Slide 1: Preliminary Results Presentation | Year Ended 31 December 2016
PRELIMINARY RESULTS PRESENTATION | YEAR ENDED 31 DECEMBER 2016
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: Presenting Today
PRESENTING TODAY Wayne Sheppard Kevin Sims CEO CFO Over 20 years’ experience Managed though Deep industry knowledge each at Ibstock multiple cycles 3
Slide 4: Agenda
AGENDA Highlights & Overview Financial review Operating review Outlook Q&A Wayne Sheppard Kevin Sims Wayne Sheppard Wayne Sheppard 4
Slide 5: Highlights 2016
HIGHLIGHTS 2016 Robust performance whilst investing for future growth Improved Invested for growth Derisked the balance Reduced financing profitability despite at Leicester and sheet by closing UK costs from 2017 by geopolitical events and Leighton Buzzard with Defined Benefit pension refinancing de
Slide 6: Overview 2016
OVERVIEW 2016 Financial Overview – year ended 31 December 2016 Group revenue Adjusted Net debt to ROCE at 19% after Continued strong Final dividend of up 5% to EBITDA up 4% EBITDA improved £44m of capex on cash generation of 5.3p per share £435m to £112m to 1.2x after major projects – with 88% EBITD
Slide 7: Agenda
AGENDA Highlights & Overview Financial review Operating review Outlook Q&A Wayne Sheppard Kevin Sims Wayne Sheppard Wayne Sheppard 7
Slide 8: Financial Highlights Year Ended 31 December 2016
FINANCIAL HIGHLIGHTS YEAR ENDED 31 DECEMBER 2016 Revenue £435m ▲5% Adjusted EBITDA1 £112m ▲4% EBITDA margin % 26% ◀ ROCE2 19% 1%pt Cash conversion3 88% ▲2%pt Net Debt to EBITDA 1.2 0.2x Final dividend 5.3 ▲20% Note (1) Adjusted EBITDA is earnings before interest, taxation, depreciation and amortisat
Slide 9: P&L Reconciliations Year Ended 31 December 2016
P&L RECONCILIATIONS YEAR ENDED 31 DECEMBER 2016 Statutory profit to Adjusted EBITDA (£m) Adjusted EBITDA (£m) to Adjusted EPS Statutory profit 2016 90 Adjusted EBITDA 2016 112 Exceptional items1 (28) Depreciation (20) Interest 3 Amortisation (6) Taxation 21 Fair value depreciation & amortisation 9 D
Slide 10: Revenue & EBITDA Bridges
REVENUE & EBITDA BRIDGES Revenue bridge (in £m) EBITDA bridge (in £m) +£21.9m (5%) +£4.6m (4%) 1.5 (3.4) 10.8 434.7 3.2 111.6 3.2 3.3 7.6 412.8 0.3 107.0 2015 UK Clay 2016 FX Concrete US UK PLC 2015 2016 FX US UK US $ average exchange rate used in 2016 is 1.35 (2015: 1.53) Incremental PLC costs rela
Slide 11: Highly Cash Generative
HIGHLY CASH GENERATIVE Year ended 31 December (£m) 2016 2015 Change % change • Disciplined inventory control reflected in working Adj. EBITDA 112 107 +5 4% capital Share-based payments 2 - +2 • Higher than average routine capex spend in 2016 Capex (excl major projects) (15) (9) (6) • Cash tax in 201
Slide 12: Financial Management
FINANCIAL MANAGEMENT New debt Facilities Amount (£m) Margin Range p.a. No debt Comfortably within Refinancing RCF facility blended Term facility 0 n/a repayments and covenants (interest from March interest rate Revolving facility 250 1.00% - 2.25%. includes cover 4.0x and debt 2017 150 bps whilst To
Slide 13: Agenda
AGENDA Highlights & Overview Financial review Operating review Outlook Q&A Wayne Sheppard Kevin Sims Wayne Sheppard Wayne Sheppard 13
Slide 14: Operating Segment Review - UK
OPERATING SEGMENT REVIEW - UK 2016 2015 % Growth Revenue £344m £336m 2% Adjusted EBITDA £103m £99m 4% Adjusted EBITDA margin 29.8% 29.4% Clay brick performance Strong Energy costs performance reduced in Volumes slightly Price increases in from concrete Overall UK Continued 2016 although higher y-o-y
Slide 15: Major Project
MAJOR PROJECT July 2016 February 2017 New brick factory, Ibstock Leicestershire Addition of £54m 100m Capex soft mud brick project High volume capacity factory with (13% of current Scheduled to be expansion total Ibstock commissioned potential brick capacity, 2H 2017 5% UK capacity) Process flexibil
Slide 16: Major Project
MAJOR PROJECT New concrete roof tile line – Leighton Buzzard £8m Capex project Manufactures New products New line now large format reduce build commissioned ‘metric tiles’ costs for users with commercial launch 1H 2017 Anticipated Forticrete incremental Aesthetically becomes full 2017 EBITDA superio
Slide 17: Major Project
MAJOR PROJECT New brick kiln – Lodge Lane (Cannock in Staffordshire) £8m Capex improvement Lodge Lane Niche product project factory range with manufactures distinct visual Scheduled to ‘blue bricks’ aesthetics commission Q4 2017 Replacement Maintains kiln reduces Ibstock’s leading costs and position
Slide 18: Operating Segment Review - US
OPERATING SEGMENT REVIEW - US 2016 2015 % Growth ($) Revenue $122m (£91m) $117m (£77m) 4% Adjusted EBITDA $17m (£13m) $12m (£8m) 40% Adjusted EBITDA margin 13.8% 10.4% Growth in EBITDA: Volumes broadly Higher average Good growth in both non- residential and single family Continued margin flat over t
Slide 19: Agenda
AGENDA Highlights & Overview Financial review Operating review Outlook Q&A Wayne Sheppard Kevin Sims Wayne Sheppard Wayne Sheppard 19
Slide 20: Current Trading
CURRENT TRADING UK Clay • Good start to the year • Sales volumes ahead of 2016 across all channels • Prices agreed by channel are in line with expectations UK Concrete and US Clay • UK concrete trading has begun the year in line with expectations • US has got off to a good start aided by mild weathe
Slide 21: Fundamentals Remain in Place - UK Housing Dynamics
FUNDAMENTALS REMAIN IN PLACE UK Housing Dynamics Strong demand for new housing 273 264 206 230 226 265 266 261 Continued shortage of new housing from long term 181 136 130 140 165 167 168 172 underbuilding 130 135 Mortgage availability remains good Government committed to increasing housing supply 2
Slide 22: Fundamentals Remain in Place - US Market Dynamics
FUNDAMENTALS REMAIN IN PLACE US Market Dynamics Steady recovery in housing starts in Glen-Gery’s key markets (Starts 000’s) 386 385 389 396 331 342 • Single family units in key markets are expected to be up c7% in 260 211 217 2017. Low inventory and increased new household formation will drive the n
Slide 23: Summary and Outlook
SUMMARY AND OUTLOOK Expectations for UK Concrete to Long term UK Clay - increase benefit from new another year of fundamentals in activity levels roof tile capacity, progress are supporting UK compared to 2016 a strong housing maintained housing remain in the weeks to date market and resilient (subj
Slide 24: Agenda
AGENDA Highlights & Overview Financial review Operating review Outlook Q&A Wayne Sheppard Kevin Sims Wayne Sheppard Wayne Sheppard 24
Slide 25: Highlights 2016
HIGHLIGHTS 2016 Robust performance whilst investing for future growth Improved Invested for growth Derisked the balance Reduced financing profitability despite at Leicester and sheet by closing UK costs from 2017 by geopolitical events and Leighton Buzzard with Defined Benefit pension refinancing de
Slide 26: Appendix | Additional Financial Information
APPENDIX | ADDITIONAL FINANCIAL INFORMATION
Slide 27: Income Statement Year Ended 31 December
INCOME STATEMENT YEAR ENDED 31 DECEMBER 2016 Income statement Statutory period ended Year ended 31 Dec 2016 Year ended 31 Dec 20151 31 Dec 2015 (10 months £m £m trading) Revenue 435 413 358 Operating profit pre-exceptional 86 81 80 Add exceptional items2 28 75 75 Operating profit 114 156 155 Net fin
Slide 28: Balance Sheet as at 31 December 2016
BALANCE SHEET AS AT 31 DECEMBER 2016 Balance Sheet 31 Dec 2016 31 Dec 2015 £m £m Assets PP&E 392 347 Intangible 123 128 Non-current assets 515 475 Inventories 89 83 Trade receivables 52 59 Other 2 1 Current assets 143 143 Total assets 658 618 Payables (81) (79) Other liabilities excl debt & pension
Slide 29: Appendix | Additional Background Information
APPENDIX | ADDITIONAL BACKGROUND INFORMATION
Slide 30: Key Investment Highlights
KEY INVESTMENT HIGHLIGHTS Market Structural Industry High barriers Strong Multiple Long-standing Outstanding leadership demand structure to entry customer growth management financial positions growth service ethic options performance Three UK brick Vertically Strong household High quality, broad Add
Slide 31: A Leading Provider of Clay and Concrete Building Products
A LEADING PROVIDER OF CLAY AND CONCRETE BUILDING PRODUCTS UK US Revenue (FY 16) % of Group £254m £52m £38m £91m 58% 12% 9% 21% A leading clay UK #1 in fencing Market leader in Market UK #1 in clay bricks brick manufacturer position1 and lintels cast stone and in Northeast and niche tiles Midwest Not
Slide 32: A Leading Provider of Clay and Concrete Building Products
A LEADING PROVIDER OF CLAY AND CONCRETE BUILDING PRODUCTS End market Sales channel A whole house product range & more Group revenue by UK (FY 16)1 end market (FY 16) Infrastructure Others 2% New build 3% Other Merchants housing Factors new build 45% 55% 23% 17% RMI 26% Housebuilders direct 29% Key s
Slide 33: Well Positioned in Structurally Attractive Markets
WELL POSITIONED IN STRUCTURALLY ATTRACTIVE MARKETS UK Brick Market Ibstock Forterra Wienerberger Other 2.6 Imports (billions of bricks) UK brick capacity (billions) 2.1 2.0 3.0% CAGR 0.2 0.1 0.9 0.8 0.9 2007 2016 2018 2016 '98 - '07 Avg. Import volumes Imports have higher Availability is partly a Ex
Slide 34: Well Positioned in Structurally Attractive Markets
WELL POSITIONED IN STRUCTURALLY ATTRACTIVE MARKETS High barriers to entry – Vertically integrated clay business Multiple growth options model with significant local footprint Product range and geographic Customer UK Clay reserves coverage relationships Capacity expansion Expand existing New c100m 13