Keller Group Plc · LSE:KLR
Keller — FY2014 Earnings Presentation
40 slides from Keller's earnings presentation, Mar 2, 2015
Slide 1: Full Year Results 2014
Keller Group Plc Full Year Results 2014 Keller Group plc February 2015 Full Year Results 2014 2 March 2015
Slide 2: Cautionary Statements
Cautionary Statements This document contains certain ‘forward looking All written or verbal forward looking statements, made in statements’ with respect to Keller’s financial condition, this document or made subsequently, which are results of operations and business and certain attributable to Kelle
Slide 3: Highlights
Highlights Record revenue and increased margin – improving conditions in the US – benefits of business improvement initiatives – strong performance on major contracts Another excellent cash performance – continued focus on converting profits into cash Strong balance sheet – refinanced during 2014 –
Slide 4: Financial Highlights
Financial Highlights* Record revenue Operating margin raised to £1,599.7m 5.8% (2013: £1,438.2m), up 11% (2013: 5.4%) Earnings per share Cash from operations 75.3p 117% (2013: 73.0p) Of EBITDA (2013: 106%) Year end net debt Total dividend increased to £102.2m 25.2p (2013: £143.7m) (2013: 24.0p) *bef
Slide 5: Group Income Statement
Group Income Statement* £m 2014 2013 % Change Revenue 1,599.7 1,438.2 +11% EBITDA 141.9 124.2 +14% Operating profit 92.0 77.8 +18% Net finance cost (6.9) (3.7) Profit before tax 85.1 74.1 +15% Tax (29.7) (23.8) Profit after tax 55.4 50.3 +10% EBITDA % 8.9% 8.6% +30bps Operating profit % 5.8% 5.4% +4
Slide 6: Group Income Statement (continued)
Group Income Statement (continued) £m 2014 2013 % Change Profit after tax* 55.4 50.3 +10% Exceptional items (56.9) (22.1) Tax on exceptional items 0.3 1.9 Non-controlling interests (1.8) (0.8) Attributable to shareholders (3.0) 29.3 -110% Earnings per share* 75.3p 73.0p +3% Dividend per share 25.2p
Slide 7: Dividend History
Dividend History Dividend per share (pence) 30 25 20 15 10 5 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Final dividend of 25.2p Dividend increased or Dividend policy of – up 5% maintained every year sustainable growth since 1994 flotati
Slide 8: Operating Profit & Margin
Operating Profit & Margin* £m 2014 2013 Revenue Op Margin Revenue Op Margin Profit Profit North America 775.6 59.9 7.7% 699.4 51.6 7.4% EMEA 451.5 12.9 2.9% 399.2 6.8 1.7% Asia 111.3 8.3 7.5% 96.2 9.0 9.4% Australia 261.3 15.7 6.0% 243.4 15.6 6.4% 1,599.7 96.8 6.1% 1,438.2 83.0 5.8% Central costs -
Slide 9: Group Balance Sheet
Group Balance Sheet £m 2014 2013 Goodwill/intangibles 183.5 187.9 Property, plant & equipment 295.6 281.9 Other non-current assets 19.9 14.9 499.0 484.7 Inventories 48.6 62.0 Receivables 408.7 414.5 Payables (353.2) (352.4) Working capital 104.1 124.1 Capital employed 603.1 608.8 Other liabilities/p
Slide 10: Group Cash Flow Statement
Group Cash Flow Statement £m 2014 2013 Cash generated from operations 165.4 132.0 Capex – net (61.0) (42.6) Interest (9.6) (5.0) Tax (28.4) (21.5) Free cash flow 66.4 62.9 Acquisitions (5.0) (200.4) Dividends (18.0) (15.6) Other - 57.6 Net cash flow 43.4 (95.5) Opening net debt (143.7) (51.2) Exchan
Slide 11: Cash Flow History
Cash Flow History 180 160 140 120 100 80 60 40 20 0 EBITDA Cash from operations 10-year cash conversion 10-year aggregate EBITDA 10-year aggregate cash rate of 101% of £1,067.6m from operations of £1,081.5m 11
Slide 12: Group Contract Awards
Group Contract Awards Monthly orders (£m) (rolling 3 month average at constant currency*) 180 Seattle 160 Crossrail; Victoria Wheatstone; Station; LNG MOF Vale; Gdansk 140 120 100 Changi Airport; 80 Sengkang Caspian region Hospital 60 Moscow 40 20 0 Order intake at a healthy Order book for next 12 F
Slide 13: 2015 Guidance
2015 Guidance 2015 expected to be another year of progress - all divisions except Australia should increase revenue and profit Short term impact of oil price decline will be minimal - forecast direct oil and gas work well under 10% of revenue - resources work included in 2015 budgets for Canada or A
Slide 14: Strategy
Strategy Our Objective – to extend our global leadership in specialist ground engineering through: – organic growth, particularly in developing markets – targeted acquisitions Our Execution: – expansion into new, higher growth regions – new technologies and methods, acquired or developed – transfer
Slide 15: Business Improvement Initiatives
Business Improvement Initiatives Another record revenue and profit from large contracts (>£5m) – recent awards in Austria, Singapore and Caspian Region Continued focus on risk management – improving trend in contract performance Improving equipment management – transferring, investing, utilising, sc
Slide 16: US Non-residential Construction Market
US Non-residential Construction Market US Construction Put-in-Place ($bn) Source: US Census Bureau, February 2015 400 350 300 250 200 150 100 50 0 Infrastructure/Public Buildings Office/Commercial Power/Industrial Total US non-residential Infrastructure/Public market up 7% in 2014 Buildings up 1% (d
Slide 17: North America Revenue by End Market
North America Revenue by End Market 2014 Revenue by End Market 2013 Revenue by End Market Total revenue $1,280m Total revenue $1,091m 27% 26% 34% 34% 13% 16% 23% 27% Infrastructure/Public Buildings Power/Industrial Office/Commercial Residential Infrastructure/Public Power/Industrial reduced In US$ t
Slide 18: North America US Foundations
North America US Foundations Strong H2 as construction activity continues to improve - operating margin of 9% Increasing number of large contracts - I635 project Dallas, Oceana Bal Harbour Miami, Elliot Bay Seattle Supplements broad range of small to medium sized contracts across products and geogra
Slide 19: North America Case Study
North America Case Study Case Foundation Company Replacement of 21 mile portion of track running between Washington DC and Boston MA with a constant tension catenary system allowing trains to reach speeds of up to 160 mph Constant tension achieved by installing a system of balancing weights and pull
Slide 20: North America - Suncoast
North America - Suncoast US Housing Starts (000s) Source: US Census Bureau Housing Starts 2500 2000 1500 1000 500 0 US housing starts continue Suncoast continuing to to increase improve - up 9% in the year, driven by - revenue up 15% (2013:19%) multi-family units - operating margin broadly flat - st
Slide 21: North America Canada
North America Canada Western Canadian energy markets remain stagnant Demand steady in the commercial and infrastructure markets Successful merger of Toronto– based Geo-Foundations into the larger Keller Canada – improved transfer of technology expected – costs reduced – results improved in H2 after
Slide 22: EMEA Regional Split
EMEA Regional Split 2014 Revenue by Region 2013 Revenue by Region Total revenue €560m Total revenue €471m 2% 19% 16% 24% 18% 7% 15% 9% 17% 8% 8% 8% 15% 9% 13% 12% Africa UK Germany Poland Middle East Austria France Other Acquisition of Franki Africa Middle East showing signs Other includes Scandinav
Slide 23: EMEA Highlights
EMEA Highlights Focus on cost control, risk management and careful contract selection Good results from Poland, Germany and Austria Progress made in the large projects initiative Increased revenue and profit from the Middle East Successful integration of Franki Africa Careful expansion of sales netw
Slide 24: EMEA Case Study
EMEA Case Study Keller UK/Getec New £16bn railway running from the west to the east of London and crossing central London below ground at depths of up to 36 metres The Crossrail projects, performed over the past five years, totalled £55m, using ten different technologies Keller combined its experien
Slide 25: Asia Regional Split
Asia Regional Split 2014 Revenue by Country 2013 Revenue by Country Total revenue S$233m Total revenue S$188m 9% 5% 12% 15% 44% 22% 61% 32% Singapore Malaysia India Other Singapore market quieter Increase in Malaysia Other represents projects in during 2014 – Strong market Hong Kong, Vietnam and Ind
Slide 26: Asia Highlights
Asia Highlights Malaysia had another excellent year – further expansion of piling business – presence in Johor to benefit from industrial and commercial investment – Ansah improves access to large foundation solution packages Singapore had a quieter year – Sengkang hospital project completed ahead o
Slide 27: Asia Case study
Asia Case study Keller India Around 1,500 bored piles and 1,300 columns were fitted to support two large LNG tanks, each measuring 85m in diameter Stringent testing of performance Set up concrete batching plant and warehouse to store cement supplies 600 employees and a modern fleet of hydraulic pili
Slide 28: Australia Highlights
Australia Highlights Wheatstone project almost complete – Group’s largest ever contract Waterway had a successful year – Brisbane wharf upgrade programme, Sydney Overseas passenger terminal Subdued market conditions – difficult H1 expected Management implementing cost saving and efficiency initiativ
Slide 29: Australia Case study
Australia Case study Keller Australia Procured, installed and tested c. 25,000 driven piles of 18 metres in length – 98% complete A significant opportunity to demonstrate the Group’s ability to deliver a very complex project using global best practise to meet exacting engineering and design standard
Slide 30: Outlook
Outlook Global markets remain mixed: - North America: continuing broadly based, steady improvement in the US, Canada subdued - Europe: no material changes in challenging market conditions - subdued market conditions in Australia - good opportunities in Africa and Asia Contract awards remain at a hea
Slide 31: Appendix
Keller Group Plc Full Year Results 2014 Keller Group plc February 2015 Appendix
Slide 32: Introduction to Keller
Introduction to Keller The world’s largest independent ground engineering contractor – ground engineering is a small, niche sub-sector of construction – growing faster than construction, reflecting: – more pressure to build on brownfield and marginal land – more ambitious development and infrastruct
Slide 33: Ground Engineering Worldwide
Ground Engineering Worldwide Piling Ground Specialty Anchors, nails, Post-tension improvement grouting minipiles concrete 51% 20% 10% 10% 9% Foundation Foundation Control of building Excavation Slab-on-grade support support settlement support foundations Earth retention Seismic risk Ground water Slo
Slide 34: Group Revenue by End Market
Group Revenue by End Market 2014 Revenue by End Market 2013 Revenue by End Market Total revenue £1,600m Total revenue £1,438m 19% 19% 35% 34% 18% 15% 28% 32% Infrastructure/Public Buildings Power/Industrial Office/Commercial Residential Keller operates across all Infrastructure/Public Power/Industri
Slide 35: Ten Year Track Record: Revenue
Ten Year Track Record Revenue 2005 - 2014 (Continuing Operations) 1800 1,599.7 1600 1,438.2 1400 1,317.5 1,196.6 1200 1,154.3 1,068.9 1,037.9 955.1 1000 857.7 800 685.2 600 400 200 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 North America EMEA Asia Australia 35
Slide 36: Ten Year Track Record: Operating Profit
Ten Year Track Record Operating Profit 2005 - 2014 (from continuing operations and before exceptional items) 140 119.4 120 107.4 100 89.3 92.0 77.3 77.8 80 55.3 60 48.3 43.3 40 28.9 20 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 -20 Head Office Costs North America EMEA Asia Australia 36
Slide 37: Operating Margin Trend
Operating Margin Trend Operating margin* 12% 10% Through-the-cycle margin target 8% 6% 4% 2% 0% 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Operating margin Peak and trough margins recovering from unlikely to repeat historic low *before ex
Slide 38: Group Financing Position
Group Financing Position £374m of committed facilities, mainly: – £250m bank facility expiring September 2019 – US$40m private placement, repayable August 2018 – US$50m private placement, repayable October 2021 – US$75m private placement, repayable December 2024 Comfortably within all financial cove
Slide 39: History of Keller
History of Keller 2002 2006 2007 2009 2010 2013 NOW Acquired Acquired Piling Acquired HJ Acquired Acquired Acquired c.9,000 employees McKinney Contractors Foundation Resource Piling Waterway Geo-Foundations (US) (Australia) (US) (Singapore) Constructions (Canada) Offices in (Australia) >40 countries
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