Forterra Plc · LSE:FORT
Forterra — FY2024 Earnings Presentation
33 slides from Forterra's earnings presentation, Mar 12, 2025
Slide 1: Full Year Results Presentation
FULL YEAR RESULTS PRESENTATION FORTERRAPIC = Sac 12 MARCH 2025
Slide 2: Disclaimer
This document has been prepared by Forterra plc (the “Company”) solely for use at a Statements in the Presentation, including those regarding the future financial condition, results presentation on 12 March 2025 in connection with the Company’s Results Announcement in of operations, business or othe
Slide 3: Agenda
01 ⎯ Headlines 02 ⎯ Financial Review 03 ⎯ Our Markets 04 ⎯ Strategic Update 05 ⎯ Sustainability 06 ⎯ Outlook Chief Executive Officer Chief Financial Officer Full Year Results Presentation 2024 3
Slide 4: Headlines
- Revenue flat year-on-year, double digit increase in H2 vs both the prior year and H1 24 - 2024 UK brick industry despatches up 2% compared with 2023, with Q4 20% ahead of the corresponding period - Strong commercial discipline maintained with selling prices remaining relatively stable - Adjusted E
Slide 5: Financial Review
Full Year Results Presentation 2024 5
Slide 6: Group results summary
Year ended 31 December * £m 2024 2023 Change Revenue 344.3 346.4 (0.6)% EBITDA 52.0 58.1 (10.5)% EBITDA margin 15.1% 16.8% (170) bps Operating profit / EBIT 31.2 38.1 (18.1)% Profit before tax (PBT) 22.1 31.1 (28.9)% Earnings per share (pence) 7.6 11.4 (33.3)% Operating cash flow 60.1 (5.3) Net debt
Slide 7: Group income statement
Year ended 31 December* £m 2024 2023 Change Revenue 344.3 346.4 (0.6)% EBITDA - Bricks and Blocks 49.0 52.1 (6.0)% - Bespoke Products 3.0 6.0 (50.0)% Total 52.0 58.1 (10.5)% EBITDA margin 15.1% 16.8% (170) bps Depreciation and Amortisation (20.8) (20.0) 4.0% Operating profit / EBIT 31.2 38.1 (18.1)%
Slide 8: Adjusted results and adjusted items
277.4 376.1 2023 2022 Year ended 31 December • Adjusted results are provided to fairly show our £m 2024 2023 underlying trading performance on a like-for-like basis EBITDA 54.7 44.1 Adjusted items • Adjustments relate to: Fair value movement on energy derivatives 7.1 0.8 • Removal of fair value bene
Slide 9: Bricks and Blocks
• Revenue of £276.7m, in line with prior year • Brick volumes flat year-on-year with stronger growth in Year ended 31 December * blocks with Aircrete volumes increasing c.20% vs prior year £m 2024 2023 Change • Strong commercial discipline maintained with brick pricing Revenue 276.7 277.4 (0.3)% rel
Slide 10: Bespoke Products
277.4 376.1 2023 2022 • Revenue broadly flat year-on-year at £71.5m Year ended 31 December* • As a reminder, this segment delivered an extremely strong result in 2023 ahead of 2022 performance £m 2024 2023 Change Revenue 71.5 72.7 (1.7)% • Floor beam despatches increased by c.10% with a significant
Slide 11: Strong recovery in cash generation
- Strong recovery in cash generation driven by aligning production to demand - Inventories reduced in 2024 following significant inventory build seen in 2023 - Anticipate continuation of strong cash generation in 2025 Full Year Results Presentation 2024 11
Slide 12: Working capital and inventory
- Inventory reduction of £13.8m driven primarily by Aircrete, with brick inventories broadly stable - Increase in trade receivables reflects increasing activity in Q4 with industry brick despatches around 20% ahead of the 2023 comparative - Expectation for brick inventories to remain broadly static
Slide 13: Capital expenditure
Capital expenditure* £m 2019 2020 2021 2022 2023 2024 2025** Strategic 12.6 19.5 28.9 33.6 19.3 21.6 8.0 Maintenance 9.9 5.4 5.7 10.5 14.8 4.0 7.2 Total capex 22.5 24.9 34.6 44.1 34.1 25.6 15.2 Note*: Excluding capitalised borrowing costs Note**: Management forecast - £135.5m of strategic capital ex
Slide 14: Cash flow
Year ended 31 December • Decline in operating cashflow due predominantly • Strong adjusted operating cash flow, £m to a £31.1m decline in adjusted EBITDA and a 2024 2023 demonstrating the success of management significant working capital outflow driven by an Adjusted operating cash flow 60.1 (5.3) a
Slide 15: Net debt and leverage
• Net debt (before leases) of £84.9m equating to leverage of c.1.9 times At 31 December • £8.3m reduction on 2023 (£93.2m) not withstanding total capital spend of over £25m £m 2024 2023 Change • Committed revolving credit facility (RCF) of Cash and cash equivalents 15.2 16.0 (0.8) £170m extending to
Slide 16: Capital allocation priorities
Continued strong free cash flow will be allocated in line with our capital allocation priorities: - Strategic organic capital investment to deliver compelling returns - Attractive mid-term dividend policy with a pay- out ratio of 55% of earnings - Bolt-ons as suitable opportunities arise in adjacent
Slide 17: Our Markets
Full Year Results Presentation 2024 17
Slide 18: UK housing starts and completions
Average number of Government focus on Affordability remains a Our customers are Whilst unlocking the completions over last 20 planning reform to ‘unlock’ constraint however more positive in the supply side is crucial, years of 172,000 supply side and drive UK interest rates in the UK short to medium
Slide 19: Brick consumption, inventory and imports
Brick inventory Brick imports Starts and completions 600 25% 250,000 600 50% 500 500 20% 200,000 40% 400 400 30% 15% 150,000 300 300 100,000 20% 10% 200 200 50,000 100 10% 100 5% - 0 0% 0 0% 2022 2023 2024F 2025F 2026F Dec 2022 Dec 2023 Dec 2024 Dec 2022 Dec 2023 Dec 2024 Starts Completions Inventor
Slide 20: Evolving domestic brick industry capacity
Evolving domestic brick industry capacity Forterra capacity 3.5 Increase Decrease Total Forterra Demand (2022) 3.3 Others Demand (estimate at 300,000 140% homes Government target) 3.1 22% 120% 9% 115% 2.9 7% 100% 33% 100% 2.7 2.60 Bricks (bn) 2.5 80% -47% 66% 2.3 0.10 2.20 -9% (0.30) 60% 0.15 2.1 2.
Slide 21: Strategic Update
Full Year Results Presentation 2024 21
Slide 22: Our strategy
Strengthen the core Make our current business even better than it is today - Our strategy supports the delivery of our purpose, recognising the key role our products play in shaping the built environment - Strategic imperatives provide a clear roadmap for the organisation, guiding our efforts across
Slide 23: Wilnecote factory reinstatement
- Further progress on the reinstatement of our Wilnecote factory despite supply chain challenges, which will ultimately deliver: - Increased capacity and broader range - Diversification through the attractive commercial and specification market - A range that includes non-standard brick dimensions &
Slide 24: Brick slip line at Accrington
- Investing in new capacity to deliver growth in sales volumes along with enhanced efficiency - New brick slip manufacturing line at Accrington; a cost-effective entry into this attractive market, with commissioning ongoing - The first UK manufactured extruded slip solution offers improved cost and
Slide 25: Sustainability
Full Year Results Presentation 2024 25
Slide 26: Sustainability achievements, progress and targets
2022-23 ACHIEVEMENTS 30% more efficient Forterra Solar Farm Desford brick factory open generating c.80% of our electricity demand now open 2024 PROGRESS Calcined clay Plastic packaging utilising as cement substitute – Ongoing work to meet our short- initially within our own products term plastic red
Slide 27: Calcined clay as cement substitute
- Calcined clay is produced by heating clay to high temperatures, resulting in a product that has only 42% of the embodied carbon of traditional cement - Using waste bricks eliminates an energy intensive element of this process and delivers an even lower embodied carbon – 11% of regular cement - In
Slide 28: Outlook
Full Year Results Presentation 2024 28
Slide 29: Outlook
- Trading in the first two months of 2025 continued the positive trends seen in the final quarter of 2024, with our brick despatches 17% ahead of the weather impacted prior year - Entering 2025 we are facing more normal levels of cost inflation, but with the added challenge of increasing Employers'
Slide 30: Growth illustration
▪ Strategic capital investments will leverage the return to a normalised market - Brick slips - Commercial excellence ▪ Growth illustration assumes: - Manufacturing excellence ▪ Return to 2022 levels of profitability (208k completed new homes vs.169k in 2024) ▪ Incremental benefits from projects (as
Slide 31: Appendix
Full Year Results Presentation 2024 31
Slide 32: Balance sheet
Year ended 31 December £m 2024 2023 Change Intangible assets 11.6 19.2 (7.6) Property, plant and equipment 263.8 249.7 14.1 Right-of-use assets 20.5 24.1 (3.6) Derivative asset 2.8 5.0 (2.2) Total non-current assets 298.7 298.0 0.7 Inventories 82.0 95.8 (13.8) Trade and other receivables 39.0 31.0 8
Slide 33: Forterra plc contact details
Forterra plc 5 Grange Park Court, Roman Way, Northampton NN4 5EA Tel: 01604 707600