Boom Logistics Ltd · ASX:BOL
Boom Logistics — Investor Presentation (November 2009)
44 slides from Boom Logistics's investor presentation, Nov 18, 2009
Slide 1: Equity Raising
For personal use only Equity Raising November 2009 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS
Slide 2: Important notice
Important notice This presentation has been prepared by Boom Logistics Limited ACN 095 466 961 (BOOM). In Past performance receiving this presentation, you are agreeing to the following restrictions and limitations. Past performance information given in this presentation is given for illustrative pu
Slide 3: Agenda
Agenda For personal use only 1. Executive Summary 1 2. BOOM Equity Story 6 3. Financial Position 22 4. Offer Details 24 Appendix 27 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS
Slide 4: 1. Executive Summary
For personal use only 1. Executive Summary NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS
Slide 5: Investment highlights
Investment highlights For personal use only • Australia’s largest crane hire company, over twice the size of nearest competitor • Market leader in Travel Tower hire, over six times the size of nearest competitor UNIQUE MARKET POSITION • A leading Access Equipment hire business • National footprint •
Slide 6: Strengthened balance sheet positions BOOM for upturn
Strengthened balance sheet positions BOOM for upturn For personal use only • BOOM to raise c. $67m of equity via a fully underwritten offer at $0.30 per share − c. $52m 1-for-1 non-renounceable pro-rata entitlement offer − c. $15m institutional placement EQUITY RAISING • In addition, BOOM to raise u
Slide 7: Unsolicited and highly conditional proposal
Unsolicited and highly conditional proposal For personal use only • On 17 November 2009, BOOM entered a trading halt pending an announcement on the equity raising • After this trading halt was in place and after strong support from investors for the equity raising, BOOM received an incomplete, unsol
Slide 8: Outcome of strategic review process
Outcome of strategic review process For personal use only • On 7 July 2009, BOOM announced a strategic review of opportunities to support BOOM’s strategy of enhancing its market position, strengthening its balance sheet and maximising shareholder value • Alternatives considered include: - Expression
Slide 9: Improved net debt position
Improved net debt position PRO FORMA NET DEBT POSITION ($M) For personal use only 235.4 23.2 212.2 9.9 63.7 138.6 19.8 118.8 Net debt as at 30 Year to date debt Net debt as at 31 Tax refunds (by 31 Equity raising net Pro forma net debt Maximum SPP (non- Pro forma net debt (1) June 2009 reduction to
Slide 10: 2. BOOM Equity Story
For personal use only 2. BOOM Equity Story NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS
Slide 11: Leading provider of integrated lifting solutions on a national basis
Leading provider of integrated lifting solutions on a national basis For personal use only CRANE HIRE BOOM SHERRIN JAMES EQUIPMENT FY09 revenue = $263m FY09 revenue = $85m FY09 revenue = $49m (1) (1) (1) % of FY09 EBITDA : 61% % of FY09 EBITDA : 39% % of FY09 EBITDA : 0% (2) (2) (2) Net trading asse
Slide 12: Business model delivers a strong value proposition
Business model delivers a strong value proposition For personal use only REQUIREMENT BOOM’S STRENGTHS GEOGRAPHIC Diverse national footprint, further underpinned by the mobile nature of the COVERAGE majority of BOOM’s fleet INFRASTRUCTURE Established business infrastructure, built up over many years
Slide 13: Strong industry growth is forecast across BOOM's key markets
Strong industry growth is forecast across BOOM’s key markets For personal use only AUSTRALIAN IRON ORE EXPORTS AUSTRALIAN COKING COAL VOLUMES 500 Mt 225 Mt 450 Mt 200 Mt 400 Mt 175 Mt 350 Mt 150 Mt 300 Mt 125 Mt 250 Mt 100 Mt 200 Mt 75 Mt 150 Mt 100 Mt 50 Mt na 50 Mt 25 Mt 0 Mt 0 Mt 2007 2008 2009E
Slide 14: Well positioned to capitalise on major project pipeline
Well positioned to capitalise on major project pipeline • Over $180bn in major projects anticipated over the next 3 years in Australia For personal use only • BOOM has strong relationships with all major contractors for these projects • Crane and lifting solutions required for all projects - Long-te
Slide 15: Management actions position BOOM for upturn: Completed initiatives
Management actions position BOOM for upturn: Completed initiatives For personal use only INITIATIVE OUTCOME • Strengthening of management structure and team • Highly skilled and experienced team now in place – • Key General Manager appointments made in significant experience in industrial services M
Slide 16: Management actions position BOOM for upturn: Near term priorities
Management actions position BOOM for upturn: Near term priorities For personal use only INITIATIVE OUTCOME • Reduce total costs and increase variable relative to • Additional operational improvement projects underway OPERATIONAL fixed costs − Maintenance and workshops IMPROVEMENTS − Transport • Rene
Slide 17: BOOM Crane Hire highlights
1. BOOM Crane Hire highlights For personal use only • Australia’s largest provider of crane hire services MARKET LEADER • Significant number of blue-chip customers with long term relationships • Customers in all market segments • 23 depots nationwide / c. 840 employees NATIONAL FOOTPRINT • Strong br
Slide 18: Leader in Australia's crane hire market
Leader in Australia’s crane hire market For personal use only • An estimated 3,500 cranes operate in Australia’s c. $1.5bn(1) crane hire market • BOOM’s crane fleet is more than twice the size of its nearest competitor MOBILE CRANE HIRE(2) MARKET SHARE BY CRANE FLEET(2) BOOM Number of Cranes 16% 1 B
Slide 19: Established presence in key market segments
Established presence in key market segments For personal use only • Crane revenue aligned to the key growth markets • Well established in the resources and mining sector • Significant opportunity in construction segment (e.g. LNG) AUSTRALIAN CRANE HIRE MARKET (BY VALUE OF WORK)(1) BOOM FY09 REVENUE
Slide 20: Improving pipeline evidences upturn
Improving pipeline evidences upturn For personal use only • The internal tender pipeline for BOOM’s crane business has increased from $25m in March 2009 to $92m as at 13 November 2009 • The pipeline is aligned to BOOM’s fleet plan profile and key industry segments CRANE TENDER PIPELINE ACTIVITY $14m
Slide 21: Strong asset base to capitalise on economic recovery
Strong asset base to capitalise on economic recovery… For personal use only • Focused fleet investment and large fixed asset base - Well maintained and diversified existing fleet - Supported by specific investment - Aligned with growth opportunities to capitalise on economic recovery and projects -
Slide 22: ...with strong leverage to upside
…with strong leverage to upside For personal use only • Utilisation and revenue per day is expected to increase as economic recovery gains momentum • BOOM is well positioned to deliver earnings growth from the economic recovery and Australia’s strong pipeline of projects - Large, under-utilised but
Slide 23: BOOM Sherrin highlights
2. BOOM Sherrin highlights For personal use only • #1 in travel towers – dominant player MARKET LEADER • #3 in total Elevated Work Platforms (“EWP”) market • Customers in all market segments • 24 depots across all major States / c. 350 employees UNIQUE NATIONAL • Only nationwide provider of both tra
Slide 24: BOOM Sherrin is well positioned in high growth markets
BOOM Sherrin is well positioned in high growth markets For personal use only • Strong market share in large, high growth markets FORECAST EWP MARKET GROWTH (FY10-13)(1) 26.0% 25.0% 9.0% Maintenance - Construction - Maintenance - Industrial/Utility Industrial/Utility Commercial FY09 Market Size $127m
Slide 25: James Group highlights
3. James Group highlights For personal use only • Specialists in the sale of new and used mobile cranes SPECIALIST CRANE • Includes crane maintenance and refurbishment business SALES BUSINESS • 10 year rebuild specialist • Located in Brisbane, Perth, Sydney and Melbourne STRATEGIC FOOTPRINT • Provid
Slide 26: James Group update
James Group update For personal use only • Impacted by downturn in the economic cycle and weaker A$ during 2H FY09, particularly against the Yen and Euro • Actions implemented - Inventory control - Fixed cost reduction - Expand relationship with SANY for crane procurement - Focus on sale of BOOM’s c
Slide 27: 3. Financial Position
For personal use only 3. Financial Position NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS
Slide 28: Improved covenant position
Improved covenant position • Following the equity raising, BOOM will have significant headroom on each of its banking covenants For personal use only • BOOM’s banks have agreed, conditional upon an equity raising, to amend its ELR covenant, providing significant headroom(1) BOOM’S ELR(1) REVISED ELR
Slide 29: FY10 guidance
FY10 guidance For personal use only • FY10 EBITDA guidance of $50m - $60m announced to the ASX on 4 November 2009 maintained • Guidance based on: - Year to date operating performance, with conditions consistent with those experienced in the first four months of FY10 - Specific operational improvemen
Slide 30: 4. Offer Details
For personal use only 4. Offer Details NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS
Slide 31: Equity raising overview
Equity raising overview For personal use only • Accelerated pro-rata 1 for 1 non-renounceable entitlement offer raising c. $52m − Institutional component of c. $13m $67M EQUITY RAISING − Retail component of c. $39m. Eligible retail shareholders may also apply for additional New Shares in excess of t
Slide 32: Indicative equity raising timetable
Indicative equity raising timetable For personal use only Event Date Announcement of equity raising Wednesday 18 November 2009 Wednesday 18 – Thursday 19 Institutional Entitlement Offer and Placement November 2009 BOOM shares recommence trading Friday 20 November 2009 7.00pm (AEDT) Monday 23 Record
Slide 33: Key risks
Key risks For personal use only • There are a number of risks attached to an investment in BOOM. Some of these risks are listed below. Further information regarding these risks is provided in the Appendix BOOM SPECIFIC RISKS INDUSTRY SPECIFIC RISKS GENERAL RISKS • Debt covenants may be breached if •
Slide 34: Appendix
For personal use only Appendix NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS
Slide 35: Key risks
Key risks • This section identifies some of the key risks associated with an investment in shares in BOOM. These risks are not exhaustive of the risks faced by potential For personal use only investors in BOOM. • You should carefully consider the risks described in this section, as well as other inf
Slide 36: Key risks (cont'd)
Key risks (cont’d) For personal use only Inability to fund capital expenditure • The businesses carried on by BOOM require regular capital expenditure. BOOM’s operating and financial performance will be partly reliant on sufficient funding being available to meet the capital expenditure requirements
Slide 37: Key risks (cont'd)
Key risks (cont’d) For personal use only Adverse exchange rate movements • BOOM acquires goods and services such as capital equipment in foreign denominated currencies and from companies outside Australia. The impact of such exchange rate risk cannot be predicted reliably. BOOM’s main exchange rate
Slide 38: Key risks (cont'd)
Key risks (cont’d) For personal use only Specific risk factors that affect the industry in which BOOM operates Operational risks • BOOM is exposed to short, medium or long term interruptions to its operations arising from events including equipment failure or damage, inability to renew property or e
Slide 39: Key risks (cont'd)
Key risks (cont’d) For personal use only Employee disputes or disruptions • The majority of BOOM’s operational employees are members of trade unions. These employees are generally covered by collective agreements which are periodically renegotiated. The risk of other forms of industrial action that
Slide 40: Key risks (cont'd)
Key risks (cont’d) For personal use only General risk factors Counterparty / credit default risk • Third parties, such as customers, suppliers and other counterparties to contracts may not be willing or able to perform their obligations to BOOM. BOOM’s credit risk on trade and other receivables aris
Slide 41: International selling restrictions
International selling restrictions For personal use only European Economic Area (Belgium, Germany, Liechtenstein, Luxembourg and The Netherlands) The information in this document has been prepared on the basis that all offers of New Shares will be made pursuant to an exemption under the Directive 20
Slide 42: International selling restrictions (cont'd)
International selling restrictions (cont’d) For personal use only New Zealand By attending the presentation to which this document relates or by accepting this document, you will be taken to have represented, warranted and undertaken that if the offer to participate in the Offer is made to you in Ne
Slide 43: International selling restrictions (cont'd)
International selling restrictions (cont’d) For personal use only Singapore The offer or invitation which is the subject of this presentation and accompanying documents is only allowed to be made to the persons set out herein. The offer which is the subject of this presentation and accompanying docu
Slide 44: International selling restrictions (cont'd)
International selling restrictions (cont’d) For personal use only Switzerland The New Shares may not be publicly offered, sold or distributed (directly or indirectly) in Switzerland. No solicitation for investment in the New Shares may be made in Switzerland in any way that could constitute a public
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