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

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

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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

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FULL-YEAR 2014 RESULTS

3 MARCH 2015

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BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 2

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

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BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 3

Peter Tom CBE Executive Chairman

2014: RESULTS OVERVIEW

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BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 4

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
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BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 5

2014: BREEDON’S ‘GOLDEN RULES’

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

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BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 6

Rob Wood Group Finance Director

2014: FINANCIAL REVIEW

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BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 7

2014: FINANCIAL HIGHLIGHTS

Revenue

£269.7m

2013: £224.5m +20% Underlying EBITDA

£38.5m

2013: £28.3m +36% Underlying EBITDA margin

14.3%

2013: 12.6% +1.7ppt Acquisitions EBITDA*

£4.6m

Underlying basic EPS

1.64p

2013: 1.12p +46% Net debt

£66.3m

2013: £54.4m + £11.9m

* £1.5 million from 2014 acquisitions and additional £3.1 million from 2013 acquisitions (excluding non-underlying items)

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BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 8

2014: INCOME STATEMENT

2013 £ million 2014 £ 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

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BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 9

2014: DIVISIONAL PERFORMANCE

2013 2014 England Scotland

Revenue £ million

England 15.8 23.7 15.9 19.2 (3.4) (4.4) Scotland 2013 2014

EBITDA £ million

HO 114.9 109.6 145.0 124.7

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BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 10

2014: PRODUCT VOLUMES

2013 2014 6.1 7.7

Aggregates million t

2013 2014

Asphalt million t

2013 2014

Concrete million m3

0.6 0.8 1.4 1.5

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BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 11

Opening debt EBITDA Non-underlying/

  • ther

Working capital Interest Tax Dividend Purchase of property, plant and equipment Disposals Acquisitions and investment Equity Closing debt

£ million

(10) (20) (30) (40) (50) (70) (60)

2014: NET DEBT MOVEMENT

(54.4) (66.3)

¡

Ou$low

¡

Inflow

¡ ¡ ¡

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BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 12

Simon Vivian Group Chief Executive

2014: OPERATIONAL REVIEW & OUTLOOK

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BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 13

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

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BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 14

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

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BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 15

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
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BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 16

2014: MAJOR CONTRACTS SUPPLIED

  • Dualling of A453 in Nottinghamshire

– 65,000 tonnes of aggregates, 13,000m3 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

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BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 17

BREEDON AGGREGATES ENGLAND

54%

  • f Group revenue

15

quarries

9

asphalt plants

23

ready-mixed concrete and mortar plants

2

regional contract surfacing

  • perations

Revenue

55%

  • f Group EBITDA

EBITDA

1

concrete block plant

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BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 18

2014: ENGLAND SUMMARY FINANCIALS

Volumes

+33%

Aggregates

+12%

Asphalt

+33%

Concrete

2013 £ million 2014 £ million Variance

Revenue 114.9 145.0 26% EBITDA 15.8 23.7 50% EBITDA margin 13.7% 16.4% 2.7ppt

  • Excellent EBITDA improvement
  • Strong demand in all regional operating

areas

  • All key market segments ahead
  • Huntsmans and all newly-opened sites

performing in line with expectations

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BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 19

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
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BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 20

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
  • perational perspectives
  • Sustain and cultivate culture of being ‘easy to do business

with’; competitive differentiation through excellent service

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BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 21

BREEDON AGGREGATES SCOTLAND

46%

  • f Group revenue

38

quarries

37

ready-mixed concrete and mortar plants

2

concrete block plants

Revenue

45%

  • f Group EBITDAEBITDA

EBITDA

18

asphalt plants

5

regional contract surfacing

  • perations

21

1

traffic management services company

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BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 22

2014: SCOTLAND SUMMARY FINANCIALS

Volumes

+15%

Aggregates

+12%

Asphalt

+11%

Concrete

2013 £ million 2014 £ million Variance

Revenue 109.6 124.7 14% EBITDA 15.9 19.2 21% EBITDA margin 14.5% 15.4% 0.9ppt

  • Healthy EBITDA improvement
  • Strong pricing and margins despite flat

market

  • Reduced local authority expenditure offset

by growth in private, commercial & housing

  • Particularly strong growth in Aberdeen

area

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BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 23

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
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BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 24

2015: SCOTLAND OUTLOOK & PRIORITIES

  • Continue drive towards ‘Zero Harm’ – a safe business is

a profitable business

  • General local authority and trunk road market remaining

subdued post-referendum, although enquiry levels for housing and commercial development strengthening

  • Barr Quarries integration and capital programme well

underway to deliver operational and financial benefits

  • High PSV stone opportunities and major wind farm projects
  • Targeting work stream from AWPR, Forth Crossing & A9
  • Implementing asphalt plant strategy post CMA disposal
  • Prioritising capex on cost saving/value-adding projects
  • Sustain and cultivate culture of being ‘easy to do business

with’; competitive differentiation through excellent service

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BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 25

2014: GROUP OUTLOOK FOR 2015

  • Most favourable outlook since end of recession - construction
  • utput forecast to grow by over 5% in 2015
  • Strong anticipated recovery in infrastructure on back of public

spending plans (growth of over 50% 2013-18)

  • Slower growth in housing market after exceptionally strong 2014
  • Product volumes expected to grow further
  • Continuing economic benefits of low oil price
  • Continuing organic investment to deliver operational

improvements

  • Key contracts in Scotland: AWPR, Forth Crossing, A9 upgrade
  • Further acquisitions in prospect
  • Uncertainties regarding general election likely to be temporary
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BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 26

2014: APPENDICES

MPA volumes & other information

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BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 27

MPA CRUSHED ROCK MAT ACTUAL

Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Crushed Rock MAT actual

million tonnes

(36)% 4%

Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 million tonnes

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BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 28

MPA SAND & GRAVEL MAT ACTUAL

Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Crushed Rock MAT actual

million tonnes Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 million tonnes

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BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 29

MPA ASPHALT MAT ACTUAL

Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Crushed Rock MAT actual

million tonnes Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 million tonnes

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BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 30

MPA CONCRETE MAT ACTUAL

Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Crushed Rock MAT actual

million tonnes Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 million cubic metres

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BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 31

OUR BUSINESS MODEL

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BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 32

OUR TRACK RECORD (1 OF 2)

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BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 33

OUR TRACK RECORD (2 OF 2)

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BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 34

OUR GROWTH

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BREEDON AGGREGATES FULL-YEAR 2014 RESULTS 3 MARCH 2015 35

This ¡ presentation ¡ may ¡ contain ¡ statements ¡ related ¡ to ¡ our ¡ and ¡ our ¡ subsidiaries' ¡ future ¡ business ¡and ¡financial ¡performance, ¡and ¡future ¡events ¡or ¡developments ¡involving ¡Breedon ¡ Aggregates ¡ that ¡ are ¡ not ¡ purely ¡ historical ¡ and ¡ which ¡ may ¡ constitute ¡ forward-­‑looking ¡

  • statements. ¡These ¡statements ¡may ¡be ¡identified ¡by ¡words ¡such ¡as ¡"expect," ¡"look ¡forward ¡

to," ¡ "anticipate," ¡ "intend," ¡ "plan," ¡ "believe," ¡ "seek," ¡ "estimate," ¡ "will," ¡ "project" ¡ or ¡ variations ¡of ¡such ¡words ¡and ¡similar ¡expressions. ¡Such ¡statements ¡are ¡based ¡on ¡the ¡current ¡ expectations ¡and ¡beliefs ¡of, ¡ and ¡certain ¡assumptions ¡ made ¡by, ¡and ¡information ¡currently ¡ available ¡to, Breedon ¡Aggregates’ ¡management, ¡and ¡are ¡therefore, ¡subject ¡to ¡certain ¡risks ¡ and ¡ uncertainties. ¡ A ¡ variety ¡ of ¡ factors, ¡ many ¡ of ¡ which ¡ are ¡ beyond ¡ Breedon ¡ Aggregates’ ¡ control, ¡affect ¡our ¡operations, ¡performance, ¡business ¡strategy ¡and ¡results ¡and ¡could ¡cause ¡ the ¡ actual ¡ results, ¡ performance ¡ or ¡ achievements ¡ of ¡ Breedon ¡ Aggregates ¡ to ¡ be ¡ materially ¡ different ¡from ¡any ¡future ¡results, ¡performance ¡or ¡achievements ¡that ¡may ¡be ¡expressed ¡or ¡ implied ¡by ¡such ¡forward-­‑looking ¡statements ¡or ¡anticipated ¡on ¡the ¡basis ¡of ¡historical ¡trends. Forward-­‑looking ¡statements ¡should ¡be ¡evaluated ¡in ¡the ¡context ¡of ¡these ¡factors. ¡