Slide 1: Polypipe Group plc Full Year Results
Polypipe Group plc Full Year Results Year ended 31 December 2016
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 Introduction David Hall Presentation Team David Hall Martin Payne Chief Executive Officer Chief Financial Officer 3
Slide 4: Introduction
Introduction Excellent UK revenue growth – outpaced the market No discernible effect from EU Referendum Nuaire successfully integrated and performing well Middle East plant commissioned Significant growth in export Further year of progression ahead 4
Slide 5: Agenda
Agenda Introduction Financial Review David Hall Martin Payne 5
Slide 6: Financial highlights
Financial highlights Revenue 23.8% higher at £436.9m, 9.1% higher on a like for like basis UK revenue 10.5% ahead excluding acquisitions Underlying operating profit 28.0% higher at £69.4m 50bps improvement in underlying operating margin to a record 15.9% Underlying diluted earnings per sha
Slide 7: 2016 underlying results summary
2016 underlying results summary £m 2016 2015 change % change Revenue 436.9 352.9 84.0 23.8% Cost of sales (256.8) (210.0) (46.8) Gross profit 180.1 142.9 37.2 26.0% Gross margin 41.2% 40.5% Selling & distribution costs (69.4) (56.4) (13.0) Administrative expenses (41.3) (32.3) (9.0) Underlying opera
Slide 8: Revenue and underlying operating profit bridge
Revenue and underlying operating profit bridge Revenue (£m) +6.2 +30.5 436.9 +47.3 352.9 2015 Acquisitions Organic Middle East Investment FX 2016 352.9 Underlying operating profit (£m) -0.8 +0.2 +5.8 69.4 69.4 +10.0 54.2 2015 Acquisitions Organic Middle East Investment FX 2016 8
Slide 9: Cashflow
Cashflow £m 2016 2015 change EBITDA (before non-underlying items) 85.7 69.3 16.4 Capital expenditure (19.1) (19.3) 0.2 Movement in net working capital (0.2) 4.9 (5.1) Share-based payments 1.0 0.4 0.6 Operating cashflow after capital expenditure 67.4 55.3 12.1 Financing costs – net interest paid (7.3
Slide 10: Balance sheet summary
Balance sheet summary 31 December 31 December £m 2016 2015 Change Non-current assets – property, plant & equipment 101.0 98.1 2.9 – goodwill 329.3 329.3 - – other intangible assets 42.3 49.1 (6.8) Net working capital 0.5 (2.3) 2.8 Net debt (164.3) (194.3) 30.0 Taxation (14.3) (14.7) 0.4 Other (7.1)
Slide 11: Net working capital
Net working capital 31 December 31 December £m 2016 2015 Change Inventories 52.2 47.5 4.7 Trade and other receivables 40.1 30.5 9.6 Trade and other payables (91.8) (80.3) (11.5) Net working capital 0.5 (2.3) 2.8 Net working capital to revenue 0.1% -0.7% 11
Slide 12: Banking facilities
Banking facilities Headroom at 31 December 2016: £m At 31 December 2016 Facility Headroom Bank loans 192.0 300.0 108.0 Cash and cash equivalents (26.5) - 26.5 Net debt excluding unamortised debt issue costs 165.5 134.5 Unamortised debt issue costs (1.2) Net debt 164.3 Position at 31 Covenant Covenan
Slide 13: Guidance summary 2017
Guidance summary 2017 Margins more weighted towards second half compared to 2016 as H1 2017 price increases work through 2017 Capital expenditure £25m – confidence regained after EU Referendum Cash tax broadly in line with underlying tax P&L charge Dividend policy maintained 13
Slide 14: Agenda
Agenda Introduction Financial Review Business Review David Hall Martin Payne David Hall 14
Slide 15: Our strategy
Our strategy Our Strategic Objectives: Accelerated by 1. Retain agility to adapt to market Selective Acquisitions movements Defined Channel Strategy 2. Leveraging brand position across all sectors of UK construction Carbon Efficient Solutions 3. Continued product development for Substitution of Lega
Slide 16: Seventh consecutive year of progress
Seventh consecutive year of progress 450 437 200 35 UK sales growth vs. UK construction total output Construction index (2007 = 100) 400 180 353 64 160 180 350 327 21 Sales £m 22 298 289 300 17 140 300 287 283 55 54 4 11 270 11 13 57 253 12 120 73 12 61 250 7 68 81 61 102 100 63 100 66 200 160 80 33
Slide 17: Drivers of sales growth
Drivers of sales growth Middle East & Export £31m Development Products 2015 UK £277m UK Market growth 2015 Europe and share gain 2015 Middle East & £47m ROW Organic growth of acquisitions FX £6m £22m Acquisitions £54m Development Products Middle East and Rest Of World Sales 35 39% 30% 34% 28% 22 25%
Slide 18: Successful integration of Nuaire
Successful integration of Nuaire All key personnel retained Growth trajectory maintained New product development boosted by alignment with broader Group Cross selling of in-house ducting Merger of product platforms with original ventilation business Rationalisation of some back-office, p
Slide 19: Investment in manufacturing in the Middle East
Investment in manufacturing in the Middle East Installed and commissioned Polystorm production capability in a new 72,000ft2 manufacturing facility in Dubai 100%-Polypipe owned and controlled in Jebel Ali Free Zone Recruited and trained 35 staff Achieved ISO 9001 Certification / BBA, local a
Slide 20: Polypipe has a balanced portfolio across all construction markets
Polypipe has a balanced portfolio across all construction markets UK Infrastructure 8.6% UK RMI UK Commercial ‐ Public 25.0% 10.2% UK Commercial ‐ Private Commercial and UK Residential 10.8% infrastructure 47.9% 52.1% European Markets UK New Build 14.8% 22.9% Rest of the World Note – based on projec
Slide 21: Operating segment review - Residential
Operating segment review - Residential Residential 2016 2015 2014 Revenue £207.6m £182.6m £173.3m Underlying operating profit £39.1m £32.8m £28.4m Underlying operating margin 18.8% 18.0% 16.4% 6.6% like for like growth supported by new build activity Further skew to National Housebuilders Grow
Slide 22: Operating segment review – C&I UK
Operating segment review – C&I UK Commercial & Infrastructure - UK 2016 2015 2014 Revenue £184.2m £131.5m £111.1m Underlying operating profit £29.0m £20.1m £17.0m Underlying operating margin 15.7% 15.3% 15.3% 16.1% like for like growth supported by strong demand from Roads sector Demand for wate
Slide 23: Operating segment review – C&I Mainland Europe
Operating segment review – C&I Mainland Europe Commercial & Infrastructure – Mainland Europe 2016 2015 2014 Revenue £57.9m £50.4m £53.9m Underlying operating profit £1.3m £1.3m £0.9m Underlying operating margin 2.2% 2.6% 1.7% Revenue broadly flat (+2.4%) in local currency Distributor initiatives
Slide 24: Summary & outlook
Summary & outlook Strategy continues to deliver record results - EPS growth of 28.9% Nuaire acquisition successfully integrated and performing well No discernible impact of EU Referendum on orders but we remain alert Increased Government focus on housing and infrastructure Addition of manu
Slide 25: Questions & Answers
Questions & Answers © Polypipe 25