Southern Cross Electrical Engineering Limited · ASX:SXE
Southern Cross Electrical Engineering — H1 FY2018 Earnings Presentation
28 slides from Southern Cross Electrical Engineering's earnings presentation, Mar 14, 2018
Slide 1: Investor Presentation
For personal use only Investor Presentation 14 March 2018
Slide 2: About SCEE
For personal use only About SCEE Southern Cross Electrical Engineering (SCEE) is an ASX listed electrical, instrumentation, Our Values communication and maintenance services Safety company recognised for our industry leading capabilities It’s in everything we do. Quality Established in 1978 in Weste
Slide 3: Highlights
For personal use only Highlights Financial Strategic Outlook Revenue $176.2m, EBITDA $8.6m and an Growth strategy reaffirmed to achieve Order book of over $450m at 31 underlying NPAT* of $4.6m further sector and geographic diversity December 2017 Revenue up 187% on prior corresponding Successful cap
Slide 4: Half Year financial performance
For personal use only Half Year financial performance Revenue up 187% on prior corresponding period as first full period in which Heyday results consolidated Gross margins for the half-year were 11.1% compared to 11.9% in the prior corresponding period Turnaround in profitability with EBITDA of $8.6
Slide 5: HY18 – Revenue by sector
For personal use only HY18 – Revenue by sector Revenue growth in all sectors HY17 HY18 Revenue: $62m Revenue: $176m Commercial Resources Public infrastructure and defence Telecommunications and data centres Industrials, energy & utilities Half Year Results to 31 December 2017 5
Slide 6: Balance sheet
For personal use only Balance sheet Strong balance sheet throughout the period Cash of $63.3m and negligible debt at 31 December Banking facility includes $10m working capital sub- facility Bank guarantee and surety bond capacity of $60m of which $36.3m used Half Year Results to 31 December 2017 6
Slide 7: Cashflow
For personal use only Cashflow Cash increased from $40.6m to $63.3m over period $9.25m paid to Heyday vendors in September 2017 $31.9m net cash proceeds from capital raising in November 2017 Capex remained low at $0.9m in period and forecast to remain at these levels Half Year Results to 31 December
Slide 8: Health, safety and people
For personal use only Health, safety and people Workforce currently over 1100 employees LTI free over period Original SCEE business over thirteen years LTI free in Australia and “5 Star Commitment Safety Program” rolled out in period Integration of functions and processes across SCEE businesses ongo
Slide 9: Leading national diversified electrical contractor
For personal use only Leading national diversified electrical contractor WA NT QLD RAAF Tindal Amrun Bauxite Project Commercial Wheatstone LNG Rio Tinto Various Arrow MSA Resources BHP Billiton Various NBN construction Sino Iron Carrier networks construction Public Infrastructure and defence Bodding
Slide 10: Order book by sector
For personal use only Order book by sector Four out of five of SCEE’s market sectors in or entering growth phase - tendering at high level with over $700m of submitted tenders with clients pending decision. Business development pipeline strong and, combined with submitted tenders, exceeds $2bn HY17
Slide 11: Strategy
For personal use only Strategy SCEE primarily sees itself as an electrical contractor. From early 2016 we implemented a strategy to add to our historic resources business by diversifying into adjacent and complementary sectors through organic initiatives and the acquisitions of Datatel and Heyday. S
Slide 12: Market overview
For personal use only Market overview Australian electrical contracting industry revenue valued at Electrical Contracting in Australia – By Major Segment $19.3 billion in last financial year Investment anticipated to improve in most building and 8 infrastructure markets from 2018-19 7 Electrical con
Slide 13: Commercial
For personal use only Commercial Annual value of electrical contracting for commercial and retail expected Estimated Annual Value of Electrical Contracting for Commercial / Retail to grow to $3.8bn by 2021 Development in Australia ($bn) Growth in NSW as a result of office, multi-storey and retail in
Slide 14: Commercial - continued
For personal use only Commercial - continued In NSW and ACT worked on a range of large construction and fit-out projects including the Duo Central Park tower development in Chippendale, the Insurance Australia Group office fit-out at Darling Park and at Stockland’s Greenhills Shopping Centre Contrac
Slide 15: Resources
For personal use only Resources Mining construction activity now bottomed out with visibility of electrical activity on significant WA iron-ore replacement tonnage projects Continuing investment into sustaining capital in iron-ore. Growth in ore exports will place pressure on assets and require incr
Slide 16: Resources - continued
For personal use only Resources - continued In WA continued to win and perform work for the major iron ore producers and on the Wheatstone LNG project In Queensland activity ramped up on Rio Tinto’s Amrun Bauxite project Positioning for the upcoming large scale replacement tonnage projects at Rio Ti
Slide 17: Public infrastructure & defence
For personal use only Public infrastructure & defence Infrastructure projects by State Sector primarily driven by government expenditure Large city road and rail transport networks see increased investment to address population growth and congestion NSW has a $72.7 billion four-year infrastructure p
Slide 18: Public infrastructure & defence - continued
For personal use only Public infrastructure & defence - continued Work continued throughout the period on the University of Canberra Hospital in the ACT and at RAAF Tindal in the Northern Territory Won Westmead General Hospital in Sydney from Multiplex for over $66m Heyday positioning for number of
Slide 19: Telecommunications & data centres
For personal use only Telecommunications & data centres Global Mobile Traffic by Connection Type (Exabytes per Month) Substantial investment in NBN with $13.4bn capex remaining for FY18-FY21 (NBN Corporate Plan 2018-21) Ongoing capital expenditure by the private sector has become an important driver
Slide 20: Telecommunications & data centres - continued
For personal use only Telecommunications & data centres - continued Significant construction activity at datacentres included the Airtrunk and Global Switch projects in Sydney NBN construction activity continued across Australia Commenced our first construction projects in the wireless sector Contin
Slide 21: Industrials, energy & utilities
For personal use only Industrials, energy & utilities Industrial sector stable Energy generation and distribution to meet demand remains a challenge for east coast Continued investment in renewables throughout Australia driven by 2020 RET with strong focus on solar Most states are increasing investm
Slide 22: Industrials, energy & utilities - continued
For personal use only Industrials, energy & utilities - continued SCEE’s first solar power projects were completed in New South Wales Three year Ergon Energy Service Agreement commenced in northern Queensland Work at Woodman Point Waste Water Treatment plant ongoing Half Year Results to 31 December
Slide 23: Conclusion and outlook
For personal use only Conclusion and outlook • Revenue of $176.2m up 187% on prior corresponding period • Turnaround in profitability with EBITDA of $8.6m • Strong balance sheet with successful capital raising in November • Record cash of $63.3m at 31 December 2017 and negligible debt • Significant
Slide 24: Appendices
For personal use only Appendices Appendix 1 - Underlying to statutory results reconciliation Appendix 2 - Corporate summary Appendix 3 - Disclaimer Half Year Results to 31st December 2017 24
Slide 25: Appendix – Underlying to statutory results reconciliation
For personal use only Appendix 1 – Underlying to statutory results reconciliation 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 a
Slide 26: Appendix - Corporate summary
For personal use only Appendix 2 - Corporate summary Capital Structure Shareholders at 31 January 2018 ASX Code SXE Shareholder % Share Price (23 February 2018) $0.74 Frank Tomasi 28.2% No. of ordinary shares 231.4m Heyday Vendors 11.9% Market Capitalisation (23 February 2018) $171.2m Colonial First
Slide 27: Appendix - Disclaimer
For personal use only Appendix 3 - Disclaimer Some of the information contained in this presentation contains “forward- This presentation is for information purposes only. It is not financial product or looking statements” which may not directly or exclusively relate to historical investment advice
Slide 28: For personal use only
scee SCEE Perth Office (Head Office) 4) Macedonia Street, Naval Base Westem Australia, 6165 E scee@scee.com.au T +61(0)8 9236 8300 F +61(0)8 9410 2504 PERTH | BRISBANE | DARWIN ADELAIDE KARRATHA | NEWMAN TOWNSVILLE CANBERRA | SYDNEY scee.com.au CELEBRATING MES ISBBESOS| bre 24.987 77m abizhed 18 Got
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