Genuit Group Plc · LSE:GEN
Genuit — H1 2023 Earnings Presentation
27 slides from Genuit's earnings presentation, Aug 15, 2023
Slide 1: Genuit Group plc 2023 Half Year Results Presentation
Genuit Group plc 2023 Half Year Results Presentation 15 August 2023 1 Genuit © 2023
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”, “scop
Slide 3: Agenda
Half year results presentation Agenda 1 Key Highlights 2 Financial Results 3 Business Review 4 Outlook 3 Genuit © 2023
Slide 4: Operational progress in challenging markets
Operational progress in challenging markets Our Results Underlying operating margin up 50 basis points, driven by self-help initiatives and balanced price and cost management. Revenue down by 4.2% driven by a volume decline of 14.5% offset broadly in line with the market. Sustainable Building
Slide 5: Good progress on our strategy
Good progress on our strategy Realising benefits from deployment of Sustainable Solutions for Growth strategy Well prepared for challenging market conditions in the short term, and greater efficiencies in the longer term Simpler, better aligned model – Operating as three Business Units since 1st J
Slide 6: ESG highlights
ESG highlights Our Path to Net Zero The Group continues to make progress on operating sustainably, in order to be the lowest carbon supplier of choice for our customers: Recycled materials formed 48.4% of our polymer inputs (2022: 47.1%). We remain the European leader in the use of recyclate. Th
Slide 7: Agenda
Half year results presentation Agenda 1 Key Highlights 2 Financial Results 3 Business Review 4 Outlook 7 Genuit © 2023
Slide 8: Financial Results
Financial Results Delivering a strong foundation for future growth Revenue decrease of 4.2%, 5.0% lower on a like- £m H1 2023 H1 2022 Change Revenue 304.8 318.0 (4.2%) for-like basis. Cost of sales (168.4) (182.9) (7.9%) The Group demonstrated 220 basis points gross Gross profit 136.4 135.1 0.9%
Slide 9: Revenue And Underlying Operating Profit Bridge
Revenue And Underlying Operating Profit Bridge Revenue £m Cost Savings of £3.7m achieved. Planned exit from low margin volume. Full recovery from isolated EBIT £m 2022 cyber incident. Significant improvement in gross margin of 220 basis points as we continue to focus 16.4% 14.9% 15.4% 16.4%
Slide 10: Sustainable Building Solutions
Sustainable Building Solutions Market volume decline in the UK residential new build Performed better than expectations sector and planned exit of low margin business within SBS, was offset with continued balanced price £m H1 2023 H1 2022 Growth management in the market. Underlying operating pro
Slide 11: Water Management Solutions
Water Management Solutions Trading activity for the first six months was relatively Strengthening performance strong considering the difficult UK economic dynamics, particularly in residential, and WMS outperformed the £m H1 2023 H1 2022 Growth market overall. Underpinning this level of activity
Slide 12: Climate Management Solutions
Climate Management Solutions Revenue growth in challenging markets CMS recovered lost volume following the 2022 isolated cyber incident (fully remediated) and normalising for this event, growth was 1.2%. £m H1 2023 H1 2022 Growth The boiler market remains subdued, but we expect Revenue 84.7 77.8
Slide 13: Non-underlying Items
Non-underlying Items Uptick in restructuring costs offset with gain on sale of property £m H1 2023 H1 2022 Non-underlying items: Net cash impact before tax £1.6m. Amortisation of intangible assets (7.4) (7.5) Restructuring costs driven by closure Restructuring costs (5.0) (1.1) of three faciliti
Slide 14: Cashflow
Cashflow Strong working capital management and strategic capital investment £m H1 2023 H1 2022 Change EBITDA (before non-underlying items) 60.2 58.4 1.8 Continued strategic capital investment in the Capex (net of proceeds) (6.7) (7.4) 0.7 business. Working capital (23.1) (37.4) 14.3 Improving wo
Slide 15: Financing
Financing Well within covenants and significant headroom £m Drawn at Facility Headroom Well within covenant requirements. 30/06/23 Sustainability Linked Loan 160.0 350.0 190.0 Sustainability Linked Loan Re-Fi Cash and cash equivalents (27.9) - 27.9 committed through to August 2027 and Net debt e
Slide 16: Technical Guidance Update Full Year 2023
Technical Guidance Update Full Year 2023 Capex below £40m. Operating cashflow conversion approximately 70%. Net finance costs circa £14m. Leverage at or around 1x by the year end. 16 Genuit © 2023
Slide 17: Agenda
Half year results presentation Agenda 1 Key Highlights 2 Financial Results 3 Business Review 4 Outlook 17 Genuit © 2023
Slide 18: Genuit Group: Sustainable Solutions for Growth
Genuit Group: Sustainable Solutions for Growth Sustainability Growth Focus on higher growth, sustainability-driven Continually improve the sustainability of our Strategy markets, via organic growth operation to be the lowest and disciplined M&A carbon choice for our opportunities customers Genuit Bu
Slide 19: Climate Management Solutions
Climate Management Solutions Highlights Strengthened senior leadership team. Five key priorities identified for tactical execution in 2023, Including collaborations between all five brands. Decision made to merge the Surestop brand into our ADEY business. This will help us grow our sales by le
Slide 20: Water Management Solutions
Water Management Solutions Highlights Geographical expansion in the Middle East. Growth in exports to USA via new SubTerra CT product range. Increased specification focus on a wider range of products which has led to an increase in multi-product quotations and orders. Business rationalisatio
Slide 21: Sustainable Building Solutions
Sustainable Building Solutions Highlights Deployment of solution sales strategy showing growth in sales of “Advantage” drainage and commercial water systems. Lean lighthouse programme deployment on track and starting to yield efficiency and service improvements with past due orders reaching a re
Slide 22: Genuit Business System
Genuit Business System GBS is our methodology for deploying lean techniques across the Group Genuit Business System is a key enabler for expanding our operating margins to 20% (2022: 15.8%), whilst improving customer service. It provides a flywheel to facilitate the release of unrealised synergi
Slide 23: Innovation at the heart of organic growth
Innovation at the heart of organic growth The MRXBOX Hybrid Cooling System from Nuaire combines the benefits of MVHR with the ability to lower the temperature of fresh air entering the building. Orders received to date >£1.7m, with a strong project funnel. With its body made from 100% recycled m
Slide 24: Pathway to Shareholder Value Creation
Pathway to Shareholder Value Creation Sustainable Growth Capital Allocation Outcomes in Free Cashflow Disciplined • Investment in innovation Market outperformance investment for • Investment in efficiency gains future growth • Investment in sustainability ROCE 15%+ of 2-4% Accretive • ROIC ahead of
Slide 25: Agenda
Half year results presentation Agenda 1 Key Highlights 2 Financial Results 3 Business Review 4 Outlook 25 Genuit © 2023
Slide 26: Outlook
Outlook 2023 operating profit at top-end of expectations H1 performance is better than management expectations - self-help, simplification, purchasing and early GBS wins all played a role. Market remains challenging - industry outlook lowered since start of year with improvement in 2023 unlikely
Slide 27: Q&A
Half year results presentation Q&A 27 Genuit © 2023