Cairn Homes Plc · LSE:CRN
Cairn Homes — FY2022 Earnings Presentation
42 slides from Cairn Homes's earnings presentation, Mar 2, 2023
Slide 1: Cairn Homes plc 2022 Preliminary Results Presentation
Cairn Homes plc 2022 Preliminary Results Presentation
Slide 2: Table of Contents
2022 Preliminary Results Presentation – 2 March 2023 Table of Contents Page Michael Stanley 1 FY 2022 Highlights 2 Chief Executive Officer 2 FY 2022 Financial Results and Guidance 9 Shane Doherty Chief Financial Officer 3 Sustainability Update 17 Tara Grimley Company Secretary & Head of Sustainabili
Slide 3: FY 2022 Highlights
01 FY 2022 Highlights Harpur Lane, Leixlip
Slide 4: 2022 Key Financial Highlights
2022 Key Financial Highlights Scaled Delivery Driving Revenue and Favourable Mix and Mature Platform Operating Profit Platform Improving Margins 1,526 €617.4m 21.7% Closed A-rated new home sales Incl. €611m core revenue Gross margin (+36% on FY21) (+46% on FY21) (FY21: 19.8%) 495* €103m 16.7% Social
Slide 5: Key Operational Highlights
Key Operational Highlights Strong Demand in Operating Platform Decarbonisation Undersupplied Market With Capacity For Scale Targets Set 1,503* +30% -46.2% Current closed and forward sales with a Increase in new home commencements Reduction in absolute Scope 1 & 2 net sales value in excess of €534m t
Slide 6: Sales Pricing in 2022
Sales Pricing in 2022 New Homes Average Selling Prices ASPs €’k (Gross) Year Closed Sales Revenue (Net) Starter Homes Trade Up/Down Apartments Overall 2022 1,526 366 532 490 456 €611m 2021 1,120 350 493 454 428 €419m Movement +36.3% +4.6% +7.9% +7.9% +6.5% +€192m 5 4x Cairn schemes where FTBs can bo
Slide 7: 2022 Sales Analysis
2022 Sales Analysis 2022 Buyer Profile of 1,526 Closed Sales 2022 Sales Backdrop • Strong demand across all of our expanding and multiple sales channels 23% 25% • Average sales rates were in Institutional Private: excess of 4 new homes per FTB / Starter week per active selling site during 2023 • Sal
Slide 8: Cairn Starter Home Is Significantly Cheaper Than Equivalent Rental
Cairn Starter Home Is Significantly Cheaper Than Equivalent Rental Energy Costs of a Cairn Starter Home* Monthly Cost of Our New Homes With Government Supports €4,000 Owning - Help €3,619 Renting to Buy & First €3,500 Home Scheme €3,000 Monthly Rent / Mortgage (at 4%) €2,600 €1,253 €2,500 €2,027 Mon
Slide 9: Mitigating Build Cost Inflation – Supply Chain Collaboration
Mitigating Build Cost Inflation – Supply Chain Collaboration • €469m labour and materials spend in 2022 (average €39m per c. €10,000 month) will increase to c. €500m in 2023 • c. 78% procured on active sites for 2023 and c. 54% for 2024 (c. 4%) expected build cost inflation for each new • Continued
Slide 10: FY 2022 Financial Results and Guidance
02 FY 2022 Financial Results and Guidance Griffith Wood, Dublin 9
Slide 11: FY 2022 Financial Performance
FY 2022 Financial Performance 2022 Unaudited 2021 Audited Movement €m €m Revenue 617.4 424.0 +46% Cost of Sales (483.1) (340.1) +42% Gross profit 134.2 83.9 +60% Gross margin % 21.7% 19.8% +190bps Opex (31.2) (25.5) +22% EBIT 103.0 58.4 +76% EBIT margin % 16.7% 13.8% +290bps Finance Costs (9.5) (8.2
Slide 12: Revenue and Sales Performance KPIs
Revenue and Sales Performance KPIs Closed and Forward Sales Pipeline (as at 01 March 2023) Units Revenue (Net) 2023 – closed and forward sales 1,204 €435m 2024 – forward sales 299 €99m Total closed and forward sales pipeline 1,503 €534m WIP Investment Underpinned by Sales Strategy FY20 FY21 FY22 Clo
Slide 13: Balance Sheet as at 31 December 2022
Balance Sheet as at 31 December 2022 31 December 2022 Unaudited 31 December 2021 Audited Change €m €m Land held for development 628.3 671.7 Construction work in progress 339.0 268.3 €70.7m Other receivables 20.5 29.9 Other assets and liabilities (86.7) (81.6) Net assets (excluding net debt) 901.1 88
Slide 14: Key Cash Flow Movements
Key Cash Flow Movements Dec-22 Dec-21 Movement • Net debt increased by €39.8m in the period to €149.3m, resulting in available liquidity of €199.2m €m €m €m at year end Net Debt 149.3 109.5 (39.8) • Operating cashflow, before distributions and acquisitions, of €125.9m was generated in the year, incl
Slide 15: Value Creation Through Strong Platform and ROE Growth
Value Creation Through Strong Platform and ROE Growth Track Record Future (what we have done) (leveraging our track record for further growth) FY21: • Further updates on our capital allocation strategy will • €40m (€20m interim and €20m final dividend) be provided during 2023 • 6% ROE • Annual growt
Slide 16: Capital Allocation: Value Creation and ROE Growth
Capital Allocation: Value Creation and ROE Growth Capital Allocation 2020 2021 2022 Medium FY23 & Beyond €’m €’m €’m Term • Continued annual growth in Land Acquisitions €37.7 €43.4 €32.1 volumes, revenue and WIP Investment €73.3 (€9.5) €70.7 profitability Land & WIP Investment €111.0 €33.9 €102.8 •
Slide 17: Guidance Recap
Guidance Recap 2023 In excess of €650m Revenue & Sales Volumes 1,750 to 1,800 sales completions Gross Margin c. 21% Operating Profit Continued growth Ordinary dividend of 40 – 50% of profit after tax Shareholder Returns €40m share buyback programme Further updates on capital allocation during 2023 T
Slide 18: Sustainability Update
03 Sustainability Update Mariavilla, Maynooth
Slide 19: Environmental – Tracking Progress to our Decarbonisation Strategy
Environmental – Tracking Progress to our Decarbonisation Strategy • Move to Hydrotreated Vegetable Oil (HVO) • Submitted Scope 1-3 targets to the Science Based Targets biodiesel for use in plant and machinery initiative (SBTi) for verification across all sites in Ireland (HVO - Cairn • Scope 3 measu
Slide 20: Social Governance
Social Governance • Retained our Great Place to Work certification as one • Aligning our sustainability strategy through the completion of Ireland’s Best Workplaces 2022 in the Best of a new €277.5m Sustainability Linked Facility Large Category and ranked as one of the Top 20 and meeting EU Taxonomy
Slide 21: Health & Safety – Our Number One Priority
Health & Safety – Our Number One Priority Delivered three new H&S INCREASED ACTIVITY VS FEWER INCIDENTS Training Initiatives 96% Total reported accident 1,526 and first aid events Homes delivered • Scaffolding Management Training • Lifting Supervisor Training 804 -3.3% decline in first aid • Advance
Slide 22: Macro Environment and Look Ahead
04 Macro Environment and Look Ahead Citywest Phase 3, Dublin 24
Slide 23: Macroeconomic Backdrop
Macroeconomic Backdrop The Irish economy entered 2023 in a position of relative strength. Against the backdrop of strong demand for new homes, Irish household debt to deposit ratios are at all-time lows and savings at record levels which somewhat mitigates against rising interest rates: Strong Econo
Slide 24: Our Forward Looking Strategy
Our Forward Looking Strategy Scaled Regional Delivery to Creating Value for Operating Platform Our Customers Stakeholders Low Cost Landbank Business to Customer Customers • 16,800 units in attractive locations • Core FTB market (up to €450k • 5,800+ new homes with high sales absorption ASP to avail
Slide 25: Clonburris Update – A New Suburb and New Homes for 25,000 Residents
Clonburris Update – A New Suburb and New Homes for 25,000 Residents Status Update • Infrastructure works: commenced in November 2022 • Phase 1 (569 units): commenced in January 2023 • First foundations: February 2023 FEB • First new home closings: Q4 2023 2023 • Phase 2 & 3: 750 unit commencement pl
Slide 26: New Homes: Continued Growth into 2023
Continued Growth into 2023 Our Volume Growth Trajectory 1,750 – 1,800 1526 New Homes 1120 743 2020 2021 2022 2023 (F) Strengthening Year on Year Forward Sales # Units 1,503* / €534m €’m 1,600 600 1,400 500 1,200 853 / €266m 400 1,000 800 300 600 200 11-Jan-22 02-Mar-20 03-Mar-21 02-Mar-22 01-Mar-23
Slide 27: 2023 & Medium-Term Outlook
2023 & Medium-Term Outlook • Continue to grow our annual volumes, revenue and profitability • Significant medium and long-term Economy Market cash generation is forecast to continue to grow at the demand for new homes underpinned fastest pace in the EU in 2023 following by record employment, growing
Slide 28: Appendices
05 Appendices Linden Demesne, Maynooth
Slide 29: Apartment Construction – Track Record & Capability
Apartment Construction – Track Record & Capability The Facts Underpinning the Irish Rental and Affordable Rental Apartment Market • 1,100 homes available to rent nationwide on 1 February 2023 • Lowest percentage of population living in apartments in EU at <10% (2006 – 2021 average 8,500) (EU average
Slide 30: Case Study – Efficient and Timely Apartment Delivery
Case Study – Efficient and Timely Apartment Delivery Library of Apartment Homes • Similar to houses, we follow a design-led standardisation • We own the value engineering journey from site acquisition, approach that is repeatable across our apartment schemes through planning, design, pre-constructio
Slide 31: Digital Transformation and Innovation
Digital Transformation and Innovation Significant investment in IT and innovation driving continuous improvement and efficiency in our business model Innovation in action/BIM (Building Driving Sustainability Information Modelling) • Using full structural BIM models to • 3D Components Library: elevat
Slide 32: Cash Flow Statement for the Year Ended 31 December 2022
Cash Flow Statement for the Year Ended 31 December 2022 FY 2022 Unaudited FY 2021 Audited Movement €m €m EBITDA 109.9 62.7 47.2 Increase/(decrease) in inventories (24.6) 30.1 (54.7) Other working capital movements 8.6 (4.3) 12.9 Net cash from operating activities 93.9 88.5 5.4 Purchase of tangible/i
Slide 33: Demographics Driving Strong Structural Demand
Demographics Driving Strong Structural Demand Strong population growth Strong population growth to sustain demand 6.75m • Population of 5.12m as at April 2022, the highest since 1851, an Housing Commission increase of 7.6% since Census 2016 7,000,000 estimated population in 2050 • The Housing Commis
Slide 34: Demand Drivers: Strong Macro Environment
Demand Drivers: Strong Macro Environment Strong momentum amidst macro uncertainty Impressive household savings continued in 2022 2.5 150,000 140,000 2 2023 Forecast Growth % 130,000 € millions 1.5 120,000 110,000 1 100,000 0.5 90,000 80,000 Apr 2016 May 2018 Oct 2018 Apr 2021 Jan 2015 Jun 2015 Jul 2
Slide 35: Slowdown in Pipeline of Supply – Planning Grants & Commencements
Slowdown in Pipeline of Supply – Planning Grants & Commencements Fall off in apartment planning grants in H2 2022 20% fall off in Dublin apartment permissions in Q3 2022 Units Units 30,000 20,000 12m rolling permissions 12m rolling permissions 18,000 25,000 16,000 20,000 21,072 14,000 14,344 12,000
Slide 36: Significant Increase in Supply in 2022
Q4 Rolling Completions Units 5,000 0 10,000 20,000 25,000 30,000 15,000 2011Q4 2012Q2 Source: DHLGH, CSO. 2012Q4 2013Q2 2013Q4 2014Q2 Overall 2014Q4 2015Q2 2015Q4 2016Q2 2016Q4 2017Q2 2017Q4 2018Q2 Scheme Houses 2018Q4 2019Q2 2019Q4 2020Q2 2020Q4 2021Q2 2021Q4 Apartments 2022Q2 2022Q4 Close to 30,00
Slide 37: Mortgage Market
Mortgage Market FTB mortgage drawdowns continue to grow Strong pipeline of mortgage approvals Rolling 12m Rolling 12m Total (number of mortgages) 4,500 4,250 65,000 4,000 58,276 3,500 55,000 3,000 45,000 €m 2,500 2,417 2,000 35,000 1,500 25,000 27,953 1,000 500 15,000 Dec-2017 Dec-2018 Dec-2019 Dec-
Slide 38: Housing For All – Ambitious Plan to Deliver 140,000+ Social & Affordable New Homes
Housing For All – Ambitious Plan to Deliver 140,000+ Social & Affordable New Homes Historic delivery of social housing in Ireland highlights the ambitions of Housing For All Units 18,000 47.4%* 16,000 14,000 12,000 10,000 32.7%* 8,000 28.1%* 23.1%* 6,000 4,000 2,000 4.3%* 0 Local Authority Housing A
Slide 39: Methodology, Assumptions and Data – Energy Cost Savings
Methodology, Assumptions and Data – Energy Cost Savings A2 Rated Home • Methodology for the calculations provided are based on best available data. • Average energy use (kWh/m2) is based on Household Electricity & Gas Consumption by Building Energy Ratings 2021. • Energy unit rate is taken from Elec
Slide 40: Cairn Development Brands
Cairn Development Brands 39
Slide 41: Disclaimer
Disclaimer This presentation document (hereinafter “this document”) has been Certain information contained herein constitutes “forward-looking prepared by Cairn Homes plc (“Cairn” or the “Company”). statements”, which can be identified by the use of terms such as “may”, “will”, “should”, “expect”, “
Slide 42: 45 Mespil Road, Dublin 4
45 Mespil Road, Dublin 4, D04 W2F1 01 696 4600 www.cairnhomes.com