Slide 1: Interim Results Presentation 30 July 2019
Forterra plc Interim Results Presentation 30 July 2019
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 30 June 2019 (the “Presentation”). For the purposes of this notice, “Presentation” shall mean and
Slide 3: Forterra at a glance
Forterra at a glance Revenue by segment (%) (H1 2019) 26% 48% Focus on bricks and blocks Market leaders in masonry 26% with complementary range of walls & precast concrete bespoke clay & concrete floors products Brick Block Bespoke Revenue by end use (%) 6% 29% 65% Sole manufacturer of iconic Precas
Slide 4: Highlights
Highlights • Revenue increase of 7.6% due to higher brick and precast concrete volumes, and price increases applied to offset cost inflation • Profit before tax in line with Board expectations and ahead of prior year due to the benefits of higher revenue partly offset by increased operating costs •
Slide 5: Financial review
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Slide 6: Financial highlights
Financial highlights £m HY 2019 HY 2018 Change (%) FY 2018 Revenue 193.6 180.0 7.6% 367.5 EBITDA 42.5 39.2 8.4% 78.8 EBITDA margin (%) 22.0% 21.8% 21.4% Profit before tax 32.7 32.3 1.2% 64.8 Earnings per share (pence) 13.6p 13.0p 4.6% 26.5p Operating cash flow 27.6 24.0 15.0% 79.8 Net debt* 34.5 51.
Slide 7: Group Cash Flow
Group Cash Flow • Strong level of operating cash flow, delivering £27.6m in H1 (2018: £24.0m) • Expected increase in working capital due to Spring selling season • Capital expenditure was higher than H2 2018 at £8.6m including £2.7m on strategic investment at the Newbury aircrete plant and the major
Slide 8: Net Debt and Facilities
Net Debt and Facilities 180 2.5 2.2 160 Net Debt : EBITDA (x) 140 2 Net Debt (£m) 120 1.3 1.5 100 80 0.8 1 60 0.5 0.4 40 0.5 20 155.0 92.3 60.8 38.8 34.5 0 0 IPO (April 2016) 31-Dec-16 31-Dec-17 31-Dec-18 30-Jun-19 Net Debt Net Debt : EBITDA (LTM) • Since the IPO, the business has generated over £20
Slide 9: Business review
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Slide 10: Market fundamentals
Market fundamentals Housing completions vs. government target 300,000 250,000 200,000 150,000 100,000 50,000 - 2012 2013 2014 2015 2016 2017 2018 2019F 2020F 2021F Source: MHCLG, CPA Forecast Spring 2019 Completions Government target (less conversions) Note: CPA Forecast states Great Britain complet
Slide 11: RMI Market: Planning applications of less than £100k
RMI Market: Planning applications of less than £100k 250000 200000 Number of applications 150000 100000 50000 0 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Source: Barbour ABI • Planning applications of up to £100k are a useful proxy for the
Slide 12: Desford expansion project update
Desford expansion project update Desford • In May 2018 the Board approved the project to build a new extruded brick factory at Desford in Leicestershire, with a manufacturing capacity of 180 million bricks per annum at a capital cost of £95 million • Full planning consent has been secured with const
Slide 13: Other project updates
Other project updates New product development • Precast concrete sandwich panels with optional brick facing • Surebrick – development of a mechanically retained and fully non-combustible brick slip façade solutions System upgrades • Modernisation of IT solutions - total project spend of £3.6m over t
Slide 14: Bricks and Blocks
Bricks and Blocks £m HY 2019 HY 2018 FY 2018 Revenue 143.9 136.6 277.5 EBITDA 41.6 38.5 75.8 EBITDA margin % 28.9% 28.2% 27.3% • Revenue increased by 5.3% as a result of the benefits of higher volumes and price increases applied to offset higher operating costs • Brick volumes increased modestly due
Slide 15: Bespoke Products
Bespoke Products £m HY 2019 HY 2018 FY 2018 Revenue 50.9 44.3 92.2 EBITDA 0.9 0.7 3.0 EBITDA margin % 1.8% 1.6% 3.3% • Revenue for Bespoke Products increased by 14.9% due to higher volumes of precast concrete, especially floor beams, and also price increases applied to offset the effects of cost inf
Slide 16: New Projects
New Projects • The Bison Precast business has successfully secured a number of large contracts totalling over £10m for deliveries commencing in the H2 2019, including the substantial custodial project at Wellingborough • Bison’s scope is 4,920 bespoke components including walls, solid slabs, columns
Slide 17: Swadlincote (Bison) productivity
Swadlincote (Bison) productivity Beds per day 3 month average 9.0 8.0 7.0 6.0 Beds per day 5.0 4.0 3.0 2.0 1.0 0.0 Jul-18 Jun-19 Apr-18 May-18 Jun-18 Apr-19 May-19 Sep-18 Nov-18 Feb-18 Mar-18 Feb-19 Mar-19 Jan-18 Aug-18 Dec-18 Jan-19 Oct-18 Source: Company information Note: A bed in this context is
Slide 18: Summary and outlook
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Slide 19: Summary and Outlook
Summary and Outlook • The Group delivered a result in H1 in line with the Board’s expectations • Construction has commenced on our new brick facility at Desford following the confirmation of full planning consent. Once completed, the £95m investment will result in the largest and most efficient bric
Slide 20: Q&A
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Slide 21: Appendices
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Slide 22: Investment case
Investment case UK focus Resilience Strategy Leadership Iconic Flexible production Growth Efficiency Fletton brick capacity 1. 2. 3. 4. 5. 6. 100% in UK Sole manufacturer Operational agility Well-equipped to An efficient deliver long-term manufacturing Consolidated growth through base is at the comp
Slide 23: Summary Profit & Loss
Summary Profit & Loss £m HY 2019 HY 2018 FY 2018 Revenue 193.6 180.0 367.5 EBITDA - Bricks and Blocks 41.6 38.5 75.8 - Bespoke Products 0.9 0.7 3.0 - Total 42.5 39.2 78.8 EBITDA margin (%) 22.0% 21.8% 21.4% Depreciation and amortisation (8.6) (5.7) (11.7) Operating profit 33.9 33.5 67.1 Finance expe
Slide 24: Trade working capital
Trade working capital Dec-18 Jun-19 Trade working capital breakdown £(1)m £12m £m 31 Dec 2018 30 Jun 2019 Inventory days 60 61 90 Debtor days 41 37 42 37 Trade working capital (£m) 40 55 38 (10) (37) (43) (60) (39) (42) Inventory Trade and other receivables Accrued & other payables (110) Trade payab
Slide 25: Summary Balance sheet
Summary Balance sheet £m Jun 2019 Jun 2018 Dec 2018 Intangible assets 17.9 16.7 17.3 Property, plant and equipment 186.8 164.4 170.5 Total non-current assets 204.7 181.1 187.8 Current assets Inventories 42.1 36.7 37.4 Trade and other receivables 55.1 56.9 37.9 Cash and cash equivalents 32.2 27.9 26.
Slide 26: Summary Cash Flow
Summary Cash Flow £m 2019 HY 2018 HY 2018 FY EBITDA 42.5 39.2 78.8 Change in working capital (15.8) (18.0) 2.7 Other movements 0.9 2.8 (1.7) Operating cash flow 27.6 24.0 79.8 Tax and Interest (4.2) (6.9) (14.0) Capital expenditure - maintenance (5.3) (3.5) (8.5) - strategic (3.3) (2.5) (10.1) Divid