Sgh Limited · ASX:SGH
Sgh — Seven Group Holdings — FY2023 Earnings Presentation
36 slides from Sgh's earnings presentation, Aug 17, 2023
Slide 1: ASX Announcement: Investor Presentation
17 August 2023 Company Announcements Office Australian Securities Exchange Limited 20 Bridge Street SYDNEY NSW 2000 INVESTOR PRESENTATION Seven Group Holdings Limited (ASX: SVW) attaches the Investor Presentation for the year ended 30 June 2023. This release has been authorised to be given to ASX by
Slide 2: FY23 Results Presentation
Seven Group Holdings FY23 Results Presentation 17th August 2023 FY23 Results Presentation 1
Slide 3: Group Overview: Who We Are
Group Overview Who We Are Seven Group Holdings (ASX:SVW) Industrial Services • Sole CAT dealer in WA & NSW/ACT • Leading diversified operating Group • Leading mining market share • ASX100, +$9 billion market cap • Providing whole-of-life machine management • 15,000 employees over 5 core businesses I
Slide 4: Group Overview: FY23 Key Results
Group Overview FY23 Key Results SGH FY23 Sankey Diagram ($m) $9,627m 20% $1,689m 15% Revenue EBITDA $1,187m 20% $654m 18% EBIT NPAT1 180cps 18% $1,570m 55% EPS Op Cashflow • This presentation refers to underlying results unless otherwise specified 1 Attributable to members of the Group FY23 Results
Slide 5: Group Overview: Strategic Sector Exposures
Group Overview Strategic Sector Exposures Infrastructure and Transitional Mining Production Construction Energy • Exposure through WesTrac • Exposure through Coates and Boral • Gas/LNG critical transitional energy • Customer activity linked to mining • Exposure through Beach and SGHE • $1.2t five-ye
Slide 6: Group Overview: Purpose, Objective and Values
Group Overview Purpose, Objective and Values Owner’s Mindset Courage • Commit to achieving our long-term • Empower and trust our objectives and delivery of outcomes people to recognise • Invest in businesses where the and pursue investment opportunity exceeds the opportunities return requirements •
Slide 7: Group Overview: Accountable, Scalable Operating Model
Group Overview Accountable, Scalable Operating Model Group and BU delineation Front-line focused • Workforce and decision making is front-line • Business Units have separate Board structures focused (doers over delegators), avoiding top-heavy structures • No corporate costs to BUs, promoting true P&
Slide 8: Group Overview: Safety
Group Overview Safety Safety focus delivering material improvement LTIFR1 TRIFR2 • Group LTIFR of 1.9 improved by 27% June June June June 2023 2022 2023 2022 • Group TRIFR of 6.0 improved by 42% WesTrac WA 0.3 0.3 5.8 7.8 • Significant safety improvement at Coates and Boral, WesTrac NSW 0.6 0.0 3.1
Slide 9: Group Overview: ESG
Group Overview ESG Environmental • Coates Greener Choices fleet up 18% to 7% of hire fleet (OC) • Solar roll-out at WesTrac and Coates locations continues, sites achieving up to 47% energy self-sufficiency • Coates EV pilot running, utilising solar-backed charging stations • Boral Berrima chlorine b
Slide 10: Group Overview: Earnings Growth
Group Overview Earnings Growth Strong FY23 Group earnings growth FY22-23 EBIT ($m) 600 • EBIT of $1,187m up 20%, above long-run CAGR of 10% Delivered through our operated businesses 18% 500 • Elevated customer activity across mining production, infrastructure and construction continues • Industrial
Slide 11: Group Overview: Key Financials
Group Overview Key Financials Underlying Results ($m)1 FY23 FY22 % Change Revenue 9,627 8,013 20% Earnings before interest, tax, depreciation and amortisation1 1,689 1,465 15% Earnings before interest and tax1 1,187 987 20% Underlying net profit after tax attributable to shareholders1,2 654 554 18%
Slide 12: WesTrac – Business Unit Overview
WesTrac – Business Unit Overview FY23 Results Presentation 11
Slide 13: Industrial Services: WesTrac Highlights
Industrial Services WesTrac Highlights Above-trend sales growth continues WesTrac Revenue Split ($m) 2,700 • Total sales up 24%, outperforming long-run CAGR of 9% 2,200 Capital sales Product support • Machine sales up 25%, strong resources and infrastructure 1,700 investment 1,200 • Product support
Slide 14: Industrial Services: WesTrac Financials
Industrial Services WesTrac Financials Revenue up 24% to $4,905m • EBIT up 18% to $500m • EBIT margin to 10.2%, slight compression on product mix Cash flow and working capital 4,905 • Operating cashflow up 467% to $682m 500 3,962 426 24% 18% • Cash conversion of 117%, up 93% FY22 FY23 FY22 FY23 Reve
Slide 15: Coates – Business Unit Overview
Coates – Business Unit Overview FY23 Investor Day Presentation 14
Slide 16: Industrial Services: Coates Highlights
Industrial Services Coates Highlights Cumulative Renewables Investment Forecast ($m) Strong customer activity and outlook $2,500 • Equipment hire growth delivered in all regions $2,000 $1,500 • Supported by $1.21 trillion 5-year infra. & cons. pipeline $1,000 • +$22 trillion 10-year renewables pipel
Slide 17: Industrial Services: Coates Financials
Industrial Services Coates Financials Revenue of $1,143m, up 13% • Strong demand growth and pricing traction in all regions • Revenue growth amplified in EBIT of $300m, up 22% • Supported by improving asset utilisation, network optimisation, duration and fleet management Improving operating leverage
Slide 18: Boral – Business Unit Overview
Boral – Business Unit Overview SGH FY23 Investor Day Presentation 17
Slide 19: Industrial Services: Boral Highlights (72.6%)
Industrial Services Boral Highlights (72.6%) Strong volume and pricing outcomes Boral Volume and Pricing Trends • Sales volumes up across all product categories Volume Quarries Volume Cement, Bulk Volume Concrete Volume Recycling Volume Asphalt ~13% • Pricing traction achieved in all products and re
Slide 20: Industrial Services: Boral Financials
Industrial Services Boral Financials Revenue of $3,461m up 17% • Supported by 14% - 20% revenue increases across quarries, cement, concrete and asphalt Earnings, operating leverage and yield expansion • EBITDA of $454m up 40%, margin of 13.1% up 215bp 3,461 EBIT of $232m up 117%, margin of 6.7% up 3
Slide 21: Energy – Business Unit Overview
Energy – Business Unit Overview FY23 Results Presentation 20
Slide 22: Energy: Beach and SGH Energy Highlights
Energy Beach and SGH Energy Highlights Beach Energy Key Financials Beach Energy (30%) • NPAT of $385m down 24%, primarily on lower production and slight margin compression • Production up 12% in Q4, led by 51% lift in Otway basin, as Thylacine North wells brought online mid-May Waitsia construction
Slide 23: Media – Business Unit Overview
Media – Business Unit Overview FY23 Results Presentation 22
Slide 24: Media: Seven West Media (39.8%) & Other Media
Media Seven West Media (39.8%) & Other Media Revenue of $1,487m, down 3% on softer advertising Seven West Media Key Financials market since 2Q FY23 • EBITDA of $280m, down 18% • NPAT of $146m, down 27% • Digital EBITDA up 17%1 1,487 Balance sheet remains strong 1,540 280 342 -3% -18% • Net Debt
Slide 25: Group Finances
Seven Group Holdings FY23 Results Presentation Group Finances Richard Richards, CFO FY23 Results Presentation 24
Slide 26: Financials: Profit and Loss
Financials Profit and Loss $m FY23 FY22 Change % Revenue - continuing operations 9,626.5 8,013.4 20.1% Other income 39.1 59.3 (34.1)% Share of results from equity accounted investees 195.0 252.9 (22.9)% Revenue and other income 9,860.6 8,325.6 18.4% Expenses (excluding depreciation, amortisation and
Slide 27: Financials: Significant Items
Financials Significant Items $m FY23 FY22 Revaluation of equity accounted interest arising from acquisition of Boral - 756.8 Fair value adjustments arising from acquisition of Boral 12.9 (5.7) Impairment of goodwill - (728.4) Boral property segment EBIT - (1.9) Project implementation costs / Boral t
Slide 28: Financials: Business Unit Earnings
Financials Business Unit Earnings $m Total Group WesTrac Coates Boral Energy Media Investments Corporate Revenue from continuing operations 9,626.5 4,905.2 1,143.2 3,460.6 4.0 - 113.5 - Statutory EBIT 1,141.0 500.1 300.2 255.0 118.6 (12.6) 8.4 (28.7) Add: unfavourable significant items 76.1 - - - -
Slide 29: Financials: Cashflow
Financials Cashflow $m FY23 FY22 Key Commentary Underlying EBIT 1,186.5 1,137.9 • Underlying OCF of $1,570m up 55%, led by WesTrac Add: depreciation and amortisation 502.0 477.9 • OCF increases largely attributable to Underlying EBITDA 1,688.5 1,615.8 earnings growth and reduction in inventory- Oper
Slide 30: Financials: Balance Sheet
Financials Balance Sheet $m FY23 FY22 Change % Trade and other receivables 1,649.3 1,534.7 7.5% Inventories 1,846.7 1,692.8 9.1% Assets held for sale 3.2 3.7 (13.5)% Investments 1,797.5 1,791.3 0.3% Property, plant and equipment 3,497.9 3,424.7 2.1% Oil and gas assets 476.5 365.7 30.3% Intangible as
Slide 31: Group Finance: Capital Management
Group Finance Capital Management Net Debt and Leverage Facility Maturity as at 30 Jun 2023 ($m) • Strong cash flow utilised to reduce net debt (ND) 1,800 $1,666m by 9% to $4,017m, or $3,801m excluding Boral 1,600 1,400 • Adjusted1 ND/EBITDA (leverage) down 20% to sub-2.3x, 12 months ahead of committ
Slide 32: Key Messages & Outlook
Seven Group Holdings FY23 Results Presentation Key Messages & Outlook Ryan Stokes, MD & CEO FY23 Results Presentation 31
Slide 33: Closing Key Messages and Outlook
Closing Key Messages and Outlook Earnings momentum continues in FY24 • Ageing mining fleet and bulk commodity production outlook supports WesTrac service opportunity, committed orderbook gives confidence in capital sales outlook • Infrastructure and construction investment supports the customer acti
Slide 34: Q&A
Seven Group Holdings FY23 Results Presentation Q&A 17th August 2023 FY23 Results Presentation 33
Slide 35: Appendix: Businesses and Markets
Appendix Businesses and Markets Industrials Industrials Industrials Energy Media 100% 100% 73% Beach 30% SGHE 100% 40% WesTrac is one of the largest Coates is Australia’s largest Boral is Australia’s largest Beach Energy is a leading mid- Seven West Media is a leading CAT® dealers globally (by sales
Slide 36: 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 investments. This data is included for information purposes only and has not been subject to the same level of review b