Speedy Hire Plc · LSE:SDY
Speedy Hire — FY2012 Earnings Presentation
41 slides from Speedy Hire's earnings presentation, 2012
Slide 1: Measured progress
Measured progress Speedy Hire Plc Annual Results For the year ended 31 March 2012 1
Slide 2: Legal disclaimer
Legal disclaimer This presentation has been prepared to inform investment professionals about Speedy Hire Plc (“Speedy”) and does not constitute an offer of securities or otherwise constitute an invitation or inducement to any person to underwrite, subscribe for or otherwise acquire securities in Sp
Slide 3: Welcome
Welcome Ishbel Macpherson Chairman 3
Slide 4: Results presentation agenda
Results presentation Agenda • Financial Performance – Lynn Krige • Measured Progress Progress, Clear Vision – Steve Corcoran • Question and Answer Session – Ishbel Macpherson 4
Slide 5: 2012 – A year of measured progress
2012 – A year of measured progress • ROCE* increased from 2.3% to 6.0%, reflecting improvements in operational efficiency, enhanced margin and capital performance • EPS* increased from (0.02p) to 1.72p • Gross hire fleet investment of £64.2m (2011: £41.8m) • Net debt reduced byy £37.6m to £76.3m,, w
Slide 6: Financial performance
Financial performance Lynn Krige Group Finance Director 6
Slide 7: Summary of 2012 results
Summary of 2012 results Year ended Year ended March 2012 March 2011 Revenue £326.4m £313.0m Continuing* * EBITDA £62.6m £58.3m % margin 19.2% 18.6% EBITA £19.7m £12.3m % margin 6 0% 6.0% 3 9% 3.9% Profit before tax* £12.4m £(0.7)m Earnings per share* 1.72p (0.02)p Group Dividend per share 0 46p 0.46
Slide 8: Return on capital employed
Return on capital employed 500 20% 450 18% 400 16% 350 14% 300 12% £m 250 10% 200 8% 150 6% 100 4% 50 2% ‐ ‐ FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 * Capital employed (average) (LHS) EBITA margin(RHS) ROCE (RHS) 8 * pre amortisation and exceptional costs
Slide 9: Continuing P&L bridge
Continuing P&L bridge Revenue 340 330 2.7 £m m 320 3 0 10 7 10.7 310 326.4 313.0 300 65 EBITDA** 63 61 2.1 £m 59 2.2 62.6 57 58.3 55 20 1.2 18 EBIITA* 16 6.2 £m m 14 19 7 19.7 12 10 12.3 8 Continuing FY11 UK & Ireland Intern'l International Corporate costs Continuing FY12 * pre exceptional costs UK
Slide 10: UK & Ireland
UK & Ireland Year ended Year ended EBITDA margin March 2012 March 2011 Revenue £315.3m £304.6m 20.8% 20.8% EBITDA £65.7m £63.5m % margin 20 8% 20.8% 20 8% 20.8% EBITA £27.9m £21.7m FY11 FY12 % margin 8.8% 7.1% EBITA margin • Pricing – improvement impro ement in price • Products – improved availabili
Slide 11: International
International Year ended Year ended EBITDA margin March 2012 March 2011 Revenue £11.1m £8.4m 21.1% EBITDA £2.5m £0.4m 4.8% % margin 21 1% 21.1% 4 8% 4.8% EBITA (£0.7m) (£1.9m) FY11 FY12 % margin (6.4%) (22.6%) EBITA margin (6.4%) • Second full year of trading • EBITA profit in H2 (22.6%) • Good pipe
Slide 12: Strengthening financial position
Strengthening financial position Year ended Year ended March 2012 March 2011 Property, plant & equipment £241.0m £219.9m N t debt Net d bt £76 3 £76.3m £113 9 £113.9m Net debt: EBITDA* 1.2x 1.8x Gearing 33.2% 49.7% Return on capital employed 6.0% 2.3% Net tangible asset value per share 33p 33p Share
Slide 13: Hire fleet investment
Hire fleet investment 100 250% 90 80 200% Cash flow 2012 2011 £m £m 70 UK capex 54.5 36.8 60 150% International 9.7 5.0 £m 50 capex 40 100% 64.2 41.8 30 Proceeds from (19.4) (16.2) disposals 20 50% Net fleet 44.8 25.6 investment 10 ‐ ‐ FY08 FY09 FY10 FY11 FY12 Fleet capex (gross) (LHS) Fleet depreci
Slide 14: Debt structure & headroom
Debt structure & headroom Book value Borrowing base Borrowings Total facility Total £259.5m Receivables 85% of eligible UK & Ireland £81.6m Overdraft debtors £5.0m Total £152.6m Plant & machinery £41.7m £69.3m 85% of eligible headroom ABL facility UK & Ireland plant & £215.0m machinery £177.9m £110.
Slide 15: Movement in net debt
Self funded investment 120 8.9 ovement in net debt (£m) 100 19.4 5.2 33.4 6.6 57.0 80 64.2 60 113.9 12.7 - 40 76.3 Mo 20 - 15
Slide 16: Financial summary
Financial summary • Continued net debt reduction • Reinvestment out of self generated cash • Strong balance sheet • Well positioned for 2013 16
Slide 17: Measured progress – clear vision
Measured progress – clear vision Steve Corcoran Chief Executive 17
Slide 18: Measured progress
Measured progress • Reduced costs • Increased efficiency • Improved customer service • Innovated products and systems Clear Vision • Targeted opportunities • Right customer, right markets • Extend value-add activities 18
Slide 19: Cost reduction
Cost reduction Number of employees Number of vehicles 6,000 3,500 5,109 2,891 5,000 4,692 3,000 4,267 2,543 4 124 4,124 3,844 2,500 2,221 4,000 2,055 1,919 2,000 3,000 1,500 2,000 1 000 1,000 1,000 500 ‐ ‐ FY08 FY09 FY10 FY11 FY12 FY08 FY09 FY10 FY11 FY12 Number of depots Revenue and EBITA margin %
Slide 20: Improved efficiency – well advanced
Improved efficiency – well advanced Revenue* per depot Revenue* per employee 1.4 100 94.0 87.7 88.9 1.1 1.2 85.1 1.2 80.8 81.0 10 1.0 76 3 76.3 77 0 77.0 80 1.0 0.9 0.9 0.9 0.8 60 0.8 0.6 £m £000 0.6 40 04 0.4 0.2 20 ‐ ‐ FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12
Slide 21: Focus on the right markets
Focus on the right markets Sector variation 2010-11 construction market Facilities Retail & Leisure Management 20% 2% 2% Construction 17.8 Infrastructure 33% 4% Finishing Trades 15% UK 8% Infrastructure Projects 10% 59% 7.6 Sole Traders Other Construction 14% Projects 5% 3.3 3.3 4.2 41% Other Busine
Slide 22: Focus on the right customers
Focus on the right customers Market share of Top 100 construction firms1 Revenue from Top 100 construction firms2 50% of CN Top 20 CN Top 100 Building and 32% 26% construction Others revenue Other Clients CN Top 21‐ 74% 100 18% Forecast growth of Top 100 construction firms1 £90 79 • The Construction
Slide 23: Focus on the right offering
Focus on the right offering Hire alone does not fully remove risk Full Asset Management = Full Risk Management If a machine is hired and given to someone • Capital risk reduction Training • Operating risk reduction unqualified to use it, at best there is a loss of productivity or damage to property
Slide 24: The focus is working
The focus is working Major contractor relationship evolution £12m+ 30 x Revenue over 7 years Speedy appointed as strategic partner Revenue Technology benefits delivered 4.8% 4 8% margin improvement on activity serviced Speedy employees implanted on customer site c. £400k FY04 FY08 FY10 FY12 Appointe
Slide 25: The benefit for customers
The benefit for customers S Speedy d NPS Score S Detractors Passive Promoters NPS Score 18.5% 33.5% 48.0% 29.5% Competitor NPS Score Detractors Passive Promoters NPS Score 22.9% 43.2% 33.9% 11.0% 25 Source: Management March 2012-Service & Customer feedback ; NPS Score - B2B International 2012 custom
Slide 26: Benefits for Speedy
Benefits for Speedy EBITA* margin EBITDA* margin ROCE* 16 29 28.2 16 15.2 13.7 14 27 12 12 10.9 25 10 23 25.9 8 8 % % % 10.2 6.0 21 6.0 19.4 19.2 6 4 2.3 19 4 20 2.0 2.3 2.3 17 17.9 2 ‐ 15 ‐ FY08 FY09 FY10 FY11 FY12 FY08 FY09 FY10 FY11 FY12 FY08 FY09 FY10 FY11 FY12 Net debt Net debt/EBITDA* Net debt
Slide 27: Reconfiguration benefits; case study
Reconfiguration benefits; case study • 4 depots consolidated into a Superstore • If property leases have not expired; OLP booked – circa £200k • Investment capex on Superstore – circa £200k 1st year’s trading review: Superstore • Turnover – benefit from cross selling • Reduction in direct costs and
Slide 28: 5 year network reconfiguration programme
5 year network reconfiguration programme Multi Service Centre (2 to 12) Multi •Regional hub Service •Centralised logistics & asset management •Full service offering inc. TRIM & training Centre Express •Centralised , enhanced repair facilities Superstore (16 to 50) •Area hub & logistics Superstore •“
Slide 29: Measured progress
Measured progress • Financial strength Strong balance sheet Significant asset backing Substantial headroom • Operational efficiency Revenue per depot at highest level Revenue per employee returning to pre-downturn levels Network reconfiguration driving improved returns • Solid growth prospects Major
Slide 30: Questions
Questions Ishbel Macpherson Chairman 30
Slide 31: Appendix
“Wikeay Appendix
Slide 32: Reconciliation of continuing trading
Reconciliation of continuing trading Year ended Discontinued Continuing* Year ended Discontinued Continuing* March 2012 adjustment March 2012 March 2011 adjustment March 2011 Speedy Hire Plc Revenue £329.3m £(2.9)m £326.4m £354.2m £(41.2)m £313.0m EBITDA** £63.2m £(0.6)m £62.6m £63.4m £(5.1)m £58.3m
Slide 33: Segmental analysis
Segmental analysis Year ended Year ended March 2012 March 2011 Revenue UK & Ireland Asset Services £318.2m £345.8m International Asset Services £11.1m £8.4m £329.4m £354.2m EBITDA* UK & Ireland Asset Services £66.3m £68.6m International Asset Services £2 5m £2.5m £0 4m £0.4m Central £(5.6)m £(5.6)m
Slide 34: Property, plant & equipment
Property, plant & equipment Year ended Year ended March 2012 March 2011 UK hire equipment £180.8m £167.6m Ireland hire equipment £5.0m £4.1m International hire equipment £24.5m £14.0m g Land & buildings £11.4m £11.4m Other £19.3m £22.8m £241.0m £219.9m 34
Slide 35: Covenants
Covenants Covenant threshold Position at Methodology 31 March 2012 Leverage Not greater than 1.2x Total net debt to EBITDA* 2.25x Fixed charge cover Not less than 2.1x 3.0x EBITDAR* to Rent Adjusted Finance Charges (“RAFR”) Where: EBITDAR* is EBITDA* before operating lease charges RAFR is net financ
Slide 36: Yield management (YoY change UK)
Yield management (YoY change UK) +6% Year on year change in hire +10% Volume revenue Volumes down with +0% focus on quality Q1 FY12 Q2 FY12 Q3 FY13 Q4 FY13 FY 12 revenue +5% ‐10% +10% Product mix +4% Minimal changes in +0% product d mix (other ( h Q1 FY12 Q2 FY12 Q3 FY13 Q4 FY13 FY 12 than seasonal
Slide 37: Driving asset utilisation
Driving asset utilisation Change in utilisation vs April 2010 30% 25% 20% 15% 10% 5% 0% ‐5% 37
Slide 38: SME contractors facing difficult times
SME contractors facing difficult times SME workload declined for the 16th consecutive quarter... • At –21% the SME workload balance fell to its • Overall, employment prospects have been subdued lowest level since 2010 Q1, when it reached –30%. among SME contractors since late 2007, with firms Source
Slide 39: Contribution to growth by 2015
Contribution to growth by 2015 £6 £4.0 £4 £3.6 £2.8 £2 4 £2.4 £2 £1.2 £0.8 £0.5 £bn £0 -£1.0 ‐£2 ‐£4 ‐£6 -£6.0 ‐£8 Private P i t Private h i Public housing P bli Public housing h i Public PPublic bli non‐ non- Commercial C i l Industrial I d ti l Infrastructure I f t t New N Work W k R&M T t l Total
Slide 40: Continued innovation VB-9
Continued innovation VB-9 • Doubling the hire rate • 87% reduction in fuels costs overall • 18% savings to the customer Traditional T diti l Light Li ht Running Costs VT1-Eco VB-9 VB9 LED Tower (VT1) Example rate per month £320 £400 £600 £640 Running cost per month (30 Days) £534 £358 £134 £67 Total
Slide 41: Thank you
Thank you 41