Sgh Limited · ASX:SGH
Sgh — Seven Group Holdings — Australia Conference, Sydney 2014
35 slides from Sgh's conference presentation, May 8, 2014
Slide 1: Company Announcement cover letter
8 May 2014 For personal use only Company Announcement Office ASX Limited Level 6 20 Bridge Street SYDNEY NSW 2000 By electronic lodgement Total Pages (including cover letter): 35 Dear Sir / Madam PRESENTATION Please find attached a slide presentation made by Mr Richard Richards of Seven Group Holdin
Slide 2: Group Overview May 2014
For personal use only Group Overview May 2014
Slide 3: Disclaimer
Disclaimer Basis of preparation of slides Included in this presentation is data prepared by the management of Seven Group Holdings Limited (SGH) and other associated entities and For personal use only investments. This data is included for information purposes only and has not been subject to the
Slide 4: Group Structure
Group Structure For personal use only Industrial Services Media Investments WA ~35% + $289m RCPS 100% Listed ~$857m NSW/ACT Portfolio Australia EMP 100% 100% Property China Portfolio 45% 100% Notes: 1. Group structure as at 31 December 2013 100% 2. Investment values as at 31 December 2013 3. Seven W
Slide 5: Group Highlights
Group Highlights Reduced demand for new and rental equipment as Underlying results impacted miners focus on cost efficiencies and capital deferrals For personal use only by mining sector downturn Transformation undertaken in FY13 has now right- sized the business Steady earnings in media TV ad
Slide 6: Key Financial Numbers
Key Financial Numbers Total Group – Half Year Result For personal use only 1H FY14 1H FY13 % Change Trading revenue $ 1,577.1 m $ 2,704.2 m -42% EBITDA 1, 2 $ 213.7 m $ 406.5 m -47% Underlying net profit after tax (excluding Significant Items) 2 $ 131.8 m $ 235.1 m -44% Significant Items (including
Slide 7: Capital Management
Capital Management Ensure an efficient capital structure and maintain prudent levels of gearing For personal use only Objectives Retain sufficient balance sheet flexibility to fund the working capital needs of operating businesses through the cycle and to pursue growth and investment opportuniti
Slide 8: Transformation in Progress
Transformation in Progress For personal use only Good progress being made across a range of focus areas – Transitioning new management team – Improving customer service and assurance – Emphasising operational efficiency – Ensuring capital effectiveness – Expanding portfolio structure Businesses
Slide 9: Consolidated Profit and Loss
Consolidated Profit and Loss Underlying Performance For personal use only Please refer to $m 1H FY14 1H FY13 Change % the Appendix 4D Revenue 1,577.1 2,704.2 -42% for the detailed Other income 61.6 48.7 26% statutory Share of results from equity accounted investees 67.4 84.5 -20% presentation Tota
Slide 10: Summary of Significant Items
Summary of Significant Items For personal use only $m 1H FY14 1H FY13 Gain on sale of other investments and mark-to-market on derivatives 32.2 58.5 Impairment reversal - SWM equity 127.9 - Impairment - other - (9.5) Restructuring, redundancy and other costs (11.7) (11.3) Share of equity accounted in
Slide 11: Earnings Summary
Earnings Summary For personal use only Total WesTrac WesTrac Allight Coates Media Other $m Other Group Aus China Sykes Hire Investm. Investm. Trading revenue 1,577.1 1,261.0 265.8 50.3 - - - - Statutory EBIT 354.9 88.7 9.1 (2.6) 27.9 190.5 52.3 (11.0) Add back unfavourable Individually Significant I
Slide 12: Consolidated Balance Sheet
Consolidated Balance Sheet Total Group For personal use only As at As at Change Significant reduction in $m 31 Dec 13 30 Jun 13 % working capital levels Trade and other receivables 552.1 721.6 -23% Investment portfolio has Inventories 889.0 1,050.5 -15% generated value Intangible assets 777.9 76
Slide 13: Consolidated Investment Listing
Consolidated Investment Listing Total Group For personal use only As at As at $m 31 Dec 13 30 Jun 13 Seven West Media (Ordinary shares + RCPS) 3 1,115.1 947.1 Listed Portfolio 1,2 857.2 758.8 Coates Hire 3 461.8 430.2 Other 59.3 73.0 Total Investments 2,493.4 2,209.1 Notes: 1. Available for sale sec
Slide 14: Balance Sheet Metrics
Balance Sheet Metrics Total Group For personal use only As at As at $m 31 Dec 13 30 Jun 13 Total assets 5,604.7 5,654.3 Total shareholder's equity 3,333.4 3,035.3 Net debt1 615.4 746.9 Debt ratios Gearing: net debt1 to net debt plus equity 15.6% 19.7% Net debt1 / underlying EBITDA2 1.2x 1.2x Interes
Slide 15: Operating Cash Flow
Operating Cash Flow For personal use only $m 1H FY14 1H FY13 Underlying EBIT 189.2 379.7 Add: depreciation and amortisation 24.5 26.8 Underlying EBITDA 213.7 406.5 Operating cash flow 225.3 622.8 Add: interest and other costs of finance paid 33.6 59.6 Income taxes paid / (refunded) 137.5 93.5 Add ba
Slide 16: Total Cash Flow
Total Cash Flow For personal use only $m 1H FY14 1H FY13 Operating cash flow 225.3 622.8 Investing cash flow (3.7) 302.3 Financing cash flow (240.7) (621.4) Net increase in cash and cash equivalents (19.1) 303.8 Cash and cash equivalents at end of period 524.9 431.7 Opening net debt 713.4 1,718.7 Mo
Slide 17: SGH Investment Portfolio
SGH Investment Portfolio Movement in SGH Investment Portfolio For personal use only Our aim is to realise value creation through 1,000 137 20 76 selective investment opportunities where 900 857 58 strategic rationale exists to enhance Unrealised 800 759 shareholder return 700 Focus on investment
Slide 18: SGH Property Holdings
SGH Property Holdings Our aim is to maximise the value and return Kings Square Masterplan KS1 KS2 KS4 KS5 For personal use only from our existing property assets – Perth Entertainment Centre / Kings Square – Seven’s Tuart Hill studio in Perth – Indirect property investments through the Flagship un
Slide 19: Investments and Property Profit and Loss
Investments and Property Profit and Loss Excluding Significant Items For personal use only $m 1H FY14 1H FY13 Change % The 31 Dec 2013 result excludes results from Revenue 0.0 5.8 -100% Engin (sold Sep 2012) Other income 16.3 14.1 16% Other income comprises Share of results from equity accounted
Slide 20: WesTrac Australia Overview
WesTrac Australia Overview The volume of new resources projects has declined resulting For personal use only in a normalisation of capital equipment demand – 2013 saw the previously unprecedented levels of new equipment sales start to normalise as new projects have been delayed – 2H revenue was im
Slide 21: WesTrac Australia Half Year Result
WesTrac Australia Half Year Result Trading Revenue $m EBIT $m For personal use only 275 2,383 64% decline in product sales compared to pcp Product – Driven by softening in the coal sector and support 704 1,261 reduction in new iron ore projects 97 1,679 649 8% decline in product support sales ag
Slide 22: WesTrac China Half Year Result
WesTrac China Half Year Result Trading Revenue EBIT US$m For personal use only US$m 238 243 US$78m in operating cash flow delivered as Product 58 inventory levels were managed down support 61 8.4 EBIT turnaround primarily due to lower cost Product 177 185 sales base and strong culture of cost co
Slide 23: AllightSykes Half Year Result
AllightSykes Half Year Result For personal use only Trading Revenue $m EBIT $m Revenue down 45% on pcp on the back of 92 softer demand 3.4 50 Cost reduction initiatives have been implemented with focus now on customers and -1.8 market share 1H 13 1H 14 1H 13 1H 14 Strong free cash flow generat
Slide 24: Coates Hire Group Half Year Result
Coates Hire Group Half Year Result Trading Revenue $m EBIT $m For personal use only 654 586 160 Revenue of $586m down (10%) against pcp, 113 driven by soft trading conditions EBITDA decreased (17%) on prior corresponding period Sold its UK operations, realising $119m with a 1H 13 1H 14 1H 13 1
Slide 25: Media Investments Profit and Loss
Media Investments Profit and Loss Excluding Significant Items For personal use only SGH holds a 35.33% interest $m 1H FY14 1H FY13 Change % in the ordinary shares of SWM and also holds RCPS with Share of associates NPAT a 31 Dec 2013 carrying value - Seven West Media 48.6 46.4 5% of $289m - Consol
Slide 26: Seven West Media Interim Result Highlights
Seven West Media Interim Result Highlights Outstanding television revenue share – 39.7% SWM Revenue 1H FY14 1H FY13 Change % For personal use only Television 683.7 666.1 2.6% share in 1H FY14 (CY13: 40.1%) Newspapers 139.4 158.0 -11.8% Ongoing management focus on cost, quality and Magazines 123.
Slide 27: Investment approach and portfolio enhancement
Investment approach and portfolio enhancement SGH adopts a disciplined, value-driven methodology of investment selection Indicative criteria for new strategic investments SGH has funding capacity for strategic investment For personal use only A$B Asset quality – growth sectors that offer comparati
Slide 28: Strategic rationale for investment in Oil & Gas
Strategic rationale for investment in Oil & Gas Energy market trends support the view that the sector offers long-term value For personal use only Population & urbanisation growth is lifting energy demand, especially for natural gas, which is versatile, affordable & relatively clean Demand for gas a
Slide 29: Strategic rationale for investment in Oil & Gas
Strategic rationale for investment in Oil & Gas Australia’s comparative advantage and recent gas market dislocation are attractive Key rationale for domestic Oil & Gas investment For personal use only LNG supply is growing and excess demand expected Australia has world-class Oil & Gas resources an
Slide 30: Identifying value & leveraging expertise
Strategic rationale for investment in Oil & Gas Identifying value & leveraging expertise Value Considerations Relative valuation of large & small cap ASX Energy stocks For personal use only Upstream assets (exploration, development & production) are preferable to downstream assets (refinement, tra
Slide 31: Nexus Energy Limited Company Overview
Nexus Energy Limited Company Overview Description Historical Profit & Loss ($’000) 1HFY14 FY13 FY12 For personal use only Revenue1 28,624 51,996 80,670 ASX-listed (NXS) Oil & Gas explorer & producer, with a portfolio of assets: Longtom – a producing gas/condensate field in the Gippsland Basin (off
Slide 32: Nexus Energy Limited Asset Overview
Nexus Energy Limited Asset Overview Longtom Crux Echuca Shoals Location Gippsland Basin, offshore Victoria Browse Basin, offshore WA Browse Basin, offshore WA For personal use only Licence ownership Longtom, Gemfish, Grayling - VIC/L29: 100% Crux, Auriga, Caelum, Shiraz Echuca Shoals/Fos
Slide 33: Proposed Acquisition of Nexus
Proposed Acquisition of Nexus On 31-Mar-14, SGH announced it had signed a conditional Merger Implementation Agreement to acquire Nexus via scheme of arrangement For personal use only Offer highlights Contingency plan Nexus shareholders to receive A$0.02 per share in cash As Nexus noted in its 1H
Slide 34: Proposed Acquisition of Nexus: Balance sheet considerations
Proposed Acquisition of Nexus Balance sheet considerations Nexus Pro Forma As at Considerations For personal use only Balance Sheet 31-Dec-13 Adjustments Pro-forma Current assets SGH is required to recognise appropriate provisions (including covering Cash and cash equivalents 10,049 (5,249) 4,800
Slide 35: For personal use only
For personal use only SGH Presentation May 2014 Slide 34
Seven Group Holdings — Australia Conference, Sydney 2014 on 6ix