Austin Engineering Limited · ASX:ANG
Austin Engineering — Investor Presentation (July 2015)
33 slides from Austin Engineering's investor presentation, July 2015
Slide 1: Austin Engineering Ltd Capital Raising Presentation
Austin Engineering Ltd Capital Raising Presentation July 2015
Slide 2: Disclaimer
Disclaimer This investor presentation (Presentation) has been prepared by Austin Engineering Limited (ABN 60 078 480 136) (“ANG” or the “Company”). This Presentation has been prepared in relation to a non-renounceable accelerated entitlement offer of New Shares, to be made to eligible institutional
Slide 3: Disclaimer
Disclaimer Not investment advice: This Presentation does not constitute financial product or investment advice (nor tax, accounting or legal advice) nor is it a recommendation to acquire entitlements or New Shares and does not and will not form part of any contract for the acquisition of entitlement
Slide 4: Disclaimer
Disclaimer Future performance: This Presentation contains certain “forward looking statements”. Forward looking statements can generally be identified by the use of forward looking words such as, “expect”, “anticipate”, “likely”, “intend”, “should”, “could”, “may”, “predict”, “plan”, “propose”, “wil
Slide 5: Overview
Overview • The Company is undertaking a capital raising of $51.6m comprising: – a fully underwritten $31.6m pro rata accelerated non-renounceable entitlement offer at an offer price of $0.45 per share and – a $20m subordinated loan facility (together the “Capital Raising”) • Austin is undertaking th
Slide 6: Earnings Guidance
Earnings Guidance • The Company expects FY15 revenue to be $205m and normalised1 EBITDA to be between $14.5m and $15.5m • FY16 earnings are expected to improve with revenue of approximately $235m2 and normalised1 EBITDA of approximately $20m2 • Over the last 6 months Austin has experienced a gradual
Slide 7: Business Update and Outlook: Americas
Business Update and Outlook Americas • Chile - Servigrut crane hire division has secured a 5 year contract extension with El Abra mining group - El Abra has awarded Austin an order for the design and manufacture of 9 tray bodies to be delivered June/July 2015 - Austin’s maintenance division has been
Slide 8: Business Update and Outlook: Americas (Cont.)
Business Update and Outlook Americas (Cont.) • Colombia - 3 year contract for the supply of maintenance personnel to Prodeco’s port - 6 month extension to the existing 2 mine contract for the supply of 300 personnel for maintenance on its mining equipment - Finalising negotiations to establish a for
Slide 9: Business Update and Outlook: Australia
Business Update and Outlook Australia • West Coast - Supply contract for tray bodies with a large mining company - the first order is for 15 bodies with delivery from July to October 2015 - Continue to receive high levels of repair work from the major miners within their service agreements - Signifi
Slide 10: Business Update and Outlook: Asia
Business Update and Outlook Asia - Indonesian operations have recently been operating at a high level of utilisation on Indonesian projects and orders into Africa - Forecasting lower first quarter of FY16 however existing orders will commence in October 2015 - Tendering at good levels
Slide 11: Entitlement Offer: Key Details
Entitlement Offer: Key Details Offer Size • 5 for 6 pro rata accelerated non-renounceable entitlement offer of ordinary shares in Austin to eligible shareholders to raise approximately $31.6m Offer Price • $0.45 per fully paid ordinary share ‒ 18.2% discount to last closing price of $0.55 per share¹
Slide 12: Subordinated Loan: Key Details
Subordinated Loan: Key Details • $20m subordinated loan facility with LIM Asia Special Situations Master Fund • Interest rate of 9.0%pa • 2.0% establishment fee • 2.0% redemption fee (early repayment) and 1.0% maturity fee (if no early repayment) • Drawdown date by 28 July 2015 for a 36 month term •
Slide 13: Strengthened Balance Sheet
Strengthened Balance Sheet As at 31 December Impact of the Offer Pro Forma as at 31 December 2014 • This pro-forma2 Balance Sheet illustrates the 2014 ($m) ($m) ($m) effect of the Capital Raising on the balance Cash and cash equivalents 10 10 sheet of the Company as at 31 December Trade and other re
Slide 14: Debt profile after recapitalisation and debt reduction
Debt profile after recapitalisation and debt reduction • Total Gross Debt of approximately $67m comprising: – $33m syndicated bank debt (Nil US denominated) – $14m other bank debt and – $20m subordinated loan • Net debt of approximately $61m – $6m cash as at 3 July 2015 • Headroom within gearing cov
Slide 15: Indicative Timetable
Indicative Timetable Event Date¹ Announcement of the Entitlement Offer and Institutional Entitlement Offer Monday, 20 July 2015 opens Institutional Entitlement Offer closes Tuesday, 21 July 2015 Shares recommence trading on ASX Wednesday, 22 July 2015 Retail Entitlement Offer record date Thursday, 2
Slide 16: Appendix
Appendix austinengineernng..
Slide 17: EBITDA Adjustments
EBITDA Adjustments FY15 forecast EBITDA ($m) Statutory EBITDA (32.9) ......Adjustments - Westech legal fees 3.4 • Westech legal fees are associated with defending patent infringement claims - Restructuring costs 3.6 against Westech in the USA – Plaintiff has requested for the trial which - Impairmen
Slide 18: FY16 Revenue/Earnings methodology
FY16 Revenue/Earnings methodology The earnings forecasts have been prepared by the Company on the following basis: • The FY16 budget prepared in accordance with the Company’s normal annual budget process. • This is a bottom up process where each reporting unit provides a detailed profit & loss state
Slide 19: Basis of preparation of pro-forma Balance Sheet
Basis of preparation of pro-forma Balance Sheet • The pro-forma consolidated balance sheet of the Company has been prepared to illustrate the effect of the Offer on the Company. • It is based on the reviewed balance sheet of the Company as 31 December 2014, adjusted to reflect the relevant pro-forma
Slide 20: Key Risks
Key Risks Summary Investors should be aware that there are risks associated with an investment in the Company. Activities of the Company and its controlled entities, as in any business, are subject to risks which may impact on the Company’s future performance. There are a number of factors, both spe
Slide 21: Key Risks: Specific Risks
Key Risks Specific Risks Risks associated with banking facilities • Austin has debt obligations to its senior lenders . The debt facilities contain a variety of material covenants which the Company and its subsidiaries must comply with. Whilst every effort will be made to seek to comply with the cov
Slide 22: Key Risks: Operational risk
Key Risks Operational risk • Interruptions at the Company’s facilities could impact Austin’s ability to supply its customers and could adversely affect our operations, financial condition or results of operations. • The production of mining consumables and steel products involves inherent risks rela
Slide 23: Key Risks: Product risk
Key Risks Product risk • The products and services Austin produces are subject to sales agreements with customers and must meet certain specifications. Despite controls and measures being in place, products and services may fall outside these specifications due to process failures, equipment malfunc
Slide 24: Key Risks: Intellectual property
Key Risks Intellectual property • There can be no assurances that the validity, ownership or authorised use of intellectual property (including technology, know-how, trademarks, designs and patents (both owned and licensed) relevant to Austin’s business may not be challenged. Litigation and legal ma
Slide 25: Key Risks: Global operations
Key Risks Risks associated with global operations • Austin is subject to political, legal, social and economic policy risks and uncertainties in the countries in which the Company operates. Any deterioration or disruption of the political, legal, social or economic environment and business climate i
Slide 26: Key Risks: General Risks
Key Risks General Risks Stock market fluctuations • The value of the New Shares will be determined by the share market and will be subject to a range of factors beyond the control of the Company and the Directors. Share market fluctuations in Australia and other stock markets around the world may ne
Slide 27: Key Risks: Legal and Regulatory Changes
Key Risks Legal and Regulatory Changes • The operating activities of the Company are subject to extensive laws and regulations. These relate to labour standards, taxes, occupational health, waste disposal, transportation safety and other matters. Compliance with these laws and regulations increases
Slide 28: Foreign Selling Restrictions
Foreign Selling Restrictions This document does not constitute an offer of new ordinary shares ("New Shares") of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may not be offered or sold, in any cou
Slide 29: Foreign Selling Restrictions
Foreign Selling Restrictions New Zealand This document has not been registered, filed with or approved by any New Zealand regulatory authority under the Financial Markets Conduct Act 2013 (the "FMC Act"). The New Shares are not being offered to the public within New Zealand other than to existing sh
Slide 30: Foreign Selling Restrictions
Foreign Selling Restrictions United Kingdom Neither the information in this document nor any other document relating to the offer has been delivered for approval to the Financial Conduct Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services and
Slide 31: Austin's Principal Products
Austin’s Principal Products Off-highway Buckets Water tanks Service modules dump truck bodies Tyre handlers Ancillary Industrial cooling and heat attachments transfer systems (COR Cooling)
Slide 32: Austin Principal Services
Austin Principal Services Equipment Specialised Painting and repair and fabrication blasting maintenance Specialised On-site maintenance and shutdown machining and services (Pilbara Hire) line boring
Slide 33: Austin Brands
Austin Brands The Austin Engineering brand encompasses design and manufacture of mining and earthmoving equipment, along with the provision of support services, from four Australian operations (Brisbane, Hunter Valley, Mackay, Perth), an Indonesian operation and Peruvian operation. The Austin Ingeni
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