Perenti Limited · ASX:PRN
Perenti — H1 2023 Earnings Presentation
30 slides from Perenti's earnings presentation, Feb 21, 2023
Slide 1: 1H23 Results
1H23 Results 21 February 2023
Slide 2: Important notice and disclaimer
Important notice and disclaimer This presentation and these materials (together the “Presentation”) have been prepared by Perenti Limited ABN 95 009 211 474 (ASX:PRN) You should consult your own advisors as to legal, tax, financial and related matters and conduct your own investigations, enquiries a
Slide 3: Dugald River | A tragic incident and a devastating outcome
Dugald River | A tragic incident and a devastating outcome • On the morning of the 15th February 2023, there was an incident involving three Barminco employees at the Dugald River underground mine. • One Barminco employee was safely rescued and received medical treatment for minor injuries. • A high
Slide 4: 1H23 Overview
(—O Perenti 1H23 Overview
Slide 5: 1H23 | Outperformance drives strong revenue and earnings
1H23 | Outperformance drives strong revenue and earnings REVENUE EBITDA EBIT(A) EBIT(A) Margin $1.4B $281M $135M 9.4% ▲ 21% on 1H22 ▲ 39% on 1H22 ▲ 67% on 1H22 ▲ 260 bps on 1H22 Revenue underpinned primarily by Operational outperformance delivered Margin growth as operating and progressive ramp-up o
Slide 6: 1H23 | Business overview
1H23 | Business overview Sustainability • Since FY22 we have continued to implement our critical control management programs, including the implementation of our third phase “SystemCheck” to support our “CheckMate” and ”CheckIn” critical control management programs. In 2H23 our Contract Mining Safet
Slide 7: 1H23 Business performance
(—O Perenti 1H23 Business performance
Slide 8: Group performance – underlying
Group performance – underlying REVENUE EBITDA EBIT(A) ROACE $1,439M ▲21% Pcp $281M ▲39% Pcp $135M ▲67% Pcp 22.2% ▲841 bps Pcp 1,439 22.2% $11.3m Iduapriem impact 1,245 281 190bps Iduapriem impact 1,192 135 $11.3m Iduapriem impact $11.3m Iduapriem impact 229 16.6% 202 96 13.7% 80 1H22 2H22 1H23 1H22
Slide 9: Underlying Group performance – our continued improvement
Underlying Group performance – our continued improvement REVENUE EBITDA EBIT(A) ROACE ▲16% HoH ▲25% HoH ▲41% HoH ▲570 bps HoH Recovery into Recovery into Recovery into Recovery into steady state steady state steady state steady state COVID-19 onset COVID-19 onset COVID-19 onset 1,439 281 COVID-19 on
Slide 10: Contract Mining: Underground mining – further margin improvement
Contract Mining: Underground mining – further margin improvement REVENUE EBIT(A) EBIT(A) Margin $1,002M ▲18% Pcp $123M ▲44% Pcp 12.3% ▲220 bps Pcp 123 12.3% 1,002 11.1% 888 10.1% 849 99 86 1H22 2H22 1H23 1H22 2H22 1H23 1H22 2H22 1H23 • Zone 5 continued to ramp-up, becoming the largest • 1H23 EBIT(A)
Slide 11: Contract Mining: Surface mining – back to double digit margins
Contract Mining: Surface mining – back to double digit margins REVENUE EBIT(A) EBIT(A) Margin $341M ▲28% Pcp $38M ▲171% Pcp 11.1% ▲585bps Pcp 11.1% 38 341 287 Iduapriem impact $11.3m Iduapriem impact 300bps 266 Iduapriem impact $11.3m 5.7% 5.2% 16 14 1H22 2H22 1H23 1H22 2H22 1H23 1H22 2H22 1H23 • St
Slide 12: Investments – Mining Services and idoba
Investments – Mining Services and idoba REVENUE EBIT(A) EBIT(A) Margin $96M ▲24% Pcp $6M ▲32% Pcp 6.1% ▲37bps Pcp 96 9 12.5% 77 70 6 4 5.8% 6.1% 1H22 2H22 1H23 1H22 2H22 1H23 1H22 2H22 1H23 • Revenue increase driven by stronger demand for BTP • Improved earnings from Supply Direct on improved • BTP
Slide 13: EBIT(A) margin expansion to FY25
EBIT(A) margin expansion to FY25 Represents ~0.8% EBIT(A) margin impact related to the Iduapriem rate adjustment (slide 8). 10.4% >10% 10.0% 9.4% ~9.0% Adjusted margin 8.6% 8.4% 8.0% 7.7% 7.2% 6.8% 6.0% Indicative EBIT(A) margin expansion by category to FY25 (not to scale) 4.0% 2.0% 0.0% FY20 FY21 F
Slide 14: 1H23 Financials
(—O Perenti 1H23 Financials
Slide 15: Underlying profit and loss
Underlying profit and loss $M 1H22 1H23 Change Revenue 1,192.4 1,438.5 ▲20.6% • $1.4 billion of revenue underpinned by the ramp-up of growth projects combined with improved commercial and operational conditions. EBITDA 201.8 281.2 ▲39.4% • EBITDA was up ~40% YoY and EBIT(A) up ~67% due to previously
Slide 16: Reconciliation of underlying to statutory
Reconciliation of underlying to statutory $M REVENUE EBITDA EBIT NPAT Underlying results 1,438.5 281.2 134.6 61.0 Margin (%) - 19.5% 9.4% 4.2% Add non-recurring items below Transaction, restructuring and other one-off costs - (1.0) (1.0) (1.0) Non-cash impairment in relation to sale of business - (4
Slide 17: Cash flow waterfall
Cash flow waterfall • The business performed ahead of expectations and the Group continued to generate solid cash flows. 13.3 • In-line with our 2025 Strategy and capital prioritization activities, growth capital was moderated and 158.4 strategic portfolio rationalisation and simplification activiti
Slide 18: Cash flow and cash conversion
Cash flow and cash conversion $M 1H22 1H23 Change Operating cash flows (before interest and tax) 190.4 210.6 ▲10.6% Operating cash conversion1 94% 75% ▼19% Net interest paid (24.6) (31.4) ▲27.4% • Net interest paid was up due to: Taxation paid (35.3) (20.8) ▼ 41.1% • volatility of USD/AUD exchange r
Slide 19: Reconciliation of Cash Flow Conversion
Reconciliation of Cash Flow Conversion $M 1H23 Operating cash flows (before interest and tax) 210.6 Operating cash conversion1 75% Timing of cash flows related to Iduapriem rate adjustment 11.3 Profits recognised in EBITDA related to sale of assets but not classified as an operating cash flow 8.2 In
Slide 20: Capital and liability management activities
Capital and liability management activities Share buy-back activities Bond buy-back activities $1.40 710 105 $1.30 705 $1.20 Commenced 100 Bond Price (% of face value) 700 $1.10 share buy-back Shares on issue (m) Share Price ($/sh) $1.00 695 95 $0.90 690 91.5% face value $0.80 685 90 $0.70 680 $0.60
Slide 21: Liquidity and capital management
Liquidity and capital management GROUP DEBT ($M) 1H22 FY22 1H23 US guaranteed senior notes 619.1 651.7 635.2 Revolving credit facilities 113.0 198.8 214.5 Asset finance and other funding 49.3 51.3 39.2 Total borrowings and lease liabilities 781.4 901.9 888.9 Cash and cash equivalents (258.9) (348.5)
Slide 22: Outlook to FY25
(—O Perenti FY23 Outlook to FY25
Slide 23: An accelerated outlook given delivery on our strategic focus areas
An accelerated outlook given delivery on our strategic focus areas Strategic Business Capital Organisational People and Data and Focus Areas: performance management health culture analytics • Continue to • Complete portfolio review • Embed new operating • Continue to roll-out • Establish data and di
Slide 24: Evolving how we work | The Perenti Operating Model
Evolving how we work | The Perenti Operating Model Organisational Design People and Culture • Portfolio management • Our Purpose & Principles • Decentralised structure • Leadership • Operating business full P&L accountability • Key capabilities • Performance management • Working together Core Capabi
Slide 25: FY23 | Guidance
FY23 | Guidance TARGETING No life changing events HOW WE WILL DELIVER2 • Continue to focus on safety performance improvements. REVENUE $2.8B to $2.9B • FY23 secured revenue ~$2.5 billion from $5.4 billion Work in Hand. $9.2 billion pipeline. • Continued ramp-up of several growth projects to deliver
Slide 26: Thank you
Thank you perentigroup.com Expect More
Slide 27: APPENDIX: Underlying financials
APPENDIX: Underlying financials Group ($M) 1H22 1H23 Change (YoY) Revenue 1,192.4 1,438.5 ▲20.6% EBITDA 201.8 281.2 ▲39.4% EBIT(A) 80.8 134.6 ▲66.6% NPAT(A) 34.9 61.0 ▲74.8% Cash Conversion 94% 75% ▼19% Net Debt 522.5 566.5 ▲8.4% Leverage 1.3 1.1 ▼0.2 points ROACE 13.8% 22.2% ▲841bps Underground ($M
Slide 28: APPENDIX: 1H23 revenue breakdown
APPENDIX: 1H23 revenue breakdown Mining Revenue by Project (%) Group Underground Surface Services* Top Project 6.0% 7.8% 23.6% 70.4% Top 2 – 10 projects 43.4% 48.6% 61.2% 21.9% Top 11-20 projects 28.1% 23.6% 10.0% 7.6% All others 22.5% 19.9% 5.2% N/A Revenue by Country (%) Australia 47.0% 49.7% 29.1
Slide 29: APPENDIX: Our diversification | Revenue breakdown
APPENDIX: Our diversification| Revenue breakdown 6% 7% 22% 19% Revenue by Project 42% FY20 Not reliant on any one project for revenue 1H23 44% 22% 28% Top project Top 2 to 10 projects Top 11 to 20 projects All others 8% 4% 6% 10% Revenue by Country FY20 44% 1H23 Revenue from Tier 1 mining jurisdicti
Slide 30: APPENDIX: WIH and Pipeline breakdown
APPENDIX: WIH and Pipeline breakdown Current operations and offices Value ($B) Work in Hand Pipeline Australia 2.6 2.8 West Africa 1.3 1.7 Botswana 1.1 0.7 Southern Africa 0.3 1.3 North America 0.1 2.7 TOTAL 5.4 9.2 Value ($B) Work in Hand Pipeline Gold 3.2 5.8 Copper 1.2 1.4 Nickel 0.7 0.8 Zinc 0.1