Breedon Group Plc · LSE:BREE
Breedon — Investor Presentation (January 2010)
20 slides from Breedon's investor presentation, Jan 13, 2010
Slide 1: Presentation to Numis Securities
Presentation to Numis Securities 13 January 2010 Essential Products Scarce Resources
Slide 2: Background and history
Background and history • June 2008: Marwyn Materials created & listed on AIM, backed by Marwyn Capital Strategy to consolidate smaller end of heavyside building materials industry Experienced management – strong track record in delivering shareholder value • Sept 2010: acquisition of Breedon Holding
Slide 3: The Market
The Market
Slide 4: The UK aggregates market
The UK aggregates market • £4.8bn market in 2008* • Underpinned by stable, long-term demand for primary aggregates 200mt+ pa 1983-2007** • Historical inflation hedge aggregates prices +54pc vs RPI +40pc since 1995*** • Highly consolidated Breedon Aggregates 6th largest • High barriers to entry • Ind
Slide 5: Product Volume Split 2009 by End-use Sector
Product Volume Split 2009 by End-use Sector* Percent 100 Non-Housing RM&I*** Housing RM&I*** Public Non-Housing 80 Infrastructure ** Road maintenance Industrial 60 Commercial 40 New road construction New Housing 20 0 Crushed Rock Sand & Gravel Asphalt RMC Cement Mortar Primary Aggregates Note: * UK
Slide 6: The market opportunity for us
The market opportunity for us • Breedon Aggregates acquired at low point in economic cycle • Previously 9 fully-listed ‘big name’ UK building materials companies none today • UK now dominated by global cement companies many seeking to divest non-core operations • Smaller end of market highly fragmen
Slide 7: Breedon Aggregates – a unique platform for growth
Breedon Aggregates – a unique platform for growth
Slide 8: Breedon Aggregates - Overview
Breedon Aggregates - Overview • Fully integrated aggregates producer 29 quarries, 19 asphalt plants & 27 concrete plants in 37 locations • Substantial modern fleet 120+ owned/leased trucks, 54 owner-driver vehicles, many multi-purpose • Fully invested business £12m+ annual fixed asset depreciation •
Slide 9: Scotland quarries and plants map
Scotland @ Morefields Quarry RQ/ CON —. AGGREGATES Boyne Bay Quarry RQ/ CON @ Nerhersien Quarry RQ/AS @ irerness CON @ en of Rothes (Elgin) CON Daviot AS/ CTR () (2) Stirlinghit! Quarry RQ /AS / CON @ Tullochgribban (inactive) SG Aviemore CON @ Craigenlow Quarry Meadowside Quarry RQ/AS/ CON/ CTR . @
Slide 10: Breedon Aggregates England map
4 él BREEDON AGGREGATES @ Mansfieisas/cTR Leaton Quarry ®@ Breedon Quarry RQ/CTR RQ/AS/CON/ CTR @ south witham Quarry RA Cloud Hill Quarry @ Norwich (Longwater) AS / CTR RQ/AS/CON Shropham Quary sc @ ® Beccles (Ellough) Leinthail Quarry (inactive) AS AS/ IN RQ/AS/CON/CTR @ conyas/cor Ling Hall Quarr
Slide 11: Experienced management team
Experienced management team Executive Chairman Peter Tom Aggregate Industries Group Chief Executive Simon Vivian Hanson, Mowlem Group Finance Director Ian Peters Hanson CEO Breedon Aggregates England Tim Hall Tilcon, Tarmac CEO Breedon Aggregates Scotland Alan Mackenzie Wimpey, Tarmac
Slide 12: Key markets
Key markets • Local authorities and Transport Scotland for road building • Civil contractors for building houses, factories, offices, schools, etc. • Private individuals for drives, pathways, rockeries, etc. • Wholesalers for bagged aggregates No customer = more than 6% of group revenues
Slide 13: Key products and services
Key products and services Percentage of revenue
Slide 14: Key figures – Breedon Holdings FY Proforma 2009
Key figures – Breedon Holdings FY Proforma 2009 2009 2009 Employees Turnover £m. EBITDA £m. at 08/10 FTEs England 57.7 5.6 295 Scotland 77.8 14.2 399 Head Office - (2.3) 6 TOTAL UK 135.6 17.6 700 Associate - 1.1 - TOTAL GROUP 135.6 18.7 700
Slide 15: Key figures – Breedon Group
Key figures – Breedon Group 6 months to June 2010 Turnover EBITDA Act PY Act PY England 32.8 28.9 2.2 3.2 Scotland 39.8 39.8 5.3 7.3 Head Office - - (1.1) (2.4) TOTAL UK 72.6 68.7 6.4 8.1 Associate 0.4 0.5 TOTAL BREEDON 6.8 8.6
Slide 16: Pro forma Group Balance Sheet
Pro forma Group Balance Sheet June 2010 June 2010 Acquisition Financing Pro Forma £’000 £’000 Adjustments Adjustments Net Assets of MMAT BHL £,000 £,000 Enlarged Group Fixed Assets Intangible 602 602 Tangible Assets 172,030 172,030 Investments 1,647 1,647 174,279 174,279 Current Assets Inventories 6
Slide 17: Loan facilities
Loan facilities FACILITY AMOUNT 1M GBP CASH TOTAL INTEREST FINAL £m LIBOR MARGIN RATE COST REPAYMENT £m Term Loan 64.5 0.50% 3.0% 3.50% 2.26 06/09/2015 RCF A 15.0 0.50% 3.0% 3.50% 0.25 06/09/2015 RCF B 15.0 0.50% 3.0% 3.50% Undrawn 06/09/2015 TOTAL 94.5 2.51 £64.5m stepped LIBOR hedging cap, startin
Slide 18: 2010 update & outlook
2010 update & outlook • No surprises following acquisition • Employee launch events well received morale better than expected, near 100pc take-up of share allocation • Business activity mixed some volume recovery in England Scotland more difficult • Management strengthened in key positions • Cost ba
Slide 19: Summary
Summary • Unique investment in focused, independent UK aggregates player with highly experienced management • Prime beneficiary of cyclical recovery when it comes • Sound organic growth potential from improved localised service and ongoing business improvement initiatives • Strengthening balance she
Slide 20: Essential Products Scarce Resources
Presentation to Numis Securities 13 January 2010 Essential Products Scarce Resources