Ready to go, Charles.
Right. Welcome to all, and thank you for joining the SigmaRoc FY 2021 results presentation. Today we have our Chairman, David Barrett, our CEO, Max Vermorken, and our CFO, Garth Palmer. The exec is gonna present the FY 2021 results to you, after which there'll be an opportunity for a Q&A session. If you do have any questions, please feel free to use the Zoom Q&A conference facility or just raise your hand, and after the presentation, we'll answer as many questions before we close the meeting at 12:50. David, the floor and the screen is yours.
Good afternoon, everybody. Pleased to present our fifth set of annual results and our fifth year of significant progress. We've doubled the underlying EBITDA, and there's a 20% growth of the underlying EPS. The business now is in all the target markets in terms of sectors, agriculture, industry, construction, all the markets that we're looking to be in. There's some geographical areas that we've identified that we would like to be in, but we don't have to be everywhere. We've continued to make improvements in the Benelux and the U.K. platforms, which have all performed very well. The Nordkalk business has been successfully integrated, and we've launched some performance initiatives there. Again, that's going very well. ESG's heading in the right direction.
We present our report in next month, and we're pleased to say that Axelle Henry has joined us to address the gender diversity for one, but also the experience that she'll bring with her to the board. There's obviously several headwinds at the moment, which we've got mitigation procedures in place to deal with, but the underlying demand remains solid, and our full year outlook is left unchanged. It's difficult to talk about anything at the moment without recognizing what's going on in the Ukraine. Obviously, as a business, as everybody individually, we deplore what's actually going on there. We had three employees in the Ukraine. Their families are now safely in Poland, and we're looking to keep in contact with those guys as much as we can.
I'll hand you over to Max now. He's gonna give you some details.
Thank you, David. Good afternoon, everybody. A few slides on operations, followed by some financial review, and then we'll come back to strategy. As a background, 2021 saw us create a number of extra platforms, in particular the Benelux. We have now aggregates and concrete split out from the dimension stone. We've expanded our U.K. footprint with Johnston Quarry Group. We combined that with GD Harries and obviously Nordkalk. If you look at the next slide, in terms of revenue mix and split, it gives us actually a really nicely balanced picture. We have five key markets, the U.K., Channel Islands, and Finland being the largest two, followed very closely by the Benelux, Poland, and Sweden, and then some smaller markets, Ukraine, Baltics, Germany.
Product mix, construction remains by far the largest segment, which is great 'cause it has a lot of support currently. Then we've got a number of higher value adds, markets on top of that: metals, mining, chemical, environment, paper and pulp. When you look again at the type of products we make on the right, limestone, quicklime, high-grade and aggregates remain the largest ones, followed again by some products, ready-mix, dimension stone and others. A very nicely balanced and diversified business, which is exactly the space and the place we wanted to be. These platforms are grouped. We've grouped them roughly by the rough geographic area they're in.
There's three in the sort of the British Isles, we'll talk about first, followed by the other ones in the Benelux and in the North. Fundamentally, market backdrop for Ronez, PPG and GD Harries in 2021 was very good. Three sets of demand, primarily for construction aggregates or construction materials, housing development, RMI and then infrastructure spending. All three solid in these three markets. Ronez had a great year because of Guernsey and Jersey both performing well in spite of some lockdowns at the start of the year. PPG, Precast Products, again, similarly very strong year. The demand that was really excellent in Q4 2020 continued all the way through 2021, in large parts again, for blocks and landscaping because of the construction and RMI spend, which has been very solid in the U.K.
GD Harries in South Wales performed exactly in line with expectations. Again, some further lockdowns in South Wales, which were managed slightly differently than elsewhere, which slowed the recovery there a little bit, but in line with what we hoped to achieve. Benelux, the second set of platforms, there's two now, Bluestone and the Benelux platform, which is an aggregates and concrete platform. Bluestone had a fantastic year. We had some nervousness at the end of 2021 on visibility on planning and planning approvals, and that was actually in part due to working from home arrangements. That all went fine. Demand right across year 2021 was really sustained and very well, and it's continued into 2022 as well.
In the aggregate space, we did a joint venture deal with Groupe Carrières du Boulonnais, which is a fantastic business in northern France. We now have a full spectrum of construction aggregates products in the Benelux, with access not just to the Belgian market, Dutch markets, and the French markets as well. There's plenty of opportunity to expand that setup. Look at Nordkalk, our last set of platforms in the north. We can really split that down to the three markets there, Finland, Sweden, Poland. Poland had a fantastic year with lots of agricultural and construction materials demands. Sweden, cement driven again by construction, also by quicklime, and some extra supplies in the cement works.
Finland, a lot of quicklime production, of course, in Finland, which CO2 and electricity costs rising needed to be managed there. All in all, underlying demand was great, and we managed to get these cost increases pushed through by dynamic pricing and hedging strategies. As a review of operationally, a very good year 2021, with good trends continuing in 2022. Garth, fourth and financials.
Thanks, Max. Good afternoon, everyone. Pleased to present our results for 2021 from a financial perspective. Reporting revenue of GBP 272 million for the year, up 198% year-on-year. Underlying EBITDA of GBP 49 million, up 106% year-on-year. These results were ahead of estimates and benefited from a full year contribution from Harries, over eight months from B-Mix, and four months from Nordkalk. Revenue was GBP 30 million higher than we expected, which was due to the pass-through of higher input costs, which did impact our margins, and we'll provide a bit more detail on that shortly. We achieved underlying EPS of 5.4p, up 19% year-on-year, demonstrating that earnings enhancement from the recent acquisitions and the effectiveness of our operational efficiency programs across the group.
Our adjusted leverage ratio closed at 1.88 times below our self-imposed 2x target, and that gave us headroom to complete the Johnston acquisition post-year-end without any dilution to shareholders. Quick overview of volumes for the year. Aggregate volumes are up to 6.3 million tons, primarily driven by the addition of Nordkalk for four months. Asphalt and contracted services were up to 257,000 tons, an increase of 12% year-on-year. Dimension stone was up 13% to 94,000 tons, positively impacted by the macro shipping environment, reducing competitive imports. Ready-mix and concrete products were up 63%, 365 cubic meters, due largely to the acquisition of B-Mix in April.
We have the additional products from the Nordkalk acquisition, four months of quicklime at 275,000 tons and high-grade limestone products at 860,000 tons. Quick overview of the macroeconomic conditions impacting the markets we are operating in. We experienced substantial energy price increases through the year, particularly in Q4 and specifically in December. Year-on-year coal prices were up 215% and gas 430%. In terms of electricity on a country basis, it's up 250% in Sweden, 195% in Finland, 84% in Poland, and 274% in the U.K. It's a very inflationary environment, everyone's acutely aware.
In terms of how we're managing that, a significant cost input, cost pressure obviously affecting energy we've mentioned, but it also impacted freight and materials. Big-ticket items such as freight, energy, and carbon are separately itemized on customer invoices and passed through at market prices. We're actively shifting energy supply to more advantageous sources in line with ESG and government sanctions. Solar capacity at CDH in Belgium is covering approximately 30% of its electricity needs. That's obviously very beneficial. Where applicable, legacy pricing and/or energy hedging mechanisms in acquired businesses are being rolled off and replaced with dynamic pricing systems and more active hedging policies as and when possible. These new pricing mechanisms, combined with hedging, have allowed for protection of our net profitability in 2021.
However, as mentioned, that has increased our turnover and that has impacted margins, which we'll go into on this following slide. Essentially, this shows the pass-through of the increase in cost through the year. We obviously achieved higher EBITDA through a combination of volumes and operational efficiencies. We're now measuring that EBITDA against an inflated top line though. The pass-through of pricing pressure in freight, materials, hydrocarbons and energy has resulted in that additional GBP 30 million of revenue. We're reporting EBITDA margins of 18.1%. If we didn't have that increased cost, we'd be looking at 20.4%, which is a strong improvement over 2020 at 19.2%. Just a quick overview of the income statement.
Touched on sort of the above the EBITDA line, obviously substantial growth there with various contributions of our acquisitions over the last 12 months. Looking below the EBITDA line, net finance costs increased on the back of the acquisition of Nordkalk and the higher debt profile of the group. Other net gains of GBP 2 million relate to forex call options, realized forex gains in sale of property, plant, and equipment, and share of earnings from associates. Income tax is more in line with future expectations at around 17% of profit before tax. Historically, we've had carried forward losses in the various U.K. entities. We've pretty much used those up now. We did have a slightly inflated tax expense this year with the changes in U.K. tax rates impacting our deferred tax liabilities.
All of that's translated into profit before tax, underlying profit before tax of GBP 22 million, adjusting for outside equity interest, translating into EPS of 5.37 pence per share. In terms of key assets for the group, with the acquisition of Nordkalk and also the resource extension at Soignies in Belgium, reserves and resources have increased by 250% to 1.3 billion tons. Total assets now stand at GBP 769 million, up 200% year-on-year. We have 76 operational sites across 10 countries and over 1,800 personnel in the group. Lastly, just in terms of our net debt evolution, we started the year at GBP 44 million net debt. We had GBP 49 million of underlying EBITDA through the period. GBP 8 million positive working capital movement, primarily deferral around trade and other payables.
GBP 5 million in tax paid. GBP 19 million net capital expenditure outflows, which translated into underlying free cash flow of GBP 33 million. We had we raised GBP 255 million net of fees in equity as part of the Nordkalk acquisition, and then paid in aggregate, including fees and net debt acquired, GBP 394 million across the year for acquisitions. There was a further GBP 14 million of other outflows, primarily financial derivatives and net finance costs, which translated into a closing position of GBP 164 million net debt, which if we we strip out IFRS 16 leases would be closer to GBP 140. That concludes the financial review. I'll hand back to Max for strategy and outlook.
Thanks, Garth. Okay. Our strategy in general is always captured in in sort of four words: invest, improve, integrate, and innovate. If we look through what we've achieved over the last year and what we're going to achieve in the year coming in these four categories, the invest part, of course, was very busy in 2021. We were primarily a U.K.-focused business before we started in the Benelux in 2019. We split that business up into two. We created a specific construction materials platform in Belgium and then expanded with Nordkalk across North Europe and into Scandinavia. As a result of that, we have a footprint, which is the target footprint we set out in 2016 to achieve, with significant further possibility of expansion in these various markets.
Think about Germany, think about North France, Denmark, and other parts of North Europe. From that perspective, the strategic position of the group across 2021 made a huge leap forward, and we're now in a great place to keep going. That's the invest aspect. Obviously, once we've acquired these businesses, we like to improve and integrate them. I'll take you back to what we achieved in Belgium as an example first to give you a bit of an idea of what we can achieve in the North as well. We bought the dimension stone business and immediately saw there were two companies within that, the Granulates and Aggregates business on the one hand, and a dimension stone business on the other.
We split those out and started to review the operating processes and realized we could make the whole thing a lot more efficient, turning the aggregates side of things from a loss-making business to a profitable business, in part by, for instance, reviewing number of operators, number of plant equipment used, nearly reducing that by 45%-50% and making other aspects more streamlined for the same 1.5 million ton-2 million ton output per year. That's an example of what we've achieved in Belgium. We're now applying the same logic and the same principles to Nordkalk through our various integration teams, which are adding them up.
As a result of that, in the first quarter of this year already, we implemented changes that lead to a full year impact of GBP 1.5 million synergistic cost savings. That's just the start of it, as you can see on the list below. Quite a dozen or so initiatives are ongoing. Financial integration of Nordkalk within the group, the reporting structures within our Sigma setup, the creation of specific teams to chase these synergies, have been completed.
The next phase of our review and integration is going to be primarily focused on machine utilization, limitations of waste and waste materials, alignment of sales and processes, sales and production processes, and then a whole raft of reviews in the realm of energy use, CO2, hedging and kiln operations. All that's ongoing with local teams and will lead to further cost savings in the second half of this year and into 2023. Plenty of potential within that group so far and for the future. We then look at the fourth pillar of our strategy, innovate. We were very happy in 2021 to launch the first U.K. concrete construction block, the Greenbloc product line, ultra-low carbon product, to receive EPD certification.
We're the first ones to do that. To give you an illustration of the impact of this innovation, the graph on the slide, 2018 shows you the volume of blocks produced by the CCP business, our block-making business, as we acquired it in 2018. The dark blue column in the middle is the additional capacity that we've extracted from the same plant and machinery to get to the taller column '21, which is our total production in 2021 by proportion, which generated the net CO₂ of the gray column you can see in the middle of the slide.
We're now in 2022, we're going to change over nearly more than half the production from standard gray concrete blocks to Greenbloc products, which will lead to a net carbon reduction of the green column on the right and a net carbon emission on the far right of the slide. You can see that the net CO₂ emitted with a much higher volume of concrete products is going to be significantly lower than what we would have even emitted at the start of that acquisition. We're very happy with the results and with the potential that the Greenbloc product line has as we roll that out across all our concrete products this year. That leads to the next phase of our ESG agenda and our ESG leadership.
There's a detailed report that will be published in April 2022, with full detail on our roadmap. Our roadmap is already included in this annual report, has a net zero target of 2040. Pretty much everywhere leading targets against all the various classifications that we have. This roadmap on the screen here as an illustration. There's obviously not just environmental initiatives, but also social and governance. We've appointed a new board member. We'll continue to diversify our board over time. We're working on a lot of innovation, a lot of solar and other renewable energy. Digitalization of the group, which is HiVis, is a very successful initiative, and there's more to come. We have joint ventures with, among others, Prins Mathijs, to work on new products and new streams.
From an ESG perspective, we think that we're very, very well positioned, certainly industry-leading from a lime perspective and perhaps even more so in as a sector in general. There's one point that some people forget about lime, which lime is quite an interesting product, which for instance, contrary to cement, has a very active reabsorption capacity when it comes to CO₂ recarbonation. A few graphs here which you can take away and have a look at in more detail, but the overall message is CO₂ emitted by the stone during production gets reabsorbed within the five years post-production as you can see on these graphs, which is sometimes forgotten and will help even more on our net zero journey that we showed you in the graph before.
All that leads then to the outlook for 2022. There's a few headwinds which are fairly obvious, I think. The Ukraine poses a significant challenge potentially for the whole European economy. What are the spillovers? Are there any? Will there be cost inflations, availability of energy and other resources? These things obviously need to be flagged, and there are potential headwinds in European markets. We have a strike at UPM, one of our key customers in Finland, which is a paper maker. These obviously are the headwinds, but we know about them, and we've put together a whole list of initiatives which form the tailwinds on the side on the right. Our competitive positioning in the northern markets is strengthening, which is very good.
There's a whole bunch of synergy and cost improvement programs ongoing right across the group in Nordkalk as well. The integration of Nordkalk has gone really smoothly, thanks also to the teams up there. That helps us to extract further value from that business. The hedging strategies initiatives are being looked at intensely. There's obviously roll-off, as Garth mentioned, of existing hedging structures, and the newer ones are a lot more efficient, which will help us with the management of energy in the future. There's some catch-up demand expected for when the strike at UPM in Finland is over, which will help the bottom line there. All in all, to summarize that on our sort of last slide for this presentation, good customer demand everywhere.
The known unknowns, the headwinds, the inflation are identified, programs set up to make sure that we recover any losses there. Nordkalk integration, very solid, very good with further synergies expected for the second half and into 2023. Our buy and build strategy remains attractive both in good and bad markets. There is always good opportunities to go after. ESG roadmap is published and will be available with further detail next month. As a result of that, our outlook for the year remains unchanged, which means very positive. Our midterm targets as outlined at the bottom of the slide again remain unchanged as well. A positive outlook for what we hope to be a positive year in spite of some headwinds. Thank you very much for your attention.
I'm very happy to take any questions, which, Charlie, I think you can moderate. Charlie?
Yes, Max. Thank you. We've had no formal questions submitted. We do have an attendee with a hand up. I wonder if Elisa could maybe let Christian take the floor. Or if not, oh, there you go, Christian.
Thank you. Can you hear me okay?
Yes. Yeah.
Excellent. Afternoon, everyone. Thanks for taking my questions. I've got three, if that's okay. First on Greenbloc, just a bit more information perhaps on the market demands of this new product, and potential to expand that outside of the U.K. as well. The second, for Garth, given the inflationary backdrop, and the impact on margins in 2021, should we expect a similar impact in 2022 with those dynamics on margins? Then thirdly, just to touch on the M&A pipeline and Max, I know you did sort of touch on this just at the end, but the appetite for M&A given the increased sort of geopolitical uncertainty. Thank you.
Greenbloc first. The demand picture has been evolving over the last two quarters until now. What changed a lot and helped a lot was the EPD certification, which we were first in. As a result of that, a lot of the specification architects are allowed to specify this product now 'cause there's now certification on its green credentials. You'll see as we announced, I think, at the end of last year, pretty much all the big contractors, all the big merchants stocking all the big contractors specified in projects that are coming.
The demand is extremely good, and as a result of that, we've been able to already forecast that 60% of our block production out of CCP in Manchester, near Manchester and Liverpool is going to be on a green mix basis. From that perspective, we are very encouraged to see that. We also offer it now in all our precast products, so everything that is Clanfield based, which are more put into infrastructure jobs, and that demand is also coming through. I'm very hopeful that by the end of this year, more than half of our production will be on a green mix, and then into 2023, the entire production.
Christian also asked about the possibility for expansion of Greenbloc into Europe.
Yeah, that's a good point. Yes, we are looking at that. The PPG Group is already expanding into Belgium. That's first with the precasts and infrastructure-related precast business, and we will then go into other countries where we have quarries and operations. The expansion into those countries will be primarily driven by the Greenbloc mixes, not gray, standard gray mixes.
On a margin point, we're expecting an uptick in margins through the full year, but probably similar to where we landed in 2021 for the half year, but then pick up through the second half. That's obviously dependent on macro situation, but that's our expectation. We're in close to the 20% mark.
The M&A question, Christian. The appetite for the group to do M&A and to further expand remains exactly the same. We've about 10 deals live at any point in time. The geographies we're in means that we have a lot of choice. There's lots of choice in terms of small or large or midsize M&A markets. There's markets where we have no presence in or very little, which obviously have a bit of focus to tie the whole structure around our overseas together a bit more. An economically bad market or a good market don't make much of a difference to us. They present different types of opportunities. A good solid family business is probably less likely to be sold in a bad market because they've all seen it all before.
They just hunker down and see it through. You get the bigger groups that restructure their balance sheets a bit and are happy to then dispose of some units. It doesn't really matter what the market really looks like. From our perspective, as long as we can generate further EPS growth, which is ultimately the only thing that really matters from that perspective, and make the strategic footprint better, more valuable, more integrated, more connected business, we'll always have a look at buying more assets.
Excellent. Thank you very much.
Thanks. Charlie?
Max, we don't have any more questions from any of the attendees on the call. If there's nothing else to answer, I thank David, Max, and Garth for your time and thank everyone that joined the call to listen to the SigmaRoc FY 2021 presentation.
Thanks, everyone.
Thank you very much.