Slide 1: Seven Group Holdings Investor Presentation
12 June 2020 Seven Group Holdings Investor Presentation Attached is an Investor Presentation to be given to analysts today by Mr Ryan Stokes AO, Managing Director & Chief Executive Officer of Seven Group Holdings Limited (“SGH”) (ASX Code “SVW”). This release has been authorised by the Managing Dire
Slide 2: SGH Investor Presentation
SGH INVESTOR PRESENTATION 12 JUNE 2020
Slide 3: Agenda
SGH Investor Presentation Seven Group Holdings 2 12 June 2020 AGENDA 1. Group Overview 2. Trading Update 3. Capital Management 4. Outlook
Slide 4: Group Overview
SGH Investor Presentation Seven Group Holdings 3 12 June 2020 Group Overview We are a leading operating and investment group • Total assets: $6.9bn With positions in • Industrial Services • Energy • Media • Investments
Slide 5: Group Overview: People and Safety
SGH Investor Presentation Seven Group Holdings 4 12 June 2020 GROUP OVERVIEW PEOPLE AND SAFETY More than 5,800 people employed as at April 2020 Rolling 12 Month LTIFR TRIFR • 3,532 employees at WesTrac in NSW/ACT and WA Apr Apr Apr Apr • 2,042 employed across Australia at Coates Hire 2019 2020 2019
Slide 6: Group Overview: Community Engagement
SGH Investor Presentation Seven Group Holdings 5 12 June 2020 GROUP OVERVIEW COMMUNITY ENGAGEMENT Uniquely positioned to assist our communities • Incredible work undertaken by 35 of our brave and committed people who serve in the RFS and other volunteer services – Providing paid leave for all leave
Slide 7: Group Overview: COVID-19
SGH Investor Presentation Seven Group Holdings 6 12 June 2020 GROUP OVERVIEW COVID-19 Key Principles of the SGH COVID-19 Response Plan • Support the health and wellbeing of our employees and their families • Operate core businesses as essential services • Support our customers to maintain their busi
Slide 8: Group Overview: Our Purpose
SGH Investor Presentation Seven Group Holdings 7 12 June 2020 GROUP OVERVIEW OUR PURPOSE Purpose and objective • The Group’s purpose is to recognise and serve exceptional businesses • And by doing so seeks to maximise returns to shareholders, with total shareholder return of 41% over 3 years to Dece
Slide 9: Group Overview: Structure
SGH Investor Presentation Seven Group Holdings 8 12 June 2020 GROUP OVERVIEW STRUCTURE
Slide 10: Group Overview: Businesses and Markets
SGH Investor Presentation Seven Group Holdings 9 12 June 2020 GROUP OVERVIEW BUSINESSES AND MARKETS Mining production Industrial Industrial Energy Media • We provide equipment solutions to the world’s services services investments largest miners, supporting record production volumes and driving effi
Slide 11: Trading Update
SGH Investor Presentation Seven Group Holdings 10 12 June 2020 Trading Update Key themes: • Our businesses are positioned to support customer investment • Resource production remains near record highs • Customers are extending fleet lives • Infrastructure activity will lead the economy • Domestic en
Slide 12: WesTrac
SGH Investor Presentation Seven Group Holdings 11 12 June 2020 WesTrac Leader in helping customers to drive efficiency by partnering on product support and technology solutions
Slide 13: WesTrac Overview
SGH Investor Presentation Seven Group Holdings 12 12 June 2020 WESTRAC OVERVIEW Value proposition • WesTrac is among the top five Caterpillar equipment dealerships in the world and supports some of the world’s largest miners in Australia’s rich iron ore and coal regions together with infrastructure
Slide 14: WesTrac Trading Update
SGH Investor Presentation Seven Group Holdings 13 12 June 2020 WESTRAC TRADING UPDATE Continuing strong demand Major projects awarded • COVID-19 minimal impact on key drivers of mining production, fleet utilisation and age Customer Project Awarded Scope • May YTD revenue up 15% on prior comparative
Slide 15: WesTrac Investing in Capability and Capacity
SGH Investor Presentation Seven Group Holdings 14 12 June 2020 WESTRAC INVESTING IN CAPABILITY AND CAPACITY World leader in autonomous mining South Guildford Capacity Expansion Program • Australia has the largest installed fleet of autonomous mining equipment in the world (88% as at March) • WesTrac
Slide 16: WesTrac Off Highway Truck Lifecycle
SGH Investor Presentation 15 12 June 2020 WESTRAC OFF HIGHWAY TRUCK LIFECYCLE Capturing the product support opportunity • Significant parts opportunity created through the large installed base of equipment across WA and NSW • 793F mining trucks typically consume $3.9m in parts and maintenance over 1
Slide 17: WesTrac Component Rebuilds and PEX
SGH Investor Presentation 16 12 June 2020 WESTRAC COMPONENT REBUILDS AND PEX Valuable customer solutions • WesTrac has grown additional revenue streams through its Component Rebuild Centre (CRC) and Parts Exchange Program (PEX) • These are aimed at providing cost effective and time effective solutio
Slide 18: Coates Hire
SGH Investor Presentation Seven Group Holdings 17 12 June 2020 Coates Hire A key supplier of equipment to infrastructure and non- residential construction markets with a strong pipeline of projects ahead
Slide 19: Coates Hire Overview
SGH Investor Presentation Seven Group Holdings 18 12 June 2020 COATES HIRE OVERVIEW Value proposition • #1 hire equipment company in Australia with over 160 branches and over 1 million pieces of equipment • Ability to provide customers with a single source for their equipment needs nationally • Majo
Slide 20: Coates Hire Trading Update
SGH Investor Presentation Seven Group Holdings 19 12 June 2020 COATES HIRE TRADING UPDATE Some softness in construction but infrastructure holding up • COVID-19 has directly impacted the Events hire business (Supercars, Formula 1, Royal Easter Show, AFL) • Social distancing is estimated to have adve
Slide 21: Coates Hire Infrastructure Outlook
SGH Investor Presentation Seven Group Holdings 20 12 June 2020 COATES HIRE INFRASTRUCTURE OUTLOOK Major infrastructure programs • Australia is in the midst of its largest ever transport infrastructure boom with expenditure on projects >$2bn expected to reach circa $18bn per annum in 2023 driven by:
Slide 22: Energy
SGH Investor Presentation Seven Group Holdings 21 12 June 2020 Energy Portfolio of opportunities within Beach Energy and SGH Energy aimed at meeting the East Coast gas demand and new domestic LNG export opportunities
Slide 23: Energy Overview
SGH Investor Presentation Seven Group Holdings 22 12 June 2020 ENERGY OVERVIEW East Coast gas demand Projected Eastern and South-Eastern Australian Gas Production (export LNG and domestic) • SGH’s energy investments are well positioned to meet the growing level of East Coast gas demand – Beach Energ
Slide 24: Beach Energy Update
SGH Investor Presentation Seven Group Holdings 23 12 June 2020 BEACH ENERGY UPDATE Beach Energy well positioned for low energy prices • Balance sheet strength –$80m net cash and $530m liquidity available as at 31 March 2020 • Majority gas producer with minimal spot price exposure - 97% of East Coast
Slide 25: SGH Energy Update
SGH Investor Presentation Seven Group Holdings 24 12 June 2020 SGH ENERGY UPDATE Crux development update Crux location map and Prelude back-fill concept • Crux remains an attractive asset, supplying backfill gas to Shell’s existing Prelude FLNG infrastructure • Due to market conditions Final Investm
Slide 26: Media
SGH Investor Presentation Seven Group Holdings 25 12 June 2020 Media Seven Network provides leadership through its mass audience reach across FTA TV and digital Other media investments provide exposure to growth in China’s media, entertainment and consumer sectors
Slide 27: Media Overview
SGH Investor Presentation Seven Group Holdings 26 12 June 2020 MEDIA OVERVIEW SWM has a market leading presence in content production across free-to-air TV and digital • Seven Network was Australia’s most watched TV network from FY06 to FY19 – 7News is Australia’s most watched news service for 16 st
Slide 28: Media Update
SGH Investor Presentation Seven Group Holdings 27 12 June 2020 MEDIA UPDATE Seven West Media • Redwave regional WA radio network sold for $28m • Osborne Park (WA) site sold for $75m • Pacific Magazines sale completed for $40m cash consideration, pre adjustments and leave provisions, and $6.6m in adv
Slide 29: Investments Update
SGH Investor Presentation Seven Group Holdings 28 12 June 2020 INVESTMENTS UPDATE Boral investment • Screening process identified Boral as a leading industrials business with challenges around leadership, strategy, litigation and execution • Recent price dislocation provided an opportunity to build
Slide 30: Capital Management
SGH Investor Presentation Seven Group Holdings 29 12 June 2020 Capital Management Our aim is to maximise return to stakeholders through long-term sustainable value creation Financial discipline on cash flow and funding are key areas we focus on to drive financial returns
Slide 31: Capital Management Update
SGH Investor Presentation Seven Group Holdings 30 12 June 2020 CAPITAL MANAGEMENT UPDATE Over $700m in new funding available to the Group • US$300m / A$460m US private placement, priced in May, closing in July – Oversubscribed with US$865m in bids received – Demonstrates strong investor demand and c
Slide 32: Capital Management USPP
SGH Investor Presentation Seven Group Holdings 31 12 June 2020 CAPITAL MANAGEMENT USPP US private placement • US$300m placement in three tranches: – US$75m, 7-year 3.31% fixed coupon (A$115m at BBSW +3.2%) – A$230m, 10-year, 4.265% fixed coupon – US$75m, 12-year, 3.66% fixed coupon (A$115m at BBSW +
Slide 33: Outlook
SGH Investor Presentation Seven Group Holdings 32 12 June 2020 Outlook
Slide 34: Outlook Key Messages
SGH Investor Presentation Seven Group Holdings 33 12 June 2020 OUTLOOK KEY MESSAGES Key messages • Continuing strength in most underlying markets through COVID-19 – Majority of WesTrac and Coates Hire customers operate in essential industries and activity levels have remained high – Beach Energy per