Emeco Holdings Limited · ASX:EHL
Emeco — Investor Presentation (August 2020)
33 slides from Emeco's investor presentation, Aug 24, 2020
Slide 1: Equity raising, debt reduction and extension
Emeco Holdings Limited Equity raising, debt reduction and extension 24 August 2020
Slide 2: Important Notices and Disclaimers
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES IMPORTANT NOTICES AND DISCLAIMERS This investor presentation (“Presentation”) has been prepared by Emeco Holdings Limited (ACN 112 188 815) Not financial product advice (“Emeco” or “Company”). This Presentation has been prepared in connection with
Slide 3: Important Notices and Disclaimers (Continued)
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES IMPORTANT NOTICES AND DISCLAIMERS (CONTINUED) Future performance shares. The Underwriters (or its affiliates) may, for its own account, write derivative transactions with those investors relating to the New Shares to provide the Economic Interest,
Slide 4: Comprehensive capital structure solution
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES Comprehensive capital structure solution
Slide 5: Comprehensive Capital Structure Solution
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES COMPREHENSIVE CAPITAL STRUCTURE SOLUTION — As part of privately negotiated transactions, Emeco has obtained binding pre-commitments from individual major noteholders New March 2024 (including Black Diamond) to exchange US$180m of existing notes du
Slide 6: Transaction Rationale
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES TRANSACTION RATIONALE Gross debt reduced and remaining maturity extended Debt maturity profile (current) (A$m)1 Significantly reduces Secured Notes outstanding from A$442m1 to A$250m2 97 Cash interest will reduce by ~A$19m p.a3 442 Remaining
Slide 7: Pro Forma Capitalisation Table
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES PRO FORMA CAPITALISATION TABLE Significantly reduced gross debt with remaining notes maturity extended to 2024, eliminating 2022 refinancing task and ensuring a sustainable long-term capital structure Net equity New 2024 30-Jun- Note Hedge RCF Pro
Slide 8: Equity raising
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES Equity raising
Slide 9: Equity Raising Overview
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES EQUITY RAISING OVERVIEW — Underwritten pro-rata accelerated non-renounceable entitlement offer to existing shareholders to raise up to approximately A$149m (“Entitlement Offer”) Offer size and — Under the Entitlement Offer, eligible shareholders a
Slide 10: Equity Raising Timetable
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES EQUITY RAISING TIMETABLE Event Date (Sydney time) Trading halt and announcement of Entitlement Offer Monday, 24 August 2020 Institutional Entitlement Offer opens Institutional Entitlement Offer closes Monday, 24 August 2020 Trading halt lifted and
Slide 11: Our focus for the future
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES Our focus for the future
Slide 12: Continuing to Achieve Our Objectives
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES CONTINUING TO ACHIEVE OUR OBJECTIVES Objective Achievement Strong growth in earnings FY20 Operating EBITDA1 ▲15% PREVIOUSLY ANNOUNCED Increased workshops activity FY20 workshops activity2 ▲43% Strong free cash flow generation FY20 free cash fl
Slide 13: Outlook
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OUTLOOK FY21 outlook remains consistent with FY20 full year presentation commentary — Market conditions remain consistent with the information provided in our full year results presentation — COVID-19 has not significantly impacted operations, we
Slide 14: Strategy
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES STRATEGY In FY21 we will continue to diversify our commodity and customer mix, increase our service levels and win long term projects, which will provide a platform for growth in FY22 — Continue to be the lowest cost, highest quality provider of m
Slide 15: Appendix A: Risk factors
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES Appendix A: Risk factors
Slide 16: Risk Factors
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES RISK FACTORS 1. INTRODUCTION equipment, particularly when increased demand or pricing makes it difficult to source new or used equipment. 1.1 Introduction The Company could be adversely impacted by any incidents affecting the ability of these manu
Slide 17: Risk Factors (Continued)
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES RISK FACTORS (CONTINUED) 2.4 Information systems risks because of challenging market conditions and lower than historical rates of utilisation. The Company reported $9.9 million of The Company relies on computer, information, and communications te
Slide 18: Risk Factors (Continued)
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES RISK FACTORS (CONTINUED) 2.8 Workplace safety equipment and the rental rates that the Company can charge of earthmoving volumes. The maintenance of mining equipment involves risks and dangers to the personnel involved, including the risk of person
Slide 19: Risk Factors (Continued)
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES RISK FACTORS (CONTINUED) 2.13 Indebtedness equipment in certain circumstances where the customer who has rented that equipment becomes insolvent or goes into administration (“Insolvency Event”), and the owner of the equipment hasn’t registered a s
Slide 20: Risk Factors (Continued)
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES RISK FACTORS (CONTINUED) 2.20 Foreign exchange risks 3.2 Sell-down by Emeco's substantial shareholders The majority of the Company’s debt is denominated in U.S. dollars. Although steps may be undertaken to manage currency risk (for There is a risk
Slide 21: Risk Factors (Continued)
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES RISK FACTORS (CONTINUED) 3.9 Underwriting risk 3.10 Risks associated with not taking up your rights under the Entitlement Offer The Underwriting Agreement relating to the Entitlement Offer sets out various events, the occurrence of which will enti
Slide 22: Appendix B: Further information on Black Diamond's sub-underwriting arrangement
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES Appendix B: Further information on Black Diamond’s sub-underwriting arrangement
Slide 23: Further Information on Black Diamond's Sub-Underwriting Arrangement
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES FURTHER INFORMATION ON BLACK DIAMOND’S SUB- UNDERWRITING ARRANGEMENT In order to take up additional shares in Emeco in excess of its pro-rata entitlement pursuant to its sub-underwriting commitments, Black Diamond requires Foreign Investment Revie
Slide 24: Appendix C: International offer restrictions
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES Appendix C: International offer restrictions
Slide 25: International Offer Restrictions
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES INTERNATIONAL OFFER RESTRICTIONS This document does not constitute an offer of new ordinary shares ("New Shares") of the Company in any jurisdiction in which it European Union would be unlawful. In particular, this document may not be distributed
Slide 26: International Offer Restrictions (Continued)
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES INTERNATIONAL OFFER RESTRICTIONS (CONTINUED) Norway No offer or invitation to subscribe for New Shares is valid, or permitted from any person, in the Abu Dhabi Global Market or the Dubai This document has not been approved by, or registered with,
Slide 27: Appendix D: Key financial information and basis of preparation
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES Appendix D: Key financial information and basis of preparation
Slide 28: Basis of Preparation
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES BASIS OF PREPARATION Basis of preparation Pro forma adjustments The basis of preparation in compiling the group’s pro forma statement of financial position The 30 June 2020 statement of financial position has been adjusted to reflect the following
Slide 29: Key Financial Information
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES KEY FINANCIAL INFORMATION Pro forma statement of financial position Equity Note Hedge close Maturity RCF Pro forma A$m 30-Jun-20 raising (1) repurchase (2) out (3) extension (4) repayment (5) Tax effect (6) post-Offer Cash 198 147 (217) 28 (4) (97
Slide 30: Appendix E: FY20 statutory to operating financial reconciliations
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES Appendix E: FY20 statutory to operating financial reconciliations
Slide 31: Reconciliations
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES RECONCILIATIONS FY20 operating1 earnings reconciliation FY20 cash flow reconciliation AASB 16 $Am NPAT EBIT EBITDA $Am Operating inclusive Statutory Result 66.1 105.3 234.1 Operating EBITDA 246.1 254.4 Ineffective hedge (gain) (2.1) - - Working Ca
Slide 32: AASB16 Impact
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES AASB16 IMPACT AASB16 Leases net debt and leverage reconciliation FY19 FY20 AASB 16 FY20 AASB16 Operating Operating Adjustment Operating Gross debt Hedged Notes 441.7 441.7 - 441.7 Revolving credit facility - 97.0 - 97.0 Leases 21.9 62.6 - 62.6 Tot
Slide 33: Thank you
Thank you emecogroup.com