Qube Holdings Ltd. · ASX:QUB
Qube — FY2023 Earnings Presentation
51 slides from Qube's earnings presentation, Aug 24, 2023
Slide 1: Investor Presentation – 2023 Full Year Results
24 August 2023 ASX Announcement Investor Presentation – 2023 Full Year Results Attached is Qube's Investor Presentation for the year ended 30 June 2023. Authorised for release by: The Board of Directors, Qube Holdings Limited Further enquiries: Media: Analysts/Investors: Ben Pratt Paul Lewis Directo
Slide 2: FY23 Full Year Results
Qube Holdings Limited FY23 FULL YEAR RESULTS Investor Presentation 1
Slide 3: Disclaimer – Important Notice
Disclaimer – Important Notice The information contained in this Presentation or subsequently provided to the recipient whether orally or in writing by, or on behalf of Qube Holdings Limited (Qube) The delivery of this Presentation does not under any circumstances imply that the or any of its directo
Slide 4: Table of Contents
Table of Contents 1 FY23 Highlights 2 FY23 Divisional Performance 3 Key Financial Information 4 Summary and FY24 Outlook 5 Additional Information: Operating Division 6 Additional Financial Information: Appendices 3
Slide 5: FY23 Highlights
FY23 Highlights 4
Slide 6: Our plan to Thrive
Our plan to Thrive VISION Our ambition. Be the best at what we do. STRATEGY Be the leading provider of integrated logistics services. Our focus. for import, export and targeted domestic supply chains in Australasia and selective international locations. PURPOSE Helping our customers, communities, in
Slide 7: FY23 Highlights
FY23 Highlights STRATEGY DELIVERED RECORD UNDERLYING RESULTS IN THE PERIOD KEY FINANCIAL METRICS1 YEAR IN REVIEW Statutory Revenue Underlying Revenue +14.4% • Strong underlying earnings growth and high cashflow generation reflects $2,879.8 million +16.2% $2,989.9 million quality and diversity of Qub
Slide 8: Safety Performance
Safety Performance CONTINUE TO FOCUS ON EMPLOYEE SAFETY OUTCOMES SAFETY & HEALTH PERFORMANCE Total Recordable Injury Frequency Rate (TRIFR) Lost Time Injury Frequency Rate (LTIFR) Critical Incident Frequency Rate (CIFR) 3.00 18 3.50 16.2 3.15 16 2.40 2.50 3.00 14 2.00 2.50 2.18 12 9.3 8.9 9.0 2.00 1
Slide 9: Decarbonisation
Decarbonisation AIMING TO BE A SUPPLY CHAIN LEADER IN THE TRANSITION To address Scope 1 direct emissions from owned or 3% 3.6% 18% 30% controlled assets, we are continuing to: 1. Transition 95% of our fleet to Euro 5/6 standards by 2027 (currently at 90% as at June 30, 2023). Reduction in Reduction
Slide 10: Qube Growth Drivers
Qube Growth Drivers QUBE’S GROWTH CONTINUES TO BE DRIVEN BY MULTIPLE DRIVERS ACROSS ITS BUSINESS Volume drivers FY23 Value drivers FY23 GDP GROWTH MULTI-PURPOSE Existing - Infrastructure INFRASTRUCTURE Base Integration and GROWTH OF OUR Diversification MULTI-PURPOSE CUSTOMERS OPERATING UNITS IMPROVE
Slide 11: FY23 Performance Overview – Qube Key Markets
FY23 Performance Overview – Qube Key Markets DIVERSIFICATION ACROSS MARKETS, PRODUCTS, CUSTOMERS AND GEOGRAPHIES SUPPORTED CONTINUED GROWTH DESPITE SOME CHALLENGES PERFORMANCE KEY MARKETS FY23 REVENUE PERFORMANCE FY23 MARGIN PERFORMANCE OUTLOOK OUTCOME Strong across all key activities (inc transport
Slide 12: Qube Revenue Diversity
Qube Revenue Diversity OUR CUSTOMERS AND REVENUES ARE GEOGRAPHICALLY DIVERSIFIED REVENUE SEGMENTATION BY REGION $m WA NSW QLD VIC NZ SA TAS NT Others1 FY23 824.8 678.0 641.8 344.2 175.6 160.8 53.4 57.5 55.5 FY222 750.8 535.6 523.2 299.4 160.9 137.8 44.6 47.6 72.5 Growth $’m 74.0 141.6 118.6 44.8 14.
Slide 13: Key Challenges and Offsets
Key Challenges and Offsets SIMILAR CONDITIONS TO FY23 ARE EXPECTED IN FY24 KEY CHALLENGES INFLATION LABOUR / SKILL SHORTAGES ECONOMIC DOWNTURN Pass through inflation cost mechanisms in The labour market continues to be While there have been signs of a slowdown in the broader economy, most of Qube’s
Slide 14: FY23 Divisional Performance
FY23 Divisional Performance 13
Slide 15: Operating Division
Operating Division VERY STRONG REVENUE AND EARNINGS GROWTH UNDERLYING REVENUE 3,500 • Continued high activity levels across both L&I and P&B business units. 3,000 (2.1) 213.3 205.9 • Revenue growth driven by a combination of organic growth (volume and 2,500 rates) as well the contribution from prior
Slide 16: Logistics & Infrastructure
Logistics & Infrastructure VERY STRONG FY23 RESULTS UNDERPINNED BY HIGH VOLUMES ACROSS STRATEGIC INFRASTRUCTURE FINANCIAL PERFORMANCE AND COMMENTARY Change Change FY23 FY22 ($’m) (%) Revenue 1,342.6 1,129.3 213.3 18.9% • Grew revenue by 18.9% to $1.34 billion and underlying EBITA by 54.2% to $224.5
Slide 17: Logistics & Infrastructure – MLP Terminal Development
Logistics & Infrastructure QUBE CONTINUES TO PROGRESS ITS MLP TERMINAL INFRASTRUCTURE DEVELOPMENT IMEX INTERSTATE • Construction and testing of the automated IMEX Terminal continued in the period • The construction of the Interstate Terminal and Rail Access Network continued to with rail volumes div
Slide 18: Ports & Bulk (P&B)
Ports & Bulk (P&B) HIGHER REVENUE BUT LOWER EARNINGS FINANCIAL PERFORMANCE AND COMMENTARY Change Change FY23 FY22 • Revenue increased by 14.3% to $1.65 billion with volume growth and ($’m) (%) high activity levels across most areas of the business. Revenue 1,649.0 1,443.1 205.9 14.3% • Key areas of
Slide 19: Patrick
Patrick HIGHER REVENUE AND IMPROVED MARGINS FINANCIAL PERFORMANCE AND COMMENTARY Underlying Results Change Change • Underlying revenue increased by 6.9% to $780.6 million and FY23 FY22 underlying EBITA grew by 10.7% to $229.1 million, with pleasing ($’m) (%) Patrick (100%) margin improvement. Revenu
Slide 20: Patrick – Volume and Market Share
Patrick MARKET SHARE DECREASED SLIGHTLY, KEY PROJECTS ARE ON TRACK TO BE DELIVERED VOLUME & MARKET SHARE FY 23 Volume Growth vs PCP Patrick 12 Month Market Share • Patrick volume (lifts) in FY23 were around 2.6% lower than FY22 compared to the 0.0% 43.0% 42.7% market decline of around 1.2%. 42.4% 42
Slide 21: Patrick – Internal Valuation
Patrick INTERNAL VALUATION IMPLIES SIGNIFICANT VALUE CREATION SINCE QUBE’S INITIAL INVESTMENT PATRICK INTERNAL VALUATION FY23 FY17 • Qube initially invested around $1.0 billion in Patrick in August 2016 for a 50% Patrick (100%) interest. The investment comprised around $635.4 million in equity, $358
Slide 22: Qube Proportional Underlying Results
Patrick Terminals – Sydney AutoStrad Qube Proportional Underlying Results A VERY STRONG FINANCIAL PERFORMANCE QUBE PROPORTIONAL UNDERLYING RESULTS Full Year Result Including Proportional Patrick FY 23 FY 22 Change (%) ($m) ($m) Revenue 3,380.2 2,937.9 15.1% EBITDA 617.6 528.7 16.8% EBITA 394.9 324.6
Slide 23: Key Financial Information
Key Financial Information 22
Slide 24: Qube Statutory Results
Qube Statutory Results FY23 FY23 FY22 (excl. (incl. (incl. • Statutory earnings are shown exclusive Discontinued discontinued discontinued discontinued Change (%) and inclusive of the discontinued Property operations1 operations) operations) operations) Division. ($m) ($m) ($m) • The reconciliation
Slide 25: Qube Underlying Results
Qube Underlying Results A VERY STRONG FINANCIAL PERFORMANCE FY 23 FY 22 • Prior slides speak to the very strong Operating Division and Change (%) ($m) ($m) Associates’ contribution to Qube’s FY23 results. • Net finance costs in the period are net of interest income on shareholder loans to Patrick ($
Slide 26: Capital Expenditure
Capital Expenditure ONGOING INVESTMENT IN MAINTENANCE AND GROWTH ASSETS GROSS CASH CAPEX BY BUSINESS UNIT GROSS CASH CAPEX BY CATEGORY MLP Total Gross Disposal Total Net Growth 22.7% Acquisitions2 Growth Maintenance Terminals3 Capex Proceeds Capex L&I 29.7 78.2 107.0 90.6 305.5 (2.1) 303.4 Maintenan
Slide 27: Acquisitions Update
Qube continued its track record of completing value-accretive bolt-on acquisitions Acquisitions Update These acquisitions are currently exceeding initial expectations and both are expected to deliver a return on average capital employed (ROACE) of at least 10% and be earnings per share (pre-amortisa
Slide 28: ROACE Performance
ROACE PERFORMANCE Continued Improvement Towards Target of 10%+ Qube Group Operating Division Patrick 10.5% 8.3% 9.1% 10.6% 10.4% 3,500.0 9.0% 1,500.0 10.0% 6,000.0 7.4% Average Capital Employed ($m) Average Capital Employed ($m) 8.0% 10.4% 10.2% 8.0% Average Capital Employed ($m) 3,000.0 8.0% 5,000.
Slide 29: Cash Flow
Cash Flow IMPROVING CASH CONVERSION SUPPORTS ONGOING INVESTMENT CHANGE IN NET BORROWINGS FOR TWELVE MONTHS TO 30 JUNE 2023 1,000.0 945.5 889.1 900.0 136.8 800.0 305.0 • Slight increase in net debt of 305.0 700.0 (258.7) 195.2 $56.4 million from June 22 to (498.1) June 23 despite significant 600.0 44
Slide 30: Balance Sheet & Funding
Balance Sheet & Funding CONTINUED STRONG BALANCE SHEET AND LIQUIDITY POSITION KEY DEBT METRICS DEBT FACILITIES MATURITY PROFILE AT 30 JUNE 2023 Key metrics 30-Jun-23 30-Jun-22 700 600 Net assets attributable to Qube ($m) 3,035.8 2,993.1 500 101 400 Net debt ($m)1 945.5 889.1 $ million 300 305 51 496
Slide 31: Summary and FY24 Outlook
Summary and FY24 Outlook 30
Slide 32: Qube's Vision and Strategy
Qube’s Vision and Strategy FOCUSSED STRATEGY TO DELIVER A SUSTAINABLE COMPETITIVE ADVANTAGE To be the leading provider of integrated logistics services for import, export and targeted domestic supply chains in Australasia and selective international locations OPERATIONAL FOCUS FINANCIAL FOCUS • Attr
Slide 33: Qube's Strategy
Qube’s Strategy CONTINUES TO DELIVER SUSTAINABLE GROWTH SUSTAINABLE GROWTH FY23 FY23 Commentary Results Outcome • Consistently delivering revenue growth well above GDP through REVENUE = GDP+ +16.2% (vs FY22) ✔ organic and inorganic growth. EBITA margin: • Margins improved despite impact of weather e
Slide 34: Qube's Strategy – Sustainable Growth
Qube’s Strategy CONTINUES TO DELIVER SUSTAINABLE GROWTH Underlying Revenue - Operating Division Dividends Underlying EPSA CAGR: +15.9% CAGR: +23.6% CAGR: +18.7% 3,500.0 10.00 16.0 2,989.7 13.6 8.1 3,000.0 14.0 2,572.6 8.00 7.0 12.0 10.6 2,500.0 6.0 2,008.5 0.70 6.1 1,493 5.2 10.0 1,785.4 6.00 4.35 8
Slide 35: FY24 Outlook
FY24 Outlook GUIDANCE COMMENTS • Solid growth currently expected in underlying revenue and earnings (EBITA). • This guidance reflects a range of assumptions including: • The Ports & Bulk business unit is expected to achieve higher growth than the growth • No material deterioration in economic condit
Slide 36: FY24 Outlook
FY24 Outlook GUIDANCE COMMENTS • Corporate costs (EBIT) are expected to increase modestly in FY24 mainly due to cost • This guidance assumes no material further increase in inflation, increased SHS expenditure and higher insurance costs. interest rates. • Significant increase in net interest expense
Slide 37: Additional Information: Operating Division
Additional Information: Operating Division 36
Slide 38: Logistics & Infrastructure – Revenue by Region
Logistics & Infrastructure REVENUE BY REGION INDICATIVE REVENUE SEGMENTATION BY REGION FY23 FY22 • Revenue growth across all regions Global forwarding 1.2% Global forwarding 1.3% in FY23. SA 6.0% TAS 0.4% SA 5.7% • Strongest contribution from NSW, QLD and SA. WA 8.1% WA 9.0% • NSW growth driven in p
Slide 39: Ports & Bulk – Revenue by Region
Ports & Bulk REVENUE BY REGION INDICATIVE REVENUE SEGMENTATION BY REGION FY23 FY22 • P&B offers a diverse range of TAS 2.9% NT 3.3% services across numerous NT 3.5% TAS 3.1% geographies, commodities and Other 2.4% Other 4.0% markets to many different customers. SA 5.1% WA 43.4% SA 4.8% • Whilst most
Slide 40: Logistics & Infrastructure – Revenue by Industry
Logistics & Infrastructure REVENUE BY INDUSTRY INDICATIVE REVENUE SEGMENTATION BY INDUSTRY FY23 FY22 FY 23 FY23 FY 22 Change By Industry Infrastructure and project works % of Rev ($m) ($m) (%) Infrastructure and project works 3.8% 4.7% Freight Fwd Container handling & Container handling & Manufactur
Slide 41: Ports & Bulk – Revenue by Product
Ports & Bulk REVENUE BY PRODUCT INDICATIVE REVENUE SEGMENTATION BY PRODUCT FY23 % FY 23 FY 22 Change By Product of total FY23 FY22 ($m) ($m) (%) rev Other Base Metals Infrastructure Infrastructure 6.1% 3.4% (Copper, Nickel and 11.9% 195.8 187.3 4.6% Iron Ore 8.4% Other*** 9.8% Iron Ore 9.4% Zinc)* O
Slide 42: Additional Financial Information (Appendices)
Additional Financial Information (Appendices) 41
Slide 43: Reconciliation of FY23 Statutory to Underlying Results
Appendix 1 RECONCILIATION OF FY23 – STATUTORY RESULTS TO UNDERLYING RESULTS Operating Discontinued Corporate Patrick Consolidated Statutory earnings include the following key Year Ended 30 June 2023 Division Operations and Other ($m) ($m) ($m) ($m) ($m) items which have been excluded from underlying
Slide 44: Reconciliation of FY22 Statutory to Underlying Results
Appendix 2 RECONCILIATION OF FY22 – STATUTORY RESULTS TO UNDERLYING RESULTS Operating Property Corporate Patrick Consolidated Year Ended 30 June 2022 Division Division and Other ($m) ($m) ($m) ($m) ($m) Statutory net profit/(loss) before income tax 223.4 (16.3) (34.2) 45.0 217.9 Share of (profit)/lo
Slide 45: Operating Division – Underlying Results
Appendix 3 OPERATING DIVISION – UNDERLYING RESULTS FY 23 FY 22 Change (%) ($m) ($m) Total revenue 2,989.7 2,572.6 16.2% EBITDA 503.2 419.7 19.9% Depreciation (184.2) (167.3) (10.1%) EBITA 319.0 252.4 26.4% Amortisation (8.0) (6.8) (17.6%) EBIT 311.0 245.6 26.6% Share of Profit of Associates (excludi
Slide 46: Operating Division (By Business Unit) – Underlying Results
Appendix 4 OPERATING DIVISION (BY BUSINESS UNIT) – UNDERLYING RESULTS FY 23 FY 22 Change FY 23 FY 22 Change ($m) ($m) (%) ($m) ($m) (%) Logistics & Infrastructure 1,342.6 1,129.3 18.9% Logistics & Infrastructure 21.2% 17.2% 4.0% Ports & Bulk 1,649.0 1,443.1 14.3% Ports & Bulk 15.4% 17.5% (2.1%) Divi
Slide 47: Patrick – Underlying Results
Appendix 5 PATRICK – UNDERLYING RESULTS FY 23 FY 22 Change (%) ($m) ($m) 100% Revenue 780.6 730.3 6.9% EBITDA 305.5 279.8 9.2% Depreciation (76.4) (72.8) (4.9%) EBITA 229.1 207.0 10.7% Amortisation (26.4) (29.5) 10.5% EBIT 202.7 177.5 14.2% Interest Expense (Net) - External (48.9) (22.1) (121.3%) In
Slide 48: Other – Underlying Results
Appendix 6 OTHER – UNDERLYING RESULTS FY 23 FY 22 Corporate Change (%) ($m) ($m) Revenue 0.1 0.2 (50.0%) EBITDA (38.4) (31.1) (23.5%) Depreciation (0.3) (0.2) (50.0%) EBITA (38.7) (31.3) (23.6%) Amortisation - - - EBIT (38.7) (31.3) (23.6%) FY 23 FY 22 Qube Share of Profit of Associates (excluding P
Slide 49: Patrick – Historical Market Growth
Patrick HISTORICAL MARKET GROWTH FY09-FY23 Average FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 Compound Growth Market (m lifts) 3.5 3.7 3.9 4.0 4.0 4.2 4.3 4.3 4.5 4.8 4.8 4.6 5.0 5.0 5.0 Growth 3.5% 5.8% 4.2% 0.4% 3.3% 2.3% 0.8% 3.4% 7.0% 1.2% (4.9%) 8.8% 0.5% (1.2%)
Slide 50: ROACE Methodology
ROACE METHODOLOGY ROACE: Calculated as 12 month underlying EBITA / Average 12 month Underlying Capital Employed QUBE GROUP UNDERLYING CAPITAL EMPLOYED Qube Corporate Overheads EBITA and Operating Division EBITA Qube Portion of Patrick EBITA Qube Portion of Other Associates EBITA Capital Employed (Op
Slide 51: Q&A
Q&A 50