Slide 1: Full Year Results Presentation
Full Year Results Presentation Year ended 31 December 2018
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 Presenting today 1 Overview Joe Hudson, CEO 2 Financial Review 3 Strategic Update Kevin Sims, CFO 4 Q&A Full Year Results Presentation – Year Ended 31 December 2018 3
Slide 4: Overview
Overview Full Year Results Presentation – Year Ended 31 December 2018 4
Slide 5: Financial Review
Financial Review Full Year Results Presentation – Year Ended 31 December 2018 5
Slide 6: Financial Highlights
Financial Highlights 12 months ended 31 December (£m) 2018 2017 Movement Continuing operations Revenue 391.4 362.6 7.9% Adjusted EBITDA 112.4 107.9 4.1% Adjusted PBT 84.5 82.5 2.4% Adjusted EPS 18.8p 18.9p - Exceptional profits on disposal of property 9.5 - Reported EPS 18.8p 16.0p 17.5% Total ordin
Slide 7: Revenue bridge – continuing operations
Revenue bridge – continuing operations +£29m (+8%) Revenue up 8% for UK business 391.4 Primarily driven by UK clay brick business 2 0.7 Benefitting from both price and volume growth 362.6 28.1 New 100m soft mud brick factory contributing to volume growth in H2 Concrete revenues broadly fla
Slide 8: EBITDA bridge – continuing operations
EBITDA bridge – continuing operations Adjusted EBITDA growth of £4m, strong revenue growth offset by: Higher than expected energy costs c.£4m (+4%) Up £6m in 2018 on a like-for-like basis Impact from enhanced maintenance program in UK brick 5.8 (1.4) 112.4 business 107.9 Maintenance costs
Slide 9: Strong cash generation and de-leveraging
Strong cash generation and de-leveraging Working capital reflects growth in the business 12 months ended 31 December (£m) 2018 2017 Change %Change Stronger brick sales in final two months of the year Adj. EBITDA 112 108 +4 4% Share-based payments 2 1 +1 Total capex spend reflects completion of
Slide 10: Commitment to shareholder returns
Commitment to shareholder returns Group Total Adjusted EPS 21.4 20 1.2 1.3 19.6 0.8 Group adjusted EPS declined in 2018 primarily due to deferred tax benefit from US tax reform in 2017 15 Continuing EPS broadly flat as profit growth offset by 18.9 18.8 10 higher effective tax rate in 2018 Disc
Slide 11: Disciplined capital allocation
Disciplined capital allocation Full Year Results Presentation – Year Ended 31 December 2018 11
Slide 12: Building a track record of growth and disciplined capital allocation
Building a track record of growth and disciplined capital allocation Revenue (£m) EBITDA (£m) Adjusted EPS (p/sh) Growth +7% CAGR 391 +6% CAGR 112 +7% CAGR 18.9 18.8 108 363 344 99 16.4 2016 2017 2018 2016 2017 2018 2016 2017 2018 Financial Pension scheme Total Capex (£m) Leverage (x) Dividend (p/sh
Slide 13: Strategic Update
Strategic Update Full Year Results Presentation – Year Ended 31 December 2018 13
Slide 14: Creating a market leading UK focused business
Creating a market leading UK focused business Completed a strategic review of the Groups assets Disposal of US Glen Gery business US brick market structure is different to the UK Opportunities to grow in the US were not inline with our strategic objectives US $110 million EV divestment, eq
Slide 15: A simplified core business and platform for growth
A simplified core business and platform for growth Ibstock Brick Ibstock Concrete Leading UK brick manufacturer 3 leading brands Revenues of c.£300m Revenues c.£100m Product range of 400+ brick types, and “specials” Diverse product range across; and components Roof tiles Ibstock Bric
Slide 16: Market fundamentals remain supportive for new build housing in the UK
Market fundamentals remain supportive for new build housing in the UK 275 Substantial housing deficit 225 Household formations 500k higher than housing completions over the last decade 175 125 Cross-party political support for new house building; Conservatives – 1 million new homes from 2015
Slide 17: Strong demand and low stock levels
Strong demand and low stock levels Brick Consumption (billions of bricks) Brick Production and Stock (billions) Domestic Despatches Imports Production Stock 2.5 1.9 2.0 0.4 1.9 1.9 0.3 1.8 1.8 1.9 0.3 0.2 1.6 1.6 0.1 0.1 0.3 1.4 1.5 0.1 0.1 0.1 1.3 0.1 2.0 2.1 1.8 1.7 1.8 1.7 1.8 1.6 1.6 1.6 1.5 1.1
Slide 18: Strategic Update
Performance improvement Investing for growth Strategic Update 18 Opportunities to strengthen the business and drive growth Full Year Results Presentation – Year Ended 31 December 2018
Slide 19: Strategic Update: Performance Improvement
Strategic Update Performance Improvement 19 Full Year Results Presentation – Year Ended 31 December 2018
Slide 20: Operational excellence - maintenance
Operational excellence - maintenance Key objective to maintain manufacturing network Packing robot output capacity and product quality renewal and upgrade at South Holmwood Reviewed and optimised the structure of our manufacturing team Group CI and sustainability director appointed Repair and
Slide 21: Optimising our supply chain
Optimising our supply chain Very traditional industry, high cancellation rates Network optimisation - greater analysis and discipline managing product around our network Investment in technology - to digitalise our end-to-end order process and work more closely with our customers to ensure con
Slide 22: Long history of product innovation to support an evolving industry
Long history of product innovation to support an evolving industry Faststack Chimney SL8 MechSlip Low profile, large format Brick slip cladding system Brick clad pre-fabricated chimneys rooftiles Full Year Results Presentation – Year Ended 31 December 2018 22
Slide 23: Design centre
Design centre London design centre opened, providing a new “go to market” strategy for Ibstock Supporting our market-led approach, focusing on design and product innovation Leveraging our links with architects, designers and specifiers Maximise lead generation and cross-selling opportunities
Slide 24: Sustainability at the heart of our business
Sustainability at the heart of our business Making good progress with our core ESG KPI’s Health and Safety CO2 Emmissions (lost time accidents) (tonnes of CO2e) Edie – 2019 energy efficiency award 20 16 0.19 Highly successful apprentice program running since 2012 0.18 Creating a roadmap to m
Slide 25: Strategic Update: Investing for growth
Strategic Update Investing for growth Full Year Results Presentation – Year Ended 31 December 2018 25
Slide 26: Selective growth
Selective growth Enhancement projects Large scale projects M&A Several projects being appraised ‘Eclipse’ project fully Balance sheet strength provides that are outside of normal operational optionality recurring ‘replacement’ capex Continue to scope EBITDA enhancement through opportunitie
Slide 27: Outlook
Outlook Current trading inline with management expectations Political and economic uncertainty remains Total capex of £28-32m per annum expected for 2019 and 2020 Market fundamentals remain supportive for the medium term outlook Full Year Results Presentation – Year Ended 31 December 2018 27
Slide 28: Summary
Summary Investing for growth Performance Improvement Organic growth projects M&A optionality Operational optimisation of our core business Maintenance and supply chain optimisation Solid core business with strong market positions and Market led approach UK focus Ibstock Brick Ibstock C
Slide 29: Q&A
Q&A Full Year Results Presentation – Year Ended 31 December 2018 29
Slide 30: Appendix
Appendix Full Year Results Presentation – Year Ended 31 December 2018 30
Slide 31: Key investment highlights
Key investment highlights Market Structural Industry High barriers Strong Multiple Experienced Strong leadership demand structure to entry customer growth senior financial positions growth service ethic options management performance team Vertically Additional capacity, Strong household High quality
Slide 32: Leading manufacturers of…
Leading manufacturers of… WALLING ROOFING RAIL & − Facing bricks INFRASTRUCTURE − Special bricks − Roof tiles − Troughing − Walling stone − Roof window systems − Cable theft protection − Architectural Masonry − Roofing accessories − Boards, blocks & bases − Façade systems − Chimneys − Catchpits − Li
Slide 33: A leading provider of clay and concrete building products
A leading provider of clay and concrete building products End market Sales channel Infrastructure Others 1% New build 4% Other Factors housing new build 24% Merchants 54% 10% 46% RMI 35% Housebuilders direct 26% Key supplier to the Complementary Cross-selling Opportunity to add RMI exposure provides
Slide 34: Summary balance sheet
Summary balance sheet 12 months ended 31 December Continuing Group (£m) 2018 2017 Assets PP&E 365 400 Intangible 101 116 Non-current assets 466 516 Inventories 68 91 Trade receivables 56 53 Other - 6 Current assets 124 150 Total assets 590 666 Payables (92) (85) Other liabilities excl debt & pension
Slide 35: Summary cash flow
Summary cash flow Continuing operations 2018 2017 Adj EBITDA 112 108 Working capital (7) 2 Net interest (4) (4) Tax (10) (11) Post-employee benefits (1) (4) (6) Other (5) (1) Net Cash Flow from Operations 82 88 Total Capex (31) (34) Surplus property disposals 16 1 Proceeds of sale from US disposal 7
Slide 36: Adjusted P&L reconciliation 2018
Adjusted P&L reconciliation 2018 Fair Value Adjusted Adjustments Property Exceptionals Other Reported Revenue 391 - - - - 391 Costs (279) - - (3) - (282) Other - - 9 2 - 11 EBITDA 112 - 9 (1) - 120 D&A (16) (8) - - - (24) EBIT 96 (8) 9 (1) - 96 Finance (4) - - - 1 (3) Tax (15) 1 (1) - (2) (17) PAT 7
Slide 37: Adjusted P&L reconciliation 2017
Adjusted P&L reconciliation 2017 Fair Value Adjusted Adjustments Property Exceptionals Other Reported Revenue 363 - - - - 363 Costs (255) - - 2 - (253) Other income - - - - - - EBITDA 108 - - 2 - 110 D&A (12) (9) - - - (21) EBIT 96 (9) - 2 - 89 Finance (4) - (7) - (11) Tax (15) 1 - 1 - (13) PAT 77 (