Slide 1: Castings PLC Final results
Castings PLC Final results 31 March 2023 1
Slide 2: 1. Introduction and overview
1. Introduction and overview www.castings.plc.uk 2
Slide 3: Timeline
Timeline Foundry Brownhills Robotic production site CNC automation commences production Walsall Speedwell Highly project in Walsall begins site closed acquired invested commences iron foundry 1835 1907 1957 1960 1977 1991 1996 2009 2016 2023 and machine Castings Floated on William Major new shop Lim
Slide 4: The Castings group
The Castings group Foundry | Brownhills Foundry | Dronfield Machinist | Brownhills Founded 1835 Acquired 1991 Acquired 1996 30,000 tonnes capacity* 40,000 tonnes capacity* Over 100 CNC machines 392 employees 456 employees 375 employees * production capacity which, after machining, converts to a sale
Slide 5: Financial headlines
Financial headlines Results • Despatch weight up 6.6% to 53,100 tonnes • Revenue up 35% to £201m • Underlying revenue growth of 24% excluding energy related surcharges • Operating profit up 36% to £16.4m • Strong balance sheet with cash of £35.6m and no debt Dividends • Final ordinary dividend decla
Slide 6: Highlights
Highlights • Strong growth in sales tonnes (6.6%) • Mix of machined work at record high (59.2% by weight) • Price increases to fully recover labour and general cost inflation • Energy surcharges to recover energy cost inflation (at nil margin) in H2 • Operating margin maintained at 8.1% (8.8% exclud
Slide 7: 2. Financial review
2. Financial review www.castings.plc.uk 7
Slide 8: Final results overview
Final results overview £m (unless stated) 2019 2020 20212 2022 2023 Growth Revenue 150.2 138.7 114.7 148.6 201.0 35.3% Operating profit1 15.2 12.5 4.3 12.0 16.4 36.1% Operating margin 10.1% 9.0% 3.7% 8.1% 8.1% - EPS1 28.16p 23.05p 8.06p 19.60p 31.66p 61.5% Return on capital employed1 14.7% 12.7% 4.6
Slide 9: Profit before tax per tonne sold
Profit before tax per tonne sold 400 350 300 250 200 150 100 50 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 www.castings.plc.uk 9
Slide 10: Dividend growth record
Dividend growth record Ordinary dividend declared per share 16.00 9.3% 10% 9% 14.00 7.5% 8% 12.00 6.9% 6.4% 7% Pence per share 10.00 6% 5.0% 5.0% 5.0% 4.7% 4.7% 4.7% 8.00 4.3% 4.3% 5% 3.8% 3.5% 4% 6.00 3.1% 2.9% 2.7% 2.6% 3% 4.00 1.9% 1.9% 2% 2.00 0.7% 1% 0.0% 0.0% 0.00 0% 2001 2003 2005 2007 2009 2
Slide 11: Foundry segmental results
Foundry segmental results £m (unless stated) 2019 2020 2021 2022 2023 Growth Revenue Gross 164.6 151.3 123.1 162.6 223.7 37.6% Less: inter-group revenue (21.5) (17.7) (11.1) (17.0) (24.7) 45.3% External revenue 143.1 133.6 112.0 145.6 199.0 36.7% Foundry sales weight (tonnes) 52,200 47,700 40,100 49
Slide 12: Machining segmental results
Machining segmental results £m (unless stated) 2019 2020 2021 2022 2023 Growth Revenue Gross 27.8 24.5 18.3 22.5 27.7 23.1% Less: inter-group revenue (20.6) (19.5) (15.6) (19.5) (25.6) 31.3% External revenue 7.2 5.0 2.7 3.0 2.0 -33.3% Segmental result (1.3) (0.7) (2.3) (0.9) 0.2 - Segmental margin o
Slide 13: Summary cash flow statement
Summary cash flow statement £m 2019 2020 2021 2022 2023 PBT net of tax payments 12.6 8.3 4.3 9.5 13.8 Depreciation 8.3 8.9 8.8 8.6 8.6 Working capital movement (5.2) 5.9 (0.7) (7.7) (2.7) Capex (net) (4.9) (8.2) (5.2) (4.4) (6.2) Sale of property - - 1.7 - - Free cash flow (excluding pension payment
Slide 14: 3. Business review
3. Business review www.castings.plc.uk 14
Slide 15: Revenue profile
Revenue profile Revenue by sector Revenue by location 0.5% 14% 7.5% UK 17.0% Heavy truck 9% Europe Automotive North & South America 77% 75.0% Other Rest of world www.castings.plc.uk 15
Slide 16: Our customers
Our customers Other 14% Auto 9% Commercial vehicle 77% www.castings.plc.uk 16
Slide 17: Heavy truck registrations
Heavy truck registrations European heavy truck registrations (calendar year) 350,000 300,000 250,000 Units registered 200,000 Volvo estimate Volvo estimate Volvo estimate 150,000 100,000 50,000 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Source: Data f
Slide 18: Foundry sales weight
Foundry sales weight 2017 2018 2019 2020 2021 2022 2023 Foundry sales weight (tonnes) 47,200 49,200 52,200 47,700 40,100 49,800 53,100 www.castings.plc.uk 18
Slide 19: Commercial vehicle customer revenue mix
Commercial vehicle customer revenue mix 2011 2016 2018 2019 2020 2021 2022 2023 Customer A 23% 25% 30% 29% 28% 28% 23% 25% B 11% 13% 13% 13% 13% 14% 15% 15% C 1% 4% 8% 10% 9% 10% 12% 11% D 10% 9% 10% 10% 9% 7% 7% 9% Total 45% 51% 61% 62% 59% 59% 57% 60% 70 % of external revenue 60 50 D 40 C 30 B 20
Slide 20: Group performance
Group performance Customers Production Costs / prices • Pent-up truck demand • Automation investment • Input price rises • OEMs seeking to increase - Robotic investment • Electricity contract ended • New engine platforms for - AI quality inspection 30 September 2022 two customers • Rebalancing of pr
Slide 21: Sustainability
Sustainability • Castings plc is a recycler • Overall tCO2e per tonne of castings produced reduced to 0.528 (from 0.547) • Electric melting only, unlike a number of competitors • Electricity (scope 2) - 87% of our total energy kWh • 100% REGO backed supply • Nil emissions using market-based approach
Slide 22: 4. Summary and outlook
4. Summary and outlook www.castings.plc.uk 22
Slide 23: Outlook – short to medium term
Outlook – short to medium term • Volume increases • Capital investment • Pent-up demand in heavy truck • Capacity • Schedule increases • Automation / multi-manning • Scania CBE engine to MAN from 2024 • Energy efficient / recycling solutions • Other sectors strong • Alternative materials (aluminium)
Slide 24: Outlook – longer term
Outlook – longer term • Electrification of trucks (BEV, FCEV, biofuels) over next two decades Electric solutions to make up 10% • Heavy trucks (our market) likely to be the last of total vehicles sales volume by 2025 and 50% by 2030 • EU commission proposed heavy truck target to reduce on average co
Slide 25: In summary
In summary Driving production efficiencies and margins Investment for Investment productivity Ramp-up on new customer platforms Debt free Opportunities Strong Next generation trucks balance sheet Value add in house – reduce supply chain miles Progressive Agile dividend policy US market – growing cus
Slide 26: Appendix - Additional information
Appendix - Additional information www.castings.plc.uk 26
Slide 27: Revenue and PBIT
£’m 100 120 140 0 20 40 £’m 100 120 180140 20 60 40 80 60 80 100 150 160 200 200160250 50 0 0 1990 1990 19911990 1991 19921991 1992 19931992 1993 19941993 1994 19951994 * market consensus figures for 2023 1995 19961995 1996 19971996 1997 19981997 1998 1998 1999 1999 1999 2000 2000 2000 2001 Revenue
Slide 28: Track record of strong cash generation
Track record of strong cash generation 40 Wm Lee CNC 35 30 25 20 15 10 5 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Dividend (supplementary) Net capex Pension contribution
Slide 29: Strategy
Strategy Deliver long term sustainable revenues and higher average margins through the following strategic priorities: Reinvestment for innovation and efficiency Increase OEM market share • Innovative design processes • Collaborative, dedicated customer teams • Reinvestment in automation • Increase
Slide 30: Business Model
Business Model Design collaboration & our people Value for stakeholders • Experienced teams • Technical knowledge Customers • Close customer relationships • Flexibility, cost-effective, quality • Latest design simulation • Capability for diverse range • Long term security Foundry production • High v
Slide 31: Production facilities
Production facilities • Sites: • Castings (Brownhills) – 14 acres • William Lee (Dronfield) – 14 acres • CNC Speedwell – 4 acres • Production facilities: • Castings (Brownhills) – 32,000 m2 (of which 5,000 m2 is warehousing) • 2 x Disamatic vertical moulding lines (up to 15kg part weight) • 1 x GF/D
Slide 32: Recent investments
Recent investments • Robotic handling and processing (started 2016) • Over 62 robots across the group • £13m investment to date • Roll-out continues • Warehouse management system (started 2017) • Bespoke FIFO system in Brownhills • £1m+ investment • Heat treatment plant for alloyed parts (commission