Emeco Holdings Limited · ASX:EHL
Emeco — FY2011 Earnings Presentation
31 slides from Emeco's earnings presentation, Aug 23, 2011
Slide 1: 2011 Full Year Results
For personal use only 2011 Full Year Results Keith Gordon, Managing Director & Chief Executive Officer Stephen Gobby, Chief Financial Officer
Slide 2: Presentation Overview
For personal use only Presentation Overview Highlights Financials Strategy & Outlook Questions Appendices
Slide 3: Highlights
For personal use only Kalgoorlie, Western Australia Highlights Keith Gordon Managing Director & Chief Executive Officer
Slide 4: Overview
Overview Execution of strategy translating to improved returns for shareholders For personal use only Successes Operating NPAT of $56.0M, up 36.3% (FY10: $41.1M) ROC improving to 11.3% (FY10: 8.3%) FY11 dividends of 10.0cps, fully franked, including final dividend of 3.0cps “Optimising the C
Slide 5: 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 6: 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 Jun-09 Jun-10 Jun-11 Opp
Slide 7: Rental Fleet Utilisation
Rental Fleet Utilisation Sustained mining activity driving strong utilisation in FY11 For personal use only Average Equipment Utilisation by WDV Average utilisation improved to 85% (FY10: 72%) o QLD, WA and Canada delivered full year of high utilisation 23 Aug-11 o Redeployment of large fleet in I
Slide 8: 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 $165M in Large 36% Mining Jun-10: $578M Large Mining Jun-11: $586M Small 49% Mining in FY12 Small 45% Mining 55% Advantages of Large Mining
Slide 9: Customers
Customers 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% 9 Note: Graphs based on group revenue FY11
Slide 10: Regional Performance – Australian Rental
Regional Performance – Australian Rental High utilisation underpinning FY11 returns with further growth from investment in FY12 For personal use only EBIT ROFE Utilisation 98.3 23.8% 20.6% 79.0 19.1% 72.9 WDV $421.2M FY09 FY10 FY11 Jun-09 Jun-10 Jun-11 Operating EBIT up 34.9% to $98.3M Average u
Slide 11: 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 Utilisation 18.6 17.6% 15.8 14.8% 6.5% 5.3 WDV $53.7M FY09 FY10 FY11 Jun-09 Jun-10 Jun-11 1H11 debtor impairment ($6.0M) and subseque
Slide 12: Regional Performance - Canada
Regional Performance - Canada Fleet reconfiguration translating to higher earnings & improved returns For personal use only EBIT (AUD) ROFE Utilisation 14.0 11.3% 9.5 7.2% 2.8% 3.1 WDV $102.9M FY09 FY10 FY11 Jun-09 Jun-10 Jun-11 Operating EBIT up 348% to A$14.0M Fleet reconfiguration towards lar
Slide 13: Financials
For personal use only Superpit, Kalgoorlie WA Financials Stephen Gobby Chief Financial Officer
Slide 14: Financial summary
Financial summary 3.0% ROC improvement from strong earnings growth and balance sheet optimisation For personal use only ROC increased to 11.3% (8.3% at Jun-10) Operating NPAT of $56.0M, up 36.3% YoY Statutory NPAT of $49.6M o Discontinued Operations $0.4M o One-off debtor impairment (Indonesia
Slide 15: Group Financials
Group Financials Execution of strategy translating into improved performance For personal use only A$ 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 16: 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 17: 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 18: Balance Sheet
Balance Sheet Capital efficiencies delivered in FY11 For personal use only Quality fleet now in place after non Balance Sheet core asset disposals & reinvestment in large mining fleet Downsized Sales & Parts inventories to align with Rental business Working capital efficiency gains by targetin
Slide 19: 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 20: FY12 Capital Investment
FY12 Capital Investment Global procurement capability essential to growth given tight equipment market For personal use only Global procurement capability giving Emeco access to quality equipment Cumulative payment & deployment of FY12 growth investment Existing growth capital commitments of $16
Slide 21: Strategy & Outlook
For personal use only Balikpapan, Indonesia Strategy & Outlook Keith Gordon Managing Director & Chief Executive Officer
Slide 22: The Emeco Strategy
The Emeco Strategy Strategy developed to drive business performance and growth For personal use only Ongoing optimisation of Grow without sacrificing invested capital and quality of earnings earnings Leverage capabilities for Continue to evolve the growth business model Consistent Value Crea
Slide 23: Growth – in the context of Emeco's Strategy
Growth – in the context of Emeco’s Strategy Restructure activities complete in FY11 with focus on Growth in FY12 For personal use only Earn the right to grow Grow from a solid foundation Global restructuring - complete Organic growth through investment in large mining Canada – reconfigure flee
Slide 24: Market Outlook
Market Outlook Global economic volatility has re-emerged but commodities volume expected to grow For personal use only Global Production Forecasts Emeco Commodity Exposure 1,500 Iron ore Thermal Coal Coking Coal 1,200 CAGR: 6.5% AUSTRALIA 900 Production 600 90% 300 0 2009 2010 2011 2012F 2013F 2014F
Slide 25: Emeco Outlook
Emeco Outlook Emeco well positioned to capitalise on strong sector fundamentals For personal use only Strong demand for mining equipment in an environment of long lead times Confidence that all growth capex equipment will be placed promptly Rental model works particularly well for owner miners
Slide 26: Questions
For personal use only <INSERT PICTURE> Hitachi EX3600, Queensland Questions
Slide 27: Further Information
For personal use only Further Information Thank you for your interest in Emeco Further investor enquiries should be directed to: Keith Gordon CEO Stephen Gobby CFO Graham Borgerson Investor Relations emecogroup.com
Slide 28: Appendices
For personal use only Appendix Hitachi EX3600, Queensland Appendices
Slide 29: Detailed Financials
For personal use only Detailed Financials Profit & Loss Cash flow A$ Millions FY10 FY11 Var Var A$ Millions FY10 FY11 Var Var Operating Operating $ % A$ m A$ m A$ m % Revenue 444.4 502.5 58.1 13.1 Operating Cash flow 178.2 200.8 22.6 12.7 General Working Capital 2.2 9.0 6.8 309.1 EBITDA 190.4 223.3
Slide 30: Operating Segments
For personal use only Operating Segments EBIT - Earnings Bridge 25.4 10.9 (1.6) (10.5) (2.5) (4.1) EBIT $101.2M EBIT $83.6M FY10 AUS RENTAL SALES & PARTS CANADA INDONESIA DISC. OPS CORPORATE FY11 Funds Employed at Jun-10 Funds Employed at Jun-11 Notes: Graphs represent operating results; 30 Funds Em
Slide 31: 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.