Breedon Group Plc · LSE:BREE
Breedon — H1 2017 Earnings Presentation
25 slides from Breedon's earnings presentation, Jul 20, 2017
Slide 1: Half-Year 2017 Results
HALF-YEAR 2017 RESULTS 20 July 2017 Placeholder
Slide 2: H1 2017: Results
H1 2017: RESULTS Introduction Peter Tom CBE Executive Chairman Financial review Rob Wood Group Finance Director Group & operational review Pat Ward Group Chief Executive Q&A BREEDON GROUP H1 2017 RESULTS 20 JULY 2017 2
Slide 3: Peter Tom CBE, Executive Chairman
H1 2017: RESULTS PETER TOM CBE Executive Chairman BREEDON GROUP H1 2017 RESULTS 20 JULY 2017 3
Slide 4: Highlights
H1 2017: HIGHLIGHTS • Strong operating performance • 2020 underlying EBIT margin target exceeded in former Breedon Aggregates business • Further progress on safety • Net debt further reduced • Cement kiln maintenance and upgrade shutdowns completed • Integration of Hope completed, ahead of schedule
Slide 5: Rob Wood, Group Finance Director
H1 2017: RESULTS ROB WOOD Group Finance Director BREEDON GROUP H1 2017 RESULTS 20 JULY 2017 5
Slide 6: New Reporting Structure
H1 2017: NEW REPORTING STRUCTURE 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 As indicated in our 2016 fu
Slide 7: Financial Highlights
H1 2017: FINANCIAL HIGHLIGHTS Revenue Underlying EBIT* Underlying EBIT margin* £326.3m £35.8m 11.0% H1 2016: £163.0m +100% H1 2016: £22.8m +57% H1 2016: 14.0% Profit before tax Underlying basic EPS* Net debt £31.2m 1.84p £146.8m H1 2016: £20.9m +50% H1 2016: 1.50p +23% at Dec 2016: £159.3m *Underlyi
Slide 8: Income Statement
H1 2017: INCOME STATEMENT H1 2016 H1 2017 Variance £ million £ million % Revenue 163.0 326.3 +100% Underlying EBITDA 31.4 53.9 +72% Depletion & depreciation (9.0) (19.3) Underlying operating profit 22.4 34.6 +54% Share of associate and joint ventures 0.4 1.2 Underlying EBIT 22.8 35.8 +57% Interest (
Slide 9: H1 2017 Divisional Performance
H1 2017 DIVISIONAL PERFORMANCE H1 2016 revenue £ million H1 2017 revenue £ million 71.5 (33.7) 326.3 190.6 86.0 163.0 97.9 77.0 Breedon Breedon Group Breedon Breedon Hope Elimination Group Northern Southern Northern Southern Cement H1 2016 H1 2017 H1 2016 H1 2017 Underlying Underlying Underlying EBI
Slide 10: H1 2017 Product Volumes
H1 2017 PRODUCT VOLUMES Aggregates Asphalt Concrete million tonnes million tonnes million m3 +2% 1.7 0.9 0.9 +87% +70% 7.9 +255% +44% -5% +372% 4.6 +93% +7% 0.5 2016 2017 2016 2017 2016 2017 Breedon Northern Breedon Southern NOTE: In accordance with the Cement Market Data Order 2016, cement volumes
Slide 11: H1 2017 Net Debt Movement
H1 2017 NET DEBT MOVEMENT £ million Inflow Outflow (159.3) (146.8) 0 Opening EBITDA Non- Working Interest Tax Dividend Capital Disposals Acquisitions Equity Closing debt underlying/ capital received expenditure and issued debt other investment BREEDON GROUP H1 2017 RESULTS 20 JULY 2017 11
Slide 12: Pat Ward, Group Chief Executive
H1 2017 GROUP AND OPERATIONAL REVIEW PAT WARD Group Chief Executive BREEDON GROUP H1 2017 RESULTS 20 JULY 2017 12
Slide 13: Market Background
H1 2017: MARKET BACKGROUND • Economy grew by 0.2% in Q11 and thought to have grown at broadly the same rate in Q22 • Continued momentum in construction activity 3 • output up 1.1% • Reflected in sales volume trends4 • aggregates +2.1% • concrete +0.7% • asphalt -0.8% • Significant regional variation
Slide 14: Strong All-Round Performance
H1 2017: STRONG ALL-ROUND PERFORMANCE • Positive contributions from all three divisions • Underlying EBIT margin of 15.8% delivered by former Breedon Aggregates business • Both cement kiln shutdowns completed on time and to budget • Integration of Hope completed and synergies ahead of schedule • LTI
Slide 15: Strong Divisional Contributions
H1 2017: STRONG DIVISIONAL CONTRIBUTIONS Breedon Northern • Performance underpinned by major infrastructure projects • New contracts won in Aberdeen and Highlands • Sherburn aggregates and concrete operations fully integrated • Investment commenced at North Drumboy and Low Harperley Breedon Southern
Slide 16: North Drumboy: Strengthening Our Central Belt Resource
NORTH DRUMBOY: STRENGTHENING OUR CENTRAL BELT RESOURCE • New greenfield hard rock quarry • 10 miles SW of Glasgow • Allows further internalisation of stone to concrete plants • Opening H2 2017 BREEDON GROUP H1 2017 RESULTS 20 JULY 2017 16
Slide 17: Low Harperley: Key Strategic Resource in Co Durham
LOW HARPERLEY: KEY STRATEGIC RESOURCE IN CO DURHAM • Only active sand & gravel source in Co Durham • 14 miles from city of Durham • Allows further internalisation of material to concrete plants • Opening H2 2017 BREEDON GROUP H1 2017 RESULTS 20 JULY 2017 17
Slide 18: 2017: Group Outlook
2017: GROUP OUTLOOK Market • Continuing encouraging outlook for UK construction • Forecast 35% increase in infrastructure new work and increased housebuilding between now and 2019 • Aggregates, concrete and cement volumes set to continue growing • Asphalt expected to hold steady Breedon • Ongoing fo
Slide 19: Q&A
Q&A BREEDON GROUP H1 2017 RESULTS 20 JULY 2017 19
Slide 20: Appendices
APPENDICES Group profile & MPA volumes BREEDON GROUP H1 2017 RESULTS 20 JULY 2017 20
Slide 21: Breedon Group: Profile at June 2017
BREEDON GROUP: PROFILE AT 30 JUNE 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 H1 2017 R
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 2017 BREEDON GROUP H1 2017 RESULTS 20 JULY 2017 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 2017 BREEDON GROUP H1 2017 RESULTS 20 JULY 2017 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 2017 BREEDON GROUP H1 2017 RESULTS 20 JULY 2017 24
Slide 25: 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