37 slides from Austin Engineering's shareholder meeting presentation, Nov 25, 2016
Slide 1: Austin Engineering Ltd AGM – Company Presentation
Austin Engineering Ltd AGM – Company Presentation 25 November 2016
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by Austin Engineering Limited (ABN 60 078 480 136) (“Austin” or the “Company”). The information in this presentation should be read in conjunction with Austin’s continuous disclosure announcements. The information is of a general nature and has been pre
Slide 3: Agenda
Agenda • Commencement of meeting at 10:00am • Executive Chairman’s address and presentation • CEO’s address and presentation • Questions • AGM formalities • Close 3
Slide 4: Executive Chairman's address Peter Pursey
Executive Chairman’s address Peter Pursey
Slide 5: Key items
Key items 1. Significant recapitalisation with A$136m facilities raised • Senior debt now fully repaid, a reduction of $82m since June 2015, and $37m since the 2015 AGM • Total debt reduced by $55.7m since June 2015 • $84m of new funding and facilities raised and utilised during calendar 2016 • Sout
Slide 6: Active approach to strengthening the Balance Sheet in 2016
Active approach to strengthening the Balance Sheet in 2016 Continued focus on strengthening Austin’s Balance Sheet throughout 2016 has seen a number of financing options utilised. In total Austin has secured c. $136m in new financing since Jun-15 and c. $84m in 2016, allowing the complete exit of th
Slide 7: Debt has been managed down proactively
Debt has been managed down proactively Since 30 June 2016, Austin has reduced total debt by $10.7m as at Nov-16 and has now completely repaid the senior debt facility and restructured the South American loans into a smaller facility. Austin’s balance sheet is now well positioned to benefit from the
Slide 8: Key items
Key items 2. Strategic review Continue to make significant progress in respect of the initiatives identified in the strategic review 3. New senior management are now in place • Peter Forsyth appointed CEO • Christine Hayward appointed CFO and Company Secretary 4. Encouraging signs for calendar year
Slide 9: Key items
Key items 5. Further new wins since November 2016 • Further order for 27 trays in Perth, successful conversion of tender • Significant order in Indonesia – 5 trays • Westech new orders – 8 trays • Hunter Valley new orders – 2 trays, 1 bucket 9
Slide 10: Encouraging signs for calendar year 2017
Encouraging signs for calendar year 2017 Austin’s current order book shows encouraging signs for calendar year 2017 and helps underpin FY17: Evidence: Perth currently has an order book with 95 trays: • This time last year Perth had an order book of 25 trays and ultimately completed a total of 61 tra
Slide 11: Focus
Encouraging signs for calendar year 2017 Calendar Year 2016 Calendar Year 2017 Balance sheet repair Secure manufacturing revenues Focus Senior management Improve earnings and transition manage balance sheet Strategic review and implementation of Delivering recent orders initiatives Improved our abil
Slide 12: Executive Chairman's address Peter Pursey
Executive Chairman’s address Peter Pursey
Slide 13: CEO's Address Peter Forsyth
CEO’s Address Peter Forsyth austinengineering..
Slide 14: Financials – FY16
Financials – FY16 FY15 FY16 $m $m Revenues maintained Revenue 210.4 209.8 but slight margin compression Gross Margin % 36% 34% Normalised EBITDA 15.0 9.2 Within guidance range of $8m - $12m Depreciation (11.0) (10.8) Amortisation / Impairment (42.0) (10.0) Interest Income 1.3 - Interest Expense (6.1
Slide 15: Financials – FY16
Financials – FY16 Major mining players with our operations close to their locations Significant repair work, likely to transition to manufacturing work as part of replacement cycle 15
Slide 16: FY2017 Outlook
FY2017 Outlook Encouraging signs for financial year 2017 • Mixed performance for the 2017 financial year to date due to range of changes currently in progress and timing of new works, revenue mix and work volumes, first half trading is expected to be breakeven on an underlying basis • Second half re
Slide 17: Safety
Safety • A continued focus on zero harm has yielded improved safety results in FY16 • The Global LTIFR (Lost Time Injury Frequency Rate) for FY16 was 2.75 which is an improvement from 2.92 recorded for FY15 • New Global Safety Co-ordinator 17
Slide 18: Strategic Refocus – Update
Strategic Refocus – Update Initiatives Next Six . Category Underway Months - Global standards - Rollout of new initiatives in Safety - Uniform reporting progress - Active management - Co-ordinate Aust and - Global engineering Engineering USA structure excellence - Integrate South America - Training
Slide 19: Strategic Refocus - continued
Strategic Refocus - continued Organisational re-design Australasia Americas Asset North South Operations Management America America Perth Hunter Valley Perth Chile Mackay Hunter Valley Wyoming Colombia Aust Bore Mackay Peru Batam Island 19
Slide 20: Strategic Refocus - continued
Strategic Refocus - continued Organisational Structure CEO CFO & EGM Operations EGM Strategy & Safety Company Australasia Development Co-Ordinator Secretary EGM Asset Marketing Management Manager Australia North America President Country Manager Chile Country Manager Colombia Country Manager Peru 20
Slide 21: Operational Overview
Operational Overview • Stronger committed order position than in recent years • Large number of tenders under assessment • Significant number of opportunities yet to be tendered • Continued expectations of high success rates • Repairs and maintenance activity remains strong • Improved utilisation ra
Slide 22: Operational Overview
Operational Overview Australasia Perth • Orders in place for 48 trays with major iron ore client • Since announcement on 3 November 2016 further order received for 27 trays Indonesia • Orders in place for 9 chutes (over 1,300 tonnes) with global miner • Significant order received mid 1H17 plus sale
Slide 23: Operational Overview
Operational Overview Australasia - continued Mackay • Continue to win repair and maintenance work for major miners • Remains a difficult market and is trailing behind other Australasian operations in securing new work Aust Bore • Has seen consistent increase in activity since start of financial year
Slide 24: Operational Overview – Americas
Operational Overview Americas Wyoming • USA continues to be a tough operating market • Recent orders placed for 16 trays • Modest orders received from both USA and Canada Colombia • Steady revenues from site contract with a large miner • Expecting to manufacture trays and buckets for large miner and
Slide 25: Operational Overview
Operational Overview Americas - continued Peru • Base revenues earned from maintenance contract with an international miner • Supported by manufacturing work and other repair contracts Chile • Site services work underpins Austin Ingenieros business • Recent order awarded for 12 trays for major minin
Slide 26: Outlook
Outlook Austin Engineering • Austin’s design IP provides a sustainable competitive advantage: – Austin’s range of mining products and services enable end users to achieve the lowest unit cost of production – Superior engineered products customised for specific site conditions • The quality of Austin
Slide 27: Outlook
Outlook New orders in CY17 should be aided by the recent rally in commodity prices. In particular, iron ore is currently at two year highs at c. US$80/t. An upturn in commodity prices combined with components working beyond product life cycle and mine quantities increasing as miners move into new ar
Slide 28: Outlook
Outlook Austin Engineering • Austin strategy of: – owning our IP and bespoke designs – manufacturing and service / repair of our products as well as being located close to the key resource areas is fundamental to supporting our customers future product and service requirements 28
Slide 29: Formal Business
Formal Business austinengineering..
Slide 30: Resolution 1
Resolution 1 Adoption of the remuneration report To consider and, if thought fit, pass the following as an ordinary resolution under section 250R(2) of the Corporations Act 2001: ‘That the Remuneration Report for the year ended 30 June 2016 be and is hereby adopted’. Manner in which the security-hol
Slide 31: Resolution 2
Resolution 2 Election of Mr James (Jim) Allan Walker as Non-Executive Director To consider and, if thought fit, pass the following as an ordinary resolution: ‘That Mr Jim Walker, who having been appointed as a Director of the Company on 8 July 2016 in accordance with the Company’s constitution, be e
Slide 32: Resolution 3
Resolution 3 Election of Mr Christopher (Chris) Charles Indermaur as Non- Executive Director To consider and, if thought fit, pass the following as an ordinary resolution: ‘That Mr Chris Indermaur, who having been appointed as a Director of the Company on 8 July 2016 in accordance with the Company’s
Slide 33: Resolution 4
Resolution 4 Ratification of Previous Placement Shares issued To consider and, if thought fit, pass the following as an ordinary resolution: That for the purposes of Listing Rule 7.4 and for all other purposes, shareholders ratify the issue of 20,908,911 fully paid ordinary shares at an issue price
Slide 34: Questions
Questions austinengineering.. www.austineng.com.au
Slide 35: Austin's Principal Products
Austin’s Principal Products Off-highway Buckets Water tanks Service modules dump truck bodies Tyre handlers Ancillary attachments
Slide 36: Austin Principal Services
Austin Principal Services Equipment Specialised Painting and repair and fabrication blasting maintenance Specialised On-site maintenance and machining and shutdown services line boring
Slide 37: Austin Brands
Austin Brands The Austin Engineering brand encompasses design and manufacture of mining and earthmoving equipment, along with the provision of support services, from four Australasian operations – Perth, Hunter Valley, Mackay and Indonesian operation and Peruvian operation. The Austin Ingenieros bra