Emeco Holdings Limited · ASX:EHL
Emeco — H1 2007 Earnings Presentation
25 slides from Emeco's earnings presentation, Feb 22, 2007
Slide 1: 1H07 Results Presentation
“Helping you move the Earth” TM 1H07 Results Presentation 22 February 2007
Slide 2: Disclaimer and Important notice
1H07 Results – Analyst Presentation V2 05060D937-803573d1 Disclaimer and Important notice This presentation may contain forward looking statements that are subject to a range of risk factors and uncertainties. Whilst these statements are considered to be based on reasonable assumptions, the statem
Slide 3: Agenda
05060D937-803573d1 Agenda 1 Highlights 2 Financial results 3 Business overview 4 Outlook Page 3
Slide 4: Financial Highlights
05060D937-803573d1 Financial Highlights Revenue up 45.0% to $251.6M Pro Forma EBITDA up 59.7% to $99.8M with margins up 3.7% to 39.7% Pro Forma EBITA up 54.0% to $61.3M with margins up 1.5% to 24.4% Pro Forma EBIT up 74.7% to $59.4M with margins up 4.0% to 23.6% Pro Forma NPAT of $34.8M wi
Slide 5: Staff Health and Safety
05060D937-803573d1 Staff Health and Safety A national safety action plan has been formulated to provide a timetable over the 2007/2008 calendar years for implementing enhancements to OH&S systems and procedures Emeco has boosted its OH&S capability internally and is focussing on ensuring staff rec
Slide 6: Business Highlights
05060D937-803573d1 Business Highlights Successful Completion of IPO providing funds for future growth $109M invested in Organic Growth YTD 2 small acquisitions completed - $24M Since the IPO, 5 step out sites providing future growth and improved brand recognition established in North America
Slide 7: Agenda
05060D937-803573d1 Agenda 1 Highlights 2 Financial results 3 Business overview 4 Outlook 5 Guidance Page 7
Slide 8: Pro Forma Summary Financials
05060D937-803573d1 Pro Forma Summary Financials Growth continues to be driven by significant capital expenditure in rental machines and investment in inventory 6 months to: Dec-05 Dec-06 Change $M $M % Financial Performance Revenue 173.5 251.6 45.0% EBITDA 62.5 99.8 59.7% EBITA 39.8 61.3 54.0% EBIT
Slide 9: Continued Growth and Margin Expansion through 1H07
05060D937-803573d1 Continued Growth and Margin Expansion through 1H07 Revenue Revenue Pro ProForma Forma EBITDA EBITDA 300 120 45.0% 250 CAGR 35.0% CAGR 45.1% 100 40.0% 200 80 35.0% 60 150 99.8 30.0% 251.6 80.9 40 100 209.3 62.5 173.5 47.4 49 25.0% 153.7 20 138.1 50 0 20.0% 1H05 2H05 1H06 2H06 1H07
Slide 10: Working Capital
05060D937-803573d1 Working Capital Working capital has increased with additional investment in machines and tyres to support future operating and growth requirements 6 months to: Dec-05 Dec-06 Change $M $M % Cash 5.4 10.8 100.0% Receivables 57.3 89.7 56.5% Inventory - Sales Machines 77.0 117.8 53.0%
Slide 11: Balance Sheet
05060D937-803573d1 Balance Sheet With the successful completion of the IPO, Emeco’s balance sheet is now capable of supporting growth 6 months to: Dec-05 Dec-06 Change $M $M % Working Capital 139.2 230.6 65.7% Rental Plant 299.9 513.0 71.1% Total Assets 711.4 1,032.9 45.2% Net Assets 218.8 644.7 194
Slide 12: Cash Flow
05060D937-803573d1 Cash Flow Operating cash flows continue to grow and be re-invested into growth for the future 1H06 Operating cash flow 1H07 Operating cash flow 100 100 50 50 0 0 EBITDA Other Net SIB Inventory Grow th EBITDA Other Net SIB Inventory Grow th -50 -50 -100 -100 -150 Operating cash flo
Slide 13: Currency Risks
05060D937-803573d1 Currency Risks Adverse currency movements since preparing the Director’s forecast has dampened the reported results as overseas operations, recorded in USD, CAD and EURO, are translated into AUD Currency translation has dampened EBITDA by $1.3M and EBITA by $0.7M in 1H07 Eme
Slide 14: Return on Funds Employed
05060D937-803573d1 Return on Funds Employed Emeco has maintained strong and consistent pro forma ROFE’s over time Pro forma return on funds employed (“ROFE”) 1 50% 200 EBITA and EBITDA ROFE’s currently in line 40% 180 with Prospectus Forecasts at 28.4% and 30% 160 17.4% 20% 140 10% 120 A$m 0% 100
Slide 15: Agenda
05060D937-803573d1 Agenda 1 Highlights 2 Financial results 3 Business overview 4 Outlook Page 15
Slide 16: Rental Market Share and Global Locations
05060D937-803573d1 Rental Market Share and Global Locations #1 market share in Australia and Indonesia and a growing presence in Canada, USA and Europe Australia Indonesia Canada USA Europe 531 121 261 56 8 350 90 Emeco #2 Emeco #2 Emeco Emeco Emeco Number of machines Number of machines Number of ma
Slide 17: Utilisation and Customers
05060D937-803573d1 Utilisation and Customers Utilisation rates have remained high in Australia whilst there has been a shift in customers from small contractors to large miners Utilisation rates 1 Type of Customer 2 100.0% 90.0% FY06 1H07 80.0% 100.0% 100.0% 70.0% 80.0% 80.0% 60.0% 60.0% 60.0% 50.0%
Slide 18: Contract and Customer Revenue Profile
05060D937-803573d1 Contract and Customer Revenue Profile Longer initial term contracts are being entered into with the shift in customers, whilst maintaining customer diversity Average contract length Customer revenue contribution 31 March 06 31 December 06 FY06 1H07 20 20 18% 19% Top 5 8% Top 6–10
Slide 19: Emeco's Market Segments
05060D937-803573d1 Emeco’s Market Segments Growth in Australia and Canada has been achieved whilst maintaining diversity 1H07 EBITDA Contribution 1H07 Rental Revenue Contribution Other Civil Rest of World Zinc 10% 14% 12% Oil 7% 3% Indonesia Iron Ore 13% 10% Coal Gold 39% 17% Australia 74% Source: E
Slide 20: Significant potential to increase penetration of rental model
05060D937-803573d1 Significant potential to increase penetration of rental model Management expects development of the rental market and changing attitudes to rental to drive further rental penetration and provides another avenue for growth 100% 80% 60% 40% 20% 13% 7% 2% 0% 0% Australia Indonesia Ca
Slide 21: Agenda
05060D937-803573d1 Agenda 1 Highlights 2 Financial results 3 Business overview 4 Outlook Page 21
Slide 22: Outlook
05060D937-803573d1 Outlook Global demand for commodities is expected to remain strong, encouraging large capital expenditure programs to expand supply. Expanding supply continues to offer Emeco opportunities to provide miners/contractors a flexible, cost-effective rental alternative for expansion i
Slide 23: Growth Strategy
05060D937-803573d1 Growth Strategy Going forward, Emeco expects growth to come from both organic growth and three distinct areas of step-out opportunities Growth in earth moved is expected to continue in the mining industry served by Emeco in Australia, Indonesia and Canada Organic growth Key dr
Slide 24: Strong capital expenditure to take advantage of growth
05060D937-803573d1 Strong capital expenditure to take advantage of growth Emeco already has commitments in place that will exceed its 2007F prospectus capital expenditure Prospectus v Committed Capital YTD Capital Purchased v Deployed 300 145.1 TOTA L 154.2 243.1 250 24.1 A c quis ition Grow th 200
Slide 25: FY07 Guidance
05060D937-803573d1 FY07 Guidance Reported earnings are likely to continue to be impacted by adverse currency translation compared to the prospectus forecast Despite adverse currency translation and challenges facing management, Emeco is on target to meet Prospectus Forecast Except for acquisit