CSE Global Limited · SGX:544
CSE Global — Q3 2017 Earnings Presentation
29 slides from CSE Global's earnings presentation, Nov 9, 2017
Slide 1: 3Q/9M 2017 Results Briefing
3Q/9M 2017 Results Briefing CSE Global Limited Fullerton Hotel 9 November 2017
Slide 2: Agenda
Agenda 1. 3Q/9M 2017 Financial Overview 2. Business Overview and Outlook 3. Q&A 2
Slide 3: 3Q & 9M 2017 Financial Review
3Q & 9M 2017 Financial Review 3
Slide 4: Summary Financials 3Q & 9M 2017
Summary Financials 3Q & 9M 2017 S$’m 3Q 2017 3Q 2016 Change 9M 2017 9M 2016 Change Revenue 85.6 81.0 5.7% 245.6 239.5 2.6% Gross Profit 21.5 23.6 -8.8% 65.2 73.2 -10.9% Operating expenses 20.2 17.8 13.4% 56.3 54.2 4.0% Operating profit 1.3 5.7 -77.8% 8.9 19.0 -53.4% EBIT 4.7 5.6 -15.6% 13.1 19.3 -32
Slide 5: 3Q 2017 Financial Overview
3Q 2017 Financial Overview Revenue increased by 5.7% to S$85.6m, mainly from Infrastructure industry segment Gross margins decreased to 25.1%, leading to 8.8% decline in GP to S$21.5m Unfavourable GP impact due to margin reduction: S$3.2m Offseted by favourable higher GP due to revenue growt
Slide 6: 9M 2017 Financial Overview
9M 2017 Financial Overview Revenue increased by 2.6% to S$245.6m, mainly from Infrastructure industry segment Gross margins decreased to 26.5%, leading to 10.9% decline in GP to S$65.2m Unfavourable GP impact due to margin reduction: S$9.6m Offseted by favourable GP impact due to revenue gro
Slide 7: 9M 2017 Financial Overview: Financial Position & Cashflow
9M 2017 Financial Overview Financial Position & Cashflow Cash inflow from operations of S$6.2m in 3Q17 and S$0.5m in 9M17 Net Cash of S$20.6m at 3Q17 vs S$35.2m at 2Q17, after funding of working capital and payment of the S$16.8m one-off settlement. Equity attributable to owners of the Company
Slide 8: 3Q & 9 Months 2017 FX Movement
3Q & 9 Months 2017 FX Movement Variance Variance 3Q 2017 3Q 2016 9M 2017 9M 2016 (%) (%) USD/SGD: 1.3652 1.3540 0.82% 1.3949 1.3782 1.21% GBP/SGD: 1.7735 1.7909 -0.97% 1.7720 1.9410 -8.71% AUD/SGD: 1.0746 1.0161 5.76% 1.0631 1.0116 5.10% 8
Slide 9: 3Q & 9M 2017 Constant Currency
3Q & 9M 2017 Constant Currency 3Q 2017 S$M 3Q 2017 3Q 2016 Variance (%) Constant Variance (%) Currency Revenue: 85.6 81.0 5.7% 85.2 5.2% PATMI: 3.0 4.0 -25.3% 3.0 -26.4% 9M 2017 S$M 9M 2017 9M 2016 Variance (%) Constant Variance (%) Currency Revenue: 245.6 239.5 2.6% 240.8 0.6% PATMI: 9.0 15.0 -40.1
Slide 10: Revenue by Geographical Region – 9M 2017
Revenue by Geographical Region – 9M 2017 S$'m 9M 2017 9M 2016 Var % Americas 132.0 125.5 5.2% EMEA 18.7 32.0 -41.5% Asia Pacific 94.9 82.0 15.8% Total 245.6 239.5 2.6% 9M 2017 9M 2016 39% Americas 34% Americas EMEA EMEA 54% 53% Asia Pacific Asia Pacific 7% 13% 10
Slide 11: EBIT by Geographical Region – 9M 2017
EBIT by Geographical Region – 9M 2017 S$'m 9M 2017 9M 2016 Var % Americas 0.3 7.3 -95.6% EMEA (2.1) 3.9 -153.7% Asia Pacific 14.9 8.1 84.5% Total 13.1 19.3 -32.1% 16.0 14.9m 14.0 12.0 10.0 8.1m 8.0 7.3m 9M 2017 6.0 3.9m 9M 2016 4.0 2.0 0.3m 0.0 Americas EMEA Asia Pacific (2.0) -2.1m (4.0) 11
Slide 12: Revenue by Geographical Region – Qtrly Trends
Revenue by Geographical Region – Qtrly Trends S$'m Q3 2017 Q2 2017 Q1 2017 Q4 2016 Q3 2016 Q2 2016 Q1 2016 Americas 53.9 40.9 37.2 34.2 53.9 39.2 47.4 EMEA 1.6 8.3 8.8 9.4 1.6 8.9 12.0 Asia Pacific 30.1 36.3 28.5 34.7 30.1 26.2 24.9 Total 85.6 85.5 74.5 78.3 85.6 74.3 84.2 12
Slide 13: Revenue by Industry – 9M 2017
Revenue by Industry – 9M 2017 S$'m 9M 2017 9M 2016 Var % Mining & Mineral 13.8 12.2 13.4% Infrastructure 65.7 44.8 46.6% Oil & Gas 166.1 182.5 -9.0% Total 245.6 239.5 2.6% 9M 2017 9M 2016 6% 5% 19% 27% Mining & Mineral Mining & Mineral Infrastructure Infrastructure Oil & Gas Oil & Gas 67% 76% Infras
Slide 14: EBIT by Industry – 9M 2017
EBIT by Industry – 9M 2017 S$'m 9M 2017 9M 2016 Var % Mining & Mineral 0.9 1.2 -23.7% Infrastructure 10.0 6.2 60.2% Oil & Gas 2.2 11.8 -81.4% Total 13.1 19.3 -32.1% 9M 2017 9M 2016 7% 7% 17% Mining & Mineral Mining & Mineral 32% Infrastructure Infrastructure Oil & Gas 61% Oil & Gas 76% Infrastructur
Slide 15: Revenue by Industry – Qtrly Trends
Revenue by Industry – Qtrly Trends S$'m Q3 2017 Q2 2017 Q1 2017 Q4 2016 Q3 2016 Q2 2016 Q1 2016 Mining & Mineral 2.7 9.1 2.0 9.9 6.7 2.8 2.7 Infrastructure 23.4 23.3 19.1 14.1 16.4 15.5 12.9 Oil & Gas 59.4 53.2 53.5 54.4 57.9 56.0 68.6 Total 85.6 85.5 74.5 78.3 81.0 74.3 84.2 15
Slide 16: 3Q 2017 Group Balance Sheet
3Q 2017 Group Balance Sheet S$M 30-Sep-17 30-Jun-17 31-Mar-17 31-Dec-16 30-Sep-16 Cash at Hand & Bank 47.4 53.9 75.8 90.8 71.2 Quoted Investments 1.3 9.4 9.4 7.4 20.4 Work in Progress (Net) 41.4 38.4 42.3 30.9 27.0 Inventories 18.4 19.3 16.8 14.7 12.4 Trade Receivable 85.3 92.8 81.0 83.0 84.6 Other
Slide 17: 3Q /9 Months 2017 Group Cash Flow Statement
3Q /9 Months 2017 Group Cash Flow Statement S$'m Q3 2017 Q3 2016 9M 2017 9M 2016 As at beginning of the period 53.9 64.0 90.8 109.7 Net Operations 6.2 17.1 0.5 60.9 Interest and tax expenses (1.4) (2.2) (4.9) (3.6) Exceptional settlement (16.6) - (16.6) - Capital Expenditure (Net) (1.3) (0.8) (6.7)
Slide 18: 3Q/FY 2017 Orders
3Q/FY 2017 Orders New orders Outstanding orders $295.0m $286.6m $207.6m $163.1m $179.0m 86.4 57.7 16.1 4Q 70.8 3Q 46.7 90.7 86.9 43.2 EMEA 2Q 1Q The Americas 26.8 83.2 Asia Pacific 30.9 117.9 105.5 104.5 74.9 89.0 FY 2017 FY 2016 3Q 2017 4Q 2016 3Q 2016
Slide 19: Human Resource
Human Resource 3Q 2017 4Q 2016 3Q 2016 The America 633 526 552 EMEA Asia Pacific 432 459 449 1,106 1,036 1,057 19
Slide 20: Order Intake by Industry
Order Intake by Industry S$'m Q3 2017 Q2 2017 Q1 2017 Q4 2016 Q3 2016 Q2 2016 Q1 2016 Oil & Gas 54.8 57.8 86.4 43.3 49.6 39.5 62.2 Mining 4.0 6.0 2.4 1.9 4.2 23.8 2.0 Infrastructure 27.6 27.0 29.0 12.5 17.0 19.9 10.7 Total 86.4 90.7 117.9 57.7 70.8 83.2 74.9 20
Slide 21: Backlog by Industry
Backlog by Industry S$'m Q3 2017 Q2 2017 Q1 2017 Q4 2016 Q3 2016 Q2 2016 Q1 2016 Oil & Gas 101.0 106.9 103.1 75.2 82.6 85.9 104.5 Mining 10.0 8.7 11.9 10.7 20.6 25.8 4.7 Infrastructure 96.6 92.4 89.2 77.1 75.8 74.9 70.5 Total 207.6 207.9 204.2 163.1 179.0 186.6 179.7 21
Slide 22: Business Overview & Outlook
Business Overview & Outlook 22
Slide 23: Business Overview
Business Overview • Q3 2017 was another challenging quarter Negatives • Lower margins for projects @ 25% GM Positives • Good new order received of S$86.4m • Maintain order book > S$200m • Positive operating cash inflow 23
Slide 24: Business Outlook
Business Outlook The rest of FY2017 • Operating conditions remain challenging - increased enquires but no increase in awards • Operating expenditure of customers remains resilient, but anticipate lower level of brownfield activities and prices 24
Slide 25: Business Overview – What we intend to do
Business Overview - What we intend to do Internal • Focus on cash generation • Continue to be vigilant in managing operating cost • Integrate the 6 new acquisitions • Strengthen its technical knowhow/solutions 25
Slide 26: Business Outlook
Business Outlook External • Support and service its existing customers • Build geographical presence • Grow our Mining & Infrastructure business • Diversify into midstream and downstream O&G business and new shale formations in USA 26
Slide 27: Business Outlook Summary
Business Outlook Summary • Conditions in the sectors which the Group operates in remain difficult. The current oil/gas and commodity prices continue to influence investment decisions and customers remain highly focused on cost control and cash flow generation. • In the oil & gas sector, the Group wi
Slide 28: Business Outlook Summary
Business Outlook Summary • For the next quarter and FY2017, CSE expects to report weaker operating performance as compared to the same corresponding period in 2016, but it expects to remain in a net cash position at the end of the year. However, given the difficult operating environment, the Group e
Slide 29: Questions & Answers Thank You
Questions Questions & Answers Thank You 29