Emeco Holdings Limited · ASX:EHL
Emeco — Conference Presentation (September 2019)
16 slides from Emeco's conference presentation, Sep 19, 2019
Slide 1: Investor Conference Presentation
Emeco Holdings Limited For personal use only Investor Conference Presentation 19 September 2019
Slide 2: Important Notices and Disclaimers
IMPORTANT NOTICES AND DISCLAIMERS For personal use only Reliance on third party information No offer of securities The information and views expressed in this Presentation were prepared by Emeco Holdings Ltd (the Nothing in this Presentation should be construed as either an offer to sell or a solici
Slide 3: FY19 financial highlights
FY19 financial highlights For personal use only $214.0m 46.1% $125.4m 27.0% $63.2m Operating Operating Operating Operating Operating EBITDA EBITDA margin EBIT EBIT margin NPAT ▲40% ▲590bps ▲51% ▲520bps ▲214% 64% $114.8m 21.0% $90.1m 2.0x Operating Workshops Return on Free cash flow Net utilisation a
Slide 4: Emeco set up to execute on its growth strategy
EMECO SET UP TO EXECUTE ON ITS GROWTH STRATEGY Over the past 4 years, Emeco has established a strong foundation to continue to drive further growth and deliver strong sustainable shareholder returns For personal use only Past Present Future 4 years of proven execution Strong foundations in place Fur
Slide 5: Demand for equipment expected to remain high
DEMAND FOR EQUIPMENT EXPECTED TO REMAIN HIGH Earthmoving activity is high and forecast to increase Total material movement For personal use only Historical Forecast 8,000 6,000 Million tonnes 4,000 2,000 - 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Thermal coal Metallurgical coal Iron or
Slide 6: Equipment population has remained flat
EQUIPMENT POPULATION HAS REMAINED FLAT Mining companies remain reluctant to invest in fleet following the excesses of 2010 to 2013 and there hasn’t been an influx of equipment into the market For personal use only 5 2016-present: Investment in fleet stagnant. Mining companies have significantly 1,60
Slide 7: Limited excess equipment capacity in the market
LIMITED EXCESS EQUIPMENT CAPACITY IN THE MARKET Industry gross utilisation is high and idle fleet is scarce For personal use only Australian industry gross utilisation 100% 94% 95% 93% 93% 91% 89% 89% 88% 88% 90% 84% 2016-present: Increasing 2009-2011: Increasing utilisation with declining 80% gross
Slide 8: No large inflow of growth equipment expected
NO LARGE INFLOW OF GROWTH EQUIPMENT EXPECTED Industry capex spend is mostly replacement of retiring equipment, keeping equipment population constrained For personal use only Total equipment imports Historical Forecast 700 600 Number of Assets Shipped to Australia 500 400 300 200 100 0 2014 2015 2016
Slide 9: Emeco has a large fleet suited to Australian mining
EMECO HAS A LARGE FLEET SUITED TO AUSTRALIAN MINING With the 3rd largest fleet in Australia (including all miners and service providers), our fleet is configured to meet the demands of operations in all commodities For personal use only Emeco fleet vs industry peers1 BHP Emeco fleet composition Rio
Slide 10: Emeco's fleet has significant life remaining
EMECO’S FLEET HAS SIGNIFICANT LIFE REMAINING Emeco’s fleet is 53% younger than industry average with no significant impending replacement capex For personal use only 140 1,400 Emeco average Industry average 25,700 hrs ~55,000 hrs 120 1,200 100 1,000 80 800 Number 60 600 40 400 20 200 - - 5 10 15 20
Slide 11: Emeco's rental fleet can work harder
EMECO’S RENTAL FLEET CAN WORK HARDER Industry equipment utilisation is significantly higher than Emeco’s 64% (FY19) highlighting the substantial potential to increase fleet usage and grow earnings For personal use only 350 Emeco Australian Average 64% 112% Australian Utilisation Frequency (Primary M
Slide 12: Emeco is a leader on the cost curve
EMECO IS A LEADER ON THE COST CURVE Our continued focus on being the lowest cost and highest quality provider of equipment ensures we continue to reduce costs and expand margins For personal use only CAT 789C haul truck life-cycle cost CAT D11T dozer life-cycle cost 200 250 200 Maintenance cost ($/h
Slide 13: Managing capex is a fundamental focus
MANAGING CAPEX IS A FUNDAMENTAL FOCUS Being the lowest cost and highest quality provider of equipment requires us to continually manage capital expenditure, enabling strong return on capital For personal use only Major component cost per hour benchmarking Est. Emeco August 2019 83 rd Percentile Indu
Slide 14: Appendix
For personal use only Appendix
Slide 15: Company Snapshot
COMPANY SNAPSHOT Emeco Holdings Limited (ASX:EHL) Capital structure Shareholders For personal use only Private and other Share price (as at 17 September 2019) $2.01 holders Management 8% Black Diamond and employees Capital Mgt 52-week price range $1.64 - $3.80 5% 24% Shares outstanding (undiluted) 3
Slide 16: Thank you
Thank you For personal use only emecogroup.com
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