Wilson Bayly Holmes-ovcon Limited · JSE:WBO
Wilson Bayly Holmes-ovcon — FY2017 Earnings Presentation
45 slides from Wilson Bayly Holmes-ovcon's earnings presentation, September 2017
Slide 1: Audited Results for the Year Ended 30 June 2017
AUDITED RESULTS FOR THE 2017 YEAR ENDED 30 JUNE 2017
Slide 2: Contents
CONTENTS SUBJECT PRESENTER Welcome Mike Wylie Overview and highlights Louwtjie Nel Operational review Building and civil engineering Louwtjie Nel Australia Louwtjie Nel Roads and earthworks Richard Smith Financial review Charles Henwood Order book and project pipeline Louwtjie Nel Outlook Louwtjie N
Slide 3: Overview and Highlights
OVERVIEW AND HIGHLIGHTS LOUWTJIE NEL
Slide 4: The Year in Perspective: South Africa and Rest of Africa
Overview and highlights THE YEAR IN PERSPECTIVE SOUTH AFRICA • Low-growth environment and political instability impact business confidence • Record revenue achieved by local building divisions • Civil engineering division secures key anchor project while overall market remains challenging • Roads an
Slide 5: The Year in Perspective: Australia and New Markets
Overview and highlights THE YEAR IN PERSPECTIVE AUSTRALIA • High activity levels of recent years sustained • Strong Asian demand continues to support growth • Revenue growth of 6% in Australian dollar terms • Major projects secured in all key states • One loss-making building project in Queensland i
Slide 6: Revenue and Operating Profit
Overview and highlights REVENUE (Rm) OPERATING PROFIT (Rm) 50 000 1 500 1 250 40 000 1 000 30 000 1 029 1 005 1 040* 30 650 31 907 939 3,3% 28 823 750 4,0% 3,3% 3,9% 20 000 25 722 768 23 773 2,6% 500 4 loss-making 10 000 projects in 250 Australia - - 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
Slide 7: Safety
Overview and highlights SAFETY LTIFR (Number of lost time injuries per million man hours) 2.00 • Improvement in LTIFR from 0,94 to 0,80 in 2017 • Best ever safety performance in Africa with an LTIFR of 0,54 1.50 reflects impact of recent safety initiatives 1,35 • Group safety performance impacted by
Slide 8: Transformation and Empowerment
Overview and highlights TRANSFORMATION AND EMPOWERMENT PROCUREMENT • Inconsistent implementation of PFMA guidelines • Additional transformation requirements imposed by individual SOEs • WBHO has a proven track record in creating successful joint ventures with emerging contractors CONSTRUCTION SECTOR
Slide 9: Building and Civil Engineering
BUILDING AND CIVIL ENGINEERING LOUWTJIE NEL
Slide 10: Geographic Footprint
Building and civil engineering GEOGRAPHIC FOOTPRINT REVENUE (%) 10 19 2017 2016 90 81 OPERATING PROFIT (%) 23 31 2017 2016 77 69 Rest of Africa South Africa
Slide 11: The Year in Perspective
Building and civil engineering THE YEAR IN PERSPECTIVE BUILDING • Record revenue delivered by Gauteng and KZN building divisions • Lower revenue from the Western Cape following completion of a number of projects at V&A Waterfront and low order intake over the first six months • Activity in the Easte
Slide 12: Revenue and Operating Profit
Building and civil engineering REVENUE (Rm) OPERATING PROFIT (Rm) 12 000 600 10 000 500 8 000 400 8 136 385 7 385 7 536 370 6 000 7 002 300 352 4,7% 329 4,8% 4,9% 6 186 4,7% 4 000 200 240 3,9% 2 000 100 - 0 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 • Revenue growth of 8% (2016:2%) • Overall
Slide 13: Order Book
Building and civil engineering ORDER BOOK BUILDING AND CIVIL AT JUNE AT JUNE ORDER BOOK 17% ENGINEERING (Rm) % GROWTH 2017 2016 • 73% of FY17 revenue secured for FY18 • Lower building order book still healthy South Africa (16) 6 738 7 977 • Improvement in Western Cape and Civil Africa (36) 451 706 e
Slide 14: Australia
AUSTRALIA LOUWTJIE NEL
Slide 15: Geographic Footprint
Australia GEOGRAPHIC FOOTPRINT REVENUE (%) 11 7 2017 2016 89 93 OPERATING PROFIT (%) 7 -4 17 2017 2016 104 76 Infrastructure Building Property developments
Slide 16: The Year in Perspective
Australia THE YEAR IN PERSPECTIVE BUILDING • Melbourne and Sydney markets comprise 68% of building revenue • Activity underpinned by multi-level residential projects • Increased activity in hotel and leisure markets as Chinese tourism rises • Three large-scale retail projects in Victoria and Queensl
Slide 17: Revenue and Operating Profit
Australia REVENUE (Rm) OPERATING PROFIT (Rm) 500 20 000 400 18 113 18 600 15 000 15 352 300 313 10 000 12 441 12 438 300 1,7% 200 250 1,7% 2,0% 184 5 000 1,5% 11 100 0,0% - 0 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 • Revenue growth of 6% in AU$ terms (2016:18%) • Operating profit growth of
Slide 18: Order Book
Australia ORDER BOOK AT JUNE AT JUNE ORDER BOOK 2% AUSTRALIA (Rm) % GROWTH 2017 2016 • High volume of work maintained going into FY18 • Building order book well diversified both by Building 1,5 29 740 29 302 sector and state Infrastructure 6,7 1 786 1 674 • Margin outlook stable TOTAL 1,8 31 526 30
Slide 19: Battersea
Order book and project pipeline BATTERSEA VALUE £65m http://www.heraldsun.com.au/business/companies/future-melbourne-3d-model-show-futures-shape-of-city/news-story/2ffdcab7fa4342acb312d0b6ade11bd8
Slide 20: Roads and Earthworks
ROADS AND EARTHWORKS RICHARD SMITH
Slide 21: Geographic Footprint
Roads and earthworks GEOGRAPHIC FOOTPRINT REVENUE (%) 23 32 2017 2016 77 68 OPERATING PROFIT (%) 40 52 2017 48 2016 60 Rest of Africa South Africa
Slide 22: The Year in Perspective
Roads and earthworks THE YEAR IN PERSPECTIVE SOUTH AFRICA • Increase in private sector work over the second six months • Strong activity in local roads sector – comprises 60% of SA revenue • Large-scale road projects across most provinces • Strong growth from Roadspan surfacing division on the stren
Slide 23: Revenue and Operating Profit
Roads and earthworks REVENUE (Rm) OPERATING PROFIT (Rm) 8 000 800 6 000 600 5 282 5 074 5 002 505 4 000 4 589 400 10,0% 4 334 414 380 8,3% 7,2% 342 283 7,4% 2 000 200 6,5% - 0 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 • Revenue growth of 6% (2016: -18%) • Operating profit growth of 21% • 7%
Slide 24: Order Book
Roads and earthworks ORDER BOOK ROADS AND AT JUNE AT JUNE ORDER BOOK 103% EARTHWORKS (Rm) % GROWTH 2017 2016 • 100% of FY17 revenue secured for FY18 • 55% public versus 45% private work South Africa 95 4 969 2 554 • Key anchor projects to support activity Africa 145 1 192 487 through FY18 and early
Slide 25: Financial Review
FINANCIAL REVIEW CHARLES HENWOOD
Slide 26: Financial Performance
Financial review FINANCIAL PERFORMANCE KEY FINANCIAL INDICATORS TARGET/ GROWTH 2017 2016 Revenue growth % >10 4,1% 6,3% Operating profit margin % 3 – 4,5 3,1% 3,3% Return on capital employed % >20 22,3% 22,9% Net cash on hand Rm (3,5%) 5 546 5 752 Earnings per share cents 1,8% 1 346 1 322 Headline e
Slide 27: Contribution by Geography
Financial review CONTRIBUTION BY GEOGRAPHY REVENUE (%) REVENUE (Rm) % Growth 2017 2016 South Africa 17,6 11 454 9 739 36 32 Rest of Africa (33,8%) 1 852 2 798 2017 2016 Australia 2,7% 18 600 18 113 58 59 6 9 TOTAL 4,1% 31 907 30 650 South Africa Rest of Africa Australia OPERATING PROFIT (%) OPERATIN
Slide 28: Financial Performance
Financial review FINANCIAL PERFORMANCE KEY FINANCIAL NUMBERS AND RATIOS % change 2017 2016 Revenue 4,1 31 907 30 650 Operating profit before non-trading items (1,8) 986 1 005 Settlement agreement expense (170) – Profit on disposal of shares 13 – Gain on loss of control of subsidiary 9 – Share-based
Slide 29: Financial Position
Financial review FINANCIAL POSITION 7,500 7,300 260 7,100 1,084 32 6,900 - 6,700 (252) 6,500 6,300 (302) (180) 6,100 5,900 12 5,700 - (531) 5,500 167 (163) 5,300 5,100 4,900 4,700 5,752 4,500 5,545 4,300 4,100 3,900 3,700 3,500 Cash & cash Operating Working Net finance Taxation Dividends Net cash Ne
Slide 30: Financial Position
Financial review FINANCIAL POSITION PROPERTY, PLANT AND EQUIPMENT (Rm) 2017 2016 Property, plant and equipment 1 635 1 710 Depreciation 211 258 CAPITAL EXPENDITURE APPROVED 2018 ACTUAL 2017 ACTUAL 2016 Replacement 303 262 88 Expansion 52 47 309 TOTAL 355 309 127 • The fleet size has been carefully m
Slide 31: Financial Position
Financial review FINANCIAL POSITION INVESTMENTS (Rm) 2017 2016 Investments 0,3 202 Investments in associates 650 347 • Funding from Precint 1 of the Caulfield development repaid during the year • AU$3 invested in Precinct 2 and classified as investment in associate • £12m investment in WBHO UK for 4
Slide 32: Financial Position
Financial review FINANCIAL POSITION TAX (Rm) 2017 2016 Net deferred tax asset 575 534 Net current tax asset 124 243 Deferred tax asset consists of: Current tax asset consists of: • Asset of R42m raised on future settlement agreement expense • Foreign tax credits of R82m (2016: R91m) • Tax losses of
Slide 33: Order Book and Project Pipeline
ORDER BOOK AND PROJECT PIPELINE LOUWTJIE NEL
Slide 34: Consolidated Order Book
Order book and project pipeline CONSOLIDATED ORDER BOOK ORDER BOOK BY SEGMENT (%) AT JUNE AT JUNE SEGMENT (Rm) 2016 2017 2018 2019 Building and civil 16 20 8 683 7 189 5 945 1 244 engineering Roads and 2017 14 2016 7 70 3 041 6 161 4 631 1 530 73 earthworks Australia 30 976 31 526 17 094 14 432 TOTA
Slide 35: Consolidated Order Book
Order book and project pipeline CONSOLIDATED ORDER BOOK ORDER BOOK BY GEOGRAPHY (%) AT JUNE AT JUNE GEOGRAPHY (Rm) 2016 2017 2018 2019 27 25 South Africa 10 532 11 707 9 042 2 665 Rest of Africa 1 192 1 643 1 534 109 2017 4 2016 3 69 72 Australia 30 976 31 526 17 094 14 432 TOTAL 42 700 44 876 27 67
Slide 36: Projects Secured After 30 June 2017
Order book and project pipeline PROJECTS SECURED AFTER 30 JUNE 2017 SUMMARY (Rm) Awards after 30 June 2017 Building and civil engineering 1 370 Roads and earthworks 1 700 Australia 8 650 TOTAL 11 720 • R470m commercial office project secured in Tshwane • R900m mixed-use development secured in KZN •
Slide 37: Project Pipeline
Order book and project pipeline PROJECT PIPELINE SOUTH AFRICA Rm SOUTH AFRICA Building 20 930 • Building • Civil engineering Public 3 900 37 40 • Roads and earthworks 2017 Private 17 030 Civil engineering 12 470 23 Public 6 220 Private 6 250 SOUTH AFRICA • Public Roads and earthworks 21 850 • Privat
Slide 38: Project Pipeline
Order book and project pipeline PROJECT PIPELINE AUSTRALIA Rm AUSTRALIA 22 • Building Building 43 467 • Civil Engineering Civil engineering 12 400 2017 78 TOTAL 55 867 SUMMARY Rm 14 SUMMARY Building and civil engineering 36 600 25 • Building and civil engineering • Road and earthworks Roads and eart
Slide 39: Outlook
Outlook OUTLOOK SOUTH AFRICA • Outlook for FY18 stable with current volume of work • Country risk concerning amid technical recession, low growth forecast and persistent political instability • Challenging industry conditions likely to persist – impact on order intake for FY19 unpredictable • Buildi
Slide 40: Outlook
Outlook OUTLOOK AUSTRALIA • Overall market sentiment remains positive • Asian investment into Australian residential real estate market is significant – particularly inner-city apartment developments • Housing affordability and restrictions on capital outflows from China has potential to impact resi
Slide 41: Outlook
Outlook OUTLOOK UNITED KINGDOM • UK markets have been strong for some time, particularly London and the North West • Limited impact from BREXIT at this stage • Strong demand for residential and commercial developments • Familiarity with construction environment – similar to Australia • Byrne Group a
Slide 42: Strategy
Overview and highlights STRATEGY FLEXIBILITY AND DIVERSIFICATION • Capability to pursue opportunities across numerous sectors and geographies • Mitigates risk and reduces earnings volatility • Evident in sustained growth and essentially consistent earnings over time throughout fluctuating building,
Slide 43: Strategy
Overview and highlights STRATEGY CAPACITY AND TALENT MANAGEMENT • Ability to attract top talent and grow next generation of leaders • Significant investment in training each year SAFETY AND ENVIRONMENTAL MANAGEMENT • Responsibility to safeguard our employees and suppliers and minimise our impact on
Slide 44: Disclaimer
Outlook DISCLAIMER 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. Forwar
Slide 45: Thank You
THANK YOU
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