25 November 2022

BREEDON GROUP PLC

On track to deliver record earnings

Trading in line with expectations

Breedon Group plc ("Breedon" or the "Group"), a leading vertically-integrated construction materials group in Great Britain and Ireland, reports on its performance for the 10 months to 31 October 2022.

Trading performance

Trading conditions during the second half remained supportive, enabling the Group to fully recover rising input costs through robust pricing and disciplined cost management. In the four months to October 2022, the Group delivered revenue growth of 16% compared to the same period in 2021. This resulted in Group revenue of £1,186m in the year to date, some 14% ahead of the equivalent reported period last year and 12% on a like-for-like¹ basis.

Successful implementation of our dynamic pricing strategy has offset the impact of softer market volumes. While our volumes are behind the exceptional levels recorded during the post-Covid recovery in 2021, they remain ahead of 2019 on a like-for-like¹ basis.

The Group continued to generate strong free cash flow and is on track to deliver year-end covenant leverage comfortably below 1x.

Highlights

Outlook

The Group is on track to deliver record earnings in 2022. While construction output has softened in the second half, the majority of our end-markets remain resilient, with infrastructure and industrial markets continuing to deliver growth. Consequently, we expect to deliver full year results in line with expectations as set out with our interim results. 

While the short-term economic outlook limits visibility for the sector, our longer-term prospects remain well-underpinned by structural growth dynamics, and our exposure to infrastructure, housing and industrial end-markets is favourable. Independent of market conditions, there are many opportunities for progression within our control; optimising our assets, executing our active M&A pipeline in GB and Ireland and continuing to recover input cost inflation through our dynamic pricing strategy.

Rob Wood, Chief Executive officer, commented:

"This time last year we reminded our investors of the agile and entrepreneurial DNA that sets Breedon apart. Our rapid response to changing market conditions, local focus, vertically-integrated business model and disciplined financial framework will again enable us to deliver record results.

"Visibility in the trading landscape has been poor for some years now, for a variety of reasons. Against this constantly changing backdrop, our team's commitment and resolve have delivered quality products and great service to our customers, regardless of the economic or political landscape. For this, we thank them. Their focus and determination in turn continues to deliver for all our stakeholders."

Notes

1.   Like-for-like reflects reported values adjusted for the impact of acquisitions and disposals.

Breedon Group plc, a leading vertically-integrated construction materials group in Great Britain and Ireland, delivers essential products to the construction sector. Breedon holds around 1bn tonnes of mineral reserves and resources with long reserve life, supplying value-added products and services, including specialty materials, surfacing and highway maintenance operations, to a broad range of customers through its extensive local network of quarries, ready-mixed concrete and asphalt plants.

The Group's two well-invested cement plants are actively engaged in a number of carbon reduction practices, which include utilising alternative raw materials and lower carbon fuels. Breedon's c.3,600 colleagues embody our commitment to 'Make a Material Difference' as the Group continues to execute its strategy to create sustainable value for all stakeholders, delivering growth through organic improvement and acquisition in the heavyside construction materials market.

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