Southern Cross Electrical Engineering Limited · ASX:SXE
Southern Cross Electrical Engineering — Euroz Rottnest Conference 2017
24 slides from Southern Cross Electrical Engineering's conference presentation, Mar 15, 2017
Slide 1: Investor Presentation – Euroz Rottnest Conference
For personal use only Investor Presentation – Euroz Rottnest Conference 15 March 2017
Slide 2: Overview
Overview For personal use only SCEE has acquired leading east coast electrical contractor Heyday5 Pty Ltd (“Heyday5”) for an enterprise value of up to $54.1m The transaction is a key milestone in SCEE’s strategy to diversify and grow into adjacent and Acquisition of complementary sectors and geograp
Slide 3: Half year results
Half year results For personal use only Contributors included iron ore sustaining Underlying profit & loss account 31 December 2017 capital and maintenance works, and construction at Wheatstone LNG and for Western Power and the NBN Anticipated activity was negatively impacted by delayed mobilisation
Slide 4: Acquisition of Heyday5 – strategic rationale
Acquisition of Heyday5 – strategic rationale For personal use only SCEE primarily sees itself as an electrical contractor. Having recognised the cyclical nature of our historically predominant resources-construction market, whilst wishing to retain a resources focus as a pillar of the business, we h
Slide 5: Acquisition of Heyday5 – key terms
Acquisition of Heyday5 – key terms For personal use only SCEE has acquired 100% of Heyday5, a leading east coast electrical contractor servicing commercial and infrastructure markets Total consideration of up to $54.1m on an enterprise value basis, with $18m cash paid on completion, $2.25m after
Slide 6: Acquisition of Heyday5 – key terms (continued)
Acquisition ofHeyday5 – key terms (continued) For personal use only Step change in scale: • • Combined Group has an order book of $345m Heyday5 FY17 budget revenue of $152m and EBIT of $9.8m Balanced revenue streams across sectors and geographies: • Mining 19%, oil & gas 13%, industrial, energy
Slide 7: Heyday5 - background
Heyday5 -background For personal use only Company overview Revenue by sector (FY17B) Business originally established in 1978 as a specialist electrical contractor 21% Heyday5 is a leading provider of 27% Commercial electrical services to the building Telecommunications and data centres industry and
Slide 8: Heyday5 - recently completed projects
Heyday5 -recently completed projects For personal use only Clients in commercial, infrastructure, residential, industrial, data centres, defence, education, health and retail Commercial Retail Retail 50 Martin Place, NSW DFO Homebush, NSW Westfield Miranda, NSW Commercial Health Public infrastructur
Slide 9: Heyday5 - current projects
Heyday5 -current projects For personal use only Reputation built on philosophy of completing projects on time, in budget and superior customer service Commercial Retail Residential & Hotel 100 Mount St, North Sydney, NSW Green Hills Stockland Shopping Centre, Maitland, NSW Duo Central Park, NSW Data
Slide 10: Heyday5 - strong management team
Heyday5 -strong management team For personal use only Heyday5 has an experienced management team who will continue to manage the business: • Four of the five vendors, pictured below, continue employment as key executives under SCEE ownership • Founding vendor, Tony Borg, continues his ongoing adviso
Slide 11: Leading national diversified electrical contractor
Leading national diversified electrical contractor For personal use only The combined Group will have a diversified portfolio of projects across Australia and over 900 employees Commercial Telecommunications and data centres Public Infrastructure and defence Mining Oil and gas Industrials, energy &
Slide 12: Revenue diversification
Revenue diversification For personal use only The Group’s revenue will be balanced across major industry sectors, with east coast operations comprising more than 50% of Group revenue FY2017B SCEE standalone Merged Group (Pro-forma) 2% 17% 13% Commercial 7% Telecommunications & data centres 26% Reven
Slide 13: Sector outlooks
Sector outlooks For personal use only Whilst SCEE remains a major supplier, flow of work from large iron ore clients continues to be subdued in the short term and will be dependent on clients’ view of the commodity cycle Mining, oil & LNG activity expected to continue through FY18 gas Visibility of
Slide 14: Sector outlooks (continued)
Sector outlooks (continued) For personal use only Commercial sector growth over the next five years driven by new developments and major upgrades Commercial NSW and ACT fastest growing geographies Potential to leverage combined Group’s customer relationships and skills into new geographies WA NBN ro
Slide 15: Order book
Order book For personal use only Group order book ($millions) Group order book now totals $345m Includes estimates of framework, reimbursable and panel agreements to 31 December 2017 and approximately $30m of construction projects in final stages of approval Order book demonstrates diversification o
Slide 16: Tendering activity
Tendering activity For personal use only Submitted tenders ($millions) $10 Tendering activity at high level with $440m of $35 submitted tenders awaiting decision SCEE business development pipeline significantly $80 $210 diversified organically over period – substantial components now in defence, pub
Slide 17: Outlook and conclusion
Outlook and conclusion For personal use only Expected increase in H2 FY17 revenue in SCEE’s existing business based on current order book and tendering activity, and increasingly driven by organic diversification into telecommunications, utilities, and transport, social, commercial and defence infra
Slide 18: Appendices
For personal use only Appendices Appendix 1– Transaction terms Appendix 2– Underlying to statutory results reconciliation and additional HY results slides 17
Slide 19: Appendix 1 - Transaction terms
Appendix 1-Transaction terms For personal use only Acquisition of 100% of Heyday5 Pty Ltd Acquisition Completed on 9 March 2017 Up to a total of $54.1m payable as follows: 1. Initial Cash Consideration: $18m in cash at completion (paid 9 March 2017) 2. Further Consideration: $2.25m in cash following
Slide 20: Appendix 2 - Reconciliation underlying to statutory H1 FY17 results
Appendix 2-Reconciliation underlying to statutory H1 FY17 results For personal use only 1. Organisation restructuring represents the costs incurred as management took further actions to ensure an efficient operating structure in a strongly cost focused market 2. Acquisition, integration and diversif
Slide 21: Appendix (continued) - Balance sheet December 2016
Appendix 2 (continued)-Balance sheet 31 December 2016 For personal use only Strong balance sheet throughout the period Cash of $28.5m and debt free at 31 December Reduction in current liabilities in period as FY16 works closed out 20
Slide 22: Appendix (continued) - Cashflow H1 FY17
Appendix 2 (continued) - Cashflow H1 FY17 For personal use only Investment in acquisition and growth initiatives including Heyday5 transaction and Datatel east coast expansion Costs incurred to restructure the business and drive future savings Working capital required for mobilization on LNG works a
Slide 23: 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 24: 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 the current intentions, plans, expectations, assumptions and belief
Southern Cross Electrical Engineering — Euroz Rottnest Conference 2017 on 6ix