Breedon Group Plc · LSE:BREE
Breedon — H1 2018 Earnings Presentation
23 slides from Breedon's earnings presentation, Sep 5, 2018
Slide 1: Breedon Group 2018 Half-Year Results
BREEDON GROUP 2018 Half-Year Results 5 September 2018
Slide 2: H1 2018: Results
H1 2018: RESULTS Introduction Peter Tom CBE Executive Chairman Financial review Rob Wood Group Finance Director Group & operational review Pat Ward Group Chief Executive Q&A BREEDON GROUP: H1 2018 results 2
Slide 3: Peter Tom CBE, Executive Chairman
PETER TOM CBE Executive Chairman BREEDON GROUP: H1 2018 results 3
Slide 4: H1 2018: Highlights
H1 2018: HIGHLIGHTS • Resilient performance in challenging market • Continued strong cash generation and organic investment • Strategic acquisition of Lagan Group • Further bolt-on acquisitions, strengthening regional presence BREEDON GROUP: H1 2018 results 4
Slide 5: Rob Wood, Group Finance Director
ROB WOOD Group Finance Director BREEDON GROUP: H1 2018 results 5
Slide 6: H1 2018: Reporting Structure
H1 2018: REPORTING STRUCTURE BREEDON GROUP PLC BREEDON NORTHERN BREEDON SOUTHERN BREEDON CEMENT LAGAN GROUP BREEDON GROUP: H1 2018 results 6
Slide 7: H1 2018: Financial Highlights
H1 2018: FINANCIAL HIGHLIGHTS Revenue Underlying EBIT* Underlying EBIT margin* £378.4m £42.0m 11.1% H1 2017: £326.3m +16% H1 2017: £35.8m +17% H1 2017: 11.0% Underlying profit before tax* Underlying basic EPS* Net debt £37.4m 1.96p £383.6m H1 2017: £32.5m +15% H1 2017: 1.84p +7% At Dec 2017: £109.8m
Slide 8: H1 2018: Income Statement
H1 2018: INCOME STATEMENT H1 2017 H1 2018 Variance £ million £ million % Revenue 326.3 378.4 +16% Underlying EBITDA 53.9 66.0 +22% Depletion & depreciation (19.3) (24.9) Underlying operating profit 34.6 41.1 +19% Share of associate and joint ventures 1.2 0.9 Underlying EBIT 35.8 42.0 +17% Interest (
Slide 9: H1 2018 Divisional Performance
H1 2018 DIVISIONAL PERFORMANCE H1 2017 revenue £ million H1 2018 revenue £ million 54.6 (34.4) 378.4 68.9 71.5 (33.7) 326.3 186.0 190.6 97.9 103.3 Breedon Breedon Breedon Elimination Group Breedon Breedon Breedon Lagan Elimination Group Northern Southern Cement Northern Southern Cement Group H1 2017
Slide 10: H1 2018 Key Product Volumes
H1 2018 KEY PRODUCT VOLUMES Aggregates Asphalt Concrete million tonnes million tonnes million m3 -7% 1.7 +17% +28% 1.6 9.3 1.2 -13% 7.9 +3% 0.9 +5% +15% +1% -8% 2017 2018 2017 2018 2017 2018 Breedon Northern Breedon Southern Lagan Group NOTE: In accordance with the Cement Market Data Order 2016, cem
Slide 11: H1 2018 Net Debt Movement
H1 2018 NET DEBT MOVEMENT Inflow £ million Outflow (109.8) (383.6) 0 Opening EBITDA Non- Working Interest Tax Capital Disposals Acquisitions Equity Foreign Closing debt underlying/ capital expenditure and issued exchange debt other investment impact BREEDON GROUP: H1 2018 results 11
Slide 12: Pat Ward, Group Chief Executive
PAT WARD Group Chief Executive BREEDON GROUP: H1 2018 results 12
Slide 13: H1 2018: Market Background
H1 2018: MARKET BACKGROUND • UK economy grew by 0.6%* • GB construction output Q1 -0.8%, Q2 +0.9%* • Reflected in GB sales volumes** • aggregates -1.3% • asphalt -1.7% • concrete -6.0% • Reflects significant regional variations across GB • Continued growth in RoI, solid activity levels in NI • Ongoi
Slide 14: H1 2018: Resilient Performance
H1 2018: RESILIENT PERFORMANCE • Strong contribution from acquisitions, offsetting weaker GB outturn • Continued strong cash generation and organic investment • Underlying EBIT margin maintained • Lagan Group acquired and integration progressing well • Further bolt-on acquisitions completed • Furthe
Slide 15: H1 2018: Contrasting Pictures
H1 2018: CONTRASTING PICTURES Breedon Northern & Southern • Creditable performances in subdued markets • Supplies to final phase of AWPR, Woodsmith mine, Peterhead Harbour, East Midlands Gateway • Replacement asphalt plant commissioned at Furnace, installation of asphalt plant commenced at Dowlow Qu
Slide 16: H1 2018: New Management Structure
H1 2018: NEW MANAGEMENT STRUCTURE Northern – Managing Director, Alan Mackenzie Construction materials, contract surfacing and highway maintenance in Scotland and parts of northern England Southern – Managing Director, Mike Pearce Construction materials, contract surfacing and highway maintenance in
Slide 17: 2018: Group Outlook
2018: GROUP OUTLOOK Market - GB • Will remain challenging for remainder of 2018, compounded by Brexit uncertainty • Forecast 0.6% fall in construction output • Accelerated growth in infrastructure spending in 2019 • Continuing growth in housebuilding over medium term • Growth in volumes of all key c
Slide 18: Q&A
Q&A BREEDON GROUP: H1 2018 results 18
Slide 19: Appendices: MPA volumes
Appendices: MPA volumes to 30 June 2018 BREEDON GROUP: H1 2018 results 19
Slide 20: MPA Aggregates Volumes – MAT
MPA AGGREGATES VOLUMES – MAT 170 150 million tonnes 130 110 90 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 BREEDON GROUP: H1 2018 results 20
Slide 21: MPA Asphalt Volumes – MAT
MPA ASPHALT VOLUMES – MAT 27 25 million tonnes 23 21 19 17 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 BREEDON GROUP: H1 2018 results 21
Slide 22: MPA Ready-Mixed Concrete Volumes – MAT
MPA READY-MIXED CONCRETE VOLUMES – MAT 24 22 million cubic metres 20 18 16 14 12 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 BREEDON GROUP: H1 2018 results 22
Slide 23: UK Locations
UK LOCATIONS BREEDON GROUP: H1 2018 results 23