Southern Cross Electrical Engineering Limited · ASX:SXE
Southern Cross Electrical Engineering — Investor Presentation (March 2012)
27 slides from Southern Cross Electrical Engineering's investor presentation, Mar 8, 2012
Slide 1: Investor Presentation
For personal use only Investor Presentation 7 March 2012 Simon High Chris Douglass CEO CFO
Slide 2: Southern Cross Electrical Engineering
Southern Cross Electrical Engineering For personal use only leading provider of electrical and instrumentation services • Founded in 1978 • Listed on the ASX in 2007 • Specialises in electrical and instrumentation services for major resources projects • Established longstanding relationships with ma
Slide 3: Key messages
Key messages For personal use only transitional year of growth • Revenue up 78% on prior corresponding period to $84 million Financial • Increasing profitability • Overheads as percentage of revenue reducing • Strong and debt free balance sheet • Employees increased from 300 to 1,000 – leading indic
Slide 4: Financial overview
Financial overview For personal use only growth trajectory re-established 6 months to Dec June Dec change ($m) 2010 2011 2011 on p.c.p. Sales Revenue 47.3 54.5 84.2 Gross Profit 2.3 13.9 17.8 Gross Profit Margin 4.9% 25.5% 21.1% NPAT (4.8) 3.1 5.1 NPAT Margin (10.1)% 5.7% 6.1% 6 Month EPS (cps) (3.9
Slide 5: Revenue and earnings
Revenue and earnings positive trends For personal use only Note: Margins in 2011 adversely impacted in H1 by Pluto revision and positively impacted in H2 by Pluto recovery 4
Slide 6: Cash flow
Cash flow For personal use only funding growth • Operating cash outflow ($m) Dec Jun Dec 6 months to 2010 2011 2011 — Working capital funding growth Operating cash flows (4.4) 4.6 (2.3) — Systems investments — Recruitment costs Investing cash flows (0.1) (1.1) (0.7) • Investing cash outflow Financin
Slide 7: Balance sheet
Balance sheet For personal use only well capitalised and debt free ($m) 31 Dec 30 Jun 31 Dec 2010 2011 2011 Current assets 23.3 59.8 66.5 • Strong balance sheet with no debt • Investment in plant and equipment Non-current assets 30.1 26.8 30.1 • Well positioned to fund growth Total assets 53.4 86.6
Slide 8: Order book
Order book For personal use only lead indicator of revenues • Significant wins in period — Sino Iron Area F for MCC — Cape Lambert 33kV Overhead Power Line for Rio Tinto — QGCLNG Early Works for Thiess — Lake Vermont Coal Expansion for Thiess Sedgman JV • $76m of Order book forecast to be executed i
Slide 9: Employee numbers
Employee numbers For personal use only attracting talent to deliver growth • Significant investment in skills with twenty three apprentices and two trainees appointed in the half • Growing employee numbers being mobilised into project wins with capacity for further growth • Overheads forecast to be
Slide 10: Financial revenue by line of business
Financial revenue by line of business For personal use only Mining Australia main contributor to revenue growth • H1 FY12 revenue - $84 million • Oil & Gas expected to significantly increase revenue in FY13 9
Slide 11: Strategic outlook
Strategic outlook For personal use only unprecedented market growth Progress against stated three year targets: 1. Grow revenues to over $200m pa – H1 FY12 revenue $84m, running 18 months ahead of target 2. Restore EBITDA margins to 15–20% - H1 FY12 EBITDA margin 10% (FY11: 1%) 3. Contain overheads
Slide 12: Key Australian markets
Key Australian markets For personal use only five sectors to drive growth IRON ORE LNG CSG COAL GOLD & OTHER • Rio Tinto 353 • Ichthys • QC LNG • Lake Vermont • Tropicana mtpa • Wheatstone upstream • BHPB/BMA • Boddington • Sino Iron • Pluto 2&3 • APLNG • Rio Tinto Coal • Cadia • BHPB RGP 6 • Gorgon
Slide 13: Mining Australia
Mining Australia For personal use only current driver of revenue expansion Major upcoming opportunities • Revenue of $52m • First coal contract with Lake Vermont Expansion Iron Ore (Rio, Sino Iron, BHPB, Roy Hill) • Long term work from Rio expected award in Tropicana second half Boddington Olympic D
Slide 14: Rio Tinto framework agreement
Rio Tinto framework agreement For personal use only SCEE a preferred contractor with Rio Tinto for 353mtpa expansion • Preferred contractor status for five years at Cape Lambert and potential minesites for E&I packages • Strong relationship with Rio since 2005 – now performing circa $20m of works pr
Slide 15: Coal – a new market for SCEE
Coal – a new market for SCEE For personal use only strong growth potential Major upcoming opportunities • Commenced Lake Vermont Coal expansion Lake Vermont Coal with Thiess Sedgman JV BHPB/BMA Coal Expansion • Strong pipeline of opportunities in Rio Tinto Coal Australia Expansion Queensland Xstrata
Slide 16: Oil & Gas
Oil & Gas For personal use only SCEE in position for unprecedented growth in sector • Revenue of $4m Major upcoming opportunities • QGC coal seam gas will contribute to the second LNG West Coast: CSG East Coast: half Wheatstone QC LNG • Increased coal seam gas tendering activity - Ichthys APLNG immi
Slide 17: Operations Support & Maintenance
Operations Support & Maintenance For personal use only increased focus for long term growth • Revenue of $10m Major opportunities • Assistance with shutdowns and plant upgrades • Growing a re-current revenue base to provide a West Coast – expand Rio Tinto MSA level of stability in revenues East Coas
Slide 18: Infrastructure
Infrastructure For personal use only strong growth from mining infrastructure • Revenue of $8m Major upcoming opportunities • Strong growth expected in 2H FY12 off the back Rio Tinto of continuing mining investment BHP • Strong pipeline of opportunities with Rio Tinto, Sino Iron BHP and Sino Iron CS
Slide 19: Mining International
Mining International For personal use only progressing in line with expectations • Revenue of $10m • Current projects tracking in line with expectations • Strategic review of international operations underway Current major projects • Pueblo Viejo gold project • Antapaccay power line 18
Slide 20: Challenges
Challenges For personal use only unprecedented growth in Australian markets commenced External issues • All major sectors growing simultaneously • Size and complexity of projects increasing • Productivity challenges Key issues for management • Retain and recruit quality and quantity of workforce • I
Slide 21: Employment Strategy
Employment Strategy For personal use only recruitment - quality and quantity Resourcing strategy in order of priority: Rehiring from existing workforce. SCEE has good reputation and long relationship with many employees Apprenticeship program - continued to increase our apprentice intake. Curren
Slide 22: Overseas recruitment
Overseas recruitment For personal use only contingency for Australian labour shortage • Trialling overseas recruitment plan through 457 visa scheme • Initially source overseas labour from Philippines and Britain: • Similarities between British and Australian trade training • Closeness of Philippines
Slide 23: SCEEtrak Development Project
SCEEtrak Development Project For personal use only business intelligence software development • Executed as an internal project with dedicated Project Manager and full time project team • Significant investment with circa $2m capital budget set over next two years • First modules now rolled out, sig
Slide 24: Expanding regional presence
Expanding regional presence For personal use only efficiencies for projects and mobilisations • New and expanded Brisbane offices • Establishing a Rockhampton regional operation • Considering other regional locations 23
Slide 25: Summary and outlook
Summary and outlook For personal use only on track for strong H2 result and FY13 order book • H1 revenue ahead of target and similar or greater levels expected for H2 • Profit and margins to improve further into H2 FY12 a year of transition lower margin contracts being completed further invest
Slide 26: 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 Southern Cross Electrical Engineering Limited’s current intentions,
Slide 27: For personal use only
For personal use only Investor Presentation 7 March 2012 Simon High Chris Douglass CEO CFO
Southern Cross Electrical Engineering — Investor Presentation (March 2012) on 6ix