Southern Cross Electrical Engineering Limited · ASX:SXE
Southern Cross Electrical Engineering — Shareholder Meeting (October 2014)
28 slides from Southern Cross Electrical Engineering's shareholder meeting presentation, Oct 27, 2014
Slide 1: 2014 AGM Presentation
For personal use only 2014 AGM Presentation Simon High – Managing Director / CEO 27 October 2014
Slide 2: About SCEE
About SCEE For personal use only Leading provider of specialised electrical Project life cycle support and instrumentation services design and construction of high voltage Delivers services to large-scale resource power line distribution, switchyards and projects across Australia and overseas substa
Slide 3: Exposure to six sectors
Exposure to six sectors For personal use only Iron ore Minerals & metals LNG CSG Coal Power generation Australia Australia & overseas Australia Australia Australia Australia 2
Slide 4: 2014 highlights
2014 highlights For personal use only Full year revenue of $218.2m and NPAT of $7.7m Financial Strong balance sheet with $35.2m of net cash at 30 June 2014 Fully franked dividend of 2.7 cents per share Order book of $111m at 30 June 2014 with $119m of new awards post year end Successful completion a
Slide 5: FY14 projects
For personal use only FY14 projects 4
Slide 6: Rio Tinto Cape Lambert Port B
Rio Tinto Cape Lambert Port B For personal use only Successfully completed Phase A during the year Largest contract in the Company’s history with an award value in excess of $100m Manning peaked at over 500 Phase B works with an award value of over $80m secured and commenced in H2 FY14 Work continui
Slide 7: Anglogold Ashanti Tropicana Gold
Anglogold Ashanti Tropicana Gold For personal use only Electrical, instrumentation, communications and process control plant infrastructure at the Tropicana Gold Mine Award value in excess of $40m Manning peaked at over 200 Successfully completed during the year 6
Slide 8: BHP Billiton Iron Ore Yarnima
BHP Billiton Iron Ore Yarnima For personal use only Performing E&I works at BHP Billiton’s Yarnima Power Station near Newman SCEE’s first power station project Over $25m of scope awarded to date Work continuing into FY15 7
Slide 9: Rio Tinto Yandi Sustaining
Rio Tinto Yandi Sustaining For personal use only Installation of 33kV overhead lines to Yandi mine facilities Largest Infrastructure project in Company’s history Award value across both phases of approximately $40m Successfully completed during the year 8
Slide 10: Citic Pacific Sino Iron
Citic Pacific Sino Iron For personal use only Successfully performed the E&I works on Trains 1 and 2 and the conveyors to the primary crusher Recently secured approximately $80m of works on the next construction phase Work expected to be performed over FY15 and FY16 with opportunities for further gr
Slide 11: Other key contract wins
Other key contract wins For personal use only KSJV – Bechtel Australia Pacific LNG First LNG award for KSJV with expected value over $50m Bechtel subcontract for electrical installation services Rio Tinto Electrical Infrastructure Replacement Installation of new electrical equipment at Cape La
Slide 12: Full year financial results
Full year financial results For personal use only FY14 FY13 Change Revenue and profits down on record $m $m % FY13 results Results impacted by later than Revenue 218.2 278.0 (21%) anticipated award and commencement Gross profit 43.8 61.3 (29%) of key projects Gross margin 20.1% 22.1% H2 margins lowe
Slide 13: Balance sheet
Balance sheet For personal use only Jun 14 Jun 13 $m $m Strong balance sheet Current assets 98.6 106.7 Cash of $37.9m at 30 June 2014 with a Non current assets 48.0 51.0 further $10.9m of client receivables due in late June received in early July Total assets 146.6 157.7 Current liabilities 34.6 43.
Slide 14: Dividends
Dividends For personal use only Fully franked dividend of 2.7 cps declared Same as FY14 dividend in absolute terms Payout ratio of 56% compared to 25% in FY14 Strikes balance between delivering returns to shareholders and retaining capital for growth opportunities Record date: 22 September 2014 Paym
Slide 15: Health and safety
Health and safety For personal use only Lost Time Incident free in the period Over ten years LTI free in Australia Reflective of the proactive safety culture across the whole of SCEE from the Board to our project teams SCEE awarded the NECA-WA 2014 “Health & Safety Award” for work on Rio Tinto Yandi
Slide 16: Training and people
Training and people For personal use only Approximately 1000 employees at 30 June 2014 and remain at similar levels as activity continues on key projects Dedicated training centre provides cost effective and flexible training schedules to ensure efficient mobilisation of project teams Strong commitm
Slide 17: Order book
Order book For personal use only Order book at 30 June 2014 of $111m excludes work under recurring framework agreements A further $119m of orders secured post year end Construction awards at CLB Phase B and Sino Iron provide good visibility into FY15 Business development and tendering activity remai
Slide 18: Market conditions
Market conditions For personal use only Competition increased significantly during the year as volume of new construction work decreased Clients became more commercially focussed Increase in time taken to bid and negotiate contracts leading to delayed awards Move away from EPCM model as clients seek
Slide 19: Iron Ore
Iron Ore For personal use only Peak construction in iron ore has passed but will remain main revenue contributor Current order book for CLB Phase B and Sino Iron provide solid base of construction work for FY15 and into FY16 Secured approximately $80m of Sino works to date across process lines 3 to
Slide 20: Sustaining Capital and Operations & Maintenance
Sustaining Capital and Operations & Maintenance For personal use only SCEE strongly positioned with Rio Tinto, BHP and Sino Iron and exposed to construction, sustaining capital and operations phases - E&I component of spend increases from 3-5% in capital phase to 12-15% in later phases BHP Iron Ore
Slide 21: LNG and CSG
LNG and CSG For personal use only Peak construction in LNG and CSG still to come Disappointing not to secure more of initial awards on LNG plants but hopeful of securing further work KSJV subcontract for electrical services with Bechtel on APLNG provides presence on Curtis Island into FY15 Positioni
Slide 22: Mining
Mining For personal use only Visibility of new base metals projects in copper, gold and nickel sectors Actively pursuing EPC model with partners to perform some of these projects Signs of recovery in thermal coal market on East Coast (Adani, Cockatoo) Continuing to monitor opportunities to return to
Slide 23: Longer-term pipeline
Longer-term pipeline For personal use only Construction pipeline in Iron Ore with Sino likely to extend into FY16 and FY17 and new mine developments required by BHP and Rio Tinto LNG construction phase to continue through to FY17 – targeting secondary opportunities Upstream CSG requires long term ex
Slide 24: Strategy
Strategy For personal use only Maintaining and growing construction opportunities ($133.8m revenue in FY14) but in different form through combined offering with SMP and EPC Focused on substantially increasing recurring revenues from operations & maintenance and sustaining capital over three to five
Slide 25: Solid operating platform
Solid operating platform For personal use only Strong balance sheet and order book at 30 June 2014 Proven operational processes and systems successfully delivered CLB Phase A and Tropicana Gold on time and budget Actively managing overhead base to ensure appropriate balance between cost control and
Slide 26: Conclusion
Conclusion For personal use only FY14 saw significantly tougher resource sector conditions which we expect to continue into FY15 But we enter the year with a solid balance sheet and near record order book and continue to see a strong pipeline of available work Operations & maintenance and sustaining
Slide 27: Non-IFRS financial information
Non-IFRS financial information For personal use only SCEE’s results are reported under International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. The Company discloses certain non-IFRS measures that are not prepared in accordance with IFRS and there
Slide 28: Disclaimer
Disclaimer For personal use only Some of the information contained in this presentation contains “forward-looking statements” which may not directly or exclusively relate to historical facts. These forward-looking statements reflect Southern Cross Electrical Engineering Limited’s current intentions,
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