Emeco Holdings Limited · ASX:EHL
Emeco — FY2009 Earnings Presentation
32 slides from Emeco's earnings presentation, Aug 26, 2009
Slide 1: 2009 Full Year Results
For personal use only 2009 Full Year Results Laurie Freedman CEO & Managing Director Stephen Gobby Chief Financial Officer
Slide 2: Presentation Overview
Presentation Overview For personal use only Highlights Financials Strategy & Outlook Question & Answer Appendices 2
Slide 3: Highlights
For personal use only Highlights Laurie Freedman CEO & Managing Director 3
Slide 4: Overview
Overview For personal use only Challenging year but business model validated… Record 1st half NPAT 2nd half NPAT severely impacted by economic crisis Despite tough environment, some business units outperformed Well positioned… Delivered on cash flow and debt reduction strategy Downsizi
Slide 5: Rental Fleet Utilisation
Rental Fleet Utilisation For personal use only Unprecedented volatility impacted 2H09... 100 % NSW and Indonesia robust despite 95 % downturn 90 % 83% Avg 85 % 30 June Canada, Western Australia, Queensland 78% Avg and USA heavily impacted 80 % 75 % 68% Avg Project postponements and mine closur
Slide 6: Customers
Customers Establishing long-term supplier relationships For personal use only with blue-chip customers Evolution of customer type Miner Contractor Other 100% 70% of revenue coming from major blue-chip customers 80% Customer profile trending toward large mining 60% houses as brand equity increase
Slide 7: Commodities
Commodities For personal use only Remaining exposed to large volume commodities FY09 Thermal coal production forecast rise by 8% in Coal, Australia and 4% in Indonesia in 2010 (ABARE, June-09) 41% Iron ore and coking coal expected to strengthen in response to a global economic recovery Other,
Slide 8: Equipment
Equipment For personal use only Monitoring equipment trends across global markets and identifying reconfiguration opportunities Liquidity in global equipment markets impacted by economic crisis Small civil equipment values have declined in North America / Europe Large mining equipment values r
Slide 9: Business Unit Performance
Business Unit Performance For personal use only NSW utilisation QLD utilisation 100 % 30 June 100 % 30 June 90 % 90 % 80 % 80 % 70 % 70 % 60 % 60 % 50 % 50 % 40 % 40 % 30 % 30 % 20 % 20 % 10 % 10 % – % – % Dec-07 Jun-08 Dec-08 Jun-09 Dec-07 Jun-08 Dec-08 Jun-09 WA utilisation VIC utilisation 100 % 1
Slide 10: Business Unit Performance
Business Unit Performance For personal use only Indonesia utilisation Canada utilisation 100 % 30 June 100 % 30 June 90 % 90 % 80 % 80 % 70 % 70 % 60 % 60 % 50 % 50 % 40 % 40 % 30 % 30 % 20 % 20 % 10 % 10 % – % – % Dec-07 Jun-08 Dec-08 Jun-09 Dec-07 Jun-08 Dec-08 Jun-09 USA utilisation A$M Australia
Slide 11: Financials
For personal use only Financials Stephen Gobby Chief Financial Officer 11
Slide 12: Financial Performance
Financial Performance For personal use only Achievement of $57.7M Operating NPAT A$ Millions FY08 FY09 FY09 Var Operating Operating Statutory Operating Revenue 617.9 528.2 528.2 (14.5)% EBITDA 213.5 210.9 185.3 (1.2)% margin (%) 34.5 39.9 EBITA 120.3 106.3 80.7 (11.6)% margin (%) 19.5 20.1 NPATA 68.
Slide 13: Contrasting halves
Contrasting halves For personal use only Record first half profit but second half impacted by economic crisis… A$M A$M REVENUE EBIT 350 75 300 69.5 250 309.8 50 200 218.4 150 36.4 25 100 50 0 0 1H09 2H09 1H09 2H09 A$M A$M EBITDA NPAT 150 50 125 40 128.6 100 39.0 30 75 82.3 20 50 18.7 25 10 0 0 1H09
Slide 14: Business Performance
Business Performance For personal use only Whilst overall performance was down there were continued improvements in some businesses… A$m 150 6.6 11.6 140 (5.3) 8.2 130 (10.4) (0.2) 120 (7.3) EBIT 110 119 (7.8) (3.2) (5.4) EBIT 100 106 90 80 Indonesia Sales & VIC QLD USA NSW Europe EBIT EBIT WA POSA
Slide 15: Earnings Composition
Earnings Composition For personal use only REVENUE EBIT & MARGINS Rental Sales Parts █ EBIT (A$ M) 618 30% 180 600 554 - EBIT Margin (%) 160 528 25% 22.3% 500 20.2% 19.5% 20.1% 140 383 20% 120 400 FY07 124 100 15% FY08 300 292 119 FY09 251 106 80 190 10% 60 200 FY06 77 40 100 5% 20 0 0% 0 FY06 FY07
Slide 16: One-off Significant Items
One-off Significant Items One-off, largely non-cash items impacting NTA by 6%… For personal use only A$m Europe 70 (26.8)M 60 57.7 50 USA (13.4)M (10.2) 40 (4.2) (2.9) Canada 30 (6.9) (4.2)M (2.7) (3.5) 20 (5.6) (4.3) 10 (4.2) 13.3 0 Goodwill Goodwill Restructuring Operating Inventory Inventory Doub
Slide 17: Cash Flow
Cash Flow Strong cash flow in tough environment For personal use only demonstrates the flexibility of the business model… A$m 1H09 2H09 100 9.3 22.5 90 80 83.5 70 12.4 60 60.1 50 (35.0) (12.5) (7.5) 40 Free Cash 30 flow 8.9 45.5 20 (15.7) 10 (80.6) 0 Working Working Dividends Dividends Disposals Dis
Slide 18: Balance Sheet & Borrowings
Balance Sheet & Borrowings For personal use only Quality balance sheet with sound funding position NTA of $0.74 after one-off impairments Benefits of working capital focus paying off Balance Sheet Jun 08 Dec 08 Jun 09 A$ m A$ m A$ m Capex limited until outlook improves Total Assets 1,167 1,266
Slide 19: Return on Funds Employed
Return on Funds Employed For personal use only Focused on improving ROFE and delivering superior returns to shareholders 1,400 - Group EBITA ROFE (%) 40.0% - EBITA ROFE, exc Europe (%) Future ROFE improvements from 1,200 - EBITA ROFE, exc Europe & USA (%) 35.0% █ █ █ Corresponding Funds employed (
Slide 20: Strategy & Outlook
For personal use only Strategy & Outlook Laurie Freedman CEO & Managing Director 20
Slide 21: Strategy
Strategy For personal use only Medium to Short-Term Long-Term Downsizing Europe Reposition fleet away from small civil to large mining USA Strategic review Increase exposure to low cost Further debt reduction until outlook producers in key commodities clearer Build scale and commodity
Slide 22: Market Outlook
Market Outlook Positive signs emerging… For personal use only Production volumes expected to remain solid Development volumes expanding as business confidence improves Volumes Growth in bulk commodities in Asia Pacific expected Canadian oil sands now stable, development activity to recommenc
Slide 23: Summary
Summary For personal use only Emeco Business model has been validated during the year Solid operational NPAT Significant free cash flow generated Further debt reduction Activity across key commodities appears to be rebounding Strengthening relationships with blue-chip customers Install
Slide 24: Questions & Answers
For personal use only Questions & Answers 24
Slide 25: Appendix
Appendix For personal use only Financials Australia review Indonesia review Canada review USA review Europe review 25
Slide 26: Financials
Financials For personal use only Cash Flow Balance sheet A$ Millions FY 08 FY 09 Var A$ Millions Dec 07 Jun 08 Dec 08 Jun 09 A$ m A$ m A$ m A$ m A$ m A$ m A$ m EBITDA 214.4 209.5 (4.9) General w orking capital 83 93 95 60 General Working Capital (19.5) 15.7 35.2 Sales & Parts inventory 203 144 167 1
Slide 27: Australia
Australia For personal use only Funds Employed & Utilisation Rental End Market 100% Funds employed 700 Thermal Utilisation by units 90% Utilisation by value Coal Coking 600 18% coal 80% 17% Funds employed (A$m) 500 Other 70% 7% 60% Utilisation 400 50% 300 Iron Ore 40% 12% 30% 200 Civil Gold 20% 4% 2
Slide 28: Indonesia
Indonesia For personal use only Funds Employed & Utilisation Rental End Market Funds employed Utilisation by units 100% Utilisation by value 130 120 Thermal 90% Funds employed (A$m) 110 Coal 80% Civil 100 5% 57% 70% 90 Utilisation 60% 80 50% 70 60 40% 50 30% 40 20% 30 20 Coking 10% 10 coal 0% – 38%
Slide 29: Canada
Canada For personal use only Funds Employed & Utilisation Rental End Market 100% Funds employed 160 Utilisation by units Coking 90% Utilisation by value 140 coal Thermal 3% Funds employed (A$m) 80% Coal 120 70% 1% 100 Other 60% Utilisation 3% Oil Sands 50% 80 64% 40% 60 30% Civil 40 29% 20% 10% 20 0
Slide 30: USA
USA For personal use only Funds Employed & Utilisation Rental End Market 100% Funds employed 100 Thermal 90% Utilisation by units 90 Coal Utilisation by value 95% Funds employed (A$m) 80% 80 70% 70 60% 60 Utilisation 50% 50 40% 40 30% 30 20% 20 10% 10 0% – Other Civil Mar-06 Mar-07 Mar-08 Mar-09 Sep
Slide 31: Europe
Europe For personal use only Funds Employed 35 Funds employed Funds Em ployed (A$m ) 30 25 20 15 10 5 0 Feb-06 Feb-07 Feb-08 Feb-09 Nov-06 Nov-07 Nov-08 Aug-07 Aug-08 Aug-06 May-06 May-07 May-08 May-09 Funds employed is defined as net tangible assets plus interest bearing liabilities 31
Slide 32: 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.