Austin Engineering Limited · ASX:ANG
Austin Engineering — HY15 Earnings Presentation
21 slides from Austin Engineering's earnings presentation, February 2015
Slide 1: Austin Engineering Ltd HY15 Results Presentation
Austin Engineering Ltd HY15 Results Presentation
Slide 2: Key Items
Key Items • Revenue for the half-year was 4% lower than the PCP. However, normalised EBITDA was 10% higher • $40.9m of non-cash impairment charges were booked, reflecting subdued market conditions • Operating cash flow improved $8.4m reflecting operational improvements and stock reduction initiative
Slide 3: HY15 Financial Performance
HY15 Financial Performance 1H 13/14 1H 14/15 Half on Half $m $m % Change Sales 106.1 102.1 -4% Gross Margin % 35% 37% 6% Normalised EBITDA 8.2 9.0 10% Depreciation (5.1) (5.2) 1% Amortisation / Impairment (0.4) (41.4) 10246% Interest Income 0.0 1.4 100% Interest Expense (1.5) (3.0) 98% Tax (Expense)
Slide 4: HY15 Financial Performance
HY15 Financial Performance • A flat normalised Revenue and EBITDA result was achieved versus the PCP • GM% improving to 37% was a pleasing result and results from efficiencies gained despite pressure on price • A reduction in Net Debt of $3m as $5m repayments and $4m of funds released from Escrow, w
Slide 5: Reconciliation of Normalised EBITDA
Reconciliation of Normalised EBITDA EBITDA NPAT $m $m Reported Results (35.3) (41.6) Restructuring Costs 1.0 0.7 Impairment Charges 40.9 40.9 Legal costs * 2.5 1.6 Underlying Results 9.0 1.6 * Legal costs associated with defending patent infringement claims against Westech in the USA. The case is cu
Slide 6: Net Debt
Net Debt • The Net Debt result excluding fx translation was a reduction to $82.6m over the last 6 months. $US adverse movements affected this negatively by $4.7m to arrive at a final value of $87.3m • Funds released from Escrow are funds previously tied up in a property deal which we have chosen not
Slide 7: Working Capital
Working Capital $m Working Capital at 30 June 2014 33.9 Receivables 3.3 Payables (6.3) Inventories (7.9) Working Capital at 31 December 2014 23.0 • $11m (32%) reduction in working capital since June • Inventories have reduced due to the stock reduction program as well as write-downs in Peru • Positi
Slide 8: Debt Reduction Strategy
Debt Reduction Strategy • The Company has negotiated new covenants to commence on 31 March 2015 • The variation reflects expected trading over the next 12 months and the agreed debt reduction strategy as foreshadowed at the AGM • The agreed covenants reflect the Company strategy and cover the follow
Slide 9: Safety
Safety • LTFIR reduced from 5.9 to 3.5 on the PCP
Slide 10: Segment Results
Segment Results 1H 13/14 1H 14/15 Half on Half $m $m % Change Revenue: Australia 61.8 58.8 -5% Americas 42.8 37.5 -12% Middle East 0.4 0.0 -100% Asia (Indonesia) 1.4 5.8 320% 106.4 102.1 -4% Normalised EBITDA*: Australia 3.6 3.4 -5% Americas 4.7 3.8 -18% Middle East 0.0 0.0 -100% Asia (Indonesia) 0.
Slide 11: Operational Review
Operational Review Australia • The previous 12 month cycle formerly reported has continued i.e. – Increases in production levels – Decreases in capital for new or replacement equipment – Increases in OPEX maintenance of equipment • Expenditure from Iron Ore miners is still occurring, although at red
Slide 12: Operational Review
Operational Review Australia • Despite the above Austin have been successful on a number of contracts including; – COR Cooling was successful with 2 long term contracts for service and supply of parts in the Pilbara and Hunter Valley – Mackay has signed a contract as a preferred supplier for the rep
Slide 13: Operational Review
Operational Review Americas • The market in South America has very much reflected the Australian market with decreases in expenditure while attempting to maintain/increase production levels • The La Negra operation has suffered with lack of throughput, although the Collahausi contract announced last
Slide 14: Operational Review
Operational Review Americas • Servigrut produced an excellent result for the half and has ongoing long term contracts in place • Westech (USA) on a normalised basis (excluding legal costs) produced a fair result in the current market • Westech has sold its first products into the Mexican market and
Slide 15: Operational Review
Operational Review Americas • The Colombian operation reported a loss for the first half however, from December 2014 the operation has been profitable with the Prodeco site maintenance contracts now contributing • The operation was also successful in signing a new long term contract for port service
Slide 16: Operational Review
Operational Review Asia • The Indonesian operation produced a result above budget for the half-year • Ongoing contracts until July 2015, place the operation in a strong position • Recent contract win for supply of equipment in Tanzania • Expect a record result for the year
Slide 17: Outlook
Outlook • Austin enters the second half of FY15 with forward workload higher than the past 3 PCP’s • Tenders and quoting opportunities are also at high levels, and should the current conversion rate continue, the company is expecting an improved result in the second half • The Company has recently w
Slide 18: Outlook
Outlook • Maintenance is becoming a very important part of the Companies base revenue (which leads to increased work as mentioned above) • Austin will continue to focus on our strategic model of design, manufacture and service • Austin Engineering strategic model of products and locations is still s
Slide 19: Austin's Principal Products
Austin’s Principal Products Off-highway Buckets Water tanks Service modules dump truck bodies Tyre handlers Ancillary Industrial cooling and heat attachments transfer systems (COR Cooling)
Slide 20: Austin Principal Services
Austin Principal Services Equipment Specialised Painting and repair and fabrication blasting maintenance Specialised On-site maintenance and shutdown machining and services (Pilbara Hire) line boring
Slide 21: Austin Brands
Austin Brands The Austin Engineering brand encompasses design and manufacture of mining and earthmoving equipment, along with the provision of support services, from four Australian operations (Brisbane, Hunter Valley, Mackay, Perth), an Indonesian operation and Peruvian operation. The Austin Ingeni