Speedy Hire Plc · LSE:SDY
Speedy Hire — H1 FY2024 Earnings Presentation
39 slides from Speedy Hire's earnings presentation, November 2023
Slide 1: Half year results to 30 September 2023
Half year results to 30 September 2023 Resilient performance and strong strategic progress
Slide 2: Presentation team
Presentation team Dan Evans Paul Rayner Chief Executive Chief Financial Officer 2
Slide 3: Key themes
Key themes General business • Resilient UK hire business performing satisfactorily, despite economic backdrop • Pricing discipline retained • Velocity strategy progressing well. • Investment in the first half • Second half continued investment with expected benefits • Recent national key contract wi
Slide 4: Financial update
Financial update Paul Rayner, Chief Financial Officer
Slide 5: P&L summary
P&L summary HY24 HY23 % Variance vs FY23 £m £m HY23 £m • Hire revenue down 1.2% on H1 FY23 with national Revenue 208.5 214.8 (2.9)% 440.6 customers up 5% and regional customers down 6% Hire 125.6 127.1 (1.2)% 258.0 • Services revenue excluding fuel up 4% on H1 FY23 Services (excl. 62.5 60.0 4.2
Slide 6: Customer and revenue analysis
Customer and revenue analysis Total revenue by segment Total number of customers by segment Hire segment analysis (000’s) H1 YOY Revenue Volume Rate National 0.4 Regional 21 Trade & Retail 23 Customer segment • National: • Growth in the first half, driven by rate improvement, whilst maintaining volu
Slide 7: Joint ventures
Joint ventures HY24 HY23 FY23 FY22 £m £m £m £m Share of results 1.9 3.9 6.6 3.2 Cash flow 2.7 2.3 5.6 1.9 Investment 8.4 10.2 9.2 7.8 • Kazakhstan joint venture performing behind the record performance in FY23, also impacted by dollar exchange rate movements • Cash backed profits with dividend
Slide 8: Adjusted profit bridge
Adjusted profit bridge • Significant movement in profit/loss on disposal versus H1 FY2023, inclusive of additional £1m of asset provision • £1.1m of additional non itemised depreciation recognised in the first half, policy now 7yrs as opposed to 15yrs • £1.0m investment in Velocity strategy transfor
Slide 9: Balance sheet summary
Balance sheet summary 30 Sep 23 30 Sep 22 31 Mar 23 • Hire fleet £m £m £m • Itemised £170m (Mar-23: £172m) Intangibles and JV 32.5 35.6 34.2 • Non itemised £30m (Mar-23: £36m) • Asset count performed at the end of September with no Hire fleet 200.1 234.4 207.9 further provision required Other as
Slide 10: Assets and controls
Assets and controls • Full asset count performed at the end of September 2023 with no increase to provisions required • Blended count accuracy across the entire fleet was 99.3% • An asset counting app has been developed and was successfully trialled at a small number of sites • Total number of non-i
Slide 11: Cash flow bridge
Cash flow bridge • Strong operating cash of £42.4m (H1 FY23 £40.2m), 92% conversion from EBITDA (H1 FY23: 85%), against target of 90% • Total net capex spend £14m – gross capex of £21m and disposals of £7m • Full year hire capex guidance of c.£35m, with continued focus on eco product range • Free ca
Slide 12: Financial metrics
Financial metrics Total revenue Operating cash Itemised utilisation EPS £208.5m £42.4m 50.5% 0.98p Profitable Cashflow Assets Shareholder growth returns EBITDA Net debt to EBITDA ROCE DPS: 0.80 pence per share £46.2m 1.3x 11.9% FY23 completion of £30m share buyback • Current itemised utilisation 58%
Slide 13: Business and strategy update
Business and strategy update Dan Evans, Chief Executive
Slide 14: Speedy Capital Markets Day
Speedy Capital Markets Day The launch of Velocity, our five-year transformation and growth strategy • Capital Markets Day held at the Speedy Innovation Centre, Milton Keynes in July 2023. Five-year key financial metrics summary presented: • £650m revenue • 28% EBITDA margin • Up to 1.5x leverage • T
Slide 15: Our growth engines update
Our growth engines update Core hire Specialist products Trade and retail products and services markets • Competitive end markets • World first hydrogen powered • Launch of online, home delivery • Challenging regional customer access machine launch with Nifty tool hire proposition on diy.com segment
Slide 16: Velocity strategy in action
Velocity strategy in action • Continued investment in enable phase of Velocity strategy despite challenging market • Investment in worlds first hydrogen electric powered access machines in partnership with Nifty, diversifying our product offering • Joint venture with AFC Energy to launch dedicated H
Slide 17: Cleaner solutions – end to end clean energy provider
Cleaner solutions – end to end clean energy provider Combining the latest technologies we can provide a greener power solution, reducing fuel usage on site, reducing emissions and improving air quality STAGE V COMPLIANT GENERATOR OFFICE & HVO FUEL WELFARE (example requirement) ERICA MDU BSU Manageme
Slide 18: General business update
General business update • Continued development and conversion of national customer pipeline and opportunities • Commercial discipline maintained in competitive market • Digital evolution of our partnership with B&Q: • Launch of online, home delivery tool hire proposition on DIY.com and Trade-point.
Slide 19: Business update – Major projects
Business update – Major projects HS2 Nuclear Rail Commercial Building 19
Slide 20: Strategic pillars
Strategic pillars Foundational elements that will support everything we do to accelerate sustainable growth People First ESG Digital Modern workplace experience Aim to be a Top 100 employer by Our “Decade to deliver,” Easy to do business with Intuitive user systems with AI 2029 encouraging people to
Slide 21: People First and sustainability
People First and sustainability People First • Average increase in base pay to colleagues of c.7% in April 2023 • Voluntary attrition has reduced by 5.5pp to 18.9% in October 2023 • Investment in key service centres using our Innovation Centre blueprint • 5% club silver member • Continued flexible w
Slide 22: Our commitment to safety
Our commitment to safety People & Reporting Innovation communities • Collective Responsibility safety • RIDDOR Accident Frequency Rate of • EcoOnline, record number of leading programme, delivering effective 0.22 (H1 FY23: 0.12) indicators risk management and leading the way in raising safety standa
Slide 23: Summary and outlook
Summary and outlook
Slide 24: Summary and outlook
Summary and outlook • Resilient UK hire revenue performance, down 1.2% versus H1 FY2023 • Challenging but manageable market backdrop • Executing well and continuing to invest in our Velocity transformation strategy • Investing in specialist business growth engine • Digital evolution of our partnersh
Slide 25: Q&A
Q&A
Slide 26: Appendices
Appendices
Slide 27: Why invest in Speedy Hire
Why invest in Speedy Hire Ambitious, purpose-led Velocity Supportive long-term end strategy to accelerate profitable market fundamentals Ambitious growth and become the UK’s most End markets efficient and sustainable Hire business A digital and data driven business, Strong balance sheet and cash opt
Slide 28: VELOCITY
VELOCITY Velocity measures the difference between a start and eventual position It’s about Speed and Direction of travel Both are important We need Velocity!
Slide 29: Our vision
Our vision To inspire and innovate the future of hire and accelerate sustainable growth
Slide 30: Our mission
Our mission To be the most efficient and sustainable UK hire business: digital and data driven, optimised through operational excellence, and powered by our people
Slide 31: Our values
Our values PLE FIRST EO ” O2% Innovative Inclusive Safe Together Trusted We lead with We nurturea Weare all unique, Weshared Weare family; Weare responsible. bravery to make culture where and we all belong collective proud to work as and do the right anything possible. ideas grow. responsibility to
Slide 32: Velocity - Our five year strategy for growth
Velocity - Our five year strategy for growth • Velocity is a five year transformation and growth strategy • There are two defined stages to drive sustainable long-term growth: Enable growth Deliver growth Deliver foundational improvements across Become the most efficient and technology and operation
Slide 33: Our strategy - driving sustainable long-term growth (Stage 1)
Our strategy - driving sustainable long-term growth Stage 1. Enable growth: Deliver foundational improvements across technology and operational efficiency Group-wide Brand and Technology Cloud based transformation customer and data secure platform programme Clear brand strategy Technology and data l
Slide 34: Our strategy - driving sustainable long-term growth (Stage 2)
Our strategy - driving sustainable long-term growth Stage 2. Deliver growth: To be the most efficient and sustainable UK hire business Customers Sectors Products Grow customer base; Expand market share in Invest in cleaner energy national, regional, trade key target sectors* and efficient technology
Slide 35: Hydrogen Powered Access
Hydrogen Powered Access Speedy Hire and NiftyLift launch world-first hydrogen-electric powered access platform Ground-breaking collaboration between two British companies brings a unique and sustainable solution to UK Construction World’s first hydrogen-electric powered, zero carbon access platform
Slide 36: Cleaner solutions – end to end clean energy provider
Cleaner solutions – end to end clean energy provider Combining the latest technologies we can provide a greener power solution, reducing fuel usage on site, reducing emissions and improving air quality. STAGE V COMPLIANT GENERATOR OFFICE & HVO FUEL WELFARE (example ERICA MDU BSU requirement) Managem
Slide 37: Speedy Hydrogen Solutions
Speedy Hydrogen Solutions Speedy Hire and AFC Energy have launched a dedicated Hydrogen-powered generator plant hire business This collaboration will provide the market with AFC Energy’s sustainable, zero emission, temporary power solutions designed specifically for the off-grid power market. “The p
Slide 38: Capital allocation
Capital allocation Organic growth Paying dividends M&A activity Efficient balance sheet Policy • Investments to • Regular dividend • Funds available for • Committed to better enable us to payments in the acquisition with a maintaining net serve our range between focus on specialist debt to EBITDA cu
Slide 39: Disclaimer
Disclaimer The information, opinions and statements contained in this presentation and any associated discussion (this “Presentation”) has been prepared by Speedy Hire PLC (the “Company”) and has not been independently verified. The Presentation is only intended for information and reference purpose