Emeco Holdings Limited · ASX:EHL
Emeco — FY2010 Earnings Presentation
30 slides from Emeco's earnings presentation, Aug 25, 2010
Slide 1: 2010 Full Year Results
For personal use only 2010 Full Year Results Keith Gordon, Managing Director & Chief Executive Officer Stephen Gobby, Chief Financial Officer
Slide 2: Presentation Overview
For personal use only Presentation Overview Highlights Financials Strategy & Outlook Question & Answer Appendices Picture: CAT 793C 240 tonne dump truck working in Western Australia
Slide 3: Highlights
For personal use only Highlights Keith Gordon Managing Director & Chief Executive Officer
Slide 4: Overview
For personal use only Overview Achievements during the year Idle fleet redeployed in all core markets Investment in large mining equipment Action taken on underperforming businesses Delivered strategic review Performance in-line with guidance Operating NPAT of $41.1M Successful exit from
Slide 5: Financial summary
Financial summary Balance sheet flexibility restored while operating earnings improve For personal use only Achievement of $41.1M operating NPAT, in-line with guidance Significant one-off impairment and restructuring charges of $90.4M after tax ($74.9M non-cash) arising from business portfolio r
Slide 6: Rental Fleet Utilisation
Rental Fleet Utilisation Strong finish to the year - well placed to capitalise on increasing mining sector activity For personal use only Average Equipment Utilisation by WDV Strong demand for small and large mining 100 % 30 June 86% equipment 95 % 83% Avg 90 % 78% FY10 growth capex investments
Slide 7: Customers
Customers Leveraged to bulk commodities and gold with significant exposure to production cycle For personal use only Emeco’s mining cycle exposure Commodity exposure 6% 10% 6% 26% 19% 42% 8% 4% 10% 19% 33% 16% Core Production Overburden (Production) Thermal Coal Coking Coal Gold Zinc Mine Developmen
Slide 8: Equipment
Equipment Fleet strategy well developed For personal use only June 09 June 10 Civil Civil Fleet Fleet Evolution of fleet towards 16% 9% WDV: larger mining equipment Jun 09 - $623M Large Small Large Small Jun 10 - $572M Mining Mining Mining Mining 24% 60% 36% 55% Strategic acquisition of 39 large
Slide 9: Business Unit Performance
Business Unit Performance QLD and NSW closed FY10 at high utilisation levels with strong demand & enquiry levels 30 June For personal use only 100 % 90 % Global steel market volatility had short but 80 % severe impact on metaliferous coal activity 70 % Queensland 60 % Step change in utilisation
Slide 10: Business Unit Performance
Business Unit Performance Strong utilisation recovery in WA and Victoria 30 June For personal use only 100 % Broad based recovery in activity across iron 90 % 80 % ore, gold and other commodities driving Western Australia 70 % strong utilisation recovery 60 % 50 % Investment in 10 x 240 tonne tr
Slide 11: Business Unit Performance
Business Unit Performance Revised strategy and strong market fundamentals providing growth opportunities offshore For personal use only 30 June 100 % Reconfigured mining fleet to participate 90 % in oil sands mining activity 80 % 70 % Strategy to diversify commodity 60 % Canada 50 % exposure usi
Slide 12: Strategic Update
Strategic Update Performance in line with guidance across a range of metrics For personal use only Objective Guidance (at Dec 09) Delivered Operating NPAT $40M - $44M $41.1M Completed on time Business Restructures Exit USA & Europe by June 10 2H10 charges of $29.7M Cashflow & Gearing to reduce
Slide 13: Financials
For personal use only Financials Stephen Gobby Chief Financial Officer
Slide 14: Earnings
Earnings Trough earnings in 1H10 with earnings momentum building through 2H10 For personal use only A$ Millions FY09 FY10 Var Var Operating Operating $ % Revenue 528.2 444.4 (83.8) (15.9) EBITDA 210.9 190.4 (20.5) (9.7) margin (%) 39.9 42.8 - 2.9 EBIT 105.9 83.6 (22.3) (21.1) margin (%) 20.0 18.8 -
Slide 15: Contrasting Halves
Contrasting Halves Earnings adversely impacted in CY09, but gathering momentum into FY11 For personal use only Group Revenue Earnings & Margins Rental Sales and Parts EBITDA EBIT 350 Margin Margin 50.0% 140 300 45.0% 120 40.0% 250 35.0% 100 200 30.0% A$M 80 A$M 25.0% 150 60 20.0% 100 15.0% 40 10.0%
Slide 16: Significant Items
Significant Items Previously announced impairment and restructuring charges arising from strategic review For personal use only 1H10 2H10 A$Millions Tangible Tangible Intangible Closure and FCTR Tax TOTAL impairment impairment impairment Restructure effect (NPAT) charges Operating NPAT 41.1 Continue
Slide 17: Cash Flow
Cash Flow Positive cash flow generation through the downturn demonstrates flexibility of the business model For personal use only FY10 Cash Flow 200 47.5 180 160 5.9 137.0 2.2 140 120 (70.7) A$m 100 80 60 40 37.5 (84.4) 24.9 20 (12.6) 0 Operating Working Sales & Parts Disposals Sustaining Growth Cas
Slide 18: Balance sheet & Borrowings
Balance sheet & Borrowings Cash flow focus & liberation of underperforming assets has resulted in a robust & flexible balance sheet For personal use only Balance Sheet Impairment of underperforming assets in A$ Millions Jun 09 Dec 09 Jun 10 FY10 resulting in NTA of $0.70 at June 10 Total Assets 1,
Slide 19: Return on Capital
Return on Capital Disposal of underperforming assets and incremental investment in core businesses will deliver returns above the cost of capital For personal use only CY09 trough earnings more than a Return on Capital commodity down cycle 1,400 20.0% 18.0% 1,200 Short-term reduction in invested
Slide 20: Strategy & Outlook
For personal use only Strategy & Outlook Keith Gordon Managing Director & Chief Executive Officer
Slide 21: The Emeco Strategy
The Emeco Strategy Strategy developed to drive business performance and growth For personal use only Ongoing optimisation of Grow without sacrificing invested capital and quality of earnings earnings Leverage capabilities for Continue to evolve the growth business model Consistent Value Crea
Slide 22: Current Business Focus
Current Business Focus Strategy execution is a key focus for management For personal use only Embed “Customer Centric” model in Incremental investment in growing mining markets core markets with quality Align Australia Sales and Parts with historical returns Rental (mining) Expand maintenanc
Slide 23: Market Outlook
Market Outlook Despite ongoing market volatility outlook for Emeco’s core markets is positive For personal use only Dynamic Outlook Production volumes have recovered rapidly over FY10 Customer Mine development activity resuming, however market uncertainty slowing decisions Activity Forecast gr
Slide 24: Questions
For personal use only Questions
Slide 25: Company Contact Details
For personal use only Company Contact Details Thank you for your interest in Emeco Further investor enquiries should be directed to: Keith Gordon CEO Stephen Gobby CFO Graham Borgerson Investor Relations emecogroup.com
Slide 26: Appendix
For personal use only Appendix
Slide 27: Detailed Financials
Detailed Financials Profit & Loss Cash flow For personal use only A$ Millions 1H10 2H10 Var Var A$ Millions FY09 FY10 Var Var Operating Operating $ % A$ m A$ m A$ m % Revenue 208.5 235.9 27.4 13.1 Operating Cash flow 202.0 178.2 (23.8) (11.8) EBITDA 82.5 107.9 25.4 30.8 General Working Capital 15.7
Slide 28: Operating Segments
For personal use only Operating Segments Composition of Funds Employed at 30 June 2010 ROFE Australia Rental 10% (exc Vic) 20.0% 18.0% 13% 16.0% Vic Rental 14.0% 53% 12.0% 18% 10.0% 8.0% 6% Indonesia 6.0% 4.0% FY09 Composition of EBIT 2.0% FY10 FY 10 0.0% Canada Canada Indonesia Australia Victoria S
Slide 29: Commodity Exposure
For personal use only Commodity Exposure Australia Rental Indonesian Rental Canadian 0% Rental 0% 0% 0% 4% 7% 7% 19% 20% 15% 0% 14% 32% 20% 57% 80% 25% Thermal Coal Coking Coal Gold Zinc Oil Sands Iron Ore Civil Other 29 Percentages based on rental revenue for FY10
Slide 30: Disclaimer
For personal use only Disclaimer Reliance on third party information The information and views expressed in this Presentation were prepared by Emeco Holdings Ltd (the Company) and may contain information that has been derived from publicly available sources that have not been independently verified.