Emeco Holdings Limited · ASX:EHL
Emeco — H1 2020 Earnings Presentation
23 slides from Emeco's earnings presentation, Feb 18, 2020
Slide 1: Emeco Holdings Limited 2020 Interim Results
Emeco Holdings Limited 2020 Interim Results 18 February 2020
Slide 2: Important Notices and Disclaimers
IMPORTANT NOTICES AND DISCLAIMERS 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 solicitation of an offer to
Slide 3: 1H20 Financial Highlights
1H20 Financial Highlights $246.5m $119.1m 48.3% $67.5m 27.4% Revenue Operating Operating Operating Operating ▲10% EBITDA EBITDA margin EBIT EBIT margin ▲16% ▲250bps ▲13% ▲70bps $42.1m $82.6m $23.3m 1.77x 20.6% Operating NPAT Workshops Operating Net Return on ▲33 % activity cash flow Leverage capital
Slide 4: 1H20 Highlights
1H20 HIGHLIGHTS Strong earnings growth in 1H20 with Operating EBITDA in line with management guidance and delivering on strategy Continued strong performance with significant growth on 1H19. Operating EBITDA1 of $119.1m, Strong Financial Performance up 16% on 1H19 Delivering Growth in Line with
Slide 5: People and safety
People and safety @ Emeco
Slide 6: Safety
SAFETY Emeco had zero lost time injuries in 1H20 and safety is the #1 priority Safety ▪ Zero lost time injuries ▪ Current total recordable injury frequency rate (TRIFR) is 4.3, reduced from 4.6 at 30 June 2019 ▪ Safety of our workers is paramount – We set ourselves a goal to reduce the TRIFR and we
Slide 7: People
PEOPLE The Emeco Team continues to grow, both in number and capability People ▪ People are the most important part of our business – they are responsible for customer relationships, building on Emeco’s value proposition and the craftsmanship that creates our quality ▪ We challenge ourselves to ensur
Slide 8: Operating segments
Operating segments @ Emeco
Slide 9: Rental
RENTAL Improving conditions in WA, the growth assets and operational efficiencies drive growth in earnings and margins Operating EBITDA1 up 14% Operating EBIT1 up 13% 1H20 overview 48.0% 61.7% ▪ Rental growth predominantly due to strong demand $140.0m $120.0m from customers in metallurgical coal, im
Slide 10: Rental – Eastern Region
RENTAL – EASTERN REGION Strong metallurgical coal demand continues to drive increased utilisation Operating EBITDA up 22%1 1H20 overview 2H20 outlook .0m 75.0% 69.2% ▪ Growth underpinned predominately by ▪ Strong continued demand, .0m 70.0% 66.1% contribution from growth assets and increased particu
Slide 11: Rental – Western Region
RENTAL – WESTERN REGION Following projects completing in FY19, the Western Region ramped up in 1H20 as it redeployed fleet into iron ore and gold projects Operating EBITDA up 10%1 1H20 overview 2H20 outlook 0m 48.3% ▪ Consistent with previous announcements, 50.0% ▪ Earnings will grow in 2H20 resulti
Slide 12: Force Workshops
FORCE WORKSHOPS Workshops throughput continues to grow and contribute earnings and savings to the Group Activity1 up 91% on 1H19 1H20 overview $82.6m ▪ Workshops activity has significantly increased driven by internal activity as Force $71.1m supported redeployment of Western Region fleet to new pro
Slide 13: Financial results
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Slide 14: Profit and Loss
PROFIT AND LOSS Earnings and margins continue to expand and we further diversify our commodity exposure Operating financial performance1 1H20 Group revenue by commodity $m unless otherwise stated 1H194 1H20 Change Operating revenue 224.3 246.5 10%▲ Operating EBITDA2 102.8 119.1 16%▲ Operating EBITDA
Slide 15: Cash Flow
CASH FLOW Operating cash flow continues to grow as the business benefits from its growing scale Overview 1H20 cash flow1,2 ▪ Operating cash flow up 19% on 1H19 to $75.3m $m 1H19 1H20 ▪ Working capital cash outflow in the period due to: Operating EBITDA 102.8 119.1 − Final instalment of growth capex
Slide 16: Balance Sheet
BALANCE SHEET Leverage down to 1.77x and on track for 1.5x by June 2020 Overview Leverage (net debt2 / operating EBITDA3) ▪ Further improvement in leverage to 1.77x1, down from 2.0x at 30 June 2019, on track to achieve FY20 target of 1.5x ▪ Further deleveraging achieved through a fully underwritten
Slide 17: Outlook & Strategy
Outlook & Strategy @ Emeco
Slide 18: FY20 Focus & Outlook
FY20 FOCUS & OUTLOOK Utilisation improvements and margin expansion setting up Emeco for further growth in 2020 — Further develop HSE systems and resources given growth and added complexity of the business with the growth of the Force Workshops and the acquisition of the Pit N Portal business — Integ
Slide 19: Pit N Portal Update
PIT N PORTAL UPDATE Strategic acquisition of underground mining services provider Pit N Portal expected to deliver strong growth in the expanding underground sector Platform for growth into expanding underground mining sector Platform for FY19 revenue of $101m, Operating EBITDA of $20m Emeco pro
Slide 20: More Than Just a Rental Company
MORE THAN JUST A RENTAL COMPANY Underpinned by high quality, low cost equipment, Emeco and Pit N Portal’s service offerings are supported by industry leading capabilities Procurement Planning and On-site project Force workshops EOS Technology capability component analysis support ▪ Ability to use it
Slide 21: Appendix A: Operating to statutory reconciliation
Appendix A: Operating to statutory reconciliation
Slide 22: Reconciliations
RECONCILIATIONS 1H20 operating earnings reconciliation 1H20 operating cash flow reconciliation1 $Am NPAT EBIT EBITDA $Am Statutory result 27.0 52.8 113.1 Operating EBITDA 119.1 Ineffective hedge (gain) (0.5) - - Working capital (20.5) Tangible asset impairment 5.9 5.9 - Net sustaining capex (49.1) L
Slide 23: Thank you
Thank you emecogroup.com