K & S Corporation Limited · ASX:KSC
K & S — H1 2011 Earnings Presentation
26 slides from K & S's earnings presentation, Mar 16, 2011
Slide 1: 1H2011 Results
For personal use only 1H2011 Results March 2011
Slide 2: Disclaimer
For personal use only Disclaimer Despite anything stated in this notice or elsewhere in the document, none of the information (whether considered separately or together) constitutes an offer, invitation, solicitation, advice or recommendation with respect to the issue, purchase or sale of any shar
Slide 3: 1H2011 Results
For personal use only 1H2011 Results 3 www.ksgroup.com.au
Slide 4: 1H2011 Highlights
For personal use only 1H2011 Highlights Revenue growth of 21.9% to $264.7m EBITDA increased from $25.0m $25 0m to $29.0m $29 0m NPAT of $8.1m EPS to 10.9cps Successful acquisition of Regal Transport Group Perth rail terminal completed Fullyy franked dividend of 5.0cps Successfully completed a fully
Slide 5: 1H2011 Customer Momentum
For personal use only 1H2011 Customer Momentum Weaker trading conditions on the east coast of Australia. Lower steel volumes on back of reduced production, inventory de-stocking and a change in product and distribution mix. Negatively impacted by closure of Wesley Vale and Burnie paper mills i
Slide 6: 1H2011 Customer Momentum (continued)
For personal use only 1H2011 Customer Momentum (continued) Significant contract renewals with OneSteel and Laminex for 5 years. Won substantial contracts with BlueScope and CHEP for the first time. Strong customer contract position (mostly 2 – 4 years) is a key competitive advantage. advantage
Slide 7: 1H2011 Acquisition Highlights
For personal use only 1H2011 Acquisition Highlights Completed p acquisition q of Regal g Transport p Group p in July y 2010: – Regal Transport Group has a strong focus on the Pilbara. – The acquisition of Regal Transport Group provides K&S with a strong footprint and critical mass to target the gr
Slide 8: 1H2011 Operational Highlights
For personal use only 1H2011 Operational Highlights K&S undertook 3 major j operational p initiatives in 1H2011:- – Consolidated Sydney operations onto adjoining properties has been completed. This consolidation will result in significant operational efficiencies and productivity improvements for
Slide 9: Half Year Result
For personal use only Half Year Result Half Year ended 31 December 2010 2009 Variance Revenue ($m) 264.7 217.2 21.9% EBITDA ($m) 29.0 25.0 15.1% EBITDA margin 11.0% 11.5% EBIT ($m) 16.2 15.0 7.4% EBIT margin 6.1% 6.9% Less Net Interest ($m) 4.6 2.4 Net Profit Before Tax ($m) 11.6 12.6 ‐7.8% Less Tax
Slide 10: 1H2011 Segment Performance
For personal use only 1H2011Segment Performance K&S Pacific/Regal K&S Half Year ended 31 Dec 2010 Australia Transport K&S Fuels DTM New Zealand Revenue ($m) 159.4 38.3 28.0 27.6 11.4 EBITDA ($m) 20.3 5.0 0.7 1.5 1.5 EBITDA margin 12.7% 13.1% 2.5% 5.4% 13.2% EBIT ($m) 10.7 3.2 0.6 1.4 0.3 EBIT margin
Slide 11: 5-Year Underlying EBIT
5-Year Underlying* EBIT For personal use only $M 3 35 30 25 16.9 17.3 11.5 14.8 20 12 4 12.4 2H 15 1H 10 16.2 16.0 15.0 16.3 13.2 13.4 5 0 2006 2007 2008 2009 2010 2011 * Underlying EBIT excludes significant one-off non-recurring items. 11 www.ksgroup.com.au
Slide 12: Balance Sheet Summary
For personal use only Balance Sheet Summary As at ($m) 31 Dec 2010 30 June 2010 Cash and equivalents 9.2 12.0 Receivables 62.4 56.7 Inventories 2.9 2.7 Oh Other 64 6.4 48 4.8 Strong Balance Sheet Total Current Assets 80.9 76.2 Property, Plant & Equipment 221.7 197.2 position following Intangibles
Slide 13: Gearing
For personal use only Gearing Key Liquidity Ratios As at 31 Dec 2010 As at 30 June 2010 Net Debt $77.0m $52.3m Gearing (Net Debt /Net Debt + Shareholders’ Funds) 26.8% 22.6% Gearing (Net Debt / NTA) 55.6% 39.0% 13 www.ksgroup.com.au
Slide 14: Dividend Summary
For personal use only Dividend Summary Interim dividend of 5.0 cents per share: – Record date for interim dividend is 17 March 2011. – Interim dividend payable on 31 March 2011. DRP remains active with a 2.5% price discount. Franking credit balance of $42.5m as at 31 December 2010. 14 www.ksgr
Slide 15: 5-Year Dividend Payment History
For personal use only 5-Year Dividend Payment History Cents per share cents 16 14 12 8 7 7 7 10 5 Final Interim 8 6 4 8 7 7 7 7 5 2 0 2006 2007 2008 2009 2010 2011 15 www.ksgroup.com.au
Slide 16: Key Customers
For personal use only Key Customers K&S has a large and diversified customer base (top 10 customers = 53% of revenue in 1H2011). 16 www.ksgroup.com.au
Slide 17: K&S Nationwide
For personal use only K&S Nationwide K&S operates extensively throughout Australia and New Zealand. www.ksgroup.com.au 17
Slide 18: Acquisition Impact
For personal use only Acquisition Impact Integration of Pacific Transport’s and Regal Transport Group’s operations has been completed. Strong presence and infrastructure in the Pilbara region which is experiencing massive growth. Depots in Port Hedland, Hedland Karratha and Newman which will c
Slide 19: Perth Terminal
For personal use only Perth Terminal New rail terminal in the Pacific National rail yard in Perth. Commenced operation mid January 2011. Development is part of 5 year contract between Pacific National and K&S which hi h was signed i d iin 2009 2009. Total expected CAPEX investment of approxi
Slide 20: Our Safety Target Remains Zero Harm
For personal use only Our Safety Target Remains Zero Harm Our investment in safetyy has resulted in improvements over the long term. 20 www.ksgroup.com.au
Slide 21: Corporate Strategy
For personal use only Corporate Strategy Our strategy is focused on achieving continued growth and further enhancing our business. Specific initiatives include: – Development of alliances and long term customer relationships and partnerships with large g enterprises p that value our service. – D
Slide 22: Long Term Growth Opportunities
For personal use only Long Term Growth Opportunities Revenues are expected to grow in Australia over the long term. – We see growth from our existing customer base. – We continue to bid strongly on new tenders. – Our state-of-the-art facility at Truganina in Victoria has improved efficiencyy and p
Slide 23: Carbon Emissions
For personal use only Carbon Emissions K&S generated 0.115m tonne CO2e in FY2010. Carbon pricing uncertain. K&S continues to look for ways to reduce its emissions and energy consumption. Any policy should be designed to reduce global emissions and not negatively impact the competitiveness of
Slide 24: FY2011 Outlook
For personal use only FY2011 Outlook K&S is well positioned for the future with a strong balance sheet and low gearing. – The economy is uncertain and the high Australian dollar will continue to impact Australian manufacturers. – Steel market is showing some signs of improvement with a number of m
Slide 25: FY2011 Outlook (continued)
For personal use only FY2011 Outlook (continued) – The company has in place secure customer contracts. – The full year benefit of the Pacific Transport and Regal Transport Group acquisitions will deliver synergies of $2m annualised. – Ongoing productivity benefits are expected from: • Sydney operati
Slide 26: Contacts
K&S For personal use only Contacts Mr Legh Winser Mr Bryan Walsh Managing Director Chief Financial Officer Ph: 0417 885 861 Ph: 0402 899 889 legh.winser@ksgroup.com.au bryan.walsh@ksgroup.com.au 26 www.ksgroup.com.au