Sgh Limited · ASX:SGH
Sgh — Seven Group Holdings — H1 FY2014 Earnings Presentation
35 slides from Sgh's earnings presentation, Feb 27, 2014
Slide 1: Presentation of Results to Analysts cover letter
27 February 2014 Company Announcements Office Australian Securities Exchange Limited Level 6, 20 Bridge Street SYDNEY NSW 2000 By Electronic Lodgment Total pages: 35 (including cover letter) Dear Sir / Madam Presentation of Results to Analysts Following is a copy of the Presentation of Results for t
Slide 2: Results for the Six Months Ended 31 December 2013
RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2013 1H FY14 Presentation on 27 February 2014
Slide 3: Disclaimer
Disclaimer Basis of preparation of slides Included in this presentation is data prepared by the management of Seven Group Holdings Limited (SGH) and other associated entities and investments. This data is included for information purposes only and has not been subject to the same level of review b
Slide 4: Today's Agenda
Today’s Agenda Overview Don Voelte Outlook Don Voelte Financials Richard Richards Investments Ryan Stokes Property Ryan Stokes Industrial Services Don Voelte WesTrac Group AllightSykes Coates Hire Group Media Investments Don Voelte Key Takeaways and Questions Don Voelte Results
Slide 5: Group Highlights
Group Highlights Reduced demand for new and rental equipment as Underlying results impacted miners focus on cost efficiencies and capital deferrals by mining sector downturn Transformation undertaken in FY13 has now right- sized the business Steady earnings in media TV advertising and audience
Slide 6: Key Financial Numbers
Key Financial Numbers Total Group – Half Year Result 1H FY14 1H FY13 % Change Trading revenue $ 1,577.1 m $ 2,704.2 m -42% EBITDA 1, 2 $ 213.7 m $ 406.5 m -47% Underlying net profit after tax (excluding Significant Items) 2 $ 131.8 m $ 235.1 m -44% Significant Items (including tax impact) 2 $ 132.9
Slide 7: Capital Management
Capital Management Ensure an efficient capital structure and maintain prudent levels of gearing Objectives Retain sufficient balance sheet flexibility to fund the working capital needs of operating businesses through the cycle and to pursue growth and investment opportunities Our aim is to mai
Slide 8: Transformation in Progress
Transformation in Progress Good progress being made across a range of focus areas – Transitioning new management team – Improving customer service and assurance – Emphasising operational efficiency – Ensuring capital effectiveness – Expanding portfolio structure Businesses repositioned for curre
Slide 9: S3 Program – WesTrac Guiding Principles
S3 Program – WesTrac Guiding Principles Alignment with Cat current and future direction Engage with strategic partners (Accenture and Cat) that WesTrac to be a steady follower leveraging proven understand our execution and interface risk solutions working with Cat dealers (Hewitt, Trakindo,
Slide 10: Outlook
Outlook – refer disclaimer We remain cautious regarding trading conditions Notwithstanding the FY12/13 exceptional results, WesTrac Australia is continuing to grow on a decade-long trend, albeit at a subdued level compared to the prior reporting period Seven West Media see the advertising mark
Slide 11: Consolidated Profit and Loss
Consolidated Profit and Loss Underlying Performance Please refer to $m 1H FY14 1H FY13 Change % the Appendix 4D Revenue 1,577.1 2,704.2 -42% for the detailed Other income 61.6 48.7 26% statutory Share of results from equity accounted investees 67.4 84.5 -20% presentation Total revenue and other in
Slide 12: Summary of Significant Items
Summary of Significant Items $m 1H FY14 1H FY13 Gain on sale of other investments and mark-to-market on derivatives 32.2 58.5 Impairment reversal - SWM equity 127.9 - Impairment - other - (9.5) Restructuring, redundancy and other costs (11.7) (11.3) Share of equity accounted investees' Significant I
Slide 13: Earnings Summary
Earnings Summary Total WesTrac WesTrac Allight Coates Media Other $m Other Group Aus China Sykes Hire Investm. Investm. Trading revenue 1,577.1 1,261.0 265.8 50.3 - - - - Statutory EBIT 354.9 88.7 9.1 (2.6) 27.9 190.5 52.3 (11.0) Add back unfavourable Individually Significant Items Restructuring cos
Slide 14: Consolidated Balance Sheet
Consolidated Balance Sheet Total Group As at As at Change Significant reduction in $m 31 Dec 13 30 Jun 13 % working capital levels Trade and other receivables 552.1 721.6 -23% Investment portfolio has Inventories 889.0 1,050.5 -15% generated value Intangible assets 777.9 765.2 2% Net debt redu
Slide 15: Consolidated Investment Listing
Consolidated Investment Listing Total Group As at As at $m 31 Dec 13 30 Jun 13 Seven West Media (Ordinary shares + RCPS) 3 1,115.1 947.1 Listed Portfolio 1,2 857.2 758.8 Coates Hire 3 461.8 430.2 Other 59.3 73.0 Total Investments 2,493.4 2,209.1 Notes: 1. Available for sale security - fair value mov
Slide 16: Balance Sheet Metrics
Balance Sheet Metrics Total Group As at As at $m 31 Dec 13 30 Jun 13 Total assets 5,604.7 5,654.3 Total shareholder's equity 3,333.4 3,035.3 Net debt1 615.4 746.9 Debt ratios Gearing: net debt1 to net debt plus equity 15.6% 19.7% Net debt1 / underlying EBITDA2 1.2x 1.2x Interest cover2 5.4x 5.7x 1.
Slide 17: Operating Cash Flow
Operating Cash Flow $m 1H FY14 1H FY13 Underlying EBIT 189.2 379.7 Add: depreciation and amortisation 24.5 26.8 Underlying EBITDA 213.7 406.5 Operating cash flow 225.3 622.8 Add: interest and other costs of finance paid 33.6 59.6 Income taxes paid / (refunded) 137.5 93.5 Add back: restructuring cost
Slide 18: Total Cash Flow
Total Cash Flow $m 1H FY14 1H FY13 Operating cash flow 225.3 622.8 Investing cash flow (3.7) 302.3 Financing cash flow (240.7) (621.4) Net increase in cash and cash equivalents (19.1) 303.8 Cash and cash equivalents at end of period 524.9 431.7 Opening net debt 713.4 1,718.7 Movement in net debt (10
Slide 19: Consolidated Debt Maturity Profile
Consolidated Debt Maturity Profile Total Group as at 31 Dec 2013 (refer disclaimer) Debt maturity profile China Australia USPP Cash At 31 Dec 2013 the Group 600 had $1,078m of available 525 undrawn borrowing facilities 500 431 Current “<1 year” debt AUD m 400 includes a number of offshore facili
Slide 20: Debt Facilities
Debt Facilities Debt Facilities $m By Type $m By Geography $m Total facilities 2,214.4 Syndicated facilities 750.0 Australia 1,327.9 Drawn (1,132.6) Capital markets - USPP 646.7 USA 646.7 Deferred borrowing costs (3.5) OEM Financing 516.0 China 168.3 Available facilities 1,078.3 Working capital 257.
Slide 21: SGH Investment Portfolio
SGH Investment Portfolio Movement in SGH Investment Portfolio Our aim is to realise value creation through 1,000 137 20 76 selective investment opportunities where 900 857 58 strategic rationale exists to enhance Unrealised 800 759 shareholder return 700 Focus on investments that are 600 complem
Slide 22: SGH Property Holdings
SGH Property Holdings Our aim is to maximise the value and return Kings Square Masterplan KS1 KS2 KS4 KS5 from our existing property assets – Perth Entertainment Centre / Kings Square – Seven’s Tuart Hill studio in Perth – Indirect property investments through the Flagship unlisted property trust
Slide 23: Investments and Property Profit and Loss
Investments and Property Profit and Loss Excluding Significant Items $m 1H FY14 1H FY13 Change % The 31 Dec 2013 result excludes results from Revenue 0.0 5.8 -100% Engin (sold Sep 2012) Other income 16.3 14.1 16% Other income comprises Share of results from equity accounted investees 3.4 0.0 - l
Slide 24: WesTrac Australia
WesTrac Australia Overview The volume of new resources projects has declined resulting in a normalisation of capital equipment demand – 2013 saw the previously unprecedented levels of new equipment sales start to normalise as new projects have been delayed – 2H revenue was impacted by the softenin
Slide 25: WesTrac Australia Half Year Result
WesTrac Australia Half Year Result Trading Revenue $m EBIT $m 275 2,383 64% decline in product sales compared to pcp Product – Driven by softening in the coal sector and support 704 1,261 reduction in new iron ore projects 97 1,679 649 8% decline in product support sales against a Product sales
Slide 26: WesTrac China Half Year Result
WesTrac China Half Year Result Trading Revenue EBIT US$m US$m 238 243 US$78m in operating cash flow delivered as Product 58 inventory levels were managed down support 61 8.4 EBIT turnaround primarily due to lower cost Product 177 185 sales base and strong culture of cost control -0.4 First hal
Slide 27: AllightSykes Half Year Result
AllightSykes Half Year Result Trading Revenue $m EBIT $m Revenue down 45% on pcp on the back of 92 softer demand 3.4 50 Cost reduction initiatives have been implemented with focus now on customers and -1.8 market share 1H 13 1H 14 1H 13 1H 14 Strong free cash flow generated from working EBIT M
Slide 28: Coates Hire Group Half Year Result
Coates Hire Group Half Year Result Trading Revenue $m EBIT $m 654 586 160 Revenue of $586m down (10%) against pcp, 113 driven by soft trading conditions EBITDA decreased (17%) on prior corresponding period Sold its UK operations, realising $119m with a 1H 13 1H 14 1H 13 1H 14 NPAT benefit in e
Slide 29: Media Investments Profit and Loss
Media Investments Profit and Loss Excluding Significant Items SGH holds a 35.33% interest $m 1H FY14 1H FY13 Change % in the ordinary shares of SWM and also holds RCPS with Share of associates NPAT a 31 Dec 2013 carrying value - Seven West Media 48.6 46.4 5% of $289m - Consolidated Media Holdings
Slide 30: Seven West Media Interim Result Highlights
Seven West Media Interim Result Highlights Outstanding television revenue share – 39.7% SWM Revenue 1H FY14 1H FY13 Change % Television 683.7 666.1 2.6% share in 1H FY14 (CY13: 40.1%) Newspapers 139.4 158.0 -11.8% Ongoing management focus on cost, quality and Magazines 123.8 133.6 -7.3% Other 28
Slide 31: Key Takeaways and Questions
Key Takeaways and Questions Significant restructuring across our industrial services businesses – focus returning to revenue generation and customer solutions Strong balance sheet in addition to strategic investments and property portfolio where we have demonstrated an ability to realise value
Slide 32: Appendix
Appendix Group Structure Mining Technology Results Presentation – 1H FY14 27 February 2014 Slide 31
Slide 33: Group Structure
Group Structure Industrial Services Media Investments WA ~35% + $289m RCPS 100% Listed ~$857m NSW/ACT Portfolio Australia EMP 100% 100% Property China Portfolio 45% 100% Notes: 1. Group structure as at 31 December 2013 100% 2. Investment values as at 31 December 2013 3. Seven West Media investment i
Slide 34: Realising our Strategy: Mining Technology
Realising our Strategy: Mining Technology WesTrac’s strategy is to deliver solutions that contribute to our customers’ success – In Mining Technology we do this through deploying the Cat MineStar System – This delivers value for our customers by improving their safety and productivity, and provide
Slide 35: Slide 34
Results Presentation – 1H FY14 27 February 2014 Slide 34
Seven Group Holdings — H1 FY2014 Earnings Presentation on 6ix