Wilson Bayly Holmes-ovcon Limited · JSE:WBO
Wilson Bayly Holmes-ovcon — FY2019 Earnings Presentation
58 slides from Wilson Bayly Holmes-ovcon's earnings presentation, June 2019
Slide 1: Audited Results for the Year Ended 30 June 2019
AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019
Slide 2: Contents
CONTENTS SUBJECT PRESENTER • Welcome Mike Wylie • Overview and highlights Louwtjie Nel • Operational review › Building and civil engineering Wolfgang Neff › Roads and earthworks Riaan De Necker › Australia Paul Foley › United Kingdom Paul Foley • Financial review Charles Henwood • Order book and pro
Slide 3: Overview and Highlights
OVERVIEW AND HIGHLIGHTS Louwtjie Nel WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 3
Slide 4: Group Results FY19
GROUP RESULTS FY19 OVERVIEW AND HIGHLIGHTS 50 000 2 500 REVENUE (Rm) OPERATING PROFIT (Rm) 40,614 40 000 2 000 35,028 30,650 31,907 28,823 30 000 1 500 20 000 1 000 1 005 986 1,045 3.3% 3.1% 3.0% 10 000 768 500 2.7% 561 1.4% - - 2015 2016 2017 2018 2019 Revenue Operating profit • Revenue growth of 1
Slide 5: Contribution by Geography
CONTRIBUTION BY GEOGRAPHY FINANCIAL REVIEW 50 000 REVENUE (Rm) 40 614 40 000 35 028 31 907 30 650 30 000 28 823 21 941 18 600 21 713 20 000 18 113 15 351 11 454 10 650 9 796 9,739 10 000 10 856 3 676 2 798 5 684 1 853 2 437 2 361 - 2015 2016 2017 2018 2019 Total South Africa Rest of Africa Australia
Slide 6: Contribution by Geography
CONTRIBUTION BY GEOGRAPHY FINANCIAL REVIEW REVENUE (Rm) % Growth 2019 2018 REVENUE (%) South Africa 2.1 10 856 10 650 14% 2 361 27% Rest of Africa (4.0) 2 437 Australia (1.0) 21 713 21 941 2019 6% United Kingdom 5 684 - 53% TOTAL 15.9 40 614 35 028 OPERATING PROFIT (Rm) % Margin 2019 2018 30% South
Slide 7: The Year in Perspective
THE YEAR IN PERSPECTIVE OVERVIEW AND HIGHLIGHTS SOUTH AFRICA • The construction environment remained under severe pressure throughout the year with fewer opportunities across all major sectors • Capacity of the industry as a whole has been severely reduced with the spate of corporate failures and ex
Slide 8: The Year in Perspective
THE YEAR IN PERSPECTIVE OVERVIEW AND HIGHLIGHTS REST OF AFRICA • Building and mining activity in West Africa remained heavily subdued • Increased activity in Botswana and Zambia • Award of first gas-related infrastructure projects in the region a positive sign AUSTRALIA • Construction markets remain
Slide 9: Safety Performance
SAFETY PERFORMANCE OVERVIEW AND HIGHLIGHTS LTIFR (No. of lost time injuries per million man hours) 2.0 1.5 0.94 0.91 1.0 0.80 0.75 0.69 0.5 0.0 2015 2016 2017 2018 2019 • Improved safety performance statistics achieved in 2019 • Strong improvement from local building divisions and Australian operati
Slide 10: Transformation and Empowerment
TRANSFORMATION AND EMPOWERMENT OVERVIEW AND HIGHLIGHTS • WBHO proudly became a Level 1 contributor in 2018 • Recognised as second most empowered company on the JSE • WBHO spends 80% of its total measured procurement on B-BBEE compliant companies › Total B-BBEE spend of R7.5 billion › Black-owned spe
Slide 11: Building and Civil Engineering
BUILDING AND CIVIL ENGINEERING Wolfgang Neff WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 11
Slide 12: Building and Civil Engineering FY19 Result
BUILDING AND CIVIL ENGINEERING FY19 RESULT BUILDING AND CIVIL ENGINEERING 10 000 1 000 REVENUE (Rm) OPERATING PROFIT (Rm) 8,136 8 000 7,385 7,536 7,302 7,338 800 6 000 600 4 000 400 300 385 352 332 4.8% 4.7% 304 2 000 4.9% 4.5% 200 4.1% - - 2015 2016 2017 2018 2019 Revenue Operating profit • Revenue
Slide 13: Geographic Footprint
GEOGRAPHIC FOOTPRINT BUILDING AND CIVIL ENGINEERING REVENUE (Rm) 8 000 6 550 6 443 6 000 4 000 2 000 788 659 - 2019 2018 GHANA South Africa Rest of Africa OPERATING PROFIT (Rm) 300 245 239 200 ZAMBIA 93 100 MOZAMBIQUE 59 - SOUTH AFRICA 2019 2018 South Africa Rest of Africa WBHO AUDITED RESULTS FOR T
Slide 14: The Year in Perspective
THE YEAR IN PERSPECTIVE BUILDING AND CIVIL ENGINEERING BUILDING • Division performed well to sustain activity levels • Concentration of work in commercial office sector – but sector is in decline due to over-supply • Increase in residential-only and mixed-use developments • Retail sector remains sub
Slide 15: Order Book
ORDER BOOK BUILDING AND CIVIL ENGINEERING ORDER BOOK UP 8% • Improved order intake locally over the second At June 2019 At June 2018 % growth six months South Africa 6 348 5 374 18 • Minimal building opportunities in West Africa – focus on Southern Africa Rest of Africa 98 611 (84) • Completion of m
Slide 16: 144 Oxford Street
144 OXFORD STREET WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 16
Slide 17: 155 West Street
155 WEST STREET WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 17
Slide 18: Absa Towers
ABSA TOWERS WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 18
Slide 19: Hatfield Student Accommodation
HATFIELD STUDENT ACCOMMODATION WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 19
Slide 20: Deloitte Head Office
DELOITTE HEAD OFFICE WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 20
Slide 21: Jewel City – Inner City Regeneration Project
JEWEL CITY – INNER CITY REGENERATION PROJECT WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 21
Slide 22: Jorrisson Street
JORRISSON STREET WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 22
Slide 23: Trilogy Apartments
TRILOGY APARTMENTS WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 23
Slide 24: Roads and Earthworks
ROADS AND EARTHWORKS Riaan De Necker WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 24
Slide 25: Roads and Earthworks FY19 Result
ROADS AND EARTHWORKS FY19 RESULT ROADS AND EARTHWORKS 8 000 1 000 REVENUE (Rm) OPERATING PROFIT (Rm) 800 6 000 5,282 5,282 5,295 4,334 4,590 600 4 000 400 380 371 2 000 342 343 7.2% 300 7.0% 200 7.4% 6.5% 6.5% - - 2015 2016 2017 2018 2019 Revenue Operating profit • Revenue levels stable (2018: 15%)
Slide 26: Geographic Footprint
GEOGRAPHIC FOOTPRINT ROADS AND EARTHWORKS REVENUE (Rm) 4 000 3,721 3,538 3 000 2 000 1,744 1,574 BURKINA FASO 1 000 GUINEA - SIERRA LEONE 2019 2018 GHANA South Africa Rest of Africa OPERATING PROFIT (Rm) 300 273 209 200 134 MOZAMBIQUE 98 100 NAMIBIA BOTSWANA eSWATINI (SWAZILAND) - SOUTH AFRICA 2019
Slide 27: The Year in Perspective
THE YEAR IN PERSPECTIVE ROADS AND EARTHWORKS SOUTH AFRICA • Solid performance in a challenging market • Growth in revenue supported by mining and energy infrastructure sectors • Decline in roadwork – activity supported by existing projects with only three new projects secured in 2019 • Coal mining i
Slide 28: Order Book
ORDER BOOK ROADS AND EARTHWORKS ORDER BOOK UP BY 39% • Local order book bolstered by additional work At June 2019 At June 2018 % growth awarded on mining and energy infrastructure South Africa 4 290 3 323 29 projects as well as new Zulti Pipeline project • Difficulty in securing new work in West Afr
Slide 29: Australia
AUSTRALIA Paul Foley WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 29
Slide 30: Australia FY19 Result
AUSTRALIA FY19 RESULT AUSTRALIA 24 000 21,941 1 000 21,713 REVENUE (Rm) OPERATING PROFIT (Rm) 800 18,113 18,600 18 000 600 15,352 400 12 000 300 200 259 278 1.7% 1.4% 1.3% (335) - 11 Includes -1.5% 6 000 0.0% 3 loss-making ( 200) AU$57m civil projects WRU loss in ( 400) in Australia Australia - ( 60
Slide 31: Geographic Footprint
GEOGRAPHIC FOOTPRINT AUSTRALIA REVENUE (Rm) 20 000 18 310 16 941 15 000 10 000 4,772 5 000 3,631 - 2019 2018 QUEENSLAND Building Infrastructure OPERATING PROFIT (Rm) NEW WESTERN AUSTRALIA SOUTH 400 WALES 222 176 102 VICTORIA - (400) (557) (800) 2019 2018 Building Infrastructure WBHO AUDITED RESULTS
Slide 32: The Year in Perspective – Western Roads Upgrade
THE YEAR IN PERSPECTIVE AUSTRALIA WESTERN ROADS UPGRADE PROJECT • Single design and construct contract comprising eight separate packages • Four packages fully subcontracted – to be completed in Q1 2020 • Four packages self-executed › Extensive delays in obtaining initial design approval – due dilig
Slide 33: The Year in Perspective
THE YEAR IN PERSPECTIVE AUSTRALIA BUILDING • Strong fixed investment in Melbourne and Sydney market with a focus on mixed-use development mega-projects • Opportunities within retail and residential markets remain subdued • Moderate decline in revenue from Probuild - focus on project execution • Melb
Slide 34: Order Book
ORDER BOOK AUSTRALIA ORDER BOOK DOWN 16% • Consolidation of building business and focused At June 2019 At June 2018 % decline project selection reflected in lower building Building 21 717 23 997 (10) order book • Building order book remains healthy with 77% Infrastructure 5 599 8 569 (35) concentrat
Slide 35: United Kingdom
UNITED KINGDOM Paul Foley WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 35
Slide 36: Geographic Footprint
GEOGRAPHIC FOOTPRINT UNITED KINGDOM REVENUE (Rm) 4 000 3 628 3 500 3 000 2 394* 2 500 1 884 2 000 1 500 1 000 500 - 2019 2018 Byrne Group* Russells OPERATING PROFIT (Rm) 200 129 MANCHESTER 103 100 - 2019 2018 LONDON ( 100) (133)* ( 200) Byrne Group* Russells *For comparative purposes only. Byrne gro
Slide 37: The Year in Perspective
THE YEAR IN PERSPECTIVE UNITED KINGDOM BYRNE GROUP • London construction market offered sufficient opportunities in the year but softened over the last quarter • Successful restructuring of the business › 46% increase in revenue, 34% decrease in overheads and reduced restructuring costs › Return to
Slide 38: Order Book
ORDER BOOK UNITED KINGDOM ORDER BOOK UP 21% • Combined UK operations reflect 100% of FY19 At June 2019 At June 2018 % growth revenue secured for FY20 Byrne Group 3 959 6 446 (39) • Declining order book for Byrne Group reflects softening markets Russells Construction 3 851 - - • Prior year included £
Slide 39: Financial Review
FINANCIAL REVIEW Charles Henwood WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 39
Slide 40: Key Financial Indicators
KEY FINANCIAL INDICATORS FINANCIAL REVIEW TARGET / GROWTH 2019 2018 Revenue growth % >10 15.9% 9.8% Operating profit margin % 3 – 4.5 1.4% 3.0% Return on capital employed % >20 12.4% 19.8% Cash and cash equivalents Rm 0% 5 952 5 992 Earnings per share cents (39)% 939 1 534 Headline earnings per shar
Slide 41: Key Financial Numbers and Ratios
KEY FINANCIAL NUMBERS AND RATIOS FINANCIAL REVIEW (Rm) % change 2019 2018 Revenue 15.9 40 614 35 028 Operating profit before non-trading items (46.3) 561 1 045 Gain on loss of control of subsidiary - 5 Loss on deemed disposal of equity accounted investment - (58) Gain on bargain purchase of subsidia
Slide 42: Cashflow Movement
CASHFLOW MOVEMENT FINANCIAL REVIEW 8 000 202 1 433 33 (327) 7 000 (193) 5 992 140 5 952 6 000 (867) (445) (16) 5 000 4 000 Cash & cash Operating Working Net Taxation Dividends Net Net Foreign Cash Cash & cash equivalents profit capital finance paid paid cash flow cash flow currency acquired equivale
Slide 43: Non Current Assets
NON CURRENT ASSETS FINANCIAL REVIEW PROPERTY, PLANT AND EQUIPMENT (Rm) 2019 2018 Property, plant and equipment 1 937 1 883 Depreciation 283 240 APPROVED ACTUAL ACTUAL CAPITAL EXPENDITURE 2020 2019 2018 Replacement 232 294 283 Expansion 122 80 33 TOTAL 344 374 316 • Replacement CAPEX aimed at maintai
Slide 44: Financial Position – Equity Accounted Investments
FINANCIAL POSITION FINANCIAL REVIEW EQUITY ACCOUNTED INVESTMENTS CARRYING SHARE OF COUNTRY OF EFFECTIVE AMOUNT OF PROFITS/(LOSSES) ENTITY INDUSTRY OPERATION % INVESTMENT 2019 2018 CONCESSION INVESTMENTS: Gigajoule International Gas supply Mozambique 26.6% 167.4 18.2 10.9 Gigajoule Power Power Mozamb
Slide 45: Financial Position – Equity Accounted Investments
FINANCIAL POSITION FINANCIAL REVIEW EQUITY ACCOUNTED INVESTMENTS CARRYING SHARE OF COUNTRY OF EFFECTIVE AMOUNT OF PROFITS/(LOSSES) ENTITY INDUSTRY OPERATION % INVESTMENT 2019 2018 PROPERTY DEVELOPMENTS: Catchu Trading^ Property development South Africa 50% 102.6 - - Caulfield^ Property development A
Slide 46: Financial Position – Tax and NCI Movement
FINANCIAL POSITION FINANCIAL REVIEW TAX (Rm) 2019 2018 Net deferred tax asset 730 640 Net current tax asset 152 105 Deferred tax asset consists of: Current tax asset consists of: • Tax losses of R221m (2018: R276m) • Foreign tax credits of R48m (2018: R81m) • Timing differences of R508m (2018: R364m
Slide 47: Financial Position – Effect of New Reporting Standards
FINANCIAL POSITION FINANCIAL REVIEW EFFECT OF NEW REPORTING STANDARDS (Rm) 2019 Total equity at 30 June 2018 6 019 Tender costs previously capitalised (IFRS 15) (51) Expected credit loss (IFRS 9) (85) Deferred tax adjustment 40 Non-controlling interest adjustment 11 Total equity at 1 July 2018 5 933
Slide 48: Order Book and Project Pipeline
ORDER BOOK AND PROJECT PIPELINE Louwtjie Nel WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 48
Slide 49: Consolidated Order Book
CONSOLIDATED ORDER BOOK ORDER BOOK AT JUNE AT JUNE SEGMENT (Rm) 2018 2019 2020 2021 ORDER BOOK BY SEGMENT (%) 16% Building and civil engineering 5 986 6 446 5 269 1 177 12% 14% Roads and earthworks 4 164 5 730 4 334 1 396 2019 Australia 32 565 27 316 18 215 9 102 58% United Kingdom 6 446 7 810 5 818
Slide 50: Consolidated Order Book by Geography
CONSOLIDATED ORDER BOOK ORDER BOOK AT JUNE AT JUNE ORDER BOOK BY GEOGRPAHY (%) GEOGRAPHY (Rm) 2018 2019 2020 2021 17% South Africa 8 698 10 639 8 262 2 376 3% 22% Rest of Africa 1 452 1 410 1 209 121 2019 Australia 32 565 27 316 18 215 9 102 58% United Kingdom 6 446 7 810 5 818 1 992 13% 18% TOTAL 4
Slide 51: Project Pipeline
PROJECT PIPELINE PROJECT PIPELINE SOUTH AFRICA Rm SOUTH AFRICA Building 26 940 44% Building Public 4 140 2019 Civil engineering 37% Roads and earthworks Private 22 800 Civil engineering 11 590 19% Public 3 270 Private 8 320 SOUTH AFRICA 42% Roads and earthworks 22 460 Public 2019 Private Public 18 4
Slide 52: Project Pipeline
PROJECT PIPELINE PROJECT PIPELINE AUSTRALIA Rm 10% Building 38 897 Infrastructure 4 355 2019 AUSTRALIA TOTAL 43 252 Building Infrastructure 90% UNITED KINGDOM Rm Byrne Group 18 386 Russells Construction 12 880 2019 59% UNITED KINGDOM 41% TOTAL 31 266 Byrne Group Russells Construction WBHO AUDITED RE
Slide 53: Project Pipeline
PROJECT PIPELINE PROJECT PIPELINE SUMMARY Rm 20% Building and civil engineering 46 275 29% SUMMARY Roads and earthworks 37 105 Building 2019 Infrastructure Australia 43 252 Australia 27% United Kingdom 24% United Kingdom 31 266 TOTAL 157 898 WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 53
Slide 54: Outlook
OUTLOOK OUTLOOK SOUTH AFRICA • Local market conditions likely to remain subdued over the short term • WBHO has sufficient work secured to manage through this period • Progress made by government in restoring sound governance within State-owned enterprises • Multiple multi-billion rand projects recen
Slide 55: Outlook
OUTLOOK OUTLOOK AUSTRALIA • Market sentiment anticipated to remain positive over the mid-term, particularly Melbourne and Sydney • Consolidation of building business and renewed focus on project selection and delivery to continue • Public infrastructure spending will continue • Lower risk constructi
Slide 56: Summary
SUMMARY OUTLOOK • Business is well positioned with healthy 12 month order book • Construction-focused business model • Balance sheet strength maintained despite impact of WRU project • Increased operational cash flows • Dividend payment resumed • Internal succession of executives successfully implem
Slide 57: Disclaimer
DISCLAIMER Certain statements contained within this presentation may be classified as forward-looking statements. Words, including but not limited to, “believe”, “anticipate”, “expect”, “seek”, “intend”, “estimate”, “project”, “plan”, or “predict” are used to identify such statements. Forward-lookin
Slide 58: Thank You
THANK YOU
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