Full Year Results 2021 – statement

Ibstock Plc ("Ibstock" or the "Group"), a leading UK manufacturer of clay bricks and concrete products, announces its results for the year ended 31 December 2021.

Results for the year ended 31 December 2021

Strong performance for the year; clear growth strategy supported by new medium term financial targets

Ibstock Plc ("Ibstock" or the "Group"), a leading UK manufacturer of clay bricks and concrete products, announces its results for the year ended 31 December 2021.

	Statutory results
Year ended 31 December	2021	2020	2019	Δ 1Y	Δ 2Y
Revenue	£409m	£316m	£409m	+£93m	-
Profit / (loss) before taxation	£65m	(£24m)	£82m	+£89m	(£17m)
EPS	7.8p	(6.8p)	16.3p	+14.6p	(8.5p)

	Adjusted results¹
Year ended 31 December	2021	2020	2019	Δ 1Y	Δ 2Y
Adjusted EBITDA	£103m	£52m	£122m	+£51m	(£19m)
Adjusted EPS	13.9p	4.0p	18.3p	+9.9p	(4.4p)
Total dividend per share	7.5p	1.6p	3.2p	+5.9p	+4.3p
Adjusted free cashflow	£51m	£26m	£33m	+£25m	+£18m
Net debt	£39m	£69m	£85m	(£30m)	(£46m)

In order to provide a more relevant performance commentary, comparison in this statement has been made to the corresponding 2020 and 2019 financial years, the latter considered to represent a relevant pre-COVID baseline for performance comparisons. Longley Concrete is included in 2021 and 2020 results and partially in 2019 as it was acquired in H2 2019.
All numbers from continuing operations

Operational and financial highlights

Robust trading and good operational execution supported by continued strong demand across both clay and concrete markets
Adjusted EBITDA¹of £103 million (2020: £52 million, 2019: £122 million) was ahead of our expectations, driven by outperformance in Clay division
Statutory profit before tax of £65 million (2020: loss of £24 million, 2019: £82 million) reflects strong recovery from 2020 and reduced exceptional costs¹with a net exceptional gain of £5 million (2020: exceptional cost of £36 million)
Strong recovery of Group adjusted EBITDA¹margin to 25.2% (2020: 16.5%, 2019: 29.9%) reflecting effective management of industry-wide supply chain challenges and dynamic pricing to address cost inflation
Balance sheet strength enhanced with excellent free cash flow performance; net debt to adjusted EBITDA¹of 0.4 times (2020: 1.5 times) below bottom of 0.5 to 1.5 target range; liquidity headroom increased to £186 million (2020: £146 million)
Recommended final dividend of 5.0p per share, bringing full year dividend to 7.5p per share (2020: 1.6p), reflecting Board’s confidence in financial strength and prospects

Strategic highlights

Further strong strategic progress delivered in the year:
- Ibstock Futures established to capture opportunities in new, fast growth sectors of construction markets
- Committed investment of £50 million during 2022 in Atlas, Aldridge and Nostell projects to support medium-term growth objectives
- Launch of new Environmental, Social & Governance (ESG) strategic framework with ambitious targets underlining our commitment to environmental and social responsibility; targets to reduce carbon emissions by 40 per cent by 2030 and be net zero carbon by 2040
Clear path for growth, based on a combination of investment within the core business and diversified growth opportunities;
New medium-term financial targets announced today, including
- Group revenues to grow to in excess of £600 million by 2026;
- Revenues outside of the clay division to exceed 40% of the overall Group; and
- Group adjusted EBITDA¹margins above 28% over medium-term
Expect cash available after committed investments and ordinary dividends over next five years of more than £200 million, to support further organic and inorganic growth investments and additional shareholder returns

Strong momentum into 2022

Trading in the early weeks of 2022 has started well, with a positive demand outlook across end markets
Commissioning of capital enhancements on track to increase our clay network capacity by 5% by mid-2022
Dynamic pricing strategy in place against a backdrop of cost inflation
Energy price risk well covered with around 85% of 2022 energy requirements secured (with over 90% secured for H1)
A number of organic and inorganic initiatives underway within Ibstock Futures aimed at accelerating the Group’s entry into fast growth product/technology niches
The Board expects to deliver significant further strategic and financial progress in 2022

Joe Hudson, Chief Executive Officer of Ibstock Plc, commented: “Our 2021 results reflect both continued robust demand across our markets and strong operational execution. Despite market-wide challenges arising from cost inflation and supply chain pressure, we have delivered a result ahead of the Board’s expectations, and are well positioned for future growth.

"Whilst we remain mindful of the broader macroeconomic uncertainties, particularly in light of the tragic conflict in Ukraine, we have made a good start to 2022, with a strong demand backdrop. This positive momentum, along with additional brick capacity coming on stream during 2022, provides us with a strong platform to deliver significant further financial and strategic progress.

"Today, we also set out a path for growth and value creation over the next five years, combining expansion of our core business with accelerated diversification into new, fast growing areas of the UK construction market. These strategic ambitions are underpinned by clear financial objectives and capital discipline, which are reflected in the new medium term financial targets. We expect to generate significant additional capital, in excess of our current commitments, over the next five years, which will support both further growth investments and additional shareholder returns.

"With the built environment accounting for around 40 per cent of carbon emissions globally, our industry has a vital role to play in delivering climate change solutions. With our plans to produce the UK’s first net-zero carbon bricks and brick slips well underway, we are supporting our customers in addressing their carbon reduction goals. Having achieved many of the environmental targets set in 2018 several years earlier than expected, we have now announced our new ESG strategic framework and targets, including our commitment to be a net zero carbon business by 2040.”

¹ Alternative Performance Measures are described in Note 3 to the results announcement

Results presentation

Ibstock is holding a presentation at 10am today at 54 Hatton Garden, London, EC1N 8HN.

Those wishing to attend should contact ibstock@citigatedewerogerson.com to register.

Those unable to attend in person can listen to the presentation live by using the webcast details below.

To register for the webcast, please see: Ibstock webcast

The presentation can also be heard via a conference call, where there will be the opportunity to ask questions.

Conference Call Dial-In Details:
UK: +44 (0)330 336 9601
US: +1 646-828-8073
Confirmation code: 8408969

An archived version of today's webcast analyst presentation will be available later today.

Ibstock Plc
Joe Hudson, CEO
Chris McLeish, CFO
01530 261 999

Citigate Dewe Rogerson
Kevin Smith
Holly Gillis
020 7638 9571

About Ibstock Plc

Ibstock Plc is a leading UK manufacturer of clay bricks and a diversified range of clay and concrete products. Its principal products are clay bricks, brick components, concrete roof tiles, concrete alternatives for stone masonry, concrete fencing and pre‐stressed concrete products.

The Group's two divisions are:

Ibstock Clay: The leading manufacturer by volume of clay bricks sold in the United Kingdom. With 16 manufacturing sites Ibstock Brick has the largest brick production capacity in the United Kingdom. It operates a network of 18 active quarries located close to its manufacturing plants. Ibstock Kevington provides masonry and pre-fabricated component building solutions, operating from 6 sites across the United Kingdom.

Ibstock Concrete: A leading manufacturer of concrete roofing, walling, flooring and fencing products, along with lintels and general concrete building products, with 14 manufacturing plants in the United Kingdom.

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