Speedy Hire PLC · LSE:SDY
Speedy Hire — H1 FY2012 Earnings Presentation
38 slides from Speedy Hire's earnings presentation, 2011
Slide 1: Self help delivering results
Self help delivering results Speedy Hire Plc Interim Results F the For th 6 months th ended d d 30 S September t b 2011
Slide 2: Ishbel Macpherson, Chairman
Ishbel Macpherson Chairman “Gizeay jones
Slide 3: Summary
Summary Significant improvement in profitability vs prior year Continuingg EBITDA (pre‐exceptional) (p p ) increased byy 29.2% Successfully disposed of the accommodation operation, removing loss maker and reducing net debt Completed the refinancing of the debt facilities, providing sustainab
Slide 4: Lynn Krige, Group Finance Director
Lynn Krige Group Finance Director
Slide 5: Financial highlights
Financial highlights 6 months to 6 months to September September 2011 2010 £m £m Revenue 161.8 177.3 EBITDA* 29.8 24.9 EBITDA % 18% 14% EBIT* 8.4 (4.6) PBT* 4.8 (9.9) Adjusted earnings/(loss) per share* 0.9p (1.9p) DPS (UK GAAP) 0 2p 0.2p 0 2p 0.2p Operating cash flow (before net hire fleet capex) 2
Slide 6: Continuing trading financial highlights
Continuing* trading financial highlights 6 months to 6 months to S t b September S t b September 2011 2010 Change Change £m £m £m Continuing* revenue 158 9 158.9 155 6 155.6 33 3.3 2 1% 2.1% Continuing* EBITDA (pre exceptional costs) 29.2 22.6 6.6 29.2% EBITDA % 18.4% 14.5% 3.9bps Continuing* EBITA
Slide 7: Continuing P&L bridge
Continuing P&L bridge 160 Revenue e 158 156 £m 154 158.9 152 155.6 150 30 A* 28 EBITDA 26 £m 24 29.2 22 22.6 20 9 7 EBITTA* 5 8.5 3 £m 1 £ (1) (2.2 ) (3) (5) Continuing H1 FY11 UK & Ireland Intern'l & TAS Corporate costs Continuing H1 FY12 * pre exceptional costs UK & Ireland driving profit improvem
Slide 8: UK & Ireland
UK & Ireland 6 months to 6 months to Continuing* EBITDA** margin September September 2011 2010 Change £m £m Revenue 156.2 172.8 (9.6%) 21.1% 17.5% Continuing* revenue 153.3 151.1 1.5% EBITDA ** 33.0 33 0 28.8 28 8 14.6% 14 6% Continuing* EBITDA ** 32.4 26.5 22.2% Sep 2010 Sep 2011 21.1% 17.5% Contin
Slide 9: International and Training & Advisory Services
International and Training & Advisory Services International Asset Services 6 months to 6 months to September September 2011 2010 Change £m £m Ongoing progress from Revenue 4.8 3.7 29.3% Increasing revenues EBITDA 06 0.6 (0 3) (0.3) n/a Reducing losses EBITA (0.8) (1.4) n/a Recent contract w
Slide 10: Strong financial position
Strong financial position September September March 2011 2010 2011 £m £m £m Property, plant & equipment 223.8 270.3 219.9 Net debt 77.0 123.0 113.9 Net debt : EBITDA* 1.1x 2.1x 1.8x Shareholder funds 227.8 236.3 229.4 Return on capital employed 6.4% (0.1%) 2.3% Net asset value per share 44p 46p 44p
Slide 11: Strong cash generation supports fleet investment
Strong cash generation supports fleet investment 6 months to 6 months to September September 2011 2010 £m £m Cash generated from operations 29.8 17.5 Purchase of hire equipment (26.7) (26 7) (18.3) (18 3) Proceeds from sale of hire equipment 6.9 6.5 Net investment in non-fleet assets (2.5) (1.4) Int
Slide 12: Hire fleet investment
Hire fleet investment 50 180% 45 160% 40 140% 35 120% % 30 100% £m 25 80% 20 60% 15 10 40% 5 20% 0 0% H1 FY08 H2 FY08 H1 FY09 H2 FY09 H1 FY10 H2 FY10 H1 FY11 H2 FY11 H1 FY12 Fleet capex (gross) (LHS) Fleet depreciation (LHS) Capex % of depreciation (RHS) Significant investment in capex funded from o
Slide 13: Debt structure & headroom
Debt structure & headroom Borrowing Book value Borrowings Total facility base Receivables R i bl £91.5m £5.0m Overdraft 85% of eligible UK & Ireland debtors Total £148.2m £42.2m £63.2m Plant & unutilised facilityy £215.0m ABL facility machinery 85% of eligible UK £172.3m & Ireland plant & machinery
Slide 14: ABL – supports growth
ABL – supports growth Worked example Book value Borrowing base Borrowings Invest £20m in UK hire fleet Borrowing base increases Upon payment of capex creditor, borrowings Growth in revenue results in 85% of additional fleet increase byy £20m increase in UK debtors of £4m 85% of additiona
Slide 15: Summary
Summary Strong St cash h generation ti Return to profitabilityy Balance sheet provides platform for future growth 15
Slide 16: Steve Corcoran, Chief Executive
Steve Corcoran Chief Executive
Slide 17: Self help delivering results
Self help delivering results Reduced Costs Improved Efficiency Identified Opportunities Innovated Products and Services Measure, Measure, Measure! 17
Slide 18: Cost reduction
Cost reduction 3,100 5,500 2,900 5,000 2,700 Number off employees Numberr of vehicles 2,500 4,500 2,300 4,000 2,100 1,900 3,500 1,700 3,000 1,500 Sep 08 Mar 09 Sep 09 Mar 10 Sep 10 Mar 11 Sep 11 Sep 08 Mar 09 Sep 09 Mar 10 Sep 10 Mar 11 Sep 11 140 600 14% Annualised cost saving vs peak costs (£m) ng
Slide 19: Delivering through reduced costs & efficiencies
Delivering through reduced costs & efficiencies 280 Revenue decline 260 Revvenue e Half yeaar revenue (£m) 240 220 Revenue stability 200 180 160 140 120 100 35 Cost reduction 30 EBITA** 25 Business efficiency Half year EBITA* (£m) 20 15 10 5 0 ‐5 ‐10 10 Post sale of * pre exceptional costs accommoda
Slide 20: Improved efficiency & customer satisfaction
Improved efficiency & customer satisfaction Operations Assets Revenue Per Man + 4% Hire Rate + 8% Per Van + 1% Utilisation + 6% Per Site + 7% Yield + 7% EBITA margin i 9% ROCE 6% Processes Customer Service Credit Notes + 11% Equipment reliability 94% Queries - 15 % On time / In full 94% Working Capi
Slide 21: Construction market
Construction market £bn 2005 prices £35 £120 £104bn £102bn £102bn £30 £100 £98bn £25 £80 £20 £60 £15 £40 £10 £20 £5 £ 2010 2011 2012 2013 £bn£ 2006 2007 2008 2009 2010 2011 2012 2013 • Remains a large industry, 7.5% GDP Public Housing Public Non-residential • Infrastructure remains strong R&M Public
Slide 22: Hire industry – stable & still a large market
Hire industry – stable & still a large market £4.5 FY10 FY10- Market share £4.0 £3.5 £3.1bn £3.1bn(2) £3.0bn (1) £3.0bn(2) £3.0 £2 5 £2.5 £2.0 % share of Top 10 £1.5 revenues £1.0 £.5 £.0 2010 2011 2012 2013 22 Source: ERA Rental %, Company listings from Catherine Stratton PIR, Revenue from Companie
Slide 23: Opportunities, focus on the right markets
Opportunities, focus on the right markets Water • AMP5 - £22bn over 2010-15 (non-capital) ( ) (2) Does not take acco accountnt of • £12bn capital expenditure(4) private investment in: • AMP6 already in planning Ports Docks Waste Airports (2) • £10bn landfill reduction programmes • £1.4bn was
Slide 24: Delivering on opportunities, Speedy success
Delivering on opportunities, Speedy success Water Client: Thames Water – 5 yr AMP5 agreement; Welsh Water 3+2yr AMP5 agreement Contractors: Costain, GCA, Galliford Try, KMI, Morgan Sindall, MVB (Lea Tunnel) Waste Client: Greater Manchester Waste, Enviropark Waste, Sita UK, London First Biomass Contr
Slide 25: Focus on the right customers
Focus on the right customers Market Share of Top 100 Construction Firms Forecast Growth of Top 100 Construction Firms £90 £79bn £80 £70bn £70 £63bn CN Top 20 £58bn £60 32% £50 £40 £30 £20 CN Top 21- 100 £10 18% £ 2010 2011 2012 2013 The Construction News ((CN)) Top p 100 accounts for approx pp 50%
Slide 26: Innovation – Driving rates & reducing customer costs
Innovation – Driving rates & reducing customer costs Bespoke Reporting VB-9 VB 9 • Hire % / Total % • By product • By region • £160 p/w more to hire • By project • Invoice queries • 40% reduction in fuels costs overall • £176 savings to the customer E-Trading • Automated off hire requests Traditiona
Slide 27: Driving asset utilisation
Driving asset utilisation Change g in utilisation vs April p 2010 20% 15% 10% 5% 0% -5% Utilisation up 15 consecutive months on April 2010 27
Slide 28: Yield management (YoY change UK)
Yield management (YoY change UK) Year on year change in hire Volume 10% revenue Volumes down 5.0% 0% with focus on Q1 FY12 Q2 FY12 Average 4.5% quality revenue ‐10% 4.0% P d t mix Product i 10% 3.5% 0% Minimal 3.0% Q1 FY12 Q2 FY12 Average changes in ‐10% product d t mixi 2.5% Customer mix 2.0% 10% S
Slide 29: Self help - measured results
Self help - measured results ROCE* (rolling 12 month) Rolling 12 month EBITA* margin Rolling 12 month EBITDA* margin 16% 30% 16% 28% 14% 14% 26% 12% 12% 24% 10% 10% 22% 8% 8% 20% 6% 6% 18% 16% 4% 4% 14% 2% 2% 12% 0% 0% 10% ‐2% ‐2% Net debt (£m) Earnings Per Share* (pps) Net debt : EBITDA* (rolling 1
Slide 30: Opportunities and challenges
Opportunities and challenges Opportunities Challenges Water, waste, energy and transport Wider construction market sectors Continued self help Cost pressures Asset efficiency & IT benefits People costs – salary rises & pension costs Property network Business rates Yield focus Fuel & raw material cos
Slide 31: Conclusion
Conclusion Speedy d moving b backk into profit; f market k share h remains strong We are well placed to face the market challenges Ongoing commitment to improve margins and returns Focus on customers, markets and innovation Well positioned to maintain progress and benefit from eventual mar
Slide 32: Appendix
Appendix 32
Slide 33: Reconciliation of Continuing Trading
Reconciliation of Continuing Trading Speedy Hire plc 6 months to Dis- Continuing* 6 months to Dis- Continuing* September continued September continued 2011 adjj 2010 adjj £m £m £m £m £m £m Revenue 161.8 (2.9) 158.9 177.3 (21.7) 155.6 EBITDA** 29.8 ((0.6)) 29.2 24.9 ((2.3)) 22.6 18.4% 18.4% 14.0% 14.
Slide 34: Segmental analysis
Segmental analysis 6 months to 6 months to 12 months to September September March 2011 2010 Change 2011 £m £m £m £m Revenue UK & Ireland Asset Services 156.2 172.8 (16.6) 343.5 International Asset Services 4.8 3.7 1.1 8.4 g & Advisory Training y Services 0.8 0.8 ((0.0)) 2.3 161.8 177.3 (15.5) 354.2
Slide 35: Exceptional items
Exceptional items 6 months to 6 months to 12 months to September September March 2011 2010 2011 £m £m £m Restructuring / integration costs: - Onerous lease provision and associated costs - - 2.6 - Redundancy - 0.6 2.9 - Sale of accommodation hire assets 2.9 - - W it down Write d off accommodation d
Slide 36: Property, plant and equipment
Property, plant and equipment September September March 2011 2010 2011 £m £m £m UK hire equipment 172.7 172 7 218.9 218 9 167.6 167 6 Ireland hire equipment 4.6 4.8 4.1 International hire equipment 14.2 11.0 14.0 Land & buildings 11.1 12.0 11.4 Fi t Fixtures & fitti fittings 21 2 21.2 23 6 23.6 22 8
Slide 37: Covenants
Covenants Covenant Position at Methodology threshold 30 Sept 2011 Not greater Total Net Debt to EBITDA* Leverage than 2.25x 1 1x 1.1x EBITDAR* to Rent Adjusted Finance Charges ((“RAFR”) RAFR ) Fixed Charge Not less Where: 2.9x Cover than 2.1x EBITDAR* is EBITDA* before operating lease charges RAFR i
Slide 38: SME contractors facing difficult times
SME contractors facing difficult times SME workload declined for the 14th consecutive quarter... THE SME construction sector has now experienced three consecutive years of declining conditions and is heading into a double dip recession as the economy falters falters. Source: Federation of Master Bu