Ibstock Plc · LSE:IBST
Ibstock — FY2023 Earnings Presentation
38 slides from Ibstock's earnings presentation, Mar 6, 2024
Slide 1: 2023 Full Year Results
2023 FULL YEAR RESULTS 6 MARCH 2024 Project name: The John Morden Centre Product used: Bexhill Purple Multi
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 OVERVIEW Joe Hudson FINANCIAL REVIEW Chris McLeish MARKET UPDATE & STRATEGIC PROGRESS Joe Hudson SUMMARY & OUTLOOK Joe Hudson Q&A 3
Slide 4: Overview
Product used: Gemini roof tiles Project name: Westley Grange housing development, Wigston OVERVIEW Resilient performance against a challenging market backdrop Active management of short term cost and capacity, while continuing to build the platform for sustainable growth Strategic progress on core b
Slide 5: Financial Review
Project name: Lewisham Exchange Product used: Mechslip Façade FINANCIAL REVIEW
Slide 6: Financial Summary
FINANCIAL SUMMARY Adjusted Revenue Adjusted EBITDA EBITDA margin £406m £107m 26.5% 2022: £513m (-21%) 2022: £140m (-23%) 2022: 27.2% (-80bps) Return on Dividend Adjusted EPS EBITDA: Net debt Capital Employed per share 13.9p 1.1x 13.4% 7.0p 2022: 22.7p (-39%) 2022: 0.4x 2022: 23.4% (-10ppts) 2022: 8.
Slide 7: Revenue Bridge
REVENUE BRIDGE Significantly lower activity levels in UK residential construction markets UK domestic brick volumes reduced by 30% FY 2022 369 144 513 compared to prior year Clay 436 (77) Group revenues reduced by 21% -£107m (-21%) Clay revenues 21% lower with sales volumes in Concrete 406 (30) line
Slide 8: Clay
Project name: Southmere Village Product used: New Ivanhoe Cream bricks CLAY Resilient performance underpinned by stable pricing, network reliability and robust cost action 12 months ended 31st December 2023 (£m) 2023 2022 Total Revenue 292 369 Adjusted EBITDA 99 127 Margin 33.8% 34.3% Revenue decrea
Slide 9: Concrete
Project name: High-rise development, Essex Product used: Precast concrete staircases CONCRETE Robust margin performance despite subdued market backdrop 12 months ended 31st December 2023 (£m) 2023 2022 Total Revenue 114 144 Adjusted EBITDA 19 24 Margin 16.4% 16.4% Revenue decreased by £30m, down 21%
Slide 10: Capacity and Cost Management
Employee at our Power Park Factory Colleagues at our Power Park Factory CAPACITY AND COST MANAGEMENT Comprehensive operational review undertaken during the year to reduce fixed cost base and align capacity to near term demand Restructuring programme included actions to temporarily reduce capacity ac
Slide 11: Cash Flow Performance
CASH FLOW PERFORMANCE Investment in fixed assets and working capital to support our medium-term growth objectives 12 months ended 31st December 2023 2023 2022 Adjusted EBITDA 107 140 Δ in net working capital (37) (2) Cash conversion percentage reflects rebuild of Net interest (6) (4) inventory to pr
Slide 12: Continued Balance Sheet Strength
CONTINUED BALANCE SHEET STRENGTH Net debt increased in the period after £100m growth and working capital investments Closing net debt increased to £101m at 31st December 2023 Leverage at 1.1x, in the middle of our target range Diversified debt structure continues to provide efficient, lower cost fin
Slide 13: Major Organic Growth Projects
MAJOR ORGANIC GROWTH PROJECTS Group’s investment programme underpinning medium term ambition now well advanced Incremental Cumulative Spend to EBITDA £m spend to Total cost complete at full 31 Dec 2023 utilisation Core Clay Investment to increase capacity and provide UK’s first investments at carbon
Slide 14: Technical Guidance FY24
Colleagues at our Chesterton Factory TECHNICAL GUIDANCE FY24 Adjusted EBIT Markets to remain subdued in FY24; currently anticipate improvement as year progresses Restructuring action to deliver YoY benefit of £15m in FY24 (broadly equivalent to 2023 benefit from fixed cost absorption) Group will car
Slide 15: Market Update & Strategic Progress
MARKET UPDATE & STRATEGIC PROGRESS Colleague at our Power Park Innovation Hub
Slide 16: Markets Expected to Remain Subdued in Near Term
MARKETS EXPECTED TO REMAIN SUBDUED IN NEAR TERM Initial signs of improvement in end markets not yet converting into an increase in residential construction activity Private Housing Starts (‘000s) Private Housing Completions (‘000s) New build demand subdued with impact on brick market Overall UK bric
Slide 17: Robust Medium Term Drivers in Place
ROBUST MEDIUM TERM DRIVERS IN PLACE Fundamentals supporting new build housing remain strong Market expected to evolve over time More diversification in housing Increase in social and more affordable housing through housing associations and shared ownership Build to Rent Playing more of an important
Slide 18: Well Positioned for the Recovery - Clay
WELL POSITIONED FOR THE RECOVERY - CLAY Clay estate substantially upgraded to a more efficient and sustainable network to underpin our medium-term objectives +15% 105% What we’ve done 100% -10% Optimised our unrivalled Clay factory footprint across the UK 1, 2 Progressed commissioning of core strate
Slide 19: Well Positioned for the Recovery - Concrete
WELL POSITIONED FOR THE RECOVERY - CONCRETE Agile business operating in attractive product categories with strong fundamentals Strong performance - Focus on roofing – product Technical & new product Two high-quality bolt on Rail & Infrastructure - underpinned by a scalable category delivering margin
Slide 20: Evolving with Our Markets – Ibstock Futures
EVOLVING WITH OUR MARKETS – IBSTOCK FUTURES Building a strong position in evolving markets through diversification and decarbonisation-led growth opportunities Façade systems & MMC solutions Decarbonisation-led growth Decarbonisation-led growth 20
Slide 21: A Strong Platform Across Facades
A STRONG PLATFORM ACROSS FACADES Building a portfolio of products and solutions focused on delivering strong growth in mid-to-high rise & modern methods of construction 6 2 3 1 5 4 Growing range of facades and brick slip solutions Power Park Nostell Slips Factory Investment 1 = GRC 4 = Nexus Home to
Slide 22: Decarbonisation-Led Growth
DECARBONISATION-LED GROWTH Research and development opportunities progressing to next stage Calcined Clay Waste to Energy Further progress towards the production of Progressing commercial conversations to calcined clays for use as low-carbon commission assets following success trials cementitious re
Slide 23: Summary & Outlook
SUMMARY & OUTLOOK Colleagues hosting customers at our Power Park Showroom
Slide 24: Summary
SUMMARY With medium term fundamentals in place, we are extracting higher value from our business to accelerate performance as markets recover Optimised organisation structures and Unified Ibstock master brand, with one Strong progress on new product and R&D opportunities progressing to next stage fa
Slide 25: Outlook
Product used: Genbrix brick cladding system Project name: Alliot House Student accommodation, London OUTLOOK Subdued activity in early weeks of 2024; anticipate a degree of improvement as the year progresses Focused on doing the right things to deliver near term performance Improvements have created
Slide 26: Q&A
Q&A Customer meeting with Design Advisor
Slide 27: Appendices
APPENDICES Colleagues at our Chesterton Factory
Slide 28: Ibstock at a Glance
IBSTOCK AT A GLANCE Ibstock Plc is a leading UK manufacturer of a diverse range of building products and solutions, backed up by design and technical services Key facts Eight core product categories and solutions 200 Over 200 years of experience 32 Operating manufacturing facilities across the UK c.
Slide 29: Progress in 2023 Against Our ESG 2030 Ambitions
PROGRESS IN 2023 AGAINST OUR ESG 2030 AMBITIONS Carbon reduction (Scope 1 and 2) Product innovation Health and safety 37% 11% 60% 2022: 20% 2022: 13% 2022: 61% % absolute carbon reduction tonnes CO2 (relative to 2019 baseline) % sales turnover from new products and solutions % reduction in Lost Time
Slide 30: Brick Market Dynamics
BRICK MARKET DYNAMICS Balancing supply and demand Brick Consumption (billions of bricks) Brick Production and Stock (billions of bricks) Domestic Despatches Imports Production Stock 2.1 2.0 2.0 1.9 1.9 1.9 0.5 1.8 1.8 0.4 0.5 0.6 0.3 1.6 1.6 1.6 0.3 0.2 1.5 0.3 1.4 1.4 0.1 0.3 1.3 0.1 0.1 0.1 0.1 0.
Slide 31: Group Revenue Analysis
GROUP REVENUE ANALYSIS 12 months ended 31st December 2023 Clay Concrete Total Bricks & Masonry (1) 282 69% 20 5% 302 74% Flooring & Lintels (2) 0 0% 36 9% 36 9% Roofing 0 0% 21 5% 21 5% Fencing & Landscaping 0 0% 20 5% 20 5% Rail & Infrastructure (3) 0 0% 16 4% 16 4% Facades 10 2% 0 0% 10 2% Other 0
Slide 32: Capacity and Cost Management
Employee at our Power Park Factory Employees at our Power Park Factory CAPACITY AND COST MANAGEMENT Comprehensive operational review undertaken during the year to reduce fixed cost base and align capacity to near term demand Restructuring programme included actions to temporarily reduce capacity acr
Slide 33: Income Statement
INCOME STATEMENT Year ended 31st December 2023 2023 2022 Revenue £406m £513m Adjusted EBITDA £107m £140m Normal depreciation (£29m) (£26m) Adjusted profit before interest and tax £78m £113m Cash interest (£6m) (£4m) Adjusted profit before tax £72m £109m Taxation - at effective rate (£18m) (£18m) Adj
Slide 34: Adjusted Income Statement Reconciliation
ADJUSTED INCOME STATEMENT RECONCILIATION Depreciation and Exceptional Non-cash Deferred tax Capitalised Year ended 31st December 2023 Adjusted Statutory amortisation items interest rate change interest Revenue £406m - - - - - £406m Costs (£299m) (£42m) (£31m) - - - (£371m) EBITDA £107m (£42m) (£31m)
Slide 35: Balance Sheet
BALANCE SHEET Year ended 31st December 2023 2023 2022 Property, plant and equipment £440m £409m Right of Use assets £40m £31m Intangible fixed assets & Goodwill £82m £90m Non-current assets £562m £531m Inventories £119m £94m Trade and other receivables £38m £66m Assets held for sale £0m £0m Current
Slide 36: Cash Flow
CASH FLOW Year ended 31st December 2023 2023 2022 Cash generated from operations £64m £138m Interest paid (£4m) (£3m) Other interest paid - lease liabilities (£2m) (£1m) Tax paid £1m (£12m) Net cash flow from operating activities £58m £122m Cash flows from investing activities Purchase of property,
Slide 37: Cash Flows Since IPO
CASH FLOWS SINCE IPO 2016 2017 2018 2019 2020 2021 2022 2023 Total Adjusted operating cash flow £96m £97m £84m £72m £50m £76m £108m £50m £634m Capital invested (£59m) (£38m) (£31m) (£39m) (£24m) (£25m) (£58m) (£66m) (£340m) Adjusted free cash flow £38m £59m £53m £33m £26m £51m £50m (£16m) £294m Ordi
Slide 38: Adjusted EBIT LTM and ROCE
ROCE Clay Concrete Group £68.1m -31% £8.0m -38% £65.8m -35% Adjusted EBIT LTM 2023 £68.1m 2023 £8.0m 2023 £65.8m 2022 £99.1m 2022 £12.9m 2022 £101.1m 2021 £62.7m 2021 £11.5m 2021 £64.7m 16.3% -11pts 9.7% -7pts 13.4% -10pts ROCE (1) 2023 16.3% 2023 9.7% 2023 13.4% 2022 16.6% 2022 23.4% 2022 27.0% 202