Southern Cross Electrical Engineering Limited · ASX:SXE
Southern Cross Electrical Engineering — H1 FY2023 Earnings Presentation
21 slides from Southern Cross Electrical Engineering's earnings presentation, Feb 28, 2023
Slide 1: Half Year Ended 31 December 2022 Results Presentation
Half Year Ended 31 December 2022 Results Presentation Half Year 31 December 2022 Results 11 28 February 2023
Slide 2: Our businesses
Our businesses Southern Cross Electrical Engineering Limited (“SCEE Group”) is a national electrical, instrumentation, communications and maintenance services company established in 1978 and listed in 2007 (ASX:SXE). The acquisitions of Datatel in 2016, Heyday in 2017 and the Trivantage Group (S.J.
Slide 3: Investment proposition
Investment proposition Blue-chip client base Diversified markets Recurring earnings growth Rio Tinto Resources Services BHP Multiplex Infrastructure Maintenance CPB Commercial Framework Woolworths agreements Coles Decarbonisation theme M&A opportunities Strong dividend yield Half Year 31 December 20
Slide 4: Financial highlights
Financial highlights Revenue $255.4m (H1 FY22: $253.0m) up 1.0% on pcp Gross margin percentage 15.3% (H1 FY22 : 13.2%) up 2.1% on pcp as more profitable project mix EBITDA $19.0m (H1 FY22 : $14.1m) up 34.7% on pcp * EBIT $14.4m (H1 FY22 : $9.8m) up 47.2% on pcp * NPAT $9.7m (H1 FY22 : $6.7m) up 45.4
Slide 5: Operational highlights
Operational highlights Resources remained largest sector by revenue Successfully closed-out MARBL Kemerton Lithium Plant project Finalised Rio Tinto Gudai Darri project main scope with minor additional works ongoing Cross-group BHP Villages Security Projects completed with more camps works expected
Slide 6: Outlook
Outlook H2 Revenue same or slightly below H1 as large resources projects ran longer than expected FY23 Revenue expected circa 10% less than FY22 as wins for H2 taking longer than forecast FY23 EBITDA still forecast in range $36m-$38m as project mix is more profitable Resources sector has long tail o
Slide 7: Profit & Loss
Profit & Loss Revenue of $255.4m fell back to similar levels as prior Summary P&L: corresponding period H1 FY23 H1 FY22 % Significant revenue contributors were MARBL Kemerton Lithium Plant, Rio Tinto Gudai-Darri Mine, Pitt Street $m $m Metro, Woolworths and Coles Revenue 255.4 253.0 1.0% Gross margi
Slide 8: Revenue split by sector
Revenue split by sector Resources remained largest sector although down on prior corresponding period with corresponding increase in Infrastructure revenue meaning activity fairly balanced across the three sectors H1 FY22 H1 FY23 $253m $255m $81m $82m Commercial Infrastructure $126m Resources Half Y
Slide 9: Record cash and debt free
Record cash and debt free Record cash of $70.3m (30 June 2022: $53.1m) up 32.3% Balance sheet summary: on prior period end and no debt Cash result driven by successful close-out of large resources projects and return of working capital 31 Dec 22 31 Jun 22 $62.3m of bank guarantees and surety bonds o
Slide 10: Cashflow
Cashflow Cash of $70.3m at 31 December exceptional and included having funded in period further $5.7m penultimate acquisition payment for Trivantage, Trivantage having exceeded full earn-out targets, and a record $10.2m dividend payment in October Half Year 31 December 2022 Results 10 10
Slide 11: Order book
Order book Order book down slightly by 7.1% on prior period end as large resources projects completed and not yet replaced. Infrastructure and commercial largest components of order book as their projects tend to run over longer periods than resources projects 30 June 2022 31 December 2022 $565m $52
Slide 12: Projects in period
Projects in period MARBL JV Kemerton Lithium Multiplex Western Sydney Processing Plant – SCEE Electrical International Airport - Heyday Over $100m Over $100m Rio Tinto Gudai-Darri Iron Ore CPB Sydney Metro Pitt Street Mine – SCEE Electrical Station and Towers - Heyday Over $100m Over $70m Ergon Ener
Slide 13: Strategy
Strategy SCEE Group primarily sees itself as an electrical contractor diversified across the resources, commercial and infrastructure sectors Our growth strategy continues to be to deepen our presence in those sectors and broaden our geographic diversity through expanding our core competencies and a
Slide 14: Resources sector
Resources sector Resources remained SCEE’s largest sector this half as the large resources projects Resources revenue: had a longer tail than initially forecast H1 FY23 H1 FY22 Resources will fall back in second half as the large projects are not to be immediately replaced but there is a long tail o
Slide 15: Infrastructure sector
Infrastructure sector Sector primarily driven by government spending although some segments have private involvement and includes transport – road, rail Infrastructure revenue: and airports, health – hospitals and aged care, utilities – electrical, telco and water, education – universities and schoo
Slide 16: Commercial sector
Commercial sector Commercial sector divides in two parts for SCEE Group: Commercial revenue: • Heyday - CBD towers, hotels, retail, and mixed-use developments H1 FY23 H1 FY22 • Trivantage - supermarkets electrical services and maintenance $m $m Heyday commercial activity picking up after disruptions
Slide 17: Decarbonisation
Decarbonisation SCEE exposed to global decarbonisation activity through three avenues: • Supporting the decarbonisation of resources operations – such as battery, solar and wind projects for mining companies • Assisting meeting the demand for commodities required for decarbonisation – bidding on, or
Slide 18: Conclusion
Conclusion Revenue $255.4m (H1 FY22: $253.0m) up 1.0% on pcp Gross margin percentage 15.3% (H1 FY22 : 13.2%) up 2.1% on pcp as more profitable project mix EBITDA* up 34.7%, EBIT* up 47.2% and NPAT up 45.4% on prior corresponding period Successful close-out of major resources projects Record Cash $70
Slide 19: Corporate summary
Corporate summary Capital Structure Shareholders at 20 February 2023 ASX Code SXE Thorney Investments 15.8% Share Price (24 February 2023) 69.0c First Sentier Investors 9.1% No. of ordinary shares 261.4m Other Institutions in Top 30 Shareholders 11.6% Market Capitalisation (24 February 2023) $180.4m
Slide 20: Appendix – IFRS reconciliation
Appendix – IFRS reconciliation SCEE’s results are reported under H1 FY23 H1 FY22 International Financial Reporting Standards (IFRS). SCEE discloses certain non-IFRS $m $m measures that are not prepared in Contract revenue 255.4 253.0 accordance with IFRS. The non-IFRS measures should only be conside
Slide 21: Disclaimer
Disclaimer Some of the information contained in this presentation contains “forward-looking statements” which may not directly or exclusively relate to historical facts. These forward-looking statements reflect the current intentions, plans, expectations, assumptions and beliefs of Southern Cross El
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