Breedon Group Plc announced revenue from audited annual results for the year ended 31 December 2021 totalling GBP1232.5m, up 33 per cent from GBP928.7m in 2020. Profit before tax amounted to GBP114.3m compared to GBP48.1m in 2020, a rise of 138 per cent. Statutory EBIT reached GBP127.4m, up 107 per cent when compared to GBP61.6m in 2020.
On a like-for-like (LfL) basis and compared to 2019, aggregates volumes increased 12 per cent, asphalt volumes 20 per cent and cement volumes by 14 per cent with a large proportion of the increase relating to cement imported through the company's terminals to satisfy the high levels of market demand. However, LfL ready-mixed concrete volumes slipped by one per cent as the company closed a number of less profitable plants.
Volumes grew strongly, supported by the Cemex acquisition, and Breedon supplied 35 per cent more aggregates, 37 per cent more asphalt, and 29 per cent more ready-mixed concrete than in 2020. Robust market conditions enabled dynamic price increases, leading to reported revenue of GBP845.2m (2020: GBP602.8m), which was an increase of 40 per cent compared to the prior year. Cement revenue amounted to GBP245.6m up from GBP197.2m in 2020, a rise of 25 per cent.
At 31 December 2021, net debt (excluding IFRS 16) was GBP161.5m (2020: GBP265.2m) and Breedon’s covenant leverage was 0.8x (2020: 1.9x).
Ireland
Irish revenue totalled GBP225.4m in 221 up from GBP189.3m in 2020. Irish operations produced materially more aggregates, increasing volumes 31 per cent to 3.5Mt. Asphalt volumes were steady as surfacing contracts remained resilient and public authority customers shifted their budgets to focus on replacing street lighting with more efficient LED technology.
Cement performance
Breedon's two cement plants delivered an outstanding performance, producing and distributing 2.4Mt of cement (2020: 2Mt). A significant proportion of the 22 per cent increase in volumes was attributed to cement imported through its cement terminals to satisfy the high levels of demand. Buoyant trading conditions in 2021 enabled the cement division to grow revenue by 25 per cent to GBP245.6m (2020: GBP197.2m). Tight supply conditions existed across the industry, leading to robust price increases. In 2021 the cost of carbon emissions permits was offset by increasingly dynamic pricing.
While both plants continue to maximise the use of alternative fuels and the company's fossil fuel requirements are reducing, coal and electricity remain a core input. In 2021 Breedon’s forward hedging policy materially offset energy cost inflation, enabling cement to generate underlying EBIT of GBP41.6m (2020: GBP31.7m) and increase the EBIT margin by 0.8 percentage points to 16.9 per cent.
The Hope plant marked 2021 as the third consecutive year where reliability exceeded 97 per cent, with more than a month between kiln outages. The Kinnegad plant, which operates on a lowest-cost production strategy, replaced an average 75 per cent of fossil fuels with lower-carbon renewable alternative fuels, an improvement of four percentage points during the year, extending its world-class performance.
Breedon has reduced carbon emissions through higher usage of alternative fuels. The company will increase its use of alternative fuels still further to reduce carbon intensity by 30 per cent by 2030 (based on the 2005 baseline), while advancing the procurement of decarbonised energy. To address the process emissions from production, where possible Breedon will reduce the clinker element in its cementitious products. In 2021 Breedon utilised over 120,000t of alternative raw materials. Meanwhile, work continued on the Hope alternative raw material system project, progressing planning permission and securing material reserves. Breedon is fully engaged in the development of carbon capture use and storage, and is collaborating with the HyNet project in the UK.
Rob Wood, Breedon CEO, said: "2021 was a record year for Breedon. We navigated the second year of the pandemic successfully, supplied our customers with more materials than at any point in our history and fully integrated the Cemex assets. This excellent outcome was achieved at a time of constant change and the response from our colleagues, adjusting to the pandemic and the volatile economic backdrop, has been outstanding."
