Southern Cross Electrical Engineering Limited · ASX:SXE
Southern Cross Electrical Engineering — Shareholder Meeting (October 2015)
25 slides from Southern Cross Electrical Engineering's shareholder meeting presentation, Oct 26, 2015
Slide 1: 2015 AGM Presentation
For personal use only 2015 AGM Presentation Chris Douglass – Interim CEO 26 October 2015
Slide 2: About SCEE
About SCEE For personal use only Leading provider of specialised electrical Project life cycle support and instrumentation services design and construction of high voltage Delivers services to projects across Australia power line distribution, switchyards and and overseas throughout their life cycle
Slide 3: Highlights
Highlights For personal use only FY15 statutory loss after tax of $9.8m; underlying trading profit after tax of $4.2m* Underlying trading revenue increased by 10% on PCP but was offset by lower margins Financial Strong balance sheet with $44.6m of cash and no debt at 30 June 2015 Fully franked divid
Slide 4: FY15 projects
For personal use only FY15 projects 3
Slide 5: Significant FY15 projects
Significant FY15 projects For personal use only Rio Tinto Cape Lambert Phase B - Completed E&I works included the car dumpers and screenhouse; award value over $80m and peak manning 480 BHP Billiton Iron Ore Yarnima Power Station – Completed Awarded over $25m of E&I works at the Yarnima Power St
Slide 6: FY15 financial result
FY15 financial result For personal use only FY15 statutory result impacted by a NPAT number of one-off items: $m • Restructuring initiatives Statutory loss after tax (9.8) implemented to ensure the Add back: business is appropriately organised and efficient for current market Organisation restructur
Slide 7: FY15 financial performance
FY15 financial performance For personal use only Revenue increased but challenging market Underlying conditions continue to impact margins FY15* FY14 Change $m $m % Solid H1 as key projects secured and commenced in FY14 were successfully Revenue 240.6 218.2 10% closed out Gross profit 35.6 43.8 (19%
Slide 8: Balance sheet
Balance sheet For personal use only Strong balance sheet throughout the year Jun 15 Jun 14 $m $m Cash of $44.6m and debt free at 30 June Current assets 92.0 98.6 Historical claims settled and enhanced confidence in collectability of remaining WIP Non current assets 31.6 48.0 and debtors Total assets
Slide 9: Order book at June
Order book at 30 June For personal use only Order book at 30 June 2015 of $111m With a further $30m of work forecast to be performed under already awarded reimbursable contracts Excludes work under recurring framework agreements Tendering remains high but bid process highly competitive 8
Slide 10: Dividends
Dividends For personal use only Fully franked dividend of 2.7 cps paid Maintained at same absolute level as prior two years Strikes balance between delivering returns to shareholders and retaining capital for growth opportunities Franking account balance at 30 June 2015 of $12m 9
Slide 11: Health, safety and people
Health, safety and people For personal use only Performing our work safely remains our highest priority and we are now over eleven years LTI free in Australia Employee numbers dropped during H2 as activity slowed but increased significantly over recent months as key projects ramped up Now over 1000
Slide 12: NECA WA 2015 Awards
NECA WA 2015 AWARDS For personal use only National Electrical and Communications Association (NECA) WA Awards were held on Friday 21 August SCEE awarded Certificate of Commendation in the Industrial Large Project category for work on Rio Tinto Cape Lambert Phase B project Daniel Cocker was the 2015
Slide 13: Strong start to FY16
Strong start to FY16 For personal use only Entered the year at high activity levels as key projects ramped up and had a strong Q1 Current projects progressing well and are profitable Manning levels remain significant going into Q2 Strong H1 expected High level of tendering for work to replace major
Slide 14: Market conditions
Market conditions For personal use only Current conditions in resources sector expected to continue for the foreseeable future Clients remain focussed on cost resulting in highly competitive tendering and lower margins Limited new large scale resources construction work in the pipeline Operations &
Slide 15: Iron Ore
Iron Ore For personal use only Remains a core commodity and expected to provide the majority of revenues in FY16 with work continuing at Sino Iron and Roy Hill Sector offers a continued baseload of work from: • Long standing relationship with Rio Tinto • Continuing to build our relationship with BHP
Slide 16: LNG and CSG
LNG and CSG For personal use only Continuing to work for Bechtel on Australia Pacific LNG project through KSJV Longer and bigger tail to E&I works in the sector than previously forecast Multiple Australian LNG projects remain in construction with only two of the six plants having achieved production
Slide 17: Strategy
Strategy For personal use only The Board remains committed to targeting growth Key strategic objectives of: • expansion into other geographies and adjacent or complementary sectors; and • increasing recurring revenue from operations & maintenance and sustaining capital in the resources sector Manage
Slide 18: International
International For personal use only History of successful international project delivery Rejuvenation of existing Peru business New alliances being developed to facilitate entry into strategically targeted geographies Weak AUD increases ability to price competitively 17
Slide 19: Adjacent and complementary sectors
Adjacent and complementary sectors For personal use only Opportunity to leverage our current skillsets to adjacent and complementary sectors (eg infrastructure projects, commercial, telecommunications) Entry via acquisition may provide more immediate market penetration than organic expansion List of
Slide 20: Overheads
Overheads For personal use only Significant restructuring exercise performed late FY15 Now sized and structured to efficiently support forecast activity levels Reduced overhead base and depreciation expense Evaluating alternative models for cost effective delivery of business services 19
Slide 21: Board and management changes
Board and management changes For personal use only Perth based Board sized for the current conditions Broad range of operational and corporate experience to align with growth strategy Leaner management structure but have retained capability and capacity to effectively execute core business and drive
Slide 22: Conclusion
Conclusion For personal use only FY15 was challenging but action has been taken to ensure the business is appropriately sized for forecast activity levels Continuing to maintain a strong balance sheet with cash available to fund growth Currently operating at high activity levels with a streamlined s
Slide 23: Non-IFRS financial information
Non-IFRS financial information For personal use only SCEE’s results are reported under International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. The Company discloses certain non-IFRS measures that are not prepared in accordance with IFRS and there
Slide 24: Non-IFRS financial information (cont.)
Non-IFRS financial information (cont.) For personal use only EBIT and EBITDA are a non-IFRS earnings measure which do not have any standard meaning prescribed by IFRS and therefore may not be comparable to EBIT and EBITDA presented by other companies. EBIT represents earnings before interest and inc
Slide 25: Disclaimer
Disclaimer For personal use only Some of the information contained in this presentation contains “forward-looking statements” which may not directly or exclusively relate to historical facts. These forward-looking statements reflect Southern Cross Electrical Engineering Limited’s current intentions,
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