Emeco Holdings Limited · ASX:EHL
Emeco — H1 2024 Earnings Presentation
32 slides from Emeco's earnings presentation, Feb 20, 2024
Slide 1: Emeco Holdings Limited 1H24 Results
For personal use only Emeco Holdings Limited 1H24 Results 20 February 2024
Slide 2: Important Notices and Disclaimers
IMPORTANT NOTICES AND DISCLAIMERS Reliance on third party information For personal use only The information and views expressed in this Presentation were prepared by Emeco Holdings Ltd (the Company) and may contain information that has been derived from publicly available sources that have not been
Slide 3: Emeco consolidates improved business performance in 1H24
HIGHLIGHTS RESULTS AND OUTLOOK OVERVIEW Emeco consolidates improved business performance in 1H24 For personal use only Safety remains a key focus, with TRIFR improving to 2.6 at 31 December 2023 Operational PNP exit from contract mining with sale of contracts and transfer of majority of workforc
Slide 4: 1H24 Group Financial Highlights
1H24 GROUP FINANCIAL HIGHLIGHTS Returns improved on the back of improved performance from all businesses For personal use only Revenue Operating EBITDA1 Operating EBIT1 Operating NPAT1 $435m $137m $61m $33m +1% vs PCP, -2% vs 2H23 +21% vs PCP, stable vs 2H23 +49% vs PCP, -$3m vs 2H23 +69% vs PCP, -$
Slide 5: Performance History – Half on Half
PERFORMANCE HISTORY – HALF ON HALF 1H24 consolidated improved 2H23 performance, delivering improved return on capital, whilst maintaining leverage For personal use only Revenue ($m) Operating EBITDA1 ($m) Operating EBIT1 ($m) Operating NPAT1 ($m) 445 435 430 62 64 37 39 122 129 114 137 137 59 61 32
Slide 6: Establishment of Emeco Underground
ESTABLISHMENT OF EMECO UNDERGROUND Exit contract mining and grow underground business focused on core rental capabilities For personal use only • Sold underground contracting operations and transferred majority of workforce to Macmahon, in exchange for ~$10m of in- demand mining equipment (transacti
Slide 7: Safety
SAFETY Safety remains a key focus, with nil LTIs reported in the period, TRIFR improving to 2.6 For personal use only Safety 2.9 2.6 2.1 1.9 0.3 0.3 0.0 0.0 FY21 FY22 FY23 HY24 TRIFR LTIFR Emeco remains committed to providing a healthy and safe workplace. The safety of people is paramount, and our
Slide 8: Outlook positive with demand across Rental and Force expected to remain robust
HIGHLIGHTS 2H24 AND OUTLOOK OUTLOOK Outlook positive with demand across Rental and Force businesses expected to remain robust For personal use only Outlook for 2H24 remains positive with strong earnings momentum from the Rental business in particular Operational Business continues to focus on co
Slide 9: Divisional Performance
For personal use only Divisional Performance
Slide 10: Rental
RENTAL Strong utilisation levels supported strong stable earnings and margins for the Rental business For personal use only $m 1H23 2H23 1H24 unless otherwise stated Operating and financial performance External Revenue 233.7 261.1 259.8 Revenue increase of 11% on pcp driven by strong demand for al
Slide 11: Force
FORCE Force continues to deliver good returns from a low capital base for the business as a trusted provider of high quality rebuild and workshop services, more than doubling its EBIT contribution vs the pcp. For personal use only $m 1H23 2H23 1H24 unless otherwise stated Operating and financial per
Slide 12: Pit N Portal
PIT N PORTAL Sale of PNP’s contract mining projects provide the foundation for the establishment of Emeco Underground – a pure underground rental business expected to deliver higher returns. Pit N Portal earnings in line with expectations For personal use only $m 1H23 2H23 1H24 Operating and financi
Slide 13: Financial Results
For personal use only Financial Results
Slide 14: Operating Profit and Loss
OPERATING PROFIT AND LOSS Strong performance from all businesses drove increase in Operating EBITDA and Operating EBIT vs pcp For personal use only 1H24 Operating Financial Performance1,2 Commentary $m 1H23 2H23 1H24 unless otherwise stated Margins held even with slightly lower revenue levels, fol
Slide 15: Cash Flow
CASH FLOW Continued operating free cash flow generation supports fleet re-investment For personal use only 1H24 Cash Flow ($m) Overview Operating free cash flow generation of $40 million, $32 million higher than pcp Back-to-back 2H23 and 1H24 cash flow generation driven by disciplined credit man
Slide 16: Balance Sheet
BALANCE SHEET Balance sheet leverage of 1.06x, marginally above long-term target of 1.0x For personal use only Summary balance sheet Overview Gross rental fleet utilisation2 levels remain high at 92%, justifying 30 June 31 December incremental investment in larger sized, in-demand fleet $m 2023 20
Slide 17: Debt Maturity Profile and Liquidity
DEBT MATURITY PROFILE AND LIQUIDITY Committed and undrawn facilities provide flexibility to pursue growth opportunities For personal use only Drawn debt maturity at 31 December 2023 Liquidity $ million $ million 30 June 23 31 December 23 300 AMTN AUD Notes1 250.0 250.0 250 Term facilities – RCF2 95.
Slide 18: Strategy and Sustainability
For personal use only Strategy and Sustainability
Slide 19: Our Strategy
OUR STRATEGY Building a sustainable and resilient business generating free cash and long term value for shareholders For personal use only The lowest cost, highest quality provider Balanced and diversified portfolio Best-in-class operational capabilities to be the Target a balanced customer and
Slide 20: Emeco's Competitive Advantage
EMECO’S COMPETITIVE ADVANTAGE By focusing on our core competency of equipment rental and maintenance, we will continue to provide a clear cost and quality advantage to customers For personal use only Rental Workshops Brands Open cut Underground Australia’s largest provider of open cut rental Austral
Slide 21: Environmental, Social & Governance
ENVIRONMENTAL, SOCIAL & GOVERNANCE At Emeco, we strive to create a sustainable business which continues to deliver creative solutions for our customers, a family feel for our people, support for our local communities and value for our investors For personal use only Overview Inaugural ESG Strategy
Slide 22: Operational Priorities
OPERATIONAL PRIORITIES A focus on our operational priorities will build a better business For personal use only Priorities for Calendar 2024 Core Business Deliver returns on announced growth capex programmes. Targeting circa 20% IRR. Business continues to focus on cost efficiencies and contrac
Slide 23: Emeco Investment Highlights
EMECO INVESTMENT HIGHLIGHTS Emeco offers an attractive diversified investment exposure to the Australian mining industry For personal use only 1 2 3 Australia’s largest Scale and asset mining equipment rental Focused on delivering management expertise provider with national strong returns and free p
Slide 24: Appendix: Additional information
For personal use only Appendix: Additional information
Slide 25: Reconciliations – Statutory to Non-IFRS Disclosure
RECONCILIATIONS – STATUTORY TO NON-IFRS DISCLOSURE For personal use only 1H23 1H24 Statutory to operating reconciliation Statutory to operating reconciliation $m NPAT EBIT EBITDA $m NPAT EBIT EBITDA Statutory 2.7 16.8 89.7 Statutory 19.4 41.0 133.3 Tangible asset Tangible asset 0.2 0.2 - 15.9 15.9 -
Slide 26: Reconciliations – Statutory to Non-IFRS Disclosure
RECONCILIATIONS – STATUTORY TO NON-IFRS DISCLOSURE For personal use only Cash flow reconciliation Net debt and leverage reconciliation $m 1H23 1H24 30 June 31 December $m 2023 2023 Operating EBITDA 113.5 137.1 AUD secured notes 250.0 250.0 Working capital (29.2) (6.7) Revolving credit facility - 20.
Slide 27: Rental – Eastern Region
RENTAL – EASTERN REGION Eastern Region delivered strong revenue and earnings growth on 1H23, stable vs 2H23 For personal use only $m 1H23 2H23 1H24 unless otherwise stated Operating and financial performance External Revenue 144.4 164.2 161.9 Eastern Region delivered 12% revenue growth off new pro
Slide 28: Rental – Western Region
RENTAL – WESTERN REGION Strong revenue and earnings growth on pcp, driven by improved gross fleet utilisation1. Higher depreciation charges in 1H24 were driven by asset replacements and inflation For personal use only $m 1H23 2H23 1H24 unless otherwise stated Operating and financial performance Exte
Slide 29: Capex / Asset Management
CAPEX / ASSET MANAGEMENT Disciplined re-investment in capital maintains strong capability while driving improved returns For personal use only Capex summary $ million (unless stated otherwise) 1H23 1H24 Component rebuilds 55.1 82.1 Asset replacement 6.3 2.2 Component inventory 3.8 0.2 Total sustaini
Slide 30: Credit Management
CREDIT MANAGEMENT Credit management resources and processes significantly increased and improved to provide a more conservative credit risk profile For personal use only Economic Credit Losses Overview Top 10 customers represent 73% of total revenue Specific provision 1H23 1H24 - 93% of debtors
Slide 31: External Revenue Analysis
EXTERNAL REVENUE ANALYSIS For personal use only Revenue by commodity Revenue by geography Revenue by type Revenue by customer – Top 10 Customer 1 1H24 1H24 1H24 1H24 Customer 2 Customer 3 11% 4% 14% Gold WA Customer 4 11% 19% Rental 27% 26% Met Coal 9% Customer 5 QLD 13% Iron Ore Customer 6 PNP 14%
Slide 32: Thank you
Thank you For personal use only Investor enquiries: Theresa Mlikota Chief Financial Officer Investor.relations@emecogroup.com emecogroup.com