Full Year Results 2009 Monday, 1 st March 2010 1 1
Disclaimer Forward Looking Statements This presentation contains certain forward-looking statements. Actual results may differ materially from those projected or implied in such forward-looking statements. Such forwardlooking information involves risks and uncertainties that could affect expected results. 2 2
Agenda Highlights for 2009 Financial Review Review by Business Unit Strategy & Outlook 2010 Farnborough, UK 3 3
2009 Financial Performance Turnover down 33% to 1,125.5mn On constant currency -28% Pre-Exceptional Operating Result down 60% to 62.7mn On constant currency -57% Basic EPS 28.7 cent, up 7% Net Debt 164.3mn, a reduction of 135.3mn, interest cover 9.4 times Reduction in working capital of 99mn Total investment of 48.1mn of which capex was 43.2mn DCT Dome Happy Jack, Arizona 4 4
2009 Operational Performance Solid performance in 2009 from the overall Group, despite hostile economic conditions In Insulation Boards, total sales volumes were down 23%, although growing sales and penetration in Western Europe Insulated Panels UK, Ireland and Western Europe sales volumes were down 33%, with particular weakness in the speculative development segment Insulated Panel sales volumes in North America were down 23% - Architectural Façade products strong Central and Eastern Europe was also weaker with sales volumes down 25% - reorganisation of this unit will continue into 2010 Access Floors sales volumes were down 31% globally, however, margins and profitability were strong Group wide, fixed cost reductions in the year of 50mn, bringing the total since peak to 66mn. This process is largely complete Total investment in the year 48.1mn: Kooltherm facility, Tiel, Netherlands Insulated Panel facility, Toronto, Canada Solar facility, Northern Ireland 5 AIR-CELL Insulation acquisition, Perth, Australia 5
2009 Bottoming Out Peak to trough drop in volume of 50% Fixed cost reduction of >20% Capital investment curtailed/postponed Capacity in situ for turnover of 2bn + Debt reduced by 135.3mn to 164.3mn Operational leverage of +25% to benefit from future top line improvement Product, Geographic Market & Sector Development continues unabated Underlying growth business model very much intact Hamilton Art Gallery, Ontario, Canada 6 6
Summary P&L Total Total 2008 2009 YoY '000 '000 % change Revenue 1,672.7 1,125.5-33% Trading Profit 161.7 67.1-59% Intangible amortisation (4.6) (4.4) -4% Non-trading items (75.1) - Operating result 82.0 62.7-24% Net finance cost (13.9) (6.0) -57% Result for the year before tax 68.1 56.7-17% Income tax expense (24.1) (8.7) -64% Net result for the year 44.0 48.0 9% Basic EPS ( cents) 26.7 28.7 7% Diluted EPS ( cents) 26.5 28.3 7% Dividend per share ( cents) 8.0 Nil 7 7
2009 Sales by Geography 27% 11% 2008 3% 10% mn 2008 2009 % change at constant currency % change YoY Republic of Ireland 173.8 78.1 55% 55% Britain & Northern Ireland 826.6 503.3 32% 39% Mainland Europe 453.1 310.9 28% 31% Americas 177.1 192.7 5% 9% Other 42.1 40.5 2% 4% Group Sales 1,672.7 1,125.5 28% 33% 2009 49% 17% 3% 7% 45% Republic of Ireland Britain/Northern Ireland Mainland Europe Americas Other 28% 8 8
Sales by Product Group % change at constant rates % change at actual rates mn 2008 2009 Insulated Panels 862.1 593.9 27% 31% Insulation Boards 345.2 215.3 33% 38% Environmental & Renewables 266.7 168.7 29% 37% Access Floors 198.7 147.6 25% 26% Group Sales 1,672.7 1,125.5 28% 33% 'mn 900 800 700 600 500 400 300 200 100 0 Insulated Panels Insulation Boards Environmental & Renewables Access Floors 2008 2009 9 9
Turnover Bridge 1,800 'mn 1,600 1,400 1,200 1,000 800 600 1,672.7 398.9 101.6 70.8 24.1 1,125.5 400 200 0 10 10
Operating Profit by Division before Amortisation & Non-Trading Items 2008 2009 Total Group 9.7% 6.5% 17.5% 18.0% 16.0% 14.0% 12.9% 14.0% 12.0% 10.0% 8.0% 6.0% 5.3% 5.9% 6.4% 2008 2009 4.0% 2.0% 1.0% 1.7% 0.0% Panels Insulation Boards Environmental & Renewables Access Floors 11 11
Operating Profit Bridge 250 200 1.5 71.8 150 163.7 'mn 100 157.1 50 4.0 62.7 0 EBIT 2008 Acquisitions Operating Costs Volume Margin EBIT 2009 12 12
Cost Savings 66mn annualised fixed cost savings achieved since the peak summarised as follows; Cost Savings Total H2 08 H1 09 H2 09 16mn 31mn 19mn 66mn Cost Savings by Division 22% 7% 54% 17% Insulated Panels Insulation Boards Environmental & Renewables Access Floors 13 13
Free Cash Flow 300 192.3 250 200 197.7 43.6 187.7 'mn 150 100 284.2 202.3 105.4 50 102.8 0 (50) (100) (66.8) (48.2) (20.5) (25.1) 2007 2008 2009 EBITDA Change in Working Capital Other 14 14
Cashflow Statement 'mn 2008 2009 Inflows Operating profit 82.0 62.7 Depreciation 40.6 35.8 Amortisation 4.6 4.3 Pension contributions (2.6) (2.9) Working capital (increase)/decrease 43.6 105.4 Interest paid (12.7) (12.9) Taxation paid (18.1) (10.1) Others 60.3 5.4 Free cash flow 197.7 187.7 Acquisitions (92.6) (8.0) Net capital expenditure (97.5) (45.9) Dividends paid (42.3) (0.3) Share Buyback (32.6) 0.0 (265.0) (54.2) Cash flow movement (67.3) 133.5 Debt translation (7.3) 1.8 Decrease / (increase) in net debt (74.6) 135.3 Net debt at start of year (225.0) (299.6) Net debt at end of year (299.6) (164.3) 15 15
Net Assets Statement & Key Ratios Net Assets Statement - mn 2008 2009 Tangible Fixed Assets 411.1 419.0 Intangible Assets 292.9 310.3 Working Capital 222.3 123.3 Current Corporate Tax & Deferred Tax (47.4) (43.5) Provisions (60.2) (64.2) Net Debt (299.6) (164.3) Net FX on PP Debt 0.0 4.9 Net Assets 519.1 585.5 Key ratios 2008 2009 Gearing (Net Debt:Shareholder funds) 57.7% 28.1% Debt/EBITDA 1.48 1.60 Interest Cover 14.6 9.4 ROCE (before non-trading items) 19.2% 8.4% Working Capital as % of Sales 13.3% 11.0% 16 16
Capital Expenditure 'mn 200 180 160 140 120 100 80 60 40 20 0 195.3 186.4 48.1 2007 2008 2009 Capex Acquisitions 17 17
Working Capital 300 56 60 250 49 50 200 40 40 150 285.4 30 100 222.3 20 50 123.3 10 0 2007 2008 2009 0 Working Capital, m Working Capital Days 18 18
Core Banking Facilities Revolving Credit Facility of 330mn September 2013 maturity date Private placement 151mn (USD200mn) Repayable 2015 119mn & 2017 32mn Same covenants as Revolving Facility Various bilateral facilities totalling c. 65mn Significant headroom on covenants Max 3.5x net debt:ebitda; actual 1.6 Min 4.0x interest cover; actual 9.4 Min 400mn net assets; actual 585.5mn Year end 2009 Net Debt 164.3mn headroom c. 380mn 19 19
Debt Maturity Schedule 500 481 450 400 350 330 'mn 300 250 200 150 164.3 119 100 50 0 Actual debt Total Facilities 2009 2010 2011 2012 2013 2014 2015 2016 2017 32 Committed Facilities Loan Notes 20 20
Insulated Panels UK, IRL, WE 2008 2009 Sales ( mn) 553.7 331.4 % of Group Sales 33% 30% UK market remained tough throughout the year, volume down 35% Ireland deteriorated further, volume down 61% Benelux was comparatively solid, volume down 14% Australia/New Zealand grew by 9% - business gaining traction Total orderbook -15% on prior year Intake in recent months marginally ahead of prior year Analysis of YoY % change Currency Volume Price & Mix Total -4% -33% -3% -40% Bradford University Campus Phoenix Place, Essex, UK 21 21
Insulated Panels CEMEI 2008 2009 Sales ( mn) 235.1 156.7 % of Group Sales 14% 14% Note: The above figures include Germany and Turkey From Q2 2009, volumes began to slip materially finishing the year down 25% Czech, Romania and the Baltic states worst affected Germany and Poland relatively solid Turkey/Middle East volumes similar to prior year, good progress in margin improvement Present focus on operational restructuring Orderbook down 3% on prior year, and recent intake similar to prior year Analysis of YoY % change Currency Volume Price & Mix Total -5% -25% -3% -33% Ostrava, Czech Republic 22 22
Insulated Panels North America 2008 2009 Sales ( mn) 73.3 105.8 % of Group Sales 4% 9% Currency Analysis of YoY % change Volume & Price Acquisitions Total +5% -23% +62% +44% Very challenging non-residential construction environment Overall sales down an underlying 23%; Commercial/Industrial very weak, Architectural solid Excellent progress on US Acquisition integration and operational cost reduction Canada facilities (Vancouver & Toronto) now commissioned, startup difficulties Low energy legislation slow to progress, but moving in the right direction Caterpillar, US 23 23
Insulation Boards 2008 2009 Sales ( mn) 345.2 215.3 % of Group Sales 21% 19% UK market remained weak, particularly in newbuild housing, until Q4, where some uplift was experienced - overall volume down 24% Ireland weakened further towards year end, down 34% Western Europe performance was very strong, volume up 4%, particularly in Kooltherm range in Germany Market entry into Australia with acquisition of AIR-CELL in December Slow weather related start to 2010, particularly in Western Europe Analysis of YoY % change Currency Volume Price & Mix Total Insulation -6% -23% +4% -25% Currency Price, Mix & Volume Total Engineered Timber Systems -3% -69% -72% Emirates Stadium, Arsenal Football Club, London 24 24
Environmental & Renewables 2008 2009 Sales ( mn) 266.7 168.7 % of Group Sales 16% 15% Currency Analysis of YoY % change Price & Volume Disposals Total -8% -21% -8% -37% Exposure to UK and Ireland resulted in heavy volume decline Hot Water was down for most of the year, but began recovery in Q4 Solar, particularly in Germany, weakened significantly, but product costs now lower since new manufacturing processes installed Pollution Control weak on newbuild housing Overall significantly lower cost base, Vieste, Italy Early 2010 performance is broadly flat on prior year 25 25
Access Floors 2008 2009 Sales ( mn) 198.7 147.6 % of Group Sales 12% 13% Analysis of YoY % change Currency Volume Price & Mix Total -1% -31% +6% -26% Volumes weak, down 29% in North America and down 32% in Europe Sizeable export contracts Favourable mix and cost reductions reinforced margin performance Current rising steel, and contracting office starts will materially impact margins later in 2010-25% +36% RBC Centre, Toronto, Canada 26 26
Building Regulations by Region Percentage improvement in standards from 2005 *Note: 2011/16 are estimates in UK & US 27 27
Penetration Potential 2009 2013 Insulated Panels UK Insulated Panels NA 60% 7% 75% 10% UK Insulation 33% 40% Germany External Wall 1.5% 10% CEE Insulation 0.5% 8% 29 29
2010 Outlook More stable volumes anticipated in the UK, Western and Central European Panel volumes US volumes likely to weaken, and Canada may improve slightly Insulation volumes in Ireland will weaken, while the UK and Western Europe should prove more steady after Q1 Environmental should improve as UK newbuild housing starts rise Access Floors will show steep volume decline globally Overall margins will be pressurised from excess capacity in all products, and rising steel prices in the first half 30 30