Wilson Bayly Holmes-ovcon Limited · JSE:WBO
Wilson Bayly Holmes-ovcon — H1 FY2017 Earnings Presentation
42 slides from Wilson Bayly Holmes-ovcon's earnings presentation, December 2016
Slide 1: Unaudited Results for the six months ended 31 December 2016
UNAUDITED RESULTS for the six months ended 31 December 2016 WBHO UNAUDITED RESULTS DECEMBER 2016
Slide 2: Contents
Contents 2 SUBJECT Welcome Overview and highlights Operational review Roads and earthworks Building and civil engineering Australia Financial review Order book and outlook WBHO UNAUDITED RESULTS DECEMBER 2016
Slide 3: Overview and highlights
OVERVIEW AND AND OVERVIEW RESULTS 2015 Name HIGHLIGHTS HIGHLIGHTS AUDITED RESULTS FOR THE YEAR Surname ENDED 30 JUNE WBHO UNAUDITED 2015 DECEMBER 2016 RESULTS
Slide 4: Overview and highlights
Overview OVERVIEW and highlights 4 • Recognition of socio-economic contribution arising from the settlement agreement signed with Government impacts earnings in the 1st half • Overall operational performance was satisfactory • Strong results from local Building division • Low order intake within Civ
Slide 5: Revenue
REVENUE Overview and highlights 5 R’m R’m Contribution by geography 25 000 8 625 5 921 20 000 56% 39% 15 000 15 276 H1 14 649 15 374 15 416 14 405 2017 10 000 South Africa 5 000 870 Rest of Africa 5% Australia 0 H1 FY15 H2 FY15 H1 FY16 H2 FY16 H1 FY17 5 099 33% 8 684 Revenue 0,9% from H1 FY16 57% H1
Slide 6: Operating profit
OPERATING PROFIT Overview and highlights 6 Contribution by geography R’m 1 000 101 22% 800 289 H1 58% 600 2017 South Africa 495 510 400 471 81 Rest of Africa 384 384 20% 200 Australia 0 H1 FY15 H2 FY15 H1 FY16 H2 FY16 H1 FY17 128 218 26% Overall margin of 3,1% (2015:3,2%) 44% • 4,9% margin from Sout
Slide 7: Safety and transformation
Overview SAFETY AND TRANSFORMATION and highlights 7 2,0 R’m 1,5 1,0 0,94 0,94 0.93 0,75 0,5 0,0 June 2013 June 2014 June 2015 Dec 2016 No. of lost-time injuries per million man hours SAFETY • One subcontractor fatality in Australia • Focus remains on leading indicators EMPOWERMENT • Level 4 on gener
Slide 8: Industry matters
Overview INDUSTRY MATTERS and highlights 8 COMPETITION COMMISSION • ‘World Cup Stadia’ meeting and contractual terms of N17 road tender referred to the Competition Tribunal • WBHO continues to defend civil claim from the Cape Town City Council • 4 civil claims received from SANRAL withdrawn under se
Slide 9: Roads and earthworks
ROADS AND EARTHWORKS WBHO UNAUDITED RESULTS DECEMBER 2016
Slide 10: Footprint
FOOTPRINT Roads and earthworks 10 Revenue 1 South Africa 22% 2 Lesotho H1 3 Swaziland 2017 4 Botswana South Africa 5 Namibia 78% 6 Mozambique Rest of Africa 10 9 8 7 Zambia 8 Ghana 43% 9 Sierra Leone 10 Guinea H1 7 2016 6 5 4 3 57% 1 2 WBHO UNAUDITED RESULTS DECEMBER 2016
Slide 11: Six months in perspective
SIX MONTHS IN PERSPECTIVE Roads and earthworks 11 Improved performance in a challenging market • Growth in South Africa largely offsets declining revenue from the rest of Africa • Weighting toward roadwork continued to increase • Mining activity continued its decline over the six month period • Pipe
Slide 12: Revenue
Roads and earthworks 12 REVENUE R’m Revenue contribution to group 5 000 14% 4 000 2 838 3 000 2 444 2 362 H1 2 119 2 000 1 972 2017 1 000 0 H1 FY15 H2 FY15 H1 FY16 H2 FY16 H1 FY17 16% ` Revenue 10,3% on H1 2016, yet ` 8% on H2 2016 H1 • 23% growth in South Africa 2016 • 54% decline from the rest of
Slide 13: Operating profit
Roads and earthworks 13 OPERATING PROFIT R’m Operating profit contribution to group 350 300 31% 250 203 H1 200 177 2017 149 144 150 134 100 50 0 H1 FY15 H2 FY15 H1 FY16 H2 FY16 H1 FY17 ` Operating profit 3,4% from H1 FY16 30% ……8% ` on H2 FY16 H1 • Margin in line with H2 FY16 at 6,8% 2016 6,8% WBHO
Slide 14: Order book
Roads and earthworks 14 ORDER BOOK 28% ROADS AND At At To EARTHWORKS June Dec June Beyond Dec (R’m) 2016 2016 2017 2016 South Africa 2 554 4 395 1 845 2 550 Africa 487 1 444 795 649 72% South Africa Total 3 041 5 839 2 640 3 199 Rest of Africa Order book 92% • Strong order in-take in the 2nd quarter
Slide 15: Building and civil engineering
BUILDING AND CIVIL ENGINEERING WBHO UNAUDITED RESULTS DECEMBER 2016
Slide 16: Footprint
Building and civil FOOTPRINT engineering 16 Revenue 9% H1 1 South Africa 2017 2 Mozambique 3 Zambia South Africa 91% 4 Ghana Rest of Africa 4 14% H1 3 2016 2 86% 1 WBHO UNAUDITED RESULTS DECEMBER 2016
Slide 17: Six months in perspective: Building
Building and civil SIX MONTHS IN PERSPECTIVE engineering 17 BUILDING Local Building division delivers excellent results • Sustained growth in Gauteng and Kwa-Zulu Natal • Activity centred in retail, commercial and entertainment sectors • Key projects progressing well • Improvement in margins Africa
Slide 18: Six months in perspective: Civil engineering
Building and civil SIX MONTHS IN PERSPECTIVE engineering 18 CIVIL ENGINEERING Industry conditions considered to be at lowest levels in many years • Revenue declined further in the six month period due to low activity and project delays in the sector • Tender margins under pressure • Ongoing presence
Slide 19: Revenue
Building and civil engineering 19 REVENUE R’m Revenue contribution to group 8 000 7 000 28% 6 000 5 000 4 332 3 810 3 894 H1 4 000 3 575 3 491 2017 3 000 2 000 1 000 0 H1 FY15 H2 FY15 H1 FY16 H2 FY16 H1 FY17 25% Revenue 11,3% on H1 FY16 and 24% H1 on H2 FY16 2016 • 18% growth in South Africa • 28% d
Slide 20: Operating profit
Building and civil engineering 20 OPERATING PROFIT R’m Operating profit contribution to group 350 300 250 217 H1 46% 200 168 184 186 184 2017 150 100 50 0 H1 FY15 H2 FY15 H1 FY16 H2 FY16 H1 FY17 Operating profit 17% H1 38% • Margin of 5,0% up from 4,7% at 2016 31 December 2015 • Peak in earnings des
Slide 21: Order book
Building and civil engineering 21 ORDER BOOK 6% BUILDING AND At At To CIVIL ENGINEERING June Dec June Beyond Dec 2016 2016 2017 (R’m) 2016 South Africa 7 977 7 609 2 887 4 722 94% Africa 706 481 247 234 South Africa Rest of Africa Total 8 683 8 090 3 134 4 956 ` 8% Order book 7% • Building order boo
Slide 22: Australia
RESULTS 2015 AUSTRALIA AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE WBHO UNAUDITED 2015 DECEMBER 2016 RESULTS
Slide 23: Footprint
FOOTPRINT Australia review 23 Revenue 9% H1 4 2017 3 6 91% Civil engineering 2 Buiding 5 7% 1 BUILDING 1 Melbourne (Victoria) 2 Sydney (New South Wales) H1 3 Perth (Western Australia) 2016 4 Brisbane (Queensland) CIVIL ENGINEERING 5 Eastern region 93% 6 Western region WBHO UNAUDITED RESULTS DECEMBER
Slide 24: Six months in perspective
Australia SIX MONTHS IN PERSPECTIVE review 24 BUILDING Building markets remain buoyant • Strategic diversification across key states proving successful • Lower revenue from Victoria largely offset by growth in Queensland, New South Wales, Western Australia and Monaco Hickey • Landmark projects in al
Slide 25: Revenue
Australia 25 REVENUE R’m Compound Annual Growth Rate (CAGR): 21.6% Revenue contribution to group 14 000 12 000 9 429 10 000 8 684 8 625 7 268 8 053 H1 8 000 2017 56% 6 000 4 000 2 000 0 H1 FY15 H2 FY15 H1 FY16 H2 FY16 H1 FY17 ` Revenue ` 0,7% (ZAR) on H1 FY16 H1 and 9% on H2 FY16 2016 • 10,8% AU$ de
Slide 26: Operating profit
Australia 26 OPERATING PROFIT R’m Operating profit contribution to group 200 172 21% 150 128 157 119 H1 100 98 101 2017 50 10 0,5 0 H1 FY15 H2 FY15 H1 FY16 H2 FY16 H1 FY17 26% Adjusted for unrealised currency effects H1 Operating margin 1,2% 2016 • Victoria and Western Region deliver solid profitabi
Slide 27: Order book
Australia 27 ORDER BOOK 8% AUSTRALIA At At To Dec June Dec June Beyond (R’m) 2016 2016 2016 2017 Building 29 302 24 013 8 610 15 403 Civil engineering Civil engineering 1 674 2 211 1 020 1 191 92% Building Total 30 976 26 224 9 630 16 594 5% ` Order book 15% • R11b secured after 31 Dec in retail, Ju
Slide 28: Financial review
OVERVIEW AND FINANCIAL RESULTS 2015 Name REVIEW HIGHLIGHTS AUDITED RESULTS FOR THE YEAR Surname Charles ENDED WBHO Henwood 30 JUNE UNAUDITED 2015 DECEMBER 2016 RESULTS
Slide 29: Financial performance: key numbers and ratios
FINANCIAL PERFORMANCE Financial review 29 Target / KEY FINANCIAL NUMBERS AND RATIOS growth% H1 FY17 H1 FY16 Revenue growth > 10% 0,9% 6,9% Operating profit margin 3% - 4,5% 3,1% 3,2% Earnings per share – continuing operations (38,5)% 398 647 (cents) Adjusted earnings per share – continuing 9,7% 709
Slide 30: Financial performance: continuing operations
FINANCIAL PERFORMANCE Financial review 30 (Restated) CONTINUING OPERATIONS (R’m) % change H1 FY16 H1 FY17 Revenue 0,9 15 416 15 276 Operating profit before non-trading items (4,7) 471 495 Socio-economic fund contribution (170) - Profit on disposal of investment 12 - Share-based payment expense (24)
Slide 31: Financial position: cash flow analysis
FINANCIAL POSITION Financial review 31 CASH FLOW ANALYSIS (R’m) FY14 FY13 7 000 6 750 6 500 6 250 289 143 6 000 190 5 752 153 79 5 750 200 5 500 434 5 250 5 151 356 5 000 4 750 4 500 Cash & cash Operating Working Net finance Taxation Dividends Net cash Net cash Foreign Cash and equivalents profit ca
Slide 32: Financial position: property, plant and equipment
FINANCIAL POSITION Financial review 32 PROPERTY, PLANT AND EQUIPMENT (R’m) H1 FY17 June FY16 Property, plant and equipment 1 657 1 710 Depreciation 115 242 CAPITAL EXPENDITURE (R’m) Approved FY17 H1 FY17 June FY16 Replacement 254 117 87 Expansion 51 22 39 Total 305 139 126 • Conservative capital exp
Slide 33: Financial position: investments and loans
FINANCIAL POSITION Financial review 33 INVESTMENTS (R’m) H1 FY17 June FY16 Investments 48 202 Investments in associates 344 347 • Capital repayment of AU$14m investment in Caulfield development in Australia • No further equity investment in Gigawatt Power and Dipalopalo • Profit from Gigajoule of R1
Slide 34: Financial position: tax and NCI acquisitions
FINANCIAL POSITION Financial review 34 TAX (R’m) H1 FY17 June FY16 Net deferred tax asset 469 535 Net current tax asset 197 244 Deferred tax balances consist of: Current tax asset consists of: • Tax losses of R80m in Australia and R51m • Taxation refundable amounting to R135m in Africa • Tax liabili
Slide 35: Order book and outlook
OVERVIEW ANDBOOK ORDER Name AND OUTLOOK HIGHLIGHTS Surname WBHO UNAUDITED RESULTS DECEMBER 2016
Slide 36: Consolidated order book by segment
CONSOLIDATED Order book and outlook 36 ORDER BOOK At At To SEGMENT (R’m) June Dec June Beyond 20% 2016 2016 2017 Building and civil 8 683 8 090 3 134 4 956 Dec engineering Roads and 2016 3 041 5 839 2 640 3 199 earthworks 15% 65% Australia 30 976 26 224 9 630 16 594 Total 42 700 40 153 15 404 24 749
Slide 37: Consolidated order book by geography
CONSOLIDATED Order book and outlook 37 ORDER BOOK At At To GEOGRAPHIC June Dec June Beyond (R’m) 30% 2016 2016 2017 South Africa 10 532 12 004 4 733 7 271 Dec Rest of Africa 1 192 1 925 1 041 884 2016 65% 5% Australia 30 976 26 224 9 630 16 594 Total 42 700 40 153 15 404 24 749 South Africa Rest of
Slide 38: Outlook: South Africa
OUTLOOK Outlook 38 SOUTH AFRICA Building order book healthy over the short-term • Local market has peaked and is beginning to soften • No mega-projects in targeted pipeline • Impact of low growth economy on this sector a concern over the longer-term Civil engineering markets remain suppressed • Limi
Slide 39: Outlook: Africa
OUTLOOK Outlook 39 AFRICA Building opportunities still available • 1st commercial office project in Ghana secured • Good relationships built with partners seeking African expansion • Exploring opportunities in other African countries Increase in commodity prices improving mining outlook • 3 projects
Slide 40: Outlook: Australia
OUTLOOK Outlook 40 AUSTRALIA Building markets remain healthy • Positive outlook for next 24 months, additional R11b secured in H2 FY17 • Lower residential activity negated by increased commercial activity and sustained activity within retail and entertainment sectors • Strong order book growth in ot
Slide 41: Thank you, questions?
41 THANK YOU QUESTIONS ? WBHO UNAUDITED RESULTS DECEMBER 2016
Slide 42: Disclaimer
DISCLAIMER 42 Certain statements contained within this presentation may be classified as forward-looking statements. Words, including but not limited to, “believe”, “anticipate”, “expect”, “seek”, “intend”, “estimate”, “project”, “plan”, or “predict” are used to identify such statements. Forward-loo
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