Perenti Limited · ASX:PRN
Perenti — Perenti Global — H1 FY2020 Earnings Presentation
37 slides from Perenti's earnings presentation, Feb 25, 2020
Slide 1: FY20 Half-year results
For personal use only FY20 Half-year results 25 February 2020 Perenti Global Limited ABN 95 009 211 474
Slide 2: We are a global mining services provider
We are a global mining services provider For personal use only Our Our Our Purpose Principles Aspiration To create enduring value No shortcuts To become the and certainty Never wasteful indispensable Smarter together mining services company Walk in their shoes Enable tomorrow
Slide 3: Our businesses
For personal use only Our businesses ▪ Working in 13 countries across 5 continents ▪ Over 30 years experience, over 25 years operating internationally ▪ More than 55 projects Underground Surface Investments Mining Mining 3
Slide 4: HY20 Highlights
HY20 Highlights ▪ Revenue of $1 billion and EBIT(A) of $111 million, NPAT(A) Revenue EBIT(A) NPAT(A) down primarily due to normalised taxation expense ($m) ($m) ($m) For personal use only 103.1 111.0 ▪ Strong performance in underground mining offset by 955.9 1,006.9 64.6 60.1 unsatisfactory performa
Slide 5: People
People ▪ Unprecedented terrorist attack near the Boungou project in Workforce 8,270 7,895 For personal use only Burkina Faso resulted in a tragic loss of life. As a result the company has exited the Boungou and Bissa projects and 6,103 5,206 continues to work with affected families to provide the be
Slide 6: Safety
Safety Serious Potential Incident Frequency Rate (SPIFR) ▪ Perenti continues to make solid progress to improve workplace For personal use only safety, with multiple initiatives, including: 9.9 o Aligning Critical Risk Standards across the Group o Enhancing our HSE Management System Standards 6.1 6.0
Slide 7: Business Performance
For personal use only Business Performance
Slide 8: Group performance
Group performance Revenue EBIT(A) EBIT(A) Margin ROACE For personal use only ($m) ($m) (%) (%) 111.0 10.8 11.0 1,006.9 103.1 16.3 955.9 16.1 HY19 HY20 HY19 HY20 HY19 HY20 HY19 HY20 HY20 revenue HY20 revenue HY20 revenue (by country) (by commodity) (by project) 4% 2% Australia 1% 8% Gold 4% 2% Ghana
Slide 9: Underground performance
Underground performance Revenue EBIT(A) EBIT(A) Margin ▪ Strong operational and financial performance delivered ($m) ($m) (%) For personal use only during HY20 in both Australasia and Africa 626.2 97.7 15.6 14.2 506.7 72.2 ▪ Revenue and earnings growth driven by the ramp-up of Obuasi and increased s
Slide 10: Surface performance
Surface performance ▪ Unsatisfactory performance driven by AMS. Initiatives to address Revenue EBIT(A) EBIT(A) Margin are underway and strategic review commenced ($m) ($m) (%) For personal use only 7.4 ▪ Australian surface mining delivering in line with expectations 390.3 28.8 307.2 ▪ Revenue reduct
Slide 11: AMS H1 – H2 FY20 earnings drivers
AMS H1 – H2 FY20 earnings drivers Anticipated For personal use only H1 EBIT(A) H2 EBIT(A) Project / initiative Status contribution vs H1 EBIT(A) Boungou contract ▪ Operations ceased in H1 ▪ Negative contribution in H1, full withdrawal to benefit H2 earnings Nsuta (GMC) contract ▪ Terminated in H
Slide 12: Investments performance
Investments performance Revenue EBIT(A) EBIT(A) Margin ▪ Revenue and earnings growth driven by increased rental ($m) ($m) (%) For personal use only equipment utilisation and part sales in BTP and Supply 73.5 20.7 Direct Group as a result of strong market conditions 59.0 15.2 18.7 11.0 ▪ Other busine
Slide 13: Financials
For personal use only Financials
Slide 14: Profit and loss
For personal use only Profit and loss 6 months to 6 months to $million Change Dec18 Dec19 ▪ Revenue growth of 5.3% Revenue 955.9 1,006.9 5.3% EBITDA 200.7 222.0 10.6% ▪ EBITDA growth of 10.6% delivered with EBITDA margin maintained above 20% EBITDA margin 21.0% 22.1% 110bps ▪ EBIT(A) growth de
Slide 15: HY20 Reconciliation of statutory to underlying results
HY20 Reconciliation of statutory to underlying results $million Revenue EBITDA EBIT NPAT For personal use only Statutory Results 1,006.9 216.7 86.4 38.2 Non-cash amortisation of intangibles - - 19.3 19.3 A Statutory Results before amortisation 1,006.9 216.7 105.7 57.5 Transaction and other one-off c
Slide 16: Statutory cash conversion
Statutory cash conversion ▪ Lower cash flow conversion is due to the working For personal use only 6 months to 6 months to $million Dec18 Dec19 capital ramp up for Zone 5 and delayed payments in Underlying EBITDA 130.6 222.0 Burkina Faso and Ghana due to contract completion Share of profits from AUM
Slide 17: Statutory cash flow
For personal use only Statutory cash flow 6 months to 6 months to $million Dec18 Dec19 ▪ H1 FY19 includes only two months of Barminco following completion of acquisition on 31 October 2018 Operating cash flows before interest and tax 93.4 151.3 Net interest expense (34.6) (24.8) ▪ H1 FY19 interest c
Slide 18: Statutory balance sheet
For personal use only Statutory balance sheet $million Jun19 Dec19 ▪ Significant tangible asset backing of $2.0 billion Cash and cash equivalents 223.5 243.7 including $1.0 billion of property, plant and Receivables 399.4 407.6 equipment. Assets adjusted for the adoption of Inventories 251.1 259.1 A
Slide 19: Group debt and funding
Group debt and funding Group Debt ($million) Jun19 Dec19 Maturity profile For personal use only 600 US$350 million secured notes 497.4 497.9 500 Revolving Credit Facilities 225.1 296.5 400 Asset finance and other funding 34.9 78.8 300 Total borrowings 757.4 873.2 200 Cash and cash equivalents (223.5
Slide 20: Strategy and Outlook
For personal use only Strategy and Outlook
Slide 21: Delivering our 2025 Group Strategy
For personal use only Delivering our 2025 Group Strategy Operational Strategic Organisational Technology Financial Strategic Pillars Capacity Excellence Growth Health Driven Future Horizon 1: • Transform AMS • Brand and • Strengthen • Building the • Portfolio review Setting the marketing focus gover
Slide 22: Transform AMS
For personal use only Transform AMS ▪ Key focus of Perenti’s 2025 Group strategy is transforming AMS. Initiatives under way include targeting enhanced earnings, cash conversion, and efficient capital Operational management Excellence ▪ Challenges have been significant, but the business has responded
Slide 23: Grow organically - Pipeline of $7.0bn
Grow organically - Pipeline of $7.0bn Pipeline phasing ($bn) ▪ Currently identified pipeline of 34 projects over the For personal use only 4.0 next 36 months, predominantly located in existing 3.0 countries of operation Operational 2.0 ▪ Management estimates potential revenues of Excellence 1.0 $7.0
Slide 24: Regional & service expansion
Regional & service expansion ▪ We are focused on building on existing capabilities, having greater diversification to manage risk, and delivering more value and certainty to shareholders For personal use only ▪ Regional expansion Strategic o Target optimisation of capital and management time towards
Slide 25: Technology Driven Future
For personal use only Technology Driven Future ▪ In what the company believes is a world first, Barminco successfully operated a loader working underground, from its head office in Perth, at Technology a client mine site more than 750 kilometres away in the Goldfields Driven Future ▪ Pushing boundar
Slide 26: Portfolio review
Portfolio review ▪ Portfolio review is ongoing. We continue to assess businesses and assets For personal use only that best fit with our strategy and align with our purpose to create Financial enduring value and certainty Capacity ▪ Completed sale of the Connector drilling assets in August 2019 • Po
Slide 27: H2 FY20 Priorities and Outlook
For personal use only H2 FY20 Priorities and Outlook ▪ Ongoing operational excellence in Underground, delivering existing work and ramping up new projects ▪ Continue the Transform AMS initiative, address legacy items, deliver on the initiatives and progress strategic review ▪ Working capital managem
Slide 28: Appendices
For personal use only Appendices
Slide 29: Work in hand - $5.7bn
Work in hand - $5.7bn Work in hand Work in hand Work in hand (by ISG) For personal use only (by country) (by commodity) 3% 3%2% 1% Australia 4% 1% 2% 5% Botswana Gold 15% Underground 9% Burkina Faso 6% Ghana Copper 43% Nickel $5.7bn 12% $5.7bn Egypt 16% $5.7bn Surface Mali Coal 14% Senegal 68% 82% Z
Slide 30: Equipment
For personal use only Equipment Surface Underground Investments Mining Mining Ancillary 146 Ancillary 183 Ancillary 59 Dozers 46 Drills 155 Dozers 34 Drills 213 Loaders 88 Excavators 7 Excavators 47 Trucks 84 Loaders 14 Loaders 19 Trucks 33 Trucks 186 657 510 147 30
Slide 31: HY20 Adjustments explained
HY20 Adjustments explained For personal use only A Includes customer related intangibles and software amortisation expense that is recognised post Barminco acquisition date of 31 October 2018 B Includes transaction costs, redundancy costs and one-off expense incurred during the period C Normalising
Slide 32: HY19 Reconciliation of proforma to statutory results
HY19 Reconciliation of proforma to statutory results $million Revenue EBITDA EBIT NPAT For personal use only Statutory Results 624.4 284.1 213.7 217.0 Non-cash amortisation of intangibles - - 6.8 6.8 A Statutory Results before amortisation 624.4 284.1 220.5 223.8 50% AUMS step acquisition gains - (1
Slide 33: HY19 Adjustments explained
HY19 Adjustments explained For personal use only A Includes customer related intangibles and software amortisation expense that is recognised post Barminco acquisition date of 31 October 2018 The AUMS step acquisition gains relate to the fair value adjustment on Perenti’s existing 50% share in AUMS
Slide 34: AASB16 Lease impact
AASB16 Lease impact For personal use only Balance Sheet Profit and Loss Cash Flow Financial Metrics • Effective from 1 July 2019 the company adopted Right of Use Operating AASB16 and recognised a ‘right to use’ asset and EBITDA Net Debt Assets Cash inflow liability and the balance as at 31 December
Slide 35: Important notice and disclaimer
Important notice and disclaimer This presentation and these materials (together the “Presentation”) have been prepared by Perenti Global any particular person. You should consult your own advisors as to legal, tax, financial and related matters and For personal use only Limited ABN 95 009 211 474 (A
Slide 36: For personal use only
Expect More Ajuc ® SN jeuosied 10) e) Perenti
Slide 37: Thank you
For personal use only Thank you perentigroup.com