Sgh Limited · ASX:SGH
Sgh — Seven Group Holdings — FY2024 Earnings Presentation
35 slides from Sgh's earnings presentation, Aug 14, 2024
Slide 1: Investor Presentation cover letter to ASX
14 August 2024 Company Announcements Office Australian Securities Exchange Limited 20 Bridge Street SYDNEY NSW 2000 INVESTOR PRESENTATION Seven Group Holdings Limited (ASX: SVW) attaches the Investor Presentation for the year ended 30 June 2024. This release has been authorised to be given to ASX by
Slide 2: SGH FY24 Results
SGH FY24 Results Ryan Stokes, SGH MD & CEO 14th August 2024
Slide 3: SGH Overview – Who We Are
SGH Overview – Who We Are Seven Group Holdings (ASX:SVW) Strategic Growth-Sector Exposures • One of Australia’s leading diversified operating groups • $15+ billion market capitalisation, ASX100 constituent Market leading businesses Mining Infrastructure & Transitional • Scale and leadership position
Slide 4: SGH Overview – FY24 Key Results
SGH Overview – FY24 Key Results $10,605m 10% $1,930m 14% $1,419m 20% $850m 30% $1,311m 16% Revenue EBITDA EBIT NPAT1 Op Cash2 SGH FY24 Sankey Diagram ($m) $1,930m EBITDA $1,419m $10,605m EBIT $1,126m SGH PBT $850m $3m Oil and Gas Revenue NPAT1 $392m Sig’ Items $1,158m Hire $2,011m $193m $212m $522m
Slide 5: SGH Overview – Earnings Growth & Key Outcomes
SGH Overview – Earnings Growth & Key Outcomes A decade of high-teens earnings growth FY24 SGH EBIT Result ($m) • SGH EBIT of $1,419m, up 20% (58%) 0% +20% (13%) • 10-year EBIT CAGR of 18% +9% 99 32 (33) Other 1,419 327 Delivered by Industrial Services (IS) • IS revenue growth of 11%, enabled by stro
Slide 6: SGH Overview – Key Financials
SGH Overview – Key Financials $m1 FY24 FY23 % Change Revenue 10,605 9,627 10% Earnings before interest, tax, depreciation and amortisation 1,930 1,689 14% Earnings before interest and tax (EBIT) 1,419 1,187 20% 10,605 Statutory EBIT Impact (351) (56) - 1,419 9,627 1,187 Statutory EBIT 1,068 1,130 (5
Slide 7: SGH Overview – Core Values & Operating Model
SGH Overview – Core Values & Operating Model Purpose, Objectives and Values SGH Operating Model Purpose Recognising and serving exceptional businesses Strategic Maximise return to Objective stakeholders through long term sustainable value creation Accountable, Scalable Operating Model Values Owner’s
Slide 8: SGH Overview – Investment Thematics
SGH Overview – Investment Thematics Mining Production – Through WesTrac 1,000 WesTrac Key Bulk Commodity Outlook 230 Thermal Coal (mt) 950 210 Commodity export volumes up 4% in the year to June-24 Iron Ore (mt) • 900 190 • Average of 955/205mtpa iron ore and thermal coal exports expected to FY29 850
Slide 9: SGH Overview - Safety and Sustainability
SGH Overview - Safety and Sustainability Safety first focus delivering performance improvements Rolling 12m LTIFR1 Rolling 12m TRIFR2 June 2024 June 2023 June 2024 June 2023 • LTIFR and TRIFR both improved by 26% WesTrac 0.3 0.4 5.2 5.0 • Driven by visible leadership, collective accountability cultu
Slide 10: WesTrac Highlights & Result
WesTrac Highlights & Result SGH Overview WesTrac Boral Coates Energy Media Financials Closing and Outlook 9
Slide 11: Industrial Services – WesTrac Highlights
Industrial Services – WesTrac Highlights Delivering above-trend sales growth WesTrac Revenue Split ($m) 6,000 • Machine sales up 12%, with strong demand from expansion Capital sales activities and fleet replacement 5,000 Services 4,000 • Services sales up 23%, ahead of 10% 10-year CAGR, 3,000 on 5%
Slide 12: Industrial Services – WesTrac Financials
Industrial Services – WesTrac Financials Revenue up 19% to $5.8bn • Operating leverage focus saw EBIT margins lift 51bp to 10.7% • EBIT of $623m up 25%, ahead of 10-year CAGR of 16% Working capital and inventory position • Operating cash flow (OCF) of $164m, down $515m 5,826 4,905 623 500 • OCF impa
Slide 13: Boral Highlights & Result
Boral Highlights & Result SGH Overview WesTrac Boral Coates Energy Media Financials Closing and Outlook 12
Slide 14: Industrial Services - Boral Highlights
Industrial Services - Boral Highlights Resilient volumes Concrete Volumes Quarries Volumes Recycling Volumes • Boral sales volumes remain resilient, slightly down on moderation in residential activity • Strong customer activity in infrastructure Pricing traction maintained • Improved go-to-market st
Slide 15: Industrial Services - Boral Financials
Industrial Services - Boral Financials Revenue, earnings and cash flow growth • Revenue of $3.6bn up 3%, strong infrastructure activity offsetting temporary moderation in residential market • EBITDA of $599m, up 32% • EBIT margin expansion of 376bp to 10.5% • EBIT of $372m, up 61% 3,555 3,461 372 23
Slide 16: Coates Highlights & Result
Coates Highlights & Result SGH Overview WesTrac Boral Coates Energy Media Financials Closing and Outlook 15
Slide 17: Industrial Services - Coates Highlights
Industrial Services - Coates Highlights Strong customer activity Skilled Labour Shortfall for Infra’ Projects (000, FTE equivalents) Major Public Infrastructure Quarterly Investment Forecasts ($m) • Customer activity remains robust, strong growth in 500 60,000 West and North 400 50,000 300 • Strong
Slide 18: Industrial Services - Coates Financials
Industrial Services - Coates Financials FY24 revenue and earnings growth • Revenue of $1.1b marginally up1, supported by customer activity and pricing traction across all regions • EBITDA margin up 282bp to 46.2%, EBITDA of $528m up 6% • EBIT margin up 234bp to 28.6%, EBIT of $327m up 9% Time utilis
Slide 19: Energy Highlights & Result
Energy Highlights & Result SGH Overview WesTrac Boral Coates Energy Media Financials Closing and Outlook 18
Slide 20: Beach (30%) and SGH Energy Highlights
Beach (30%) and SGH Energy Highlights Beach Energy gaining momentum • Quarter-on-quarter production and revenue up 6% and 10% in 4Q FY24, respectively • Brett Woods appointed as CEO, strategic refresh underway • Delivered 26% of 30% target reduction in headcount 1,798 1,646 Targeting 30% improvement
Slide 21: Media Highlights & Result
Media Highlights & Result SGH Overview WesTrac Boral Coates Energy Media Financials Closing and Outlook 20
Slide 22: Seven West Media (40%) & Other Media
Seven West Media (40%) & Other Media Seven West Media • Revenue of $1,416m down 5%, EBITDA of $187m down 33% • Result reflects 8.2% decline in Total TV market partially offset by 1.7 point gain in revenue share to 40.2% • Total TV Content strategy driving audience share growth underpinning revenue s
Slide 23: Group Finance
WesTrac – Business Unit Overview Group Finance Richard Richards, SGH CFO
Slide 24: Financials – Profit and Loss
Financials – Profit and Loss $m FY24 FY23 Change % Revenue - continuing operations 10,605.2 9,626.5 10.2% Other income 35.1 39.1 (10.2)% Share of results from equity accounted investees 157.5 195.0 (19.2)% Revenue and other income 10,797.8 9,860.6 9.5% Expenses (excluding depreciation, amortisation
Slide 25: Financials – Significant Items
Financials – Significant Items $m FY24 FY23 Net gain on disposal of controlled entities 76.3 - Fair value adjustments arising from acquisition of Boral (11.4) 12.9 Costs incurred in relation to the Boral takeover (14.4) - Property EBIT 4.6 - Transformation and restructure (costs)/benefits (6.7) 8.4
Slide 26: Financials – Business Unit Earnings
Financials – Business Unit Earnings $m Total SGH WesTrac Boral Coates Energy Media Investments Corporate Revenue from continuing operations 10,617.5 5,825.6 3,554.6 1,142.3 2.7 - 92.3 - Statutory EBIT 1,068.0 623.4 340.9 363.7 (146.6) (123.1) 38.9 (29.2) Add: unfavourable significant items 443.8 - 4
Slide 27: Financials – Cash Flow
Financials – Cash Flow $m FY24 FY23 Key Commentary Underlying EBIT 1,419.2 1,186.5 • Lower operating cash flows due to Add: depreciation and amortisation 510.7 502.0 $537m working capital investment Underlying EBITDA 1,929.9 1,688.5 at WesTrac Operating cash flow 808.2 1,193.6 • Investing cash flow
Slide 28: Financials – Balance Sheet
Financials – Balance Sheet $m FY24 FY23 Change % Trade and other receivables and contract assets 1,524.7 1,649.3 (7.6)% Inventories 2,337.9 1,846.7 26.6% Assets held for sale 7.3 3.2 - Investments 1,391.6 1,797.5 (22.6)% Property, plant and equipment 3,642.1 3,497.9 4.1% Oil and gas assets 627.7 476
Slide 29: Financials – Capital Management
Financials – Capital Management Year-end leverage of 2.2x1, down 3% Facility Maturity, Proforma as at 30 July 2024 ($m) • Post-Boral acquisition leverage increased to 2.3x1 1,445 Simplified capital structure • $366m equity swap and $250m EB closed as part of Boral acquisition, $46m convertible note
Slide 30: Closing & Outlook
Closing & Outlook Ryan Stokes, SGH MD & CEO
Slide 31: Closing Messages and Outlook – Boral Transaction
Closing Messages and Outlook – Boral Transaction Natural fit for SGH SGH Benefits of 100% Boral Ownership • Exposed to infrastructure and construction (I&C) $1.7t pipeline • Australian focused Industrial Services business, where SGH has Access to Cash proven ability to drive performance • Market lea
Slide 32: SGH Closing and Outlook – FY25 Priorities
SGH Closing and Outlook – FY25 Priorities Drive performance outcomes across SGH SGH and ASX100 TSR (%) 200 • Maintain operating and cost discipline to drive operating leverage TSR SVW ASX100 5-yr 137% 44% 134% TSR 150 • Integrate Boral, support and accelerate “Good to Great” 10-yr 598% 117% performa
Slide 33: SGH Closing and Outlook – FY25 Guidance
SGH Closing and Outlook – FY25 Guidance FY25 Guidance • Positive outlook for core sector exposures, adjacent growth opportunities, and investment in working capital supports SGH earnings guidance of: “High single-digit EBIT growth expected in FY25” WesTrac • Strong demand for services, FY24 working
Slide 34: Disclaimer
Disclaimer Basis of preparation of slides Included in this presentation is data prepared by the management of Seven Group Holdings Limited (“SGH”) and other associated entities and investments. This data is included for information purposes only and has not been subject to the same level of review b
Slide 35: Appendix – Business and Markets
Appendix – Business and Markets Industrials Industrials Industrials Energy Media 100% 100% 100% Beach 30% SGHE 100% 40% WesTrac is one of the largest Coates is Australia’s largest Boral is Australia’s largest Beach Energy is a leading mid- Seven West Media is a leading Caterpillar® dealers globally