# SigmaRoc delivers resilient results, EBITDA and EPS ahead of expectations

- Link: https://www.directorstalkinterviews.com/sigmaroc-delivers-resilient-results-ebitda-and-eps-ahead-of-expectations/4121185667
- Published: 2025-02-03T07:24:41+00:00
- Author: Amilia Stone

**SigmaRoc plc **(LON:SRC), a leading European lime and minerals group, has updated
the market on Group trading for the year ended 31 December 2024.

**Highlights**

The Group is expecting to report underlying FY24 EBITDA and EPS modestly ahead of
current consensus expectations^(1):

_Financial_

·      Revenue expected to be 72% higher year-on-year (‘YoY’) at c. £998m (FY23:
£580m) reflecting the contribution from the acquisitions. Proforma^(2) revenue down
2% LFL primarily reflecting foreign exchange effects and pass throughs;

·      Underlying^(3) EBITDA is expected to exceed £222m, up 90% YoY (FY23: £116.7m).
Proforma^(2) EBITDA up 2% LFL reflects integration progress;

·      Underlying^(3) EBITDA margins improved to 22.3%, increasing 220bps YoY;

·      Underlying EPS^(3) expected to be around 8.3p, approximately 10% ahead of
consensus^(1) and 3% ahead of prior year;

·      FY24 covenant leverage is expected to close below 2.1x (2.3x at 30 June 2024);

·      Current outlook for FY25 unchanged.

_Strategic_

·      Transformational acquisition of portfolio of lime and limestone assets from
[CRH plc](https://www.directorstalkinterviews.com/ftse-company/crh-plc/crh.l) completed
during the year, doubling the size of the Group;

·      Disposal of non-core Belgian and French concrete plants, at a disposal multiple
in excess of 7x LTM EBITDA, for full consideration of €49.5m, €4.5m of which is 
subject to an earnout; €37m was received in December 2024;

·      The Group is in advanced discussions to replace the bridge loan which expires
in November 2025 with a longer-term facility at preferential rates in order to optimise
the capital structure of the Group to support future growth;

·      Board strengthened during 2024 with appointment of two independent non-executive
directors.

**Update on CRH acquisitions and integration**

·      Acquisition of the European lime businesses completed during 2024. Integration
proceeding well and largely complete;

·      German, Czech and Irish acquisitions closed in January 2024, the UK in March
2024, and Poland in September 2024;

·      The synergy programme remains on track with €35m minimum (increased from 
€30m at the interims) expected and a target of €60m by year end 2027;

·      Restructuring and cost saving initiatives implemented in Germany, the Nordics
and Belgium completed, contributing to the synergy programme from 2025;

·      Other initiatives relating to production efficiency, cost reductions and 
organisational optimisation in progress. A further update will be provided with 
the full year results.

**Operations and trading**

SigmaRoc delivered resilient results in the second half of FY24, despite market 
conditions remaining challenging in some areas. SigmaRoc’s diversified model and
broad end market exposure remain key to the Group’s delivery, with industrial mineral
markets and infrastructure generally performing well, offsetting softer residential
construction and steel markets.

Group revenues increased by 72% YoY to c. £998m, reflecting the contribution from
the acquired businesses. Proforma^(2) LFL volumes reduced 4%, reflecting the current
market environment.

·      Industrial Minerals markets – 34.5% of FY24 Group revenues (37.8%: H1 2024)–
showed continued resilience in the latter part of the year. Pulp, paper & board 
segments had a stronger year than 2023 and performed well, countered by weakness
in steel, impacted by general economic headwinds.

·      Environmental and food markets – 18.7% of FY24 Group revenues (17.4%: H1 
2024) – continued good volume development in food and water purification segments
with higher than usual wind energy generation, impacting demand for flue gas treatment.

·      Construction markets – 46.8% of FY24 Group revenues (44.8%: H1 2024) – infrastructure
applications, which represent around 65% of the Group’s construction market revenues,
saw robust trading over the year in both the UK and Continental Europe. Residential
markets remained soft with the Group effective in re-focusing resources to increase
infrastructure weighting.

**Divestment of Belgian and French ready-mix concrete plants in two-part deal**

In line with SigmaRoc’s strategy, the Group continued to look at rationalising the
portfolio through the disposal of non-core assets. In December 2024, SigmaRoc reached
an agreement to dispose of its non-core, but sector leading, Belgian and French 
ready-mix concrete businesses, for a maximum consideration of €49.5m, including 
a €4.5m earnout.

The full consideration represents an attractive disposal multiple in excess of 7x
LTM EBITDA, reflecting the high quality of the businesses being sold and a recognition
of the meaningful margin expansion programme implemented since our acquisitions (
between 2021 and 2023).

Of the consideration, €37m was received in December 2024 relating to the completion
of the Belgian assets, with payment and completion for the smaller French plants
and earnout due by the end of FY25.

**Outlook for FY25**

SigmaRoc made good progress in 2024, a year characterised by the transformational
acquisition of lime and limestone businesses from CRH and a robust performance in
infrastructure construction, with continued softness in residential construction,
and some areas within environmental and steel markets. Whilst these trends are likely
to persist into 2025, the Company is well placed to navigate these given its diversified
model and broad end market exposure.   

The Board remains confident in the Group’s ability to deliver another successful
year, and to build on its leadership offering to customers in the lime and limestone
sectors. Whilst the economic backdrop across Europe remains mixed, the Group will
maintain its disciplined approach to cost management and focus on executing its 
strategy and successful delivery of synergies.

Overall, SigmaRoc is well positioned for 2025, as a leading European lime and limestone
company and the Board’s current outlook for FY25 remains unchanged, with covenant
leverage expected to continue to reduce.

> **Max Vermorken, CEO of SigmaRoc, commented:**
> “2024 was a transformational year for SigmaRoc. We completed the acquisition of
> CRH’s lime assets, securing our position as one of Europe’s leading lime and limestone
> businesses and I would like to thank all our colleagues for their positive attitude
> and commitment at the start of a new journey.
> “We have delivered good results despite the challenging backdrop, and we are well
> positioned for 2025. We have made the first steps on our divestment programme 
> of non-core assets with the disposal of the Belgian ready-mix plants, with completion
> of the smaller French plants and earnout to follow.
> “During the year, we welcomed a new CFO, Jan van Beek, and I would like to thank
> his predecessor, Garth Palmer, for his years of dedicated service. In addition,
> we appointed two experienced independent non-executive directors to the Board 
> during the year, Francesca Medda and Peter Johnson. They have both played an active
> role in the development of the Group, joining our various Board committees, which
> have been updated following their appointments in line with best corporate governance
> practice.
> “Our business has been refocused on lime and limestone, and I am confident we 
> are well positioned for future growth. Lime is an essential product for life, 
> that plays a critical role in several trends that impact our society, from decarbonisation
> to sustainable construction, to environmental protection and the electrification
> of the economy.  
> “Overall, we expect to report 2024 results modestly ahead of expectations and,
> despite the challenging backdrop, are well positioned to continue our growth in
> 2025 as a larger and more focused Group.”

**_FY24 annual report and financial statements and ESG report_**

_The Group intends to publish its audited results for the year ended 31 December
2024 and its ESG report by the end of March 2024._

_^(1)_ _Consensus expectations for SigmaRoc, being the average of forecasts for 
the year ending 31 December 2024 provided by Analysts covering the Company, are 
revenue of £1,056.1m, underlying EBITDA of £221.0m and EPS of 7.60p._

_^(2)_ _Proforma calculation includes all acquisitions made by SigmaRoc in 2024 
and excludes companies divested at year end, for the entire Period on an underlying
basis._

_^(3)_ _Underlying results are stated before acquisition related expenses, certain
finance costs, redundancy and reorganisation costs, impairments, amortisation of
acquisition intangibles and share option expense. These measures are not defined
by UK IAS and therefore may not be directly comparable to similar measures adopted
by other companies._

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