Midway — Non-Deal Roadshow (March 2018)
26 slides from Midway's roadshow presentation, March 2018
Slide 1: Investor Roadshow Presentation
Investor Roadshow Presentation Tony Price Chief Executive, Midway Limited March 2018
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by Midway Limited ACN 005 616 044 (Midway or the Company). The information contained in this presentation is current at the date of this presentation. The information is a summary overview of the current activities of the Company and does not purport to
Slide 3: Corporate Overview
Corporate Overview • Midway is a leading Australian wood fibre exporter, primarily involved in the production and export of high quality woodfibre to Overview of Midway’s business activities producers of pulp, paper and associated products in China and Japan • Founded in 1980, Midway wholly owns str
Slide 4: A leading Australian woodfibre exporter
A leading Australian woodfibre exporter Produces and exports high quality woodfibre, headquartered in Geelong Key customers are pulp and paper producers in China and Japan Long relationships with major Japanese customers and a pioneer in developing Chinese sales Substantial future supply fro
Slide 5: Strategically located port and processing facilities
Strategically located port and processing facilities Five Key Export Ports QCE Brisbane Only woodfibre exporter from Brisbane Port – provides geographic and market diversity 15 year lease on a four ha site with the Port of Brisbane for producing, storing & loading Graincorp provides toll ship
Slide 6: Strategic Priorities and Outlook
Strategic Priorities and Outlook March 2018 6
Slide 7: Business Growth – Focussed on core and related business activities
Business Growth – Focussed on core and related business activities Key areas of expertise Plantation and land Harvesting and logistics Processing and materials Marketing and shipping Management • Existing freehold estate • Extensive experience in • Management of woodfibre • Market most of own • Expe
Slide 8: A long history of growth
A long history of growth Over the last 10 years growth has been driven through effective new capital investment Midway total export volumes since 1986 (million GMT) – ~18% CAGR since 1986 Geelong Portland Brisbane 3.00 3.10 2.92 2.18 1.66 1.63 1.46 1.34 1.23 1.23 0.99 1.08 1.07 0.85 0.88 0.97 0.70 0
Slide 9: Supply deficit expected in medium term
Supply deficit expected in medium term Asian hardwood chip balance forecast – demand to outstrip supply 2020 - 2030 Demand is forecast to be relatively stable in the Asian Hardwood Chip Demand & Supply Forecast (‘000 BDMT) short term, but supply is expected to reduce over the medium term, resultin
Slide 10: Strategic Priorities on track post IPO
Strategic Priorities on track post IPO Good progress continues to be Increasing EBIT over time: made with our Strategic Objectives for FY18 1. OPERATING EFFICIENCIES • Economies of scale • Maximising long term fibre supply by replanting • Margin expansion existing land, securing contracts with third
Slide 11: Diversified Geographic Footprint
Diversified Geographic Footprint • Midway Geelong (head office) • QCE – Brisbane • SWF – Portland • Midway Tasmania • ADDCO – Mt Maunganui (NZ) • PMP • Cambodia • Laos • Singapore • Melville Island 11
Slide 12: Finalised acquisition of Plantation Management Partners Pty Ltd (PMP)
Finalised acquisition of Plantation Management Partners Pty Ltd (PMP) PMP • Settled in October 2017 • Privately-owned plantation management business with over 70,000 ha of plantation under management in Northern Australia and SE Asia • 34,000 ha of Acacia on Melville Island (NT) • 13,000 ha plantati
Slide 13: Strategic Investment – ADDCO Fibre Group
Strategic Investment – ADDCO Fibre Group • Strategic investment in ADDCO Fibre Group – January 2018 • ADDCO Fibre Group provides forestry supply chain and logistics services to clients in the Australasian forestry and wood processing sectors. • ADDCO Fibre Group Limited was founded in 2017 and is ba
Slide 14: Growth and Expansion Opportunities
Growth and Expansion Opportunities Primary Focus Maximising asset utilisation Acquisition of processing facilities Growing plantation management business Developing log export business Expanding logistics business Marketing and Sales Secondary Focus Midway plantation development Bio mass production
Slide 15: Strong outlook for FY18
Strong outlook for FY18 FY18 results on track with market earnings forecasts range • Full year results on track despite lower than expected H1 • Higher sales volume • Positive price movement • Contribution from chip trading activities Contribution from new business activities • Plantation Management
Slide 16: Appendix – Financial Performance
Appendix Financial Performance 16
Slide 17: Performance Overview – 1H18
Performance Overview – 1H18 First Half FY18 EBITDA $6.5M ($10.8M pcp) 1H18 results down on pcp: Revenue • Volume impact on revenue of two delayed export shipments $85.2M -3% • Earnings impact on export shipments of stronger A$ • Higher wood supply costs Midway confident of meeting FY18 full year mar
Slide 18: Cash Flow – 1H18
Cash Flow – 1H18 $Am 1H18 1H17 $Am Change Operating Cash Flow (11.2) (2.5) (8.7) Investing Cash Flow (15.2) 0.8 (16.0) Financing Cash Flow 13.7 (4.9) 18.6 Net Change in Cash (12.7) (6.6) (6.1) Net Debt(1) 49.9 26.5 23.4 (1) Net debt has increased due to the drawdown of $14.0M on the acquisition faci
Slide 19: Financial Performance – 1H18
Financial Performance – 1H18 $Am 1H18 1H17 % Change Sales Revenue 85.2 88.0 (3.2) Other Income 2.0 1.8 11.1 Equity Accounted Share of Profits 1.2 1.6 (25.0) Operating Costs (81.9) (80.6) (1.6) EBITDA 6.5 10.8 (39.8) Depreciation and Amortisation (2.0) (1.7) (17.6) EBIT 4.5 9.1 (50.5) Finance expense
Slide 20: Balance Sheet – 1H18
Balance Sheet – 1H18 $Am 1H18 1H17 $Am Change Total Current Assets 36.2 33.5 2.7 Total Non-current Assets 137.3 120.5 16.8 Total Assets 173.5 154.0 19.5 Total Current Liabilities 29.4 15.8 (13.5) Long Term Debt 39.5 30.5 (9.0) Total Non-current Liabilities 56.9 45.0 (11.9) Total Liabilities 86.2 60.
Slide 21: Solid FY17 results
Solid FY17 results FY17 results in line with expectations •Sales of $209.2 million and EBITDA of $24.9 million •Pro forma NPAT of $17.3 million, exceeding the pro forma forecast •Statutory net profit before tax was $19.9 million and statutory NPAT was $14.9 million, down 42.5% on a pcp basis due to
Slide 22: Financial Performance – FY17
Financial Performance – FY17 $Am FY16 FY17 % Change Sales Revenue 208.5 209.2 0.3% Other Income 4.6 4.1 (10.9%) Equity Accounted Share of Profits 5.7 2.8 (50.1%) Operating Costs (178.0) (191.2) (7.4%) EBITDA 40.8 24.9 (39.0%) Depreciation and Amortisation (3.6) (3.4) 5.6% EBIT 37.2 21.5 (42.2%) Fina
Slide 23: Cash Flow – FY17
Cash Flow – FY17 $Am FY16 FY17 $Am Change Operating Cash Flow 3.0 16.2 440.0% Investing Cash Flow 51.7 (0.4) (100.8%) Financing Cash Flow (72.7) (12.0) 83.5% Net Change in Cash (18.0) 3.8 121.1% Net Debt 19.9 16.6 16.6% Interest Cover 21.7 18.6 14.3% 23
Slide 24: Balance Sheet – FY17
Balance Sheet – FY17 $Am FY16 FY17 $Am Change Total Current Assets 39.0 35.7 (8.5%) Total Non-current Assets 117.3 119.1 1.5% Total Assets 156.3 154.8 (1.0%) Total Current Liabilities 20.9 19.9 4.8% Long Term Debt 30.4 30.9 (1.6%) Total Non-current Liabilities 44.9 43.9 2.2% Total Liabilities 65.8 6
Slide 25: Board of Directors – overseen strong growth
Board of Directors – overseen strong growth Greg McCormack Founding Director of Midway in 1980 and has a long-term commitment to the Australian forest products industry, holding senior positions Non-Executive Chairman with both the National and Victorian Association of Forest industries (having serv
Slide 26: Management team – over 15 years average service
Management team – over 15 years average service Glen Samsa Glen brings over 20 years of industry expertise and is the Chief Executive Officer of the recently acquired Plantation Management General Manager - Plantations Partners. He has extensive knowledge and skills in forestry analysis and valuatio