Speedy Hire Plc · LSE:SDY
Speedy Hire — H1 2012 Earnings Presentation
27 slides from Speedy Hire's earnings presentation, November 2012
Slide 1: Interim results for the six months ended 30 September 2012
Speedy Hire Plc Interim results for the six months ended 30 September 2012 1
Slide 2: Legal disclaimer
Legal disclaimer This presentation has been prepared to inform investment professionals about Speedy Hire Plc (“Speedy”) and does not constitute an offer of securities or otherwise constitute an invitation or inducement to any person to underwrite, subscribe for or otherwise acquire securities in Sp
Slide 3: Agenda
Results presentation Agenda • Financial performance – Lynn Krige • Consistent strategy delivering growth – Steve Corcoran • Questions and answer session – Ishbel Macpherson 3
Slide 4: Financial performance
Rental Training TRIM Financial performance Lynn Krige Group Finance Director Partnered Services
Slide 5: Financial highlights
Financial highlights Six months to 30 September 2012 2011 * Change £m £m Revenue 169.1 158.9 up 6.4% EBITDA 33.6 29.2 up 15.0% EBITDA % 20% 18% EBITA 10.4 8.5 up 22.3% EBITA % 6.2% 5.4% Adjusted PBT 6.6 4.8 up 37.5% Adjusted earnings per share 1.10p 0.89p up 23.6% Interim dividend per share 0.22p 0.
Slide 6: UK & Ireland
UK & Ireland Continuing EBITDA* margin Six months to 30 September 2012 2011 * Change £m £m 21.3% Revenue 160.6 154.1 4.2% 20.5% EBITDA 34.2 31.6 8.2% 21.3% 20.5% 30 Sept 2012 30 Sept 2011 EBITA 13.8 13.0 6.1% 8.6% 8.4% NBV of property, plant & equipment 220.7 209.3 5.4% Continuing EBITA* margin Net
Slide 7: International
International EBITDA margin Six months to September 2012 2011 Change £m £m 28.2% Revenue 8.5 4.8 77.1% 12.5% EBITDA 2.4 0.6 300.0% 28.2% 12.5% EBITA 0.3 (0.8) n/a 30 Sept 2012 30 Sept 2011 3.5% (16.7%) NBV of property, plant & equipment 30.1 14.5 107.6% Net capital expenditure 7.4 2.4 208.3% EBITA m
Slide 8: Movement in net debt
Self-funded investment Group excluding International International 90 0.2 80 2.3 9.4 0.3 Movement in net debt (£m) 70 0.4 5.2 - 8.9 5.3 60 28.8 23.0 2.9 50 40 76.3 82.6 75.4 30 20 10 0 Strong cashfow funding capex 8
Slide 9: The Capex decision
The Capex decision ROI assessment Buy decision Include in fleet / drive utilisation ROI / payback Strong stewardship of capital; return focus 9
Slide 10: Financial position
Financial position September March 2012 2012 £m £m Property, plant & equipment 250.8 241.0 Net debt 82.6 76.3 Net debt : EBITDA* 1.2x 1.2x Shareholder funds 233.2 229.5 Net asset value per share 45p 44p Gearing 35.4% 33.2% *pre exceptional costs Strong Balance Sheet – low gearing 10
Slide 11: Return on capital employed
Return on capital employed 10% 9% 8% 7.5% 7.0% Return on capital employed 7% 6.6% 6.0% 6% 5% 4% 3.0% 3% 2.3% 2.0% 2% 1.8% 1% 0% FY10 FY11 FY12 H1 FY13* ROCE - Group ROCE - Group excl International * Rolling 12 months Group target of 10% by Dec 2014 11
Slide 12: 2012 in conclusion
2012 in conclusion • Good first half performance • Efficiency initiatives continue to underpin margin progression and future performance • Judicious investment driving growth across Group • Confident in achieving the Board’s expectations for the full year Good steady progress 12
Slide 13: Consistent strategy delivering growth
Consistent strategy delivering growth Steve Corcoran Rental Chief Executive Training TRIM 13 Partnered Services
Slide 14: Right clients, right markets
Right clients, right markets Revenue growth – CN top contractors & Speedy 8% 7.7% 6% 5.6% 4% 4.8% 3.3% 2% 2.9% 2.2% 0% CN Top 25 CN Top 50 CN Top 100 Construction Market -2% Market 2012 v. 2011 Speedy HY1 2012 v. Speedy HY1 2013 -4% -6.3% -6.1% -6% -8% Key infrastructure markets – predicted growth &
Slide 15: More for less
More for less Efficiency • Revenue per depot: up 13.8% year on year • Revenue per employee: up 6.8% year on year • Revenue per vehicle: up 9.9% year on year Effectiveness • Depot service score: 91.1% in Sept 2012 (Sept 2011: 89.5%) • Customer recommendation score: 95.3% in Sept 2012 (Sept 2011: 94.1
Slide 16: Developing services: helping clients manage risk
Developing services: helping clients manage risk Speedy is more than a just a hire company 16
Slide 17: What are the steps to doing it?
What are the steps to doing it? Higher value, security of income, lower competitive threat 17
Slide 18: How are we going to do it
How are we going to do it Growth from: • Expanded international presence • Increased services activities • More long-term secured contracts More secured contracts, international growth, higher service elements 18
Slide 19: Case study: ZADCO UZ project
Case study: ZADCO UZ 750 project Island size 1km2 ZADCO contract • Direct relationship with end client • Integrated asset management to support end-to-end drilling operations • Over 60% of revenues are services denominated • Projected ROCE is 30%+ • Minimum $50m over five years Long-term earnings vi
Slide 20: Summary
Summary Objective • To be a services company not just a hire company Strategic intent • Own the customer relationship not the asset Operating model • Intelligence led, systems driven, logistics based Interim milestones • Maintain growth momentum – meet expectations; be boringly reliable • Operating
Slide 21: Questions
Questions Ishbel Macpherson Rental Chairman Training TRIM Partnered Services 21
Slide 22: Appendices
Appendices Rental Training TRIM Partnered Services 22
Slide 23: Debt structure & headroom
Debt structure & headroom “Wikeay A better way ici Receivables 85% of eligible UK & Ireland debtors Plant & machinery 85% of eligible UK & Ireland plant & machinery £183.9m Total £158.7m £114.4m £66.8m unutilised facility Overdraft ABL facility 23
Slide 24: Covenants
Covenants Covenant Position at Methodology threshold 31 Sept 2012 Leverage Not greater Total Net Debt to EBITDA 1.2x than 2.25x EBITDAR to Rent Adjusted Finance Charges (“RAFR”) Fixed Charge Not less Where: Cover 3.1x than 2.1x EBITDAR is EBITDA before operating lease charges RAFR is net finance cha
Slide 25: Yield management (YoY change UK)
Yield management (YoY change UK) 25
Slide 26: Cost efficiencies
Cost efficiencies Number of depots Number of vehicles 400 2,500 363 353 2,221 2,158 350 327 2,055 1,977 1,919 292 2,000 1,880 300 283 268 250 1,500 200 150 1,000 100 500 50 0 Mar 10 Sep 10 Mar 11 Sep 11 Mar 12 Sep 12 0 Mar 10 Sep 10 Mar 11 Sep 11 Mar 12 Sep 12 Headcount Cost efficiencies 4,400 4,300
Slide 27: Innovation
Innovation VT-Hybrid LED • Doubling the hire rate • 92% reduction in fuels costs • 20% savings to the customer Traditional Light Running Costs VT1-Eco VB-9 VT-Hybrid Tower (VT1) Example rate per month £320 £400 £600 £640 Running cost per month (30 Days) £534 £358 £134 £45 Total Costs (excluding labo