Breedon Group PLC · LSE:BREE
Breedon — Breedon Aggregates — FY2013 Earnings Presentation
33 slides from Breedon's earnings presentation, Mar 4, 2014
Slide 1: Full-year 2013 Aggregates results
Breedon Aggregates Breedon Full-year 2013 Aggregates results Preliminary results 4 March 2014 5 March 2013 Delivering ready-mixed concrete to the Beauly to Denny Power Line 1
Slide 2: Overview
Overview Peter Tom CBE Chairman 2
Slide 3: 2013 presentation
2013 presentation Results overview Peter Tom Financial review Ian Peters Operational review, summary, outlook Simon Vivian Q&A 3
Slide 4: Delivering value
Delivering value Further value-adding growth delivered in 2013 Improvement in EBITDA margin Two transformational acquisitions completed Balance sheet further strengthened Business positioned for both organic and acquisitive growth 4
Slide 5: Breedon's 'Golden Rules'
Breedon’s ‘Golden Rules’ 1. Stay local Easy to do business with at every site 2. Stay nimble Keep ahead of our markets & develop new ones 3. Devolve responsibility and decision-making to regional teams 4. Squeeze our assets Maximise return from every tonne of rock 5. Eliminate underperformance If a
Slide 6: 2013 Highlights
2013 Highlights Sales revenue EBITDA PBT +29.5% to £224.5m +40.1% to £28.3m +121.4% to £12.4m EBITDA margin Acquisitions Net debt +1 pts to 12.6% EBITDA £5.3m -26.5% to £54.4m PBT, EBITDA and EBITDA margin all exclude non-underlying items 6
Slide 7: Financial Review
Financial Review Ian Peters Group Finance Director 7
Slide 8: Detailed profit & loss 2013
Detailed profit & loss 2013 Variance 2011 2012 2013 v 2012 Variance £’000 £’000 £’000 £’000 v 2012 % Turnover 168,888 173,457 224,546 51,089 +29.5% EBITDA 17,063 20,183 28,267 8,084 +40.1% Depreciation & Amortisation (11,375) (11,343) (13,646) (2,303) (20.3)% Underlying Operating Profit 5,688 8,840
Slide 9: Analysis by division 2013
Analysis by division 2013 Variance 2011 2012 2013 v 2012 Variance £’000 £’000 £’000 £’000 v 2012 % Turnover England 86,158 91,278 114,886 23,608 +25.9% Scotland 82,730 82,179 109,660 27,481 +33.4% Total 168,888 173,457 224,546 51,089 +29.5% EBITDA England 9,090 11,562 15,760 4,198 +36.3% Scotland 10
Slide 10: Sales volumes 2013
Sales volumes 2013 2010 2011 2012 2013 ’000 ’000 ’000 ’000 Variance tonnes tonnes tonnes tonnes v 2012 % England base 1,947 2,222 2,319 2,959 +27.6% England acquisition - - - 652 n/a Scotland base 1,668 1,879 1,972 1,830 (7.2)% Scotland acquisition - - - 683 n/a Aggregates 3,615 4,101 4,291 6,124 +4
Slide 11: Closing balance sheet at Dec 2013
Closing balance sheet at Dec 2013 2011 Dec 2012 Dec 2013 Dec £’000 £’000 £’000 Tangible Fixed Assets 151,984 144,895 183,542 Investments 792 887 1,332 Goodwill (Breedon, NRMX, Marshalls, Scotland AI) 1,449 2,143 14,652 Intangible Assets 199 152 424 Total Non-Current Assets 154,424 148,077 199,950 Cu
Slide 12: Cashflow 2013
Cashflow 2013 2012 2013 2012 2013 £’000 £’000 £’000 £’000 Profit before Interest and Tax 10,068 14,618 Net Interest Paid (3,870) (3,372) Income from associate (1,033) (1,383) Taxation - - Dividends Received / (Paid) 938 888 (Profit) on disposals (1,084) (1,647) Investment in Fixed Assets (7,323) (12
Slide 13: Analysis of net debt at Dec 2013
Analysis of net debt at Dec 2013 Dec 2011 Dec 2012 Jun 2013 Dec 2013 £’000 £’000 £’000 £’000 Term Loans 72,607 62,822 62,733 59,833 Bank overdrafts 3,115 - - - Cash (921) (5,048) (4,817) (17,450) Bank Debt / (Cash) 74,801 57,774 57,916 42,383 Finance Leases (over 1 year) 16,262 11,468 9,618 7,701 Fi
Slide 14: Operational Review
Operational Review Simon Vivian Group Chief Executive 14
Slide 15: 2012 Market background
2012 Market background Economic recovery postponed – again Demand at lowest levels in living memory: consumption of primary aggregates down 50pc from 1989 peak Poor weather: record rainfall in Q2 No uplift in infrastructure spending Extended holidays during Jubilee and Olympics Further sharp UK-wide
Slide 16: 2013 Market background: What a difference a year makes
2013 Market background What a difference a year makes Economic recovery gathered pace Steady pickup in construction activity after slow Q1 2012 the low point in the cycle Volumes 4-11% ahead in main product categories Increased investment in industry capacity & fleet 2014 Q1 price increases expected
Slide 17: Breedon gathering momentum
Breedon gathering momentum EBITDA margin 12.6% : improved profitability in both divisions Sales volume growth ahead of MPA (excl. acquisitions) Previous acquisitions ahead of expectations Continuing H&S improvements: accidents cut by further 40% Capital expenditure increased to £13m Refurbishments/u
Slide 18: Breedon Aggregates England
Breedon Aggregates England The new entrance at Leaton quarry 18
Slide 19: England – Summary financials
England – Summary financials 2012 2013 Variance % Volumes £’000 £’000 +55.7% Aggregates Turnover 91,278 114,886 +25.9% +14.8% Asphalt +24.4% Concrete EBITDA 11,562 15,760 +36.3% Operating Profit 6,021 8,969 +49.0% EBITDA Margin 12.7% 13.7% +1.0% Operating margin 6.6% 7.8% +1.2% EBITDA excl. Marshall
Slide 20: England: achievements
England: achievements No Lost Time Injuries (since August 2012) 172kt of sub-base/capping & 11km3 RMX supplied to A453 18kt of asphalt supplied to Jaguar Land Rover at i54 Cloud Hill aggregates production boosted by 10% following upgrade Further 10mt of reserves released at Cloud Hill: now totalling
Slide 21: England: outlook & priorities for 2014
England: outlook & priorities for 2014 Continue focus on health & safety to drive zero accident tolerance Maximise value of Marshalls acquisition remove lignite at Astley Moss planning at Clearwell & Saredon washing of scalpings at Clearwell Integrate and maximise use of West Deeping, Clearwell conc
Slide 22: Innovative Breedon Spectrum asphalt laid at Halbeath Park
Innovative Breedon Spectrum asphalt laid at Halbeath Park & Choose near Dunfermline 22
Slide 23: Scotland – Summary financials
Scotland – Summary financials 2012 2013 Variance Volumes £’000 £’000 % +27.4% Aggregates Turnover 82,179 109,660 +33.4% +14.5% Asphalt +29.0% Concrete EBITDA 11,345 15,868 +39.9% Operating Profit 5,548 9,013 +62.5% EBITDA Margin 13.8% 14.5% +0.7% Operating margin 6.8% 8.2% +1.4% AI acquisition compl
Slide 24: Outcome of OFT/CC review
Outcome of OFT/CC review Provisional findings in aggregates & concrete largely as expected Likely remedies: Behavioural remedy: pricing formula for asphalt in Inverness Sale of concrete plant at Peterhead Sale of asphalt plant in Aberdeen No significant overall impact on value of acquisition to Bree
Slide 25: Scotland: achievements
Scotland: achievements Improved cost control via targeted capital investment Improved contracting result despite no major contracts Haulage fleet expanded & enhanced to self-deliver, with improved fuel efficiency Planning extensions secured at Orrock (2.8mt) & Shierglas (1.1mt) Craigenlow, Orrock &
Slide 26: Scotland: outlook & priorities for 2014
Scotland: outlook & priorities for 2014 Fully integrate AI business and complete divestments speedily Deliver cost reductions & meet production targets on mobile crushers Currently pricing large volumes for AWPR – planned 2015 start Operational cost savings & carbon reduction from new fine aggregate
Slide 27: Outlook
BREEDO aN Outlook
Slide 28: Outlook
Outlook Improving business confidence: forecast GDP +2.7% in 2014; CPI, RPI & unemployment continuing to fall Continuing strong housing recovery Strong manufacturing investment in Central England National Infrastructure Plan set to increase investment from £309bn to £375bn+ (Highways Agency to becom
Slide 29: Appendices
Appendices: MPA volumes Breedon Aggregates relative volumes 29
Slide 30: MPA crushed rock volumes – moving annual trend
MPA crushed rock volumes – moving annual trend 130.0 120.0 110.0 million tonnes 100.0 90.0 80.0 70.0 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Crushed Rock MAT actual
Slide 31: MPA sand & gravel volumes – moving annual trend
MPA sand & gravel volumes – moving annual trend 90.0 85.0 80.0 75.0 million tonnes 70.0 65.0 60.0 55.0 50.0 45.0 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Sand & Gravel MAT actual
Slide 32: MPA asphalt volumes – moving annual trend
MPA asphalt volumes – moving annual trend 27.0 25.0 million tonnes 23.0 21.0 19.0 17.0 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Asphalt MAT actual
Slide 33: MPA readymix volumes – moving annual trend
MPA readymix volumes – moving annual trend 24.0 22.0 20.0 million cubic metres 18.0 16.0 14.0 12.0 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Readymix concrete MAT actual