Sgh Limited · ASX:SGH
Sgh — Seven Group Holdings — FY2018 Earnings Presentation
34 slides from Sgh's earnings presentation, Aug 22, 2018
Slide 1: Focus on execution
FY18 Results Presentation 22 August 2018 Focus on execution Results for the year ended 30 June 2018 22 August 2018
Slide 2: Disclaimer
FY18 Results Presentation 22 August 2018 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
Slide 3: Group Overview
FY18 Results Presentation 22 August 2018 Group Overview Ryan Stokes Chief Executive Officer & Managing Director 3
Slide 4: Group People, Safety and Culture
FY18 Results Presentation 22 August 2018 Group People, Safety and Culture Committed to health, safety and welfare of staff Workplace health and safety is the collective responsibility of all the Group’s ~5,400 direct employees Safety reporting and performance are a key focus of the Group and hav
Slide 5: Group Strategic Framework
FY18 Results Presentation 22 August 2018 Group Strategic Framework Maximise return to shareholders through Strategic objective long term sustainable value creation Performance Values Disciplined (Results) Accountable Agility Respect Outstanding Commercial Strategically People Acumen Opportunistic En
Slide 6: Group Timeline
FY18 Results Presentation 22 August 2018 Group Timeline Sale of WesTrac China $385m equity raising $350m convertible notes $535m proceeds (net of cash) Increased free float Lower cash interest cost Attractive point in the cycle New institutional investors on register Increased tenor and
Slide 7: Group Businesses
FY18 Results Presentation 22 August 2018 Group Businesses Industrial Services: Equipment solutions Industrial Services Energy leveraged to growth in mining production and infrastructure investment Energy: Diversified energy assets leveraged Australia’s leading mid-cap oil and to growing East Coast g
Slide 8: Group Highlights
FY18 Results Presentation 22 August 2018 Group Highlights Momentum continues in key sectors Significant year of growth and transformation for the Group Strong operational and financial results delivered by WesTrac, Coates Hire, Beach Energy and Seven West Media Group underlying EBIT growth of
Slide 9: Group Key Financials
FY18 Results Presentation 22 August 2018 Group Key Financials Underlying results ($m) – continuing operations FY18 FY17 % Change Trading revenue 3,207.9 2,283.3 41% Earnings before interest and tax1 496.9 297.2 67% Underlying net profit after tax1 321.9 187.1 72% Underlying earnings per share1 97 ce
Slide 10: Financials
FY18 Results Presentation 22 August 2018 Financials Year ended 30 June 2018 Richard Richards Chief Financial Officer 10
Slide 11: Financials Profit and Loss
FY18 Results Presentation 22 August 2018 Financials Profit and Loss $m FY18 FY17 Change % Revenue 3,207.9 2,283.3 41% Other income 65.1 51.7 26% Share of results from equity accounted investees 144.1 121.0 19% Trading revenue and other income 3,417.1 2,455.0 39% Expenses (excl. depreciation, amortis
Slide 12: Financials Significant Items
FY18 Results Presentation 22 August 2018 Financials Significant Items $m FY18 FY17 Gain on sale of assets and derivatives 78.8 1.9 Impairment reversal – SWM equity 28.6 128.4 Revaluation of equity interest – Coates Hire 14.5 - Mark-to-market of derivatives 4.0 1.9 Impairment – S3 Program costs (29.2
Slide 13: Financials Earnings Summary
FY18 Results Presentation 22 August 2018 Financials Earnings Summary Continuing Operations Discontinued Total WesTrac Coates Allight Invest- WesTrac $m Energy Media Other Group Aus Hire Sykes ments China Trading revenue 3,207.9 2,452.2 649.8 91.2 5.9 - 8.8 - 189.9 Statutory EBIT 570.4 174.0 144.2 2.
Slide 14: Financials Cash Flow
FY18 Results Presentation 22 August 2018 Financials Cash Flow Cash conversion lower than in recent years given: $m FY18 FY17 Underlying EBIT 496.9 333.3 – WesTrac’s investment in new machines and components to support future demand Add: depreciation and amortisation 145.8 33.6 – Greater proportion
Slide 15: Financials Balance Sheet
FY18 Results Presentation 22 August 2018 Financials Balance Sheet $m FY18 FY17 Change % Balance sheet movements include impact of Coates Hire consolidation, particularly the Trade and other receivables 585.8 341.1 72% working capital line items and net debt Inventories 828.6 654.7 27% Net assets
Slide 16: Financials Capital Management
FY18 Results Presentation 22 August 2018 Financials Capital Management Capital structure strengthened and diversified $385m institutional placement completed in September 2017 – Increased free float from 26% to 34% leading to improved quality and diversity of the institutional share register – 81%
Slide 17: Financials TELYS4 Conversion
FY18 Results Presentation 22 August 2018 Financials TELYS4 Conversion Proposal to convert at 15% premium to current TELYS4 price TELYS4 shares have not enjoyed the same market re-rating as ordinary shares Potential amendments to the franking system may limit the ability for SMSFs to obtain a cas
Slide 18: Financials Debt Maturity Profile
FY18 Results Presentation 22 August 2018 Financials Debt Maturity Profile Balance sheet strength has enabled strategic initiatives Refinancing has further improved tenor and borrowing cost As at 30 June 2018, the Group had $411m of available Corporate facility upsized from $900m to $1.3bn undraw
Slide 19: Financials Property and Listed Investments
FY18 Results Presentation 22 August 2018 Financials Property and Listed Investments $m FY18 FY17 Property impacted by slowdown in Perth market Revenue 8.8 5.3 Early signs of recovery in Perth property market Other income 30.8 35.7 – Vacancy rates in the CBD have fallen but yet to translate Share o
Slide 20: WesTrac Highlights
FY18 Results Presentation 22 August 2018 WesTrac Highlights Ryan Stokes Chief Executive Officer & Managing Director 20
Slide 21: Industrial Services WesTrac Highlights
FY18 Results Presentation 22 August 2018 Industrial Services WesTrac Highlights Strategic objective and value proposition To be the customer’s first choice in equipment solutions with zero Cat Equipment Utilisation WA NSW Total harm safety culture and focus on growth and sustained profitability Ma
Slide 22: Industrial Services WesTrac Financials
FY18 Results Presentation 22 August 2018 Industrial Services WesTrac Financials Growth in construction market complements mining demand Revenue growth of $249m or 11% YoY including $95m or 18% rise in capital sales and $154m or 9% rise in product support Growth of 57% achieved in equipment sales
Slide 23: Coates Hire Highlights
FY18 Results Presentation 22 August 2018 Coates Hire Highlights 23
Slide 24: Industrial Services Coates Hire Highlights
FY18 Results Presentation 22 August 2018 Industrial Services Coates Hire Highlights Strategic objective and value proposition Future value of major road and rail infrastructure projects To be the leading equipment solutions provider and help build a better future ̶ Largest equipment hire business
Slide 25: Industrial Services Coates Hire Financials
FY18 Results Presentation 22 August 2018 Industrial Services Coates Hire Financials Strong operating results achieved Group revenue up 7% YoY, underlining the continued infrastructure activity levels in eastern states EBIT up 21% and EBIT margin improved by 2.1% to 17.6% All regions outperform
Slide 26: AllightSykes Highlights
FY18 Results Presentation 22 August 2018 AllightSykes Highlights 26
Slide 27: Industrial Services AllightSykes
FY18 Results Presentation 22 August 2018 Industrial Services AllightSykes Strategic objective Provide product and service solutions that are competitive, reliable and backed by knowledge and experience to deliver sales growth and shareholder return Turnaround achieved in business performance Imp
Slide 28: Energy Highlights
FY18 Results Presentation 22 August 2018 Energy Highlights 28
Slide 29: Energy Highlights
FY18 Results Presentation 22 August 2018 Energy Highlights Positive macroeconomic trend for energy $m FY18 FY17 Global economy is entering a period of higher growth and activity Sale of gas and condensate 5.9 4.6 which has a positive correlation to demand for energy Other income 0.7 - Australian
Slide 30: Energy Beach Investment
FY18 Results Presentation 22 August 2018 Energy Beach Investment Lattice transaction ahead of plan and creating significant value Value created through Lattice with Beach as a low cost operator having balance sheet flexibility and capturing improved GSA pricing, reserves growth and ability to opti
Slide 31: Media Highlights
FY18 Results Presentation 22 August 2018 Media Highlights 31
Slide 32: Media SWM Highlights
FY18 Results Presentation 22 August 2018 Media SWM Highlights $m FY18 FY17 Guidance delivered and costs / leverage ahead of target Share of associate NPAT - SWM 58.4 68.3 Underlying EBIT of $236m, at upper end of $220-240m guidance Other media investments 14.2 1.4 Cost reductions ahead of guidan
Slide 33: Outlook
FY18 Results Presentation 22 August 2018 Outlook 33
Slide 34: Outlook
FY18 Results Presentation 22 August 2018 Outlook Business Outlook WesTrac continuing Parts volume level to remain strong while service sales will benefit from an expected increase in to benefit from maintenance activities, new machine assembly, and a rise in service rates due to the tight labour m