Eurocell Plc · LSE:ECEL
Eurocell — FY2016 Earnings Presentation
24 slides from Eurocell's earnings presentation, Mar 8, 2017
Slide 1: Eurocell Plc 2016 Full Year Results
EUROCELL PLC 2016 Full Year Results
Slide 2: Agenda
AGENDA Manufacturer Operations and Business Review Mark Kelly Chief Executive Financial Review Distributor Michael Scott Chief Financial Officer Strategy and Outlook Mark Kelly Recycler 1
Slide 3: Overview
OVERVIEW Mark Kelly – Chief Executive Good financial results Strong sales growth Revenue Stable gross margin £204.8m ▲16% (11% excluding acquisitions) Robust cash flow Strong operational performance Investment in business expansion Adjusted EBITDA Growing market share £31.3m ▲ 5% (2015: £29.7m) Incr
Slide 4: Market Backdrop: Flat RMI Market
MARKET BACKDROP Flat RMI Market Driver Description Eurocell Revenue by Market (%) UK GDP is forecast to grow by 2.0% in 2017 GDP (2016: 2.2%) Consumer confidence dropped sharply in the aftermath Consumer of the vote to leave the EU, but has quickly recovered to confidence pre-vote levels Interest UK
Slide 5: Operational Highlights: Strong Operational Performance
OPERATIONAL HIGHLIGHTS Strong Operational Performance New Branches ► Investment to expand branch network - 159 branches, with 18 new sites opened in 2016 ► Investment in specifications team - Customised product solutions unique to Eurocell ► Increased use of recycled PVC in Recycling Operation manuf
Slide 6: Divisional Review: Profiles
DIVISIONAL REVIEW Profiles ► Gaining market share in a flat market Profiles Division P&L - 4% organic sales growth Change £m 2016 2015 - Vista and S&S in line with expectations 3rd Party ► Positive trends across customer base 87.4 73.9 ▲18% Revenue - Larger fabricators increasing capacity and Organi
Slide 7: Divisional Review: Building Plastics
DIVISIONAL REVIEW Building Plastics Building Plastics Division P&L £m 2016 2015 Change ► Significant market share growth 3rd Party 117.5 102.1 ▲15% ► Like for like(1) sales up 10% Revenue - Driven by maturing branches Inter-segment 0.7 0.6 ▲18% Revenue • Opened 2014 and prior Total Revenue 118.2 102
Slide 8: Branch Network Expansion: Investment for Growth
BRANCH NETWORK EXPANSION Investment for Growth Indicative Branch Economics (Rounded) ► Accelerated investment in branch expansion Branch Open - Secure medium-term growth <2 2-4 >4 years years years ► Existing branch estate No. of Branches 33 12 114 - Up to 2 years to break-even Average Sales per 200
Slide 9: Financial Highlights
FINANCIAL HIGHLIGHTS Michael Scott – Chief Financial Officer Revenue Gross Margin Adjusted EBITDA £204.8m 52.0% £31.3m ▲16% (11% excluding acquisitions) ▲ 0.3% (2015: 51.7%) ▲ 5% (2015: £29.7m) Adjusted Basic EPS Total Dividends Net Debt 20.0p 8.5p per share £20.3m ▲ 7% (2015: 18.6p) ▲ 8% (2015: 7.9
Slide 10: Financial Performance: Good Financial Results
FINANCIAL PERFORMANCE Good Financial Results £m 2016 2015 Change Revenue 204.8 175.9 p 16% Gross Margin % 52.0% 51.7% Overheads (75.2) (61.3) Adjusted EBITDA(1) 31.3 29.7 p 5% Depreciation and Amortisation (6.3) (5.4) Finance Costs (0.7) (1.3) Adjusted Profit Before Tax(2) 24.3 23.0 p 5% Tax (4.3) (
Slide 11: Sales Performance: Strong Sales Growth
SALES PERFORMANCE Strong Sales Growth Sales ▲16% (including acquisitions) 210 10.3 204.8 200 3.2 5.0 190 10.4 180 175.9 £m 170 160 150 140 2015 Building 2015 / 2016 Profiles Acquistions 2016 Plastics LFL Branches ► Sales ▲ 11% excluding acquisitions ► Building Plastics: like for like growth 10% ► Bu
Slide 12: Overheads: Investment in Business Expansion
OVERHEADS Investment in Business Expansion Underlying overheads▲9% 80 5.2 75.2 5.4 70 1.9 1.4 61.3 £m 60 50 40 2015 2015 Provisions 2015 / 2016 Underlying Acquistions 2016 Branches Business ► Reassessment of provisions in 2015 ► Underlying business cost increase: - Investment in specification and bu
Slide 13: Capex: Investment in Business Expansion
CAPEX Investment in Business Expansion Total Capital Expenditure 8 7.2 ► 2016 capex £7.2m (2015: £6.4m) 6 6.4 - Growth capex £2.6m 5.1 £m • Increase recycling capacity £1.1m 4 • New branches £0.8m • Foiling machine £0.7m 2 - Recurring / maintenance capex £4.6m • Operations £3.2m includes tooling cos
Slide 14: Cash Flow: Robust Cash Flow Generation
CASH FLOW Reconciliation of Net Debt Robust Cash Flow Generation £m 2015 2016 Change Cash 1.2 5.5 4.3 Borrowing (27.1) (25.8) 1.3 Net Debt (25.9) (20.3) 5.6 35 0.8 (3.7) 31.3 (1) 30 28.4 (7.2) 25 (1.3) (8.0) 20 £m 15 (6.3) 10 5.6 5 0 2016 EBITDA Working Tax and Net Cash from Capex Financing Dividend
Slide 15: Strong Balance Sheet: Capital Allocation
STRONG BALANCE SHEET Capital Allocation ► Min. 30 branches p.a. (subject to market conditions) Investment in organic business expansion ► Increase use of recycled material ► Manufacturing efficiencies Dividend policy ► Target at least 40% of adjusted earnings ► Clear strategic and financial criteria
Slide 16: Strategy and Growth Opportunities
STRATEGY AND GROWTH OPPORTUNITIES Mark Kelly – Chief Executive ► Grow market share - Target new build, commercial and public sector work - Pull through demand from expanding branch network Sustainable Growth in ► Expand branch network Shareholder Value - 30 new branches in 2017 - Growth in window sa
Slide 17: Summary and Outlook
SUMMARY And Outlook Good financial results Strong sales growth Stable gross margin Robust cash flow Strong operational performance Investment in business expansion Growing market share Increased use of recycled material Outlook Clear strategy Opportunities for growth Positive start to 2017 16
Slide 18: Appendices
Appendices eurocell: All together better
Slide 19: Eurocell at a Glance
EUROCELL AT A GLANCE EUROCELL PROFILES EUROCELL BUILDING PLASTICS Market position: the UK’s Market position: ranked #1 PVC leading manufacturer, distributor building products specialist outlet and recycler of window, door, conservatory and roofline Sells and distributes: a range of products Eurocell
Slide 20: Differentiation
DIFFERENTIATION B2B supplier Sustainability Vertically Clear strategy Stable ownership of innovative PVC In-house integrated Grow market share, Fresh focus, with building products closed loop business model expand branch new horizons recycling facility Recycling, network, develop manufacturing new p
Slide 21: A Complete Product Range
A COMPLETE PRODUCT RANGE Modus windows and doors Skypod pitched skylights Aspect bi-folding doors Conservatories and equinox tiled roofs Fascias, soffits and guttering Traded goods 20
Slide 22: Locations
LOCATIONS Centrally located Extrusion centre Secondary Recycling Warehousing HQ, Manufacturing, operations factory Warehousing, 140,000 sq ft 260,000 sq ft Injection Moulding 45 extruders 120,000 sq ft 75,000 sq ft and Recycling 6 extruders 12 extruders Injection Composite Door Moulding Manufacture
Slide 23: Disclaimer
DISCLAIMER This Presentation may contain forward-looking statements form of commitment on the part forward-looking statements that involve risks and uncertainties of the Company to proceed with involve substantial risks and because they relate to events and any transaction. uncertainties, and actual
Slide 24: Eurocell: All together better
eurocell ® All together better 23