Slide 1: Castings PLC Final results
Castings PLC Final results 31 March 2022 15 June 2022 1
Slide 2: Group overview
Group overview Brownhills Dronfield Brownhills Foundry Foundry Machinist Founded 1835 Acquired in 1991 Acquired in 1996 Relocated in 1957 40,000 tonnes/year Over 100 CNC m/c 30,000 tonnes/year 441 employees 350 employees 390 employees www.castings.plc.uk 2
Slide 3: Timeline
Timeline Foundry Brownhills Robotic production site CNC Highly automation commences production Walsall Speedwell project invested in Walsall begins site closed acquired commences iron foundry 1835 1907 1957 1960 1977 1991 1996 2009 2016 2022 and Castings Floated on William Major new machine Limited
Slide 4: Headlines
Headlines Q1 Q2 o Sales volumes in line with pre-COVID years o Supply chain issues - OEM facility closures o Machining business profitable o Scrap prices continue to rise o Rising scrap prices o Labour market difficulties Strong heavy truck demand o Improving schedule conversion by the end o Unpredi
Slide 5: Final results overview
Final results overview £m (unless stated) 2018 2019 2020 2021 2022 Revenue Gross 170.8 192.4 175.8 141.4 185.1 Less: inter-group revenue (37.5) (42.2) (37.1) (26.7) (36.5) Reported revenue 133.3 150.2 138.7 114.7 148.6 Profit before tax (excluding exceptional items) 11.8 15.3 12.7 4.3 12.0 Net margi
Slide 6: Current revenue profile
Current revenue profile 33% engine 37% chassis 2011 2016 2018 2019 2020 2022 Comment Customer sector Heavy truck 59% 64% 70% 70% 69% 70% Core market (trucks >= 16t) – 4 key OEM groups Automotive 15% 23% 11% 12% 12% 12% Non-core market Other 26% 13% 19% 18% 19% 18% Includes agriculture, rail and wind
Slide 7: Heavy truck registrations
Heavy truck registrations European heavy truck registrations (calendar year) 350,000 300,000 250,000 Units registered 200,000 Volvo estimate Volvo estimate Volvo estimate 150,000 100,000 50,000 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Source: Data from S
Slide 8: Foundry sales weight
Foundry sales weight 2016 2017 2018 2019 2020 2021 2022 Foundry sales weight (tonnes) 52,000 47,200 49,200 52,200 47,700 40,100 49,800 Castings - Group quarterly sales weight (tonnes) Brexit stock build 16,000 15,000 14,000 13,000 12,000 11,000 10,000 9,000 8,000 7,000 6,000 5,000 4,000 Q1 Q2 Q3 Q4
Slide 9: Foundry segmental results
Foundry segmental results £m (unless stated) 2017 2018 2019 2020 2021 2022 Foundry sales weight (tonnes) 47,200 49,200 52,200 47,700 40,100 49,800 Average selling price (£/tonne) £2,371 £2,581 £2,741 £2,801 £2,793 £2,924 Revenue Gross 128.7 146.0 164.6 151.3 123.1 162.6 Less: inter-group revenue (16
Slide 10: Machining segmental results
Machining segmental results £m (unless stated) 2017 2018 2019 2020 2021 2022 Revenue Gross 23.3 24.8 27.8 24.5 18.3 22.5 Less: inter-group revenue (16.3) (18.6) (20.6) (19.5) (15.6) (19.5) External revenue 7.0 6.2 7.2 5.0 2.7 3.0 Segmental result 1.5 (4.0) (1.3) (0.7) (2.3) (0.9) Segmental margin on
Slide 11: Summary cash flow statement
Summary cash flow statement £m 2017 2018 2019 2020 2021 2022 PBT net of tax payments 12.5 8.9 12.6 8.3 4.3 9.5 Depreciation 7.3 8.5 8.3 8.9 8.8 8.6 Working capital movement (1.5) (3.0) (5.2) 5.9 (0.7) (7.7) Capex (net) (14.2) (11.2) (4.9) (8.2) (5.2) (4.4) Sale of property - - - - 1.7 - Free cash fl
Slide 12: Dividend growth record
Dividend growth record Ordinary dividend declared per share 16.00 10% 14.00 9% 8% 12.00 7% Pence per share 10.00 6% 8.00 5% 6.00 4% 3% 4.00 2% 2.00 1% 0.00 0% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Interim Final Dividend increase
Slide 13: Outlook – current year
Outlook – current year • Volume increases • New business wins • Pent-up demand • Greater content on new platforms • OEM supply chain issues easing • US opportunities • Other sector successes • Improved production efficiencies • Wind power • Greater schedule consistency • Agricultural • Recruitment c
Slide 14: Outlook – short to medium term
Outlook – short to medium term • Heavy truck OEMs developed/ing new, more efficient ICE • Scania new CBE engine launching and ramping up plus MAN volumes from 2024 • Typical life of 10+ years • Increasing volumes from other sector wins • US market • Alternative materials, e.g. aluminium • Greater va
Slide 15: Outlook – longer term
Outlook – longer term • Electrification of trucks (BEV, FCEV, biofuels) over next two decades • What our customers are saying: • Target is for electric solutions to make up 10 percent of total vehicles sales volume by 2025 and 50 percent by 2030 • Roadmap suggesting by 2025: 40T with > 4.5 hours dri
Slide 16: Sustainability
Sustainability • Recycler of scrap metal, locally sourced • Electric melting only, unlike a number of competitors • Reducing intensity – 1kWh per £1 of revenue (down from 1.02kWh) • Electricity (scope 2) - 89% of our total energy kWh in FY22 • All from renewable sources1 • Nil emissions using market
Slide 17: In summary
In summary Greater content on new OEM platforms Investment Investment Other sector wins No debt & Opportunities pension buy-in Strong Post COVID-19 opportunities balance & next generation trucks sheet Bring value add in house – reduce supply chain miles Progressive Agility dividend policy US market
Slide 18: Additional information
Additional information www.castings.plc.uk 18
Slide 19: Strategy
Strategy Deliver long term sustainable revenues and higher average margins through the following strategic priorities: Reinvestment for innovation and efficiency Increase OEM market share • Innovative design processes • Collaborative, dedicated customer teams • Reinvestment in automation • Increase
Slide 20: Business Model
Business Model Design collaboration & our people Value for stakeholders • Experienced teams • Technical knowledge Customers • Close customer relationships • Flexibility, cost-effective, quality • Latest design simulation • Capability for diverse range • Long term security Foundry production • High v
Slide 21: The casting process
The casting process https://www.youtube.com/watch?v=vottPvv0Th0 www.castings.plc.uk 21
Slide 22: Our customers
Our customers Other 18% Commercial vehicle 70% Auto 12% www.castings.plc.uk 22
Slide 23: Commercial vehicle customer revenue mix
Commercial vehicle customer revenue mix 2011 2016 2018 2019 2020 2021 2022 Customer A 23% 25% 30% 29% 28% 28% 23% B 11% 13% 13% 13% 13% 14% 15% C 1% 4% 8% 10% 9% 10% 12% D 10% 9% 10% 10% 9% 7% 7% Total 45% 51% 61% 62% 59% 59% 57% 70 % of external revenue 60 50 D 40 C 30 B 20 10 A 0 2011 2016 2018 20
Slide 24: Revenue and PBIT
Revenue and PBIT 160 20% 18% 140 16% 120 14% 100 12% 80 10% 8% 60 6% 40 4% 20 2% 0 0% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Revenue PBIT (excluding exceptionals) PBIT% (RHS)
Slide 25: Strong cash generation
Strong cash generation 45 45 45 40 40 40 Wm Lee CNC 35 35 35 30 30 30 25 25 25 £’m £’m 20 20 20 15 15 15 10 10 10 55 5 00 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 1990 1991 1992 1993 1
Slide 26: Facilities and recent investments
Facilities and recent investments • Sites: • Castings (Brownhills) – 14 acres • William Lee (Dronfield) – 14 acres • CNC Speedwell – 4 acres • Production facilities: • Castings (Brownhills) – 32,000 m2 (of which 5,000 m2 is warehousing) • 2 x Disamatic vertical moulding lines (up to 15kg part weight
Slide 27: Facilities and recent investments
Facilities and recent investments • Robotic handling and processing • Investment programme commenced 2016 • 55 robotic cells across the group • £1m investment in FY22 and £10m to date • 4 currently on order and roll-out will continue • Heat treatment plant for alloyed parts • Commissioned in FY21 •