Southern Cross Electrical Engineering Limited · ASX:SXE
Southern Cross Electrical Engineering — FY2013 Earnings Presentation
27 slides from Southern Cross Electrical Engineering's earnings presentation, Aug 28, 2013
Slide 1: SCEE Reports Record Result
For personal use only SCEE Reports Record Result Full Year Results For The Year Ended 30 June 2013 Investor Presentation - 28 August 2013
Slide 2: Highlights
Highlights For personal use only Best financial result in SCEE’s 35 year history Revenue up 26% to $278.0m NPAT up 27% to $17.3m Strong balance sheet with $40.9m of cash Fully franked dividend up 20% to 2.70 cps Significant investment in systems and assets Record employee numbers KSJV formed to targ
Slide 3: About SCEE
About SCEE For personal use only Emerging Tier One provider of specialised electrical and instrumentation services Deliver life-of-project services to large-scale resource projects across Australia and overseas Strong reputation for safety and excellence Established in 1978 and listed on the Austral
Slide 4: Project life cycle support
Project life cycle support For personal use only Early Phase Capex Capex Opex 3
Slide 5: FY13 projects
For personal use only FY13 projects 4
Slide 6: Key FY13 contract wins
Key FY13 contract wins For personal use only Rio Tinto Cape Lambert Port B Phase A Largest contract in Company’s history at over $100m Manning peaked at over 500 AngloGold Ashanti Tropicana Gold Project Contract value over $40m Manning peaked at over 200 Rio Tinto Yandi Expansion Project C
Slide 7: Full year financial results
Full year financial results For personal use only Significant revenue increase driven by FY13 FY12 Change key project wins $m $m % Revenue 278.0 220.0 26% Ramp up in second half delivers H2 NPAT of $13m Gross profit 61.3 43.4 41% Gross margin (%) 22.1 19.7 Operating at annualised turnover of over EB
Slide 8: Revenues by operating division
Revenues by operating division For personal use only SCEE Infrastructure Revenue ($m) Main contributors: Rio Tinto Coastal Waters Rio Tinto Yandi Expansion 22.5 Rio Tinto Cape Lambert 33kV 69.7 SCEE Construction Main contributors: Rio Tinto Cape Lambert Port B AngloGold Ashanti Tropicana 1
Slide 9: Balance sheet
Balance sheet For personal use only Jun 13 Jun 12 Entered FY14 with a strong balance sheet $m $m Cash over $40m and minimal debt Current assets 106.7 91.9 Non current assets 51.0 34.7 Advance payments from half-year unwound Total assets 157.7 126.6 Current liabilities 43.8 33.4 $22.4m of capex spend
Slide 10: Cashflow
Cashflow For personal use only 80 70 6.5 60 18.5 50 31.2 5.4 0.9 3.6 $m 40 30 20 40.9 31.6 10 0 Opening Cash EBITDA Working Capex Tax, Interest, Repayment of Dividends Closing Cash July 2012 Capital Other Borrowings June 2013 9
Slide 11: Historical results summary
Historical results summary For personal use only 2011 2012 2013 $m $m $m Revenue 101.8 220.0 278.0 Gross profit 16.2 43.4 61.3 Gross margin (%) 15.9 19.7 22.1 EBITDA 0.6 22.2 31.2 EBIT (1.1) 19.4 25.3 NPAT (1.7) 13.7 17.3 Net margin (%) (1.6) 6.2 6.2 Dividends (cps) nil 2.25 2.70 Net Cash 22.8 30.0
Slide 12: Financial trends
For personal use only Financial trends 11
Slide 13: Increasing shareholder returns
Increasing shareholder returns For personal use only Earnings per share up 26% to 10.74 cents Fully franked dividend up 20% to 2.70 cents per share Franking account balance at 30 June 2013 of $9.3m FY13 dividend strikes a balance between providing returns to shareholders and retaining cash to suppor
Slide 14: Investment in systems and assets
Investment in systems and assets For personal use only Over $20m invested in systems and fixed assets in FY13 with over $30m invested over past two years Expansion and renewal of plant and equipment fleet Benefitting financially from reduction in hired equipment Progressed systems upgrades with full
Slide 15: Health and safety
Health and safety For personal use only Lost Time Incident free in the year (12.6 million man hours) Ninth consecutive year LTI free in Australia Reflects the emphasis placed on safety from the Board through to our project teams We place a priority on creating a proactive safety culture across the w
Slide 16: Training
Training For personal use only SCEE’s dedicated training centre expanded during the year Cost effective and flexible training schedules to ensure efficient mobilisation of project teams Successfully delivered more than 2,000 individual training events over a four month period as activity ramped up a
Slide 17: Growth of our people
Growth of our people For personal use only Employee numbers peaked at over 1,200 in June 2013 Indicative of high levels of activity at year end Recruitment handled by in-house capability Apprenticeship program continued to grow with a record 78 apprentices in FY13 Continued commitment to indigenous
Slide 18: Outlook
For personal use only Outlook 17
Slide 19: Order book at June 2013
Order book at 30 June 2013 For personal use only Order book at 30 June 2013 of $91.5m Ongoing works: Rio Tinto Cape Lambert Phase A AngloGold Ashanti Tropicana Gold Project Rio Tinto Coastal Waters Rio Tinto Yandi Expansion BHP Sustaining Capital BP Framework Agreement Work continuing on
Slide 20: Changing operating environment
Changing operating environment For personal use only Commodity price weakness has led to some high profile project deferrals and cancellations Clients becoming more commercially focussed and looking to transfer risk Increased competition to win work Anticipate changes to client contracting model But
Slide 21: Exposure to five sectors
Exposure to five sectors For personal use only LNG CSG Iron ore Minerals & metals Coal 20
Slide 22: Sector outlook
Sector outlook For personal use only LNG KSJV formed with Kentech in December 2012 Aims to capitalise on unprecedented Australian LNG activity Targeting onshore LNG plant construction Up to $7bn of E&I works available in LNG sector in next 3-5 years Currently tendering for work on large sc
Slide 23: Sector outlook
Sector outlook For personal use only Iron ore Remains a core business for SCEE Framework agreements with Rio Tinto and BHP Expansion of existing projects at Cape Lambert and Sino Potential new projects such as Roy Hill Gold Viewed as a spot market Proven capability and will tender work a
Slide 24: Growing recurring revenues
Growing recurring revenues For personal use only Growth of services business fundamental to long term growth SCEE Services brand established from 1 July 2012 Achieved significant revenue growth during the year Making good progress in growth of recurring iron ore work with framework agreements in pla
Slide 25: Conclusion
Conclusion For personal use only Record result for the second consecutive year Entered FY14 operating at historically high activity levels Significant progress towards achieving Tier One goal KSJV positioned to capitalise on unprecedented levels of E&I work on LNG projects Strong balance sheet and i
Slide 26: 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 27: 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,
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