Breedon Group PLC · LSE:BREE
Breedon — Investor Presentation (September 2017)
26 slides from Breedon's investor presentation, Sep 28, 2017
Slide 1: Analysts Visit to Hope Cement Works
ANALYSTS VISIT TO HOPE CEMENT WORKS 28 September 2017
Slide 2: Welcome & Agenda
WELCOME & AGENDA • Introductions • Orientation & facilities • No fire drill planned – muster point in car park • Refreshments • PPE • Hazard awareness • An overview… BREEDON GROUP 2
Slide 3: Commercial overview
Commercial overview Tim Billingham Interim Managing Director, Breedon Cement BREEDON GROUP BREEDON GROUP 3
Slide 4: GB Cementitious Market Overview
GB CEMENTITIOUS MARKET OVERVIEW Cementitious market size: 13.5mt Manufactured cement: 9.2mt Imported cement: 2.1mt GGBS/fly ash: 2.2mt Bulk cement: 9.3mt Packed cement: 2.0mt Source: BDS Marketing Research 2015 BREEDON GROUP 4
Slide 5: Main Routes to Market – Bulk Cement
MAIN ROUTES TO MARKET – BULK CEMENT Concrete products regular demand, logistically flexible product quality fundamental Readymix more uneven demand logistically more challenging Adhesives small sector stable customer base Soil stabilisation small sector, construction sites rather than fixed outlets
Slide 6: Manufactured Product Mix
MANUFACTURED PRODUCT MIX Breedon Portland Breedon Rapid • 28-day strength target • high early strength • applications where early strength • reduces curing costs in cold is less crucial weather • readymix, mortar, soil stabilisation • precast concrete Breedon Portland Plus Bagged cement • high stren
Slide 7: Supply Network
SUPPLY NETWORK • 44 road tankers • 175 rail wagons • c.1mt pa transported by rail • 4 rail-fed depots serving major 1.5mt capacity & industrial/ commercial conurbations Two kilns centres Two cement • 2 import mills adding flexibility terminals Rail-linked to 4 nationwide depots c1m tonnes delivered
Slide 8: Import Terminals
IMPORT TERMINALS • Valuable complement to Hope Works o improved stock management o increased supply flexibility • Expanding our cementitious business o cement + GGBS BREEDON GROUP 8
Slide 9: Bagged Cement
BAGGED CEMENT Comprehensive range of GP, PG & specialist products BREEDON GROUP 9
Slide 10: Bagged Cement
BAGGED CEMENT • Additional route to market for our cement • Packed, stored & distributed from Dagenham • Focused on local geographies • Emphasis on service: o consistent 1-3 day lead times • All bags plastic & waterproof • Distinctive & contemporary packaging • Recently rebranded Breedon: o well rec
Slide 11: GB Market Outlook: 2017-19
GB MARKET OUTLOOK: 2017-19 Construction output forecast to grow by c. 4% Cementitious sales forecast to grow by c. 4% Infrastructure output to grow by c. 25% Private housing starts to grow by c. 7% Approx. two-thirds of our sales are to these two end-use markets Sources: ONS/Construction Products As
Slide 12: Looking Ahead: Priorities
LOOKING AHEAD: PRIORITIES • Re-phase shutdowns to improve stock management • Continue to improve logistics management • Focus on customer segmentation • Optimise potential of Dagenham BREEDON GROUP 12
Slide 13: Quarry & plant overview
Quarry & plant overview Ed Cavanagh Hope Cement Works Manager BREEDON GROUP BREEDON GROUP 13
Slide 14: Overview of Plant & Quarries
OVERVIEW OF PLANT & QUARRIES Built 1929 5 wet kilns 10 cement mills 800+ employees Upgraded 1970 BREEDON GROUP 14
Slide 15: Current Vital Statistics
CURRENT VITAL STATISTICS 1.4mt capacity Two kilns Two cement mills Rail-linked to 4 nationwide depots c1m tonnes delivered by rail Over 160 employees Excellent relations with local stakeholders Certified to ISO 9001, ISO 14001 & OHSAS 18001 Revised operating permit issued in April BREEDON GROUP 15
Slide 16: Site Plan
SITE PLAN Hope Castleton Shale quarry Cement Works Limestone quarry Bradwell BREEDON GROUP 16
Slide 17: Why Are We Here?
WHY ARE WE HERE? BREEDON GROUP 17
Slide 18: Limestone Quarry
LIMESTONE QUARRY 1.5 km long, 0.6 km wide 165 metres deep Reserves of 36.5 million tonnes 2 million tonnes pa extraction Carboniferous limestone 335 million years old BREEDON GROUP 18
Slide 19: Shale Quarry
SHALE QUARRY Remaining area of shale extraction Site of Roman fort Carboniferous shale of variable sulphur content Reserves of 3 million tonnes 0.3 million tonnes pa extraction (pre-PFA substitution) Substituting with PFA BREEDON GROUP 19
Slide 20: Reserves Management
RESERVES MANAGEMENT • Strategic approach driven by complexity and planning • Working with the DNPA well ahead of current extraction consent limitations • Limestone quarry options around Duchy & Bradwell Moor • Scoping environmental impact assessment (EIA) and pre-application stages • Discussions und
Slide 21: Hope Works: Cement-Making Process
HOPE WORKS: CEMENT-MAKING PROCESS BREEDON GROUP 21
Slide 22: £14M Investment & Optimisation Completed
£14M INVESTMENT & OPTIMISATION COMPLETED New clinker shed Kiln 2 shell section & tyre SWF plant Chimney repairs Firing pipe replacements Kiln back-end replacements Kiln feed system uprating BREEDON GROUP 22
Slide 23: ARM & WDF Strategies
ARM & WDF STRATEGIES • Since 2001, Hope has utilised 1.2 million tonnes of waste in the process: o 0.7 million tonnes of alternative raw materials o 0.5 million tonnes of waste-derived fuels • We have progressively increased coal substitution: Waste Derived Fuel First year of Introduction Chipped ty
Slide 24: Training & Apprenticeships
TRAINING & APPRENTICESHIPS • On-site ‘Production Coach’ dedicated to process knowledge development • Control Room Operators (CROs) focus, inc. performance monitoring • Continually enhanced modules to include plant modifications & new technologies • Engineering apprentice scheme approved by IET & IMe
Slide 25: Community Engagement
COMMUNITY ENGAGEMENT • Crucial to commercial operation & long- term future of plant • Wide range of key stakeholders including: o Peak District National Park Authority o Parish and County Councillors o Residential & commercial neighbours o MPs o Tourist Board and Marketing Peak District & Derbyshire
Slide 26: Any Questions?
ANY QUESTIONS? BREEDON GROUP 26
Breedon Group — Investor Presentation (September 2017) on 6ix