Midway — H1 FY2018 Earnings Presentation
23 slides from Midway's earnings presentation, February 2018
Slide 1: Interim Result FY18 Analyst and Investor Presentation
Interim Result FY18 Analyst and Investor Presentation Tony Price Chief Executive, Midway Limited
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by Midway Limited ACN 005 616 044 (Midway or the Company). The information contained in this presentation is current at the date of this presentation. The information is a summary overview of the current activities of the Company and does not purport to
Slide 3: Performance Overview
Performance Overview First Half FY18 EBITDA $6.5M ($10.8M pcp) 1H18 results down on pcp: Revenue • Volume impact on revenue of two delayed export shipments $85.2M -3% • Earnings impact on export shipments of stronger A$ • Higher wood supply costs Midway confident of meeting FY18 full year market ear
Slide 4: Midway Group EBITDA
Midway Group EBITDA Midway Group EBITDA ($m) 12 10 2.1 0.4 0.2 1.4 8 2.1 3.0 3.0 0.7 6 0.6 10.8 4 6.5 2 0 1H 2017 Volume Price FX R&M IPO Costs Bone Dry % JV (SWF) Supply costs Other 1H 2018 (shutdown timing) 4
Slide 5: Financial Performance
Financial Performance $Am 1H18 1H17 % Change Sales Revenue 85.2 88.0 (3.2) Other Income 2.0 1.8 11.1 Equity Accounted Share of Profits 1.2 1.6 (25.0) Operating Costs (81.9) (80.6) (1.6) EBITDA 6.5 10.8 (39.8) Depreciation and Amortisation (2.0) (1.7) (17.6) EBIT 4.5 9.1 (50.5) Finance expense (1.1)
Slide 6: Cash Flow
Cash Flow $Am 1H18 1H17 $Am Change Operating Cash Flow (11.2) (2.5) (8.7) Investing Cash Flow (15.2) 0.8 (16.0) Financing Cash Flow 13.7 (4.9) 18.6 Net Change in Cash (12.7) (6.6) (6.1) Net Debt(1) 49.9 26.5 23.4 (1) Net debt has increased due to the drawdown of $14.0M on the acquisition facility fo
Slide 7: Balance Sheet
Balance Sheet $Am 1H18 1H17 $Am Change Total Current Assets 36.2 33.5 2.7 Total Non-current Assets 137.3 120.5 16.8 Total Assets 173.5 154.0 19.5 Total Current Liabilities 29.4 15.8 (13.5) Long Term Debt 39.5 30.5 (9.0) Total Non-current Liabilities 56.9 45.0 (11.9) Total Liabilities 86.2 60.8 (25.4
Slide 8: Business unit contributions
Business unit contributions Revenue EBITDA NPAT Comments $Am 1H18 1H17 1H18 1H17 1H18 1H17 An unfavourable exchange rate impacted Geelong’s Midway 59.3 67.5 6.8 10.4 3.3 5.4 performance, partially offset by a higher dry fibre content Midway 100% and better USD FOB sale prices SWF SWF had strong perf
Slide 9: Strategic Priorities and Outlook
Strategic Priorities and Outlook February 2018 9
Slide 10: Strategic Priorities on track post IPO
Strategic Priorities on track post IPO Good progress continues to be Increasing EBIT over time: made with our Strategic Objectives for FY18 1. OPERATING EFFICIENCIES • Economies of scale • The company continues to maximise long • Margin expansion • Favourable demand/ supply dynamics term supply by r
Slide 11: Finalised acquisition of Plantation Management Partners Pty Ltd (PMP)
Finalised acquisition of Plantation Management Partners Pty Ltd (PMP) • Privately-owned plantation management business with over 70,000 ha of plantation under management in Northern Australia and SE Asia • 34,000 ha of Acacia on Melville Island (NT) • 13,000 ha plantation teak estate in Cambodia • 2
Slide 12: Strategic Investment – ADDCO Fibre Group
Strategic Investment – ADDCO Fibre Group • Strategic investment in ADDCO Fibre Group • ADDCO Fibre Group provides forestry supply chain and logistics services to clients in the Australasian forestry and wood processing sectors. • ADDCO Fibre Group Limited was founded in 2017 and is based in Mount Ma
Slide 13: Diversified Geographic Footprint
Diversified Geographic Footprint 13
Slide 14: Strong outlook for FY18
Strong outlook for FY18 FY18 results on track with market earnings forecasts range • Full year results on track despite lower than expected H1 • Higher sales volume • Positive price movement • Contribution from chip trading activities Contribution from new business activities • Plantation Management
Slide 15: Appendix: Overview of Company
Appendix Overview of Company 15
Slide 16: A leading woodfibre exporter
A leading woodfibre exporter Export Facilities Wood supply area ▪ Listed in December 2016, ASX: MWY Railway ▪ Produces and exports high quality woodfibre, headquartered in Geelong ▪ Key customers are pulp and paper producers in China and Japan QCE Brisbane ▪ Wholly owns strategic processing and expo
Slide 17: Largest Australian processor of woodchips
Largest Australian processor of woodchips ▪ A leading company in the Australian forestry Overview of Midway’s business activities sector, primarily involved in the production and export of high quality woodfibre to producers of pulp, paper and associated products in China and Japan ▪ Founded in 1980
Slide 18: Strategically located port and processing facilities
Strategically located port and processing facilities Hardwood woodfibre capacity ~4.0 million GMT per annum QCE Brisbane Softwood woodfibre capacity ~0.4 million GMT per annum ▪ Sole woodfibre exporter Export Facilities from Brisbane Port – Wood supply area provides geographic and market diversity R
Slide 19: Supply deficit expected in medium term
Supply deficit expected in medium term Asian hardwood chip balance forecast – demand to outstrip supply 2020 - 2030 ▪ Demand is forecast to be relatively stable in the short term, but supply is expected to reduce over Asian Hardwood Chip Demand & Supply Forecast (‘000 BDMT) the medium term, resultin
Slide 20: Future Wood Supply Volumes
Future Wood Supply Volumes There is a substantial area of plantations in the catchments of Midway’s processing facilities ▪ Midway has a number of short and long term (1 year to 10 year) agreements in place with a number of large plantation managers in each of our operating regions Facility Volumes
Slide 21: A long history of growing sales and customer base
A long history of growing sales and customer base Growth over the last 10 years has been driven through new capital investment Midway total export volumes since 1986 (million GMT) – ~18% CAGR since 1986 Geelong Portland Brisbane 3.00 3.10 2.92 2.18 1.66 1.63 1.46 1.34 1.23 1.23 0.99 1.08 1.07 0.85 0
Slide 22: Board of Directors – overseen strong growth
Board of Directors – overseen strong growth Greg McCormack Founding Director of Midway in 1980 and has a long-term commitment to the Australian forest products industry, holding senior positions Non-Executive Chairman with both the National and Victorian Association of Forest industries (having serv
Slide 23: Management team – over 15 years average service
Management team – over 15 years average service Glen Samsa Glen brings over 20 years of industry expertise and is the Chief Executive Officer of the recently acquired Plantation Management General Manager - Plantations Partners. He has extensive knowledge and skills in forestry analysis and valuatio