Slide 1: 2021 Full Year Results
2021 FULL YEAR RESULTS 9 March 2022 Project name: Lambeth Palace Library Product used: Swanage Handmade Bespoke Blend and Ashdown Blue Grey Headers
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: Agenda
Agenda Overview Joe Hudson Financial review Chris McLeish Operational update Joe Hudson Strategic update Joe Hudson / Chris McLeish ESG Joe Hudson Summary & outlook Joe Hudson Q&A 3
Slide 4: Overview
Overview A year of strong delivery and strategic progress Continued strong demand across both clay and concrete markets Supply chain challenges well managed Significant improvement in adjusted EBITDA – ahead of expectations Excellent free cash flow performance with strengthened balance sheet providi
Slide 5: Financial Review
FINANCIAL REVIEW Project name: Brookfield – University of Leicester Product used: Ivanhoe Cream
Slide 6: Financial summary
Financial summary Revenue back to 2019 levels; excellent cash flow performance delivered material reduction in net debt Divisional Revenue Adjusted EBITDA EBITDA Margins Clay Concrete £409m £103m 32.3% 16.9% 2020: £316m | 2019: £409m 2020: £52m | 2019: £122m 2020: 20.6% 2020: 14.6% 2019: 35.5% 2019:
Slide 7: Revenue bridge
Revenue bridge Revenues increased by 29% on 2020; in line with 2019 +£93m (+29%) £0m (0%) £450m Strong performance with Group revenues in line with £409m £409m 2019 levels £400m £25m £350m £67m £128m £109m Clay revenues 31% higher than 2020 and back to £316m 93% of 2019, with volumes ahead of expect
Slide 8: Clay
Clay Divisional financial performance was materially above 2020, and ahead of expectations set at the start of the year. 12 months ended 31 Dec (£m) 2021 2020 2019 Total Revenue 280 213 300 Adjusted EBITDA 91 44 107 Margin 32.3% 20.6% 35.5% Revenue increased by 31% year on year, to 93% of 2019 level
Slide 9: Concrete
Concrete Performance driven by resilient RMI trends 12 months ended 31 Dec (£m) 2021 2020 2019 Total Revenue 128 103 109 Adjusted EBITDA 22 15 22 Margin 16.9% 14.6% 20.2% Revenue increased by £19m, an increase of 18% on 2019 The division benefitted from significant exposure to RMI markets Revenue gr
Slide 10: Excellent cash flow performance
Excellent cash flow performance Adjusted free cash flow performance £25m ahead of 2020 and £18m greater than 2019 12 months ended 31 Dec (£m) 2021 2020 2019 Adjusted EBITDA 103 52 122 Strong management of working capital, with Δ in net working capital 6 17 (24) inventories increasing modestly in con
Slide 11: Net debt improvement of £30m in year
Net debt improvement of £30m in year Balance sheet further strengthened to support capital investment and returns Closing net debt reduced by £30m to £39m at 31 December 2021 Net debt reduced by £30m to £39m, representing a net debt to adjusted EBITDA ratio of 0.4 times (2020 1.5x) Continued to mana
Slide 12: Successful refinancing completed during Q4 2021
Successful refinancing completed during Q4 2021 £225m facilities provide an efficient, long-term funding platform to support the Group's investment for growth 250 2021 Refinancing £125m unsecured RCF 200 £100m US Private Placement RCF initial margin 1.6% Available USPP average rate 2.19% 150 Accordi
Slide 13: 2022 guidance
2022 guidance Income statement Commissioning of capital enhancements on track to increase clay network capacity by 5% by mid-2022 Dynamic pricing strategy in place to protect margin performance against backdrop of cost inflation headwinds Energy price risk well covered with around 85% of 2022 energy
Slide 14: Operational Update
OPERATIONAL UPDATE Project name: Davidson’s Homes, St Cuthbert’s View, Great Glen Product used: Forticrete SL8 roof tiles
Slide 15: Core residential markets update
Core residential markets update Robust demand in new build and RMI markets '000 Private Housing Starts 200 165 2021 saw a recovery in both housing starts (up 158 153 160 146 30%) and completions (up 19%) 150 118 79 70 75 81 Private housing starts are expected to rise by 5% 71 100 in 2022 and 3% in 2
Slide 16: Diversified markets update
Diversified markets update Brick facades taking an increasing share of fast growth markets Build to rent (BTR) continues to be a driver of growth Mid to high rise sector across UK residential markets Sector growth driven by recladding and build to rent market, with planning Trend towards private ren
Slide 17: Inventory and production
Inventory and production Industry inventories remain at lower levels 600 120% Domestic clay brick production for 2021 of around 1.9 billion – 34% ahead of last year and 500 100% around 92% of 2019 400 80% Imported brick volumes in 2021 of c.460m (or around 19% of total market volumes), in line with
Slide 18: Strategic Progress
STRATEGIC PROGRESS Project name: John Modern Centre Product used: Cumberland Blend
Slide 19: Building from a strengthened platform
Building from a strengthened platform Investing for growth from our strong platform to meet the challenges of tomorrow Our Business Today Strategy Pillars Investment Levers Future Trends Investment driven growth through Accelerating two areas of focus: Sustainability Sustain ESG GROW DIVERSIFIED COR
Slide 20: Sustain
Sustain Significant progress made on all three priorities: Health and safety New health & safety management system embedded On track for 2023 target of 50% reduction in LTIFR Progress and leadership recognised externally by industry awards Operational excellence Capital enhancement projects on track
Slide 21: Innovate
Innovate Innovation of products and processes is key to our growth plans Product innovation Targeting specification market with extension of I-Range 20 new bricks specifically developed for this important growth segment Enhancing sustainability of existing products: New rail platform copings with 40
Slide 22: Grow
Grow We will grow through a combination of expansion in our core business and diversification into adjacent market segments Investment in our core 5% capacity growth in Clay network by mid-22 from capital enhancement projects £60m Atlas & Aldridge investment to deliver significant earnings growth fr
Slide 23: Ibstock Futures
Ibstock Futures Step changing our growth plans Why Futures Established to respond to key industry trends of sustainability and industrialisation Strong growth prospects in new, fast growing segments of the construction industry Complements existing core business Well positioned for execution and gro
Slide 24: Financial Targets
FINANCIAL TARGETS Project name: Pump House, London Product used: White Engobe
Slide 25: Ambition to deliver strong growth and returns over next 5 years
Ambition to deliver strong growth and returns over next 5 years Our targets: 1. Target to grow revenues to >£600m by 2026 with an ambition to grow Revenue growth target beyond this – 50% upside from today 2. Medium term profitability targets: EBITDA Margins in core Clay business of >35% Overall Grou
Slide 26: Significant cash available to support further investment and shareholder returns
Significant cash available to support further investment and shareholder returns Capital structure, dividend and capital allocation policies remain unchanged: 0.5-1.5x net debt/EBITDA through the cycle Dividend pay-out of c.50% Clear capital allocation priorities Maintain and enhance assets Sustaina
Slide 27: ESG
ESG Project name: Castle Park View Product used: Ivanhoe Katrina
Slide 28: ESG
ESG At the heart of what we do for people, planet & profit Long history of sustainability in our business - market leader for decades 63% less carbon on an intensity basis 1970s 1990s 2020s 2040 “ Positioned to evolve ESG strategy to 2030 based on: In depth materiality assessment with critical stake
Slide 29: ESG
ESG Evolving our strategy to match our ambitions Addressing Climate Change - by 2030 we will: Reduce2 absolute Carbon (Scope 1 and 2) by 40% Achieve Biodiversity Net Gain Reduce2 mains water per tonne of production by 25% Improving Lives – we will: Increase senior leader female representation to 40%
Slide 30: Our journey to Net Zero
ESG Our journey to Net Zero 2018 2022 2030 2040 ACHIEVING INITIAL GOALS ACCELERATING CHANGE SCALING SOLUTIONS 100% electricity from renewable sources Energy from alternative sources Energy from alternative sources Solar Park at Ibstock HQ delivering 100% of Mobile Plant and company cars hybrid Expan
Slide 31: Summary & Outlook
SUMMARY & OUTLOOK Project name: Apartments and Social Housing at Droylsden for Vistry Partnerships Product used: Longley, Hollowcore Flooring
Slide 32: Summary and outlook
Summary and outlook Expect to make significant financial progress in 2022 year Strong trading momentum in early weeks of 2022 with continued robust demand in end markets 5% capacity being brought on line in clay network by mid-2022 Capital returns being kept actively under review for 2022 Clear path
Slide 33: Q&A
Q&A Discussing The I-Range with Architects from The Space Studio
Slide 34: Appendices
APPENDICES Ibstock Apprentices, Make UK, Birmingham
Slide 35: Leading manufacturers of...
Leading manufacturers of… 200 Years of experience Our core products Walling Facing bricks Special bricks Walling stone Special walling stone 36 Architectural masonry Cast stone Facade systems Ibstock Concrete Retaining walls Our Concrete division is a leading Manufacturing sites Lintels, sills and a
Slide 36: Key investment highlights
Key investment highlights High quality, broad Market leadership Strong customer product range and #1 in UK bricks positions service ethic strong customer relationships Strong household Additional capacity, Structural demand formations with Multiple growth product innovation growth supportive UK opti
Slide 37: Brick market dynamics
Brick market dynamics Balancing supply and demand Brick Consumption (billions of bricks) Brick Production and Stock (billions of bricks) Domestic Despatches Imports Production Stock 2.1 2.0 1.9 1.9 1.9 0.5 1.8 1.8 0.3 0.4 0.5 1.6 1.6 0.3 0.2 1.5 0.3 1.4 1.4 0.1 0.3 1.3 0.1 0.1 0.1 0.1 0.9 2.0 2.0 2.
Slide 38: Growing our core business - Atlas
Growing our core business - Atlas Strongly positive fundamentals for the UK residential markets over medium term Deficit of new homes Government policy supportive Positive trends in RM&I and build to rent which will also be supportive over the medium term Intensifying customer focus on decarbonisati
Slide 39: UK's first automated brick slips systems factory
UKs first automated brick slips systems factory Ibstock Futures’ launch will capitalise on the fast growth facades and cladding markets The factory investment will be at our existing site in Nostell, West Yorkshire Built within existing clay brick footprint, with established and reliable infrastruct
Slide 40: A leading provider of clay and concrete building products
A leading provider of clay and concrete building products RMI Factors c.30% c.20% New build Merchants and End housing Sales other market c.60% channel c.50% Infrastructure Housebuilders and other direct new build c.30% c.10% Opportunity to RMI exposure Key supplier to the Complementary Cross-selling
Slide 41: Concrete revenue analysis
Concrete revenue analysis 140 £129m 120 22 £109m Overall Concrete revenue increased by 100 £103m 8 £19m, an increase of 18% on 2019 10 Longley 17 10 7 80 3 Flooring Longley acquisition added £22m in 2021, 11 8 8 3 (£8m 2019) Other 7 60 25 25 Rail / Infrastructure LFL revenues (excluding Longley) 6%
Slide 42: Income statement
Income statement Cash flow and profit progression, with revenue back to 2019 levels 12 months ended 31 Dec 2021 2020 2019 Revenue £409m £316m £409m Adjusted EBITDA £103m £52m £122m Depreciation & amortisation (£28m) (£27m) (£27m) Adjusted profit / (loss) before interest and tax £75m £25m £96m Intere
Slide 43: Adjusted income statement reconciliation
Adjusted income statement reconciliation Depreciation and Exceptional Non-cash Deferred tax 12 months ended 31 Dec Adjusted Reported amortisation items interest rate change Revenue £409m - - - - £409m Costs (£306m) (£38m) £5m - - (£339m) EBITDA £103m (£38m) £5m - - £70m Depreciation and amortisation
Slide 44: Balance sheet
Balance sheet 12 months ended 31 Dec 2021 2020 2019 PP&E £376m £371m £386m Right of Use assets £25m £27m £30m Intangible £95m £95m £103m Non-current assets £496m £493m £519m Inventories £73m £64m £84m Trade and other receivables £65m £59m £58m Assets held for sale £1m £1m £1m Current assets £138m £1
Slide 45: Cash flow
Cash flow 12 months ended 31 Dec 2021 2020 2019 Adjusted EBITDA £103m £52m £122m Working capital £4m £17m (£24m) Net interest (£4m) (£4m) (£3m) Tax (£10m) (£6m) (£13m) Post-employee benefits (£2m) (£2m) (£1m) Exceptional items (£2m) (£10m) (£1m) Other (£3m) (£2m) (£4m) Net cash flow from operating a