Breedon Group PLC · LSE:BREE
Breedon — FY2020 Earnings Presentation
30 slides from Breedon's earnings presentation, Mar 10, 2021
Slide 1: Breedon Group 2020 Results
BREEDON GROUP 2020 RESULTS BREEDON 10 March 2021
Slide 2: Agenda
Agenda Group highlights Pat Ward, Group Chief Executive Financial review Rob Wood, Group Finance Director Operational review Pat Ward Outlook Rob Wood Q & A 2 | BREEDON 2020 RESULTS PRESENTATION 10 MARCH 2021
Slide 3: Group highlights
Group highlights Robust performance against backdrop of considerable disruption caused by COVID-19 Strong recovery in second half, with like-for-like revenue and Underlying EBIT ahead of prior year Positive outcome for the year made possible by the support and hard work of all our colleagues
Slide 4: Financial review
Financial review Rob Wood, Group Finance Director 4 | BREEDON 2020 RESULTS PRESENTATION 10 MARCH 2021
Slide 5: 2020 highlights
2020 highlights Revenue Underlying EBIT Underlying EBIT margin £928.7m £76.5m 8.2% 2019: £929.6m -0% 2019: £116.6m -34% 2019: 12.5% -4.3ppt Profit before taxation Underlying basic EPS Net debt £48.1m 2.80p £318.3m 2019: £94.6m -49% 2019: 5.08p -45% 2019: £290.3m Notes: Underlying results are stated
Slide 6: 2020 income statement
2020 income statement 2019 2020 £ million £ million Variance Revenue 929.6 928.7 (0%) Underlying EBITDA 180.2 149.2 (17%) Depletion & depreciation (65.2) (74.4) Underlying operating profit 115.0 74.8 (35%) Share of associate and joint ventures 1.6 1.7 Underlying EBIT 116.6 76.5 (34%) Interest (14.0)
Slide 7: 2020 segmental performance
2020 segmental performance 2019 revenue 2020 revenue £ million £ million (73.9) (60.6) 186.4 177.2 202.0 189.3 929.6 622.8 928.7 615.1 Great Britain Ireland Cement Eliminations Group Great Britain Ireland Cement Eliminations Group 2019 2020 2019 2020 Underlying Underlying Underlying Underlying EBIT
Slide 8: 2020 product volumes
2020 product volumes Aggregates Asphalt Concrete Cement million tonnes million tonnes million m3 million tonnes 21.7 3.0 20.2 2.0 2.0 2.7 3.3 0.2 2.6 3.0 2.6 0.1 1.0 1.1 17.6 19.0 1.9 2.3 2.8 2.5 2019 2019 2020 2020 2019 2019 2020 2020 2019 2019 2020 2020 2019 2019 2020 2020 +7% +9% -15% -3% Great B
Slide 9: 2020 net debt movement
2020 net debt movement £ million Inflow Outflow IFRS 16 Impact 9 | BREEDON 2020 RESULTS PRESENTATION 10 MARCH 2021
Slide 10: Operational review
Operational review Pat Ward, Group Chief Executive 10 | BREEDON 2020 RESULTS PRESENTATION 10 MARCH 2021
Slide 11: Business review - GB
Business review - GB MARKET BACKDROP % YoY change in GB market UK GDP declined 10% YoY in 2020 volumes Construction output declined 13% YoY in 2020 0 UK construction PMI averaged 55 during second half, up from 31 in Q2 -5 PROGRESS DURING THE YEAR Strategic capex projects completed during the
Slide 12: CEMEX Acquisition
CEMEX Acquisition • CEMEX Acquisition completed in July, total consideration £178m ‒ CMA and divestment process successfully completed Compelling strategic rationale ‒ Quality assets underpinned by c.170 million tonnes of mineral reserves and resources ‒ Around 650 talented and experienced employe
Slide 13: Business review - Ireland
Business review - Ireland MARKET BACKDROP RoI Modified Domestic Demand declined 5% in 2020 RoI construction output expected to decline c.16% 2020 RoI construction PMI averaged 50 during H2, up from 25 during Q2 Challenging market conditions in NI, GDP estimated to have declined 11% and const
Slide 14: Business review - Cement
Business review - Cement MARKET BACKDROP Market conditions in GB reflected broader construction activity levels Irish market demand remained robust PROGRESS DURING THE YEAR Two shutdowns completed on time and on budget in the first half ‒ Second shutdown at Hope delayed to Q1 2021 to support p
Slide 15: Progressing our sustainability agenda
Progressing our sustainability agenda Head of Sustainability appointed Non-executive Director formally responsible for Sustainability Sustainability successfully embedded into our strategy Materiality assessment completed during 2020 ‒ Aligned with the views of our stakeholders ‒ Key ESG ris
Slide 16: 2021 market outlook
2021 market outlook % Construction outlook: 2021-22 GB 15 CPA construction output forecast to grow 14% in 2021 and 5% in 2022 12 Sales volumes forecast to recover c.8% across all products in 2021 9 Recovery underpinned by robust activity in residential housing market and 6 increased infrastruc
Slide 17: Outlook
OUTLOOK 17 | BREEDON 2020 RESULTS PRESENTATION 10 MARCH 2021
Slide 18: Outlook
Outlook Robust performance against a backdrop of considerable disruption Priority now on CEMEX integration and synergy delivery Remain focused on further reducing debt Will pursue opportunities to grow and develop Mindful of the ongoing impact of COVID-19 Believe prospects for the indust
Slide 19: Q&A
Q&A 19 | BREEDON 2020 RESULTS PRESENTATION 10 MARCH 2021
Slide 20: 2021 technical guidance
2021 technical guidance Income statement Depreciation and mineral depletion of c.£85m, including c.£16m relating to IFRS 16 Net interest expense of c.£15m, including £3m relating to IFRS 16 (intention to refinance in 2021) Effective tax rate c.18% Potential for additional c.£19m non-cash def
Slide 21: Our track record: financial KPIs
Our track record: financial KPIs 21 | BREEDON 2020 RESULTS PRESENTATION 10 MARCH 2021
Slide 22: Our track record: non-financial KPIs
Our track record: non-financial KPIs Note: Reported for first time in 2019 22 | BREEDON 2020 RESULTS PRESENTATION 10 MARCH 2021
Slide 23: Our track record: balanced growth pre-COVID
Our track record: balanced growth pre-COVID 23 | BREEDON 2020 RESULTS PRESENTATION 10 MARCH 2021
Slide 24: Our strategy
Our strategy ▪ Our purpose is to make a material ▪ The resources we use to produce our ▪ The Group is focused on construction difference to the lives of our products are scarce and valuable, so it materials markets that deliver long colleagues, customers and is vital that we maintain a high level of
Slide 25: Our investment case
Our investment case Strong corporate governance, with a clear purpose and culture, focused on managing our 1 Sustainable business resources sustainably and maintaining our licence to operate We have a culture of continuous improvement, with opportunities for driving efficiency and 2 Margin improveme
Slide 26: Our capital allocation priorities
Our capital allocation priorities 26 | BREEDON 2020 RESULTS PRESENTATION 10 MARCH 2021
Slide 27: MPA Aggregates volumes
MPA Aggregates volumes 170 150 million tonnes (40)% 130 110 11% 90 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Note: Percentages show the % fall from peak to trough and the % recovery of the peak to trough fall to date Source: MPA member volumes 27 | BREEDON 2020
Slide 28: MPA Asphalt volumes
MPA Asphalt volumes 27 25 million tonnes 23 (36)% 21 19 13% 17 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Note: Percentages show the % fall from peak to trough and the % recovery of the peak to trough fall to date Source: MPA member volumes 28 | BREEDON 2020 RESU
Slide 29: MPA RMX volumes
MPA RMX volumes 24 22 20 million cubic metres (42)% 18 16 14 (4%) 12 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Note: Percentages show the % fall from peak to trough and the % recovery of the peak to trough fall to date Source: MPA member volumes 29 | BREEDON 202
Slide 30: 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