FULL-YEAR 2014 RESULTS 3 MARCH 2015 2014: FULL-YEAR RESULTS - PowerPoint PPT Presentation

FULL-YEAR 2014 RESULTS 3 MARCH 2015

2014: FULL-YEAR RESULTS Results overview Peter Tom CBE, Executive Chairman Financial review Rob Wood, Group Finance Director Operational review & outlook Simon Vivian, Group Chief Executive Q&A BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 2

2014: RESULTS OVERVIEW Peter Tom CBE Executive Chairman BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 3

2014: CONTINUING TO DELIVER VALUE • Steadily improving market conditions throughout 2014 • Financial results strongly ahead of 2013 • Underlying EBITDA margin up 1.7ppt to 14.3% • Strong organic growth from core business • Nearly £50 million invested in acquisitions and on capital projects • Further improvement in safety performance • Positive industry outlook BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 4

2014: BREEDON’S ‘GOLDEN RULES’ Stay local g Easy to do business with at every site 1 Stay Nimble g Maximise opportunities in our markets & develop new ones 2 Devolve responsibility g Allow decision-making by regional teams 3 Squeeze our assets g Maximise return from every tonne of material 4 Eliminate If a plant is not performing, fix it 5 underperformance g Keep central overhead to Maintain a flat structure 6 a minimum g Don’t pay rent g Locate our offices in our quarries 7 Deliver value from Always enhance earnings 8 acquisitions g BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 5

2014: FINANCIAL REVIEW Rob Wood Group Finance Director BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 6

2014: FINANCIAL HIGHLIGHTS Revenue Underlying EBITDA Underlying EBITDA margin £269.7m £38.5m 14.3% 2013: £224.5m +20% 2013: £28.3m +36% 2013: 12.6% +1.7ppt Acquisitions EBITDA* Underlying basic EPS Net debt £4.6m 1.64p £66.3m 2013: 1.12p +46% 2013: £54.4m + £11.9m * £1.5 million from 2014 acquisitions and additional £3.1 million from 2013 acquisitions (excluding non-underlying items) BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 7

2014: INCOME STATEMENT 2013 2014 £ million £ million Variance Revenue 224.5 269.7 +20% EBITDA 28.3 38.5 +36% Depletion & depreciation (13.7) (15.4) Underlying operating profit* 14.6 23.1 +58% Share of associate and joint venture 1.4 1.2 Interest (3.6) (3.3) Non-underlying items* (1.4) 0.4 Profit before tax 11.0 21.4 +94% Taxation (1.6) (4.2) Profit for the year 9.4 17.2 +83% Underlying basic earnings per share* 1.12p 1.64p +46% *Non-underlying items represent acquisition related expenses, redundancy and reorganisation costs, property items, amortisation of acquisition intangible and related tax items BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 8

2014: DIVISIONAL PERFORMANCE Revenue £ million EBITDA £ million 2013 2014 2013 2014 23.7 145.0 124.7 19.2 114.9 109.6 15.8 15.9 (3.4) (4.4) England Scotland England Scotland HO BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 9

2014: PRODUCT VOLUMES Aggregates million t Asphalt million t Concrete million m 3 2013 2014 2013 2014 2013 2014 0.8 7.7 1.5 6.1 0.6 1.4 BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 10

2014: NET DEBT MOVEMENT ¡ £ million ¡ ¡ ¡ ¡ Inflow Ou$low (54.4) (66.3) 0 (10) (20) (30) (40) (50) (60) Opening debt EBITDA Non-underlying/ Working Interest Tax Dividend Purchase of Disposals Acquisitions Equity Closing debt (70) other capital property, plant and investment and equipment BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 11

2014: OPERATIONAL REVIEW & OUTLOOK Simon Vivian Group Chief Executive BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 12

2010-14: BREEDON TRANSFORMED • Near-doubling in sales revenue • Near-three fold increase in underlying EBITDA • Underlying EBITDA margin increased from 9.5% to 14.3% • Leverage reduced from 6.7x EBITDA to 1.7x • Reserves & resources increased from 50 years to 66 years • Following Doseley, surplus assets / land disposals of £24 million • Workforce near-doubled • LTIFR reduced from 2.00 to 0.53 (-74%) • Carbon emissions cut from 11.7 kg to 8.9 kg/tonne production Based on 2010 pro-forma results BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 13

2014: RECOVERY GAINING MOMENTUM Moving from ‘self-help’ to ‘market-help’ • GDP ahead 2.6% • Inflation & unemployment down • Construction output up 5.3%* • MPA aggregates volumes up 11% • Housing starts up 18%* • Good performance from industrial and commercial • Softer outturn from infrastructure * Construction Products Association BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 14

2014: EXCELLENT PROGRESS • Strong start and finish to the year • Healthy market conditions in England Good demand from housing, commercial, industrial, agricultural • More subdued market in Scotland Impacted by referendum and lower visibility on public spending • £56 million invested in key capital projects, investments and acquisitions • LTIFR reduced by 13% • CMA remedies satisfied (post-year-end) and former AI operations fully integrated • BEAR awarded 6+2-year 4G contract for NE Scotland BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 15

2014: MAJOR CONTRACTS SUPPLIED • Dualling of A453 in Nottinghamshire – 65,000 tonnes of aggregates, 13,000m 3 of concrete • Nottingham Tram – 51,000 tonnes of asphalt • Birmingham Airport – 13,000 tonnes of asphalt • Invergordon Harbour – 133,000 tonnes of aggregates • Stornoway Harbour – 30,000 tonnes of aggregates, 3,500 tonnes of asphalt • Dundee Waterfront – 10,000 tonnes of asphalt BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 16

BREEDON AGGREGATES ENGLAND Revenue 9 15 23 54% asphalt plants quarries ready-mixed concrete and mortar plants of Group revenue EBITDA 1 2 concrete regional contract surfacing block plant operations 55% of Group EBITDA BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 17

2014: ENGLAND SUMMARY FINANCIALS Volumes 2013 2014 £ million £ million Variance +33% Revenue 114.9 145.0 26% EBITDA 15.8 23.7 50% Aggregates EBITDA margin 13.7% 16.4% 2.7ppt +12% • Excellent EBITDA improvement • Strong demand in all regional operating Asphalt areas +33% • All key market segments ahead Concrete • Huntsmans and all newly-opened sites performing in line with expectations BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 18

2014: ENGLAND HIGHLIGHTS • Huntsmans quarry acquired, extending footprint in Gloucestershire and Worcestershire • Access to high PSV stone secured through Breedon Bowen JV • £1.3 million invested in increased capacity at Norton Bottoms sand & gravel processing plant • West Deeping sand & gravel pit secured and reopened • Clearwell concrete plant purchased from AI • Construction of Cannock concrete plant completed • Two asphalt plants purchased from Hope in Suffolk and Essex • Plant upgrade at Astley Moss quarry near Manchester BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 19

2015: ENGLAND OUTLOOK & PRIORITIES • Continue drive towards ‘Zero Harm’ – a safe business is a profitable business • Further integrate Huntsmans Quarries: maximising synergies, relieving production constraints and implementing concrete products strategy • Ensure Cavenham and Wivenhoe asphalt plants perform to expectations • Obtain planning permission for Clearwell Quarry • Pursue further organic growth • Drive further margin improvement, from both commercial and operational perspectives • Sustain and cultivate culture of being ‘easy to do business with’; competitive differentiation through excellent service BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 20

BREEDON AGGREGATES SCOTLAND Revenue 38 18 37 46% quarries asphalt plants ready-mixed concrete and mortar plants of Group revenue EBITDA 2 5 1 concrete regional contract surfacing traffic block plants operations management services company 45% of Group EBITDAEBITDA 21 BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 21

2014: SCOTLAND SUMMARY FINANCIALS Volumes 2013 2014 £ million £ million Variance +15% Revenue 109.6 124.7 14% EBITDA 15.9 19.2 21% Aggregates EBITDA margin 14.5% 15.4% 0.9ppt +12% • Healthy EBITDA improvement • Strong pricing and margins despite flat Asphalt market +11% • Reduced local authority expenditure offset by growth in private, commercial & Concrete housing • Particularly strong growth in Aberdeen area BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 22

2014: SCOTLAND HIGHLIGHTS • Acquisition of Barr Quarries created fifth region and access to new markets in south-west Scotland • Former AI businesses fully integrated, with significant savings • Opening of Ardchronie quarry in the Highlands • Investment in new lime sheds at Bonawe and Ethiebeaton • New mobile crusher enables wider use of recycled asphalt • Upgrade of Craigenlow quarry near Aberdeen • New roller fleet for Contracting operations • New recycling train to reprocess waste stocks into high-value products • Significant reduction in LTIFR BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 23