Slide 1: Forterra plc Results Presentation, Year Ended 31 December 2020
FORTERRA PLC RESULTS PRESENTATION YEAR ENDED 31 DECEMBER 2020 9 MARCH 2021 Keeping Britain Building
Slide 2: Disclaimer
DISCLAIMER This document has been prepared by Forterra plc (the “Company”) solely for use at a presentation in connection with the Company’s Results Announcement in respect of the financial period ended 31 December 2020 (the “Presentation”). For the purposes of this notice, “Presentation” shall mean
Slide 3: Agenda
AGENDA 1. Key points 2. Financial review 3. Business review 4. Sustainability 5. Outlook 6. Q&A Stephen Harrison Ben Guyatt Chief Executive Officer Chief Financial Officer Keeping Britain Building 3
Slide 4: Key Points
KEY POINTS • The health, safety and wellbeing of our employees remains our primary concern • EBITDA of £37.9m reflects a strong finish to the year • 2020 final dividend of 2.8p per share, representing 45% of earnings • Desford project funding secured with construction progressing well. Contracts sig
Slide 5: Financial Review
Keeping Britain Building FINANCIAL REVIEW
Slide 6: Key Financials
KEY FINANCIALS Before exceptional items Statutory £m FY 2020 FY 2019 FY 2020 FY 2019 Revenue 291.9 380.0 291.9 380.0 EBITDA 37.9 82.7 18.5 78.4 Profit / (loss) before tax 17.4 62.5 (5.4) 58.2 Earnings per share (pence) 6.6 25.5* (2.6) 23.6* Operating cash flow 53.9 64.9 48.3 63.8 Net cash / (debt) –
Slide 7: Profit and Loss
PROFIT AND LOSS 2020 2020 2019 Exceptional £m Statutory impact Before exceptional items Revenue 291.9 - 291.9 380.0 EBITDA - Bricks and Blocks 33.1 7.2 40.3 80.4 - Bespoke Products (14.6) 12.2 (2.4) 2.3 Total 18.5 19.4 37.9 82.7 EBITDA margin (%) 6.3% 13.0% 21.8% Depreciation and Amortisation (17.1)
Slide 8: H1 / H2 Performance Split
H1 / H2 PERFORMANCE SPLIT H1 (before exceptionals) H2 (before exceptionals) £m 2020 2019 Variance 2020 2019 Variance Revenue 122.4 193.6 (37)% 169.5 186.4 (9)% EBITDA - Bricks and Blocks 11.1 41.6 (73)% 29.2 38.8 (25)% - Bespoke Products (2.9) 0.9 - 0.5 1.4 (64)% Total 8.2 42.5 (81)% 29.7 40.2 (26)%
Slide 9: Segmental Results: Bricks and Blocks
SEGMENTAL RESULTS: BRICKS AND BLOCKS 2020 2019 £m FY 2020 FY 2019 Change Revenue 223.1 279.1 (20.1)% EBITDA before exceptional items 40.3 80.4 (49.9)% EBITDA margin % 18.1% 28.8% • Revenue fell 20.1% relative to 2019 (37.1% in H1 and 1.9% in H2) • Selling prices agreed ahead of pandemic sufficient t
Slide 10: Segmental Results: Bespoke Products
SEGMENTAL RESULTS: BESPOKE PRODUCTS 2020 2019 £m FY 2020 FY 2019 Change Revenue 71.7 103.5 (30.7)% EBITDA before exceptional items (2.4) 2.3 - EBITDA margin % (3.3)% 2.2% • Revenues fell by 30.7% relative to 2019 (35.2% in H1 and 26.4% in H2) • Swadlincote hollowcore plant mothballed from September
Slide 11: Cash Flow
CASH FLOW 2020 2019 • Strong cash flow generation is a key pillar of our investment £m FY20 FY19 case with strong performance in spite of the pandemic Operating cash flow before exceptionals 53.9 64.9 • £53m equity raise completed securing Desford project funding Cash payments made in respect of exc
Slide 12: Working Capital
WORKING CAPITAL • Strong focus on cashflow ahead of profitability in 2020 delivered inventory reduction of £14.8m • Customer payment patterns have returned to normal with no material bad debts incurred • All tax deferrals now repaid Net £16m £54m £32m £5m working capital Keeping Britain Building 12
Slide 13: Net Debt and Facilities
NET DEBT AND FACILITIES Net cash / (debt) £m 2020 2019 Cash and cash equivalents 31.5 26.6 Loans and borrowings (15.5) (69.8) Net debt excluding leases 16.0 (43.2) Lease liabilities (9.4) (14.1) Net cash / (debt) 6.6 (57.3) • Strong balance sheet position with net cash pre IFRS 16 of £16.0m • Debt f
Slide 14: Business Review
Keeping Britain Building BUSINESS REVIEW
Slide 15: Customer Sentiment
CUSTOMER SENTIMENT Sentiment from our customers is positive “The UK housing RMI market “The long term fundamentals benefitted in 2020 from pent-up of the Group’s end markets demand, home working and “We are confident in the “Whilst we are mindful of remain robust with ongoing reduced spending on tra
Slide 16: Brick Market
BRICK MARKET Brick deliveries and inventory (domestic) 1200 1000 800 £000 600 400 200 0 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q410 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2
Slide 17: Forterra Brick Sales Volumes
FORTERRA BRICK SALES VOLUMES Forterra brick sales volumes 1st lockdown commenced Sales volume vs. 2019 (23 March) Source: Company information • Sustained recovery in brick sales following initial lockdown • Subsequent lockdowns have not impacted demand at all with all customers operations close to n
Slide 18: New Desford Facility on Track
NEW DESFORD FACILITY ON TRACK Summary • Project expected to generate attractive returns over the medium term positioning the Group to benefit from the favourable long-term housing market fundamentals Progress update • £32.1m spent to date (December) • New factory building structurally complete • Con
Slide 19: New Product Development
NEW PRODUCT DEVELOPMENT • New product development continued to accelerate in 2020 • Focussing on the key theme of sustainability, and particularly offsite facade solutions, utilising our clay and concrete product expertise to meet the needs of this growing market segment • These products increase sp
Slide 20: Sustainability
Keeping Britain Building SUSTAINABILITY
Slide 21: Sustainability – Carbon and Building Materials
SUSTAINABILITY – CARBON AND BUILDING MATERIALS • The manufacturing of all heavy building products generates carbon emissions • Our products create good quality, energy efficient homes that last for generations that can be recycled at the end of life Keeping Britain Building 21
Slide 22: Sustainability – Clay vs Concrete
SUSTAINABILITY – CLAY VS CONCRETE • Clay and Concrete products generate similar levels of carbon emissions overall but these are categorised and reported differently; between • Scope 1 = All direct emissions from our business or under our control • Scope 2 = Indirect emissions from the electricity w
Slide 23: Sustainability – Source of Our Emissions
SUSTAINABILITY – SOURCE OF OUR EMISSIONS 2020 120,000 CARBON EMISSIONS 100,000 12,654 BY SOURCE (SCOPE 1 80,000 AND 2) Tonnes 60,000 92,990 40,000 76,702 20,000 8,157 8,418 0 Gas Process Liquid Fuels Keeping Britain Building 23
Slide 24: Sustainability – Our Journey So Far
SUSTAINABILITY – OUR JOURNEY SO FAR • 2020 marked the end of the latest step in our journey to reduce our environmental impact in key areas • In the last 10 years we have made significant progress: Our Targets 2010-2020 2019 vs. 2010 2020 vs. 2010 Reduce carbon emissions - Kg per tonne by 20% (22)%
Slide 25: Sustainability – Our Future Targets
SUSTAINABILITY – OUR FUTURE TARGETS • We have undertaken a materiality assessment resulting in the following sustainability reporting framework of “Planet, Product, People” • The framework sets out a balanced approach to sustainability through these three pillars: Keeping Britain Building 25
Slide 26: Sustainability – Our Carbon Reduction Timeline
SUSTAINABILITY – OUR CARBON REDUCTION TIMELINE • We have committed to reducing our carbon emissions intensity by at least 32% by 2030 Keeping Britain Building 26
Slide 27: Sustainability – Continued Progress in 2020
SUSTAINABILITY – CONTINUED PROGRESS IN 2020 • Signed up to Race to Zero campaign • 100% renewable electricity • Electric forklift trial • Low emission company car fleet • Electric car chargers installed • New efficient delivery vehicles ordered • Joined the 5% Club • Living Wage Foundation accredite
Slide 28: Sustainability – Focus on Plastics
SUSTAINABILITY – FOCUS ON PLASTICS • The reduction of plastic packaging on our products is a key priority • We already minimise plastic packaging on many of our product ranges • Commitment to reduce our use plastic packaging by at least 50% by 2025 Keeping Britain Building 28
Slide 29: Sustainability – Forthcoming Report
SUSTAINABILITY – FORTHCOMING REPORT • Read more in our forthcoming Sustainability report, included within our 2020 Annual Report Keeping Britain Building 29
Slide 30: Outlook
Keeping Britain Building OUTLOOK
Slide 31: Outlook
OUTLOOK • The much-improved trading conditions seen through the second half of 2020 have continued into 2021 • This trend, alongside the lengthening order books of our housebuilding customers, offer support for a continued recovery in our key markets in the first half of the year • Ongoing uncertain
Slide 32: Q&A
Keeping Britain Building Q&A
Slide 33: Appendices
Keeping Britain Building Appendices
Slide 34: Summary Balance Sheet
SUMMARY BALANCE SHEET £m Dec 2020 Dec 2019 Intangible assets 11.0 18.2 Property, plant and equipment 187.1 182.6 Right-of-use assets 9.0 13.7 Total non-current assets 207.1 214.5 Current assets Inventories 33.0 47.8 Trade and other receivables 35.7 40.4 Cash and cash equivalents 31.5 26.6 Income tax
Slide 35: Forterra contact details
Forterra 5 Grange Park Court Roman Way Northampton NN4 5EA 01604 707600