Emeco Holdings Limited · ASX:EHL
Emeco — Debt Investor Presentation (February 2020)
22 slides from Emeco's debt investor presentation, Feb 26, 2020
Slide 1: Debt Investor Conference Presentation
Emeco Holdings Limited Debt Investor Conference For personal use only Presentation D I S C U S S I O N M AT E R I A L S Ian Testrow, Managing Director & CEO February 2020
Slide 2: Disclaimer
Disclaimer For personal use only Important Notices The information contained in this presentation has been prepared by Emeco Holding Limited (the “Company”) and its subsidiaries. The information in this presentation is given in a summary form and does not purport to be complete. The information cont
Slide 3: 1. Company overview
For personal use only 1. Company overview
Slide 4: Largest heavy earthmoving mining equipment rental and service provider in Australia
Emeco is the largest heavy earthmoving mining equipment rental and service provider in Australia For personal use only Company overview Emeco by the numbers2 Founded in 1972 and headquartered in Perth, Australia Operations Listed on the Australian Stock Exchange (EHL.ASX). Over 9006 employees
Slide 5: Full earthmoving equipment solution for customers
Emeco provides its customers with a full earthmoving equipment solution – a unique customer proposition 3 For personal use only Open cut equipment solutions Underground equipment solutions2 Equipment rebuild and repair Provide heavy earthmoving rental equipment Largest Australian provider of har
Slide 6: Well diversified across services, commodities and customers
Well diversified across services, commodities and customers For personal use only Revenue by services1 Revenue by customer1 Workshops 8% 14% 7% Top 10 customers 6% Underground rental 46% 16% 6% Customers 11 to 5% Open cut rental 150+ 5% 70% 5% 3% 4% 5% Revenue by commodity1 Revenue by customer type1
Slide 7: Long-standing relationships with diverse mining companies and contractors
Long-standing relationships with diverse mining companies and contractors For personal use only Diversified customer base Top 10 customers – Length of relationship (years) Customer 1 22 years 150+ customers1 Customer 2 5 years No single customer represents more than 8% of LTM Customer 3 2 years
Slide 8: Largest rental fleet in Australia
Largest rental fleet in Australia With the 3rd largest fleet in Australia (and #1 pure-play rental provider), our fleet is For personal use only strategically configured to be suited to all regions and commodities allowing us to meet the demands of all our customers Fleet overview Emeco fleet count
Slide 9: Demand for mining equipment rental expected to remain high
Demand for mining equipment rental is expected to remain high Earthmoving activity has historically been strong with total material movement and For personal use only stripping ratios forecast to steadily increase Total material movement in Australia (Bt) Matallurgical coal Thermal coal Iron ore Gol
Slide 10: Underground segment positioned for growth
Demand for mining equipment rental is expected to remain high Underground segment positioned for growth with discoveries increasing in depth For personal use only The outlook for underground mining is robust Depth of cover on discoveries: 1900–20191 1900 1920 1940 1960 1980 2000 2020 Underground m
Slide 11: Supply is expected to remain tight
Supply is expected to remain tight Large influx of equipment in 2010-2013 caused an oversupply of equipment in the market. This excess equipment has now been absorbed by the market with the For personal use only equipment population remaining flat notwithstanding increased activity resulting in a hi
Slide 12: Emeco's fleet has significant life remaining
Emeco’s fleet has significant life remaining No impending large capex requirements For personal use only In the last down cycle, 140 1600 customers pushed out asset Emeco average Industry average lives significantly longer than 27,600 hrs ~56,400 hrs 1400 historical norms 120 Emeco’s fleet has s
Slide 13: Emeco has a differentiated asset strategy
Emeco has a differentiated asset strategy Emeco’s asset strategy is focused on maximising return on assets by buying mid-life For personal use only equipment, putting them through the Workshops to rebuild and extend component lives cost effectively while reducing their capital intensity Asset value
Slide 14: Best-in-class capability enables low cost provider
Emeco’s best-in-class capability enables it to be a low cost provider For personal use only Emeco is low on the cost curve in managing mid-life assets … placing Emeco in the 84th percentile in managing compared to the industry… component cost Australia benchmark performance range¹ P25 P50 P75 2020 E
Slide 15: The business transformation of Emeco
The business transformation of Emeco Emeco has significantly evolved its business model to ensure that it is sustainable For personal use only through the cycles in order to maximize returns 3 Previous Emeco Business Model Evolved Emeco Business Model International operations that were created for
Slide 16: 2. Financials
For personal use only 2. Financials
Slide 17: Historical financial summary
Historical financial summary Emeco standalone financials excluding Pit N Portal For personal use only Revenue Adjusted EBITDA $300 % Margin 160.0% $250 A$230 140.0% A$486 A$214 A$464 120.0% $200 A$381 A$149 100.0% $150 80.0% A$196 $100 46.1% 47.3% 60.0% A$61 39.2% 40.0% $50 31.1% 20.0% $0 0.0% FY17
Slide 18: Strong cash flow generation and strong balance sheet
Emeco generates strong cash flow generation and is committed to a strong balance sheet Emeco standalone financials excluding Pit N Portal For personal use only Emeco Free cash flow1 (A$mm) Emeco leverage evolution2 A$139 5.5x A$126 A$92 2.6x 2.0x 1.8x A$35 2017 2018 2019 LTM 12/31/19 FY17 FY18 FY19
Slide 19: Financial policy
Financial policy Emeco is a prudent steward of capital For personal use only Continued focus on execution and cash flow generation with tight cost control and prudent management of equipment utilisation Have been focused on building a sustainable business and strengthening the balance sheet Co
Slide 20: Appendix
For personal use only Appendix
Slide 21: Adjusted EBITDA reconciliation
Adjusted EBITDA reconciliation For personal use only A$ in millions LTM 1• One off costs incurred in relation to FY 2017 FY 2018 FY 2019 1H 2019 1H 2020 12/31/19 the restructuring of businesses Net Income (A$142.5) (A$13.4) A$33.7 A$11.9 A$27.0 A$48.8 acquired in FY2017, FY2018, FY2019 Depreciation
Slide 22: Learn more about us
Learn more about us For personal use only Emecogroup.com
Emeco Holdings — Debt Investor Presentation (February 2020) on 6ix