Emeco Holdings Limited · ASX:EHL
Emeco — FY2014 Earnings Presentation
29 slides from Emeco's earnings presentation, Aug 21, 2014
Slide 1: 2014 Full Year Results
For personal use only 2014 FULL YEAR RESULTS 21 AUGUST 2014 KEN LEWSEY, MANAGING DIRECTOR & CHIEF EXECUTIVE OFFICER GREG HAWKINS, CHIEF FINANCIAL OFFICER
Slide 2: Presentation Overview
PRESENTATION OVERVIEW For personal use only • Highlights • Operational review • Financials • Strategy & Outlook • Questions • Appendices 2
Slide 3: Highlights
For personal use only HIGHLIGHTS Ken Lewsey Managing Director & Chief Executive Officer
Slide 4: During challenging times the business achieved its strategic objectives
DURING CHALLENGING TIMES THE BUSINESS ACHIEVED ITS STRATEGIC OBJECTIVES For personal use only FY14 Objective How we achieved it… New management team Built a new management team with skills to succeed in a very different market Improved utilisation from outset of FY15, currently Improve utilisation
Slide 5: FY14 Overview
FY14 OVERVIEW For personal use only PROJECT WINS OVER FOURTH QUARTER FY14 RESULTED IN UTILISATION IMPROVEMENT FROM LATE FY14 Utilisation 30 June 14 Financial performance2,4 50% 100% A$million FY13 FY14 PCP Var $M 80% Revenue 379.4 241.1 (138.3) Aug 14 60% 58%1 EBITDA 160.3 72.1 (88.2) 40% Operating
Slide 6: Current Operations
CURRENT OPERATIONS For personal use only EMECO OPERATES IN LOW COST, HIGH PRODUCTION MINING MARKETS Queensland Canada Western Regions $31.1M FY14 revenue $81.5M FY14 revenue $53.4M FY14 revenue Number of fleet: 56 Number of fleet: 113 Number of fleet: 125 Fleet WDV: $100M Fleet WDV: $147M Fleet WDV:
Slide 7: Earnings Composition
EARNINGS COMPOSITION For personal use only DIVERSIFICATION LIMITED EXPOSURE TO THE AUSTRALIAN MINING INDUSTRY Revenue by Geography Overseas geographies representing larger composition of earnings in FY14 FY13 FY14 Chile, 4% Chile, 11% Indonesia, Exited loss making Indonesian business 14% in FY14
Slide 8: Safety & Sustainability
SAFETY & SUSTAINABILITY For personal use only A HIGH STANDARD OF HSE IS KEY IN A COMPETITIVE MARKET Health, Safety & Environment Safety Performance 20 TRIFR LTIFR o Reduced TRIFR by 33% 15 o Reduced LTIFR by 74% 10 o Increased HSE lead indicators 7.1 5 o Improved HSE systems and processes 0.9 Su
Slide 9: Operational Review
For personal use only OPERATIONAL REVIEW Ken Lewsey Managing Director & Chief Executive Officer 9
Slide 10: Regional Performance - Australia
REGIONAL PERFORMANCE - AUSTRALIA For personal use only CONTRACT WINS IN RECENT MONTHS HAVE BENEFITED UTILISATION Revenue EBITDA Utilisation 30 Jun 14 73.9 152.6 100% 80% 47.9 Aug 14 98.0 60% 46%1 70.4 40% 59.6 26.5 18.2 20% 0% 1H13 2H13 1H14 2H14 1H13 2H13 1H14 2H14 Full year impact of contract lo
Slide 11: Regional Performance - Australia
REGIONAL PERFORMANCE - AUSTRALIA For personal use only PERFORMANCE OF AUSTRALIAN BUSINESS VARIED ACROSS REGIONS New South Wales Western Australia Queensland Utilisation Utilisation Utilisation 100% 100% 100% Aug 14 Aug 14 80% 62%1 80% 80% 56%1 60% 60% 60% Aug 14 40% 40% 40% 16%1 20% 20% 20% 0% 0% 0%
Slide 12: Regional Performance - Canada
REGIONAL PERFORMANCE - CANADA For personal use only CONTINUED TO EXPAND CUSTOMER BASE OVER FY14 Revenue1 EBITDA1 Utilisation 30 Jun 14 47.2 47.0 44.3 100% 24.8 37.2 21.8 80% Aug 14 57%2 15.5 60% 12.1 40% 20% 0% 1H13 2H13 1H14 2H14 1H13 2H13 1H14 2H14 Number of large customers increased from eleven
Slide 13: Regional Performance - Chile
REGIONAL PERFORMANCE - CHILE For personal use only NEW CONTRACT PROVIDING PLATFORM FOR FUTURE GROWTH Revenue1 EBITDA1 Utilisation 30 Jun 14 12.8 12.5 12.6 Aug 14 100% 8.1 83%2 7.1 80% 6.6 60% 4.6 3.0 40% 20% 0% 1H13 2H13 1H14 2H14 1H13 2H13 1H14 2H14 Recently announced Encuentro project expected t
Slide 14: Financials
For personal use only FINANCIALS Greg Hawkins Chief Financial Officer
Slide 15: Financial Summary
FINANCIAL SUMMARY For personal use only At a glance… A$million FY131 FY141 PCP Var $M Revenue 379.4 241.1 (138.3) EBITDA 160.3 72.1 (88.2) EBIT 61.3 (6.1) (67.4) NPAT 28.5 (21.6) (50.1) Statutory NPAT2 0.0 (224.2) (224.2) Free cash flow (14.0) 85.9 99.9 ROC3 6.5% (0.8)% (7.3)% Operating EPS (cps) 4.
Slide 16: Financial Performance
FINANCIAL PERFORMANCE For personal use only COST REDUCTIONS DRIVING MARGIN IMPROVEMENT IN H2 FY14 Revenue EBITDA A$M A$M Margin 250.0 100 50% 92.3 215.0 90 200.0 80 40% 164.3 68.0 70 150.0 60 30% 123.8 117.3 50 39.0 100.0 40 20% 33.1 30 50.0 20 10% 10 0.0 0 0% 1H13 2H13 1H14 2H14 1H13 2H13 1H14 2H14
Slide 17: Free Cashflow Across the Cycle
FREE CASHFLOW ACROSS THE CYCLE For personal use only Free Cash Flow Generation (excl. Growth Capex & Capital Mgt) A$M Utilisation % 250.0 100% 200.0 80% Current utilisation 58%2 150.0 60% 100.0 40% 50.0 20% - 0% -50.0 -20% -100.0 -40% 1H09 2H09 1H10 2H10 1H11 2H11 1H12 2H12 1H13 2H13 1H14 2H14 Free
Slide 18: Rental Fleet & Capital Strategy
RENTAL FLEET & CAPITAL STRATEGY For personal use only FOCUS ON RIGHT SIZING FLEET TO MATCH DEMAND IN OUR MARKETS Sustaining capex of $43.3M in FY14 down due Sustaining Capex1 63.5 to: o end of life replacement spend on hold - right sizing fleet via attrition; 26.0 25.2 17.3 o reduced major compone
Slide 19: Balance Sheet
BALANCE SHEET For personal use only SUCCESSFUL REFINANCING PROVIDES FLEXIBLE AND SUSTAINABLE DEBT STRUCTURE Net Debt Net debt reduced to $323M at 30 June 2014 A$M 500 Successful refinancing in March 2014 securing US$335M 144A bond issue: 450 o maturity profile extended to 2019 400 o covenant lig
Slide 20: Strategy & Outlook
For personal use only STRATEGY & OUTLOOK Ken Lewsey Managing Director & Chief Executive Officer
Slide 21: FY15 Outlook
FY15 OUTLOOK For personal use only Next 12 months continue to build on work completed in FY14 Improved utilisation from outset of FY15 as a result of project wins over Q4 FY14 (58%) Continue to strengthen customer relationships and expand market penetration (have had early success) Maintaine
Slide 22: Strategic Focus
STRATEGIC FOCUS For personal use only OUR DETAILED STRATEGIC REVIEW HAS LOOKED AT HOW WE EVOLVE WITHIN THE CONTEXT OF THE CURRENT MARKET: Strategic imperatives Strategic priorities Focus on addressing our leverage and strengthening Reduce capital intensity our balance sheet Build on our value
Slide 23: Questions
For personal use only QUESTIONS 23
Slide 24: Further Information
FURTHER INFORMATION For personal use only Thank you for your interest in Emeco Further investor enquiries should be directed to: • Ken Lewsey CEO • Greg Hawkins CFO • Brendan Shalders Investor Relations 24
Slide 25: Appendices
For personal use only APPENDICES 25
Slide 26: Detailed Financials
DETAILED FINANCIALS For personal use only Profit & Loss Cashflow A$ Millions FY13 FY14 PCP Var $ A$ Millions FY13 FY14 PCP Var Revenue 379.4 241.1 (138.3) Operating cashflow 175.6 57.4 (118.2) EBITDA 160.3 72.1 (88.2) General working capital 35.6 36.6 1.0 margin (%) 42.3% 29.9% (12.3%) EBIT 61.3 (6.
Slide 27: Geographic Segments
GEOGRAPHIC SEGMENTS For personal use only Australia Canada Chile A$ Millions 1H13 2H13 1H14 2H14 A$ Millions 1H13 2H13 1H14 2H14 A$ Millions 1H13 2H13 1H14 2H14 Revenue 152.6 98.0 70.4 59.6 Revenue 47.2 47.0 37.2 44.3 Revenue 4.6 12.8 12.5 12.6 EBITDA 73.9 47.9 26.5 18.2 EBITDA 24.8 21.8 12.1 15.5 E
Slide 28: Disclaimer
DISCLAIMER For personal use only Reliance on third party information 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 independently verified.
Slide 29: Learn more about us
For personal use only Learn more about us emecogroup.com