FY 2019 RESULTS RESULTS PRESENTATION · Max Vermorken - CEO David Barrett - Chairman Max Vermorken - CEO Garth Palmer - CFO. Executive Chairman ... better optimisation of resource

© SigmaRoc plc – 2019

RESULTS PRESENTATION FY 2019 RESULTS

20th April 2020

PRESENTATIONAGENDA

Introduction

Operational Review

Outlook

Q&A

Financial Review

Max Vermorken - CEO

David Barrett - Chairman

Max Vermorken - CEO

Garth Palmer - CFO

Executive Chairman

INTRODUCTIONDavid Barrett

RESULTS PRESENTATION FY 2019 SIGMAROC PLC 4

FY 2019 INVEST, IMPROVE, INTEGRATEContinued strong delivery of the business model across the Group

Solid trading in each platform. Ronez making further progress. PPG trading in line with expectations. Slow start at

CCP with catch up across the year. Good year at GDH increasing EBITDA significantly. Strong year at CDH.

OPERATIONS

Solid year of progress delivering £70.4m sales, £14.5m Underlying EBITDA, 4.2p Underlying EPS for a leverage

ratio of 2.07 times Underlying EBITDA. Underlying EBITDA margin of 20.7%.

FINANCIALS

Four acquisitions, with a pro-forma £112m revenue and £17m EBITDA including CCP, GDH, Stone and CDH,

delivering net accretive businesses into the Group with the potential to build every platform further.

ACQUISITIONS

Group-wide safety records continue to improve, reduced net-harm across the business even as we expand

through the integration of businesses with varying safety records.

SAFETY

We started the year with full order books which led to a good Q1 trading, despite challenging weather conditions

and the start of the Covid-19 pandemic. Business ready to resume full trading when circumstances allow.

M&A pipeline remains full.

OUTLOOK


FY 2019 BOARD AND GOVERNANCESignificant changes at Board and governance level preparing for next steps

After three years of tireless work Garth will step down as CFO having delivered a exceptional service to the

business. Garth will remain with the Company as Company Secretary and Non-Executive Director.

GARTH PALMER

Having joined SigmaRoc in 2017 as FD for the Ronez platform, Dean will now succeed Garth as CFO and joins the

Board as Executive. Dean brings decades of experience as a qualified accountant and Finance Director.

DEAN MASEFIELD

Dom was a founding Director of SigmaRoc and helped build the business to over £100m market cap. As we move

into the next phase Dom will continue to assist the business.

DOMINIC TRAYNOR

Patrick joined SigmaRoc with the Ronez acquisition, always with the eye to help us move into Europe. As we now

become active in Europe, Patrick will join our Benelux advisory board to actively help build our Group in the region.

PATRICK DOLBERG

Renowned industrialist Jacques Emsens joins our Board as independent Non-Executive Director. Having helped

build multi-billion Euro specialist sand and minerals group Sibelco.

JACQUES EMSENS

Former fund manager at Henderson, qualified as Chartered Accountant and an impressive network in the

investment community. Simon will join the Board as independent Non-Executive Director and Chair of the Audit

Committee.

SIMON CHISHOLM

Chief Executive Officer

FY 19 OPERATIONSMax Vermorken


FY 2019 AN EVENTFUL YEAREvery month we made further progress to deliver on our strategy and create further shareholder value

Refinancing of £10m, 6% CLN. Acquisition of CCP

and appointment of Tim Hall.

JANUARY

Opened new concrete plant in Jersey in the

presence of key shareholders.

FEBRUARY

Closed deal with Lindsay Corporation in the USA

for Road management systems.

MARCH

Acquisition of G.D. Harries and start of South West

Platform.

APRIL

Appointment of Group De Cloedt CEO Emmanuel

Maes and focus on Europe.

MAY

Support from Shareholders at AGM to continue

growth strategy.

JUNE

Start of preliminary due diligence work in Benelux

region.

JULY

Agreed terms with two major PE firms for acquisition

of CDH.

AUGUST

Acquisition of Stone Holdings with two quarries in Huy

region.

SEPTEMBER

Acquisition of CDH and fundraise of £33m becoming a

sizeable operator in the EU.

OCTOBER

Roll out of Group-wide Safety Policy to align safety

standards.

NOVEMBER

Creation of advisory board in Belgium focussed on the

Benelux business.

DECEMBER


TRADING ACROSS FY 2019Solid year across the Group beating analyst forecasts

Solid trading in 2019 beating budgets and prior year with £29m turnover. Excellent work from contracting division with

efficient delivery of projects. Volumes up in Jersey and flat in Guernsey. Good availability of the ship bar July for rust

repairs. Additional cargoes delivered for partners.

RONEZ - CHANNEL ISLANDS

Slow start in CCP and PF with reduced demand in Q1 2019. Trading picked up in Q2. Best months on record in Q3 for

CCP and PF delivering £9m in TO at PF. Additional shifts considered at CCP to keep up with demand. AC trading in line

with expectations.

SIGMAPPG - PRECAST CONCRETE

Excellent progress year-on-year with additional revenue in a busier year. Additional volumes delivered at key projects

including coastal and energy related as well as road schemes. Integration of Foelfach quarry into GDH setup to lead to

better optimisation of resource and reserves.

GDH - SOUTH WALES

Excellent year all round with 13% revenue growth and good cost control leading to strong performance. Further sales

into newer markets such as Italy and Germany. Good plant availability and motivated workforce.

CDH - BENELUX


IMPROVEMENTS HELPING GROUP PERFORM Significant improvement initiatives implemented across the year to drive performance

Further margin enhancement across the platform through better cost and stock management. New ready-mix concrete

offering with new plant leading to excellent service and quality. Continued focus on mobile plant use and fleet to reduce

maintenance cost and improve availability.


Profound restructuring of certain parts of the platform. Closure of Bury, complete redesign of Aberdo Quarry leading to

BAA Quarry of the Year award. Finalisation of oven revamp and fingercart investments. As a result sub 10% EBITDA

margins now well above 13% with further potential. New commercial and accounting teams in place.

SIGMAPPG - PRECAST CONCRETE (AC, PF, CCP)

Strong focus on safety and operational improvements leading to year-on-year EBITDA improvement. Integration of

Foelfach quarry into the operations to improve product balance and capture synergies. Expansion of footprint

organically.

GDH - SOUTH WALES

Strong focus on operational costs and administrative expenses. Revised operational plan for quarry extraction with

initial improvements realised. Good availability of plant and machinery thanks to preventive maintenance.

CDH - BENELUX

Solid quality in key management team. Safety policy rolled out having significant effect on performance with 36% LTIFR

reduction. Group-wide alignment of accounting systems to ensure speed and reliability of financial information..

Increased accounting and compliance teams.

GROUP


INITIATIVES ENVIRONMENTAL SOCIAL GOVERNANCE Launch pad from which to start a new platform across South Wales and the South West

Continuation of breeding programmes near quarry in Jersey to reintroduce wild bird species. Active participation in

wildlife conservation programmes. Systematic renewal of mobile fleet to reduce emissions. ~1,000 trees planted.


Start of a bird nesting and breeding programme near production sites. Replacing factory sodium-based lights with LED to

reduce energy consumption. Use of returned materials and recycling over 3,000t of aggregates.

SIGMAPPG - PRECAST CONCRETE (AC, PF, CCP)

Use of recycled materials by partnering with a UK start-up to recycle over 40,000 plastic bottles as partial replacement

for bitumen in road construction. Focus on sustainable water and energy management.

GDH - SOUTH WALES

Phase 3 of solar panel installation generating over 3MW of electricity or 30% of our consumption. Continued pumping

and filtering of water captured from the quarry for the water system. Participation in EU initiatives of Life in Quarries.

CDH - BENELUX

Appointment of Anthony Brockbank, ECM Partner at Fieldfisher, as part time General Counsel. Two experienced

independent NEDs added to our Board and Group-wide focus on ESG initiatives.

GROUP

Chief Financial Officer

FY19 FINANCIALS Garth Palmer


SUBSTANTIAL YEAR-ON-YEAR GROWTH IN FY 2019Strong period with excellent execution of operational improvements and business integration

FY 2018 FY 2019

Revenue

£41.2m

£70.4m

£5.5m

£8.4m

3.8p

Underlying EBITDA Underlying PBT Underlying EPS

£14.5m

£9.8m

+71%

+48% +51%

4.2p

+10%

Underlying results are stated before holding company costs, acquisition-related expenses, redundancy and reorganisation costs, property items, amortisation of acquisition

intangibles and related tax items. References to an underlying measure throughout this presentation are defined on this basis.


INCOME STATEMENT FOR FY 2019Four newly acquired businesses, CCP, GD Harries, Stone and CDH contributing to the 2019 income statement



2019 2018 Variance

£’000 £’000 %

Revenue 70,362 41,242 +70.6%

Cost of sales (50,924) (29,805) +70.9%

Profit from operations 19,438 11,437 +70.0%

Administrative expenses (9,922) (4,900) +102.5%

Net finance (expense)/income (1,269) (1,047) +21.2%

Other net (loss)/gain 126 48 +162.5%

Foreign exchange (loss)/gain (19) (17) +11.8%

Profit before underlying items and tax 8,354 5,521 +51.3%

Tax expense (448) (279) +60.6%

Underlying profit after tax 7,906 5,242 +50.8%

Underlying EPS 4.20 3.83 +9.7%


+161%

KEY BALANCE SHEET STATISTICS FOR 2019Clear picture of investment in our businesses while maintaining a solid balance sheet

Tangible assets

£50m

£79m

£16.0m

£49.8m

£3.8m

£9.9m

Total Assets Net debt Cash

£208m

£105m

+98%

+211%+58%

2018 2019


NET DEBT MOVEMENT FOR FY 2019Increasing the Group by pro-forma £112m revenue and £17m EBITDA

Positive movement Negative movement

£40m

£35m

£30m

£25m

£20m

£15m

£10m

£5m

0

Opening net debt

Underlying EBITDA

Non-underlying

Working capital

Interest CapexTax Investment Equity issued

Closing net debt

Share of earnings from

associates not paid

Net borrowings




NEW CFO DEAN MASEFIELD

Having joined SigmaRoc in 2017 as FD for the Ronez platform,

Dean will now succeed Garth as CFO and joins the Board as

Executive. Dean brings decades of experience as a qualified

accountant and Finance Director.

Prior to joining SigmaRoc, Dean served as Head of Finance at

BNP Paribas and later, Equiom Channel Islands, overseeing all

accounting, reporting, regulatory and systems aspects for tens of

billions of USD in assets under management. Dean is a chartered

accountant, having qualified with BDO in 1997, and is presently

an FCA with the Institute of Chartered Accountants in England

and Wales.

Chief Executive Officer

INVEST & IMPROVEMax Vermorken


INVEST IMPROVE INTEGRATE A STRONG BUSINESS MODELNine acquisitions in 30 months to build a solid construction materials business

A strong business model focussed on finding appealing investment opportunities, helping the acquired businesses reach

a best-in-class status operationally and financially, and locking in synergies available to us through scale and expertise.

A decentralised structure serving local markets by empowering local managers and operators to take full responsibility

for their business or division, understanding local supply chains and customer bases are of a wide variety, type, and scale.

INVEST IMPROVE INTEGRATE

LOCAL VERSUS GLOBAL

Includes quarrying assets, 400m tonnes of reserves and resources, plant, machinery and land. Strong investment in

assets with key locations should result in good ability to generate cash and hedge against inflation in the long run.

HEAVILY ASSET BACKED

Applying best-in-class operational and financial management is essential, and achieved through a solid, driven team.

From management, all the way to the shop floor, each business can rely on the strong dedication and skill of staff.

QUALITY TEAM


STRONG ORGANIC AND ACQUIRED GROWTH Nine acquisitions in 30 months to build a solid construction materials business

+31%

+60%

+17%

+21%

2017 2018 2019

Organic Acquisition

+9%

+10%

15/10/2019CARRIERES DU HAINAUT

6.8xUnderlying EBITDA for past 12 months

11/09/2019STONE HOLDINGS

4.4xUnderlying EBITDA for past three years average

15/04/2019GD HARRIES

7.6xUnderlying EBITDA for previous financial year

25/01/2019CCP

5.85xUnderlying EBITDA for past 12 months

13/12/2017POUNDFIELD


19/10/2017ALLEN CONCRETE


15/04/2017MV RONEZ SHIPPING ASSETS


05/01/2017RONEZ


Underlying EBITDA Growth by type versus prior year Underlying EBITDA




STRONG TRACK RECORD EBITDA AND EPS GROWTHSeven acquisitions in 30 months to build a solid construction materials business

2016

-1.4p

2.0p

3.8p

4.2p

2017 2018 2019

Year-on-year Underlying EPS

2016

0x

2.1x

1.6x

2.1x

2017 2018 2019

Net Debt to Underlying EBITDA




HEALTH AND SAFETY IMPROVEMENTStrong year-on-year improvement in Health and Safety across the businesses since acquisition

Positive Engagement are proactive events such as Tool Box Talks, Safe Conversations, Audits and focused Training.

Harmful events are defined as all events that have caused harm on our operational sites.

10%

13%

2018 2019

Year-on-year reduction of Harmful events

124%

265%

2018 2019

Year-on-year improvement in Positive Engagement


OUTLOOK WHAT TO EXPECT FOR THE YEARRevenue, Underlying EBITDA and EPS growth in the last three H1 periods

Solid Q1 2020 with a year-on-year 87% Revenue uplift and a 144% EBITDA uplift, a strong order books as we went into

lockdown. Clear effect of margins having improved and the business starting to integrate well.

TRADING

Healthy liquidity position with £11m on the books and significant cash management plans in place. We remain active

albeit at a reduced pace and focus on preserving cash in the business to ensure we weather to Covid-19 crisis well.

LIQUIDITY

At the start of the year our covenants were at 2x Pro-forma EBITDA. At the end of Q1 we remained at that level. Thanks

to a strong Q1 and assuming zero EBITDA in Q2 we remain well within our covenants. Group debt refi project underway

with terms in line with present facility and agreed timeline for refinancing by year-end 2020.

DEBT POSITION

Assuming our contingency plans are adequate we estimate we can come out of this crisis in a strong position, gearing at a

healthy level, a good cash position and the ability to continue our journey with success.

THE BUSINESS POST COVID-19


COVID-19 CONFRONTING THE CHALLENGEEarly preparation and contingency plans have helped us manage the impact of COVID-19

Aware of the potential danger of the Coronavirus as of the end of February with initial awareness campaigns early in

March and further roll out through the month of March.

EARLY PREPARATION

Extensive testing of financial resilience of the group under various scenarios of revenue and Ebitda drops. Testing for

cash collection reduction and what cost cuts could be implemented.

CONTINGENCY PLANS WITH FOCUS ON CASH

Decision to remain operational across to group where possible and feasible to guarantee government guidelines are

followed. This allowed us to continue to support the local economy, our customers and suppliers.

CONTINUING TO SUPPORT LOCAL ECONOMIES

Group remains in a strong position financially and operationally with activity across the group and readiness to increase

production and sales where local economies permit.

LOOKING FORWARD


DISCLAIMER

The information contained in this presentation document (the “presentation”, which term includes any information provided verbally in connection with this

presentation document) does not constitute an offer or solicitation to hold, sell or invest in any security and should not be considered as investment advice or

as a sufficient basis on which to make investment decisions. This presentation is being provided to you for information purposes only. Whilst this

presentation has been prepared in good faith, neither SigmaRoc plc (the “Company”) nor any of its group undertakings nor any of their respective directors,

members, advisers, representatives, officers, agent, consultants or employees: (i) makes, or is authorised to make any representation, warranty or

undertaking, express or implied, with respect to the information and opinions contained in it or accepts any responsibility or liability as to the accuracy,

completeness or reasonableness of such information or opinions; or (ii) accepts any liability whatsoever for any loss howsoever arising, directly or indirectly,

from use of or in connection with the information in this presentation. The Company is under no obligation to provide any additional information or to update

or revise the information in this presentation or to correct any inaccuracies which may become apparent. This presentation may include certain

forward-looking statements, beliefs or opinions. There can be no assurance that any of the results and events contemplated by any forward-looking

statements contained in the information can be achieved or will, in fact, occur. No representation is made or any assurance, undertaking or indemnity is given

that any such forward looking statements are correct or that they can be achieved.

QUESTIONS & ANSWERSSigmaRoc plc

7 - 9 Swallow Street, London, W1B 4DE

+44 20 7129 7828

[email protected]

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FY 2019 RESULTS RESULTS PRESENTATION · Max Vermorken - CEO David Barrett - Chairman Max Vermorken - CEO Garth Palmer - CFO. Executive Chairman ... better optimisation of resource