Emeco Holdings Limited · ASX:EHL
Emeco — Merrill Lynch Emerging Stars Conference 2011
30 slides from Emeco's conference presentation, Nov 22, 2011
Slide 1: Merrill Lynch Emerging Stars Conference
For personal use only Merrill Lynch Emerging Stars Conference 22-23 November 2011 Stephen Gobby, Chief Financial Officer
Slide 2: Presentation Overview
For personal use only Presentation Overview Operating Update Financial & Business Overview Strategy Outlook Appendices
Slide 3: Operating Update
For personal use only Kalgoorlie, Western Australia Operating Update
Slide 4: Favourable Operating Conditions & Growth Outlook
Favourable Operating Conditions & Growth Outlook Sustained mining activity driving strong utilisation in 1Q12 For personal use only Global fleet utilisation at 90% Emeco Group: Global Equipment Utilisation 100 % 15 Nov-11 o Australia unprecedented high utilisation 87% 90% averaging 94% Avg 83% 90
Slide 5: Regional Performance – Australian Rental
Regional Performance – Australian Rental High utilisation underpinning FY11 returns with further growth from investment in 2H12 15 Nov-11 For personal use only EBIT ROFE 100 % Utilisation 96% 98.3 23.8% 90 % 80 % 20.6% 79.0 19.1% 70 % 72.9 60 % 50 % 40 % 30 % 20 % 10 % –% May-11 May-09 May-10 Nov-08
Slide 6: Regional Performance - Indonesia
Regional Performance - Indonesia Challenging year in FY11 however strong fundamentals support return to historical performance For personal use only EBIT (AUD) ROFE 100 % Utilisation 15 Nov-11 90 % 83% 18.6 17.6% 80 % 15.8 70 % 14.8% 60 % 50 % 40 % 6.5% 30 % 5.3 20 % 10 % –% May-10 May-11 May-09 Nov
Slide 7: Regional Performance - Canada
Regional Performance - Canada Low activity in 1Q12 but recent return to higher utilisation For personal use only EBIT (AUD) ROFE Utilisation 100 % 14.0 11.3% 90 % 15 Nov-11 80 % 72% 70 % 9.5 7.2% 60 % 50 % 40 % 2.8% 30 % 3.1 20 % 10 % –% May-09 Nov-09 May-10 May-11 Nov-08 Nov-10 Nov-11 FY09 FY10 FY1
Slide 8: Financial Overview
For personal use only Kalgoorlie, Western Australia Financial Overview
Slide 9: Return on capital
Return on capital Resetting the base... For personal use only ROC 11.3% ROC of 11.3% at Jun-11 (8.3% Jun-10) 9.4% 8.3% Higher earnings through better use of asset base Evolution of fleet mix towards large mining equipment Liberated $56.1M of underperforming capital across FY11 Jun-09 Jun-10
Slide 10: Gearing & Facilities Headroom
Gearing & Facilities Headroom Funding certainty and capacity in place to support medium term growth Facilities Headroom For personal use only 700 600 Debt refinance completed in Nov-10 500 with existing banking syndicate 400 A$M $172M 300 o Extended maturities 200 o Sized for medium term growth 10
Slide 11: Strategy
For personal use only Balikpapan, Indonesia Strategy
Slide 12: Growth – in the context of Emeco's Strategy
Growth – in the context of Emeco’s Strategy Restructure activities complete in FY11 with focus on Growth in FY12 For personal use only Earn the right to grow Grow from a solid foundation Global restructuring - complete Organic growth in large mining equipment in Australia & Canada - Canada – r
Slide 13: FY12 Growth Capital Investment
FY12 Growth Capital Investment Global procurement capability essential to growth given tight equipment market For personal use only Global procurement capability giving Emeco Cumulative payment & deployment of access to quality equipment FY12 growth investment $165m Existing growth capital commi
Slide 14: Fleet Strategy
Fleet Strategy Continuing to evolve the fleet toward large mining equipment For personal use only June 10 June 11 Civil Civil 9% 6% Large Rental Assets*: Mining Large $165M in 36% Jun-10: $578M Mining Large Mining Jun-11: $586M Small 49% Mining in FY12 Small 45% Mining 55% Advantages of Large Mining
Slide 15: Geographic step-out - Chile
Geographic step-out - Chile Mining volume growth supports initial $50m investment opportunity For personal use only Forecast Volume of Earth Moved Emeco’s strategic benefits of Chile step-out Commodity diversification – opportunity to diversify into low cost, established copper mines with growing
Slide 16: Outlook
For personal use only <INSERT PICTURE> Hitachi EX3600, Queensland Outlook
Slide 17: Market Outlook
Market Outlook Global economic volatility has re-emerged but leveraged to low-cost commodites with large earthmoving volume requirements For personal use only Global Production Forecasts Emeco Commodity Exposure 1,500 Iron ore Thermal Coal Coking Coal 1,200 CAGR: 6.5% AUSTRALIA 900 Production 600 90
Slide 18: Emeco Outlook
Emeco Outlook Emeco well positioned to capitalise on strong mining fundamentals For personal use only Strong demand for mining equipment in an environment of long lead times FY12 growth capex commitment largely contracted Rental model works particularly well for owner miners but also has appli
Slide 19: Appendices
For personal use only Appendix Hitachi EX3600, Queensland Appendices
Slide 20: What is Emeco?
What is Emeco? Fast facts… For personal use only Emeco is a leading supplier of heavy earthmoving equipment solutions for the mining industry across Emeco closing share price (ASX:EHL) the globe Established in Australia in 1972 $1.20 Operations across Australia, Indonesia and Canada $1.00 Co
Slide 21: Meeting Customers Needs
Meeting Customers Needs Customer requirements vary but Emeco’s solution is used at all stages of mine life For personal use only Emeco’s Core Overburden Mine Mine Mining cycle Production (Production) Development Construction leverage: 74% 16% 6% 4% Customers Flexibility Equipment Mechanical Capital
Slide 22: Customer Composition
Customer Composition High calibre customers continue to use Emeco’s quality rental offering For personal use only Global Customer Profile Miner 66% Blue-Chip 59% Contractor 34% Other 41% 2 Note: Graphs based on group revenue FY11 2
Slide 23: Customer Case Studies
Customer Case Studies High propensity for initial contract tenure to extend For personal use only Need Customer Fleet Services Site usage Time on Site Flexibility Blue-chip 37x items of plant, based on Full maintenance Primary 4 years miner 2 production fleets of 150tn services & labour mining fleet
Slide 24: Asset profile
Asset profile Independent supplier of well-maintained, best-in-class equipment For personal use only 35 tonne 50 tonne 100 tonne 150 tonne 200 tonne 250 tonne 300 tonne Small construction Super mines Truck 15 tonne 25 tonne 35 tonne 45 tonne 60 tonne 100 tonne 150 tonne Dozer Small construction Larg
Slide 25: Safety, People & Sustainability
Safety, People & Sustainability Our customers value Emeco’s OH&S performance For personal use only Lost Time Injury Frequency Rate Safety Continuous improvement in Safety Global OH&S focus 2.4 “Zero harm” policy Recognition in Indonesia Note: LTIFR measured as number of LTI incidents per mil
Slide 26: Group Financials
Group Financials Execution of strategy translating into improved performance For personal use only A$ Millions FY10 FY11 Var Var Operating Operating $ % Revenue 444.4 502.5 58.1 13.1 EBITDA 190.4 223.3 32.9 17.3 EBIT 83.6 101.2 17.6 21.0 NPAT 41.1 56.0 14.9 36.3 EPS (cps) 6.5 8.9 2.4 36.3 DPS (cps)
Slide 27: Earnings composition
Earnings composition Improving capital turnover and consolidation of margins For personal use only Rental Revenue Earnings & Margins Aus Rental Indonesia EBITDA EBIT 500 Canada REVENUE:WDV 80% EBITDA Margin EBIT Margin 250 50% 450 70% 45% 200 40% 400 60% CAPITAL TURNOVER 35% 350 50% 150 30% A$M A$M
Slide 28: Cash Flow
Cash Flow Strong operating cashflow and capital release has enabled investment for growth while returning funds to shareholders For personal use only FY11 Cash Flow Managing Cashflow through The Cycle FY FY FY 2009 2010 2011 53.9 Cash Flow 37.6 from Operating 144.9 (87.5) 126.0 121.9 9.0 Activities
Slide 29: Further Information
For personal use only Further Information Thank you for your interest in Emeco Further investor enquiries should be directed to: Keith Gordon CEO Stephen Gobby CFO Graham Borgerson Investor Relations emecogroup.com
Slide 30: Disclaimer
For personal use only Disclaimer Reliance on third party information The information and views expressed in this Presentation were prepared by Emeco Holdings Ltd (the Company) and may contain information that has been derived from publicly available sources that have not been independently verified.
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