Emeco Holdings Limited · ASX:EHL
Emeco — FY2020 Earnings Presentation
29 slides from Emeco's earnings presentation, Jul 27, 2020
Slide 1: 2020 Full Year Results
Emeco Holdings Limited For personal use only 2020 Full Year Results 27 July 2020
Slide 2: Important Notices and Disclaimers
IMPORTANT NOTICES AND DISCLAIMERS For personal use only 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 solici
Slide 3: FY20 Financial Highlights
FY20 FINANCIAL HIGHLIGHTS1,2 Continued growth in revenue, together with tight Revenue $540.4m ▲16% For personal use only cost controls, drove the largest operating EBIT in Emeco’s history Operating EBITDA1 $246.1m ▲15% Strong free cash flow generation pushed leverage below our FY20 target of 1.5
Slide 4: What we said we would do in FY20 and what we achieved
WHAT WE SAID WE WOULD DO IN FY20 AND WHAT WE ACHIEVED Guidance Metric Result For personal use only Growth in revenue Revenue ▲16% EBITDA between $244m and $247m Operating EBITDA1 $246.1m Growth in earnings Operating EBITDA1 ▲15% Growth in workshops activity Workshops activity2 ▲43% Strong fr
Slide 5: Commodity Exposure
COMMODITY EXPOSURE Iron ore revenue more than tripled and gold revenue more than doubled, as the business grows around coal (65% to 49% of total revenue) For personal use only FY19 Group revenue FY20 Group revenue Q4 FY20 Group revenue (with Pit N Portal) Civil and other Civil and other Civil and ot
Slide 6: COVID-19, people and safety update
For personal use only COVID-19, people and safety update
Slide 7: COVID-19 Update and Response
COVID-19 UPDATE AND RESPONSE The safety of our workforce remains our top priority Ensuring the safety of our team and supply chain Operational impact For personal use only Established Coronavirus Coronavirus hotline available to No major mines have been severely impacted to Response Committee,
Slide 8: People and Safety
PEOPLE AND SAFETY Emeco reduced its TRIFR to 2.9 in FY20 and has achieved 4 years lost time injury free People Safety For personal use only People continue to be the key to our success. Our people are as Zero lost time injuries and 4 years lost time injury (LTI) free diverse as our clients and t
Slide 9: Operating segments
For personal use only Operating segments
Slide 10: Rental
RENTAL Rental division continued its trend of earnings growth and margin expansion in FY20 For personal use only Operating EBITDA1 up 11% Operating EBIT1 up 8% and and margin up 270bps $200.0m margin up 80bps 40.0% $190.0m 39.0% 61.0% 58.3% $180.0m 38.0% 36.8% $170.0m 37.0% $259.9m 36.0% $160.0m 36.
Slide 11: Rental – Eastern Region
RENTAL – EASTERN REGION Eastern Region continued to grow earnings and lift margins in FY20 For personal use only Operating EBITDA up 13%1 FY20 overview FY21 outlook Earnings and margins continued to As the COVID-19 situation has stabilised operationally, grow customer behaviour has settled and s
Slide 12: Rental – Western Region
RENTAL – WESTERN REGION Growth will continue in FY21 on the back of strong gold and iron ore demand For personal use only Operating EBITDA up 4%1 FY20 overview FY21 outlook Growth generated as new iron ore and gold Strong demand in gold and iron ore supporting projects replaced legacy projects g
Slide 13: Pit N Portal
PIT N PORTAL Pit N Portal achieved strong growth in FY20 and expands our customer proposition to include underground capabilities For personal use only FY20 overview FY21 outlook Pit N Portal was acquired on 28 February Growth of up to 15% expected pre-growth 2020 contributing 4-months of earnin
Slide 14: Force Workshops
FORCE WORKSHOPS Workshops throughput continued to grow and contribute earnings and savings to the Group in FY20 Activity1 up 43% on FY19 FY20 overview FY21 outlook For personal use only $163.8m Continued increase in workshops activity We expect activity levels to remain high, (in both retail and
Slide 15: Financial results
For personal use only Financial results
Slide 16: Profit and Loss
PROFIT AND LOSS Further strong growth in revenue and earnings in FY20 For personal use only FY20 Operating financial performance1,2 $m unless otherwise stated FY19 FY20 Change Operating revenue 464.5 540.4 16.3%▲ Operating EBITDA1 214.0 246.1 15.0%▲ Operating EBITDA margin 46.1% 45.5% 60bps▼ Operati
Slide 17: Cash Flow
CASH FLOW Strong free cash flow continues as the business benefits from its growing scale For personal use only Overview FY20 cash flow1,2 Strong free cash flow of $71.2m demonstrating strong cash $m FY19 FY20 generating ability of the business Operating EBITDA 214.0 246.1 Working capital return
Slide 18: Balance Sheet
BALANCE SHEET Leverage down to 1.46x and remain focused on further leverage reduction Overview Leverage (net debt2 / operating EBITDA3) For personal use only Further deleveraged to 1.46x1, down from 2.0x at 30 June 2019 and below our FY20 target of 1.5x Fully underwritten equity raising for the
Slide 19: Outlook and strategy
For personal use only Outlook and strategy
Slide 20: Outlook
OUTLOOK Softness in Eastern Region offset by growth in Western Region and Pit N Portal — COVID-19 has not significantly impacted operations, whilst some off-hires in the Eastern Region will impact FY21 earnings, this has now stabilised For personal use only — Significant demand in Western Region (pa
Slide 21: Strategy
STRATEGY Continue to maximise our fleet to create value for customers and shareholders For personal use only — Continue to be the lowest cost, highest quality provider of mining equipment — Redeploy off-hired fleet from coal into new long tenured, fully maintained opportunities, targeting hard rock
Slide 22: The Evolution of Emeco
THE EVOLUTION OF EMECO Our journey towards maximising our customer value proposition For personal use only 2020 – Pit N FY16 – Ensuring 2017 – Andy’s and 2017 – Force 2018 – Matilda 2019 – Strategic FY20 FY21 and Portal Emeco’s survival Orionstone Recap Equipment Equipment asset purchases achievemen
Slide 23: Appendix A: Fleet and industry data
For personal use only Appendix A: Fleet and industry data
Slide 24: Average Fleet Age
AVERAGE FLEET AGE Emeco’s fleet has significantly more life remaining than the industry average For personal use only 140 1600 Emeco average Industry average 27,600 hrs 56,400 hrs 1400 120 1200 100 1000 80 Number 800 60 600 40 400 20 200 0 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 10
Slide 25: Lowest on the Cost Curve
LOWEST ON THE COST CURVE Emeco operates at the lowest end of the cost curve For personal use only Australia benchmark performance range¹ P25 P50 P75 2020 Em eco Feb 2019 Emeco Performance¹ 84th Percentile Emeco Feb 2020 84th Percentile 200 150 Maintenance cost ($/hr) 100 Consistently outperforming i
Slide 26: Appendix B: Statutory to operating reconciliations
For personal use only Appendix B: Statutory to operating reconciliations
Slide 27: Reconciliations
RECONCILIATIONS FY20 operating1 earnings reconciliation FY20 cash flow reconciliation For personal use only AASB 16 $Am NPAT EBIT EBITDA $Am Operating inclusive Statutory Result 66.1 105.3 234.1 Operating EBITDA 246.1 254.4 Ineffective hedge (gain) (2.1) - - Working Capital (19.8) (19.8) Income tax
Slide 28: AASB16 Impact
AASB16 IMPACT AASB16 Leases net debt and leverage reconciliation AASB16 Leases EBITDA reconciliation For personal use only FY19 FY20 AASB 16 FY20 AASB16 FY20 FY20 Operating Operating Adjustment Operating $Am pre-AASB16 post-AASB16 Gross debt Operating EBITDA Hedged Notes 441.7 441.7 - 441.7 Eastern
Slide 29: Thank you
Thank you For personal use only emecogroup.com