Sgh Limited · ASX:SGH
Sgh — Seven Group Holdings — Investor Day (May 2024)
128 slides from Sgh's investor day presentation, May 21, 2024
Slide 1: ASX announcement: Investor Presentation
21 May 2024 Company Announcements Office Australian Securities Exchange Limited 20 Bridge Street SYDNEY NSW 2000 INVESTOR PRESENTATION For personal use only Please find attached an investor presentation to be given by Mr Ryan Stokes AO, CEO and Managing Director of Seven Group Holdings, as well as S
Slide 2: Seven Group Holdings FY24 Investor Day
For personal use only Seven Group Holdings FY24 Investor Day Ryan Stokes, SGH MD & CEO FY24 Investor Presentation 1 21st May 2024
Slide 3: Group Overview – Management Team
For personal use only Group Overview – Management Team Ryan Stokes Gitanjali Bhalla Robert Cotterill Richard Richards Managing Director Chief People Officer Chief Operating Officer Chief Financial Officer & CEO Jarvas Croome Adrian Howard Murray Vitlich Vik Bansal Margaret Hall CEO WesTrac CEO WesTr
Slide 4: Group Overview - Who We Are
Group Overview - Who We Are Seven Group Holdings (ASX:SVW) • Sole CAT dealer in WA & NSW/ACT • Leading ASX Industrial business • ~50k machines in territory • +22m parts sold annually ASX100, $15 billion market cap Industrial Services • For personal use only • 15,000 employees over 5 core businesses
Slide 5: Group Overview Purpose, Objective and Values
Group Overview Purpose, Objective and Values Owner’s Mindset Courage • Commit to achieving our long-term • Empower and trust our objectives and delivery of outcomes people to recognise • Invest in businesses where the and pursue opportunities For personal use only investment opportunity exceeds the
Slide 6: Group Accountable Operating Model
Group Accountable Operating Model Owner’s Mindset driving accountable operating model Group and BU delineation Front-line focused For personal use only • Each business has its own Board, holding • Decision making is front-line focused, them accountable to deliver avoiding top-heavy structures • No c
Slide 7: Capital Allocation – Principles
Capital Allocation – Principles Investments must be: Capital Allocation Principles Oriented towards our demand thematics • Incremental investment must face into mining production, infrastructure and construction, or transitional energy For personal use only Enhance or align with Group strengths Orie
Slide 8: Sector Exposures – Mining Production
Sector Exposures – Mining Production WesTrac Key Bulk Commodity Outlook Exposure to mining production volumes though WesTrac 1000 220 980 210 • Commodity export volumes up 5.1% in the year to 960 Thermal Coal (mt) 940 200 Iron Ore (mt) March-24 (latest data release) 920 For personal use only 190 900
Slide 9: Sector Exposures – Infrastructure & Construction
Sector Exposures – Infrastructure & Construction Exposure through Coates, Boral & WesTrac Australian Infrastructure and Construction Spend ($m) 300,000 • $1.7t1 7-year infrastructure and construction 250,000 pipeline, robust and replenishing For personal use only 200,000 150,000 • 240k new homes req
Slide 10: Sector Exposures – Transitional Energy
Sector Exposures – Transitional Energy Forecast Gas Supply (from 2P) and East Coast Demand Exposure though Beach and SGH Energy 2500 • Gas/LNG critical to support energy transition 2000 Gas ideal to “firm-up” increasing grid penetration of Quantity (PJ) • For personal use only 1500 variable renewabl
Slide 11: Boral Transaction – Rationale and Update
Boral Transaction – Rationale and Update Aligned with SGH’s Core Demand Thematics SGH Benefits of 100% Boral Ownership • Exposed to infrastructure and construction (I&C) $1.7t pipeline Natural fit for Group expertise Access to Cash For personal use only • Australian focused Industrial Services busin
Slide 12: 10+ Years of Active Portfolio and Capital Management
10+ Years of Active Portfolio and Capital Management $45 History of Accretive Capital Allocation and Management Boral M&A activity remainder Capital management takeover $40 Share buyback $533m equity Drove $3bn Boral For personal use only raising @ $22.50 capital return $35 Boral 69.6% stake via $30
Slide 13: Track Record – Earnings Growth and TSR
Track Record – Earnings Growth and TSR Group EBIT History and Initial Guidance EBIT History by Business Unit 1,400 600 WesTrac EBIT Underlying EBIT Initial Guidance YoY Delta (%) +20% Coates EBIT 1,200 500 Boral EBIT +25% Linear (WesTrac EBIT) 500 1,000 Linear (Coates EBIT) For personal use only +7%
Slide 14: People and Culture
For personal use only SGH FY24 Investor Day People and Culture Gitanjali Bhalla, SGH CPO FY24 Investor Presentation 13 21st May 2024
Slide 15: Safety Performance and Initiatives
Safety Performance and Initiatives Safety First focus delivering performance improvements Rolling 12mnth LTIFR 1 Rolling 12mnth TRIFR 2 • LTIFR and TRFIR improved by 47% and 48% respectively Dec 2023 Dec 2022 Dec 2023 Dec 2022 For personal use only • Coates 50% improvement in TRIFR, Boral 53% We
Slide 16: People & Culture Strategic Context
People & Culture Strategic Context People & Culture Key Trends Legislative changes/ Persistent Skills Increased Risk and Productivity AI & Ethics ESG shortages For personal use only Compliance Wage/cost of living driving Optimise structures/ Cyber security and data Climate conscious Safety CoR and P
Slide 17: People & Culture Strategic Imperatives
People & Culture Strategic Imperatives People & Culture Focus Areas Skilled labour Performance Optimised Operating Workforce stability Capable Leadership shortages/ skill Orientated & Values Model with ER focus development For personal use only Aligned Culture • Autonomy with • International sourcin
Slide 18: People & Culture Skilled Labour Strategies
People & Culture Skilled Labour Strategies Solving for Skilled Labour Shortages & Skills of the Future Training & Sourcing Ways of Working Automation Retention Development For personal use only • International • Targeted Training • Workflow redesign • Leverage automation • Enhance EVP to recruitment
Slide 19: Group Operations and Sustainability
For personal use only SGH FY24 Investor Day Group Operations and Sustainability Robert Cotterill, SGH COO FY24 Investor Presentation 18 21st May 2024
Slide 20: Operating Leverage – The SGH Approach
Operating Leverage – The SGH Approach Operating Model The SGH Approach to Operating Leverage • Accountability focus drives cost discipline and P&L ownership For personal use only SGH Values Operating Model • Owner’s Mindset and Agility promote operating discipline Continuous improvement • Targeting
Slide 21: Sustainability – Top Issues
Sustainability – Top 10 Issues Top 10 Material Issues for the Group Safety Diversity Employment Energy & Emissions Local Environment1 For personal use only Materials Technology Indigenous Inclusion Local Communities Training 1 Previously Waste and Water, updated to accommodate Boral into SGH Sustain
Slide 22: Sustainability – Our Progress
Sustainability – Our Progress WesTrac highlights • Solar rollout continues, targeting 6 additional sites in CY24, bringing total to +30% of branches For personal use only • Waste compaction technology implemented in PDCs, reducing landfill volumes, improving centre economics and lowering environment
Slide 23: Sustainability – Solutions for Customers
Sustainability – Solutions for Customers Enabling customers to meet their ESG goals through market-leading, sustainable product offerings WesTrac Solutions For personal use only • Autonomous haulage for mining improving productivity by up to 30%, reducing customer emissions • CAT partnered with glob
Slide 24: Group Finance
For personal use only SGH FY24 Investor Day Group Finance Richard Richards, SGH CFO FY24 Investor Presentation 23 21st May 2024
Slide 25: Finance – Capital Management Priorities
For personal use only Finance – Capital Management Priorities Deleverage Funding Capacity Reinvestment Dividend Target < 2.5x Adjusted Preserve flexibility to YTD capex $460m1 Net Debt to EBITDA Maintain dividend support future Growth: $140m1 ratio and grow over time investments Maintenance: $320m1
Slide 26: Finance - Capital Management Perspectives
Finance - Capital Management Perspectives • Objective is to structure the Group’s capital base to support long-term shareholder value creation • Several competing factors determine the all-in funding cost • An optimal balance provides SGH with the ability to pursue growth opportunities, maintain and
Slide 27: Financing Model - Optimisation & Optionality
Financing Model - Optimisation & Optionality Financing optimisation and optionality WesTrac Historic EBITDA Cash Conversion (%) Group nature allows optimisation of funding/financing 180% • 160% Working example 140% For personal use only 120% WesTrac is a highly cash generative business, 100% • 80% 1
Slide 28: Finance – Beneficial use of Leverage
Finance – Beneficial use of Leverage Access to capital EBITDA, Adjusted ND and Leverage History • Strong and consistent earnings and high cash conversion provides SGH access to investment grade 3.5 5,000 funding rates For personal use only 3.1x • Debt market support demonstrated by breadth of Boral
Slide 29: Finance – Funding Model and Facility Maturity
Finance – Funding Model and Facility Maturity Funding Model SGH Debt Maturity Profile ($m) • Long-term debt at OpCo and revolving debt at HoldCo 1800 • Diversity of funding sources to ensure uninterrupted 1600 For personal use only market access to fund growth opportunities • Strong ongoing credit s
Slide 30: Finance – A Decade of Group Evolution
Finance – A Decade of Group Evolution Financing model SGH Market Capitalisation • Agile capital structure enables the Group to capture opportunities to create for equity BPT Interest For personal use only • Ability to beneficially utilise leverage SWM Interest • Balanced capital management framework
Slide 31: Group Closing Messages
For personal use only SGH FY24 Investor Day Group Closing Messages Ryan Stokes, SGH MD & CEO FY24 Investor Presentation 30 21st May 2024
Slide 32: Group – Priorities and Focus
Group – Priorities and Focus Boral acquisition • Focus on achieving 100% ownership, targeting FY24 completion For personal use only • Fully integrate business into Group, continue to drive and accelerate performance journey Operating leverage • Embed operating leverage gains in our businesses • Driv
Slide 33: WesTrac
For personal use only SGH FY24 Investor Day WesTrac Jarvas Croome, WesTrac CEO Adrian Howard, WesTrac NSW CE FY24 Investor Presentation 32 21st May 2024
Slide 34: Overview
Overview WesTrac is a world leading Caterpillar dealer EST. 1990 EST. 2004 10 branches 19 branches • Equipment dealer in WA/NSW/ACT across WA across NSW/ACT For personal use only Longevity and strength of Caterpillar relationship • 35-year partnership with close commercial alignment Branch Network S
Slide 35: Dealer Model
Dealer Model Caterpillar and WesTrac are Long-term Partners Caterpillar Competitive Advantage Dealer Uniquely Placed to Support Customers Global dealer Dealers provide Caterpillar will Equipment Component Conditioning For personal use only network with156 deep customer celebrate 100 Rebuilds – capit
Slide 36: Our Objective
Our Objective WesTrac Objective To be the customers’ first choice in equipment solutions, with a zero- harm safety culture and a focus on growth and sustained profitability For personal use only Supported by • A positive attitude to safety that drives zero-harm • Focus on mining, contracting, constr
Slide 37: Recent Performance
Recent Performance Strong Growth Continues WesTrac Revenue Split by Half 3,000 • HY24 Revenue up 27% to $2,907m Capital sales 2,500 Product support For personal use only • Increased machine sales up 23% (vs pcp) with strong 2,000 deliveries across mining and construction 1,500 1,000 • Product suppor
Slide 38: New Machine Sales Growth
New Machine Sales Growth New Machine Sales Growth • Machine sales up 23%, with strong deliveries across resources and construction For personal use only WA • Strong demand for new and replacement fleets including trucks, hydraulic mining shovels, drills, dozers, graders and wheel loaders • Significa
Slide 39: New Machine Market Leading Position
New Machine Market Leading Position Resources Industries (RI) Construction Industries (CI) • ~50% market share over last 3 years • ~35% market share over last 3 years For personal use only • Strong growth in drills and shovels • High uptake of technology *Grouping based on typical application of mac
Slide 40: Services Growth
Services Growth Highly Productive Strategy aligned with Caterpillar • Represents 64% of HY24 revenue For personal use only • Growing machine population and high utilisation supports continued growth • Aging fleet in mining with over 40% increase since FY16 with increasing R&M intensity • Rebuilds op
Slide 41: Understanding Services Trends
Understanding Services Trends WesTrac Services Revenue Growth Services Revenue Growth • Increasing parts volumes, up 6% year-on-year to For personal use only Services Revenue Services Revenue 3-Year CAGR 6-Year CAGR over 12.4 million lines in HY24 22% 12% • Average revenue per part significantly inc
Slide 42: Services Competitive Advantage
Services Competitive Advantage Distribution and Branch Network Experienced Trained Technicians Services • Extensive branch network • Extensive network of field service • Offering Cat certified “like new” For personal use only • Strategically located parts and technicians ensures fast customer machin
Slide 43: Lifecycle of a Large Mining Truck
Lifecycle of a Large Mining Truck Supporting the Circular Economy • New Truck: The 793 Mining Truck is built to last, and NEW TRUCK be rebuilt for multiple lifecycles, whilst operating in Zero Hours For personal use only harsh mine conditions for over 6,000 hours per year • 2 to 4 Years: Maintenance
Slide 44: Large Mining Truck Life Extension
For personal use only Large Mining Truck Life Extension New Frame – opportunity for significant life extension, technical updates FY24 FY24Investor Investor Presentation Presentation 43 43
Slide 45: Market Dynamics – Resource Industries
Market Dynamics – Resource Industries Iron Ore Production (Mt) Positive Iron Ore Outlook WA Last Updated - Nov 2023 1,200 • WA iron ore production continues to grow 1,000 For personal use only 800 • WesTrac customers typically low on the cost curve 600 (cost per ton advantage), providing cyclical re
Slide 46: Market Dynamics – Resource Industries
Market Dynamics – Resource Industries Coal Market Resilience Black Coal Production (Mt) NSW Last Updated - Nov 2023 • Australia remains the world’s second largest exporter of 300 thermal coal 250 For personal use only 200 • Global energy challenges support Australian coal as a 150 critical resource
Slide 47: Market Dynamics – Construction Industries
Market Dynamics – Construction Industries Population Growth Infrastructure Catchup Climate Targets Rising Costs Regional Boom Defence For personal use only Australia WA NSW • Forecast strong cycle ahead • Expansion in mining activities • Projects currently underway • Engineering Construction (EC) dr
Slide 48: Productivity Focused Investment
Productivity Focused Investment Generative AI Robotics and Automation Digital Twin Evolution For personal use only • Generative AI reduces manual • AutoStore AI and robots • CRC workshop – throughput and WIP effort and provides quicker improvements • Automated hose shop analysis • Parts and componen
Slide 49: Investing in Productivity
Investing in Productivity Five-Year Expansion Partnership with Palantir Technologies to drive Digital Transformation For personal use only Multiple Sources • Improved visibility of parts and component status • Increased collaborative decision-making • Highlighted actual and predicted bottlenecks • R
Slide 50: Investing in Capacity (WA)
Investing in Capacity (WA) Ongoing Expansion and Optimisation • Facility expansions across the state to support growth in new machines, rebuilds and parts availability For personal use only • Machine shop and Component Rebuild Centre expansion to support increased engine and drivetrain parts capacit
Slide 51: Investing in Capacity (NSW)
Investing in Capacity (NSW) Ongoing Expansion and Optimisation of Key Capacity • Investment in our facilities at Tomago (Newcastle), Mt Thorley (Hunter Valley) and Bathurst to support increasing rebuild For personal use only demand • Continued investment in reuse and reclamation capability Technolog
Slide 52: Investing in Inventory
Investing in Inventory Increased inventory investment to support customer demand • Strong pipeline of committed new machine orders For personal use only • Managing parts supply constraints as volumes increase • Support continued growth • Manage shipping delays • Support growing rebuild opportunity •
Slide 53: Investing in Our People
Investing in Our People Building a Stronger WesTrac • Ongoing domestic and international skilled-labour recruitment initiatives For personal use only • Targeted recruitment campaigns for trades and women in the warehouse with a refreshed EVP look and feel • Female diversity continues to improve, cur
Slide 54: Long-term Value Creation, Next Opportunities
Long-term Value Creation, Next Opportunities Sustainable Growth WesTrac EBIT and Margin History 600 12.0% • Focus on customer experience, operational EBIT EBIT margin 500 10.0% excellence and profitability through the cycles For personal use only 400 8.0% • Execution excellence to meet our customers
Slide 55: Autonomous Drill Solutions
Autonomous Drill Solutions Cat MineStar Command – A Key Differentiator • Delivering a 20% improvement in drilling performance For personal use only • Up to 8% reduction in fuel use • Utilisation up to 23 hours per day • Allows safe operation during severe weather events • More consistent drill hole
Slide 56: Autonomy Adoption
Autonomy Adoption Automation is a Key Enabler of Electrification Market-leading Autonomous Haulage Adoption with Cat® MineStar Command for Hauling TONNES SAFELY HAULED >5,525,000,000 For personal use only BY AUTONOMOUS TRUCKS: 580+ 9+ 0 202+ 25 CAT CMD TRUCKS ON YEARS IN LOST-TIME MILLION SITES ON T
Slide 57: Electrification and Battery Trials
Electrification and Battery Trials 793 large mining truck early learner Battery Electric Mining Truck Accelerated Development Strategy Close collaboration with customers For personal use only Current Offering WA Battery Trucks Arrive for Trials in Q3 2024 • Caterpillar’s 988K XE with electric drive
Slide 58: Electrification and Battery Trials
Electrification and Battery Trials Electrification a New Opportunity for Growth Electrified Mine of the Future • Major miners committed to a decarbonisation path • New or long mine life assets will be early adopters For personal use only • Caterpillar focused on whole of mine site solutions • Green
Slide 59: Key Messages and Outlook
Key Messages and Outlook Market Environment • Commodity volumes remain strong supported by total material For personal use only movement • Iron ore volumes continue to grow, and coal volumes remains resilient • Mining company ESG commitments driving electrification progress and future opportunities
Slide 60: Key Messages and Outlook
Key Messages and Outlook Digital Investment in automation • Digital systems investment supporting increased services volumes For personal use only and improved customer experiences • Caterpillar digital investment supporting dealer opportunities • Warehouse automation supports services growth Set fo
Slide 61: Coates
For personal use only SGH FY24 Investor Day Coates Murray Vitlich, Coates CEO FY24 Investor Presentation 60 21st May 2024
Slide 62: Continued progress towards our vision
Continued progress towards our vision Strong financial and operational performance "Our vision is to be the market leader in safe, • Revenue growth of 20.9% over past 5 years smart and sustainable For personal use only • EBIT growth of 69.5% since 2019 equipment solutions" • EBITDA cash conversion o
Slide 63: Business at a glance
Business at a glance #1 $1bn+ 3x 135 21 For personal use only leader in capital investment larger than equipment equipment the market over 5 years nearest competitor types categories 7.5k ~$1.9bn ~150 24/7 139 equipment in available branches field years of models assets nationwide support experience
Slide 64: Embedded Network across Australia
Embedded Network across Australia National reach to enable our customer service ~150 Branches nationally For personal use only Leading Infrastructure market share Largest product range and offering Equipment Hire Engineering Solutions Industrial Solutions Power & HVAC; and Technology
Slide 65: Our performance
Our performance Strong Revenue and EBIT growth FY19 - H1 FY24 Financial Performance $1,400 18.0% Revenue ($M) • Increasing market demand and strong pricing EBITDA ($M) For personal use only EBIT ($M) 17.0% performance drove H1 FY24 revenue growth $1,200 ROCE 16.0% ROCE improvement continues $1,000 1
Slide 66: Our achievements in FY24
Our achievements in FY24 Growth For personal use only • EBIT margin growth delivers record ROCE >17%. • Launch of Power & HVAC to market. • Focus on M&A, acquisition of Baxter Hire and GTH. Safety, People and Culture Competitive Operating model • Improved safety performance with TRIFR < 3.1. • Imple
Slide 67: Market context
Market context Background Short-term market dynamics (1-2 yrs) Mid-term market upside (3-5 yrs) • Federal and State Governments • Government policy environment • Strong population growth to recommitted funding of $1.7tn For personal use only supportive eg. ongoing commitment release pent up demand f
Slide 68: Market Trends and Total Construction Activity
Market Trends and Total Construction Activity Australian Infrastructure and Construction Investment Outlook Engineering and Construction market remains in an upward cycle For personal use only • 7-year project pipeline of +$1.7tn • Growth driven by Road, Rail, and Renewables, with a state-by-state d
Slide 69: Market share
Market share Market share has grown to 25.5% in FY24 Coates Estimated Market Share and Addressable Market (compared with 24.4% in FY23) 3.50 30.0% 28.3% For personal use only • M&A and Solutions will drive a greater 3.00 25.0% proportion of growth across the medium term 2.50 Addressable Rental Marke
Slide 70: International and Local Benchmarks
International and Local Benchmarks Major international players are delivering EBITDA EBITDA Margin - International Peer Comparison margins consistent with Coates’ long-term targets 50% 2020 2021 2022 2023 2020 2021 2022 2023 2021 2022 2023 2020 For personal use only Coates continues to be the market
Slide 71: Margin Improvement
Margin Improvement Coates EBIT and EBITDA Margin History Track record of strong earnings growth through margin expansion and operating cost disciplines 300 45% For personal use only 40% • EBIT CAGR of 15.1% from FY16 through to FY23 250 35% • Utilising scale capacity in network to support longer 30%
Slide 72: Operational Disciplines
Operational Disciplines Historical Price Trends 2016 - 2024 Focus on driving margin improvement, with targeted 130% projects, data driven decision making, and ongoing 125% disciplined management 120% For personal use only Over 20% margin improvement in 3 years through … 115% • Consistent, discipline
Slide 73: Growing Hire Fleet
Growing Hire Fleet 125 Our fleet strategy focuses on continual Fleet Trends, Age and Scale 2,200 improvement in the quality, availability, and 115 2,000 utilisation of the fleet For personal use only 1,800 • Optimisation of the national footprint of branch 105 1,600 assets underpins this continuous
Slide 74: Maximising our Fleet Utilisation
Maximising our Fleet Utilisation Moved beyond historical operating limitations of 2,500 Coates Fleet Balance and TU Trend 70% >60% TU and associated greenline/redline limits 60% For personal use only • Our strategic initiatives focus on maintaining TU 2,000 threshold >60% 50% • Ongoing refinement of
Slide 75: Fleet and ROCE Performance
Fleet and ROCE Performance Consistency in performance has enabled smoothing Gross capital expenditure and ROCE % of capital investment and reliability of returns $300 25% For personal use only • Long term fleet planning focuses on market demand and $250 utilisation, creating value across the network
Slide 76: Building Operating Leverage
Building Operating Leverage The ongoing investment in Project Equipped (and Project Drive) builds on our continuous improvement and drives operating leverage Enables Achieve scale For personal use only • Replaces non-productive sites with scale “hubs,” benchmarking by leveraging enabling R&M improve
Slide 77: M&A activity
M&A activity Successfully completed two acquisitions in FY24: Baxter Hire and GTH Equipment For personal use only Strategic • Actively exploring value creation through smart M&A criteria (i) strategic, (ii) financial or (iii) capability enhancing. • Strategic fit covers extension of network, new cus
Slide 78: Strategy moving into FY25
Strategy moving into FY25 Safety, people and culture Differentiated customer experience • Evolve Safety First and risk culture • Accelerate Customer360 to embed CX • Focus on performance and customer principles and standards For personal use only centricity • Drive Digital Customer Experience • Grow
Slide 79: Focus on “cross cutting” themes
Focus on “cross cutting” themes Digital transformation Standardisation For personal use only Strategic priorities Strategic priorities • Integrate digital technologies across • Standardisation of systems and processes across • Step change in digital customer experience core hire and internal busines
Slide 80: Solutions Journey
Solutions Journey Solutions has experienced For personal use only FY21 Team25 strategy To accelerate growth of focused on the Solutions we… growth acceleration of solutions • Rebranded from ‘Coates • H1 FY24 Solutions • ‘Solutions’ includes Hire’ to ‘Coates’. Revenue growth of 18.9%. Engineering Sol
Slide 81: R&M Productivity Performance
R&M Productivity Performance Continuous improvement in R&M productivity R&M spend has reduced over past 5 years, with further opportunities to improve the following areas: For personal use only • Fleet quality and reliability • Pre-emptive servicing to enhance customer experience • Efficiencies in j
Slide 82: Project Drive R&M Priorities
Project Drive R&M Priorities Project Drive - established in FY24 and focusing on the following key areas: • Workshop Design and capacity For personal use only • Standardised systems and processes • R&M specialists and competent persons • Leading technology and real-time data • Parts and inventory ma
Slide 83: Closing Messages
Closing Messages Disciplined execution of our strategy • Focused on revenue growth and continuous improvement • Driving higher margins through cost disciplines and operating leverage For personal use only • Supported by digital transformation, standardisation, R&M improvement, and ongoing optimisati
Slide 84: Boral
For personal use only SGH FY24 Investor Day Boral Vik Bansal, Boral CEO FY24 Investor Presentation 83 21st May 2024
Slide 85: Boral - Agenda
Boral - Agenda ꟷ Our business For personal use only ꟷ PEMAF framework People Environment Markets Assets Financials ꟷ Property ꟷ Conclusion FY24 FY24Investor Investor Presentation Presentation 84 84
Slide 86: Our Business - Scale and Scope
Our Business - Scale and Scope Australia’s largest integrated construction materials company with a rich legacy and significant social contribution • A rich legacy founded in 1946 For personal use only ~360 operating sites1 • Integrated network provides competitive advantage • Strategy to strengthen
Slide 87: Our Business - Integrated Network
Our Business - Integrated Network Valuable upstream and downstream operations with integration being the key for value creation • ~50% of Upstream volumes supplied to For personal use only downstream operations • >90% of Downstream businesses source their raw material inputs internally • Vertical in
Slide 88: Our Business: Industry Value Drivers
Our Business: Industry Value Drivers Strengthening key value drivers will create the platform for business and earnings growth Strategy Alignment Opportunity P E M A F • Degree of vertical integration between upstream and downstream assets within a region For personal use only Integrated network • S
Slide 89: PEMAF Framework
PEMAF Framework PEMAF framework (People, Environment, Markets, Assets, Financial) supports standardisation and simplification; shapes strategic priorities For personal use only People Environment Financials Markets Assets (outcomes) FY24 FY24Investor Investor Presentation Presentation 88 88
Slide 90: People
People Ongoing, relentless focus on safety, leadership and culture Our values, culture and engagement Safety Performance For personal use only Total Recordable Injury Frequency Rate (TRIFR) • Focused safety programs driving significant performance 13.7 outcomes (TRIFR improved from 13.7 in FY22 to 4
Slide 91: Environment
Environment Progress made on decarbonisation and other environmental initiatives • Renewable energy: solar Power Purchase Agreement (PPA) Scope 1 and 2 emissions (million tonnes CO2-e)1 For personal use only providing up to 60 GWh p.a. of renewable electricity from FY25 10% • Alternative fuel progra
Slide 92: Markets - Volume
Markets - Volume Volumes flat to slightly up Boral revenue by segment Boral external volume trends For personal use only FY21 – 1H24 (% of total) +2% -2% +31% Flat -3% +7% 2 2 2 2 Other 11 12 13 15 Alterations & Additions 9 1H20 000’s cubic metres 8 7 Multi-residential 8 11 11 10 000’s tonnes 1H20 0
Slide 93: Markets - Price and Costs
Markets - Price and Costs Price realisation critical to offset real cost increases PRICE BORAL price trends1 +9% +3% +9% +5% flat +6% • Continued price realisation in 1H24 For personal use only in high cost environment • Pricing discipline remains high priority 1H22 $ / cubic metre • Aligning sales
Slide 94: Markets - Long-run Concrete Demand
Markets - Long-run Concrete Demand Concrete volumes in Australia grew at a rate of 2.3% p.a. during 1979-2023 Long run premixed concrete demand 000s cubic metres For personal use only Source: Macromonitor and Boral analysis FY24 FY24Investor Investor Presentation Presentation 93 93
Slide 95: Markets - Customer ‘Call-to-Cash’
Markets - Customer ‘Call-to-Cash’ Significant opportunity to improve call-to-cash process from systemising internal processes Systemising business processes will improve customer service – data, complexity, manual workarounds, user experience For personal use only Over 20% of customer disputes are d
Slide 96: Markets - Customer ‘Call-to-Cash’
Markets - Customer ‘Call-to-Cash’ Ongoing focus on customer journey, process standardisation and simplification Customer journey focus areas (short term focus) For personal use only • Sustain GOS performance above target >85% Grade of Service • Configure price quote (CPQ) re-platform • Reduce manual
Slide 97: Markets
Markets Focused approach to market segmentation is improving volumes, price, cost and service levels For personal use only • Simplifying and improving customer experience and service levels • Ongoing rigour in pricing, as foundation to continued margin expansion • Modernising go-to-market and custom
Slide 98: Assets - Integrated Network
Assets - Integrated Network Our prized infrastructure assets create strategic moat • Unique upstream assets in key markets/segments – 76 quarries, Cement manufacturing and Grinding For personal use only • Hard to find and hard to replicate assets • Assets with an extended lifespan, by converting res
Slide 99: Assets – Strategic Acquisition of Booyal Quarries
Assets – Strategic Acquisition of Booyal Quarries Secures 20+ years’ supply of quarry materials, for third-party customers and Boral operations For personal use only • Acquisition completed May 2024 • 75-hectare hard rock quarry located 60km south-west of Bundaberg, Queensland • A high-quality and w
Slide 100: Assets - Recycling
Assets - Recycling Targeting 4mt + of Recycling volumes p.a., representing ~10%+ of quarry volumes • Boral has had a Construction & Demolition (C&D) recycling business in NSW and Victoria for 10+ years For personal use only • Provides complementary capabilities, assets and operations to Boral’s broa
Slide 101: Assets - Recycling
Assets - Recycling Growth initiatives expected to drive strong increase in earnings Footprint and growth plans Growth plan has three streams: For personal use only 1. Internalising Boral’s concrete and asphalt waste 2. Expanding C&D business to create national geographic footprint Expanding with Sta
Slide 102: Assets
Assets Upgrading/extending upstream and downstream positions to maintain leadership Cement Quarries Geelong VIC cement facility operational Dunmore hard rock reserves acquisition NSW For personal use only Tarong QLD fly ash facility operational Hillview sand acquisition VIC Berrima NSW chlorine bypa
Slide 103: Assets
Assets Integrated network of prized upstream and downstream assets underpin competitive advantage For personal use only • Optimising network to ensure Boral retains competitive advantage • SCRO (safe, compliant, reliable, optimised) fixed and mobile assets: o optimising R&M spend through tightened c
Slide 104: Financial Highlights
Financial Highlights 1H24 highlights: six months ended 31 December 20231 Revenue EBITDA EBITDA margin ▲51.8% ▲470bps For personal use only ▲9.4% 1H24 $1,840m 1H24 $314m 1H24 17.0% 1H23 $1,681m 1H23 $207m 1H23 12.3% EBIT EBIT margin ROFE2 ▲110.9% ▲520bps ▲960bps 1H24 $201m 1H24 10.9% 1H24 18.1% 1H23
Slide 105: Financial Performance
Financial Performance Substantial improvements across all key financial metrics Net revenue ($m) EBITDA1 ($m) EBIT1 ($m) 1,840 314 201 For personal use only 1,681 1,638 258 136 117 1,479 1,500 1,839 Property 229 Property 200 313 95 83 1,638 1,681 207 193 1,479 1,500 230 107 100 95 212 207 78 188 1H2
Slide 106: Capital Expenditure
Capital Expenditure Capital allocation being tightly managed Capital expenditure and Depreciation & Amortisation1 ($m) 1H24 capex below depreciation & amortisation (D&A), For personal use only Capex D&A Capex/Rev % supporting improved cash flows and cash conversion. 350 12.0% 10.6% Key projects
Slide 107: Capital Expenditure - Catch-up Investment
Capital Expenditure - Catch-up Investment $300m-$400m of catch-up capex over next four years Category Rationale Investment focus Expected outcome Heavy Mobile Equipment (HME) For personal use only • Replacing old, sub-optimal assets • Fleet age is relatively high due to under-investment • Reliabilit
Slide 108: Property Strategy
Property Strategy Fixed asset lifecycle approach to Boral’s large portfolio of surplus property Construction Materials segment Property segment For personal use only Includes earnings from optimisation initiatives on Earnings from repurposing of property that will never land that is or will possibly
Slide 109: Key Surplus Property Assets
Key Surplus Property Assets Multiple sites either contracted or in stages of development Property Total area (ha) Description / status For personal use only Development agreement in place with Mirvac – residential Donnybrook, VIC 338 rezoning complete Development agreement in place with Mirvac – res
Slide 110: Property - Deer Park, VIC
Property - Deer Park, VIC Transforming 450ha+ at Deer Park into world class logistics precinct1 Working with LOGOS on a potential industrial For personal use only • logistics precinct - Ravenhall Logistics Park • Unique site, 4x the size of Melbourne CBD, located in heart of West Melbourne • Strateg
Slide 111: Boral – Closing Messages
Boral – Closing Messages Significant progress on ‘good-to-great’ journey, with growth opportunities remaining For personal use only • Solid 1H24 financial performance; substantial improvement in revenue, earnings, margins and operating cash flow • Strong balance sheet position with significant finan
Slide 112: Beach Energy
For personal use only SGH FY24 Investor Day Beach Energy Brett Woods, MD & CEO FY24 Investor Presentation 111 21st May 2024
Slide 113: Progressing near-term objectives
Progressing near-term objectives Organic production Gas-supported Strategic review For personal use only growth transition underway Enterprise development Climate Transition Action Plan Deliver cost-out and efficiencies Targeting first gas in Q4 FY24 Inaugural plan released 2 April 2024
Slide 114: Strategic review outcomes to be communicated in Q4 FY24
Strategic review outcomes to be communicated in Q4 FY24 Objectives Progress • New asset-based organisational structure Organisational New organisational structure in place Fit-for-purpose, high performance, strict For personal use only model • Executive appointments in progress accountability •
Slide 115: New onshore / offshore asset structure
New onshore / offshore asset structure Managing Director & CEO Brett Woods For personal use only EVP EVP Onshore EVP Offshore EVP ESG Chief Financial EVP Strategy EVP People Exploration EVP Technical Assets Assets & Legal Officer & Commercial & Culture & Subsurface Recruitment Anne-Marie Recruitment
Slide 116: Perth Basin
Perth Basin Waitsia Stage 2 cost and schedule review complete First Waitsia LNG cargo lifted in December 20231; For personal use only targeting second cargo in Q4 FY24 Waitsia Stage 2 cost and schedule review complete First gas targeted early-CY2025 $600 - 650 million capital expenditure forecast (n
Slide 117: Otway Basin
Otway Basin New arrangements deliver higher volumes and prices >50% increase in take-or-pay volumes for Base GSA1, For personal use only price review delivered increased pricing New Enterprise GSA contracted at competitive market pricing Higher take-or-pay protects revenue from extended downside nom
Slide 118: Headline financial metrics
Headline financial metrics FY23 FY24 FY24 FY24 YTD1 production $ million (unless otherwise indicated) Full Year YTD1 Guidance For personal use only Production (MMboe) 19.5 13.3 18.0 – 18.5 Sales volumes (MMboe) 20.7 15.9 Liquids Oil Sales revenue 1,617 1,333 32% 20% East Coast gas Average realised p
Slide 119: Targeting a 35% equity emissions intensity reduction by 2030
Targeting a 35% equity emissions intensity reduction by 2030 CCS to support sustainable growth and emissions reduction Moomba CCS CCS injection schematic For personal use only First CO2 injection in mid-CY2024 targeted Project 85% complete1 Targeting up to 1.7 Mtpa CO2 storage (>0.5 Mtpa net t
Slide 120: Beach Energy value proposition
Beach Energy value proposition Strategic review to re-set base business For personal use only Supplying key markets Strong financial position Cash flows for growth and dividends Multiple organic growth opportunities CCS to support emissions reduction FY24 FY24Investor Investor Presentati
Slide 121: SGH Energy, Media & Closing
For personal use only SGH FY24 Investor Day SGH Energy, Media & Closing Ryan Stokes, SGH MD & CEO FY24 Investor Presentation 120 21st May 2024
Slide 122: SGH Energy – Highlights
SGH Energy – Highlights Crux gas field • LNG backfill asset located in Browse basin, offshore WA For personal use only • Developed to backfill Shell-operated Prelude FLNG facility • Prelude operating at nameplate capacity, demonstrating increasing operational reliability • Project construction ongoi
Slide 123: SGH Energy – Highlights
SGH Energy – Highlights Longtom gas field Victorian Gas Demand vs Maximum Temperature 1200 2022 2023 2024 to 9th May • Domestic gas asset located in Gippsland basin, 1100 1000 offshore Victoria Gas Demand (TJ/d) 900 For personal use only • Independently verified resources over 80PJ 800 700 • Connect
Slide 124: Seven West Media – Highlights
Seven West Media – Highlights Australia’s #1 total TV network • Market-leading presence across total television, publishing and digital Leading and growing market share of advertising revenue Seven West Media For personal use only • at 41%, up 1.7% to Dec-23 • WAN: fastest growing cross platform aud
Slide 125: Closing Messages and Q&A
Closing Messages and Q&A Market leading businesses, market leading returns SGH, ASX100 & ASX Industrials 2-Year TSR (%) SGH has delivered: 140 120 100 96% TSR 22% 3-year EBIT CAGR, 14% 10-year EBIT CAGR For personal use only PE Ratio (NTM) • 80 60 40 • Top decile TSR over 1, 3 and 10-year horizons 2
Slide 126: Closing Messages and Q&A
Closing Messages and Q&A FY24 Group focus • Embed and accelerate Boral performance gains under full FY24 Group Guidance Evolution SGH control For personal use only • De-leverage post-Boral through strong operating cash flows FY23 Result “High single-digit EBIT growth in FY24” • Disciplined execution
Slide 127: Appendix – Businesses & Markets
Appendix – Businesses & Markets Industrials Industrials Industrials Energy Media For personal use only 100% 100% 95%1 Beach 30% SGHE 100% 40% WesTrac is one of the largest Coates is Australia’s largest Boral is Australia’s largest Beach Energy is a leading mid- Seven West Media is a leading CAT® dea
Slide 128: 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