Eurocell Plc · LSE:ECEL
Eurocell — H1 2022 Earnings Presentation
31 slides from Eurocell's earnings presentation, Sep 9, 2022
Slide 1: Eurocell Plc 2022 Half Year Results
EUROCELL PLC 2022 Half Year Results Investor Meet Company
Slide 2: Agenda and Presenters
Agenda Presenters Introduction to Eurocell Mark Kelly Chief Executive Officer Sustainability Michael Scott Chief Financial Officer H1 2022 in Review Outlook 1
Slide 3: Product Range
Product Range Standard products Ranges of window profile and doors Fascias, soffits and guttering Traded goods Made to order products Skypod pitched skylights Conservatories and Equinox tiled roofs Syncro patio and Aspect bi-fold doors 2
Slide 4: 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 5: Divisional Review: Profiles – Opportunities to Grow Share
Divisional Review Profiles – Opportunities to Grow Share ► Gaining market share – estimate now c.18% ► Compelling case for trade fabricators to switch to Eurocell ► 3-fold increase in value of new account wins - Strong product range, continued product - 18 new accounts won in 2022 development and ra
Slide 6: Building Plastics Division
Building Plastics 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 manufa
Slide 7: Divisional Review: Building Plastics – Opportunities to Grow Share
Divisional Review Target to become the number 1 choice for Listen and engage relevant trades across the UK Building Plastics – Opportunities to Grow Share ► Communicate to engage ► Branch simplification programme ► Employee engagement First for service for the ► Training and development tradesperson
Slide 8: Powerful Sustainability Credentials
Powerful Sustainability Credentials Leading UK-based Recycler of PVC Windows Use of Recycled PVC in Manufacturing 30% 27% 28% 25% ► Improving % of recycled material consumed 25% 23% - Use in primary extrusion increased to 28% of consumption in H1 2022 (FY 2021: 27%) 20% - Strategic objective to incr
Slide 9: Looking to a Sustainable Future
Looking to a Sustainable Future Four Themes to Our Sustainable Development Leading UN Sustainable Development Goals for Eurocell ► Carbon, energy and water - Defining pathway to potential carbon neutrality and net zero • Continuing to reduce Scope 1 and 2 emissions, particularly in PVC extrusion and
Slide 10: H1 2022 in Review: Good First Half
H1 2022 in Review Good First Half Revenue Good first half against strong 2021 comparatives £190.5m ▲ 13% H1 2021 Substantial progress in sales and profits vs pre-pandemic period Recovering unprecedented input cost inflation Profit before tax Delivering operational efficiencies £15.2m ▲ 7% H1 2021 Po
Slide 11: Financial Highlights
Financial Highlights Good Financial Results Revenue Profit before tax Operating profit margin £190.5m £15.2m 8.7% ▲ 13% H1 2021: £168.1m ▲ 7% H1 2021: £14.2m ▼ 0.4% H1 2021: 9.1%, FY 2021: 8.5% Earnings per share Interim dividend Net debt (pre-IFRS 16) 11.2p 3.5p per share £15.0m ▲ 13% H1 2021: 9.9p
Slide 12: Sales
Sales Good Performance vs Strong 2021 Comparatives Total sales ▲ 13% 200 24.3 190.5 180 (1.5) 168.1 (0.4) £m 160 140 120 100 H1 2021 Profiles volume Building Plastics volume Sales price increase and H1 2022 surcharges ► Sales ▲13% vs H1 2021 ► Sales ▲40% vs H1 2019 ► Cyber incident occurred late Jul
Slide 13: Operating Profit
Operating Profit Good Performance vs Strong 2021 Comparatives 18 2.0 (1.5) 17 1.0 (0.6) _ 0.3 16.6 0.1 16 15.3 £m 15 14 13 H1 2021 Vol/price/cost Headcount Operating Bad debts Recycling New branches Other H1 2022 (net) efficiencies ► Operating profit ▲8% (£1.3m) vs H1 2021 ► Headcount – additions in
Slide 14: Capex
Capex Total Capital Expenditure (£m) Investment in Operating Capacity 18 16.7 16 15.2 ► Recent investment in capacity to resolve operational constraints and 13.7 facilitate further sales and market share growth 14 12 ► H1 2022 capex £6.4m (H1 2021: £7.3m) 10 8.7 - Manufacturing capacity expansion c.
Slide 15: Capital Allocation
Capital Allocation Strong Balance Sheet 1 2 3 4 Organic Ordinary Selective Efficient growth dividends acquisitions balance sheet ► Capital investment to expand ► Dividend cover of 2x through ► Disciplined approach to ► Refinanced £75m unsecured organic capacity the cycle acquisitions sustainable RCF
Slide 16: Medium-term Ambitions
Medium-term Ambitions Delivering Sustainable Growth in Shareholder Value £ Growth Sustainability Profitability Revenue Recycling Operating profit margin • Margins impacted by exceptional • Leading UK-based recycler of PVC sales growth running ahead of • Consistent and proven delivery of Track organi
Slide 17: Outlook
Outlook Well Positioned with Proven Ability to Outperform in our Sectors Eurocell Private RMI New build Commercial revenue c.80% c.15% and increasing c.5% Sector Macroeconomic uncertainty Robust new build market Post-COVID recovery backdrop – Opportunity to take further market share – Well positione
Slide 18: Appendices
Appendices eurocell. All together better
Slide 19: Investment Case
Investment Case ✓ Clear strategy and priorities ✓ Leading market positions ✓ Proven ability to deliver revenue growth and good potential to outperform ✓ Operational capacity constraints resolved through major investments ✓ Uniquely differentiated on sustainability through recycling operation ✓ Conti
Slide 20: Financial Performance: Group Income Statement
Financial Performance Group Income Statement £m H1 2021 H1 2022 Change Revenue 168.1 190.5 ▲ 13% Gross profit 84.4 96.5 Gross margin % 50.2% 50.7% Overheads (58.3) (68.0) ▲ 17% IFRS 9 impairments 0.5 - EBITDA 26.6 28.5 ▲ 7% Depreciation and amortisation (11.3) (11.9) Operating profit 15.3 16.6 ▲ 8%
Slide 21: Divisional Review: Profiles H1 2022 Performance
Divisional Review Profiles – H1 2022 Performance Profiles Division P&L H1 H1 £m Change 2021 2022 ► Sales up 17% on H1 2021 3rd party revenue 68.5 80.1 ▲ 17% - Volume kept pace with exceptionally strong 2021 • Well ahead of pre-pandemic period Inter-segmental revenue(1) 35.9 37.9 ▲ 6% - Supported by
Slide 22: Divisional Review: Building Plastics H1 2022 Performance
Divisional Review Building Plastics – H1 2022 Performance Building Plastics Division P&L ► Sales up 11% on H1 2021 - Volume kept pace with exceptionally strong 2021 H1 H1 £m Change 2021 2022 • Well ahead of pre-pandemic period - Greater emphasis on high value project work 3rd party revenue 99.6 110.
Slide 23: Working Capital
Working Capital Key Working Capital Metrics(1) Impact of Inflation Stock Days(1) Debtor Days(1) June 2021 72 34 December 2021 95 30 ► Outflow from working capital £9.6m June 2022 101 36 - Significant impact of cost inflation, selling price increases and surcharges (net c.£8m) ► Stock days at 101 vs
Slide 24: Cash Flow
Cash Flow Significant Headroom and Good Liquidity Net Debt Reconciliation Dec Jun £m Change 2021 2022 32 28.5 (9.6) Cash & overdraft 0.7 6.3 5.6 28 Borrowings (11.7) (21.3) (9.6) 24 Net debt (pre-IFRS 16) (11.0) (15.0) (4.0) (1) 20 (0.8) IFRS 16 leases (58.7) (56.9) 1.8 18.1 (7.4) Net debt (69.7) (7
Slide 25: Financial Summary Including Technical Guidance for 2022
Financial Summary Including Technical Guidance for 2022 Guidance stated post-IFRS 16 2021 Reported 2022 Guidance ► Good financial results against tough 2021 comparatives - Strong price-driven sales growth Underlying income statement - Successfully recovering unprecedented input cost inflation via pr
Slide 26: Environmental and Social: Targets and KPIs
Environmental and Social Targets and KPIs KPI 2020 Base 2021 Result Target Link to UN SDGs Environmental – circular economy ► Objectives align with relevant Recycled material used in production % used 25% 27% 1% increase per year UN Sustainable Development Goals (SDGs) CO2 saved by recycling operati
Slide 27: Recycling Inputs and Outputs
Recycling Inputs and Outputs Major Cost and Carbon Savings K tonnes 2020 2021 H1 2022 Inputs – waste recycled Post-consumer 27.0 40.5 18.0 ► Leading UK-based recycler of PVC windows Post-industrial 6.7 7.7 4.1 - Substantial investments since 2018 Total 33.7 48.2 22.1 - Keeping pace with sales growth
Slide 28: Route to Market
Route to Market Third Party Suppliers Recycling: Eurocell Recycle Third Party Suppliers 37,200 tonnes of virgin e.g. compound consumed (1), 16,800 tonnes of recycled • Rainwater products plus 7,400 tonnes of compound consumed • Sealants other raw materials (2) (27% of profile raw material • Tools co
Slide 29: Group History
Group History Branch expansion Branch expansion Eurocell Building Branch expansion reaches 100 reaches 150 Plastics launched reaches 50 Operational Branch Branch 1st Eurocell expansion expansion Building Plastics reaches 200 reaches 219 Extrusion branch business Rebranding: Primary Primary Primary P
Slide 30: Disclaimer
DISCLAIMER This Presentation may contain forward-looking uncertainties because they relate to events and In no circumstances will the Company be statements that involve substantial risks and depend on circumstances that may or may not responsible for any costs, losses or expenses uncertainties, and
Slide 31: Eurocell – All together better
eurocell All together better