Wilson Bayly Holmes-ovcon Limited · JSE:WBO
Wilson Bayly Holmes-ovcon — FY2016 Earnings Presentation
44 slides from Wilson Bayly Holmes-ovcon's earnings presentation, 2016
Slide 1: WBHO Audited Results for the year ended 30 June 2016
WBHO AUDITED RESULTS 2016 AUDITED RESULTS for the year ended 30 June 2016
Slide 2: Contents
Contents 2 SUBJECT PRESENTER Welcome Mike Wylie Overview and highlights Louwtjie Nel Operational review Roads and earthworks Richard Smith Building and civil engineering Paul Foley Australia Paul Foley Financial review Charles Henwood Order book and project pipeline Louwtjie Nel Outlook Louwtjie Nel
Slide 3: Overview and Highlights
OVERVIEW AND AND OVERVIEW RESULTS 2015 Name HIGHLIGHTS HIGHLIGHTS AUDITED RESULTS FOR THE YEAR Surname Louwtjie ENDED NelRESULTS 30 JUNE WBHO AUDITED 20152016
Slide 4: The Year in Perspective
Overview THE YEAR IN PERSPECTIVE and highlights 4 Strong overall result delivered • Good performance from local and African building divisions as high activity levels sustained • Lower revenue from Civil engineering division in a challenging environment • Robust performance from Roads and earthworks
Slide 5: Revenue
Overview REVENUE and highlights 5 continuing operations R’m R’m Compound Annual Growth Rate Contribution by geography (CAGR): 14.4% 35,000 9 739 30,000 18 113 32% 30 650 28 823 59% 25,000 25 722 23 773 20,000 15,000 17 893 2016 South Africa 10,000 2 798 Rest of Africa 5,000 9% Australia 0 2012 2013
Slide 6: Operating Profit
Overview OPERATING PROFIT and highlights 6 continuing operations Contribution by geography R’m 346 2,000 300 35% 1,750 30% 1,500 1,250 976 1,029 1 005 2016 South Africa 1,000 768 750 939 Rest of Africa 358 500 Australia 36% 250 0 11 2012 2013 2014 2015 2016 1% 428 Overall margin of 3,3% (2015:2,7%)
Slide 7: Safety, Environmental and Empowerment
Overview SAFETY, ENVIRONMENTAL AND and highlights 7 EMPOWERMENT 2.0 R’m 1.5 1,35 1.0 0,94 0,94 0.75 0.5 0.0 2013 2014 2015 2016 Number of lost-time injuries per million man SAFETY EMPOWERMENT • Increase in LTIFR from FY15 due to • New Construction sector codes soon to be increase in Australia gazett
Slide 8: Industry Matters
Overview INDUSTRY MATTERS and highlights 8 COMPETITION COMMISSION • ‘World Cup Stadia’ meeting and contractual terms of N17 road tender referred to the Competition Tribunal • WBHO continues to defend civil claim from the Cape Town City Council • WBHO named as co-defendant with other listed construct
Slide 9: Roads and Earthworks
ROADS AND EARTHWORKS WBHO AUDITED RESULTS 2016 Richard Smith
Slide 10: Footprint
FOOTPRINT Roads and earthworks 10 Revenue 1 South Africa 32% Lesotho 2016 2 3 Swaziland 4 Botswana South Africa 5 Namibia 68% 6 Mozambique Rest of Africa 10 9 8 7 Zambia 8 Ghana 9 Sierra Leone 39% 10 Guinea 7 2015 6 5 4 3 61% 1 2 WBHO AUDITED RESULTS 2016
Slide 11: Year in Perspective
YEAR IN PERSPECTIVE Roads and earthworks 11 Robust performance in a challenging market • Overall weighting toward roadwork continues to increase • Margin pressure due to competitive nature of road market • Decline in local mining projects offset by increased mining related projects in Mozambique and
Slide 12: Revenue
Roads and earthworks 12 REVENUE Compound Annual Growth Rate R’m (CAGR): 0.3% Revenue contribution to group 8 000 7 000 14% 6 000 5 000 5 282 4 000 4 279 5 074 5 002 4 334 2016 3 000 2 000 1 000 0 2012 2013 2014 2015 2016 18% Revenue 18% • 17% decline in South Africa 2015 • 22% decline from the rest
Slide 13: Operating Profit
Roads and earthworks 13 OPERATING PROFIT R’m Operating profit contribution to group 1 000 800 28% 600 492 505 414 380 2016 400 283 200 0 2012 2013 2014 2015 2016 Operating profit 26% • Margin of 6,5% (2015: 7,2%) up from 6,2% at 31 December 2015 2015 49% • Lower earnings due to reduced activity and
Slide 14: Order Book
Roads and earthworks 14 ORDER BOOK 16% ROADS AND % June June EARTHWORKS (R’m) growth 2016 2015 2016 South Africa (9) 2 554 2 794 Africa (51) 487 995 84% South Africa Total (20) 3 041 3 789 Rest of Africa Order book 20% 26% • 61% of FY16 revenue secured for FY17 • Robust order books for RSA Roads and
Slide 15: Building and Civil Engineering
BUILDING AND CIVIL ENGINEERING WBHO AUDITED RESULTS 2016 Paul Foley
Slide 16: Footprint
Building and civil FOOTPRINT engineering 16 Revenue 19% 1 South Africa 2016 2 Mozambique 3 Zambia South Africa 4 Ghana 81% Rest of Africa 4 22% 2015 3 2 78% 1 WBHO AUDITED RESULTS 2016
Slide 17: Year in Perspective: Building
Building and civil YEAR IN PERSPECTIVE engineering 17 BUILDING Local Building division delivers excellent results • Substantial growth of 37% in Gauteng • Upswing in activity from commercial office sector • Improved revenue from Western Cape due to large volume of work at the V&A Waterfront • Solid
Slide 18: Year in Perspective: Civil Engineering
Building and civil YEAR IN PERSPECTIVE engineering 18 CIVIL ENGINEERING Industry conditions considered to be at lowest levels in many years • Revenue down 40%, however respectable margins achieved on work executed • Tender margins under pressure due to lack of available projects • Further right-sizi
Slide 19: Revenue
Building and civil engineering 19 REVENUE Compound Annual Growth Revenue contribution to group R’m Rate (CAGR): 9,5% 10 000 25% 8 000 7 536 7 002 7 385 6 000 5 249 6 166 2016 4 000 2 000 0 2012 2013 2014 2015 2016 26% Revenue 2% • 7% growth in South Africa 2015 • 23% decline in the rest of Africa 2%
Slide 20: Operating Profit
Building and civil engineering 20 OPERATING PROFIT R’m Operating profit contribution to group 600 500 37% 400 370 352 329 300 272 240 2016 200 100 0 2012 2013 2014 2015 2016 Operating profit 5% • Overall margin of 4,9% (2015: 4,8%) 46% • Three-year upward trend in 2015 earnings despite lower earning
Slide 21: Order Book
Building and civil engineering 21 ORDER BOOK 8% BUILDING AND % At June At June CIVIL ENGINEERING growth 2016 2015 (R’m) South Africa (3) 7 977 8 211 2016 Africa (24) 706 925 91% South Africa Total (5) 8 683 9 136 Rest of Africa ` Order book 5% 11% • 80% of FY16 revenue secured for FY17 • Building or
Slide 22: Australia
RESULTS 2015 AUSTRALIA AUDITED RESULTS FOR THE YEAR Paul Foley ENDED WBHO 30 JUNE AUDITED 2015 RESULTS 2016
Slide 23: Footprint
FOOTPRINT Australia review 23 Revenue 7% 4 2016 3 6 Civil engineering 2 93% Buiding 5 1 16% BUILDING 1 Melbourne (Victoria) Sydney (New South Wales) 2015 2 3 Perth (Western Australia) 4 Brisbane (Queensland) CIVIL ENGINEERING 5 Eastern region 84% 6 Western region WBHO AUDITED RESULTS 2016
Slide 24: Year in Perspective
Australia YEAR IN PERSPECTIVE review 24 BUILDING Solid performance and further growth • Additional growth in Melbourne, Victoria where residential towers and retail continue to underpin performance • Entry into Queensland market firmly established in three years • Gaining traction in Sydney, New Sou
Slide 25: Revenue
Australia 25 REVENUE R’m Compound Annual Growth Rate (CAGR): 21,6% Revenue contribution to group 20 000 17 500 18 113 15 000 15 352 12 500 10 000 12 441 12 438 2016 59% 7 500 8 291 5 000 2 500 0 2012 2013 2014 2015 2016 Revenue 18% • 8% organic AU$ growth 2015 • 18% growth in Building division 53% •
Slide 26: Operating Profit
Australia 26 OPERATING PROFIT R’m Operating profit contribution to group 500 400 30% 300 300 234 184 250 2016 200 100 11 0 2012 2013 2014 2015 2016 1% Normalised earnings in FY16 • Building divisions achieved acceptable margins 2015 • Western Region delivered solid profitability 1,7% WBHO AUDITED RE
Slide 27: Order Book
Australia 27 ORDER BOOK 5% AUSTRALIA (R’m) % growth At June 2016 At June 2015 2016 Building 24 29 302 23 697 Civil engineering Civil engineering 106 1 674 810 95% Building Total 26 30 976 24 507 3% Order book 26% • 110% of FY16 revenue secured for FY17 • Good growth in WA, QLD and NSW 2015 building
Slide 28: Financial Review
OVERVIEW AND FINANCIAL RESULTS 2015 Name REVIEW HIGHLIGHTS AUDITED RESULTS FOR THE YEAR Surname Charles ENDED WBHO Henwood 30 JUNE AUDITED 2015 RESULTS 2016
Slide 29: Financial Performance: Key Financial Numbers and Ratios
FINANCIAL PERFORMANCE Financial review 29 Target/ KEY FINANCIAL NUMBERS AND RATIOS Growth (%) FY16 FY15 Revenue growth (%) >10 6,3 14,8 Operating profit margin (%) 3 – 4,5 3,3 2,7 Return on capital employed (%) >20 22,9 18,0 Cash on hand (R’m) 44 5 752 3 995 Earnings per share – continuing operation
Slide 30: Financial Performance: Continuing Operations
FINANCIAL PERFORMANCE Financial review 30 Restated CONTINUING OPERATIONS (R’m) % change FY16 FY15 Revenue 6,3 30 650 28 823 Operating profit before non-trading items 30,7 1 005 768 Impairment of goodwill – (116) Impairment of property, plant and equipment – (54) Profit on disposal of property 29 15
Slide 31: Financial Performance: Discontinued Operations
FINANCIAL PERFORMANCE Financial review 31 Restated DISCONTINUED OPERATIONS (R’m) FY16 FY15 Operating (loss)/profit before non-trading items (12) 122 Impairment of investments and loans (3) – (Loss)/profit on disposal of operations/associate (72) 25 Onerous contracts (14) – Profit on disposal of prop
Slide 32: Financial Position: Cash Flow Analysis
FINANCIAL POSITION Financial review 32 CASH FLOW ANALYSIS (R’m) FY14 FY13 6,500 6,300 6,100 5,900 142 355 5,752 312 - 5,700 5,500 422 259 1,682 - 5,300 - 5,100 (487) 4,900 (322) (274) 4,700 4,500 4,300 4,100 3,900 3,663 3,700 3,500 3,300 3,100 2,900 2,700 2,500 Cash & Operating Working Net finance T
Slide 33: Financial Position: PP&E and Capital Expenditure
FINANCIAL POSITION Financial review 33 PROPERTY, PLANT AND EQUIPMENT (R’m) FY16 FY15 Property, plant and equipment 1 710 1 984 Depreciation 258 296 Impairments – 54 CAPITAL EXPENDITURE (R’m) Approved FY17 Actual FY16 Actual FY15 Replacement 259 88 270 Expansion 46 39 57 Total 305 127 327 • Capital e
Slide 34: Financial Position: Investments and Loans
FINANCIAL POSITION Financial review 34 INVESTMENTS (R’m) FY16 FY15 Investments 202 148 Investments in associates 347 204 • Further AU$2,5m investment into Caulfield property development in Australia • 1st phase has been completed and cash inflows are expected in FY17 • R70m equity investment in Giga
Slide 35: Financial Position: Tax and NCI Acquisitions
FINANCIAL POSITION Financial review 35 Restated TAX (R’m) FY16 FY15 Net deferred tax asset 534 415 Net current tax asset 243 259 Deferred tax balances consist of: Current tax asset consists of: • Tax losses of R89m in Australia and R58m • Taxation refundable amounting to R204m in Africa • Tax liabil
Slide 36: Order Book and Project Pipeline
OVERVIEW ORDER BOOK AND PROJECT AND PIPELINE Name HIGHLIGHTS Surname Louwtjie Nel WBHO AUDITED RESULTS 2016
Slide 37: Consolidated Order Book by Segment
CONSOLIDATED Order book and project pipeline 37 ORDER BOOK At June At June Beyond SEGMENT (R’m) 20% 2015 2016 2017 2018 Building and civil 9 136 8 683 6 399 2 284 engineering Roads and 3 789 3 041 2 713 328 2016 7% earthworks Australia 24 507 30 976 19 835 11 141 73% Total 37 432 42 700 28 947 13 75
Slide 38: Consolidated Order Book by Geography
CONSOLIDATED Order book and project pipeline 38 ORDER BOOK GEOGRAPHIC At June At June Beyond (R’m) 2015 2016 2017 2018 24% South Africa 11 005 10 532 8 176 2 356 Rest of Africa 1 920 1 192 936 256 2016 3% Australia 24 507 30 976 19 835 11 141 73% Total 37 432 42 700 28 947 13 753 South Africa • Afri
Slide 39: Project Pipeline: South Africa and Africa
PROJECT PIPELINE Order book and project pipeline 39 R’m SOUTH AFRICA BUILDING Private 28 600 Public 13 100 CIVIL ENGINEERING Private 3 950 Public 4 100 ROADS AND EARTHWORKS Private 18 300 Public 10 000 78 050 AFRICA Building and civil engineering 9 950 Roads and earthworks 13 900 23 850 TOTAL 101 90
Slide 40: Project Pipeline: Australia and Summary
PROJECT PIPELINE Order book and project pipeline 40 R’m AUSTRALIA Building 116 950 Civil engineering 9 200 TOTAL 126 150 R’m SUMMARY Building and civil engineering 77 050 Roads and earthworks 42 200 Australia 126 150 TOTAL 245 400 WBHO AUDITED RESULTS 2016
Slide 41: Outlook: South Africa
OUTLOOK Outlook 41 SOUTH AFRICA Building order book remains healthy • Private sector continues to deliver majority of projects • Short-term outlook remains positive • Impact of low growth economy on this sector a concern over the longer-term Roads and earthworks and civil engineering markets still u
Slide 42: Outlook: Africa
OUTLOOK Outlook 42 AFRICA Building opportunities still available • First commercial office project in Ghana secured • Good relationships built with partners seeking African expansion • Exploring opportunities in other African countries Limited large-scale mining opportunities in Africa • Continue wi
Slide 43: Outlook: Australia
OUTLOOK Outlook 43 AUSTRALIA Building order book remains at record levels • Positive outlook over next 24 months • Australian economy supported by strong Asian investment • High profile project secured to develop Queen Elizabeth Quay in Perth • Strong order book growth in other states decreasing rel
Slide 44: Disclaimer
DISCLAIMER 44 Certain statements contained within this presentation may be classified as forward-looking statements. Words, including but not limited to, “believe”, “anticipate”, “expect”, “seek”, “intend”, “estimate”, “project”, “plan”, or “predict” are used to identify such statements. Forward-loo
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