Southern Cross Electrical Engineering Limited · ASX:SXE
Southern Cross Electrical Engineering — H1 FY2013 Earnings Presentation
28 slides from Southern Cross Electrical Engineering's earnings presentation, Feb 26, 2013
Slide 1: Interim Results Presentation Half Year Ended 31 December 2012
For personal use only Interim Results Presentation Half Year Ended 31 December 2012 26 February 2013 1
Slide 2: Highlights
Highlights For personal use only Financial • Revenue up 43% on prior corresponding period to $120.6m • NPAT of $4.3m • Overhead base increased to support growth • Major contracts awarded later in H1 than expected but will ramp up in H2 • Strong balance sheet with cash of $46.9m Operational • LTI fre
Slide 3: About us
About us For personal use only Powering Australia’s resources industry • emerging Tier One provider of specialised electrical and instrumentation services • deliver life-of-project services to large-scale resource projects across Australia • strong reputation for safety and excellence • established
Slide 4: About us: three operating divisions
About us For personal use only Three operating divisions provide clients project life cycle support 4
Slide 5: SCEE Infrastructure
SCEE Infrastructure For personal use only Design and construction of high voltage power line distribution switchyards and substations 5
Slide 6: SCEE Construction
SCEE Construction For personal use only E&I installation and commissioning of greenfield and major brownfield upgrade projects 6
Slide 7: SCEE Services
SCEE Services For personal use only Operations support, maintenance and sustaining capital management, brownfield services 7
Slide 8: Exposure to five sectors
Exposure to five sectors For personal use only SCEE operates in the following resource sectors: • Iron ore • Minerals and metals • LNG • CSG • Coal 8
Slide 9: Contract awards
Contract awards For personal use only Rio Tinto Cape Lambert Phase A • Largest contract in Company’s history at over $100m • Awarded under existing framework agreement AngloGold Ashanti/Independence Tropicana Gold Project • Contract value over $40m Rio Tinto Yandi Expansion Project • Contract value
Slide 10: Financial results
Financial results For personal use only HY13 HY12 Change $m $m % Revenue 120.6 84.2 43% • Significant increase in revenue from corresponding prior period Gross profit 24.0 17.8 35% • Overhead base grown to support Gross margin 20% 21% expected higher activity levels EBIT 7.2 7.3 (1%) • Key contracts
Slide 11: Revenues by operating division
Revenues by operating division For personal use only Main contributors: SCEE Infrastructure $15.3m • Rio Tinto Coastal Waters • Rio Tinto Yandi Expansion $35.9m • Rio Tinto Cape Lambert 33kV SCEE Construction • MCC Sino Iron • AngloGold Ashanti Tropicana $69.4m • QGC Early Works • TSJV Lake Vermont
Slide 12: Balance Sheet
Balance Sheet For personal use only Dec 12 Jun 12 $m $m Current assets 110.2 91.9 • 46.9m cash balance • $15.6m investment in plant and equipment Non current assets 47.8 34.7 • $5.4m debt Total assets 158.0 126.6 • $60.0m banking and bonding capacity of Current liabilities 61.2 33.4 which $35.7m on
Slide 13: Cashflow
Cashflow For personal use only HY13 HY12 $m $m Operating cash flows 30.4 (2.3) • Strong operating cash inflow in period Investing cash flows (11.1) (0.7) • $11.1m cash outflow on plant and equipment Financing cash flows (4.0) (6.2) • FY12 dividend of $3.6m paid in period Net movement in cash 15.4 (9
Slide 14: Cashflow analysis
Cashflow analysis For personal use only 70 60 (11.1) (1.8) 22.6 (0.3) (3.6) 50 40 9.5 30 46.9 20 31.6 10 0 Opening Cash EBITDA Working Capital Capex Tax, Interest, Repayment of Dividends Closing Cash July 2012 Other Borrowings Dec 2012 14
Slide 15: Our vision
Our vision For personal use only SCEE’s vision statement communicates our future mid-to-long term aspirations for the business, it is a unified statement to our team and other stakeholders of both SCEE’s intent and direction: An emerging Tier One E&I contractor with first class systems, health and s
Slide 16: Order book
Order book For personal use only 200 180 Ongoing works: 160 $46m • Rio Tinto Cape Lambert Phase A • AngloGold Ashanti Tropicana Gold Project 140 • Rio Tinto Coastal Waters • Rio Tinto Yandi Expansion 120 • MCC Sino Iron 100 80 $140m Order book excludes work under recurring 60 framework agreements –
Slide 17: Strong full year expectations
Strong full year expectations For personal use only • Revenue and NPAT to significantly improve in H2 as key projects ramp up • Overheads as a percentage of revenue in H2 to return to levels equal to or lower than FY12 • Ability to meet those expectations dependent on: • Volume of activity on key pr
Slide 18: Opportunity pipeline
Opportunity pipeline For personal use only Iron ore Rio Tinto Cape Lambert Phase B, Sino Iron Trains 3 to 6, Hancock Prospecting Roy Hill, BHP Sustaining Capital LNG Chevron Wheatstone, Inpex Ichthys, Chevron Gorgon, QCLNG, APLNG, GLNG CSG QCLNG facilities, APLNG facilities, GLNG facilities Minerals
Slide 19: Growing recurring revenues
Growing recurring revenues For personal use only • Growth of services business fundamental to long term growth strategy • SCEE Services brand established from 1 July 2012 • Framework agreements in place with Rio Tinto and BHP • Targeting existing and new LNG facilities – Gorgon, Pluto and NWS 19
Slide 20: LNG: Unprecedented growth potential
LNG For personal use only Unprecedented growth potential • Up to $7bn of E&I work to be performed in Australia over the next five years on projects with FID • Additional work expected from projects in FEED • Formed KSJV with highly regarded international E&I contractor Kentech in December 2012 • Cre
Slide 21: LNG: Rationale for Joint Venture
LNG For personal use only Rationale for Joint Venture • E&I packages on LNG construction projects expected to be in the range of $400m-$500m • Clients only consider suppliers with operational and financial capacity to perform this work • Combined KSJV will be of the necessary scale • Kentech bring p
Slide 22: Health and safety
Health and safety For personal use only • Continual focus on performing our work safely • LTI free in the period • Eight years LTI free in Australia • Purpose built training facilities and training programs aimed at maintaining these high standards 22
Slide 23: Systems development
Systems development For personal use only • Project management system (SCEEtrak) development on schedule and on budget • New ERP selected and phase one of implementation scheduled to go live June 2013 23
Slide 24: Growing our people
Growing our people For personal use only Focus on recruitment and training • Return to growth in employee numbers 1400 Employee Numbers as activity increases in H2 1200 • Recruitment and training valuable part of company growth and development1100 914 1000 • Dedicated training managers, facilities 4
Slide 25: Client recognition
Client recognition For personal use only Rio Tinto Iron Ore Supplier Recognition Program • Winner of 2012 Construction Category • Recognition of the significant value added by SCEE • Demonstrates SCEE’s ongoing commitment to outstanding levels of client service 25
Slide 26: Conclusions
Conclusions For personal use only Set for second half surge • First half revenues 43% higher than corresponding prior period • Order book of $186m supports growth in full year revenues • Increased overhead base supporting growth in the business, overheads as a percentage of revenue expected to reduc
Slide 27: 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 28: 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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