Sgh Limited · ASX:SGH
Sgh — Seven Group Holdings — FY2022 Earnings Presentation
40 slides from Sgh's earnings presentation, Aug 24, 2022
Slide 1: Investor Presentation ASX Announcement
24 August 2022 Company Announcements Office Australian Securities Exchange Limited 20 Bridge Street SYDNEY NSW 2000 INVESTOR PRESENTATION Seven Group Holdings Limited (ASX: SVW) attaches the Investor Presentation for the year ended 30 June 2022. This release has been authorised to be given to ASX by
Slide 2: FY22 Financial Results Presentation
FY22 Financial Results Presentation 24 August 2022
Slide 3: Group Overview FY22 Highlights
Group Overview FY22 Highlights Group structure delivers resilient earnings • Revenue1 of $8,013.4m, up 65.6% • EBITDA2 of $1,465.0m, up 39.2% • EBIT2 of $987.1m, up 24.6% (up 8.3% pro-forma3) • NPAT2 of $577.3m, up 14.4% • Statutory NPAT $607.4m, down 4.3% • EPS2 of 152 cents, up 4.1% U The Group ha
Slide 4: Group Overview SGH Advantage
Group Overview SGH Advantage Mining Production and Infrastructure Domestic Gas / LNG Capital Reinvestment Investment facilitating energy transition Leading market positions Limited fixed price Privileged assets with Ability to manage inflation contract risk defendable moats FY22 Financial Results Pr
Slide 5: Group Overview Earnings Growth
Group Overview Earnings Growth Group EBIT guidance achieved • Outperformance at WesTrac, Coates, Beach and SWM offset Boral underperformance EBIT $425.6m, +6.3% • Group continuing operations underlying EBIT $987.1m, 24.6% 1988 on a reported basis and up 8.3% on a pro-forma basis Despite FY22 challen
Slide 6: Group Overview Key Financials
Group Overview Key Financials Underlying Results Continuing Ops ($m) FY21 FY22 % Change Revenue 4,838.7 8,013.4 65.6% Earnings before interest, tax, depreciation and 1052.4 1,465.0 39.2% amortisation1 Earnings before interest and tax1 792.1 987.1 24.6% Underlying net profit after tax1 504.6 577.3 14
Slide 7: Group Overview People, Safety and Culture
Group Overview People, Safety and Culture Continued focus on safety performance LTIFR TRIFR • Increased use of contractors and turnover exacerbated by skills shortage impacted our FY22 safety performance metrics June 2021 June 2022 June 2021 June 2022 • Renewed focus on lead indicators, safety aware
Slide 8: Group Overview Sustainability
Group Overview Sustainability Ongoing focus on sustainability • Emissions reductions roadmaps in place with first solar panels in operation at Port Hedland site • Next tranche of solar installations and LED lighting now underway at eight additional sites, with aim to be operational in 1H FY23 • Eval
Slide 9: Business Unit Overview - WesTrac
Business Unit Overview - WesTrac Ryan Stokes MD & CEO FY22 Financial Results Presentation 8
Slide 10: Industrial Services WesTrac Highlights
Industrial Services WesTrac Highlights Privileged mining market exposure with top tier partnerships Australian Production and Expected FY22-26 Growth • WA and NSW are two of the best performing CAT dealers globally, with 450 1,200 13% diversified mining and construction market exposure 400 23% 1,000
Slide 11: Industrial Services WesTrac Financials
Industrial Services WesTrac Financials Revenue up 4.0% to $3,961.7m overcoming supply chain disruptions • Product support sales of $2,564.3m, up 8.4% • Capital sales of $1,397.4m, down 3.5%, reflecting supply chain disruption • $1 in capital spend generates an average of ~$4 in service and parts rev
Slide 12: FY22 Business Unit Overview - Coates
FY22 Business Unit Overview - Coates Ryan Stokes MD & CEO FY22 Financial Results Presentation 11
Slide 13: Industrial Services Coates Highlights
Industrial Services Coates Highlights 300 Coates Historic UEBIT ($m), UEBIT Margin and ROCE 30.0% Privileged market position and strong customer activity EBIT Underlying 24.4% 250 22.4% 25.0% • Largest national footprint with leading Tier-1 customer market share EBIT Margin 21.0% 20.9% 246 200 ROCE
Slide 14: Industrial Services Coates Financials
Industrial Services Coates Financials Revenue of $1,009.3m up 6.7% • Pricing discipline delivering improving performance across key segments • Growth in equipment hire in all geographies • Slowed fleet disposals to support real fleet expansion in original cost terms 8.8% relative EBIT margin expansi
Slide 15: FY22 Business Unit Overview - Boral
FY22 Business Unit Overview - Boral Ryan Stokes MD & CEO FY22 Financial Results Presentation 14
Slide 16: Industrial Services Boral Overview
Industrial Services Boral Overview (69.6%) SGH focused on executing its Boral value creation strategy • $4.7bn investment reduced to $2.6bn post capital return • Expectation that double-digit EBIT margins should be restored but will take longer than originally anticipated • Activity levels expected
Slide 17: Industrial Services Boral Financials
Industrial Services Boral Financials Revenue of $2,955.9m from continuing operations, up 1.1% • UEBITDA ex property of $324.5m, down 15.0% (pro-forma) • UEBIT ex property of $106.5m, down 32.3% (pro-forma) • FY22 earnings impacted by construction lockdowns, extreme rain and flooding and energy price
Slide 18: FY22 Business Unit Overview - Energy
SGHE FY22 Business Unit Overview - Energy Ryan Stokes MD & CEO FY22 Financial Results Presentation 17
Slide 19: Energy Beach Energy Highlights
SGHE Energy Beach Energy Highlights (30%) Earnings growth momentum • Revenue of $1,771.4m, up 13.4% • Statutory NPAT of $500.8m, up 58.2%, underlying NPAT of $504.3, up 38.9% • Positive exposure to increasing energy prices Diversified portfolio • Five production hubs supplying five distinct commodit
Slide 20: Energy SGH Energy Highlights
SGHE Energy SGH Energy Highlights Widening Global LNG Supply-Demand Gap Crux (SGHE 15.5%) • World class gas resource to provide important backfill into the Shell-operated Prelude floating LNG facility • Pathway to market confirmed with project final investment decision in May 2022 • Execute phase un
Slide 21: FY22 Business Unit Overview - Media
FY22 Business Unit Overview - Media FY22 Financial Results Presentation 20
Slide 22: Media Seven West Media Highlights
Media Seven West Media Highlights (38.9%) Australia’s leading TV network • Largest and #1 total television network • 7plus is the #1 BVOD channel with 12.5m registered and verified users • Home to the fastest-growing print and digital news brands in the country Delivering positive financial results
Slide 23: FY22 Group Financials
FY22 Group Financials Richard Richards CFO FY22 Financial Results Presentation 22
Slide 24: Financials Profit and Loss
Financials Profit and Loss $m FY21 FY22 YoY Change % Revenue (continuing operations) 4,838.7 8,013.4 65.6% Other income 47.0 59.3 26.2% Share of results from equity accounted investees 195.4 252.9 29.4% Trading revenue and other income 5,081.1 8,325.8 63.9% Expenses (excluding. depreciation, amortis
Slide 25: Financials Significant Items
Financials Significant Items $m FY21 FY22 Revaluation of equity accounted interest on acquisition of Boral - 756.8 Fair value adjustments on acquisition of Boral - (5.7) Impairment of goodwill - (728.4) Boral property segment - (1.9) Project implementation costs / Boral transaction costs (3.4) (81.1
Slide 26: Financials Business Unit Earnings
Financials Business Unit Earnings Total $m WesTrac Coates Boral Energy Media Investments Corporate Group Revenue from continuing operations 8,013.4 3,961.7 1,009.3 2,955.9 4.6 - 81.9 - Statutory EBIT 837.5 425.6 246.1 46.2 152.1 (8.6) 1.1 (25.0) Add: unfavourable significant items 911.8 - - 817.1 1.
Slide 27: Financials Cashflow
Financials Cashflow $m FY21 FY22 Key Commentary Underlying EBIT 792.1 1,137.9 • Decrease in operating cashflow of $110.0m on increased investment in inventory at WesTrac Add: depreciation and amortisation 260.3 477.9 Underlying EBITDA • Increase in investing cash flow relates to the 1,052.4 1,615.8
Slide 28: Financials Balance Sheet
Financials Balance Sheet $m FY21 FY22 Change % Trade and other receivables 832.3 1,534.7 84.4% Inventories 804.2 1,692.8 110.5% Net assets held for sale 5.0 3.7 (26.0%) Investments 3,223.9 1,791.3 (44.4%) Property, plant and equipment 967.2 3,424.7 254.1% Oil and gas assets 351.2 365.7 4.1% Intangib
Slide 29: Financials Capital and Liquidity Management
Financials Capital and Liquidity Management Strong credit support for the Group Facility Maturity (as at 30 Jun 2022) • Attractive sector exposure and thematics • Operating performance of core businesses 1,320 • Bank confidence in ability to execute strategy Deleveraging plan completed • $2.97bn bri
Slide 30: Group Outlook and Guidance
Group Outlook and Guidance Ryan Stokes MD & CEO FY22 Financial Results Presentation 29
Slide 31: Group Outlook Guidance and Priorities
Group Outlook Guidance and Priorities Group carrying strong earnings momentum into FY23 • WesTrac expects to benefit from strong customer activity and an ageing mining fleet, driving growth in support sales and new equipment deliveries • Strength in the infrastructure and construction pipeline posit
Slide 32: FY22 Financial Results Q&A Session
FY22 Financial Results Q&A Session Dial *1 on your keypad to ask a question Ryan Stokes MD & CEO Richard FY22 Richards Financial Results PresentationCFO 31
Slide 33: Appendix Inflation Management
Appendix Inflation Management Australian Transport Cost Movement – Road and Rail Freight Proven track record managing inflation 120 Indexed to 2018 Levels • Group cost of sales increased, driven by energy, labour and transport 115 costs 110 • EBIT margins expanded at WesTrac, Coates, Beach and SWM t
Slide 34: Appendix FY22 Guidance vs Results
Appendix FY22 Guidance vs Results Company Guidance Item FY22 Guidance FY22 Result Vs Guidance Underlying EBIT ex Seven Group Holdings 8 – 10%2 growth YoY 8.3%2 growth YoY Achieved property WesTrac Underlying EBIT Low single-digit 6.3% growth YoY Outperformed Coates Underlying EBIT Low double-digit 1
Slide 35: Appendix Purpose, Objective and Values
Appendix Purpose, Objective and Values Owners Mindset Courage • Commit to achieving our long-term objectives • Empower and trust our and delivery of outcomes people to recognise and pursue opportunities Recognising • Invest in businesses where the investment opportunity exceeds the return requiremen
Slide 36: Appendix Businesses and Markets
Appendix Businesses and Markets Industrials Industrials Industrials Energy Media 100% 100% 70% Beach 30% SGHE 100% 39% WesTrac is one of the largest Coates is Australia’s largest Boral is Australia’s largest Beach Energy is a leading mid- Seven West Media is a leading CAT® dealers globally (by sales
Slide 37: Appendix Reconciliation – Underlying to Statutory
Appendix Reconciliation – Underlying to Statutory Year ended June 2022 Underlying Trading Performance Significant Items Reported Statutory Results Continued Discontinued Total Continued Discontinued Total Continued Discontinued Total Revenue 8,013.4 952.3 8,965.7 - - - 8,013.4 952.3 8,965.7 Other In
Slide 38: Appendix Pro-forma Balance Sheet
Appendix Pro-forma Balance Sheet As at 30 $m As at 30 June 2021 Change vs pro-forma June 2022 Purchase Price Other Item SGH Reported SGH ex Boral Boral Reported1 SGH Pro-forma $m % Adjustments Adjustments2 Trade and other receivables 1,534.7 832.3 496.9 - - 1,329.2 205.5 15.5% Inventories 1,692.8 80
Slide 39: Appendix Pro-forma Profit and Loss
Appendix Pro-forma Profit and Loss $m, continuing, underlying FY21 FY22 Less Boral in Add Boral Change vs Item Reported reported Pro-forma Reported results pro-forma (%) results Revenue 4,838.7 0.0 2,924.1 7,762.8 8,013.4 3.2% Other income 47.0 0.0 2.9 49.9 59.3 18.8% Share of results from equity ac
Slide 40: Disclaimer
Disclaimer Basis of preparation of slides Included in this presentation is data prepared by the management of Seven Group Holdings Limited (“SGH”) and other associated entities and investments. This data is included for information purposes only and has not been subject to the same level of review b