Slide 1: Eurocell Plc 2017 Half Year Results
EUROCELL PLC 2017 Half Year Results
Slide 2: Agenda
AGENDA Manufacturer Business Review Mark Kelly Chief Executive Financial Review Distributor Michael Scott Chief Financial Officer Strategy and Outlook Mark Kelly Recycler 1
Slide 3: Overview
OVERVIEW Mark Kelly – Chief Executive Financial results Revenue Gaining market share £108.1m Raw material price inflation ▲ 11% (9% excluding acquisitions) Robust cash flow Operational performance Investment in 15 new branches Adjusted EBITDA Driving growth in new build £14.9m ▲ 5% (H1 2016: £14.2m)
Slide 4: Market Backdrop
MARKET BACKDROP Total Window Units Supplied to Each Sector of the Market Flat RMI Market 15% 14% 7% Driver Description UK GDP is forecast to grow by 1.9% in 2017 21% GDP 43% (2016: 2.2%) Consumer confidence dropped sharply in the aftermath Consumer of the vote to leave the EU, but quickly recovered
Slide 5: Divisional Review: Profiles
DIVISIONAL REVIEW Profiles ► Gaining share in a flat market Profiles Division P&L £m H1 H1 - 6% organic sales growth 2017 2016 Change - Strong growth in private new build 3rd Party Revenue 46.4 42.4 ▲9% ► Building customer prospect pipeline Organic 41.7 39.3 ▲6% - Moving new trade fabricators onto E
Slide 6: Increasing Exposure to New Build Driving Strong Growth
INCREASING EXPOSURE TO NEW BUILD Driving Strong Growth ► New build up >15% this year ► Increasing market share through dedicated team ► Supply Chain Sustainability School Silver Award ► New build fabricator forum delivering a consistent offering ► Comprehensive range includes: - Aluminium bi-fold do
Slide 7: Divisional Review: Building Plastics
DIVISIONAL REVIEW Building Plastics Building Plastics Division P&L £m H1 H1 2017 2016 Change ► Continued market share growth 3rd Party Revenue 61.8 54.8 ▲13% ► Like for like(1) sales up 6% Organic 60.7 54.8 ▲11% - Driven by maturing branches – opened 2015 and prior Security Hardware (2) 1.1 - n/a -
Slide 8: Financial Highlights
FINANCIAL HIGHLIGHTS Michael Scott – Chief Financial Officer Revenue Gross Margin Adjusted(2) EBITDA £108.1m 51.4% £14.9m ▲11% (9% excluding acquisitions) ▼ 0.7% (H1 2016: 52.1%) ▲ 5% (H1 2016: £14.2m) Adjusted(2) Basic EPS Interim Dividend Net Debt 9.4p 3.0p per share £20.8m ▲ 8% (H1 2016: 8.7p) ▲
Slide 9: Financial Performance: Robust Financial Results
FINANCIAL PERFORMANCE Robust Financial Results £m H1 2017 H1 2016 Change Revenue 108.1 97.2 ▲ 11% Gross Margin % 51.4% 52.1% Overheads (40.7) (36.4) Adjusted EBITDA(1) 14.9 14.2 ▲ 5% Depreciation and Amortisation (3.3) (3.1) Finance Costs (0.3) (0.4) Adjusted Profit Before Tax(2) 11.3 10.7 ▲ 6% Tax
Slide 10: Sales Performance: Good Sales Growth
SALES PERFORMANCE Good Sales Growth Underlying(1) 115 sales ▲6% 110 2.7 108.1 2.3 105 3.5 103.1 100 2.4 97.2 £m 95 90 85 80 H1 2016 Profiles Building Underlying 2016 / 2017 Acquistions H1 2017 Plastics LFL Business Branches ► Sales ▲ 9% excluding acquisitions ► Building Plastics: ▲ 4% from branches
Slide 11: Overheads: Investment in Business Expansion
OVERHEADS Investment in Business Expansion Underlying(1) 42 overheads▲4% 1.4 40.7 41 40 1.6 39 0.6 £m 38 37.7 0.7 37 36.4 36 35 34 H1 2016 Wage Inflation Other Costs Underlying 2016 / 2017 Acquistions H1 2017 Business Branches ► Underlying(1) cost increase ▲ 4% ► 33 new branches opened in 2016 / 201
Slide 12: Capex: Investment in Business Expansion
CAPEX Investment in Business Expansion Total Capital Expenditure 8 7.2 ► H1 2017 capex £3.6m (H1 2016: £2.7m) 6 6.4 - Growth capex £1.6m 5.1 £m • Increase recycling capacity £0.6m 4 • New branches £1.0m 3.6 - Recurring / maintenance capex £2.0m 2 2.7 • Operations £0.8m includes tooling costs • Other
Slide 13: Cash Flow: Robust Cash Flow Generation
CASH FLOW Reconciliation of Net Debt Robust Cash Flow Generation £m Dec 2016 June 2017 Change Cash 5.5 5.0 (0.5) Borrowing (25.8) (25.8) - Net Debt (20.3) (20.8) (0.5) 16 14.9 (1.8) 14 (2.8) (1) 12 10.3 (3.6) 10 8 (0.3) (5.7) 6 £m 4 2 (1.3) (0.5) 0 -2 H1 2017 Working Tax and Net Cash from Capex Fina
Slide 14: Working Capital: Good Working Capital Management
WORKING CAPITAL Good Working Capital Management Key Working Capital Metrics(1) Stock Debtor Creditor Days Days Days ► Stock days flat at 58 vs Dec 2016 June 2016 67 42 46 - Stocks ▲ £2.5m Dec 2016 58 36 40 - New branches (£0.6m) and new product lines (£0.7m) June 2017 58 41 52 - Increased safety sto
Slide 15: Strategic Priorities
STRATEGIC PRIORITIES Mark Kelly – Chief Executive Continued confidence in strategy to create long term value Target growth in market share Expand the branch network 5 clear strategic Develop innovative new products priorities Increase use of recycled materials Explore potential bolt-on acquisition o
Slide 16: Strategic Priorities Progress Report
STRATEGIC PRIORITIES Progress Report STRATEGIC PRIORITIES 2017 OBJECTIVES PROGRESS IN H1 TARGET GROWTH IN Target new build, commercial and public sector Gaining share – Profiles organic growth of 6% MARKET SHARE Pull through demand from branch network Trade fabricator wins, with conversion i
Slide 17: Summary and Outlook
SUMMARY And Outlook Financial results Gaining market share Raw material price inflation Robust cash flow Operational performance Investment in 15 new branches Driving growth in new build Increased use of recycled material Strategy and outlook Progress with strategic priorities Some signs of market h
Slide 18: Appendices
Appendices eurocell: All together better
Slide 19: Product Range
PRODUCT RANGE Ranges of window and door profile Skypod pitched skylights Aspect bi-folding doors Conservatories and Equinox tiled roofs Fascias, soffits and guttering Traded goods 18
Slide 20: Corporate and Operational History
CORPORATE AND OPERATIONAL HISTORY Eurocell Building Branch expansion Branch expansion Branch expansion Plastics launched reaches 50 reaches 100 reaches 150 Operational Branch 1st Eurocell expansion Building Plastics reaches 174 branch Extrusion Rebranding: business single brand founded, Primary Prim
Slide 21: Locations
LOCATIONS Centrally located Extrusion centre Secondary Recycling Warehousing & HQ, Manufacturing, 140,000 sq ft operations (foiling) Factory (Merritt) Conservatory Warehousing, 51 extruders 120,000 sq ft Injection Moulding 10 extruders 75,000 sq ft Roofs and Recycling 12 extruders 260,000 sq ft Inje
Slide 22: Route to Market
ROUTE TO MARKET Recycling: Merritt Plastics 6,000 tonnes of recycled compound consumed (14% of profile raw material consumed) Third Party Suppliers Manufacturing Facilities: Retail Branches: Third Party 33,000 tonnes of virgin Eurocell Profiles Eurocell Building Plastics Suppliers e.g. compound cons
Slide 23: Recycling at Merritt Plastics
RECYCLING AT MERRITT PLASTICS Post-consumer Post-industrial 11,500 tonnes 6,000 tonnes collected and collected and recycled by Merritt recycled by Merritt 6,000 tonnes 5,000 tonnes Recycled recycled compound recycled compound compound used in production of used in trade stock rigid profile extrusion
Slide 24: Eurocell Profiles
EUROCELL PROFILES ► Manufactures: - Extruded rigid and foam PVC profiles - Manufacturing margin recorded in Profiles – benefits from branch expansion ► Sells: - Rigid PVC profiles to a network of > 350 third party fabricators and - Foam PVC profiles to customers through our nationwide branch network
Slide 25: Eurocell Building Plastics
EUROCELL BUILDING PLASTICS ► Sells: - Range of Eurocell manufactured and Number of branches branded PVC foam roofline products 180 174 - Vista doors 159 160 - Third party manufactured ancillary products: sealants, tools and rainwater 141 140 products 128 123 - Windows fabricated by third parties usi
Slide 26: Differentiation
DIFFERENTIATION B2B supplier Sustainability Vertically Stable ownership Clear strategy of innovative PVC In-house integrated Fresh focus, with Grow market share, building products closed loop business model new horizons expand branch recycling facility Recycling, network, develop manufacturing new p
Slide 27: Disclaimer
DISCLAIMER This Presentation may contain forward-looking statements form of commitment on the part forward-looking statements that involve risks and uncertainties of the Company to proceed with involve substantial risks and because they relate to events and any transaction. uncertainties, and actual
Slide 28: Eurocell
eurocell ® All together better 27