Wilson Bayly Holmes-ovcon Limited · JSE:WBO
Wilson Bayly Holmes-ovcon — H1 2020 Earnings Presentation
52 slides from Wilson Bayly Holmes-ovcon's earnings presentation, March 2020
Slide 1: Unaudited Results for the Six Months Ended 31 December 2019
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
Slide 2: Contents
CONTENTS SUBJECT PRESENTER • Welcome Louwtjie Nel • Overview and highlights Wolfgang Neff • Operational review Wolfgang Neff › Building and civil engineering › Roads and earthworks › Australia › United Kingdom • Financial review Charles Henwood • Order book and project pipeline Wolfgang Neff • Outlo
Slide 3: Overview and Highlights
OVERVIEW AND HIGHLIGHTS WBHO UNAUDITED RESULTS FOR THE PERIOD ENDED 31 DECEMBER 2019 3
Slide 4: Group Results H1:2020
GROUP RESULTS H1:2020 OVERVIEW AND HIGHLIGHTS 30 000 1 200 25 000 22 894 1 000 OPERATING PROFIT (Rm) 20 114 20 500 20 000 18 087 800 REVENUE (Rm) 16 941 15 000 600 510 535 558 10 000 400 2.7% 3.2% 2.7% 5 000 3 264 200 0% 1.2% - - H1 2018 H2 2018 H1 2019 H2 2019 H1 2020 Revenue Operating profit • Rev
Slide 5: Contribution by Geography
CONTRIBUTION BY GEOGRAPHY OVERVIEW AND HIGHLIGHTS 25 000 22 894 20 114 20 500 20 000 18 087 16 941 REVENUE (Rm) 15 000 11 103 10 838 10 707 11 006 12 073 10 000 5 558 5 092 5 695 5 161 6 082 5 000 2 555 3 129 3 491 1 427 1 010 1 157 1 204 1 248 - H1 2018 H2 2018 H1 2019 H2 2019 H1 2020 Total South A
Slide 6: Contribution by Geography
CONTRIBUTION BY GEOGRAPHY OVERVIEW AND HIGHLIGHTS REVENUE (Rm) % growth Dec 2019 Dec 2018 REVENUE (%) South Africa 6.8 6 088 5 695 15% 27% Rest of Africa 7.9 1 242 1 157 Australia 12.8 12 073 10 707 Dec 2019 5% United Kingdom 36.7 3 491 2 555 53% TOTAL 13.8 22 894 20 114 13% OPERATING PROFIT (Rm) %
Slide 7: The Six Months in Perspective
THE SIX MONTHS IN PERSPECTIVE OVERVIEW AND HIGHLIGHTS SOUTH AFRICA • The construction industry continues to endure its worst slump in decades. • The group has done well to sustain activity over this period although margins have to declined. • The capacity of the industry as a whole has reduced signi
Slide 8: The Six Months in Perspective
THE SIX MONTHS IN PERSPECTIVE OVERVIEW AND HIGHLIGHTS AUSTRALIA • The construction environment remains buoyant within key states of Victoria and New South Wales (NSW). • Ongoing containment of revenue growth in Probuild through new bidding strategy. • Poor project delivery on select projects persist
Slide 9: Safety Performance
SAFETY PERFORMANCE OVERVIEW AND HIGHLIGHTS LTIFR (No. of lost time injuries per million man hours) 1.2 0.94 0.91 0.9 0.80 0.69 0.73 0.6 0.3 0.0 Jun-16 Jun-17 Jun-18 Jun-19 Dec-19 • Overall safety statistics remain at improved levels. • African operations have maintained an LTIFR of below 0.5. • One
Slide 10: Transformation and Empowerment
TRANSFORMATION AND EMPOWERMENT OVERVIEW AND HIGHLIGHTS • Level 1 status has been retained. › WBHO spends 80% of its total measured procurement on B-BBEE compliant companies. › 15 companies on enterprise development programme. › Numerous socio-economic development initiatives supporting education and
Slide 11: Building and Civil Engineering
BUILDING AND CIVIL ENGINEERING WBHO UNAUDITED RESULTS FOR THE PERIOD ENDED 31 DECEMBER 2019 11
Slide 12: Building and Civil Engineering H1:2020 Performance
BUILDING AND CIVIL ENGINEERING H1:2020 PERFORMANCE BUILDING AND CIVIL ENGINEERING 5 000 400 4 032 350 3 916 3 925 4 000 OPERATING PROFIT (Rm) 3 386 3 413 300 REVENUE (Rm) 3 000 250 200 2 000 150 169 163 163 4.9% 141 152 4.8% 4.2% 100 1 000 4.1% 3.8% 50 - - H1 2018 H2 2018 H1 2019 H2 2019 H1 2020 Rev
Slide 13: Geographic Footprint
GEOGRAPHIC FOOTPRINT BUILDING AND CIVIL ENGINEERING REVENUE (Rm) 5 000 3 877 4 000 3 415 3 000 2 000 1 000 510 156 - H1 2020 H1 2019 GHANA South Africa Rest of Africa OPERATING PROFIT (Rm) 150 124 116 100 ZAMBIA 50 39 MOZAMBIQUE 27 - SOUTH AFRICA H1 2020 H1 2019 South Africa Rest of Africa WBHO UNAU
Slide 14: The Six Months in Perspective
THE SIX MONTHS IN PERSPECTIVE BUILDING AND CIVIL ENGINEERING BUILDING • Commendable performance to sustain activity levels, as inland activity continues to decline. • Coastal regions deliver strongly, particularly in the Western and Eastern Cape. • Increased vacancy rates in commercial hubs impactin
Slide 15: Order Book
ORDER BOOK BUILDING AND CIVIL ENGINEERING At December At June 2019 2019 % growth ORDER BOOK UP 15% • Strong order intake in the coastal regions South Africa 6 588 6 348 3.8 offsets shrinking inland order book. Rest of Africa 819 98 735.7 • Minimal building opportunities in West Africa. › Focus on So
Slide 16: Roads and Earthworks
ROADS AND EARTHWORKS WBHO UNAUDITED RESULTS FOR THE PERIOD ENDED 31 DECEMBER 2019 16
Slide 17: Roads and Earthworks H1:2020 Performance
ROADS AND EARTHWORKS H1:2020 PERFORMANCE ROADS AND EARTHWORKS 3 500 400 2 971 3 000 2 829 2 610 2 685 2 453 OPERATING PROFIT (Rm) 300 2 500 REVENUE (Rm) 2 000 200 1 500 190 181 176 6.7% 167 1 000 7.4% 6.3% 6.4% 136 100 4.6% 500 - - H1 2018 H2 2018 H1 2019 H2 2019 H1 2020 Revenue Operating profit • R
Slide 18: Geographic Footprint
GEOGRAPHIC FOOTPRINT ROADS AND EARTHWORKS REVENUE (Rm) 3 000 1 885 1 879 2 000 1 086 1 000 731 GUINEA - SIERRA LEONE H1 2020 H12019 GHANA South Africa Rest of Africa OPERATING PROFIT (Rm) 200 162 100 MOZAMBIQUE 72 64 NAMIBIA BOTSWANA eSWATINI (SWAZILAND) 5 LESOTHO - SOUTH AFRICA H1 2020 H1 2019 Sout
Slide 19: The Six Months in Perspective
THE SIX MONTHS IN PERSPECTIVE ROADS AND EARTHWORKS SOUTH AFRICA • Challenging market conditions persisted over the period. • Roadwork and mining and energy infrastructure projects were the main contributors toward activity. • The N4 road project recommenced after a one year delay due to community di
Slide 20: Order Book
ORDER BOOK ROADS AND EARTHWORKS ORDER BOOK UP BY 39% At December At June % growth / • Declining order book locally reflects market 2019 2019 (decline) conditions. South Africa 3 522 4 290 (17.9) • Adjudication of various large-scale projects issued by SANRAL and ACSA offer Rest of Africa 1 581 1 440
Slide 21: Australia
AUSTRALIA WBHO UNAUDITED RESULTS FOR THE PERIOD ENDED 31 DECEMBER 2019 21
Slide 22: Australia H1:2020 Performance
AUSTRALIA H1:2020 PERFORMANCE AUSTRALIA 16 000 800 600 12 073 OPERATING PROFIT (Rm) 12 000 11 103 10 838 10 707 11 006 400 REVENUE (Rm) 200 8 000 143 135 110 - 1.3% 1.3% 1.0% 4 000 (445) ( 200) -4.2% (174) -1.4% ( 400) - ( 600) H1 2018 H2 2018 H1 2019 H2 2019 H1 2020 Revenue Operating profit • Overa
Slide 23: Geographic Footprint
GEOGRAPHIC FOOTPRINT AUSTRALIA REVENUE (Rm) 10 000 8 514 8 612 8 000 6 000 4 000 3 559 2 095 2 000 - H1 2020 H1 2019 QUEENSLAND Building Infrastructure OPERATING PROFIT (Rm) NEW WESTERN AUSTRALIA SOUTH 200 132 WALES 10 - VICTORIA (200) (184) (400) (577) (600) H1 2020 H1 2019 Building Infrastructure
Slide 24: The Six Months in Perspective: Building
THE SIX MONTHS IN PERSPECTIVE AUSTRALIA BUILDING • The building business had successfully navigated away from its historic reliance on large-scale residential-only towers, as activity in the mixed-use and commercial sectors have increased. • The Victoria and NSW markets performed satisfactorily over
Slide 25: The Six Months in Perspective: Infrastructure
THE SIX MONTHS IN PERSPECTIVE AUSTRALIA INFRASTRUCTURE • The infrastructure business performed strongly in the Western region demonstrating good growth over the six months as well as an improved order intake. • Eastern region results dominated by further AU$20m of provisioning on WRU Project. • In d
Slide 26: Order Book
ORDER BOOK AUSTRALIA ORDER BOOK DOWN 16% At December At June • Selective bidding strategy and focus on project 2019 2019 % decline execution reflected in lower building order Building 18 149 21 717 (16.4) book. • Building order book remains strong with 77% Infrastructure 5 433 5 599 (3.1) concentrat
Slide 27: United Kingdom
UNITED KINGDOM WBHO UNAUDITED RESULTS FOR THE PERIOD ENDED 31 DECEMBER 2019 27
Slide 28: United Kingdom H1:2020 Performance
UNITED KINGDOM H1:2020 PERFORMANCE UNITED KINGDOM 5 000 400 4 000 3,491 OPERATING PROFIT (Rm) 300 3,129 REVENUE (Rm) 3 000 2,555 200 2 000 149 124 100 1 000 4.3% 104 4.0% 4.1%% - - H1 2019 H2 2019 H1 2020 Revenue Operating profit • Strong revenue growth of 37% over the period. • Corresponding profit
Slide 29: Geographic Footprint
GEOGRAPHIC FOOTPRINT UNITED KINGDOM REVENUE (Rm) 2 500 2 128 2 000 1 686 1 500 1 363 1 000 869 500 - H1 2020 H1 2019 Byrne Group Russells OPERATING PROFIT (Rm) 150 MANCHESTER 100 93 62 56 42 LONDON 50 - H1 2020 H1 2019 Byrne Group Russells WBHO UNAUDITED RESULTS FOR THE PERIOD ENDED 31 DECEMBER 2019
Slide 30: The Six Months in Perspective
THE SIX MONTHS IN PERSPECTIVE UNITED KINGDOM BYRNE GROUP • Solid operational performances from Byrne Bros. and FB Ellmers. • Revenue increased from £92 million to £115 million. • Operating profit of £3 million at an improved margin of 3%. • No major underperforming contracts. RUSSELLS LIMITED • Subs
Slide 31: Order Book
ORDER BOOK UNITED KINGDOM ORDER BOOK DOWN 19% At December At June • Combined order book remains strong at 112% 2019 2019 % growth of FY19 revenue. Byrne Group 3 273 3 959 (17) • Declining order book for Byrne Group reflects the lull in activity in the wake of Brexit Russells Limited 3 078 3 851 (20)
Slide 32: Financial Review
FINANCIAL REVIEW WBHO UNAUDITED RESULTS FOR THE PERIOD ENDED 31 DECEMBER 2019 32
Slide 33: Key Financial Indicators
KEY FINANCIAL INDICATORS FINANCIAL REVIEW Dec Dec TARGET / GROWTH 2019 2018 Revenue growth % >10 13.8 11.2 Operating profit margin % 3 – 4.5 1.2 0.0 Cash and cash equivalents Rm 19.2% 5 108 4 286 Earnings per share cents 208% 412 134 Headline earnings per share cents 183% 412 145 Ordinary dividend p
Slide 34: Key Financial Numbers and Ratios
KEY FINANCIAL NUMBERS AND RATIOS FINANCIAL REVIEW Dec Dec (Rm) 2019 2019 Revenue 22 894 20 114 Operating profit before non-trading items 264 3 Share-based payments expense (21) (27) Share of profits and losses from equity-accounted investments 71 30 Finance income 102 95 Finance costs (16) (12) Prof
Slide 35: Financial Position: Equity-Accounted Investments
FINANCIAL POSITION FINANCIAL REVIEW EQUITY-ACCOUNTED INVESTMENTS SHARE OF PROFITS/(LOSSES) COUNTRY OF EFFECTIVE CARRYING AMOUNT ENTITY INDUSTRY OPERATION % OF INVESTMENT Dec 2019 Dec 2018 Gigajoule International Gas supply Mozambique 26.6% 180.8 11.7 9.4 Gigajoule Power Power Mozambique 13.0% 163.4
Slide 36: Financial Position: Property, Plant and Equipment
FINANCIAL POSITION FINANCIAL REVIEW Dec June PROPERTY, PLANT AND EQUIPMENT (Rm) 2019 2019 Property, plant and equipment 1 929 1 937 Right-of-use asset (IFRS 16: Leases) 374 - Depreciation 167 283 APPROVED Dec June CAPITAL EXPENDITURE FY2020 2019 2019 Replacement 232 94 294 Expansion 122 48 80 TOTAL
Slide 37: Financial Position: Tax
FINANCIAL POSITION FINANCIAL REVIEW Dec June TAX (Rm) 2019 2019 Net deferred tax asset 643 730 Net current tax asset 249 152 Deferred tax asset consists of: Current tax asset consists of: • Tax losses of R225m (June 2019: R221m). • Foreign tax credits of R50m (June 2019: R48m). • Timing differences
Slide 38: Financial Position: Long Term Liabilities
FINANCIAL POSITION FINANCIAL REVIEW Dec June LONG TERM LIABILITIES (Rm) 2019 2019 Property development finance 88 814 - Asset finance 142 763 153 897 VRP liability 122 713 138 733 Lease liabilities (IFRS16) 401 045 - Other 2 092 2 092 757 426 294 722 Less: Current portion (170 378) (101 558) TOTAL 5
Slide 39: Financial Position: Current Liabilities
FINANCIAL POSITION FINANCIAL REVIEW Dec June CURRENT LIABILITIES (Rm) 2019 2019 Contract liabilities 3 168 2 207 Trade and other payables 5 743 8 627 Provisions 1 968 2 415 Other 6 15 TOTAL 10 885 13 264 • Increase in excess billings over work done (contract liabilities) reflected in strong cash pos
Slide 40: Financial Position: Cash and Cash Equivalents
FINANCIAL POSITION FINANCIAL REVIEW Dec Dec June CASH AND CASH EQUIVALENTS (Rm) 2019 2018 2019 South Africa 1 784 1 477 1 506 Africa 1 194 900 971 United Kingdom 1 093 582 815 Australia 1 037 1 327 2 660 TOTAL 5 108 4 286 5 952 • Strong cash generation over the six months in Africa and the UK. • Dec
Slide 41: Cashflow Movement
CASHFLOW MOVEMENT FINANCIAL REVIEW 7 000 5 952 6 000 (37) 100 209 5 108 5 000 (723) (241) (27) (14) (111) 4 000 3 000 Cash & cash Operating profit Working capital Net Taxation Dividends Net Net Foreign Cash & cash equivalents adjusted for changes finance income paid paid cash flow cash flow from cur
Slide 42: Order Book and Project Pipeline
ORDER BOOK AND PROJECT PIPELINE WBHO UNAUDITED RESULTS FOR THE PERIOD ENDED 31 DECEMBER 2019 42
Slide 43: Consolidated Order Book by Segment
CONSOLIDATED ORDER BOOK ORDER BOOK AT AT JUNE DECEMBER TO JUNE BEYOND SEGMENT (Rm) 2019 2019 2020 JUNE 2020 ORDER BOOK BY SEGMENT (%) 15% 17% Building and civil engineering 6 446 7 407 3 071 4 336 Roads and earthworks 5 730 5 103 2 207 2 896 Dec 12% 2019 Australia 27 316 23 583 11 065 12 518 56% Uni
Slide 44: Consolidated Order Book by Geography
CONSOLIDATED ORDER BOOK ORDER BOOK AT AT JUNE DECEMBER TO JUNE BEYOND ORDER BOOK BY GEOGRPAHY (%) GEOGRAPHY (Rm) 2019 2019 2020 JUNE 2020 15% South Africa 10 639 10 110 4 056 6 054 24% Rest of Africa 1 410 2 400 1 222 1 178 Dec 6% 2019 Australia 27 316 23 583 11 065 12 518 55% United Kingdom 7 810 6
Slide 45: Project Pipeline: South Africa and Rest of Africa
PROJECT PIPELINE PROJECT PIPELINE 20% SOUTH AFRICA Rm SOUTH AFRICA Building 34 418 Dec Building 58% Public 6 780 2019 Civil engineering Roads and earthworks Private 27 638 22% Civil engineering 13 424 Public 5 318 Private 8 106 SOUTH AFRICA 38% Roads and earthworks 11 864 Dec Public Public 10 304 20
Slide 46: Project Pipeline: Australia and United Kingdom
PROJECT PIPELINE PROJECT PIPELINE AUSTRALIA Rm 4% Building 65 130 Infrastructure 2 780 Dec AUSTRALIA 2019 TOTAL 67 190 Building Infrastructure 96% UNITED KINGDOM Rm Byrne Group 19 911 29% Russells Construction 8 325 Dec UNITED KINGDOM 2019 71% TOTAL 28 236 Byrne Group Russells Construction WBHO UNAU
Slide 47: Project Pipeline Summary
PROJECT PIPELINE PROJECT PIPELINE SUMMARY Rm 18% Building and civil engineering 55 020 32% SUMMARY Roads and earthworks 19 931 Building 2019 Infrastructure Australia 67 190 Australia 11% United Kingdom 39% United Kingdom 28 236 TOTAL 170 377 • Project pipeline consists of targeted projects expected
Slide 48: Outlook: South Africa and Rest of Africa
OUTLOOK OUTLOOK SOUTH AFRICA • Impact of poor economic growth will likely continue to dampen private investment. • Re-emergence of large-scale public infrastructure has materialised. • Multiple multi-billion rand projects recently issued by ACSA, Transnet, ESKOM and SANRAL. › ACSA – Cape Town and OR
Slide 49: Outlook: Australia and United Kingdom
OUTLOOK OUTLOOK AUSTRALIA • Future strategy for Australia is being reviewed. • Market sentiment anticipated to remain positive over the mid-term, particularly Melbourne and Sydney. • Consolidation of building business and renewed focus on project selection and delivery to continue. • Public infrastr
Slide 50: Summary
SUMMARY OUTLOOK • Business is well positioned with healthy 12 month order book. • Public sector spending has finally reached the market – although adjudication and award of a various of projects still in progress. • Construction-focused business model. • Balance sheet strength maintained despite imp
Slide 51: Disclaimer
DISCLAIMER Certain statements contained within this presentation may be classified as forward-looking statements. Words, including but not limited to, “believe”, “anticipate”, “expect”, “seek”, “intend”, “estimate”, “project”, “plan”, or “predict” are used to identify such statements. Forward-lookin
Slide 52: Thank You
THANK YOU WBHO UNAUDITED RESULTS FOR THE PERIOD ENDED 31 DECEMBER 2019 52
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