Emeco Holdings Limited · ASX:EHL
Emeco — H1 2010 Earnings Presentation
21 slides from Emeco's earnings presentation, Feb 24, 2010
Slide 1: 2010 Interim Results
For personal use only 2010 IInterim i RResults l Keith Gordon CEO & Managing Director Stephen Gobby CFO
Slide 2: Presentation Overview
Presentation Overview For personal use only Highlights Financials Strategy & Outlook Question & Answer 2
Slide 3: Highlights
For personal use only Hi hli ht Highlights Keith Gordon CEO & Managing Director 3
Slide 4: Overview
Overview For personal use only 1H recovery… Ramp‐up in customer activity slower than anticipated Utilisation hours per machine lower than historical average Decisive D i i action ti ttaken k tto reposition iti b business… i European business to be closed Restructure of North American bus
Slide 5: Rental Fleet Utilisation
Rental Fleet Utilisation For personal use only Asset utilisation recovering through 1H... 100 % 95 % Recovery underway however slower than 90 % anticipated 85 % 83% Avg 31 Dec 78% Avg 80 % Larger equipment for blue chip mining has been 75 % 70% Avg redeployed faster than smaller mining and civil
Slide 6: Leveraged to the mining cycle
Leveraged to the mining cycle For personal use only All major commodities wound back hard in FY09 due to price uncertainty and GFC 1H10 Commodity exposure (Group) Global recovery underway Majors targeting production capacity growth ‐ Emeco ‘s large equipment fleet meeting needs of coal coal, iron
Slide 7: Equipment
Equipment For personal use only Continue reorientation of the fleet mix toward large mining equipment Small Equipment Fleet Impairments taken in 1H10 on small construction equipment due to over supply Disposal of this equipment in 2H10 will improve cash generation and ROC Continue to downsize
Slide 8: Business Unit Performance
For personal use only – % 10 % 20 % 30 % 40 % 50 % 60 % 70 % 80 % 90 % 100 % –% 10 % 20 % 30 % 40 % 50 % 60 % 70 % 80 % 90 % 100 % Dec-0 07 Dec-07 Feb-0 08 Feb-08 Apr-0 08 Apr--08 Jun-0 08 Jun-08 Aug-0 08 Aug-08 Oct-0 8 Oct-08 Dec-0 08 Dec-08 NSW utilisation Feb-09 Feb-0 09 WA utilisation Apr--09 Ap
Slide 9: Business Unit Performance
For personal use only – % 10 % 20 % 30 % 40 % 50 % 60 % 70 % 80 % 90 % 100 % Dec--07 Feb--08 Apr--08 Jun--08 Aug--08 Oct--08 Indonesia utilisation Dec--08 Feb--09 Apr--09 Jun--09 Aug--09 Oct--09 31 Dec Dec--09 Feb--10 Business Unit Performance – % 10 % 20 % 30 % 40 % 50 % 60 % 70 % 80 % 90 % 100 % D
Slide 10: Financials
For personal use only Fi Financials i l Stephen Gobby CFO 10
Slide 11: Financial Performance
Financial Performance For personal use only $13.6M Operating NPAT in 1H10, in‐line with guidance 1H09 2H09 1H10 PCP Var V PCP Var V Operating Operating Operating A$ m % Revenue 309.8 218.4 208.5 (101.3) (32.7)% EBITDA 128.6 82.3 82.5 (46.1) (35.8)% margin (%) 41.5 37.7 39.6 EBIT 69.7 36.4 32.1 (37.6
Slide 12: Earnings Composition
Earnings Composition For personal use only REVENUE EARNINGS & MARGINS Rental Sales Parts 350 330 EBITDA A$M EBIT A$M 310 303 EBIT Margin % EBITDA Margin % 300 288 45.0% 160.0 252 40.0% 140.0 250 218 35.0% 209 208 120.0 200 30.0% 174 100.0 154 25.0% 150 138 80.0 20 0% 20.0% 60.0 100 15.0% 10.0% 40.0
Slide 13: One-off Significant Items
One‐off Significant Items For personal use only One‐off, largely non‐cash items impacting NTA by 4% A$ Millions 1H10 North Australia 1H10 Operating America Inventory Statutory Revenue 208.5 208.5 EBITDA 82.5 (13.3) (4.5) 64.7 EBIT 32 1 32.1 (13 3) (13.3) (4 5) (4.5) 14 3 14.3 NPAT 13.6 (11.1) (3.2)
Slide 14: Cash Flow
Cash Flow For personal use only Balance sheet used for long term capex investment in large truck fleets A$ Millions 2H09 1H10 Operating Cash flow (exc WC) 53.0 58.7 Working Capital 22.2 7.3 C Capex (3 0) (35.0) ( 0 2) (105.2) Disposals 12.4 14.6 Dividends (12.5) (12.6) Free Cash flow 40.1 (37.2) O
Slide 15: Balance Sheet & Borrowings
Balance Sheet & Borrowings For personal use only Short term gearing increased due to: Short‐term A$ Millions Dec 08 Jun 09 Dec 09 Total Assets 1,266 1,121 1,120 Low historical 12 month Total Equity 736 683 663 EBITDA Net Debt 412 331 352 ~$60m strategic investment in Interest Cover 9.7 8.1 6.3
Slide 16: Return on Capital
Return on Capital For personal use only Focused on improving ROC and delivering satisfactory returns to shareholders Current Situation 1,400 Invested Capital ROC % 20.0% CY09 low point of earnings cycle 18 0% 18.0% 1,200 16.0% Surplus/ idle fleet abnormally high 1,000 14.0% 12.0% 800 0 0% 10.0%
Slide 17: Strategy & Outlook
For personal use only St t Strategy & Outlook O tl k Keith Gordon CEO & Managing Director 17
Slide 18: Strategy
Strategy For personal use only Immediate focus to improve core business while long‐term strategic plan is finalised Medium to Short‐Term Long‐Term Exit Europe Long term strategic plan under development Exit Central Appalachian coal and restructure Focus will be on long term returns to North
Slide 19: Outlook
Outlook For personal use only Business is highly leveraged to mining recovery currently underway Both mining development and production activity undergoing positive step‐change as business confidence improves Volumes Thermal coal, coking coal and iron ore volumes growing rapidly in Asia Pacific
Slide 20: Questions
For personal use only Q ti Questions 20
Slide 21: Disclaimer
Disclaimer For personal use only Reliance on third party information The information and views expressed in this Presentation were prepared by Emeco Holdings Ltd (the Company) and may contain information that has been d derivedd ffrom publicly bl l available l bl sources that h have h not been b ind