Ibstock Plc · LSE:IBST
Ibstock — H1 2016 Earnings Presentation
25 slides from Ibstock's earnings presentation, Aug 5, 2016
Slide 1: Interim Results Presentation - Six Months to 30 June 2016
IBSTOCK iit INTERIM RESULTS PRESENTATION - SIX MONTHS TO 30 JUNE 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: Agenda
Agenda Wayne Sheppard Kevin Sims CEO (21 years at Ibstock) CFO (30 years at Ibstock) Overview Financial Operating Outlook Q&A Wayne Sheppard review review Wayne Sheppard Kevin Sims Wayne Sheppard 3
Slide 4: Overview
Overview Financial Highlights – six months to 30 June 2016 Results for the first half in line with AGM Trading Statement Group revenue up 3% to £210m Adjusted EBITDA up 7% to £56m Net debt to EBITDA remains at 1.4x after £21m of capex on major projects ROCE remains at 20% Interim dividen
Slide 5: Agenda
Agenda Overview Financial Operating Outlook Q&A Wayne Sheppard review review Wayne Sheppard Kevin Sims Wayne Sheppard 5
Slide 6: Financial highlights - six months to June 2016
Financial highlights - six months to 30 June 2016 Revenue £210m 3% Adjusted EBITDA 3 £56m 7% EBITDA Margin % 26% 1%pt ROCE 20% Cash conversion 56% 10%pt Net Debt to EBITDA 1.4 Interim dividend 2.4p Note (1) Cash conversion is the ratio of adjusted EBITDA after movement in working capital less mainte
Slide 7: P&L & EPS reconciliations – six months to June 2016
P&L & EPS reconciliations – six months to 30 June 2016 Statutory profit to Adjusted EBITDA (£m) Adjusted EBITDA (£m) to Adjusted EPS Statutory profit 1H 2016 30 Adjusted EBITDA 1H 2016 56 Interest - cash expense 3 Depreciation (10) - discounting expense 2 Amortisation (3) Taxation 8 Fair value depre
Slide 8: Revenue & EBITDA bridges
Revenue & EBITDA bridges Revenue bridge (in £m) EBITDA bridge (in £m) +£6.7m (3%) +£3.8m (7%) 55.6 210.0 2.6 0.4 51.8 203.4 4.8 3.0 3.8 0.8 (5.0) 1H 2015 FX 1H 2016 UK Clay US UK Concrete 1H 2015 FX 1H 2016 US UK Note (1) US $ exchange rates used in 1H 2016 is 1.42 (1H 2015: 1.58) 8
Slide 9: Highly cash generative
Highly cash generative 6 months ended 30 June 1H 1H Change % change (£m) 2016 2015 TWC to sales improved on 2015 Adj. EBITDA 56 52 +4 7% Full Year Guidance 2016 Share-based payments 1 - 1 • Cash outflow major projects c£42m Capex (excl major projects) (8) (3) (5) • Other capital spend c£13m • De
Slide 10: Financial management
Financial management Dividend policy Debt Facilities Amount (£m) Margin Range p.a. The Group remains highly cash generative Original term facility 200 1.25% - 2.50%. Dividend policy reflects the long-term earnings and Revolving facility 40 1.25% - 2.50%. cash flow potential of the Group Total fa
Slide 11: Agenda
Agenda Overview Financial Operating Outlook Q&A Wayne Sheppard review review Wayne Sheppard Kevin Sims Wayne Sheppard 11
Slide 12: Operating segment review—UK
Operating segment review—UK 1H 2016 1H 2015 % Growth Revenue £172m £172m - Adjusted EBITDA £51m £50m¹ 2% Adjusted EBITDA margin 29.8% 29.3% Clay brick performance • Continued growth in sales to housebuilders • Mid single digit price increases by channel • Volumes slightly lower y-o-y (distributor/
Slide 13: Major Project: New brick factory, Ibstock Leicestershire
Major Project New brick factory, Ibstock Leicestershire • £54m Cap-Ex project • Addition of 100m soft mud brick capacity (13% of current total Ibstock brick capacity, 5% UK capacity) • Low cost, high volume factory • Most modern and efficient brick plant in UK • Process flexibility to manufacture ex
Slide 14: Major Project: New roof tile line – Leighton Buzzard
Major Project New roof tile line – Leighton Buzzard • £8m Cap-Ex project • Manufactures large format ‘metric tiles’ • New products reduce build costs for users • Aesthetically superior to competing products • Forticrete becomes full range supplier to new housing sector • Commercial launch 1H 2017 14
Slide 15: Operating segment review—US
Operating segment review—US 1H 2016 1H 2015 % Growth ($) Revenue $54m (£38m) $49m (£31m) 10% Adjusted EBITDA¹ $6m (£4m) $2m (£1m) 213% Adjusted EBITDA margin 11.6% 4.5% Growth in EBITDA: • Weather conditions unusually mild in first quarter enabling strong start • Continuing benefits of operating l
Slide 16: Agenda
Agenda Overview Financial Operating Outlook Q&A Wayne Sheppard review review Wayne Sheppard Kevin Sims Wayne Sheppard 16
Slide 17: Fundamentals remain in place
Fundamentals remain in place Housing dynamics Total housing completions and formations in GB (000s) 249 246 229 218 • Continued shortage of new housing from long 206 term underbuilding 181 163 130 135 136 130 140 • Mortgage availability remains good • Supportive Government policies (particularly Hel
Slide 18: Current Trading
Current Trading UK Clay • Anecdotally house builder customers indicating no significant changes to sales levels • July LFL despatch volumes in line with 2015 • RMI brick sales progressively improving as distributor/merchant stocks are unwound • Media focus on the prime London residential market no
Slide 19: UK Visibility and Contingency Planning
UK Visibility and Contingency Planning No real visibility on housing volumes expected until Autumn selling season Experienced management team with proven track record over many business cycles Contingency plans have been developed for all businesses Flexing capacity to manage the cost base a
Slide 20: Summary and Outlook
Summary and Outlook Too early for full year visibility post Brexit Long term fundamentals supporting UK housing remain unchanged UK Clay - no significant change to activity levels currently visible UK Concrete expected to retain first half gains US Clay expected to show further progress in
Slide 21: Agenda
Agenda Overview Financial Operating Outlook Q&A Wayne Sheppard review review Wayne Sheppard Kevin Sims Wayne Sheppard 21
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Slide 23: Balance Sheet as at 30 June 2016
Balance Sheet as at 30 June 2016 Balance Sheet 30 June 31 Dec 2016 2015 £m £m Assets PP&E 371 347 Intangible 125 128 Non-current assets 496 475 Inventories 94 83 Trade receivables 64 59 Other 4 1 Current assets 162 143 Total assets 658 618 Payables (84) (79) Other liabilities excl debt (108) (86) Ne
Slide 24: Presentation of Results
Presentation of Results The Group’s statutory results for the six months ended 30 June 2015 reflect the acquisition of the trading businesses from CRH plc in February 2015 and the resulting fair value adjustments As a result, comparative statutory results only include four months trading perform
Slide 25: Reconciliation of 2015 statutory to adjusted results
Reconciliation of 2015 statutory to adjusted results A reconciliation of the Group’s statutory results for the six months ended 30 June 2015 to those presented as adjusted results is set out below: Adjusted Revenue EBITDA Statutory reported result for the six months to June 2015 (£m) 148.9 47.1 Op