Emeco Holdings Limited · ASX:EHL
Emeco — H1 2023 Earnings Presentation
26 slides from Emeco's earnings presentation, Feb 22, 2023
Slide 1: Emeco Holdings Limited 1H23 Results
Emeco Holdings Limited 1H23 Results 22 February 2023
Slide 2: 1H23 Group Operating and Financial Highlights
1H23 GROUP OPERATING AND FINANCIAL HIGHLIGHTS Revenue Operating EBITDA1 Operating EBIT1 Operating NPAT1 $429.5m $113.5m $40.8m $19.6m +15% vs pcp, +13% vs 2H22 -7% vs pcp, -12% vs 2H22 -31% vs pcp, -35% vs 2H22 -38% vs pcp, -47% vs 2H22 Impact of PNP earnings and higher AASB16 Revenue growth in all
Slide 3: 1H23 Business Highlights and Financial Summary
HIGHLIGHTS 1H23 AND BUSINESS OUTLOOK AND FINANCIAL SUMMARY Strong demand environment offset by inflationary impacts and material customer issues in PNP contracts Overview ▪ Safety TRIFR of 2.5 as at 31 December 2022 and LTI free for 7 years. ▪ Group Operating EBITDA1 of $113.5 million (guidance of $
Slide 4: Highlights and Outlook
OUTLOOK HIGHLIGHTS AND OUTLOOK Open cut and underground demand for equipment is strong. This will drive earnings growth in all operating segments. Pit N Portal has been reset with Mincor providing baseload earnings from which to grow Overview ▪ FY23 Operating EBITDA1 guidance remains at $245-260 mil
Slide 5: The Pillars of Our Strategy
THE 3 PILLARS OF OUR STRATEGY Emeco remains unrelenting on our strategic objective to build a resilient and profitable business FIT CREATE SUSTAIN Emeco continues to build on our strategic Emeco, Pit N Portal and Force partner with Building a sustainable business through: cost and quality advantage
Slide 6: Safety and Sustainability
Safety and Sustainability @ Emeco
Slide 7: Safety
SAFETY TRIFR of 2.5 as at 31 Dec 2022, and LTI free for 7 years Injury frequency rates Overview 10.0 ▪ Total recordable injury frequency rate (TRIFR) as at 31 December 2022 was 2.5. 9.0 ▪ Safety of people around our equipment is paramount and our goal is to continue the focus to reduce TRIFR. 8.0 ▪
Slide 8: People & Culture
PEOPLE & CULTURE People continue to be the key to our success. We invest a lot of time and money on making Emeco a great place to work People Community ▪ Celebrated Emeco’s 50th year. ▪ Our Community Grant program grew by allocating 23 grants to local ▪ Leadership Training and Development sessions r
Slide 9: Environmental, Social & Governance
ENVIRONMENTAL, SOCIAL & GOVERNANCE Emeco has developed its inaugural ESG Strategy Overview ▪ An ESG materiality assessment was conducted by KPMG where we considered other companies in our sector and the perspective of internal and external stakeholders. ▪ Emeco executive team members worked alongsid
Slide 10: Financial Results
Financial Results @ Emeco
Slide 11: Operating Profit and Loss
OPERATING PROFIT AND LOSS Solid financial performance within guidance in a challenging operating and inflationary environment and following Pit N Portal project terminations 1H23 Operating Financial Performance1,2 $m unless otherwise stated 1H22 2H22 1H23 Commentary Strong revenue growth across all
Slide 12: Update and Outlook on Outstanding Receivable
HIGHLIGHTS UPDATE AND OUTLOOK ON OUTSTANDING RECEIVABLE Recovery negotiations ongoing, with expected credit loss allowance raised in 1H23 for a significant portion of the outstanding amount ▪ On 14 October 22 the Company announced a potential issue as to full recoverability of outstanding amounts ow
Slide 13: Reconciliation of Statutory to Operating Results
RECONCILIATION OF STATUTORY TO OPERATING RESULTS Operating to statutory results reconciliation The following one-off or non-operating adjustments have been made to the statutory results: • Tangible asset impairments: Net impairments totalling $0.2 million (December 2021: $0.5 million) were recognise
Slide 14: Cash Flow
CASH FLOW Cash flow negatively impacted by the one-off impact of outstanding Pit N Portal receivable – operating cash conversion 74% (102% had we collected the Pit N Portal receivable in full) Overview 1H23 Cash Flow ($m) ▪ Lower EBITDA largely attributable to terminated Pit N Portal customer projec
Slide 15: Balance Sheet
BALANCE SHEET Balance sheet remains robust. Strength of underlying business and cash generation reflected in recent ratings upgrades Summary balance sheet Overview $m 30 Jun 2022 31 Dec 2022 ▪ Net leverage of 1.18x slightly above long term-target of 1.0x, attributable to PNP receivable. Prudent liqu
Slide 16: Divisional Performance
Divisional Performance @ Emeco
Slide 17: Rental
RENTAL Solid revenue growth driven by fully maintained projects that deliver increased value to our customers and differentiate us from our competitors. Strong growth in earnings and margins expected in 2H23 $m unless Overview 1H22 2H22 1H23 otherwise stated ▪ Revenue growth of 13% in pcp reflects s
Slide 18: Rental – Eastern Region
RENTAL – EASTERN REGION Strong revenue growth through pricing and additional maintenance services. Utilisation, earnings and margins will grow as weather conditions normalise Operating and financial performance highlights $m unless 1H22 2H22 1H23 otherwise stated ▪ The Eastern Region has achieved st
Slide 19: Rental – Western Region
RENTAL – WESTERN REGION Earnings and margins impacted by termination of Pit N Portal open cut projects. Several new fully maintained projects commencing in 2H23 will drive earnings and margin growth Operating and financial performance highlights $m unless 1H22 2H22 1H23 otherwise stated ▪ The Wester
Slide 20: Pit N Portal
PIT N PORTAL Decisive reset of the business resulted in PNP terminating high-risk projects which severely impacted earnings. Successful renegotiation of the Mincor contract creating win-win and setting a long-term partnership. Substantial improvement in earnings and margins expected in 2H23 $m unles
Slide 21: Force
FORCE Force continues to deliver good growth and underpin our midlife asset model to provide Emeco with a cost and quality strategic advantage, whilst providing retail customers excellent value and service $m unless Operating and financial performance highlights 1H22 2H22 1H23 otherwise stated ▪ Inc
Slide 22: Appendix: Additional information
Appendix: Additional information
Slide 23: Fleet Utilisation
FLEET UTILISATION Operating utilisation1 1H22 2H22 1H23 Eastern Region 59% 62% 63% Western Region 60% 59% 58% Rental 60% 61% 61% Gross utilisation2 1H22 2H22 1H23 Eastern Region 91% 93% 94% Western Region 90% 92% 90% Rental 90% 93% 93% Notes: 1. Operating utilisation defined as average operating hou
Slide 24: Reconciliations
RECONCILIATIONS Cash flow reconciliation Net debt and leverage reconciliation $m 30 Jun 2022 31 Dec 2022 $m 1H23 AUD secured notes 250.0 250.0 Operating EBITDA1 113.5 Revolving credit facility - 35.0 Working capital (29.2) Lease liabilities and other financing 55.6 76.1 Net sustaining capex (60.1) T
Slide 25: Important Notices and Disclaimers
IMPORTANT NOTICES AND DISCLAIMERS 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 derived from publicly available sources that have not been independently verified
Slide 26: Thank you
Thank you Investor enquiries: Thao Pham Chief Financial Officer Investor.relations@emecogroup.com emecogroup.com