Breedon Group Plc · LSE:BREE
Breedon — H1 2012 Earnings Presentation
37 slides from Breedon's earnings presentation, Jul 19, 2012
Slide 1: Interim results 6 months to 30 June 2012
Interim results 19th July 2012 6 months to 30 June 2012 1
Slide 2: Introduction
Introduction Peter Tom CBE Chairman 2
Slide 3: 2012 H1 presentation
2012 H1 presentation Results overview Peter Tom, Chairman Financial review Ian Peters, Finance Director Operational review review, summary & outlook Simon Vivian, Group CEO Q&A 3
Slide 4: Good progress in a difficult market
Good progress in a difficult market Improved EBITDA, margins and PBT despite lower volumes Continuing improvement in English operations R ili t Scottish Resilient S tti h performance f iin diffi difficult lt market k t Good performance from first two acquisitions Third acquisition completed New busi
Slide 5: 2012 H1 Highlights
2012 H1 Highlights Sales Revenue EBITDA PBT £83m £9.7m £2.2m -2.1% +15.9% +£1.4m EBITDA margin Acquisitions Net Debt 11 7% 11.7% EBITDA £81 8m £81.8m +1.8pt £1.0m -£14.4m 5
Slide 6: Financial Review
Financial Review Ian Peters Group p Finance Director 6
Slide 7: Detailed Profit & Loss Half-Year to 30 June 2012
Detailed Profit & Loss Half-Year to 30 June 2012 2011 2012 var to var to 000 £’000 £ 000 £’000 £ 000 2011 2011 £’000 % Turnover 84,714 82,977 (1,737) (2.1)% EBITDA 8,357 9,684 1,327 +15.9% 15.9% Depreciation & Amortisation (5,453) (5,764) (311) (5.7)% Underlying Operating Profit 2,904 3,920 1,016 +3
Slide 8: Analysis by Division Half-Year to 30 June 2012
Analysis by Division Half-Year to 30 June 2012 2011 2012 Variance Variance £’000 £’000 £’000 % Turnover England 38,321 44,043 5,722 +14.9% Scotland 46,393 38,934 (7,459) (16.1)% Total 84,714 82,977 (1,737) (2.1)% EBITDA England 4,119 5,451 1,332 +32.3% Scotland 5 803 5,803 5 737 5,737 (66) (1 1)% (1
Slide 9: Closing Balance Sheet at 30 June 2012
Closing Balance Sheet at 30 June 2012 2011 June 2011 Dec 2012 June Actual Actual Actual £’000 £’000 £’000 Tangible Fixed Assets 145,856 151,984 147,027 Investments 949 792 914 Intangible Assets 3,998 1,648 2,305 Total Non-Current Assets 150,803 154,424 150,246 Current Assets 46,446 43,477 48,595 Cur
Slide 10: Half-Year to 30 June 2012 Analysis – Cashflow
Half-Year to 30 June 2012 Analysis – Cashflow 2012 2012 £’000 £’000 Profit Before Interest and Tax 4,987 Net Interest Paid (2,165) Income from Associate (497) Taxation () (-) Gain on Bargain Purchase & asset sales (719) Dividends Received / (Paid) 375 Equity settled incentives 174 Investment in Fixe
Slide 11: Analysis of Net Debt at 30 June 2012
Analysis of Net Debt at 30 June 2012 2011 June 2011 Dec 2012 June Actual Actual Actual £’000 £’000 £’000 Term Loans 66,183 72,607 63,111 Bank overdrafts 3,390 3,115 1,561 Cash (1,204) (921) (712) Bank Debt 68,369 74,801 63,960 Finance Leases (over 1 year) 18 578 18,578 16 262 16,262 12 606 12,606 Fi
Slide 12: Operational Review
Operational Simon Vivian Review Simon Vivian Group Chief Executive Group Chief Executive 12
Slide 13: 2012 H1 key achievements
2012 H1 key achievements Continuing progress on health and safety Further improvement in group profitability Good range of new business wins Further reduction in cost base Major investment in former C&G plant and fleet Continuing disposal of surplus assets Rollout of C&G technical capability across
Slide 14: England – financials & volumes
England – financials & volumes 2011 H1 2012 H1 % chg £’m £ m £’m £ m Turnover 38,321 44,043 +14.9% EBITDA 4 119 4,119 5 451 5,451 +32 3% +32.3% Op. Profit 1,688 2,615 +54.9% EBITDA Margin 10.7% 12.4% +1.7% Op. Margin 4.4% 5.9% +1.5% S l Volume Sales V l Aggregates +12.9% A h lt Asphalt - 8.2% 8 2% C
Slide 15: England – good progress on all fronts
England – good progress on all fronts Major new business won May Gurney: NSP share increased from 33% to 50% Jaguar: 20,000 tonnes of asphalt Eurovia Peterborough: 9,000 tonnes of asphalt MV Kelly: K ll 5 5,000 000 m3 off readymix; d i 9 9,000 000 ttonnes off asphalt h lt Sketchley Brook: 16,000 ton
Slide 16: Scotland – financials & volumes
Scotland – financials & volumes 2011 H1 2012 H1 % chg £’m £ m £’m £ m Turnover 46,393 38,934 (16.1)% EBITDA 5 803 5,803 5 737 5,737 (1 1)% (1.1)% Op. Profit 2,794 2,814 +0.7% EBITDA Margin 12.5% 14.7% +2.2% Op. Margin 6.0% 7.2% +1.2% S l Volume Sales V l Aggregates - 6.0% A h lt Asphalt -18.6% 18 6%
Slide 17: Scotland – robust performance in tough market
Scotland – robust performance in tough market Major new business won – reduced exposure to public sector Argyll & Bute: 44,000 tonnes of asphalt over 3 years Fife ITS: 13,000 tonnes of asphalt 50,000m3 of readymix currently being supplied to wind farms 200,000 tonnes of aggregates currently being su
Slide 18: Mobile Concrete Solutions
Mobile Concrete Solutions 18
Slide 19: Mobile Concrete Solutions
Mobile Concrete Solutions 19
Slide 20: First Scottish acquisition – Rothes Glen
First Scottish acquisition – Rothes Glen First sand and gravel quarry in north-east Scotland 1m+ tonnes of sand & gravel reserves Feeds Breedon ready-mixed concrete plant already on site Complements adjacent rock quarry, concrete and asphalt plants at Netherglen p g Well positioned for major infrast
Slide 21: Renewable energy – a market opportunity
Renewable energy – a market opportunity O Onshore wind is UK’s ’ largest renewable energy source Currentlyy 350 operational p wind farms in UK 3,755 turbines, producing 6,660 MW Planning consent for 2,000+ onshore turbines Smaller turbine bases require 100-200m 100 200m3 of readymix Larger bases req
Slide 22: Onshore farms with planning approval - Scotland
Onshore farms with planning approval - Scotland • 36 projects with 5+ turbines approved in last 12 months • Total of 792 turbines • 50+ potential key customers • £9.4 billion project value approved or with planning decision pending • 111 projects undergoing planning • Griffin Windfarm Turbine Base A
Slide 23: Offshore wind
Offshore wind o Scotland home to 25% of Europe’s wind energy potential o Planned Scottish investment of c£7.1billion in next 10 years o Planned English investment of c£9.5billion in next 10 years o Crown E C Estate t t has h issued i d 3 ttranches h off seabed for development
Slide 24: Offshore wind potential – UK ports
Offshore wind potential – UK ports Key Potential Development Sites • Nigg Yard, Ross-shire • Ardersier, A d i Inverness I • Peterhead, Aberdeenshire • Kishorn, Argyll & Bute • Hunterston, North Ayrshire • Middlesbrough • Humberside
Slide 25: Offshore wind: Gravity Base Foundation
Offshore wind: Gravity Base Foundation o Effective at 25-100m depth o Average 50m foundation in ‘Round 3’ requires c3,000m3 of structural concrete o Foundations built onshore and barged to sea o Potential total market volume (gravity, monopile & jacket j k t foundations): f d ti ) 6,000 6 000 tturbi
Slide 26: Looking Ahead
4 BREED AGGREGATES LOOKING AHEAD
Slide 27: Major upcoming projects
Major upcoming projects A453 widening Major wind farm programmes Nottingham Tramway Maldie Hydro Electric scheme T Toyota t Burnaston, B t Derby D b Blar Mhor, Fort William A45 diversion/Birmingham Airport runway Peterhead Prison extension Inverness to Stirling super pylons Land Rover T1 plant Aberd
Slide 28: A453 widening
A453 widening Estimated volumes 180kt coated stone 190kt dry & cement- bound material 2,000m 2 000m3 concrete Cloud Hill 28
Slide 29: Aberdeen ring road
Aberdeen ring road Estimated volumes: 1.1mt asphalt or lean mix concrete/asphalt composite pavement Mi 500kt sub-base Min bb + structural concrete 29
Slide 30: A9 dualling
A9 dualling — AGGREGATES Key Existing dualled sections Single carriageway to be upgraded INVERNESS Inverness 4» ee /Daviot — ——~ Dalraddy to Slochd 7 =s Tomatin to M a ~_~~ Avidmore => . f= AVIEMORE ax... ——Weadowside Crubenmore to Kincraig KINGUSSIE =>, Glen Garry eo Kincraig to Dalraddy to Crubenm
Slide 31: Summary and Outlook
BREEDON AGGREGATES Summary and Outlook 31
Slide 32: Summary & Outlook
Summary & Outlook Macroeconomic conditions unlikely to improve in short term BUT Significant regional variations in activity levels Key input costs stabilised, reducing pressure on cost base Several large g contracts in our target g markets in England g & Scotland Rapidly-growing renewables sector a
Slide 33: Appendices: MPA volumes
4 BREED AGGREGATES Appendices: MPA volumes
Slide 34: Crushed rock volumes – moving annual trend
Crushed rock volumes – moving annual trend 130.0 120.0 110 0 110.0 million tonnes 100.0 90.0 80.0 70.0 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Crushed Rock MAT actual 34
Slide 35: Ready-mixed volumes – moving annual trend
Ready-mixed volumes – moving annual trend 24.0 22.0 20.0 on cubic metres 18.0 millio 16.0 14.0 12.0 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Readymix concrete MAT actual 35
Slide 36: Sand & gravel volumes – moving annual trend
Sand & gravel volumes – moving annual trend 90.0 85.0 80.0 75.0 million tonnes 70.0 65.0 m 60.0 55.0 50.0 45.0 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Sand & Gravel MAT actual 36
Slide 37: Asphalt volumes – moving annual trend
Asphalt volumes – moving annual trend 29.0 28.0 27.0 26.0 25.0 million tonnes 24.0 23.0 22.0 21.0 20.0 19.0 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Asphalt MAT actual 37