Breedon Group PLC · LSE:BREE
Breedon — Breedon Aggregates — FY2011 Earnings Presentation
34 slides from Breedon's earnings presentation, Mar 6, 2012
Slide 1: Breedon Aggregates 2011 preliminary results
Breedon Aggregates 2011 preliminary results 6th March 2012 1
Slide 2: Introduction
Introduction Peter Tom CBE Chairman 2
Slide 3: 2011 Results presentation
2011 Results presentation ! Results overview Peter Tom, Chairman ! Financial review Ian Peters, Finance Director ! Operational review Simon Vivian, Chief Executive ! Summary and outlook Peter Tom ! Q&A 3
Slide 4: Strong progress in our first full year
Strong progress in our first full year ! Group returned to profit ! Management team strengthened ! England turnaround well underway ! Robust performance in Scotland ! First bolt-on acquisition: earnings-enhancing C&G Concrete ! Substantial gains in mineral reserves ! First bonus paid to all employee
Slide 5: 2011 Full Year Highlights
2011 Full Year Highlights Sales Revenue EBITDA PBT £169m £17.1m £1.4m +17.5% +24.8% (2010: loss) EBITDA margin C&G Concrete Net Debt 10.1% EBITDA £96.2m +0.6pt £0.5m (5 mths) +£3.9m Comparisons are with the unaudited pro forma figures for the calendar year 2010 5
Slide 6: Financial Review
Financial Review Ian Peters Group Finance Director 6
Slide 7: Detailed Profit & Loss 2011
Detailed Profit & Loss 2011 2010 2011 £’m £’m Turnover 42.7 168.9 EBITDA 3.3 17.1 Depreciation & Amortisation (3.6) (11.4) Underlying Operating Profit (0.3) 5.7 Share of Associate (-) 0.6 Interest (1.6) (4.8) Exceptional Costs (4.4) (0.1) Profit Before Tax (6.3) 1.4 Taxation 0.4 (0.2) Minority Inter
Slide 8: Profit & Loss 2011 v Pro Forma 2010
Profit & Loss 2011 v Pro Forma 2010 2010 Proforma 2011 Variance £’m £’m £’m Turnover 143.8 168.9 25.1 EBITDA 13.7 17.1 3.4 Depreciation & Depletion (11.9) (11.4) 0.5 Underlying Operating Profit 1.8 5.7 3.9 Share of Associate 0.6 0.6 - Interest (6.5) (4.8) 1.7 Exceptional Costs (9.9) (0.1) 9.8 Profit
Slide 9: Analysis by Division 2011
Analysis by Division 2011 2010 Pro forma 2011 Variance Variance £’m £’m £’m % Turnover England 68.8 86.2 17.4 +25.3% Scotland 75.0 82.7 7.7 +10.3% Total 143.8 168.9 25.1 +17.5% EBITDA England 5.5 9.1 3.6 +65.5% Scotland 10.2 10.3 0.1 +1.0% Head Office (2.0) (2.3) (0.3) (15.0)% Group Total (pre Assoc
Slide 10: Closing Balance Sheet 2011
Closing Balance Sheet 2011 2010 Dec 2011 Dec Actual Actual £’m £’m Tangible Fixed Assets 146.8 152.0 Investments 1.1 0.8 Intangible Assets 1.8 1.6 Total Non-Current Assets 149.7 154.4 Current Assets 36.8 43.5 Creditors Less than One Year (34.9) (41.8) Net Current Assets 1.9 1.7 Creditors Greater tha
Slide 11: 2011 Analysis – Cashflow
2011 Analysis – Cashflow 2011 2011 £’m £’m Profit Before Interest and Tax 6.2 Interest Paid (4.6) Income from Associate (0.6) Taxation (-) Gain on Bargain Purchase & asset sales (1.5) Dividends Received / (Paid) 0.9 Equity settled incentives 0.2 Investment in Fixed Assets (6.7) Depreciation and Amor
Slide 12: Analysis of Net Debt
Analysis of Net Debt 2010 Dec 2011 Dec Actual Actual £’m £’m Term Loans 67.0 72.6 Bank overdrafts 1.6 3.1 Cash (3.2) (0.9) Bank Debt 65.4 74.8 Finance Leases (over 1 year) 21.4 16.3 Finance leases (less than 1 year) 5.5 5.1 Finance Leases 26.9 21.4 Net Debt 92.3 96.2 12
Slide 13: One year in… Operational Review
One year in… Operational Review Simon Vivian Simon Vivian Group Chief Executive Group Chief Executive 13
Slide 14: Key 2011 objectives achieved
Key 2011 objectives achieved 1. Cultural change in approach to health and safety 2. Margin improvement despite significant cost increases 3. Group procurement & credit terms improved 4. Senior management team strengthened 5. All mineral planning applications successfully concluded 6. First bolt-on a
Slide 15: England – Strong recovery
England – Strong recovery Sales Volumes (ex C&G) Aggregates + 3.9% Asphalt + 18.0% Concrete + 26.3% 2010 2011 % chg £’m £’m Turnover 68.8 86.2 +25.3% EBITDA 5.5 9.1 +65.5% Mineral reserves Op. Profit 0.0 3.8 - + 12m tonnes consented at Leaton + 24m tonnes acquired with C&G EBITDA Margin 8.0% 10.6% +
Slide 16: Scotland – Robust performance
Scotland – Robust performance Sales Volumes Aggregates +12.7% Asphalt + 9.2% Concrete +20.5% 2010 2011 % chg £’000 £’000 Turnover 75.0 82.7 +10.3% EBITDA 10.2 10.3 +1.0% Major contracts (asphalt) Op. Profit 3.8 4.2 +10.5% A9 Crubenmore 29k tonnes Dundee airport 12k tonnes EBITDA Margin 13.6% 12.5% -
Slide 17: C&G Concrete
C&G Concrete ! Acquired from administrator July 2011 for £10.8m ! Surplus assets of £2.5m identified – sale process underway ! Bridges our East Anglian and East Midlands operations ! Gives us scale in ready-mixed concrete ! Adds 24mt to our reserves and resources ! Provides internal source of sand T
Slide 18: Slide 18
Slide 19: Nottingham Readymix – second bolt-on
Nottingham Readymix – second bolt-on ! Acquired from owner January 2012 ! Largest independent in Nottingham ! Headline price: 4x EBITDA ! Cement savings & aggregate supply benefits ! Bridges gap between Cloud Hill & Norton Bottoms ! Established mini-mix business ! Experienced commercial team 19
Slide 20: England pre-C&G
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Slide 21: England post-C&G and Nottingham Readymix
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Slide 22: Entry into mini-mix market
Entry into mini-mix market ! launched as discrete ‘small load’ offer ! Good potential for household & small commercial !Initially Peterborough, Corby, Rugby, Telford, Newark !Strong local focus, backed by local promotion & advertising ! Headed by experienced mini-mix professional ! Useful additional
Slide 23: Encouraging activity levels in 2011
Encouraging activity levels in 2011 ! M&S Distribution Centre, Castle Donington ! A9 Crubenmore upgrade ! Brett Landscaping, Barrow Upon Soar ! Fochabers bypass ! Marshalls paving factory, Maltby ! Dundee airport ! Sandtoft roof tiles factory, Doncaster ! Amazon Distribution Ctre, Kinross ! Hethel r
Slide 24: Plans for 2012
Plans for 2012 ! Further improve customer service ! Expand ! Secure back up concrete plants in England ! New asphalt plant at Peterhead ! Launch recycled rubber asphalt product ! Secure further strategic reserves\resources ! Continuing pressure on cost base ! Several infill acquisitions under review
Slide 25: Outlook – not all doom and gloom!
Outlook – not all doom and gloom! ! A453 improvements ! Blar Mhor development, Fort William ! Corby Ring Road ! Aberdeen Ring Road ! Nottinghamshire framework ! Peterhead Prison ! Increased share of Norfolk tender ! Inverness Airport ! Nottingham Tram network ! Edinburgh Airport ! East Midlands Airp
Slide 26: Summary and Outlook
Summary and Outlook Peter Tom CBE Chairman 26
Slide 27: Market Outlook
Market Outlook ! Continuing Eurozone uncertainty affecting confidence ! But definite signs of recovery in housing, commercial & industrial ! Planned Government infrastructure spending welcome ! Scotland more difficult due to higher public sector exposure ! Many large customers with investment plans:
Slide 28: Appendices
Appendices: MPA forecasts Breedon Aggregates vital statistics Breedon Aggregates key markets 28
Slide 29: Crushed rock volumes – moving annual trend
Crushed rock volumes – moving annual trend 130.0 120.0 110.0 million tonnes 100.0 90.0 80.0 70.0 Jan-08 Jan-09 Jan-10 Jan-11 Jan-07 Dec-05 Crushed Rock MAT actual 29
Slide 30: Ready-mix concrete volumes – moving annual trend
Ready-mix concrete volumes – moving annual trend 24.0 22.0 million cubic metres 20.0 18.0 16.0 14.0 12.0 Dec-05 Jan-07 Jan-09 Jan-11 Jan-08 Jan-10 Readymix concrete MAT actual 30
Slide 31: 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 60.0 55.0 50.0 45.0 Jan-07 Jan-08 Jan-11 Jan-09 Jan-10 Dec-05 Sand & Gravel MAT actual 31
Slide 32: Asphalt volumes – moving annual trend
Asphalt volumes – moving annual trend 29.0 28.0 27.0 26.0 million tonnes 25.0 24.0 23.0 22.0 21.0 20.0 19.0 Dec-05 Jan-07 Jan-09 Jan-11 Jan-08 Jan-10 Asphalt MAT actual 32
Slide 33: Breedon Aggregates – vital statistics
Breedon Aggregates – vital statistics ! Fully integrated aggregates producer ! 26 quarries, 18 asphalt plants, 40 concrete plants in 53 locations ! Substantial delivery fleet ! 220 owned/leased trucks, supplemented with owner-driver vehicles ! Fully-invested business ! £11m+ annual fixed asset depre
Slide 34: 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 ! Specialist markets: agricultural, small developers, et