For personal use only
15 November 2021
UBS Australasia Conference - Presentation
Attached are presentation slides being delivered today at the UBSAustralasia Conference 2021.
Authorised for release by the Company Secretary.
-ENDS-
For further information please contact:
Darryl Hughes | Jon Snowball |
General Manager, Corporate Finance | +61 477 946 068 |
and Investor Relations | |
+61 417 814 290 | |
darryl.hughes@adbri.com.au | |
adbri.com.au | |
Level 1, 157 Grenfell Street | Adbri Limited |
Adelaide SA 5000 | ABN 15 007 596 018 |
UBS Australasia Conference 2021
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Operational / market update - October 2021
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Sales demand robust
- Volumes have recovered from recent COVID-19 restrictions on construction in east coast markets and South Australia
- October 2021 sales volumes:
- exceeded expectations across all products except concrete which was substantially in line with expectations, with weather impacting demand in Queensland offset by strong demand in other markets
- exceeded October 2020 across all products, with the exception of lime volumes following reduction in volumes supplied to Alcoa
- Demand appears to be strong across all regions delivering higher than expected sales volumes. However, costs have largely offset the benefits of higher volumes. COVID impacts have resulted in higher costs through demurrage from disrupted shipping and operational performance has reduced cement production at Birkenhead, resulting in higher unit costs (currently being addressed)
Vertical integration developments
- Agreement signed to purchase Zanows' aggregate, sand and concrete business located in western Brisbane with an acquisition price of $58 million at an EBITDA multiple of 8.5 times (inclusive of synergies)
- Accretive acquisition provides access to quarries with approved reserves of over 70 million tonnes
Positive outlook despite near term uncertainties
- Demand through balance of 4Q21 dependent upon COVID-19 restriction impacts which create uncertainty. However, current indication is that demand is strong
- 2H21 earnings have been impacted by previously announced reduction of lime volumes to Alcoa, anticipated commencement of competing cement import terminal in NSW, operational issues impacting cement production, and COVID-19 impacts including, limitations on construction activity, disrupted shipping and increased costs caused by the delayed return of the Accolade from its drydock in Singapore
UBS Australasia Conference 2021 - 15 November 2021
Financial summary
only | Revenue ($m) | Underlying EBIT1 ($m) | Underlying NPAT1 ($m) | ||||||||||||||||||||
752.3 | 86.0 | 55.0 | |||||||||||||||||||||
700.7 | 75.2 | 47.6 | |||||||||||||||||||||
use | 1H20 | 1H21 | 1H20 | 1H21 | 1H20 | 1H21 | |||||||||||||||||
2H | Dividend (cents) | Payout ratio (%) | |||||||||||||||||||||
98 | |||||||||||||||||||||||
1H | 15.0 | 15.5 | 15.0 | 82 | 84 | 98 | 87 | 83 | |||||||||||||||
16.0 | 98 | 95 | |||||||||||||||||||||
71 | |||||||||||||||||||||||
68 | 84 | 68 | |||||||||||||||||||||
81 | 63 | 80 | 63 | ||||||||||||||||||||
12.0 | |||||||||||||||||||||||
71 | |||||||||||||||||||||||
9.0 | 9.0 | 9.5 | 68 | 65 | 68 | 65 | |||||||||||||||||
12.0 | 12.5 | 13.0 | 7.25 | ||||||||||||||||||||
7.5 | 7.5 | 7.5 | 7.5 | 8.5 | |||||||||||||||||||
26 | |||||||||||||||||||||||
5.0 | 4.75 | 5.5 | |||||||||||||||||||||
2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | .0 | 2020 | 1H21 | |||||||||||||
2019 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 1H21 | ||||||||||||
Underlying | Reported | ||||||||||||||||||||||
(1) "Underlying" EBIT and NPAT exclude significant items. Refer slide 11 for reconciliation to reported earnings | |||||||||||||||||||||||
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Operational improvement and cost reduction
Progress on improvement initiatives supports our ability to reach gross cost efficiencies targeted to reach
onlyalmost $100 million(1),(2) by 2025
Key Assumptions:
Group cost-outprogram - 2020 delivered $35.5 million in gross savings.
2021 baseline a further ~$20 million in cost savings. Future incremental savings projected at ~$6 million per annum targeting organisational structure,
100
SCM strategy
90 Birkenhead
RDF usage / energy
80 | Kwinana Upgrade | |
Group cost-out program | ||
70 | ||
operational technology savings, pallet cost recovery and process benchmarking | ||||||
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for concrete and aggregates | ||||||
Kwinana Upgrade - modelled estimates for project business case include cost | 50 | |||||
avings on reduced labour, transportation, power, repairs and maintenance and | ||||||
other operational efficiencies | ||||||
RDF usage/energy - baseline energy cost savings sourced in 2021 rising to | 40 | |||||
2023 and secured through to 2029. RDF savings targeting 50% RDF usage by | ||||||
2025 versus current run-rate of circa 40%. Current EPA licencing allows up to | ||||||
ersonal | 30 | |||||
45%. Targeted RDF usage partially relies on alternate source of RDF, which the | ||||||
kiln is currently not licenced to use | ||||||
Birkenhead process benchmarking - targeting $10/t - from quarrying | 20 | |||||
activities, through to production and delivery to customer. Early benchmarking | ||||||
suggests that opportunities exist to deliver this level of saving | 10 | |||||
Supplementary Cementitious Materials - 5-yeartarget to increase tonnage | ||||||
used by 20%. Target is subject to market demand and supply | 0 | |||||
2021 | 2022 | 2023 | 2024 | 2025 |
(1) Assumptions based on Management's assessment current at the date of this document which may change subject to risks and uncertainties including, but not limited to, Government licensing and regulations, market supply and demand,
availability of kiln/calciner fuels and supplementary cementitious materials, changing market conditions, costs and pricing, completion of capital projects and availability of funding | |
(2) Gross cost efficiencies are exclusive of cost headwinds and do not represent a forecast | |
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Adelaide Brighton Limited published this content on 14 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 November 2021 21:49:08 UTC.