Austin Engineering Limited · ASX:ANG
Austin Engineering — FY2015 Earnings Presentation
21 slides from Austin Engineering's earnings presentation, Aug 21, 2015
Slide 1: Austin Engineering Ltd FY15 Results Presentation
Austin Engineering Ltd FY15 Results Presentation
Slide 2: Key Items
Key Items • Revenue and normalised* EBITDA ($15.0m) for the year was in line with statutory EBITDA for the PCP ($15.2m) • $40.9m of non-cash impairment charges were booked in December 2014, reflecting subdued market conditions and $6.9m of restructuring costs and Westech legal fees • Operating cash
Slide 3: FY15 Financial Performance
FY15 Financial Performance FY14 FY15 Annual $m $m % Change Revenue 209.9 210.4 0% Gross Margin % 35% 36% 3% Normalised EBITDA 15.2 15.0 * -1% Depreciation (10.5) (11.0) 5% Amortisation / Impairment (0.9) (42.0) 4567% Interest Income 0.1 1.3 1200% Interest Expense (3.9) (6.1) 56% Tax (Expense) / Cred
Slide 4: FY15 Financial Performance
FY15 Financial Performance • A flat Revenue and normalised EBITDA result was achieved versus the PCP • GM% improving to 36% was a pleasing outcome and results from efficiencies gained despite pressure on price • $40.9m of non-cash impairment charges were booked in December 2014, reflecting subdued m
Slide 5: Reconciliation of normalised EBITDA and NPAT
Reconciliation of normalised EBITDA and NPAT EBITDA NPAT $m $m Statutory Results (32.8) (49.3) Restructuring Costs 3.6 2.5 Impairment Charges 40.9 40.9 Legal costs * 3.4 2.2 Underlying Results 15.0 (3.7) • Legal costs associated with defending patent infringement claims against Westech in the USA. W
Slide 6: Debt
Debt • The Net Debt result of $94.0m includes adverse net fx translation of $6.7m. Excluding fx Net Debt was $87.3m and this compares to $90.3m in June 2014 • Note the majority of the adverse fx translation differences were caused by US denominated debt which has since been substantially repaid as p
Slide 7: Working Capital
Working Capital $m Working Capital at 30 June 2014 33.9 Receivables 4.1 Payables (11.4) Inventories (4.5) Working Capital at 30 June 2015 22.1 • $11.8m (35%) reduction in working capital during FY15 • Inventories have reduced due to the stock reduction program as well as write-downs in Peru in Decem
Slide 8: Debt Reduction Strategy
Debt Reduction Strategy • The company undertook a $51.6m capital raising in July, which consisted of a $31.6m rights issue and a $20m subordinated loan. The proceeds of the capital raising were used to reduce senior debt by $45m by mid-August • Senior debt refinance process is underway
Slide 9: Safety
Safety 12 10 8 6 FY14 FY15 4 2 0 No. of LTI's LTIFR • A continued focus on zero harm has yielded improved safety results in FY15 • The Global LTIFR for FY15 was 2.9 which is an improvement from 3.3 recorded for FY14
Slide 10: Segment Results
Segment Results FY14 FY15 Annual $m $m % Change Revenue: Australia 125.7 106.8 -15% Americas 79.5 87.5 10% Middle East 0.4 0.0 -100% Asia (Indonesia) 4.3 16.1 274% 209.9 210.4 0% Normalised* EBITDA: Australia 8.3 2.0 -76% Americas 7.1 7.2 3% Middle East 0.0 0.0 0% Asia (Indonesia) -0.2 5.8 3750% 15.
Slide 11: Operational Review: Australia
Operational Review Australia • FY15 produced a substantially lower result than FY14 • Overall mine production levels continue to increase and continue to defer major capital replacement programs • East Coast operations results reflected continuing difficult market conditions in the coal industry • B
Slide 12: Operational Review: Australia (con't)
Operational Review Australia (con’t) • WA has been successful with a number of orders (total of 42 truck bodies) to be delivered in H1 FY16 and currently has high levels of repair work • East Coast have won orders in May/June which have provided a good level of work through to November • East Coast
Slide 13: Operational Review: Americas
Operational Review Americas • The Americas segment produced a normalised result in line with FY14 although the mix of work in FY15 was far different to FY14 • The La Negra operation experienced a major turnaround, especially in H2 FY15, and produced a significantly better result than FY14 • The Coll
Slide 14: Operational Review: Americas (con't)
Operational Review Americas (con’t) • Servigrut produced a strong result for the year and has ongoing long term contracts in place, including the recently won 5 year extension with El Abra mining group • Westech (USA) on a normalised basis (excluding legal costs) produced a weak result due to very s
Slide 15: Operational Review: Americas (con't)
Operational Review Americas (con’t) • The Colombian operation reported a positive EBITDA for FY15 after producing losses in FY14 • Final negotiations are underway to establish a formal 3 year contract with a large Colombian miner across 2 mines. This work is currently being completed on a temporary
Slide 16: Operational Review: Asia
Operational Review Asia • The Indonesian operation produced a record result for the year via orders for Indonesian and African projects • Expecting a weak first quarter of FY16 as orders on hand commence October 2015 • Tendering at good levels
Slide 17: Outlook
Outlook • Austin enters FY16 with a solid base-load in many of its businesses. This is an important concept for Austin as this base-load provides the platform to take advantage of the operational leverage within Austin and achieve higher margins • Earnings guidance for FY16 is approximately $235m of
Slide 18: Outlook
Outlook • Maintenance continues to be a very important part of the Company’s base revenue. This is important strategically as it leads to increased work • Once these maintenance contracts are attained, the Company can demonstrate its ability to offer further solutions to these customers for increase
Slide 19: Austin's Principal Products
Austin’s Principal Products Off-highway Buckets Water tanks Service modules dump truck bodies Tyre handlers Ancillary Industrial cooling and heat attachments transfer systems (COR Cooling)
Slide 20: Austin Principal Services
Austin Principal Services Equipment Specialised Painting and repair and fabrication blasting maintenance Specialised On-site maintenance and shutdown machining and services (Pilbara Hire) line boring
Slide 21: Austin Brands
Austin Brands The Austin Engineering brand encompasses design and manufacture of mining and earthmoving equipment, along with the provision of support services, from four Australian operations (Brisbane, Hunter Valley, Mackay, Perth), an Indonesian operation and Peruvian operation. The Austin Ingeni