11.8) (17.5) Deferred tax (8.7) (8.6) NET ASSETS 63.8 59.4 NAV per share 78.7 p 68.9 p 8
Slide 10: Cash Flow Summary 2018
Cash Flow Summary 2018 2018 2017 £m £m Net cash generated by operations 11.7 6.9 Tax paid (1.8) (1.8) Interest paid (0.6) (0.3) Purchase of property, plant and equipment (1.9) (1.0) Proceeds of sale of investments/fixed assets - 2.8 Acquisition of Carlton - (23.7) Net (reduction)/increase in debt (4
Slide 11: Acquisition of Floren
Acquisition of Floren Successfully executed Q1 2019 § €9.4 million cash paid on completion ▪ Total consideration up to £8.7 million - deferred consideration of 400,000 Michelmersh ordinary shares over 24 months if EBITDA targets are met (max. value €500,000) § Represented below 6x normalised EBITDA
Slide 12: Acquisition of Floren
Acquisition of Floren An excellent strategic fit ▪ Established, profitable, clay brick manufacturing business with core markets in both Belgium and the UK THE BUSINESS ▪ Generated €1.7 million normalised EBITDA in 2018 with revenues of €5.7 million § ▪ 120 acres of land (only 50% in current operatio
Slide 13: Floren Site Location
Floren Site Location Brecht, Antwerp, Belgium ü Strong road network/access Close proximity to Antwerp ü shipping port FLOREN, BRECHT, ANTWERP Situated adjacent to the Campine ü Channel Last remaining brick plant in Brecht ü 14 minutes from Brecht to Antwerp ü main railway BRECHT, ANTWERP, BELGIUM 12
Slide 14: Floren Financial Overview
Floren Financial Overview Normalised financial results ▪ DetSails to be included FLOREN FLOREN MBH underlying PRO FORMA 2017 2018 2018 2018 €’000 €’000 £’000 £M Turnover 5,371 5,677 46,324 51,261 Gross profit 2,274 2,458 18,019 20,156 Gross margin 42.3% 43.2% 38.9% 39.3% Operating costs (1,404) (1,2
Slide 15: UK Brick Manufacturing – Current Trends
UK Brick Manufacturing – Current Trends Logical market – market equilibrium 2017 AND 2018 CUMULATIVE OUTPUT AND INDUSTRY BRICK STOCKS (MILLION) EXCESS OVER OUTPUT Source: BIS ▪ 2018 Output up 8% on 2017 ▪ 2018 Output = Despatches ▪ Imports up c. 37% over 2017 14
Slide 16: UK Brick Manufacturing – Market
UK Brick Manufacturing – Market UK BRICK MANUFACTURERS MARKET SHARE UK BRICK WORKS OTHERS MICHELMERSH 3% 5% 20 19 18 16 FORTERRA 28% 14 WIENERBERGER 21% 12 10 10 10 9 8 6 5 4 2 0 IBSTOCK WIENERBERGER FORTERRA MICHELMERSH OTHERS IBSTOCK 43% Source: Published statistics and management estimates ▪ UK b
Slide 17: Market Fundamentals
Market Fundamentals UK Housing Dynamics STRONG DEMAND FOR NEW HOUSING ▪ Continued shortage of new housing from long-term underbuilding ▪ Mortgage availability remains good ▪ Government & Labour both committed to increasing housing supply ▪ Supportive Government policies (Help to Buy) remain in place
Slide 18: Michelmersh Brick Holdings – Outlook
Michelmersh Brick Holdings – Outlook We are not the market… we ensure the right volume of the right product for the right sector INDUSTRY ▪ Continued constrained market capacity ▪ Barriers to entry ▪ Continued demand for residential development and latent RMI market MICHELMERSH ▪ Positive outlook –
Slide 19: Appendices
APPENDICES
Slide 20: Michelmersh's Growth Story To Date
Michelmersh’s Growth Story To Date Combination of organic and acquisitive strategies Background and strategy overview § Experienced senior management team with successful track record of: § acquisitions § improving capacities & efficiencies § integration § the utilisation of ‘plug & play’ processes
Slide 21: The case for Brickwork
The case for Brickwork Why Brick is the UK’s external cladding material of choice DEVELOPER/RMI/SPECIFIERS END USER/CUSTOMERS/CLIENTS ▪ Low cost & strong value at point of use ▪ Low Maintenance/low cost of ownership ▪ Forgiving of tolerance ▪ Durability ▪ Suits UK vernacular ▪ Aesthetics ▪ Favoured
Slide 22: Urban Regeneration
Urban Regeneration Battersea Power Station 21
Slide 23: Off-site panel systems
Off – site panel systems University College London Hospital 22
Slide 24: City Apartments
City Apartments Bailey Fields Student Accommodation & Material Store 23
Slide 25: Inspired Architecture
Inspired Architecture Buckingham Green 24 24
Slide 26: Aspirational Client Build
Aspirational Client Build Cobham, Surrey 25 25
Slide 27: Quality New Homes
Quality New Homes Longcross 26
Slide 28: Education Sector
Education Sector Brighton College & Charterhouse Science Centre 27
Slide 29: Commercial
Commercial @) MICHELMERSH Hodgson Hall
Slide 30: Floren offers a premium product range
Floren offers a premium product range TARTUFO REF EPPEGEM BRUNELLO MEETKERKE METEOR LF TAILOR MADE MECHELEN ALPHEN AD RIJN AGAATH PALLAS IN GRIMBERGEN ANGLIA NIEUWERKERKEN PALLAS IN GRIMBERGEN (2) 29
Slide 31: Michelmersh – Britain's Brick Specialists
@ MICHELMERSH Britain's Brick Specialists Freshfield Lane Danehill Haywards Heath Sussex RH17 7HH Tel: 0844 9310022 www.mbhplc.co.uk
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