Anglo American Plc · LSE:AAL
Anglo American — Investor Presentation (June 2004)
113 slides from Anglo American's investor presentation, Jun 16, 2004
Slide 1: Anglo Industrial Minerals (AIM)
Anglo Industrial Minerals (AIM) Robbie Robertson Chief Executive Officer 16 June 2004 1 AIM presentation
Slide 2: Agenda
Agenda Overview of AIM Tarmac & Strategy Financials Tarmac Tarmac Czech Tarmac Iberia Republic Northern 2 AIM presentation
Slide 3: Overview of AIM: Key messages
Overview of AIM Key messages • Drive further value from the UK cash “engine” • Exciting growth in Europe • Test market in China/India 3 AIM presentation
Slide 4: Overview of AIM
Overview of AIM • Wholly-owned • Strong free cash flow generation • Stable earnings and cash flows • Utilises extractive industry core competence • Sterling/Euro/Dollar denominated • Geographical diversification • Access to further potential growth areas • Strong reserve base 4 AIM presentation
Slide 5: AIM EBITDA growth
Overview of AIM AIM EBITDA growth $m 600 23 % A G R 500 C 400 300 200 100 0 2000 2001 2002 2003 5 AIM presentation
Slide 6: Management structure
Overview of AIM Management structure Chief Executive Officer Robbie Robertson Finance Technical Procurement Marketing HR Strategy Keith Jackson David Cather Graham Angela Walker Tony Davies Peter Whittle Greenhalgh UK Spain France / Central Copebrás Middle East Belgium Europe / Far East Clive James
Slide 7: Overview of AIM
Overview of AIM Anglo EBITDA Anglo employees $4.8bn 193,000 12% 6% Industrial Minerals Copebrás Tarmac (73%) (100%) UK Spain France / Central Middle East / Belgium Europe Far East 7 AIM presentation
Slide 8: AIM EBITDA and employees 2003
Overview of AIM 2003 AIM EBITDA AIM employees $557m 11,888 77% 70% 18% 14% 9% 3% 8% 1% Tarmac UK Tarmac Europe Middle/Far East Copebras CAGR EBITDA growth of 23% since 2000 8 AIM presentation
Slide 9: Key messages
Key messages • Drive further value from the UK cash “engine” • Exciting growth in Europe • Test market in China/India 9 AIM presentation
Slide 10: Tarmac UK
Tarmac UK 2003 EBITDA $424m (77% total) Employees 8,310 10 AIM presentation
Slide 11: Tarmac UK: Construction market
Tarmac UK Construction - £93 billion market Tarmac’s spread of business* Housing 16% Housing 20% R&M 37% R&M Commercial 47% 16% Commercial 15% Industrial 4% Industrial 5% Infrastructure Other public Other public 8% Infrastructure 9% 9% 14% *2003 sales by value of UK asphalt, ready-mix, Source: DTI m
Slide 12: Construction materials market
Tarmac UK Construction materials - £6 billion market By volume By value Asphalt Other Asphalt 10% aggregates 17% 25% Concrete 17% Mortar & Concrete Other Screed 23% aggregates 2% 60% Concrete Products Concrete Mortar & 11% Products Screed 31% 4% Total 2003 aggregates market inc recycled : 267mt 12 A
Slide 13: Industry consolidation – top market shares
Tarmac UK Industry consolidation – top 5 market shares % 100 90 80 70 60 50 40 30 20 10 0 1980 2003 Aggregates Asphalt Ready-mix 13 AIM presentation
Slide 14: Our market shares
Tarmac UK Our market shares Product Market share Position Aggregates 23% #1 Asphalt 31% #1 Ready-mix 24% #2 Concrete blocks 23% #1 Concrete flooring 15% #2 Lime 34% #1 Mortar 20% #1 Cement 2% #4 Source: Tarmac estimates The UK’s number one in heavy building materials 14 AIM presentation
Slide 15: Aggregates price and volume trends
Tarmac UK Aggregates price and volume trends 290 130 280 120 270 260 110 mt 250 100 240 230 90 220 80 210 200 70 00 01 02 03 Total aggregates Retail Price Index Aggregates Price* *Tarmac crushed rock aggregates price index (excludes Aggs Levy) Real price increases achieved 15 AIM presentation
Slide 16: Tarmac growth drivers
Tarmac UK Tarmac growth drivers • Demand • Margin – service differentiation – cost reduction • Projects/acquisitions • Innovation 16 AIM presentation
Slide 17: Tarmac value drivers
Tarmac UK Tarmac value drivers • Proximity to the customer • Network of plants • Strong position in local market • Customer service • Low cost of production • Vertical integration • Strong reserve base 17 AIM presentation
Slide 18: Tarmac UK
Tarmac UK KEY Aggregates Concrete Asphalt Concrete Products 18 AIM presentation
Slide 19: Adding value to aggregates
Tarmac UK Crushed rock Sand & gravel Aggregates Recycled Asphalt Cement & lime Added value Concrete products products Mortar Ready-mixed concrete Services Contracting Adding value to aggregates 19 AIM presentation
Slide 20: Barriers to entry
Tarmac UK Barriers to entry 50 Cement & Lime Contribution margin % 40 Aggregates 30 Concrete Products 20 Asphalt Ready-mix 10 & Mortar Contracting 0 Low High Barrier to entry Size of bubble = 2003 Tarmac UK contribution 20 AIM presentation
Slide 21: Our sources of competitive advantage
Tarmac UK Our sources of competitive advantage • Best quality and most widely spread assets • Market leader • Strong brand & reputation • Large reserve base (over 2 billion tonnes) • High quality people • Empowered local management • Purchasing power • SHE excellence Tarmac has a strong competitive
Slide 22: Strategy
Tarmac UK Strategy • Increase value from existing business – Customer First – Cost reduction – People development – Innovation • Growth areas – Recycling – Concrete products – South of England Focus on increasing cash flow and returns 22 AIM presentation
Slide 23: Tarmac Products
Tarmac Products David Cather Technical Director 23 AIM presentation
Slide 24: Adding value to aggregates
Crushed rock Sand & gravel Aggregates Recycled Asphalt Cement & lime Added value Concrete products products Mortar Ready-mixed concrete Services Contracting Adding value to aggregates 24 AIM presentation
Slide 25: Aggregates
Aggregates 25 AIM presentation
Slide 26: Aggregates
Aggregates 26 AIM presentation
Slide 27: Aggregates
Aggregates 27 AIM presentation
Slide 28: Aggregates
Aggregates 28 AIM presentation
Slide 29: Aggregates
Aggregates 29 AIM presentation
Slide 30: Added value
Added value 30 AIM presentation
Slide 31: Added value
Added value 31 AIM presentation
Slide 32: Added value
Added value 32 AIM presentation
Slide 33: Added value
Added value 33 AIM presentation
Slide 34: Added value
Added value 34 AIM presentation
Slide 35: Added value
Added value 35 AIM presentation
Slide 36: Added value
Added value 36 AIM presentation
Slide 37: Added value
Added value 37 AIM presentation
Slide 38: Services
Services 38 AIM presentation
Slide 39: Services
Services 39 AIM presentation
Slide 40: Key messages
Key messages • Drive further value from the UK cash “engine” • Exciting growth in Europe • Test market in China/India 40 AIM presentation
Slide 41: Tarmac Europe
Tarmac Europe 2003 EBITDA $80m (14% total) Employees 2,178 41 AIM presentation
Slide 42: GDP & construction output in Eastern Europe
Tarmac Europe GDP & construction output as a % GDP in Eastern Europe Ebn % 500 11.4 450 11.2 400 11.0 350 10.8 300 10.6 250 10.4 200 10.2 150 100 10.0 50 9.8 0 9.6 2000 2001 2002 2003 2004 2005 2006 GDP Construction output as a % GDP Source: Euroconstruct Growth markets 42 AIM presentation
Slide 43: Fragmented aggregates markets
Tarmac Europe Fragmented aggregates markets Size 400mt 700mt 420mt 53mt 70mt 269mt 100% 28 80% 56 58 60% 82 85 77 Others Top 5 40% 72 20% 44 42 18 15 23 0% France Germany Spain Czech Poland UK Rep. Significant consolidation opportunity 43 AIM presentation
Slide 44: Tarmac Europe
Tarmac Europe • France – market leader in concrete blocks • Germany – leading local positions in aggregates • Spain – leader in aggregates & ready-mix in Madrid, leading ready-mix supplier in Alicante • Poland – a leading supplier of aggregates. No 1 in concrete paving • Czech Republic – no. 1 aggre
Slide 45: The attractions of Europe
Tarmac Europe The attractions of Europe • Growth in underlying markets – New EU entrants - infrastructure spend and economic growth – Spain - tourism/immigration led growth • Consolidation potential • Diversify from UK 45 AIM presentation
Slide 46: Strategy
Tarmac Europe Strategy • Choose countries where Tarmac’s operating model can be applied cost effectively • Growth principally by acquisition – Aggregates at core – Supported where appropriate by downstream products • Tarmac value added comes from – Synergies from bolt-ons – Leveraging core UK compet
Slide 47: Key messages
Key messages • Drive further value from the UK cash “engine” • Growth in Europe • Test market in China/India 47 AIM presentation
Slide 48: Rest of the World
Rest of the World 2003 EBITDA $53m (9% total) Employees 1,400 48 AIM presentation
Slide 49: Tarmac Middle East
Rest of the World Tarmac Middle East • Operations comprise – 49% JV with local trading house operating aggregates & asphalt business serving Al Ain, Dubai and Abu Dhabi – Wholly owned asphalt business in Oman • Politically stable • Demand driven by oil price • Substantial investment in non-oil indus
Slide 50: Tarmac Far East/India
Rest of the World Tarmac Far East/India • Seedcorn investments in Shanghai and Mumbai • Markets with huge growth potential • Test whether Tarmac operating model can compete effectively and can be scaled up quickly Cautious approach to test the Tarmac model 50 AIM presentation
Slide 51: Copebrás
Rest of the World Copebrás • Brazilian producer of phosphate fertilisers and STPP* • 2003 EBITDA of $47m (up by 63% since 2000) • Goiás project at Catalão plant completed in February 2003 at a cost of $128m, $19m under budget – Doubled capacity – Added $16m to operating profit in 2003 • Catalão plan
Slide 52: Financial Review
Financial Review Keith Jackson Finance Director 52 AIM presentation
Slide 53: Key financials
Financial Review Key financials • Sales up 48% since 2000 to $3.3 billion • EBIT up 118% since 2000 to $325 million • EBITDA up 87% since 2000 to $557 million • EBITDA return up to 17% • Cost savings of $126 million • $355 million on bolt-on acquisitions • £110 million Buxton cement plant project •
Slide 54: AIM EBIT growth
Financial Review AIM EBIT growth $m 600 30 % A G R 500 C 400 300 200 100 0 2000 2001 2002 2003 54 AIM presentation
Slide 55: AIM EBITDA growth
Financial Review AIM EBITDA growth $m 600 23 % A G R 500 C 400 300 200 100 0 2000 2001 2002 2003 55 AIM presentation
Slide 56: Comparison with competitors – EBIT growth
Financial Review Comparison with competitors – EBIT growth 30% 25% 20% 15% 10% 5% 0% -5% Tarmac Hanson AI RMC -10% -15% -20% CAGR 2000-2003 Competitor information source Morgan Stanley 56 AIM presentation
Slide 57: AIM segment split
Financial Review AIM segment split 2003 $m Sales EBITDA EBITDA margin Tarmac UK 2,610 424 16.2% Spain 168 26 15.2% C Europe 121 24 14.7% France 167 30 18.0% Middle/Far East 63 6 9.5% Copebrás 189 47 24.9% Total 3,318 557 16.8% 57 AIM presentation
Slide 58: AIM currency split
Financial Review AIM currency split 2003 EBITDA Other Real 3% 8% Euro 11% $ 1% £ 77% 89% EBITDA in hard currencies 58 AIM presentation
Slide 59: AIM EBIT variance analysis
Financial Review AIM EBIT variance analysis $m 500 450 400 350 300 250 200 150 100 50 0 er n s ch 00 03 e l Vo st ic ti o th 20 20 Ex Pr Co fla O In 59 AIM presentation
Slide 60: AIM cost reduction
Financial Review AIM cost reduction $m 2001 2002 2003 Total Operating efficiency 15 14 29 Procurement 11 12 23 Restructuring/synergies 60 8 6 74 Total 60 34 32 126 60 AIM presentation
Slide 61: AIM cash flow
Financial Review AIM cash flow $ million 2002 2003 Operating profit 277 325 Depreciation/depletion 145 179 Goodwill amortisation 46 53 EBITDA 468 557 Working capital 39 17 SIB capex (109) (125) Project/expansionary capex (254) (191) Acquisitions/disposals (148) (32)* Total (4) 226 *Excludes deferred
Slide 62: AIM cash returns
Financial Review AIM cash returns 2003 Average capital EBITDA EBITDA return employed $m $m Tarmac 3,122 510 16.3% Copebrás 147 47 32.1% AIM 3,269 557 17.0% Target Tarmac returns up to Copebrás level 62 AIM presentation
Slide 63: Tarmac growth drivers
Financial Review Tarmac growth drivers • Demand • Margin – service differentiation – cost reduction • Projects/acquisitions • Innovation 63 AIM presentation
Slide 64: Tarmac UK split of business
Financial Review Tarmac UK split of business Product Contribution Share of Contribution $m total margin Aggregates 169 39% 29% Asphalt 65 15% 16% Ready-mix & mortar 57 13% 11% Concrete products 49 11% 16% Cement & lime 32 7% 41% Contracting 9 2% 2% Other 55 13% 15% Total 436 100% 16% 64 AIM presenta
Slide 65: UK market outlook – demand drivers
Financial Review UK market outlook – demand drivers (in real terms) % Tarmac volume Sector 2004F Aggregates Asphalt Ready-mix Concrete Products Housing 4.5% 14% 5% 17% 42% Commercial (4.7)% 13% 6% 19% 18% Industrial 0.0% 6% 1% 9% 5% Infrastructure 1.0% 17% 19% 14% 12% Other public 12.0% 9% 6% 11% 8%
Slide 66: UK market outlook – investment in strategic roads
Financial Review UK market outlook – investment in strategic roads £bn 3.0 2.5 2.0 1.5 1.0 0.5 0.0 1 2 3 4 5 6 7 8 9 0 1 /0 /0 /0 /0 /0 /0 /0 /0 /0 /1 /1 00 01 02 03 04 05 06 07 08 09 10 Actual Plan Current estimate Source: DTI and CPA 66 AIM presentation
Slide 67: European market outlook
Financial Review European market outlook % Construction growth 12 10 8 6 4 2 0 France Germany Spain Czech Poland -2 Republic 2004 2005 2006 Source: Euroconstruct and CEOE 67 AIM presentation
Slide 68: Impact of IFRS
Financial Review Impact of IFRS • Elimination of goodwill amortisation • Lower P&L pension charge • Proportional consolidation of JVs 68 AIM presentation
Slide 69: Summary
Financial Review Summary • Strong cash generation – EBITDA $557m • Increasing returns • Cost reduction • Value adding projects/acquisitions Continuing cash generation : continuing growth 69 AIM presentation
Slide 70: AIM presentation
70 AIM presentation
Slide 71: Key messages
Key messages • Drive further value from the UK cash “engine” • Exciting growth in Europe • Test market in China/India 71 AIM presentation
Slide 72: Tarmac Iberia
Tarmac Iberia Cipriano Gomez 72 AIM presentation
Slide 73: Index
Index 1. SPAIN – AN OPPORTUNITY – Key figures – Business driving forces 2. TARMAC IBERIA – Description of activities – Key figures – Market shares: aggregates and ready mix concrete 3. SECTOR STRUCTURE – Aggregates and ready-mixed concrete markets – Supply consolidation processes. Causes of same. –
Slide 74: Index (Cont.)
Index (Cont.) 4. MAVIKE CASE STUDY (MAVIKE ACQUISITION) 5. STRATEGY 2004-2005. Consolidation • Central Region • Mediterranean Region • Functional Strategies 2006 onwards. Product Diversification and Regional Expansion • Product diversification • Geographical expansion 74 AIM presentation
Slide 75: Spain – An Opportunity: Key Figures
1. Spain – An Opportunity Key Figures SPAIN - KEY FIGURES 1999 2000 2001 2002 2003 2004* 2005* 2006* GDP Evolution 4.2% 4.2% 2.8% 2.0% 2.4% 2.8% 3.0% 3.0% Construction Evolution 8.4% 6.7% 7.7% 6.0% 3.6% 3.0% 3.0% 3.0% Public Deficit Evolution (% of GDP) - - -0.1% -0.1% 0.0% Population Evolution '000
Slide 76: Spain – Business Driving Forces
1. Spain – An Opportunity Business Driving Forces Immigration: Houses and infrastructure demand (ie. in Madrid and on the Mediterranean Coast) Market consolidation opportunity Second market in Europe Environmental restrictions growing 76 AIM presentation
Slide 77: Tarmac Iberia - operations
2. Tarmac Iberia - operations 10 Aggregate Sites & Madrid & Guadalajara: 45 Ready-mixed concrete • 8 quarries and S&G pits plants in Spain • 16 rmc plants Gijón La Coruña Lugo Oviedo Santander Asturias Vizcaya Bilbao San Sebastian La Coruña Cantabria Santiago de Lugo Guipúzcoa Compostela Alava Catal
Slide 78: Tarmac Iberia – Key Figures
2. Tarmac Iberia – Key Figures Actual Actual Actual Actual Actual € 000´s 1999 2000 2001 2002 2003 Aggregate Sales - m illion tonnes 3.1 3.7 4.5 4.7 7.2 Ready Mix Concrete Sales - m illion m 3 0.9 1.1 1.2 1.4 2.4 Turnover 44,989 59,214 78,228 95,174 148,221 EBITDA 5,583 7,799 13,793 17,798 22,581 EB
Slide 79: Tarmac Iberia – Market Shares
2. Tarmac Iberia – Market Shares MARKET SHARES IN OUR MAIN MARKETS AGGREGATES: Madrid 11% Market Leader Alicante 17% Market Leader READY MIX CONCRETE: Madrid 9% Market Leader Alicante 17% Market Leader Leading positions in key markets 79 AIM presentation
Slide 80: Aggregates & Ready-Mixed Concrete Markets
3. Sector Structure Aggregates & Ready-Mixed Concrete Markets AG GREG ATES M ARKET 1999 2000 2001 2002 2003 SPAIN – m illion tonnes 319.6 355.8 376.9 399.6 419.9 TOP TEN COMPANIES * - m illion 63.0 66.0 73.0 81.0 88.0 tonnes TARM AC IBERIA – m illion tonnes 3.1 3.7 4.5 4.7 7.2 TOP TEN COMPANIES - %
Slide 81: Ready Mix Concrete Market
3. Sector Structure Aggregates & Ready-Mixed Concrete Markets READY MIX CONCRETE MARKET 2002 2003 SPAIN – million m3 76.0 81.0 TOP TEN COMPANIES * - million m3 30.0 31.0 TARMAC IBERIA – million m3 1.4 2.4 TOP TEN COMPANIES - % 39.5 38.3 • SPAIN: STRONG PRESENCE OF CEMENT GROUPS AND MULTI- NATIONAL C
Slide 82: Supply Consolidation Process
3. Sector Structure Supply Consolidation Process AGGREGATES: Consolidation and growing presence of cement groups and multinational companies (CRH, Hanson, etc) Shortage of reserves as a consequence of growing environmental restrictions Considerable sector consolidation in Madrid and Barcelona
Slide 83: Integration of Aggregates & Cement with Ready-Mixed Concrete
3. Sector Structure Integration of Aggregates & Cement with Ready- Mixed Concrete Importance of raw material: - Cement - Aggregates But growing importance of aggregates (environmental restrictions) Presence and involvement in the process of - Cement Groups - Other multinational and heavy build
Slide 84: Mavike Case Study
4. Mavike Case Study Acquisition of Mavike La Coruña La Coruña Lugo Asturias Gijón Oviedo Santander Cantabria Vizcaya Bilbao San Sebastian • Acquired in October 2002 for —59 million Santiago de Lugo Guipúzcoa Compostela Alava Pontevedra Vitoria Pamplona Pontevedra León León Navarra • Access to high
Slide 85: Strategy
5. Strategy 2004-2005 Consolidation • Central Region: Reinforce our mineral reserves base • Mediterranean Region: Acquisition of mineral reserves in Valencia and Barcelona Increase our ready-mix concrete business size in Valencia and Barcelona • Functional Strategies: Marketing: Customer satisfact
Slide 86: Tarmac Czech Republic
Tarmac Czech Republic Vladimir Herman 86 AIM presentation
Slide 87: Overview of the Czech Republic
Overview of the Czech Republic • Heart of the Continental Europe • Attractive growth post-EU entry 24.2% 34% Population 10.2 million 87 AIM presentation
Slide 88: Czech GDP growth
Overview of the Czech Republic 5% 4% 3% EU GDP growth Czech GDP growth 2% 1% 0% 1999 2000 2001 2002 2003 2004 F 2005 F Strong GDP growth 88 AIM presentation
Slide 89: Czech GDP per capita
Overview of the Czech Republic Czech Republic is one of the richest eastern European countries (GDP per Capita) Slovenia Czech Republic Hungary Slovakia Croatia Estonia Poland Lithuania Latvia Source: EIU estimates for 2003 Russia $0 $3,000 $6,000 $9,000 $12,000 $15,000 89 AIM presentation
Slide 90: Czech Construction Turnover
Czech Construction Turnover growth um term $m 12,000 annu m medi 4% per 10,000 8,000 Public 6,000 Commerical Housing 4,000 Source: 2,000 Czech Ministry of Industry and Trade 0 1998 1999 2000 2001 2002 2003 2004 E 2005 E 2006 E The new Ireland? 90 AIM presentation
Slide 91: Tarmac CZ units
Tarmac CZ units Sand and Gravel Hardstone • lot of units • small distances, capacities 91 AIM presentation
Slide 92: Tarmac CZ Market Shares
Tarmac CZ Market Shares 13,3 % Aggregates 2003 12% 51,7% 8% 5% 3% 3%4% Tarmac Strabag (Austrian) Basalt AG (German) Heidelberg Holcim Other Asamer (Austrian) Hanson 92 AIM presentation
Slide 93: Tarmac Czech Republic – Overview
Tarmac Czech Republic – Overview • Tarmac is the largest aggregates producer in the Czech Republic • Tarmac is the leading aggregates producer in northwestern Bohemia • Tarmac Severokamen produced 4m tonnes of aggregates in 2003 – 2.7 million tonnes of hardstone – 1.3 million tonnes of sand and grav
Slide 94: Tarmac CZ Financial Performance
Tarmac CZ Financial Performance 7000 18.0% 16.0% 6000 14.0% 5000 12.0% 4000 10.0% $ 000s EBITDA 8.0% EBITDA ROCE 3000 6.0% 2000 4.0% 1000 2.0% 0 0.0% 2000 2001 2002 2003 94 AIM presentation
Slide 95: The acquisition of Bilfinger Berger
The acquisition of Bilfinger Berger Tarmac Severokamen Bilfinger Berger Assets Acquired in 2003 Sand and Gravel Hardstone 95 AIM presentation
Slide 96: Sales and production productivity
The acquisition of Bilfinger Berger Sales and production productivity 30 350 25 300 250 No. of Empl 20 Kt/head 200 15 150 10 100 5 50 0 0 1998 1999 2000 2001 2002 2003 TSK Sales/e'ee TSK Production/e'ee BB Sales/e'ee BB Production/e'ee TSK Employees BB Employees Target to improve BB productivity up
Slide 97: Tarmac Czech Republic – Strategy
Tarmac Czech Republic – Strategy Focus on further expansion in aggregates 97 AIM presentation
Slide 98: Summary
Summary • Substantial growth expected post EU entry – Economic growth – Infrastructure investment funded by EU • Bilfinger Berger was a specific acquisition target – Extends geographic coverage – Scope for improved productivity • Further growth by acquisition 98 AIM presentation
Slide 99: AIM presentation
99 AIM presentation
Slide 100: Key messages
Key messages • Drive further value from the UK cash “engine” • Exciting growth in Europe • Test market in China/India 100 AIM presentation
Slide 101: Tarmac Northern
Tarmac Northern Terry Last 101 AIM presentation
Slide 102: Office Locations
Office Locations Tarmac Northern Inverness Office Sub-office Bellshill Belfast Birtley Lingerfield 102 AIM presentation
Slide 103: Profit Growth
Profit Growth £m 45 +12.6 40 +31.4 +9.4 34.0 35 30 25 -9.7 -15.5 20 15 10 5.8 5 0 er n e ts 00 03 e m ic tio os th 20 20 Pr lu fl a O C Vo In 103 AIM presentation
Slide 104: Steps to Success: Analysis
Steps to Success 1. Analysis Assets : Strengths – good people, reserves Weaknesses – lack of teamwork Opportunities – rationalisation & investment Threats – smaller competitors Customers: Spend – infrastructure needed Relationships – Tarmac reputation Wants – cheapest price? Needs – service & reliab
Slide 105: Steps to Success: Rationalise assets
Steps to Success 2. Rationalise assets and restructure management • For the benefit of: – Employees – “those that remained” – Customers – our assets close to markets – HSE – clearly defined responsibilities – Planners – well respected contacts – Suppliers – deals honoured – Neighbours – liaison enha
Slide 106: Steps to Success: Communicate; Forge new culture
Steps to Success 3. Communicate; Forge new culture; Motivate a. Employees – Visible felt leadership – Team briefs – Liberation & empowerment – Appreciation – Fund good ideas – Involve families 106 AIM presentation
Slide 107: Steps to Success: Customers and third parties
Steps to Success 3. Communicate; Forge new culture; Motivate b. Customers – Key Account Management – Partnerships – E-business c. 3rd parties – HSE – safest in sector – Planners – all sides win – Suppliers – lowest possible cost base – Neighbours – good housekeeping gains support 107 AIM presentatio
Slide 108: Sustainable development & summary
Sustainable development & summary Robbie Robertson 108 AIM presentation
Slide 109: Sustainable development
Sustainable development • Eradication of all Lost Time Injuries by 2005 • Elimination of all new cases of occupational illness by 2010 • Significant player in recycling of construction & demolition waste and secondary aggregates (slag & ggbs) – Slag & ggbs contribution of nearly £9m in 2003 (loss in
Slide 110: Tarmac safety performance
Sustainable development Tarmac safety performance 4.0 Employee and contractor LTIFR 3.57 3.5 LTIFR = lost time injuriesx200,000 3.0 No. hours worked 2.5 2.31 2.0 1.39 1.5 1.0 0.88 0.69 0.5 0 0.0 2000 2001 2002 2003 2004 ytd Target 2005 110 AIM presentation
Slide 111: Comparison with competitors
Sustainable development Comparison with competitors 5 2003 LTIFR 4 Tarmac 3 2 1 0 Quarries & Contracting Ready-mix Manufacturing asphalt 111 AIM presentation
Slide 112: Summary: Key messages
Summary Key messages • Drive further value from the UK cash “engine” – Customer First – Cost reduction – Bolt-ons in certain areas • Exciting growth in Europe – Market growth in new EU entrants and Spain – Acquisitions • Test market in China/India 112 AIM presentation
Slide 113: AIM presentation
113 AIM presentation