Breedon Group Plc · LSE:BREE
Breedon — Investor Presentation (May 2011)
33 slides from Breedon's investor presentation, May 11, 2011
Slide 1: Presentation to RBS
Presentation to RBS 11 May 2011 Essential Products ! Scarce Resources
Slide 2: Background and history
Background and history • June 2008: Marwyn Materials created & listed on AIM, backed by Marwyn Capital Strategy to consolidate smaller end of heavyside building materials industry Experienced management – strong track record in delivering shareholder value • Sept 2010: acquisition of Breedon Holding
Slide 3: The Market
The Market! !
Slide 4: The UK aggregates market
The UK aggregates market • £4.8bn market in 2008* • Underpinned by stable, long-term demand for primary aggregates 200mt+ pa 1983-2007** • Historical inflation hedge aggregates prices +54pc vs RPI +40pc since 1995*** • Highly consolidated Breedon Aggregates 6th largest • High barriers to entry • Ind
Slide 5: 2009 product volumes by end-use sector
2009 product volumes by end-use sector* per cent! 100 Non-Housing RM&I*** Housing RM&I*** Road" maintenance! Public Non-Housing 80 Infrastructure ** Industrial 60 New " Commercial road" construction! 40 New Housing 20 Crushed Rock Sand & Gravel Asphalt RMC Cement Mortar 0 Primary Aggregates! * UK ex
Slide 6: The market opportunity for us
The market opportunity for us • Breedon Aggregates acquired at low point in economic cycle • Previously 9 fully-listed big name UK building materials companies today there are none • UK now dominated by global cement companies many seeking to divest non-core operations likely disposals following Tar
Slide 7: Breedon Aggregates: a unique platform for growth
Breedon Aggregates: a unique platform for growth
Slide 8: Breedon Aggregates - overview
Breedon Aggregates - overview • Fully integrated aggregates producer 23 quarries, 18 asphalt plants, 27 concrete plants in 38 locations • Substantial modern fleet 120+ owned/leased trucks, 50+ owner-driver vehicles, many multi-purpose • Fully invested business £12m+ annual fixed asset depreciation •
Slide 9: Experienced management team
Experienced management team Executive Chairman Peter Tom Aggregate Industries Group Chief Executive Simon Vivian Hanson, Mowlem Group Finance Director Ian Peters Hanson CEO Breedon Aggregates England Tim Hall Tarmac, Tilcon CEO Breedon Aggregates Scotland Alan Mackenzie Wimpey, Tarmac
Slide 10: Key markets
Key markets • Local authorities and Transport Scotland for road building • Civil contractors for building houses, factories, offices, schools, etc. • Private individuals for drives, pathways, rockeries, etc. • Wholesalers for bagged aggregates No customer = more than 6% of group revenues
Slide 11: Nine months in…
Nine months in…!
Slide 12: Action taken on all fronts
Action taken on all fronts • No surprises following acquisition • Management strengthened in key positions • Cost base reduced to minimum; business on sound financial footing • ‘Best of Breedon’ business improvement scheme launched • Improved procurement and credit terms across group • New planning
Slide 13: Profit & Loss 2010 (pro forma 12 months)
Profit & Loss 2010 (pro forma 12 months) 2010 2009 Variance Pro forma Pro forma v 2009 £’000 £’000 % Turnover 143,831 135,426 6.2% EBITDA 13,725 16,502 (17.0)% Depreciation & Amortisation (12,284) (13,706) (10.0)% Underlying Operating Profit 1,441 2,796 (48.5)% Share of Associate 622 952 (34.7)% Pro
Slide 14: Analysis by division (pro forma 12 months)
Analysis by division (pro forma 12 months) 2010 A 2009 Pro forma Pro forma Variance £’000 £’000 £’000 Turnover England 68,800 57,737 11,063 Scotland 75,031 77,689 (2,658) Total 143,831 135,426 8,405 EBITDA England 5,463 5,554 (91) Scotland 10,226 14,202 (3,976) Head Office (1,964) (3,254) 1,290 Grou
Slide 15: Analysis – Volumes (pro forma 12 months)
Analysis – Volumes (pro forma 12 months) 2010 2009 Variance Pro forma Pro forma % ’000 tonnes ’000 tonnes Aggregates 3,616 3,593 +0.6% Asphalt 1,204 1,097 +9.8% Ready-mixed concrete 270 251 +7.6% Page "15!
Slide 16: Closing Balance Sheet, 31 December 2010
Closing Balance Sheet, 31 December 2010 2010 Actual £’000 Tangible Fixed Assets 150,207 Investments 1,070 Goodwill arising on Breedon 3,738 Intangible Assets 341 Total Non-current Assets 155,356 Current Assets 36,990 Creditors Less than One Year (35,632) Net Current Assets 1,358 Creditors Greater th
Slide 17: Analysis of Net Debt
Analysis of Net Debt 2010 Dec 2010 June Actual Pro forma £’m £’m Term Loans 67.0 64.3 Bank overdrafts 1.6 8.8 Cash (3.2) (3.8) Bank Debt 65.4 69.3 Finance Leases (over 1 year) 21.4 24.1 Finance leases (less than 1 year) 5.5 5.8 Finance Leases 26.9 29.9 Net Debt 92.3 99.2 Page "17!
Slide 18: Loan facilities
Loan facilities FACILITY AMOUNT 1M GBP CASH TOTAL INTEREST FINAL £m LIBOR MARGIN RATE COST REPAYMENT £m Term Loan 64.5 0.50% 3.0% 3.50% 2.26 06/09/2015 RCF A 15.0 0.50% 3.0% 3.50% 0.25 06/09/2015 RCF B 15.0 0.50% 3.0% 3.50% Undrawn 06/09/2015 TOTAL 94.5 2.51 £64.5m stepped LIBOR hedging cap, startin
Slide 19: Regional review: Breedon Aggregates Scotland
Regional review: Breedon Aggregates Scotland
Slide 20: Scotland
Scotland Moreton Onary Ganavie Chasery Bentetect Ceery Soran Gusrry Wert Meee Cont actey Fevaie Qaeery ‘Dre pas Cary Mescownte Lary Bremere Concrew Pant hevessann Core sete Piast Oras Aug Plast Neder er Ooery 1 2 a ‘ s ‘ ’ ‘ s * " Ao Gan Corcoete Mart Bort tin any Dertegt Ono teverwea Comerene Plast
Slide 21: Breedon Aggregates Scotland
Breedon Aggregates Scotland • Continued resilient performance in 2010 despite severe weather • Major new contracts: Scottish Water, A9, Fochabers • Busy Q1 with catch-up activity • High level of activity in 2011 throughout our regions Aberdeen airport extension Aberdeen Western Peripheral Route Dund
Slide 22: Regional review: Breedon Aggregates England
Regional review: Breedon Aggregates England
Slide 23: England
England ueeneneseneuuse Meneteny apres Pract Leotan Chasey Leena Chawry Boveder Query? Goud Hl Qaery (Lng iat Age Conon Peat Sue Weve Qaary Corby Aapnat & Conceste Pset Spengham Duwry** Legere: Anoka Part Nee Ne tee et ee te eee
Slide 24: Breedon Aggregates England
Breedon Aggregates England • Tim Hall appointed as CEO • New regional structure: senior appointments completed • Contracting business reorganised and scaled back • 2010 sales volumes ahead of FY09 in all product groups • Major new business: Rolls Royce, Barratt, Westleigh, A41 • Encouraging activity
Slide 25: Outlook
Outlook • Market outlook difficult to forecast • Private sector recovery underway, balanced by public sector cuts • Local authority cuts vary significantly and different in Scotland/England • Sharp rise in oil & energy-related costs in Q1 2011 – price recovery lag • Focus on improving performance in
Slide 26: Summary
BREEDON Summary
Slide 27: Summary
Summary • Unique investment in focused, independent UK aggregates player with highly experienced management • Prime beneficiary of cyclical recovery when it comes • Sound organic growth potential from improved localised service and ongoing business improvement initiatives • Strengthening balance she
Slide 28: Appendices: MPA volumes 2005-10
Appendices: MPA volumes 2005-10
Slide 29: Crushed rock volumes – moving annual trend
Crushed rock volumes – moving annual trend 130.0 120.0 110.0 million tonnes 100.0 90.0 80.0 70.0 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Crushed Rock MAT actual Page "29!
Slide 30: Ready-mixed concrete volumes – moving annual trend
Ready-mixed concrete volumes – moving annual trend 24.0 22.0 20.0 Cubic metres 18.0 16.0 14.0 12.0 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-05 Readymix concrete MAT actual Page "30!
Slide 31: Sand & gravel volumes – moving annual trend
Sand & gravel volumes – moving annual trend 90.0 85.0 80.0 75.0 million tonnes 70.0 65.0 60.0 55.0 50.0 45.0 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-05 Sand & Gravel MAT actual Page "31!
Slide 32: Asphalt volumes – moving annual trend
Asphalt volumes – moving annual trend 29.0 28.0 27.0 26.0 25.0 million tonnes 24.0 23.0 22.0 21.0 20.0 19.0 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-05 Asphalt MAT actual Page "32!
Slide 33: Presentation to RBS
Presentation to RBS 11 May 2011 Essential Products ! Scarce Resources