Emeco Holdings Limited · ASX:EHL
Emeco — H1 2021 Earnings Presentation
28 slides from Emeco's earnings presentation, Feb 9, 2021
Slide 1: 1H21 Results
Emeco Holdings Limited For personal use only 1H21 Results 9 February 2021
Slide 2: Financial Highlights
FINANCIAL HIGHLIGHTS For personal use only Revenue Operating EBITDA1 Free cash flow ROC2 $299m $118m $44m 18.7% Continued growth in revenue, up 21% on pcp Strong earnings, down only 4% on pcp despite Continued strong cash generation, up 75% on Resilient business model demonstrating COVID-19 disrupti
Slide 3: Highlights and Outlook
HIGHLIGHTS AND OUTLOOK A strong result in challenging conditions demonstrating the strength and resilience of the business, with growth building into FY22 as available fleet capacity is put to work For personal use only — TRIFR of 2.8 at 31 December 2020, down from 5.6 a year ago — Strong earnings,
Slide 4: People and safety update
For personal use only People and safety update
Slide 5: People
PEOPLE Emeco is continuously investing in its workforce of 1,000 people to drive long-term sustained success For personal use only ▪ A key driver of our success is our people and their alignment to our strategy and culture ▪ We have a workforce of over 1,000 dedicated, driven and highly skilled mech
Slide 6: Safety
SAFETY Emeco reduced its TRIFR to 2.8 from 5.6 last year and remains LTI free as the workforce expanded in 2020 For personal use only Total recordable injury frequency rate (TRIFR) Key developments ▪ Emeco continues to be lost-time injury (LTI) free for another year, extending 6.0 the LTI free perio
Slide 7: 1H21 results
For personal use only 1H21 results
Slide 8: Profit and Loss
PROFIT AND LOSS Emeco’s ongoing strategy to build a more resilient business has been executed with success, enabling us to maintain our strong earnings despite facing COVID-19 challenges and coal market weakness For personal use only 1H21 Operating financial performance1,2,3 $m unless otherwise stat
Slide 9: Cash Flow
CASH FLOW Strong free cash flow continues despite coal headwinds Overview 1H21 cash flow1 For personal use only ▪ Excellent cash conversion in the period of 107% Full impact of debt repayment and (1H20: 83%) partially due to working capital inflow interest savings ($19m per annum) to be realised fro
Slide 10: Balance Sheet
BALANCE SHEET Net leverage below 1.0x and available liquidity of $169m as a result of strong cash flow and the suite of capital structure initiatives in the period, building a more resilient and sustainable business For personal use only Overview Leverage (net debt1,2 / operating EBITDA3) 3.0x ▪ Com
Slide 11: Operating segments
For personal use only Operating segments
Slide 12: EBITDA Margins
EBITDA MARGINS Increased capital-lite services from Pit N Portal and additional fully maintained rental projects are reflected in 1H21 EBITDA margins For personal use only ▪ Emeco’s strategy of growing the services we provide and creating Group EBITDA margin value for our customers differentiates us
Slide 13: Rental
RENTAL Strong Rental earnings demonstrated the resilience of the business despite COVID-19 challenges and coal market weakness in the Eastern Region For personal use only Operating EBITDA Highlights $140.0m 62.5% 65.0% ▪ Strong earnings and margins maintained despite weak coal conditions in Eastern
Slide 14: Rental – Eastern Region
RENTAL – EASTERN REGION Eastern Region conditions have stabilised with momentum building from 4Q21 to drive earnings growth in FY22 For personal use only Operating EBITDA Overview Outlook $120.0m 75.0% ▪ The Eastern Region was impacted with a ▪ Eastern Region coal has stabilised but 70.1% 2H21 earni
Slide 15: Rental – Western Region
RENTAL – WESTERN REGION Very strong growth in Western Region as a result of project wins in gold and iron ore For personal use only Operating EBITDA Overview Outlook ▪ Project wins in gold and iron ore accelerated ▪ Western Region will continue strong $35.0m 44.6% growth in WA with EBITDA up 36% on
Slide 16: Pit N Portal
Pit N Portal New projects and strong tender pipeline set up Pit N Portal for long term success For personal use only Operational highlights Pit N Portal locations ▪ High level of activity as projects ramped up, with a strong tendering pipeline ▪ Early commencement of significant Mincor underground n
Slide 17: Pit N Portal
Pit N Portal Pit n Portal continues strong revenue growth in 2021 as projects ramp up into FY22 For personal use only Operating EBITDA1 Financial highlights ▪ Strong growth in revenue and with $18.0m 26.3% 27.0% earnings up 7% over 1H20 run-rate on 26.0% high activity levels in both underground $16.
Slide 18: Force Workshops
FORCE WORKSHOPS Workshops continue strong earnings and retail revenue growth Operating EBITDA1 For personal use only Overview ▪ External work continued to be strong driving $5.0m 10.3% 12.0% 9.8% EBITDA growth $4.0m 10.0% $4.0m ▪ Expanded operations to underground equipment, 8.0% $3.0m $3.8m support
Slide 19: Strategy
For personal use only Strategy
Slide 20: A Sustainable and Resilient Business
A SUSTAINABLE AND RESILIENT BUSINESS Emeco is now a resilient business, with a widened value proposition, diversified portfolio of customers and commodity exposure. Strong cash flows and low leverage create opportunities to continue along the strategic path For personal use only Strong balance sheet
Slide 21: Lowest Cost, Highest Quality Provider
LOWEST COST, HIGHEST QUALITY PROVIDER Unique to Emeco, rebuilding equipment internally through our Force workshops generates unmatched quality and cost advantages to be consistently lower than competitors For personal use only Emeco life-cycle cost performance Industry ranked position Mid-life asset
Slide 22: Portfolio Diversification
PORTFOLIO DIVERSIFICATION Emeco has continued to diversify its revenue by commodity in 1H21, with strong growth in metals further reducing the reliance on coal while also expanding the diversity of our customers and projects For personal use only Commodity mix Customers and projects Civil and other
Slide 23: Widening Value Proposition
WIDENING VALUE PROPOSITION Our ongoing strategy to diversify our revenue through increasing our service offering continues to widen the value proposition for our customers and positions Emeco to become further embedded on customer sites For personal use only Expanding our services Services revenue ▪
Slide 24: Strongest Balance Sheet in Emeco's History
STRONGEST BALANCE SHEET IN EMECO’S HISTORY Comprehensive package of capital structure initiatives completed in 1H21, fortifying Emeco’s balance sheet For personal use only 3.0x Leverage1 (net debt / operating EBITDA) Stronger balance sheet 2.5x Pre-AASB 16 leases Post-AASB 16 leases ▪ A$195m of US n
Slide 25: Appendix A: Statutory to operating reconciliations and disclaimer
For personal use only Appendix A: Statutory to operating reconciliations and disclaimer
Slide 26: Reconciliations
RECONCILIATIONS 1H21 operating1 earnings reconciliation 1H21 cash flow reconciliation For personal use only $Am NPBT EBIT EBITDA $Am Operating Statutory result 5.0 53.6 112.3 Operating EBITDA 117.9 Tangible asset impairment 0.5 0.5 - Working Capital 7.5 Long term incentive expense 4.1 4.1 4.1 Net ca
Slide 27: Important Notices and Disclaimers
IMPORTANT NOTICES AND DISCLAIMERS For personal use only Reliance on third party information No offer of securities The information and views expressed in this Presentation were prepared by Emeco Holdings Ltd (the Nothing in this Presentation should be construed as either an offer to sell or a solici
Slide 28: Thank you
Thank you For personal use only Investor enquiries: Sam Byford corporate@emecogroup.com M: +61 (0) 413 195 958 emecogroup.com