Slide 1: Interim Results 6 months to 30 June 2015
Polypipe Group plc Interim Results 6 months to 30 June 2015 1
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 Highlights David Hall Presentation Team David Hall Peter Shepherd Chief Executive Officer Chief Financial Officer 3
Slide 4: Highlights
Highlights 12.8% growth in operating profits Good demand for residential piping systems from UK housebuilders, increasingly from projects outside of London and the South-East Improvement in the residential RMI sector Good demand from road and rail projects Strong increase in sales of Water
Slide 5: Agenda
Agenda Highlights Financial Review David Hall Peter Shepherd 5
Slide 6: Financial highlights
Financial highlights Revenue £170.4m 1.3% Operating profit £25.6m 12.8% Profit before tax (pre exceptionals) £23.2m 41.5% Adjusted EPS 9.11p 29.2% Net Debt to EBITDA 1.3x Interim dividend 2.3p 53.3%* * Part year in 2014 6
Slide 7: 2015 Interim results summary
2015 Interim results summary £m H1 2015 H1 2014 change % change Revenue 170.4 168.2 2.2 1.3% Cost of sales (102.3) (105.3) 3.0 (2.8%) Gross profit 68.1 62.9 5.2 8.3% Gross profit margin 40.0% 37.4% Distribution costs (15.6) (16.1) 0.5 (3.1%) SG&A (26.9) (24.1) (2.8) 11.6% Operating profit pre except
Slide 8: Revenue and operating profit bridge
Revenue and operating profit bridge 180 178 Revenue £m 176 + 1.3 174 + 4.1 172 170 + 0.8 168 (4.0) 170.4 166 164 168.2 162 160 H1 2014 Selling Sales Acquisitions Currency H1 2015 Price Volume 28 Operating Profit £m + 0.8 + 0.3 27 26 + 2.5 25 (1.0) (0.5) 24 + 0.8 25.6 23 22 22.7 21 H1 2014 Selling Ma
Slide 9: Operating segment review - Residential
Operating segment review - Residential Residential H1 2015 H1 2014 % Growth Revenue £90.2m £86.8m +3.9% Operating profit* £15.4m £13.2m +16.7% Operating profit margin 17.1% 15.2% Revenue growth of 4.8% (working day adjusted): last year’s pre price increase pull forward resulted in strong comparabl
Slide 10: Operating segment review – C&I UK
Operating segment review – C&I UK Commercial & Infrastructure UK H1 2015 H1 2014 % Growth Revenue £59.1m £56.4m +4.8% Operating profit* £9.3m £8.6m +8.1% Operating profit margin 15.7% 15.2% Revenue growth of 5.6% (working day adjusted) Good demand in UK from road and rail projects and high rise
Slide 11: Operating segment review – C&I Mainland Europe
Operating segment review – C&I Mainland Europe Commercial & Infrastructure Europe H1 2015 H1 2014 % Growth Revenue £26.5m £30.6m (13.4)% Operating profit* £0.9m £0.9m - Operating profit margin 3.4% 2.9% Revenue down 2% in local currency. Housing starts in France fell by 9.7% in the first half of 2
Slide 12: Balance sheet summary
Balance sheet summary £m H1 2015 H1 2014 change Non Current Assets – property, plant & equipment 90.9 88.8 2.1 – intangibles 239.5 234.4 5.1 Net Working Capital 10.8 9.4 1.4 Outstanding listing costs - (3.5) 3.5 Cash 36.4 18.1 18.3 Long term debt – bank debt (120.0) (120.0) - Taxation (6.2) (0.5) (5
Slide 13: Net working capital
Net working capital £m H1 2015 H1 2014 Dec 2014 Inventories 39.5 41.0 39.9 Trade & Other receivables 31.8 25.8 20.9 Trade & Other payables (60.5) (60.9) (65.2) Net working Capital as reported 10.8 5.9 (4.4) Outstanding listing and refinancing costs excluded from NWC - 3.5 - Net operating working cap
Slide 14: Cashflow
Cashflow £m H1 2015 H1 2014 EBITDA1 33.0 30.0 Capital expenditure (9.3) (7.3) Working capital (15.1) (12.1) Operating Cashflow 8.6 10.6 Financing costs – net interest paid (2.2) (7.8) – refinancing costs - (9.3) Taxation (1.9) (2.4) Listing costs - (8.9) Dividends paid (6.0) - Acquisition of new bus
Slide 15: Agenda
Agenda Highlights Financial Review Business Review David Hall Peter Shepherd David Hall 15
Slide 16: Market backdrop
Market backdrop 21% Housing Completions (GB) New Work Output 33% Thousands Thousands Note: New Work Output used as proxy for commercial, public non-housing & infrastructure works. Source: DCLG, Construction Products Association 2011 constant prices 16% Housing RM&I Output 30% European Construction M
Slide 17: Strategic growth drivers
Strategic growth drivers Water Management Solutions Carbon Efficient Solutions • Strong growth for Water Management Solutions driven by • Major underfloor heating campaign targeted at householders legislation and continued new product introductions including endorsed by high profile interior designe
Slide 18: Strategic growth drivers
Strategic growth drivers Substituting Legacy Materials Middle East, Gulf & Export • Plastic plumbing growth underpinned by significant trade activity • Continued benefits from increased resource committed to including the “Grey Matters” and “Max the plumber” marketing specification sales in the Midd
Slide 19: Nuaire acquisition
Nuaire acquisition Acquisition of Nuaire for £145 million on a cash and debt-free basis – Leading UK designer, manufacturer and distributor of ventilation systems Strong strategic rationale for a combination of Polypipe and Nuaire – Consistent with stated strategy to broaden presence in markets
Slide 20: Nuaire acquisition consistent with strategy
Nuaire acquisition consistent with strategy Positioning to benefit from the market recovery Continued product development for sustainable construction Leverage brand position and end-user relationships Continuous investment in processes and efficiency initiatives Selective development in the
Slide 21: Summary & outlook
Summary & outlook UK market recovery expected to continue and we remain well placed to capture our share Continued focus on structural growth opportunities: Substituting Legacy Materials Water Management Solutions Carbon Efficient Solutions Middle East, Gulf & Export opportunities And
Slide 22: Questions & Answers
2 Polypipe Questions & Answers 23