Slide 1: Polypipe Group plc Interim Results
Polypipe Group plc Interim Results 6 months to 30 June 2014 1
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 Highlights David Hall Presentation Team David Hall Peter Shepherd Chief Executive Officer Chief Financial Officer 3
Slide 4: Operational highlights
Operational highlights Delivering the strategy set out during successful IPO in April Continuing to benefit from UK construction market recovery Strategic focus on structural growth opportunities delivered growth above the market Revenue growth in the UK of 12.9% over H1 2013 Positive impa
Slide 5: Agenda
Agenda Highlights Financial Review David Hall Peter Shepherd 5
Slide 6: Financial highlights
Financial highlights Revenue £168.2m 11% Operating profit* £22.7m 29% Adjusted EPS 7.05p 74% Cashflow from operations £17.8m 42% Net Debt to EBITDA 1.7x Interim dividend 1.5p * Before operating exceptional items 6
Slide 7: 2014 Interim results summary
2014 Interim results summary £m H1 2014 H1 2013 change % change Revenue 168.2 151.8 16.4 10.8% Cost of sales (105.3) (97.0) (8.3) 8.6% Gross profit 62.9 54.8 8.1 14.8% Gross profit margin 37.4% 36.1% Distribution costs (16.1) (14.6) (1.5) 10.3% SG&A (24.1) (22.6) (1.5) 6.6% Operating profit pre exce
Slide 8: Revenue and operating profit bridge
Revenue and operating profit bridge Revenue £m Operating Profit* £m * Before operating exceptional items 30.8% 8
Slide 9: Balance sheet summary
Balance sheet summary £m H1 2014 H1 2013 change Non Current Assets – property, plant & equipment 88.8 83.6 5.2 – intangibles 234.4 234.4 - Net Working Capital 9.4 15.8 (6.4) Outstanding listing costs (3.5) - (3.5) Cash 18.1 41.7 (23.6) Long term debt – senior secured notes - (150.0) 150.0 – bank deb
Slide 10: Net working capital
Net working capital £m H1 2014 H1 2013 Dec 2013 Inventories 41.0 34.8 38.9 Trade & Other receivables 25.8 32.1 21.4 Trade & Other payables (60.9) (51.1) (62.0) Net working Capital as reported 5.9 15.8 (1.7) Outstanding listing and refinancing costs excluded from NWC 3.5 - - Net operating working cap
Slide 11: Cashflow
Cashflow £m H1 2014 H1 2013 EBITDA1 30.0 24.5 Capital expenditure (7.3) (8.3) Working capital (12.1) (11.4) Operating Cashflow 10.6 4.8 Financing costs – net interest paid (7.8) (7.1) – refinancing costs (9.3) - Taxation (2.4) (2.7) Listing costs (8.9) - Other - (0.3) Increase in net debt (17.8) (5.
Slide 12: Taxation
Taxation H1 2014 Reconciliation of tax charge UK tax* rate for 2014 21.5% Benefit of brought forward unutilised non trading tax losses (expires end 2015) (7.0)% Underlying full year tax rate (before exceptional items) 14.5% Impact of limited tax relief on exceptional items (£1.6m on £21m of exceptio
Slide 13: Interim dividend
Interim dividend Interim Dividend: 1.5p per share Timetable August 2014 September 2014 S M T W T F S S M T W T F S Policy: 1 2 1 2 3 4 5 6 Minimum 40% of PAT 3 4 5 6 7 8 9 7 8 9 10 11 12 13 (excluding exceptionals) 10 11 12 13 14 15 16 14 15 16 17 18 19 20 17 18 19 20 21 22 23 21 22 23 24 25 26 27
Slide 14: Agenda
Agenda Highlights Financial Review Business Review David Hall Peter Shepherd David Hall 14
Slide 15: Focused strategy continuing to drive growth
Focused strategy continuing to drive growth Positioning to benefit from the market recovery Continued product development Leverage leading brand position and end-user relationships Continuous investment in processes and efficiency initiatives Selective development in France and the Middle East 15
Slide 16: Improving market backdrop
Improving market backdrop 19% Housing Completions (GB) New Work Output 32% 225000 100,000 Private Public 90,000 200000 175000 80,000 70,000 150000 60,000 125000 50,000 100000 40,000 75000 30,000 50000 20,000 25000 10,000 0 0 2007A 2008A 2009A 2010A 2011A 2012A 2013A 2014E 2015F 2016F 2017P 2018P 200
Slide 17: Strategic growth drivers
Strategic growth drivers Water Management Solutions Carbon Efficient Solutions Strong growth for water management system sales Strong progress in our ventilation segment Ridgistorm XL capacity expansion on stream, new New air ducting components with focus on whole accessible Polystorm attenu
Slide 18: Strategic growth drivers
Strategic growth drivers Substituting Legacy Materials Middle East, Gulf & Export Plastic plumbing growth underpinned by use in Project works picking up in UAE and Kuwait gave strong residential new build sales growth in the Middle East encouraging distributors Infrastructure requirements for
Slide 19: Operating segment review: Residential
Operating segment review Residential H1 2014 H1 2013 % Growth Revenue £86.8m £78.1m up 11.1% Operating profit* £13.2m £11.1m up 18.9% Operating profit margin 15.2% 14.2% Large housebuilder volumes strong, greater geographic spread Some smaller regional developers returning to the market Privat
Slide 20: Operating segment review: Commercial & Infrastructure UK
Operating segment review Commercial & Infrastructure UK H1 2014 H1 2013 % Growth Revenue £56.4m £47.3m up 19.2% Operating profit* £8.6m £5.5m up 56.4% Operating profit margin 15.2% 11.6% Road and rail volumes strong High rise developments continued in London but also other cities Growth in exp
Slide 21: Operating segment review: Commercial & Infrastructure Europe
Operating segment review Commercial & Infrastructure Europe H1 2014 H1 2013 % Growth Revenue £30.6m £31.5m down 2.9% Operating profit* £0.9m £1.0m down 10% Operating profit margin 2.9% 3.2% Performance roughly flat in local currency. Strong exports and modest market share gains offset a declining
Slide 22: Summary & outlook
Summary & outlook Positive start to life as a public company, delivering on our strategy UK market recovery expected to continue, more geographic balance across a broader base Continued focus on structural growth opportunities − Substituting Legacy Materials − Water Management Solutions − Carb
Slide 23: Questions & Answers
2 Polypipe Questions & Answers 23
Slide 24: Polypipe Group plc Appendices
Polypipe Group plc Appendices 24
Slide 25: Polypipe at a glance
Polypipe at a glance Manufacturing Markets Over 20,000 product lines covering residential piping 80% Approximate revenues from sales to systems under-floor heating above-ground drainage customers in the UK (2013) systems below-ground sewerage pipes rainwater 21% Adjusted EBITDA for UK operations in