Midway — FY2017 Earnings Presentation
23 slides from Midway's earnings presentation, September 2017
Slide 1: Fiscal Year 2017 Analyst and Investor Presentation
Fiscal Year 2017 Analyst and Investor Presentation September 2017 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: Solid full year 2017 results
Solid full year 2017 results FY17 results in line with expectations •Sales of $209.2 million and statutory EBITDA of $24.9 million •Pro forma NPAT of $17.3 million, exceeding the pro forma forecast •Statutory net profit before tax was $19.9 million and NPAT was $14.9 million, down 42.5% on a pcp bas
Slide 4: Business unit contributions [Pro Forma]
Business unit contributions [Pro Forma] Revenue EBITDA NPAT Comments $Am FY16 FY17 FY16 FY17 FY16 FY17 Geelong performed well throughout the year, with slight Midway decrease in sales volume offset by higher dry fibre content, 184.0 182.6 25.9 24.1 15.2 13.8 Midway 100% better USD FOB sale prices an
Slide 5: Financial Performance
Financial Performance $Am FY16 FY17 % Change Sales Revenue 208.5 209.2 0.3% Other Income 4.6 4.1 (10.9%) Equity Accounted Share of Profits 5.7 2.8 (50.1%) Operating Costs (178.0) (191.2) (7.4%) EBITDA 40.8 24.9 (39.0%) Depreciation and Amortisation (3.6) (3.4) 5.6% EBIT 37.2 21.5 (42.2%) Finance exp
Slide 6: Cash Flow
Cash Flow $Am FY16 FY17 $Am Change Operating Cash Flow 3.0 16.2 440.0% Investing Cash Flow 51.7 (0.4) (100.8%) Financing Cash Flow (72.7) (12.0) 83.5% Net Change in Cash (18.0) 3.8 121.1% Net Debt 19.9 16.6 16.6% Interest Cover 21.7 18.6 14.3% 6
Slide 7: Balance Sheet
Balance Sheet $Am FY16 FY17 $Am Change Total Current Assets 39.0 35.7 (8.5%) Total Non-current Assets 117.3 119.1 1.5% Total Assets 156.3 154.8 (1.0%) Total Current Liabilities 20.9 19.9 4.8% Long Term Debt 30.4 30.9 (1.6%) Total Non-current Liabilities 44.9 43.9 2.2% Total Liabilities 65.8 63.8 3.0
Slide 8: Risk Management
Risk Management Exposure to foreign exchange rates • Active hedging policy in place • Aim to reflect the movement in the AUD:USD rate in timber purchase prices • Timber supply costs are negotiated regularly. Vessel chartering • Effective management of vessel chartering to maximise profit Customer co
Slide 9: Strategic Priorities and Outlook
Strategic Priorities and Outlook September 2017 9
Slide 10: Strategic Priorities
Strategic Priorities Increasing EBIT over time: Good progress against Strategic Objectives in FY17 1. OPERATING EFFICIENCIES • Economies of scale • The company has continued to maximise • Margin expansion • Favourable demand/ supply dynamics long term supply by replanting across the land portfolio a
Slide 11: Acquisition – Plantation Management Partners Pty Ltd (PMP)
Acquisition – 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 • 24,000 ha Eu
Slide 12: Acquisition – PMP: Diversified Australasian Footprint
Acquisition – Plantation Management Partners Pty Ltd (PMP) Diversified Australasian Footprint Offices Acacia Teak Eucalypt 12
Slide 13: Acquisition – PMP: Tiwi Plantation Corporation
Acquisition – Plantation Management Partners Pty Ltd (PMP) Tiwi Plantation Corporation Pty Ltd • 34,000 ha of predominantly Acacia mangium Port Melville and Pinus caribaea plantation land on Melville Island (NT) • Managed on behalf of the Tiwi Plantation Corporation Pty Ltd • Only deep water North A
Slide 14: FY18 Outlook
FY18 Outlook Strong demand underpinning a positive price outlook • Focus on optimising use of existing infrastructure and bolt-on acquisition opportunities to grow revenue • Continue to closely manage key value drivers including: • Production and Shipping schedules • Supply chain costs • Processing
Slide 15: Appendix: Overview of Company
Appendix Overview of Company 15
Slide 16: A leading woodchip exporter
A leading woodchip 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 expor
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: Committed supply of raw materials and Strategic Alliance
Committed supply of raw materials and Strategic Alliance 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 opera
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 2.92 2.18 1.66 1.63 1.46 1.34 1.23 1.23 0.99 1.08 1.07 0.85 0.88 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 Tony Price See previous slide Chief Executive Officer Stephen Roffey Mr Roffey joined Midway in 1994 and holds forestry qualifications. He previously held the position of CEO between June 2012 and Development and Marketing February 2013. He then commen