Emeco Holdings Limited · ASX:EHL
Emeco — FY2023 Earnings Presentation
30 slides from Emeco's earnings presentation, Aug 23, 2023
Slide 1: FY23 Results
For personal use only Emeco Holdings Limited FY23 Results 23 August 2023
Slide 2: Important Notices and Disclaimers
IMPORTANT NOTICES AND DISCLAIMERS Reliance on third party information For personal use only 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
Slide 3: Emeco delivers a strong 2H23 performance
HIGHLIGHTS RESULTS AND OUTLOOK OVERVIEW Emeco delivers a strong 2H23 performance For personal use only ▪ Safety remains a key focus, with TRIFR of 2.9 at 30 June 2023 ▪ Strong conditions in commodity markets fuelled exceptional demand, driving a solid financial performance ▪ FY23 financial performan
Slide 4: FY23 Group Financial Highlights
FY23 GROUP FINANCIAL HIGHLIGHTS Strong turnaround performance in 2H23 to deliver solid returns for the year For personal use only Revenue (m) Operating EBITDA (m) 1 Operating EBIT (m) 1 Operating NPAT ($m) 1 445 430 137 62 64 37 39 122 129 114 59 32 373 382 41 20 1H22 2H22 1H23 2H23 1H22 2H22 1H23 2
Slide 5: FY23 Group Financial Highlights
FY23 GROUP FINANCIAL HIGHLIGHTS Strong turnaround performance in 2H23 to deliver solid returns for the year. Full year results impacted by a disappointing 1H23 performance from PNP For personal use only Revenue Operating EBITDA1 Operating EBIT1 Operating NPAT1 $875m $250m $105m $59m +16% vs. FY22 $7
Slide 6: Outlook positive with demand across all businesses expected to remain robust
HIGHLIGHTS FY24 AND OUTLOOK OUTLOOK Outlook positive with demand across all businesses expected to remain robust For personal use only ▪ Outlook for FY24 is positive with strong earnings momentum achieved in 2H23 ▪ Demand across all businesses expected to remain robust, driving earnings growth, weig
Slide 7: FY24 Outlook – Growth Capex
FY24 OUTLOOK – GROWTH CAPEX Emeco’s competitive advantage lies in our internal capability to acquire high demand mid-life assets which we rebuild through Force to deliver strong returns For personal use only Benefits of our mid-life asset rebuild model ▪ Capability to buy second-hand asset cores cos
Slide 8: Divisional Performance
For personal use only Divisional Performance
Slide 9: Safety
SAFETY Safety remains a key focus, with TRIFR of 2.9 For personal use only Safety 2.9 2.1 1.9 0.3 0.0 0.0 FY21 FY22 FY23 TRIFR LTIFR ▪ Total Recordable Injury Frequency Rate (TRIFR) has increased to 2.9, up from 1.9 on the pcp ▪ Lost Time Injury Frequency Rate (LTIFR) increased to 0.3 at June 2023,
Slide 10: Rental
RENTAL Increase in gross utilisation to 93% drove 8% Operating EBITDA growth in the Rental business For personal use only $m FY22 1H23 2H23 FY23 unless otherwise stated Operating and financial performance External Revenue 415.1 233.7 261.1 494.8 ▪ Revenue growth of 19% and Operating EBITDA growth of
Slide 11: Rental – Eastern Region
RENTAL – EASTERN REGION Eastern Region delivered 22% revenue growth and 9% Operating EBITDA growth, with strong gross fleet utilisation1 For personal use only $m FY22 1H23 2H23 FY23 unless otherwise stated Operating and financial performance External Revenue 253.0 144.4 164.2 308.5 ▪ Eastern Region
Slide 12: Rental – Western Region
RENTAL – WESTERN REGION Revenue and earnings growth, on the back of strong improvement in 2H23 gross fleet utilisation 1 For personal use only $m FY22 1H23 2H23 FY23 unless otherwise stated Operating and financial performance External Revenue 162.1 89.4 96.9 186.3 ▪ Western Region delivered continue
Slide 13: Force
FORCE Force delivered a 42% increase in total revenue, with over 125 machine rebuilds. 30% increase in Operating EBITDA For personal use only $m FY22 1H23 2H23 FY23 unless otherwise stated Operating and financial performance External revenue 90.6 68.3 88.2 156.5 ▪ Force delivered a 42% increase in t
Slide 14: Pit N Portal
PIT N PORTAL Pit N Portal delivered a strong 2H23 turnaround performance For personal use only $m FY22 1H23 2H23 FY23 Operating and financial performance unless otherwise stated ▪ Strong 2H23 turnaround performance, with significant increase in earnings and margin, following External Revenue 248.7 1
Slide 15: Financial Results
For personal use only Financial Results
Slide 16: Operating Profit and Loss
OPERATING PROFIT AND LOSS Strong 2H23 turnaround performance, drove 21% increase in Operating EBITDA and 56% increase in Operating EBIT. For personal use only FY23 Operating Financial Performance1,2 Commentary $m FY22 1H23 2H23 FY23 unless otherwise stated ▪ Record revenue of $874.9 million, a 16% y
Slide 17: Cash Flow
CASH FLOW Strong 2H23 cash flow generation of $44 million, continues to support ongoing investment in Rental fleet to grow earnings as well as funding returns to shareholders For personal use only FY23 Cash Flow ($m) Overview ▪ Strong cash conversion at 103% ▪ Working capital negatively impacted by
Slide 18: Capex / Asset Management
CAPEX / ASSET MANAGEMENT Emeco’s ongoing investment in capital continues to deliver strong returns for shareholders, particularly in our core Rental and Force businesses For personal use only Capex summary $ million (unless stated otherwise) FY22 FY23 Component rebuilds 125.5 139.0 Asset replacement
Slide 19: Balance Sheet
BALANCE SHEET Balance sheet remains strong with leverage conservative at 1.10x – providing flexibility for the pursuit of growth and capital management opportunities For personal use only Summary balance sheet Overview ▪ Capex investment focussed on Rental fleet 30 June 30 June $m 2022 2023 ▪ Rental
Slide 20: Debt Maturity Profile and Liquidity
DEBT MATURITY PROFILE AND LIQUIDITY Committed and undrawn facilities provide flexibility to pursue growth opportunities For personal use only Drawn debt maturity at 30 June 2023 Liquidity $ million $ million 30 June 22 30 June 23 300 AMTN AUD Notes1 250.0 250.0 250 Term facilities – RCF2 96.8 95.0 (
Slide 21: Credit Management
CREDIT MANAGEMENT Credit management a key focus with increased investment in finance and credit management resources and processes to improve risk exposure For personal use only Economic Credit Losses Overview ▪ Collections from Minjar/Barto against provision taken in 1H23, total $10.9 million (excl
Slide 22: Sustainability and Strategy
For personal use only Sustainability and Strategy
Slide 23: Our Strategy
OUR STRATEGY Building a sustainable and resilient business generating long term value for shareholders For personal use only Strong balance sheet The lowest cost, highest quality provider ⚫ Maintain a healthy balance sheet with target ⚫ Best-in-class operational capabilities to be the net leverage o
Slide 24: Environmental, Social & Governance
ENVIRONMENTAL, SOCIAL & GOVERNANCE At Emeco, we strive to create a sustainable business which continues to deliver creative solutions for our customers, a family feel for our people, support for our local communities and value for our investors For personal use only Overview ▪ In FY22, Emeco develop
Slide 25: Operational Priorities
OPERATIONAL PRIORITIES A focus on our operational priorities will build a better business For personal use only Priorities for FY24 ▪ Core Business ▪ Continue to grow Force workshop and Rental business, focussing on business improvement initiatives and margins, in particular contract repricing as we
Slide 26: Appendix: Additional information
For personal use only Appendix: Additional information
Slide 27: Reconciliations – Statutory to Non-IFRS Disclosure
RECONCILIATIONS – STATUTORY TO NON-IFRS DISCLOSURE For personal use only FY22 FY23 Statutory to operating reconciliation Statutory to operating reconciliation $m NPAT EBIT EBITDA $m NPAT EBIT EBITDA Statutory 65.0 115.1 245.7 Statutory 41.3 79.1 225.9 Tangible asset Tangible asset 1.1 1.1 - 1.0 1.0
Slide 28: Reconciliations – Statutory to Non-IFRS Disclosure
RECONCILIATIONS – STATUTORY TO NON-IFRS DISCLOSURE For personal use only Cash flow reconciliation Net debt and leverage reconciliation $m FY22 FY23 30 June 30 June $m 2022 2023 Operating EBITDA 250.2 250.4 AUD secured notes 250.0 250.0 Working capital (9.8) (18.2) Revolving credit facility - - Net f
Slide 29: External Revenue Analysis
EXTERNAL REVENUE ANALYSIS For personal use only Revenue by commodity Revenue by geography Revenue by type Revenue by customer – Top 10 Customer 1 FY23 FY23 FY23 FY23 Customer 2 Customer 3 7% 3% 12% Gold 10% WA 18% Customer 4 12% Rental 31% Met Coal 12% Customer 5 Iron Ore QLD 46% Customer 6 PNP 13%
Slide 30: Thank you
Thank you For personal use only Investor enquiries: Theresa Mlikota Chief Financial Officer Investor.relations@emecogroup.com emecogroup.com