Eurocell Plc · LSE:ECEL
Eurocell — FY2023 Earnings Presentation
33 slides from Eurocell's earnings presentation, 2024
Slide 1: Eurocell Plc 2023 Full Year Results
EUROCELL PLC 2023 Full Year Results 1
Slide 2: Contents
Contents Agenda Presenters Overview Darren Waters Financial Review Michael Scott New Strategy 2
Slide 3: Overview
Overview Darren Waters – Chief Executive Revenue £364.5m ▼ 4% 2022 Profits in line with expectations, despite further market deterioration in the second half Profit before tax Challenging backdrop, with weak RMI market and £15.2m particularly severe decline in new build housing £28.7m 2022 Early and
Slide 4: Financial Review
EUROCELL PLC Financial Review 4
Slide 5: Financial Highlights
Financial Highlights Michael Scott – Chief Financial Officer Revenue Adjusted profit before tax Adjusted earnings per share £364.5m £15.2m 11.0p ▼ 4% 2022: £381.2m ▼ 47% 2022: £28.7m ▼ 49% 2022: 21.4p Total dividends Net cash from operating activities Net cash/(debt) (pre-IFRS 16) 5.5p per share £52
Slide 6: Financial Performance
Financial Performance Income Statement £m 2022 2023 Change ► Action on costs in response to weaker markets and lower volumes Revenue 381.2 364.5 ▼ 4% - Disposal of Security Hardware in Q4 2022 Gross profit 184.5 173.8 - Restructuring in Q4 2022 Gross margin % 48.4% 47.7% • Reduced operating costs by
Slide 7: Sales
Sales CPA Construction Products Industry Forecasts 2024-26 (1) Private housing RMI growth Some Resilience in Weak Market Conditions 21% 19% 9% Sales Bridge 3% 390 (4%) (13%) (11%) 381.2 (11.1) 380 2019 2020 2021 2022 2023E 2024F 2025F (11.4) £m 370 Total housing growth 5.8 364.5 15% 15% 360 10% 4% 3
Slide 8: Adjusted Operating Profit
Adjusted Operating Profit Profits Down as Expected Operating Profit Bridge Virgin resin and Recycling Feedstock prices (indexed) 33 (10.8) 300 31.3 Infeed price Virgin compound cost 28 250 23 200 £m (0.7) (1.4) (1.9) 6.5 (3.2) 18.4 18 150 (1.4) 13 100 8 50 2022 Volume Price / margin Recycling Labour
Slide 9: Capex
Capex Well-invested Facilities Total Capital Expenditure and Allocation (£m) 2018(1) 2019 2020 2021 2022 2023 ► 2023 capex £8.9m (2022: £12.3m) - Primarily maintenance capex Manufacturing capacity 3 5 - 7 4 1 • Includes £1.5m across the branch network to improve staff welfare facilities Recycling ca
Slide 10: Working Capital
Inventory as a % of LTM Cost of Sales Working Capital 38% Efficient Stock Management 34% 30% ► Inflow from working capital £13.4m 26% ► Stock days at 84 vs 93 at December 2022 2022 2023 22% - Stocks ▼ £13.2m Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec - Stock build in H2 2021 / H1 2022 to protec
Slide 11: Cash Flow
Net Cash/(Debt) Reconciliation Cash Flow £m Dec 2022 Dec 2023 Change Cash and overdraft 5.1 0.4 (4.7) Strong Balance Sheet and Liquidity Deferred consideration 0.8 - (0.8) Borrowings (20.3) - 20.3 Net cash/(debt) (pre-IFRS 16) (14.4) 0.4 14.8 60 13.4 (3.2) (1) IFRS 16 leases (63.7) (58.6) 5.1 (0.5)
Slide 12: Financial Summary
Financial Summary Including Technical Guidance for 2024 ► Financial results in the short term impacted by continued weakness Guidance (post-IFRS 16) 2023 2024 in market conditions Reported Guidance Underlying Income Statement ► Management actions: Depreciation and amortisation £24.7m c.£25m - Cost r
Slide 13: New Strategy
EUROCELL PLC New Strategy 13
Slide 14: New Strategy
New Strategy Overview Creating sustainable building solutions for the trade of today, the homes of tomorrow and the environment of the future 5-YEAR AMBITION £500m Sales £50m Operating profit 10% Operating margin CUSTOMER BUSINESS PEOPLE ESG GROWTH EFFECTIVNESS FIRST LEADERSHIP Be the trade customer
Slide 15: Customer Growth: Branch Network
Customer Growth Branch Network CUSTOMER GROWTH OUR AMBITION Be a great place to work where we are the number one choice for relevant trades HOMEOWNER’S HOMEOWNER’S CHOICE OPTIMISE OUR BRANCH CHOICE FOR FOR EXTENDED LIVING NETWORK EXTENDED LIVING SPACES SPACES OPTIMISE OUR Estimated optimum BRANCH Co
Slide 16: Customer Growth: Windows and Doors
Total Branch Capacity Target Customers Customer Growth Maximum Capacity Windows and Doors CUSTOMER GROWTH ► Initiative to drive step change in sales of windows and doors Spare - Branches currently sell c.1,100 frames per week Capacity - Max capacity estimated at c.6,300 frames across the branch netw
Slide 17: Customer Growth: Extended Living
Customer Growth Extended Living – Garden Rooms and Extensions CUSTOMER GROWTH ► Garden rooms OUR Take share from established market leaders and become best-in-market - Built strong market presence since launch AMBITION in 2021, with c.800 builds - Close relationship with fabricator partners Horizont
Slide 18: Customer Growth: Digital
Customer Growth Digital CUSTOMER GROWTH OUR Enhance our market leading digital proposition to build awareness of our products and home improvement AMBITION solutions, driving new customers and incremental sales OUR INCREASE TRAFFIC AND BECOME KNOWN FOR STRATEGY DRIVE ECOMMERCE SALES CONVERSION EXTEN
Slide 19: Customer Growth: Fabricators
Customer Growth Fabricators – Sector Led Strategy CUSTOMER GROWTH TRADE / NEW COMMERCIAL Protect, maintain and RETAIL BUILD grow across all sectors 55% of Sales 35% of Sales 10% of Sales Protect existing business OUR Maintain our value-added AMBITION To become the number 1 sustainable choice for fab
Slide 20: Business Effectiveness
Business Effectiveness IT Systems Replacement and Operational Efficiencies BUSINESS EFFECTIVENESS OUR A lean and efficient business that enables agility and enhances our profitability AMBITION OUR SYSTEM UPGRADE: SYSTEM UPGRADE: EMBEDDING A CONTINUOUS IMPROVEMENT STRATEGY BRANCH TRADING ERP PHILOSOP
Slide 21: People First
People First A Great Place to Work PEOPLE FIRST Talented, engaged and motivated colleagues who work passionately to achieve clear business and personal goals OUR Eurocell will be a great place to work, where our culture makes colleagues feel … AMBITION “I feel part of the Eurocell team and “I know w
Slide 22: ESG Leadership
ESG Leadership A Truly Responsible Company ESG LEADERSHIP OUR Earn a reputation for being a truly responsible company AMBITION OUR ENVIRONMENT SOCIAL GOVERNANCE The leader in sustainability in the STRATEGY A great place to work With the highest standards of governance fenestration sector Maximise re
Slide 23: Financial Ambition
EUROCELL PLC STRATEGY Financial Ambition 23
Slide 24: Financial Ambition
Investment Projections (£m) Financial Ambition 2024 2025 2026 2027 2028 Organic Sales Growth and Improved Operating Margins Underlying capex 11 10 10 10 10 Strategic initiatives capex (1) 3 5 3 2 2 Strategic IT systems replacement (2) 4 5 1 - - OUR Operating Operating AMBITION £500m Sales £50m profi
Slide 25: Summary and Outlook
Summary and Outlook 2023 profits in line with expectations and strong cash flow performance Management actions and available operating capacity leave us well-placed to benefit from a recovery New strategy launched, with pathway to organic growth and improved margins Creating sustainable building sol
Slide 26: Appendix
APPENDIX 26
Slide 27: Divisional Review
Divisional Review Profiles Division P&L 2023 Performance £m 2022 2023 Change 3rd party revenue 161.7 154.9 ▼ 4% ► Profiles - Sales down 4%, with volume down 7% Inter-segmental revenue(1) 72.3 64.9 ▼ 10% • Reduced RMI and weaker new build activity • Partially offset by the benefit of recent market sh
Slide 28: Powerful Sustainable Credentials
Powerful Sustainable Credentials Use of Recycled PVC in Manufacturing Leading UK-based Recycler of PVC Windows 35% 32% 30% 29% 27% ► Improving % of recycled material consumed 25% 25% 23% - Use in primary extrusion increased to 32% of consumption in 2023 (2022: 29%) 20% 17% - Objective to increase to
Slide 29: Environmental and Social Targets and KPIs
Environmental and Social Targets and KPIs KPI 2022 Result 2023 Result Target Link to UN SDGs Environmental – circular economy No more than 5% waste to landfill by Waste to landfill % landfill 12% 9% 2025 and 1% by 2030 Increase of 2% per annum by 2025 Waste recycled % recycled 82% 76% then 1% per an
Slide 30: Product Range
Product Range Ranges of window profile Fascias, soffits and Traded goods and doors guttering Standard products Conservatories and Syncro patio and Aspect Skypod pitched skylights Equinox tiled roofs bi-fold doors Made-to- order products 30
Slide 31: 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 32: Branch Network Division
Branch Network 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 manufactu
Slide 33: Eurocell
eurocell