Genuit Group Plc · LSE:GEN
Genuit — H1 2022 Earnings Presentation
27 slides from Genuit's earnings presentation, Aug 16, 2022
Slide 1: 2022 Half Year Results
2022 Half Year Results 16 August 2022
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 1 INTRODUCTION 2 FINANCIAL SUMMARY 3 BUSINESS OVERVIEW 4 OUTLOOK AND SUMMARY 5 APPENDIX
Slide 4: Introduction
Introduction • Revenue increase of 7.6% against strong prior year comparatives, 5.7% higher on a like-for-like basis • Price leadership offset specific headwind events, a planned prioritisation of higher margin business and a minor decline in market-driven volume • Pricing lag resolved with month-on
Slide 5: Financial Summary
1 INTRODUCTION 2 FINANCIAL SUMMARY 3 BUSINESS OVERVIEW 4 OUTLOOK AND SUMMARY 5 APPENDIX
Slide 6: Financial Summary
Financial Summary • Underlying operating profit of £47.4m, a marginal decrease on prior year • An isolated cyber incident and boiler supply chain issues affected second quarter revenue with an EBIT impact of c.£7.0m • Strong order books and sequential month-on-month improvement in operating margin i
Slide 7: Underlying results summary
Underlying results summary • Revenue growth driven by robust price leadership £m H1 2022 H1 2021 Change offset by a minor decline in volume against a strong comparative Revenue 318.0 295.6 7.6% Cost of sales (194.4) (173.6) 12.0% • An isolated cyber incident and boiler supply chain Gross profit 123.
Slide 8: Revenue and underlying operating profit bridge
Revenue and underlying operating profit bridge Revenue (£m) +37.6 +12.3 +0.2 -16.7 -6.0 -5.0 • Price leadership delivered on cost inflation and offset c.4% 344.6 329.0 318.0 softer demand 295.6 328.5 328.8 322.8 317.8 295.6 • Exit from low margin volume to increase quality of the business 2021 Half
Slide 9: Statutory results
Statutory results • Amortisation increased due to full period £m H1 2022 H1 2021 of acquisitions made in H1 2021 Underlying profit after tax 34.8 38.3 • Acquisition costs and contingent Non-underlying items: consideration in H1 2022 relate to Plura - Amortisation of intangible assets (7.5) (6.6) def
Slide 10: Cash flow
Cash flow £m HY 2022 HY 2021 Change • Capex net proceeds from sale and EBITDA (before non-underlying items) 58.4 60.1 (1.7) leaseback of car fleet, spend expected to Net capex (7.4) (15.0) 7.6 increase in H2 as investment projects Working capital (37.4) (31.1) (6.3) Share-based payments 1.6 1.0 0.6
Slide 11: Net working capital
Net working capital £m H1 2022 H1 2021 Inventories 97.4 64.4 Trade and other receivables 94.8 99.4 Trade and other payables (132.4) (129.0) Net working capital 59.8 34.8 • Inventories increase driven by focus on improving customer service and overcoming material supply issues • Boiler supply chain i
Slide 12: Banking facilities
Banking facilities Drawn as at • Well within covenant requirements with £m 30 June Facility Headroom 2022 significant headroom Bank loan 218.0 300.0 82.0 Cash and cash equivalents (49.7) - 49.7 • In H2, the Revolving Credit Facility was Net debt excluding unamortised debt issue costs 168.3 300.0 131
Slide 13: Operating segment review – Residential Systems
Operating segment review – Residential Systems Growth vs LTM to June 2022 demand drivers H1 2022 H1 2021 H1 2021 Revenue £198.9m £183.8m 8.2% Underlying operating profit £37.3m £35.8m 4.2% UK Infrastructure Underlying operating margin 18.8% 19.5% 1% UK Commercial - Public 4% UK Commercial - Private
Slide 14: Operating segment review – Commercial and Infrastructure Systems
Operating segment review – Commercial and Infrastructure Systems Growth vs LTM to June 2022 demand drivers H1 2022 H1 2021 H1 2021 Revenue £119.1m £111.8m 6.5% Underlying operating profit £10.1m £12.8m (21.1)% UK RMI Underlying operating margin 8.5% 11.4% UK Infrastructure 2% 10% UK New Build 28% •
Slide 15: Business Overview
1 INTRODUCTION 2 FINANCIAL SUMMARY 3 BUSINESS OVERVIEW 4 OUTLOOK AND SUMMARY 5 APPENDIX
Slide 16: Our market leading capabilities drive outperformance
Our market leading capabilities drive outperformance Delivering growth ahead of the UK construction market over the cycle • Leading positions in structural growth markets • Strong brands in climate and water management sectors • Selective organic and inorganic opportunities • Legacy material substit
Slide 17: CPA forecast indicates construction market resilience despite uncertain economic outlook
CPA forecast indicates construction market resilience despite uncertain economic outlook Total UK Construction (excluding Infrastructure) Construction market overview • Recent CPA Summer forecast suggests 1.3% growth for 2022, though £bn 160 155 153.6 there is clearly an uncertain outlook 150 144.8
Slide 18: Highlights from across the Group
Highlights from across the Group Delivering growth, underpinned by continued investment Retrofit market growth Growth in home energy efficiency • Nu-Heat UFH sales +15% in H1 • ADEY Pro Check helping • Lead generation +20% in H1 homeowners to improve the efficiency of their central heating Internati
Slide 19: Highlights from across the Group
Highlights from across the Group Delivering growth, underpinned by continued investment Further Investment in recycled content Investment in our core • New generation of PVC pipe extrusion at • £18m capex investment in new machinery Aylesford at Polypipe Building Products in • Enables up to 65% post
Slide 20: Sustainability is at the heart of our growth strategy and the way we operate
Sustainability is at the heart of our growth strategy and the way we operate our businesses • Carbon intensity (target 66% reduction by 2025) • Broadly in line with FY 2021(44.0%) in H1; renewable energy sources • Signed Pledge to Net Zero; Science-Based Targets in 2022 • Recycled materials (target
Slide 21: Outlook and Summary
1 INTRODUCTION 2 FINANCIAL SUMMARY 3 BUSINESS OVERVIEW 4 OUTLOOK AND SUMMARY 5 APPENDIX
Slide 22: Outlook and summary
Outlook and summary • The Group has a balanced exposure to and should continue to outperform the construction market through the cycle • Despite the short term headwinds in the residential sector (including ongoing boiler supply constraints), the fundamentals continue to be strong, driven by the str
Slide 23: Q&A
QP cenuit GROUP Q&A
Slide 24: Appendix
QP cenuit GROUP APPENDIX
Slide 25: UK Construction Market – Residential remains resilient
UK Construction Market – Residential remains resilient £bn 50.0 46.2 45.0 42.0 42.5 42.5 40.0 36.4 • Momentum of post pandemic recovery slightly faltered, 35.0 30.0 though private new housebuilding remains in line with 25.0 forecast from Spring 20.0 15.0 • After the rapid recovery in starts in 2021,
Slide 26: UK Construction Market – Residential RMI remains at high levels with key sectors providing ongoing growth
UK Construction Market – Residential RMI remains at high levels with key sectors providing ongoing growth £bn 32 31.3 • Private housing RMI is still forecast to remain relatively resilient, with 30.9 30.7 31 no recent change in outlook to the slight reduction vs the record 30.0 30 expenditure levels
Slide 27: UK Construction Market – Commercial and Infrastructure
UK Construction Market – Commercial and Infrastructure Commercial Sector Output Trends £bn 35 30.2 • The sector declined by 33.3% between 2017 to 2021 before returning 30 23.5 22.9 23.6 to a meaningful growth trajectory. 25 22.1 20 • All subsectors are forecast to continue to grow, led by health and