Southern Cross Electrical Engineering Limited · ASX:SXE
Southern Cross Electrical Engineering — FY2024 Earnings Presentation
30 slides from Southern Cross Electrical Engineering's earnings presentation, Aug 21, 2024
Slide 1: Full Year Results Presentation
2024 Full Year Results Presentation Year Ended 30 June 2024 21 August 2024
Slide 2: Introduction to SCEE
Introduction to SCEE Leading national electrical, instrumentation, …built by design through operational excellence and a communications, security and maintenance group… disciplined M&A strategy Historically focused on resources and industrial work, but • Established in 1978 in Perth and listed in 20
Slide 3: SCEE's strategy
SCEE’s strategy SCEE Group primarily sees itself as an electrical contractor diversified across the infrastructure, commercial, and resources sectors • Our growth strategy continues to be to deepen our presence in those sectors and broaden our geographic diversity through expanding our core competen
Slide 4: Financial performance
Financial performance 4
Slide 5: Record profit, cash, order book
Record profit, cash, order book Revenue $551.9m (FY23: $464.7m) up 18.8% on prior year Infrastructure comprised 42.3% of total revenue to become largest sector Record EBITDA $40.1m (FY23: $38.2m) up 5.0% on record prior year * Record EBIT $32.7m (FY23: $26.7m) up 10.4% on record prior year * Record
Slide 6: Record profit
Record profit Revenue of $551.9m (FY23: $464.7m) up 18.8% on prior year and Summary financials: exceeded revenue guidance “targeting FY24 Revenue over $500m” Revenue split by sector: Infrastructure $233.7m (FY23: $141.0m), FY24 FY23 % Commercial $171.1m (FY23: $154.9m), and Resources $147.0m (FY23:
Slide 7: Strong balance sheet
Strong balance sheet Cash increased in year to a record $84.1m (30 June 2023: $77.7m) Balance sheet summary: Remain debt free Bank guarantee and surety bond facilities capacity increased from Jun 24 Jun 23 $100.0m to a record $150.0m in May $m $m $94.1m of bank guarantees and surety bonds were on is
Slide 8: Record cash
Record cash Significant cash flows in the period included: • Acquisitions - $7.3m final Trivantage payment for achieving their earn-out targets in full, and $4.9m initial consideration for MDE Group • Dividends - record pay-out of $12.7m of fully franked dividends • Tax - $17.3m of income tax paid,
Slide 9: Operations and outlook
Operations and outlook 9
Slide 10: Operational highlights and outlook
Operational highlights and outlook Lost Time Injury (“LTI”) free for second year running (2.3 million manhours LTI-free in FY24) Workforce grown by 300 in FY24 to over 1,700 employees Michael McNulty appointed to Board and Derek Parkin OAM to retire, effective 1 September Western Sydney Internationa
Slide 11: MDE Group acquisition
MDE Group acquisition Acquired MDE Group on 31 May, a Sydney-based provider of communications, data, and electrical services across a range of sectors including commercial buildings, Data Centres, healthcare and transport infrastructure • Strong operational synergies with Heyday, working together at
Slide 12: Three structural tailwinds
Three structural tailwinds 12
Slide 13: Data Centres
Data Centres SCEE businesses have worked on Data Centres for over twenty years. Having already been a strong area for SCEE in recent years the sector is now showing exponential growth with cloud computing and AI developments • Data Centre market has changed over time – progressing from company serve
Slide 14: SCEE and Data Centres
SCEE and Data Centres Data Centres are electrically dense, electrical work comprising Construction Costs of Data Centres the largest component of construction cost, and typically require triple power supplies to satisfy uptime requirements SCEE businesses have multiple touch points in the sector: •
Slide 15: Infrastructure
Infrastructure Infrastructure very wide sector for SCEE across federal, state, and private investment in transport (road, rail, airports, ports), defence, Data Centres, education, agriculture, water, energy, renewables, utilities, health and aged care Outside of Data Centres and renewables, particul
Slide 16: Electrification and decarbonisation
Electrification and decarbonisation Australia is undergoing an energy transition to achieve net zero emissions by 2050 Targets are enshrined in law and require delivery of climate change and energy transformation priorities, including: • Transforming Australia’s electricity supply to run mainly on r
Slide 17: Electrification and decarbonisation (cont.)
Electrification and decarbonisation (cont.) Transition of Australia’s electricity supply to run mainly on renewables requires huge investment in solar and wind developments supported by battery storage and grid reconfiguration SCEE well-credentialled to participate in this thematic: • Multiple solar
Slide 18: Investment proposition
Investment proposition 18
Slide 19: Diversified across markets and operations
Diversified across markets and operations FY24 Order Book FY24 Order Book Revenue breakdown by Sector by Geography by Sector FY17-FY24 $m $m $m • Infrastructure two-thirds of • 50% of order book on East • FY24 near-record year for Revenue order book Coast • Significant growth in Infrastructure in FY
Slide 20: Long-standing blue-chip client base
Long-standing blue-chip client base Seven selected clients – Woolworths, Coles, BHP, Rio These seven clients have long-standing and deep Tinto, Multiplex, CPB and Built – have consistently relationships with SCEE spanning decades and most provided over 45% on average of revenues over the last across
Slide 21: Growth of recurring revenues and earnings
Growth of recurring revenues and earnings Strong track record of recurring revenues and earnings Wide range of recurring works under services, growth - FY24 recurring revenues were over 33% of total maintenance, sustaining capital, and framework annual revenue agreements, including: Recurring Revenu
Slide 22: Strong shareholder returns and financial position
Strong shareholder returns and financial position Shareholder returns over last eight years Strong cash position to support continued growth (5.0 cps franked final dividend to be paid 9 October 2024) at 30 June 2024: Dividends paid (cps) $m FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 3.0 0.0 3.0 3.0 3.0
Slide 23: Track record of successful acquisitions
Track record of successful acquisitions Completed value-accretive acquisitions of Datatel in 2016, Revenue contribution of acquisition in first full year of Heyday in 2017, Trivantage Group in 2020 and MDE Group in consolidation 2024 Actively exploring range of further acquisition targets offering i
Slide 24: Conclusion
Conclusion 24
Slide 25: Conclusion
Conclusion Revenue $551.9m (FY23: $464.7m) up 18.8% on prior year Record EBITDA $40.1m, EBIT $32.7m and NPAT $21.9m all up on record prior year * Record profits again for all three Trivantage businesses building on record prior year Record cash $84.1m (30 June 2023: $77.7m) up 8.3% on record prior y
Slide 26: Q&A
Q&A 26
Slide 27: Corporate summary
Corporate summary Capital Structure Shareholders at 8 August 2024 ASX Code SXE Thorney Investments 14.6% Share Price (19 August 2024) $1.80 Other Institutions in Top 30 Shareholders 21.8% No. of ordinary shares (19 August 2024) 263.2m Frank Tomasi 18.0% Market Capitalisation (19 August 2024) $473.8m
Slide 28: Appendix 1 – IFRS reconciliation
Appendix 1 – IFRS reconciliation SCEE’s results are reported under International FY24 FY23 Financial Reporting Standards (IFRS). SCEE discloses certain non-IFRS measures that are not prepared in $m $m accordance with IFRS. The non-IFRS measures should only be considered in addition to, and not as a
Slide 29: Appendix 2 – selection of current projects
Appendix 2 – selection of current projects Synergy Collie Battery Energy Multiplex Western Sydney Storage System – SCEE Electrical International Airport - Heyday Over $200m Over $100m Rio Tinto Iron Ore Master Services John Holland Shoalhaven Hospital Agreement – SCEE Electrical Redevelopment - Heyd
Slide 30: Disclaimer
Disclaimer Some of the information contained in this presentation contains “forward-looking statements” which may not directly or exclusively relate to historical facts. These forward-looking statements reflect the current intentions, plans, expectations, assumptions and beliefs of Southern Cross El
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