Breedon Group Plc · LSE:BREE
Breedon — FY2016 Earnings Presentation
29 slides from Breedon's earnings presentation, Mar 8, 2017
Slide 1: 2016 Full-Year Results
2016 FULL-YEAR RESULTS 8 March 2017 Placeholder
Slide 2: 2016 Full-Year Results: Introduction, Financial Review, Group & Operational Review
2016 FULL-YEAR RESULTS Introduction Peter Tom CBE Executive Chairman Financial review Rob Wood Group Finance Director Group & operational review Pat Ward Group Chief Executive Q&A joined by: Alan Mackenzie Chief Executive, Breedon Northern Tim Hall Chief Executive, Breedon Southern Ashley Bryan Mana
Slide 3: Peter Tom CBE, Executive Chairman
2016 FULL-YEAR RESULTS PETER TOM CBE Executive Chairman BREEDON GROUP 2016 FULL- YEAR RESULTS 3
Slide 4: 2016: A Transformational Year
2016: A TRANSFORMATIONAL YEAR • Breedon transformed by the acquisition of Hope Construction Materials • Improved sales & profits from former Breedon Aggregates businesses and 5-month contribution from Hope • Acquisition of Sherburn Minerals Group • Significantly increased investment in capacity and
Slide 5: Rob Wood, Group Finance Director
2016 FULL-YEAR RESULTS ROB WOOD Group Finance Director BREEDON GROUP 2016 FULL- YEAR RESULTS 5
Slide 6: 2016 Financial Results: How We Are Reporting
2016 FINANCIAL RESULTS HOW WE ARE REPORTING Breedon Southern comprises business of former Breedon Aggregates England Breedon Northern comprises business of former Breedon Aggregates Scotland Hope Cement comprises business of former Hope Construction Materials: part of the Group for the last 5 months
Slide 7: 2016 Financial Highlights
2016 FINANCIAL HIGHLIGHTS Revenue Underlying EBIT* Underlying EBIT margin* £454.7m £59.6m 13.1% 2015: £318.5m +43% 2015: £37.8m +58% 2015: 11.9% +1.2ppt Profit before tax Underlying basic EPS* Net debt £46.8m 3.49p £159.3m 2015: £31.3m +50% 2015: 2.68p +30% 2015: net cash £10.3m *Underlying results
Slide 8: Income Statement
2016 INCOME STATEMENT 2015 2016 Variance £ million £ million % Revenue 318.5 454.7 +43% Underlying EBITDA 54.9 83.7 +52% Depletion & depreciation (17.8) (25.5) Underlying operating profit 37.1 58.2 +57% Share of associate and joint ventures 0.7 1.4 Underlying EBIT 37.8 59.6 +58% Interest (2.8) (4.5)
Slide 9: Divisional Performance
2016 DIVISIONAL PERFORMANCE 2015 revenue £ million 2016 revenue £ million (1.3) 454.7 121.3 170.9 318.5 175.3 147.6 159.4 Breedon Breedon Group Breedon Breedon Hope Elimination Group Northern Southern Northern Southern Cement 2015 2016 2015 2016 Underlying Underlying Underlying EBIT £ million £ mill
Slide 10: Product Volumes
2016 PRODUCT VOLUMES Aggregates Asphalt Concrete million tonnes million tonnes million m3 +3% 1.9 +31% 11.4 1.8 1.9 +121% +3% 8.7 +12% +11% +16% 0.9 +2% -1% 2015 2016 2015 2016 2015 2016 Breedon Northern Breedon Southern Hope Cement NOTE: In accordance with the Cement Market Data Order 2016, cement
Slide 11: Net Debt Movement
2016 NET DEBT MOVEMENT £ million Inflow Outflow (159.3) 0 10.3 Opening EBITDA Non- Working Interest Tax Dividend Capital Disposals Acquisitions Equity Closing cash underlying/ capital received expenditure and issued debt other investment BREEDON GROUP 2016 FULL- YEAR RESULTS 11
Slide 12: How We Will Report From 2017
HOW WE WILL REPORT FROM 2017 BREEDON GROUP PLC BREEDON NORTHERN BREEDON SOUTHERN HOPE CEMENT Aggregates, asphalt, Aggregates, asphalt, ready-mixed concrete, ready-mixed concrete, All cementitious products concrete products concrete products & contracting & contracting BREEDON GROUP 2016 FULL- YEAR R
Slide 13: Pat Ward, Group Chief Executive
2016 GROUP & OPERATIONAL REVIEW PAT WARD Group Chief Executive BREEDON GROUP 2016 FULL- YEAR RESULTS 13
Slide 14: 2016: A Resilient Market
2016: A RESILIENT MARKET 1 • GDP up 1.8% 2 • Construction output up 1.5% 3 • All key product volumes ahead : • aggregates +4.1% • asphalt +0.1% • concrete +4.0% • cementitious +4.0% • Significant regional variations • Better outturn than anticipated post-Brexit 1 Office for National Statistics 2 Off
Slide 15: 2016: A Platform for Performance
2016: A PLATFORM FOR PERFORMANCE • Strong platform for growth created • Integration of Hope being smoothly effected: no trading disruption and synergies accelerated • Minerals platform enhanced: reserves & resources now over 750m tonnes • Continuing planned investment in plant and equipment: deliver
Slide 16: New Management Structure for 2017
NEW MANAGEMENT STRUCTURE FOR 2017 BREEDON GROUP 2016 FULL- YEAR RESULTS 16
Slide 17: 2016: A Platform for Performance
2016: A PLATFORM FOR PERFORMANCE Breedon Northern • Challenging market conditions • Performance underpinned by major contract wins • Sherburn acquired • Full IT systems integration completed post-Hope Breedon Southern • Varied regional demand picture • Trading underpinned by healthy infrastructure a
Slide 18: 2017: Group Outlook
2017: GROUP OUTLOOK • A strong platform for performance • Encouraging medium-term outlook for UK infrastructure & housing • Benefits of major projects extending into 2017 and beyond • Ongoing evaluation of internalisation of cement and aggregates • Development and extension of concrete performance p
Slide 19: Breedon Group: Profile From 1 Jan 2017
BREEDON GROUP: PROFILE FROM 1 JAN 2017 around around nearly 2,300 60 26 200 colleagues quarries asphalt plants ready-mixed concrete and mortar plants 1 2 8 3 9 cement plant cementitious import rail-fed concrete regional contract terminals depots products plants surfacing hubs BREEDON GROUP 2016 FULL
Slide 20: Q&A
Q&A BREEDON GROUP 2016 FULL- YEAR RESULTS 20
Slide 21: Appendices
APPENDICES MPA volumes BREEDON GROUP 2016 FULL- YEAR RESULTS 21
Slide 22: MPA Aggregates Volumes – MAT
MPA AGGREGATES VOLUMES – MAT 170 150 million tonnes 130 110 90 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 BREEDON GROUP 2016 FULL- YEAR RESULTS 22
Slide 23: MPA Asphalt Volumes – MAT
MPA ASPHALT VOLUMES – MAT 27 25 million tonnes 23 21 19 17 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 BREEDON GROUP 2016 FULL- YEAR RESULTS 23
Slide 24: MPA Ready-Mixed Concrete Volumes – MAT
MPA READY-MIXED CONCRETE VOLUMES – MAT 24 22 million cubic metres 20 18 16 14 12 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 BREEDON GROUP 2016 FULL- YEAR RESULTS 24
Slide 25: Construction Output
CONSTRUCTION OUTPUT BREEDON GROUP 2016 FULL- YEAR RESULTS 25
Slide 26: Breedon's Track Record (1 of 2)
BREEDON’S TRACK RECORD (1 OF 2) BREEDON GROUP 2016 FULL- YEAR RESULTS 26
Slide 27: Breedon's Track Record (2 of 2)
BREEDON’S TRACK RECORD (2 OF 2) BREEDON GROUP 2016 FULL- YEAR RESULTS 27
Slide 28: Breedon's Operating Model
BREEDON’S OPERATING MODEL BREEDON GROUP 2016 FULL- YEAR RESULTS 28
Slide 29: Forward-looking statements
This presentation may contain statements related to our and our subsidiaries’ future business and financial performance, and future events or developments involving Breedon that are not purely historical and which may constitute forward-looking statements. These statements may be identified by words