Slide 1: Eurocell Plc 2021 Full Year Results
EUROCELL PLC 2021 Full Year Results
Slide 2: Agenda and Presenters
Agenda Presenters Business Review Mark Kelly Chief Executive Officer Sustainability Michael Scott Chief Financial Officer Financial Review Strategy and Outlook 1
Slide 3: Overview
Overview Mark Kelly – Chief Executive Officer Revenue Good 2021 performance £343.1m ▲ 23% 2019 Strong organic growth Profit before tax £27.0m Reinstatement of dividends ▲ 19% 2019 Net debt (pre-IFRS 16) Powerful sustainability credentials £11.0m ▲ £1.1m December 2020 Opportunities to deliver improve
Slide 4: Divisional Review: Profiles – 2021 Performance
Divisional Review Profiles – 2021 Performance Profiles Division P&L £m 2019 2021 Change ► Sales up 22% on 2019 3rd party revenue 115.7 140.7 ▲ 22% - Includes 11% from selling price increases / surcharge - Driven by trade fabricators focused on RMI market and Vista doors Inter-segmental revenue(1) 59
Slide 5: Divisional Review: Profiles – Opportunities to Grow Market Share
Divisional Review Profiles – Opportunities to Grow Market Share ► Investment in additional capacity ► Uniquely differentiated on sustainability - Use of recycled material increasingly attractive to housebuilders ► Strong product range and continued product development ► Range extension End-of-life W
Slide 6: Divisional Review: Building Plastics – 2021 Performance
Divisional Review Building Plastics – 2021 Performance Building Plastics Division P&L £m 2019 2021 Change ► Sales up 24% on 2019 - Includes 7% from selling price increases / surcharge 3rd party revenue 163.4 202.4 ▲ 24% - Equivalent to 20% on a like-for-like(2) basis Inter-segmental revenue 1.3 0.5
Slide 7: Divisional Review: Building Plastics – Opportunities to Grow Market Share
Divisional Review Number of Branches Building Plastics – Opportunities to Grow Market Share 250 219 206 208 202 200 190 159 150 141 ► Market – very fragmented, with > 60% served by small independents 100 - No barriers to further consolidation ► Service – intention to be recognised as first for servi
Slide 8: Sustainability: Powerful Credentials
Sustainability Powerful Credentials ► Traditionally strong on sustainability as the leading UK-based recycler of PVC windows - Replacing virgin PVC with recycled material, thereby closing the resource loop and driving a “cradle-to-cradle” solution ► Objective to continually improve all aspects of th
Slide 9: Recycling Operation
Recycling Operation Substantial Carbon and Cost Savings Use of Recycled PVC in Manufacturing 30% 27% 25% ► Leading UK-based recycler of PVC windows 25% 23% - Substantial investment since 2017 to increase recycling output 20% - Keeping pace with demand and improving % of recycled material used in pri
Slide 10: Looking to a Sustainable Future
Looking to a Sustainable Future 4 Themes to Our Sustainable Development Leading UN Sustainable Development Goals for Eurocell ► Carbon, energy and water - Defining pathway to potential carbon neutrality and net zero • Continuing to reduce Scope 1 and 2 emissions, particularly in PVC extrusion and re
Slide 11: Financial Highlights
Financial Highlights Michael Scott – Chief Financial Officer Revenue Gross margin Profit before tax £343.1m 50.5% £27.0m ▲ 23% 2019: £279.1m ▼ 0.7% 2019: 51.2% ▲ 19% 2019: £22.7m Earnings per share Total dividends Net debt (pre-IFRS 16) 18.9p 9.6p per share £11.0m ▼ 2% 2019: 19.3p 2019: 3.2p per sha
Slide 12: Financial Performance
Financial Performance Group Income Statement Change v £m 2019 2020(1) 2021 2019 Revenue 279.1 257.9 343.1 ▲ 23% Gross profit 142.9 127.4 173.4 Gross margin % 51.2% 49.4% 50.5% Overheads (100.5) (97.6) (121.7) ▲ 21% Adjusted EBITDA 42.4 29.8 51.7 ▲ 22% Depreciation and amortisation (17.8) (19.5) (22.
Slide 13: Sales Performance
Sales Performance Continued Successful Delivery of Commercial Strategies £m 400 Like-for-like(1) Total sales ▲ 21% sales ▲ 23% 350 6.0 343.1 23.2 337.1 22.0 300 12.8 279.1 250 200 150 2019 Profiles LFL Building Plastics LFL Selling price increase Group LFL New branches 2021 and surcharge ► Sales ▲23
Slide 14: Gross Margin
Gross Margin Recovering Higher Raw Material Costs 51.2% 0.1% -1.3% 0.6% -0.1% 50.5% £m 180 2.6 173.4 2.0 7.5 170 18.4 160 150 142.9 140 130 120 2019 Volume Price Recycling New branches 2021 ► Volume ▲10bps ► Impact of recycling ▲60 bps - Increased production volumes at broadly consistent gross margi
Slide 15: Overheads
Overheads Impact of Higher Production, Sales Volumes and Wage Inflation Overheads ▲ 21% £m 130 6.1 (2.2) 2.5 121.7 120 14.8 110 100.5 100 90 80 70 60 50 2019 Volume Wage inflation, bonus Bad debts New branches 2021 and SBP ► Volume ▲£14.8m ► IFRS 9 bad debts ▼£2.2m - Impact on direct labour and tran
Slide 16: Capex
Capex Total Capital Expenditure (£m) Investment in Operating Capacity 18 16.7 16 15.2 13.7 14 ► Recent investment in capacity to resolve operational constraints and 12 facilitate further sales and market share growth 10 8.7 7.2 7.5 ► 2021 capex £16.7m (2020: £13.7m) 8 - Manufacturing capacity expans
Slide 17: Working Capital
Working Capital Key Working Capital Metrics(1) Impact of Inflation Stock Days(1) Debtor Days(1) December 2020 83 32 ► Outflow from working capital £19.4m December 2021 95 30 - Significant impact of inflation, net c.£8m ► Stock days at 95 vs 83 at December 2020 Inventory as a % of LTM Cost of Sales(1
Slide 18: Cash Flow
Cash Flow Significant Headroom and Good Liquidity Net Debt Reconciliation Dec Dec £m Change 2020 2021 60 £m Cash & overdraft 2.6 0.7 (1.9) 51.7 (19.4) Borrowings (12.5) (11.7) 0.8 50 Net debt (pre-IFRS 16) (9.9) (11.0) (1.1) 40 IFRS 16 leases (48.4) (58.7) (10.3) (2.7) (1) Net debt (58.3) (69.7) (11
Slide 19: Capital Allocation
Capital Allocation Strong Balance Sheet 1 2 3 4 Organic Ordinary Selective Efficient growth dividends acquisitions balance sheet ► Capital investment to expand ► Dividend cover of 2x through ► Disciplined approach to ► £75m unsecured sustainable organic capacity the cycle acquisitions RCF, matures i
Slide 20: Financial Summary Including Technical Guidance for 2022
Financial Summary Including Technical Guidance for 2022 Guidance stated post-IFRS 16 2021 Reported 2022 Guidance ► Good financial results for 2021 Underlying income statement - Continued success of commercial strategies and strong Depreciation and amortisation £22.7m c.£24m demand in the RMI market
Slide 21: Strategy Update
Strategy Update Mark Kelly – Chief Executive Officer Strategic framework: Overall objective to deliver sustainable growth in shareholder value Develop Eurocell brand Leverage vertical integration Drive sustainability ► Clear strategic priorities ► Refined and updated priorities in 2021 - 5 strategic
Slide 22: 2022 Market Dynamics
2022 Market Dynamics Well Positioned to Capitalise on Opportunities Market drivers Eurocell drivers Renovation activity driven by: Increase propositions in Building Plastics – c.1-in-16 homes changed hands in 2021 – Maturing branches – Desire to improve / extend homes, especially post-COVID – Conser
Slide 23: Medium-term Ambitions
Medium-term Ambitions Delivering Sustainable Growth in Shareholder Value £ Growth Sustainability Profitability Revenue Recycling Operating profit margin • Margins impacted by exceptional • Leading UK-based recycler of PVC sales growth running ahead of • Consistent and proven delivery of Track organi
Slide 24: Summary
Summary Good 2021 performance Strong organic growth Reinstatement of dividends Powerful sustainability credentials Opportunities to deliver improved returns in 2022 23
Slide 25: Appendices
Appendices eurocell. All together better
Slide 26: Investment Case
Investment Case ✓ Clear strategy and priorities ✓ Leading market positions ✓ Proven ability to deliver revenue growth and good potential to outperform ✓ Operational capacity constraints resolved through major investments ✓ Uniquely differentiated on sustainability through recycling operation ✓ Conti
Slide 27: Product Range
Product Range Standard products Ranges of window profile and doors Fascias, soffits and guttering Traded goods Made to order products Skypod pitched skylights Conservatories and Equinox tiled roofs Syncro patio and Aspect bi-fold doors 26
Slide 28: Profiles Division
Profiles Division ► Manufactures: - Extruded rigid and foam PVC profiles using virgin PVC compound - Rigid products also include recycled compound ► Recycles: - Factory offcuts (post-industrial) and old windows (post-consumer waste) ► Sells: - Rigid PVC profiles to a network of c.400 third party fab
Slide 29: Building Plastics Division
Building Plastics Division ► Sells: - Range of Eurocell manufactured and branded PVC foam roofline and window fitting / maintenance products - Third party manufactured ancillary products: sealants, tools and rainwater products - Vista doors - Windows fabricated by third parties using products manufa
Slide 30: Environmental and Social: Targets and KPIs
Environmental and Social Targets and KPIs KPI 2020 Base 2021 Result Target Link to UN SDGs Environmental – circular economy ► Objectives align with relevant Recycled material used in production % used 25% 27% 1% increase per year UN Sustainable Development Goals (SDGs) CO2 saved by recycling operati
Slide 31: Recycling Inputs and Outputs
Recycling Inputs and Outputs Major Cost and Carbon Savings K tonnes 2019 2020 2021 Inputs – waste recycled Post-consumer 31.4 27.0 40.5 ► Leading UK-based recycler of PVC windows Post-industrial 9.9 6.7 7.7 - Substantial investments since 2018 Total 41.3 33.7 48.2 - Keeping pace with sales growth an
Slide 32: Route to Market
Route to Market Third Party Suppliers Recycling: Eurocell Recycle Third Party Suppliers 37,200 tonnes of virgin e.g. compound consumed (1), 16,800 tonnes of recycled • Rainwater products plus 7,400 tonnes of compound consumed • Sealants other raw materials (2) (27% of profile raw material • Tools co
Slide 33: Group History
Group History Branch expansion Branch expansion Eurocell Building Branch expansion reaches 100 reaches 150 Plastics launched reaches 50 Operational Branch 1st Eurocell expansion Building Plastics reaches 200 Extrusion branch business Rebranding: Primary Primary founded, single brand extruders: extru
Slide 34: Disclaimer
DISCLAIMER This Presentation may contain forward-looking uncertainties because they relate to events and In no circumstances will the Company be statements that involve substantial risks and depend on circumstances that may or may not responsible for any costs, losses or expenses uncertainties, and
Slide 35: Eurocell – All together better
eurocell All together better