Eurocell Plc · LSE:ECEL
Eurocell — H1 2024 Earnings Presentation
33 slides from Eurocell's earnings presentation, 2024
Slide 1: Eurocell Plc 2024 Half Year Results
EUROCELL PLC 2024 Half Year Results 1
Slide 2: Contents
Contents Agenda Presenters Overview Darren Waters Financial Review Michael Scott Strategy Update 2
Slide 3: Overview
Overview Revenue Darren Waters – Chief Executive £175.7m ▼ 5% H1 2023 Profits up 33% on lower sales, driven by proactive gross margin management and reduced input costs Adjusted profit before tax £8.0m Full year expectations unchanged, despite trading ▲ 33% H1 2023 conditions remaining challenging G
Slide 4: Financial Review
EUROCELL PLC Financial Review 4
Slide 5: Financial Highlights
Financial Highlights Michael Scott – Chief Financial Officer Revenue Adjusted profit before tax Adjusted earnings per share £175.7m £8.0m 5.6p ▼ 5% H1 2023: £184.4m ▲ 33% H1 2023: £6.0m ▲ 30% H1 2023: 4.3p Net cash from operating activities Net debt/(cash) (pre-IFRS 16) Interim dividend £21.9m £4.3m
Slide 6: Financial Performance
Financial Performance Income Statement H1 H1 ► H1 2024 non-underlying items £0.4m £m Change 2023 2024 - Implementation costs for strategic IT projects – Revenue 184.4 175.7 ▼ 5% cloud-based “Software as a Service” Gross profit 84.8 92.2 ► H1 2023 non-underlying items £2.5m Gross margin % 46.0% 52.5%
Slide 7: Sales
Sales CPA Construction Products Industry Forecasts 2024-26 (1) Private housing RMI growth Continued Weak Market Conditions 13% 6% 4% Sales Bridge 2% 190 (6)% (6.4) 2022 2023 2024 F 2025F 2026F 185 184.4 Total housing growth £m 180 1.1 (3.4) Sales 11% ▼ 5% 6% 6% 175 175.7 170 (7)% H1 2023 Profiles vo
Slide 8: Adjusted Operating Profit
Adjusted Operating Profit Profits Up Driven by Reduced Input Costs Operating Profit Bridge 16 Virgin Resin and Recycling Feedstock Prices (indexed) 3.8 (2.1) Adjusted 14 operating 300 profit Feedstock price Virgin compound price (1.6) ▲ 22% 12 (1.3) 250 2.0 (1.2) 6.2 10 (0.8) 200 9.3 8 (3.3) 150 £m
Slide 9: Capex
Capex Well-invested Facilities Total Capital Expenditure and Allocation (£m) H1 2018(1) 2019 2020 2021 2022 2023 ► H1 2024 capex £4.5m (H1 2023: £3.8m) 2024 - Primarily maintenance capex Manufacturing 3 5 - 7 4 1 - capacity ► 2024 capex guidance c.£12m Recycling capacity(1) 7 6 2 1 1 - - - £2m for s
Slide 10: Working Capital
Working Capital Efficient Cash Flow Management Key Working Capital Metrics ► Inflow from working capital £0.9m Debtors Stock Days Days ► Stock days at 88 vs 84 at December 2023 and 86 at June 2023 June 2023 86 34 - Stocks ▲ £1.3m December 2023 84 27 • Supports strategic growth initiatives June 2024
Slide 11: Cash Flow
Net Cash/(Debt) Reconciliation Cash Flow £m Dec 2023 Jun 2024 Change Cash and overdraft 0.4 0.1 (0.3) Strong Balance Sheet and Liquidity Borrowings - (4.4) (4.4) Net cash/(debt) (pre-IFRS 16) 0.4 (4.3) (4.7) 25 0.9 (0.4) IFRS 16 leases (58.6) (56.6) 2.0 (0.4) (5.0) Net debt (58.2) (60.9) (2.7) 20 21
Slide 12: Capital Allocation Policy
Capital Allocation Policy Focused on Enhancing Shareholder Returns ► Capital allocation policy updated following launch of new strategy - The Board has assessed how we enhance shareholder returns - Intend to drive returns through a combination of a progressive ordinary dividend and supplementary dis
Slide 13: Financial Summary
Financial Summary Including Technical Guidance for 2024 ► Adjusted PBT up 33% despite lower sales, driven by: Guidance (post-IFRS 16) 2023 2024 Reported Guidance - Proactive gross margin management, combined with the benefit of lower input costs Underlying Income Statement - Partially offset by lowe
Slide 14: Strategy Update
EUROCELL PLC Strategy Update 14
Slide 15: New Strategy
New Strategy Launched March 2024 Creating sustainable building solutions for the trade of today, the homes of tomorrow and the environment of the future 5-YEAR AMBITION £500m Sales £50m Operating profit 10% Operating margin CUSTOMER BUSINESS PEOPLE ESG GROWTH EFFECTIVENESS FIRST LEADERSHIP Be the tr
Slide 16: Customer Growth – Branch Network Update
Customer Growth – Branch Network Update Confirmed Optimal Estate Size of at Least 250 Branches, with Priority Locations Identified CUSTOMER GROWTH CACI help us determine Eurocell’s demand map Key Drivers and Critical Success Factors for Branches Customer demand for Eurocell Attractiveness of a Euroc
Slide 17: Customer Growth – Branch Network Update
Customer Growth – Branch Network Update Refreshed Branch Exterior and Signage CUSTOMER GROWTH New Exterior Standard Live Example – Wembley Relocation ► Brand loud and proud - Windows and doors prominent, with core categories mid-height - Services at eye-level for trade counter entry - Promotional sp
Slide 18: Customer Growth – Windows and Doors
Customer Growth – Windows and Doors Strategy Overview CUSTOMER GROWTH Route to Market for Windows and either sold directly to a window installer… manufacture which is made into windows who install the finished providing the homeowner window profile and by our fabricator partners windows and doors in
Slide 19: Customer Growth – Windows and Doors Update
Customer Growth – Windows and Doors Update Successful Trial with Roll-out Now Being Accelerated CUSTOMER GROWTH Estimated # Branches Live on Programme Sales of Windows and Doors – Estimated Capacity Utilisation from Live Branches “2024 Peak” is an average of the best individual months of each branch
Slide 20: Customer Growth – Extended Living Update
Customer Growth – Extended Living Update Performance on Track CUSTOMER GROWTH ► Garden rooms OUR Take share from established market leaders and become best-in-market - Leveraging exceptional customer AMBITION journey and efficient processes - Good opportunity to gain share Horizontal / Vertical Clad
Slide 21: Digital Growth
Digital Growth Strategy Overview and Update CUSTOMER GROWTH OUR Enhance our market leading digital proposition to build awareness of our products and home improvement AMBITION solutions, driving new customers and incremental sales Pay per click (PPC) Homeowner Social media Improved website experienc
Slide 22: Business Effectiveness
Business Effectiveness Strategy Overview and Update BUSINESS EFFECTIVENESS OUR A lean and efficient business that enables agility and enhances our profitability AMBITION Estimated cost of IT system replacement project in the region of £10m IT SYSTEM REPLACEMENT over the next 3 years (including c.£3m
Slide 23: People First
People First Strategy Overview and Update PEOPLE FIRST OUR Eurocell will be a great place to work where talented, engaged and motivated colleagues work passionately to AMBITION achieve clear business and personal goals Launch of new Eurocell people branding HEALTH AND SAFETY EMPLOYEE VALUE PROPOSITI
Slide 24: ESG Leadership
ESG Leadership Strategy Overview and Update ESG LEADERSHIP Scope 1 & 2 – Illustrative Near-term Reduction Pathway OUR Earn a reputation for being a truly responsible company AMBITION ktCO2 ► Target Net Zero by 2045 - File targets with SBTi in 2024 and publish transition plan in 2024 Annual Report -
Slide 25: Summary and Outlook
Summary and Outlook Increased first half profits Full year expectations unchanged Good early momentum with strategic initiatives 25
Slide 26: Appendix
APPENDIX 26
Slide 27: Divisional Review
Divisional Review Profiles Division P&L H1 H1 2024 Performance £m 2023 2024 Change 3rd party revenue 79.5 72.6 ▼ 9% ► Profiles - Sales down 9%, with volumes down 8% Inter-segmental revenue(1) 34.9 32.7 ▼ 6% • Subdued RMI activity and a weak new build market • Selectively acquired a small number of n
Slide 28: Powerful Sustainability Credentials
Powerful Sustainability Credentials Use of Recycled PVC in Manufacturing Leading UK-based Recycler of PVC Windows 33% 35% 32% 29% 30% 27% ► Improving % of recycled material consumed 25% 25% 23% - Use in primary extrusion increased to 33% of consumption in H1 2024 (FY 2023: 32%) 20% 17% 17% - Objecti
Slide 29: Environmental and Social
Environmental and Social Targets and KPIs KPI 2022 Result 2023 Result Target Link to UN SDGs Environmental – circular economy No more than 5% waste to landfill by Waste to landfill % landfill 12% 9% 2025 and 1% by 2030 Increase of 2% per annum by 2025 Waste recycled % recycled 82% 76% then 1% per an
Slide 30: Product Range
Product Range Ranges of window profile Fascias, soffits and Traded goods and doors guttering Standard products Conservatories and Syncro patio and Aspect Skypod pitched skylights Equinox tiled roofs bi-fold doors Made-to- order products 30
Slide 31: 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 32: Branch Network Division
Branch Network 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 manufactu
Slide 33: Eurocell
eurocell