Genuit Group Plc · LSE:GEN
Genuit — FY2021 Earnings Presentation
33 slides from Genuit's earnings presentation, Mar 15, 2022
Slide 1: Genuit Group Plc 2021 Full Year Results Presentation
Genuit Group Plc 2021 Full Year Results Presentation 15 March 2022 1
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 1 KEY HIGHLIGHTS 2 FINANCIAL RESULTS 3 BUSINESS REVIEW 4 OUTLOOK
Slide 4: Key highlights
Key highlights A year of strong progress as we position the Group for continued success ❑ Continued market outperformance - like-for-like volume growth of 2.6% vs 2019, in contrast with 3.6% market decline ❑ Record underlying EBIT performance underpinned by organic growth and recovery of unprecedent
Slide 5: Key highlights: Raising the bar in operating sustainably
Key highlights Raising the bar in operating sustainably • Against our 2025 66.0% reduction target in Scopes 1&2 Carbon intensity, made excellent progress with a 44.0% reduction • Signed Pledge to Net Zero and committed to SBTs using the more challenging 1.5°C Business Ambition • Use of recycled mate
Slide 6: Agenda
Agenda 1 KEY HIGHLIGHTS 2 FINANCIAL RESULTS 3 BUSINESS REVIEW 4 OUTLOOK
Slide 7: Financial results
Financial results ❑ Revenue increase of 49.1% due to significant increase in demand and robust price leadership in the market ❑ Ongoing recovery in underlying operating profit margin despite cost headwinds and some global supply chain constraints ❑ Underlying basic earnings per share of 30.6p, an in
Slide 8: Underlying results summary
Underlying results summary £m 2021 2020 Change Revenue 594.3 398.6 49.1% Cost of sales (348.8) (242.5) 43.8% Gross profit 245.5 156.1 57.2% Gross margin 41.3% 39.2% 210bps Selling, distribution and administration costs (150.2) (113.9) 31.8% Underlying operating profit 95.3 42.2 125.8% Operating marg
Slide 9: Revenue and underlying operating profit bridge
Revenue and underlying operating profit bridge Versus 2019 Revenue (£m) 594.3 ❑ Robust contractual price 447.6 increases with market generally following, lag effect seen in H1 significantly lessened in H2 ❑ Amendment of contractual terms to reflect high inflation environment and reduce lag time of p
Slide 10: Inflation and pricing
Inflation and pricing Strong price leadership in the market mitigating cost inflation ❑ Unprecedented raw material inflationary pressure from end of 2020 ❑ Prime PVC increase in cost per tonne 50% in 2021 ❑ Robust price leadership across Group ❑ Four announced increases in 2021 PVC material price ❑
Slide 11: Operating segment review – Residential Systems
Operating segment review – Residential Systems Strengthening performance 2021 2020 Growth Revenue £372.9m £223.9m 66.5% Underlying operating profit £73.1m £29.8m 145.3% Underlying operating margin 19.6% 13.3% ❑ Revenue 66.5% higher than 2020 and 43.3% higher than 2019 (34.5% and 15.7% higher on a li
Slide 12: Operating segment review – Commercial and Infrastructure Systems
Operating segment review – Commercial and Infrastructure Systems Robust revenue growth and recovering operating margin 2021 2020 Growth Revenue £221.4m £174.7m 26.7% Underlying operating profit £22.2m £12.4m 79.0% Underlying operating margin 10.0% 7.1% ❑ Revenue 26.7% higher than 2020 and 18.2% high
Slide 13: Non-underlying items
Non-underlying items Uptick in amortisation and acquisition costs £m 2021 2020 Non-underlying items: - Amortisation of intangible assets (14.2) (7.8) - Acquisition costs (7.3) (0.6) - Contingent consideration on acquisition (1.9) (2.4) - Restructuring costs (1.1) (1.1) - Unwind of inventory fair val
Slide 14: Cashflow
Cashflow Continued strategic investment and growth £m 2021 2020 Change EBITDA (before non-underlying items) 116.1 60.9 55.2 Capex (34.1) (24.5) (9.5) Working capital (27.0) 1.5 (28.6) Share-based payments 2.2 1.4 0.8 Operating cash flows 57.2 39.3 17.9 Interest (2.9) (5.4) 2.5 Leases (5.1) (4.0) (1.
Slide 15: Movement in net debt
Movement in net debt Year end leverage 1.2x – a beat on consensus -145.1 ❑ A strongly supported capital raise to help fund the Adey acquisition GENUIT © 2022 15
Slide 16: Financing
Financing Well within covenants and significant headroom Drawn as at 31 £m December 2021 Facility Headroom Bank loan 198.0 300.0 102.0 Cash and cash equivalents (52.3) - 52.3 Net debt excluding unamortised debt issue costs 145.7 300.0 154.3 Unamortised debt issue costs (0.6) Net debt including unamo
Slide 17: Agenda
Agenda 1 KEY HIGHLIGHTS 2 FINANCIAL RESULTS 3 BUSINESS REVIEW 4 OUTLOOK
Slide 18: Balanced portfolio across the UK construction market
Balanced portfolio across the UK construction market 2021 sales split by sector and geography 5% 8% 32% UK RMI 12% UK New Build UK 90% Rest of the World European Markets UK Commercial - Private 6% UK Commercial - Public UK Infrastructure 4% 33% GENUIT © 2022 18
Slide 19: Market outperformance
Market outperformance Driven by structural growth drivers ❑ Leading positions in structural growth markets ❑ Sustainability is at the heart of our culture ❑ Strong brands in climate and water management sectors ▪ Innovation ❑ Selective organic and inorganic opportunities ▪ Recycling ❑ Legacy materia
Slide 20: Sustainably-driven innovation
Sustainably-driven innovation Improving resilience and adaptation is core to our innovation ❑ The Polysync system integrates smart technology into Permavoid solutions ❑ The system provides drainage attenuation, storing rainwater for irrigation ❑ Smart monitoring checks local weather forecasting for
Slide 21: Acquisition update
Acquisition update Performing well, with Adey ahead of expectations Invested £210m (11.8x) ❑ Adey continues to perform ahead of our business case ▪ Overseas growth initiatives now well embedded; European sales +37% vs 2020 ▪ Commercial Water Testing is expanding; sales +19% vs 2020 ▪ Announced UK Pa
Slide 22: Agenda
Agenda 1 KEY HIGHLIGHTS 2 FINANCIAL RESULTS 3 BUSINESS REVIEW 4 OUTLOOK
Slide 23: Resilient UK construction market
Resilient UK construction market Up 11.6% on 2020 but still 7.1% down on 2019 ❑ Construction market resilient in face of Covid-19 pandemic, benefitting from Government stimulus, consumer spending Construction Market Development* and continuing structural drivers 170 +1.7% +3.2% +2.8% 150 +11.6% -16.
Slide 24: Outlook
Outlook Diversified end markets; continued strong fundamentals ❑ Balanced exposure to UK construction markets with robust growth drivers ❑ Execution of strategy through organic and M&A investment, with recent acquisitions performing well ❑ Housebuilding sector’s encouraging start to 2022 with starts
Slide 25: Why did I join Genuit?
Why did I join Genuit? ❑ Well-respected in the market and by investors ❑ Strong brands with good products customers appreciate ❑ Record of growth and profitability ❑ Disciplined and strategic M&A ❑ Truly coherent strategy to help construction address the challenges of climate change ❑ Decarbonisatio
Slide 26: First impressions
First impressions ❑ It’s been a full and stimulating two weeks ❑ Visited with our four divisions ❑ Walked most of our largest sites ❑ Met more than 40 of our top leaders ❑ Listened to our people – and our advisors, analysts, and board ❑ Looking forward to several busy weeks with investors ahead ❑ Th
Slide 27: Appendices
QP cenuit GROUP Appendices
Slide 28: Market performance - Residential
Market performance - Residential Private Housing RMI Starts v Completions - Units 24 250 207 201 203 206 204 22 182 192 199 200 20 167 151 000 units £’000 18 150 16 100 14 12 50 10 0 2019 2020 2021 2022 2023 2019 2020 2021 2022f 2023f Starts Completions UK 97%of completions significantly outstrippin
Slide 29: Market performance – Commercial / Non-Housing
Market performance – Commercial / Non-Housing Commercial Construction %Y/Y Public Non-Housing %Y/Y 10 15 5.4 12.1 5 2.6 3.1 10 0 5 2.9 2.8 -5 -2.1 -10 -6.7 0 -15 -2.1 -5 -20 -6.7 -25 -22.4 -10 -8.2 2018 2019 2020 2021 2022f 2023f 2018 2019 2020 2021 2022f 2023f UK ❑ The commercial97% sector, has see
Slide 30: Market performance – Infrastructure
Market performance – Infrastructure Infrastructure % Y/Y Roads % Y/Y 25 23.5 16 14.4 20 14 12.0 12 15 9.7 10 10 8 5 3.0 1.1 6 0 3.6 4 3.0 2.0 -5 2 -4.7 -10 0 2019 UK2020 2021 2022 2023 2019 2020 2021 2022 2023 97% ❑ Infrastructure has shown rapid growth across key subsectors of rail and utilities ❑
Slide 31: Quarterly performance through the crisis
Quarterly performance through the crisis Five successive quarters of revenue growth over prior year with momentum into 2022 140 120 ❑ Strong revenue momentum 100 entering 2022 ❑ Five successive quarters’ Revenue* £m outperformance of prior year 80 quarter ❑ Strong comparators in Q3 and 60 Q4 reflect
Slide 32: Net working capital
Net working capital Inventory rebuilt to service customer base 2021 2021 Change £m As reported Acquisitions (excl. acquisitions) 2020 (excl. acquisitions) Inventories 80.8 13.1 67.7 52.6 15.1 Trade and other receivables 76.7 8.4 68.3 61.6 6.7 Trade and other payables (135.5) (14.3) (121.2) (112.2) (
Slide 33: Capital allocation
Capital allocation Delivering on our priorities Profitable organic Significant growth investment levels Dividends 2.5 x payout ratio Strategic & financial M&A discipline Debt 1.0-2.0 x range 33 GENUIT © 2022