HILL & SMITH PLC 2022
Preliminary Results | |
8 March 2023 | for the year ended 31 December 2022 |
HIGHLIGHTS
Record 2022 trading performance
- 14% organic constant currency (OCC) revenue and profit growth
- US businesses represented 64% of Group profit
- Highlights resilience of our attractive end markets and continued portfolio evolution
Significant progress on portfolio management
-
£66m deployed on four high-quality acquisitions in last six months o Q4 2022: National Signal and Widnes Galvanising
o Q1 2023: Enduro Composites and Korns Galvanizing - Reallocating £62m proceeds from disposal of lower growth France Galva
Improved cash generation and returns
- H2 cash conversion: 93%
- Covenant financial leverage 0.7 times
- ROIC increased to 19.2%
Final dividend of 22.0p proposed
- Total FY 2022 dividend 35.0p: +13% yoy
Refreshed financial framework reflecting Group's growth potential
Group expects to make further progress in 2023
2022 PRELIMINARY RESULTS | 2 |
2022 RESULTS
Reported | Constant Currency | Organic Constant | |||
2022 | 2021 | +/- | +/- | Currency +/- | |
CONTINUING OPERATIONS | |||||
Revenue | £732.1m | £625.2m | +17% | +12% | +14% |
Operating profit | £97.1m | £77.3m | +26% | +17% | +14% |
Operating margin | 13.3% | 12.4% | +90 bps | ||
Profit before tax | £87.9m | £71.2m | +23% | ||
Earnings per share | 85.4p | 70.0p | +22% | ||
TOTAL GROUP | |||||
Earnings per share | 91.9p | 77.9p | +18% | ||
Dividend per share | 35.0p | 31.0p | +13% | ||
2022 PRELIMINARY RESULTS | 3 |
GALVANIZING
Constant | ||||
CONTINUING OPERATIONS | 2022 | 2021 | Currency +/- | OCC +/- |
Revenue (£m) | 180.7 | 141.8 | +20% | +20% |
Operating profit (£m) | 44.0 | 33.4 | +23% | +23% |
Operating margin | 24.3% | 23.6% | ||
Headlines
• | Record operating profit performance +23% OCC |
• | Pricing power enabling superior operating margins to be |
Operating | ||
£m | Revenue | Profit |
2021 | 141.8 | 33.4 |
FX | 8.2 | 2.4 |
M&A | 0.8 | - |
Organic | 29.9 | 8.2 |
2022 | 180.7 | 44.0 |
2022 | ||
Revenue | £m | OCC +/- |
UK | 81.9 | +17% |
US | 98.8 | +23% |
Total | 180.7 | +20% |
maintained |
US
- Growth driven by volume +11%, alongside pricing actions and favourable product mix
- Korns acquisition expands capacity in northeastern market
- 2023 outlook: positive, supported by strong end market demand, particularly road & bridge infrastructure
UK
- Record profit performance reflecting strong H1 and focus on price and higher margin work
- Widnes acquisition expands footprint in north west
- 2023 outlook: degree of caution given wider UK economic backdrop
CUSTOMER END MARKETS
Road & bridge infrastructure | |||||||
14% | 13% | Other infrastructure | |||||
1% | Transportation | ||||||
4% | 2022 | 13% | Residential construction | ||||
REVENUE | Commercial and other | ||||||
£180.7m | construction | ||||||
11% | Energy, chemical oil & gas | ||||||
35% | Income from recycling materials | ||||||
9% | |||||||
Other | |||||||
MACRO DRIVERS | MARKET DRIVERS | ||||||
• | Increasing population | • | Sustainable materials | ||||
• | Urbanisation | • | Decarbonisation | ||||
• | Climate change | ||||||
2022 PRELIMINARY RESULTS | 4 |
US GALVANIZING
CASE STUDY
V&S Galvanizing
- Hot-dipgalvanizing: a proven steel corrosion protection solution used in a wide range of infrastructure and industrial applications
- Nine strategically located plants
- Local market leader with focus on customer service and quality
Record performance in 2022
- £98.8m revenue: +23% OCC growth
- +11% volume growth driven by road & bridge infrastructure and commercial construction
- Easing of labour availability challenges experienced in 2021
- Pricing power and operational excellence maintained superior margins
Growth opportunity > GDP
- Significant investment in US infrastructure (IIJA)
- Benefiting from move to increased on-shoring of manufacturing
- Increasing substitution for paint and other coatings due to full life cycle cost and sustainability benefits
- Existing plants have capacity for growth
- Potential for market consolidation through acquisitions
- Geographic expansion via plant builds (subject to cost appraisal)
2022 PRELIMINARY RESULTS
STRATEGICALLY LOCATED
PLANTS
V&S plants
A BROAD SECTORAL SPREAD
OF END MARKETS
15% | Road & bridge infrastructure | |||
19% | Other infrastructure | |||
1% | ||||
Transportation | ||||
7% | ||||
V&S 2022 | 9% | Residential construction | ||
REVENUE | Commercial and other construction | |||
10% | Energy, chemical oil & gas | |||
1% | ||||
38% | Income from recycling materials | |||
Other
5
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Disclaimer
Hill & Smith plc published this content on 08 March 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 March 2023 08:46:08 UTC.
