Breedon Group PLC · LSE:BREE

Breedon — Breedon Aggregates — FY2012 Earnings Presentation

33 slides from Breedon's earnings presentation, Mar 5, 2013

  1. Slide 1: Breedon Aggregates Preliminary results 5 March 2013

    Breedon Aggregates Preliminary results 5 March 2013 1

  2. Slide 2: Overview

    Overview Peter Tom CBE Chairman 2

  3. Slide 3: 2012 presentation

    2012 presentation Results overview Peter Tom Financial review Ian Peters Operational review, summary, outlook Simon Vivian Q&A 3

  4. Slide 4: A story of continued growth

    A story of continued growth Delivering on our promises Further improvement in EBITDA margins Value from acquisitions delivered ahead of schedule Balance sheet further strengthened 4

  5. Slide 5: Breedon's 'Golden Rules'

    Breedon’s ‘Golden Rules’ Stay local – easy to do business with in every location Stay nimble – keep ahead of our markets : and develop new ones Devolve responsibility – and decision-making to regional teams Squeeze our assets – maximise return from every tonne of rock Eliminate underperformance – if

  6. Slide 6: 2012 Highlights

    2012 Highlights Sales Revenue EBITDA PBT +3% to £173.5m +18% to £20.2m +272% to £5.6m EBITDA margin Acquisitions Net Debt +1.5 pts to 11.6% EBITDA £2.1m -23% to £74.1m PBT, EBITDA and EBITDA margin all exclude non-underlying items 6

  7. Slide 7: Financial Review

    Financial Review Ian Peters Group Finance Director 7

  8. Slide 8: Profit & Loss 2012

    Profit & Loss 2012 2011 2012 Variance Variance £’000 £’000 v 2011 v 2011 £’000 % Revenue 168,888 173,457 4,569 +2.7% EBITDA 17,063 20,183 3,120 +18.3% Depreciation & Amortisation (11,375) (11,343) 32 +0.3% Underlying Operating Profit 5,688 8,840 3,152 +55.4% Share of Associate 659 1,033 374 +56.8% I

  9. Slide 9: Analysis by division 2012

    Analysis by division 2012 2010 Variance Proforma 2011 2012 v 2011 Variance £’000 £’000 £’000 £’000 v 2011 % Revenue England 68,800 86,158 91,278 5,120 +5.9% Scotland 75,000 82,730 82,179 (551) (0.7)% Total 143,800 168,888 173,457 4,569 +2.7% EBITDA England 5,500 9,090 11,562 2,472 +27.2% Scotland 10

  10. Slide 10: Volumes 2012

    Volumes 2012 2010 2011 2012 Variance ’000 ’000 ’000 v 2011 tonnes tonnes tonnes % England 1,947.5 2,022.9 1,880.8 (7.0)% England (C&G) - 198.9 438.2 n/a Scotland 1,667.6 1,878.8 1,972.0 +5.0% Aggregates 3,615.1 4,100.6 4,291.0 +4.6% England 735.7 867.8 761.0 (12.3)% Scotland 467.6 510.6 441.0 (13.6)

  11. Slide 11: Closing Balance Sheet: December 2012

    Closing Balance Sheet : December 2012 2010 Dec 2011 Dec 2012 Dec £’000 £’000 £’000 Tangible Fixed Assets 146,816 151,984 144,895 Investments 1,070 792 887 Goodwill arising on 1,449 1,449 2,143 Breedon and NRMX Intangible Assets 341 199 152 Total Non-Current Assets 149,676 154,424 148,077 Current Ass

  12. Slide 12: Cashflow 2012

    Cashflow 2012 2011 2012 2011 2012 £’000 £’000 £’000 £’000 Profit before Interest and Tax 6,225 10,068 Interest Paid (4,588) (4,102) Income from associate (659) (1,033) Taxation (2) - Gain on bargain purchase & asset sales (1,489) (1,084) Dividends Received / (Paid) 877 938 Depreciation and amortisat

  13. Slide 13: Analysis of net debt: December 2012

    Analysis of net debt : December 2012 Dec 2010 Dec 2011 Dec 2012 £’m £’m £’m Term Loans 67.0 72.6 62.8 Bank overdrafts 1.6 3.1 - Cash (3.2) (0.9) (5.0) Bank Debt 65.4 74.8 57.8 Finance Leases (over 1 year) 21.4 16.3 11.5 Finance leases (less than 1 year) 5.5 5.1 4.8 Finance Leases 26.9 21.4 16.3 Net

  14. Slide 14: Operational Review

    Operational Review Simon Vivian Group Chief Executive 14

  15. Slide 15: 2012 Market Background

    2012 Market Background Economic recovery postponed – again Demand at lowest levels in living memory: consumption of primary aggregates down 50pc from 1989 peak Poor weather: record rainfall in Q2 No uplift in infrastructure spending Extended holidays during Jubilee and Olympics Further sharp UK-wide

  16. Slide 16: Against the trend

    Against the trend EBITDA margin up 1.5 points : underlying profitability up in both divisions Performances from acquisitions ahead of expectations 1stMix profitable within first 6 months : growing well Significant improvements in health & safety : accidents cut by 50% Success in new markets : renewa

  17. Slide 17: 17

    17

  18. Slide 18: England – Summary financials

    England – Summary financials 2011 2012 Variance Volumes £’000 £’000 % +4.4% Aggregates -12.3% Asphalt Turnover 86,158 91,278 +5.9% +32.0% Concrete EBITDA 9,090 11,562 +27.2% Operating Profit 3,830 6,021 +57.2% Margins Aggregates +6.3% Asphalt +2.5% Concrete -0.4% EBITDA Margin 10.6% 12.7% +2.1% Oper

  19. Slide 19: England: achievements

    England: achievements Good cost control and improved pricing Underperforming units turned around (Corby, Leinthall, Mansfield) New planning consents at Shropham and South Witham Continued reduction in purchasing costs C&G restructuring completed Core vehicle fleet (exc C&G) reduced from 40 to 26 50%

  20. Slide 20: Underperformance reversed: 2012 vs 2010

    Underperformance reversed: 2012 vs 2010 Leaton Corby Leinthall Volume +11% Volume +1% Volume +32% Revenue +34% Revenue +17% Revenue +74% EBITDA +53% EBITDA +109% EBITDA +402% Selective selling, broad customer base Focus on margin-enhancing work, early recovery of hydrocarbon ..increases Focus on loc

  21. Slide 21: England: priorities for 2013

    England: priorities for 2013 Continued focus on margin improvements Deliver benefits of capital investment at Cloud Hill and Leaton Maintain tight control of operating costs and procurement of cement and bitumen Target further improvement in customer service levels Build on successful launch of 1stM

  22. Slide 22: Breedon Aggregates Scotland

    Breedon Aggregates Scotland 22

  23. Slide 23: Scotland – Summary financials

    Scotland – Summary financials 2011 2012 Variance Volumes £’000 £’000 % +5.0% Aggregates -13.6% Asphalt Turnover 82,730 82,179 -0.7% +4.4% Concrete EBITDA 10,316 11,345 +10.0% Operating Profit 4,213 5,548 +31.7% Margins Aggregates -2.5% Asphalt +1.4% Concrete +4.6% EBITDA Margin 12.5% 13.8% +1.3% Ope

  24. Slide 24: Scotland: achievements

    Scotland: achievements Good cost control, lower input costs and strong pricing Contracting ahead of expectations BEAR Scotland and Alba ahead of expectations new NW maintenance contract will secure long term supplies Strong performance from Rothes Glen acquisition Ethiebeaton quarry extension: +9m t

  25. Slide 25: Scotland: purchase of St Michaels

    Scotland: purchase of St Michaels Sand and gravel reserves near Strathburn, Fife 3m tonnes consented reserves, 2m unconsented Operations scheduled to commence April 2013 25

  26. Slide 26: Scotland: priorities for 2013

    Scotland: priorities for 2013 Commence operations at St Michaels in Q2 Secure further procurement efficiencies Further growth at Mobile Concrete Solutions Continuing refreshment/improved efficiency of fleet Additional cost-control and mitigation measures Deliver efficiency benefits from recent capit

  27. Slide 27: Outlook

    BREEDO aN Outlook

  28. Slide 28: Outlook

    Outlook Economic outlook still uncertain, but some signs of optimism several construction projects approved in 2011 coming on stream MPA/CPA forecast lower output & volumes again in 2013, prior to recovery in 2014 Changed industry landscape post merger of Tarmac & Lafarge and creation of Hope Constr

  29. Slide 29: Appendix: MPA volumes

    BREEDO AGGREGATES Appendix MPA volumes

  30. Slide 30: MPA crushed rock volumes – moving annual trend

    MPA 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 Dec-11 Dec-12 Crushed Rock MAT actual

  31. Slide 31: MPA sand & gravel volumes – moving annual trend

    MPA 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-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Sand & Gravel MAT actual

  32. Slide 32: MPA asphalt volumes – moving annual trend

    MPA asphalt volumes – moving annual trend 28.0 27.0 26.0 25.0 24.0 million tonnes 23.0 22.0 21.0 20.0 19.0 18.0 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Asphalt MAT actual

  33. Slide 33: MPA readymix volumes – moving annual trend

    MPA readymix volumes – moving annual trend 24.0 22.0 20.0 million cubic metres 18.0 16.0 14.0 12.0 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Readymix concrete MAT actual

Breedon Aggregates — FY2012 Earnings Presentation on 6ix