Vp Plc · LSE:VP.
Vp — H1 2023 Earnings Presentation
32 slides from Vp's earnings presentation, November 2022
Slide 1: Interim Results for the period ended 30 September 2022 (H1 2023)
Interim Results for the period ended 30 September 2022 (H1 2023) The Equipment Rental Specialist
Slide 2: Agenda
Agenda Highlights 1. Highlights Market and Trading Review 2. Financial Review 3. Market and Trading Review Financial Review Vp plc | The Equipment Rental Specialist |2
Slide 3: Highlights
Highlights
Slide 4: Highlights – Resilient H1 Performance
Highlights – Resilient H1 Performance Strategic Aim and Highlights ▪ Earnings quality – profits maintained with strong return on capital and margins ▪ Recovery - Revenue growth includes hire rate increase contributions ▪ Markets - Supportive infrastructure and housebuild sectors against an inflation
Slide 5: Financial Review
Financial Review
Slide 6: Financial highlights - further progress
Financial highlights - further progress Strategic Aim and Highlights H1 2023 H1 2022 % FY 2022 £m £m change £m Revenue 186.5 176.1 +6% 350.9 EBITDA * 47.8 44.5 +7% 88.8 Market and Trading Review Depreciation* (23.8) (22.0) +8% (45.5) EBITA * 24.0 22.5 +7% 43.3 Interest * (2.5) (2.3) +9% (4.4) PBTA (
Slide 7: ROACE – long term quality of earnings
ROACE – long term quality of earnings Strategic Aim and Highlights 20 18 16.2% 16.3% 16.0% 16 14.8% 14.5% 14.5% 14.5% 14.4% 14 13.5% 12 Market and Trading Review 10 9.2% 8 WACC 6 4 2 0 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 H1 2023 Financial Review ➢ Interest rate ch
Slide 8: Growth in dividends and EPS
Growth in dividends and EPS Strategic Aim and Highlights H1 H1 2023 2022 Dividend per share 11.0 pence 10.5 pence Market and Trading Review Dividend cover times 3.9x 3.6x EPS adjusted * 42.5 pence 37.7 pence * Pre amortisation, exceptionals and IFRS16 Financial Review ➢ Interim dividend of 11.0 penc
Slide 9: Balance sheet strength
Balance sheet strength Strategic Aim and Highlights H1 2023 H1 2022 FY 2022 £m £m £m Hire Fleet 223.6 213.7 216.6 Other assets / liabilities 80.7 80.4 82.0 Working capital 18.7 (2.3) 0.9 Market and Trading Review Net debt (148.9) (131.7) (130.6) IFRS16 net (2.5) (2.4) (2.3) Net assets 171.6 157.7 16
Slide 10: Strong EBITDA
Strong EBITDA Strategic Aim and Highlights H1 2023 H1 2022 FY 2022 £m £m £m EBITDA 47.8 44.5 88.8 Exceptional items (1.9) - - Market and Trading Review Working capital (19.7) (9.4) (13.0) Profit on sale ( 5.0) (3.4) (7.0) Capital expenditure (36.0) (34.9) (68.7) Proceeds from disposals 12.2 8.2 17.8
Slide 11: Net debt and facilities - 62% at fixed rate
Net debt and facilities - 62% at fixed rate Strategic Aim and Highlights H1 2023 FY 2022 £m £m Private placement matures Jan 2027 (fixed rates) 65.0 65.0 Private placement matures April 2028 (fixed rates) 28.0 28.0 Market and Trading Review RCF matures June 2024 90.0 90.0 Total committed facilities
Slide 12: Good headroom against covenants
Good headroom against covenants Strategic Aim and Highlights EBITA Interest Cover > 3 times Net Debt / EBITDA < 2.5 times 18.0 3.0 16.0 2.5 14.0 12.0 11.21 2.0 Market and Trading Review 10.58 10.12 9.81 1.65 1.62 10.0 1.62 1.60 1.5 1.43 8.0 6.66 6.0 1.0 4.0 0.5 2.0 0.0 0.0 Financial Review FY 19 FY
Slide 13: Market and Trading Review
VP pic Market and Trading Review
Slide 14: Markets – Growth in core sectors
Markets – Growth in core sectors Strategic Aim and Highlights Revenue Key market segments Market exposure H1 2023 H1 2022 Growth on (£m) (£m) prior year Infrastructure* 38% 70.5 66.2 7% Market and Trading Review Construction 41% 76.0 69.5 9% Housebuilding 8% 15.8 15.0 5% Energy 6% 11.0 15.2 - 28% Ot
Slide 15: UK Construction Output – Vp Core Market Sectors
UK Construction Output – Vp Core Market Sectors £bn New Infrastructure 50.0 New Housing 35.0 £bn 30.0 45.0 25.0 40.0 20.0 35.0 15.0 30.0 2018 2019 2020 2021 2022 2023 2024 2018 2019 2020 2021 2022 2023 2024 Total Repair & Maintenance £bn New Non-Residential (*) £bn 70 50 65 45 40 60 35 55 30 50 2018
Slide 16: Business performance – Group
Business performance – Group Strategic Aim and Highlights H1 2023 (£m) H1 2022 (£m) Revenue 186.5 176.1 +6% Market and Trading Review PBITA 24.0 22.5 +6% Operating margin 12.8% 12.8% Good revenue growth Mix of pricing uplift and Margins maintained Financial Review activity against inflationary chall
Slide 17: Business performance – UK
Business performance – UK Strategic Aim and Highlights H1 2023 (£m) H1 2022 (£m) Revenue 166.9 160.8 +4% PBITA 22.5 21.8 +3% Market and Trading Review Operating margin 13.5% 13.6% Infrastructure Construction Housebuilding Margins maintained in Strengths: AMP7 Strengths: RMI & Civils - Stable lower g
Slide 18: Business performance – International
Business performance – International Strategic Aim and Highlights H1 2022 (£m) H1 2022 (£m) Revenue 19.6 15.3 +28% PBITA 1.5 0.7 +114% Market and Trading Review Operating margin 7.7% 4.6% Easing of Australia / New Zealand Good recovery in International markets lockdown Positive energy market includi
Slide 19: Rental fleet investment
Rental fleet investment Strategic Aim and Highlights H1 2023 (£m) H1 2022 (£m) UK 30.6 29.1 +5% International 3.2 2.6 +23% Market and Trading Review Total fleet investment 33.8 31.7 +7% Disposal proceeds (12.2) (8.2) +49% Net expenditure on fleet 21.6 23.5 -8% Disposals growth as increased Financial
Slide 20: Outlook
Outlook Strategic Aim and Highlights ▪ Lower growth environment ▪ Investing in technology and our people - Efficient management of costs ▪ Trading continues in line with the Board’s - Supply chain inflation mitigated by hire expectations rate increases Market and Trading Review - Higher hurdle rate
Slide 21: Supplementary Schedules
Vp pic Supplementary Schedules
Slide 22: Net Working Capital
Net Working Capital Cashflow H1 2023 FY 2022 movement £m £m £m Inventories 8.7 8.0 (0.7) Trade and other receivables 87.7 76.7 (11.0) Trade creditors, accruals, other (77.7) (83.8) (6.1) Net working capital 18.7 0.9 (17.8) Capital creditors movement (1.1) Other cashflow (0.8) Working capital cashflo
Slide 23: IFRS16 impact on profit
IFRS16 impact on profit H1 2023 H1 2023 H1 2023 H1 2022 excluding IFRS IFRS impact Reported Reported EBITDA £m 47.8 9.5 57.3 54.5 PBITA (and exceptionals) £m 24.0 1.4 25.4 24.0 Financial expense £m (2.5) (1.5) (4.0) (3.8) PBTA (and exceptionals) £m 21.5 (0.1) 21.4 20.2 EPS (adjusted) pence 42.5 (0.2
Slide 24: Revenues approaching Pre-Covid peak
Revenues approaching Pre-Covid peak Strategic Aim and Highlights 400 Revenue 382.8 362.9 * 368.5 350.9 350 303.6 308.0 300 Market and Trading Review 248.7 250 205.6 208.7 200 183.1 150 193.2 186.5 186.5 176.1 100 142.1 Financial Review 136.0 121.7 101.3 105.1 91.3 50 FY 2014 FY 2015 FY 2016 FY 2017
Slide 25: Long Term Profit Trend
Long Term Profit Trend Strategic Aim and Highlights Profit before tax, amortisation and exceptional items £millions 50 47.1 46.8 45 40.6 * 41.0 40 38.9 Market and Trading Review 34.9 35 29.8 30 26.8 25 23.3 20.1 20 15 25.9 25.9 21.2 20.2 21.5 17.2 18.7 Financial Review 10 16.2 12.8 8.6 5 FY 2014 FY
Slide 26: Dividends – Long Term View
Dividends – Long Term View Strategic Aim and Highlights Dividend per share (pence) 40 36.0 35 30.2 30.5 30 26.0 25.0 Market and Trading Review 25 22.0 20 18.9 16.5 15 14.0 11.0 10 10.5 5 6.8 8.2 8.5 6.0 5.0 5.4 3.6 Financial Review 0 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY
Slide 27: ESG Initiatives
ESG Initiatives Strategic Aim and Highlights ▪ Group commitment to Science Based Targets (SBTi) underpins our plan ▪ Short term (2021-2025) road map adopted and being delivered ▪ Investment in new rental fleet focused on low emission equipment solutions: ✓ Solar panel lighting fleet and charge pods
Slide 28: Roadmap & Milestones
Roadmap & Milestones Vp plc | The Equipment Rental Specialist | 28
Slide 29: Group history – 1954 to date
Group history – 1954 to date 2021 2016 Acquisition of Acquisition of M&S Hire Higher Access 2014 and TR Pty 2007 Vp celebrates (Australia) MEP 60 years acquired 2005 2000 TPA and ESS UK Forks acquired 2017 1996 division Cannon Acquisition of created Brandon Hire Tool Hire acquired 1982 Exit from US
Slide 30: Group businesses
Group businesses Vp plc | The Equipment Rental Specialist | 30
Slide 31: Group businesses
Group businesses Vp plc | The Equipment Rental Specialist | 31
Slide 32: Central House, Beckwith Knowle, Otley Road, Harrogate
Central House, Beckwith Knowle Otley Road, Harrogate North Yorkshire, HG3 1UD T 01423 533400 www.vpplc.com Vp plc Company Number 481833 Vp plc | The Equipment Rental Specialist 32