Srg Global Limited · ASX:SRG
Srg Global — H1 FY2020 Earnings Presentation
31 slides from Srg Global's earnings presentation, Feb 25, 2020
Slide 1: 2020 Half Year Results Presentation
2020 HALF YEAR RESULTS PRESENTATION 25 FEBRUARY 2020 1
Slide 2: SRG Global Model
SRG GLOBAL MODEL WHO WE ARE We’re an engineering-led specialist construction, maintenance and mining services group OUR OPERATING MODEL End-to-end solutions across the entire asset lifecycle OUR VISION The most sought-after specialist construction, maintenance and mining services business 2
Slide 3: Operating Segments
OPERATING SEGMENTS CONSTRUCTION Constructing complex infrastructure Targeted Revenue ASSET SERVICES Sustaining complex infrastructure Recurring Revenue MINING SERVICES Comprehensive ground solutions Recurring Revenue CIVIL Specialist engineering and construction services for complex structures in ke
Slide 4: SRG Global Snapshot
SRG GLOBAL SNAPSHOT SUMMARY SUBSTANTIAL HOLDERS Shares on Issue 445.8m Perennial Value Investment 14.4% Share Price(1) $0.38 Mitsubishi UFG Financial Group, Inc 9.7% Market Capitalisation(1) $169.4m Board and Management 15.0% Note: (1) Share price and market capitalisation as at 24 February 2020 Sou
Slide 5: 1H FY20 In Review
1H FY20 IN REVIEW David Macgeorge, Managing Director 5
Slide 6: Executive Summary
EXECUTIVE SUMMARY Adjusted Revenue in 1H FY20 of $267.1m Adjusted EBITDA of $12.1m and Adjusted EBIT of $7.0m 1H financial result overview: – Very strong growth in Asset Services with work in hand up 172% in past 12 months – Solid operational performance in Mining Services, Specialist Facade a
Slide 7: Our People
OUR PEOPLE GLOBAL WORKFORCE HIGHLY SKILLED WORKFORCE 27% 20% 25% 1,950 1,950 EMPLOYEES EMPLOYEES 80% 75% Australia International Tech. / Eng. / Mgmt. Operational ZERO HARM ZERO HARM ZERO HARM LEADERSHIP INTERACTIONS IMPROVEMENT 89% SAFETY LEADERSHIP 500k 1.66 1.57 TAKE 5’s TRAINING LTIFR Dec 18 LTIF
Slide 8: Financial Strength
FINANCIAL STRENGTH AS AT 31 DECEMBER 2019 CASH IN HAND NET DEBT NET ASSETS $33.6m $11.4m $256m WORK IN WORK IN HAND1 OPPORTUNITY HAND1 BY YEAR PIPELINE 5% 27% 20% 27% 25% 35% 29% 32% 37% $737m $737m 45% $5.7b 60% 48% 34% Construction Asset Services Mining Services FY20 FY21 FY22+ Construction Asset
Slide 9: Financial Review
FINANCIAL REVIEW Roger Lee, Chief Financial Officer 9
Slide 10: 1H FY20 Financial Performance
1H FY20 FINANCIAL PERFORMANCE ADJUSTED REVENUE ($M) ADJUSTED EBITDA ($M) ADJUSTED EBIT ($M) 267.1 16.4 12.0 238.5 12.1 7.0 1H FY19 1H FY20 1H FY19 1H FY20 1H FY19 1H FY20 Revenue increase driven through: – Commencement of new contract wins in the Asset Services Segment – Additional project revenue
Slide 11: Cashflow Analysis
CASHFLOW ANALYSIS With the introduction of AASB16 lease payments which were During the half year a significant investment in working capital was required to support growth previously reflected in EBITDA are in new term / recurring revenue contracts and record work in hand (e.g. South32, OneSteel now
Slide 12: Financial Position
FINANCIAL POSITION Balance Sheet - $m FY19 1H FY20 Strong available liquidity of $67m including Cash and cash equivalents 58.3 33.6 $34m undrawn working capital facilities Trade, other receivables & contract assets 118.0 115.2 Inventories 13.0 14.0 1H FY20 includes $20.9m of “Right to use” assets in
Slide 13: Operating Segment Update
OPERATING SEGMENT UPDATE David Macgeorge, Managing Director 13
Slide 14: Construction Update
CONSTRUCTION UPDATE 56% OVERVIEW KEY FOCUS Strong project and operational delivery across domestic and international Civil Global focus on projects specialist markets of dams, bridges, tanks Large pipeline of specialist civil infrastructure project opportunities and windfarms Continued focus
Slide 15: Active Case Studies – Specialist Construction
ACTIVE CASE STUDIES – SPECIALIST CONSTRUCTION INFINITY BRIDGE FAIRBAIRN DAM Specialist Bridge Construction Specialist Dam Anchoring and Strengthening SRG Global secured a specialist engineering and SRG Global are undertaking Dam Anchoring and construction contract with Belhasa Six Construct LLC Stre
Slide 16: Asset Services Update
ASSET SERVICES UPDATE OVERVIEW KEY FOCUS Highest growth and highest earning segment in SRG Global portfolio, underpinned by Step change growth in a significant and growing number of term contracts with WIH growth of 172% in past recurring / term 12 months specialist asset maintenance services
Slide 17: Active Case Studies – Asset Services
ACTIVE CASE STUDIES – ASSET SERVICES ALCOA KWINANA TRANSPOWER NZ Multi-disciplinary Asset Services Specialist Infrastructure Maintenance SRG Global secured a five-year $90m multi-disciplinary SRG Global secured a new three-year contract with contract with Alcoa of Australia Limited at their alumina
Slide 18: Mining Services Update
MINING SERVICES UPDATE 14% OVERVIEW KEY FOCUS Strong asset utilisation across the fleet >95% Selective growth with targeted clients / Higher margins delivered on a period on period basis, reflecting the additional value commodities proposition SRG Global offers to its customer base through inn
Slide 19: Active Case Studies – Mining Services
ACTIVE CASE STUDIES – MINING SERVICES EVOLUTION MINING INNOVATION Production Drill and Blast Innovation SRG Global secured a $115m Umbrella Agreement with SRG Global has committed to the integration of new Evolution Mining to extend the terms of its drill and blast technologies across our modern fle
Slide 20: Executing Our Strategy
EXECUTING OUR STRATEGY David Macgeorge, Managing Director 20
Slide 21: Our Strategic Horizons
OUR STRATEGIC HORIZONS Building the most sought-after specialist construction, maintenance and mining services business LEADERSHIP GROWTH Zero Harm industry leader Step change growth in recurring Asset Recognised employer of choice Maintenance Services Key partner of choice in our specialised Target
Slide 22: Executing Strategy: Record Work in Hand
EXECUTING STRATEGY… “RECORD WORK IN HAND” 25% 32% $737m 45% 48% 45% $520m 31 DEC 2018 31 DEC 20191 30% 20% Construction Asset Services Mining Services Note 1: Work In Hand as at 31 December 2019 includes Alcoa contract announced December 2019 22
Slide 23: Executing Strategy: Shifting the Business Mix
EXECUTING STRATEGY… “SHIFTING THE BUSINESS MIX” WORK IN HAND Recurring revenue WIH up $215m in the past 12 months BY SEGMENT Recurring revenue is now c.70% of record $737m WIH $737m Asset Services WIH up 172% in the past 12 months Recurring: $501m $520m Examples of recent term contract wins: R
Slide 24: Winning Term Contracts in Diverse Sectors
WINNING TERM CONTRACTS IN… “DIVERSE SECTORS” 24
Slide 25: Winning Term Contracts in Diverse Capability
WINNING TERM CONTRACTS… “DIVERSE CAPABILITY” 25
Slide 26: Outlook
OUTLOOK David Macgeorge, Managing Director 26
Slide 27: Outlook: Building Momentum
OUTLOOK… “BUILDING MOMENTUM” Record Work in Hand of $737m with ~70% recurring revenue Strong opportunity pipeline of $5.7b across diverse growth sectors Imminent award of Western Australian Building construction contracts which will address timing and carrying cost issue Near term contract w
Slide 28: Attractive Investment Proposition
Attractive Investment Proposition Complete Diverse Specialist business model market sector global (end-to-end) exposure footprint Recurring / Strong Dividend repeat growth paying revenues profile stock 28
Slide 29: Appendix
APPENDIX 29
Slide 30: Reconciliation of Financial Information
RECONCILIATION OF FINANCIAL INFORMATION ADJUSTED REVENUE ($m) REVENUE ADJUSTMENTS ($m) 1H FY19 1H FY20 267.1 Reported Revenue 232.6 259.2 238.5 ADD ADJUSTMENT ITEMS 50% of JV revenue 6.0 7.9 Total Adjustment Items 6.0 7.9 Adjusted Revenue 238.5 267.1 1H FY19 1H FY20 ADJUSTED EBITDA ($m) EBIT AND EBI
Slide 31: Solving Challenges Wherever They Are
Solving challenges wherever they are srgglobal.com.au 31