Austin Engineering Limited · ASX:ANG
Austin Engineering — FY2014 Earnings Presentation
22 slides from Austin Engineering's earnings presentation, Aug 28, 2014
Slide 1: Investor Presentation FY14
Investor Presentation FY14 Focus on productivity benefits for customers after weathering the cycle
Slide 2: FY 13/14 Overview
FY 13/14 Overview • FY 14 result directly impacted by significant reductions in capital spending in the mining sector globally • FY 14 revenue, EBITDA and NPAT significantly down on last year. Interim dividend of 4.5 cents. No final dividend to be declared • Banking covenants renegotiated and met fo
Slide 3: FY 13/14 Overview (cont’d)
FY 13/14 Overview (cont’d) • Signs of improvement: • South America - multi-year service contracts and new orders provide solid base revenue and platform for more work • Number and value of enquiries increasing, particularly in South America • Full year improvement expected but likely to be inconsist
Slide 4: FY14 Revenue, EBITDA, Dividend Developments
FY14 Revenue, EBITDA, Dividend Developments
Slide 5: FY14 Financial Results - Summary
FY14 Financial Results - Summary FY13 FY14 $m $m % Change Revenue 288.8 209.9 -27% EBITDA 51.1 15.2 -70% NPBT 39.6 0.0 * -100% NPAT 28.4 0.9 * -97% EBITDA/Revenue 17.7% 7.2% -59% NPBT/Revenue 13.7% 0.0% -100% NPAT/Revenue 9.8% 0.4% -96% Basic Earnings Per Share (cents) 39.20 1.14 -97% Final Dividend
Slide 6: FY14 Financial Results – Segment Revenue & EBITDA
FY14 Financial Results – Segment Revenue & EBITDA FY13 FY14 $m $m % Change Revenue: Australia 200.3 125.7 -37% Americas 78.7 79.5 1% Middle East 2.4 0.4 -83% Asia (Indonesia) 7.4 4.3 -42% 288.8 209.9 -27% EBITDA: Australia 33.9 8.2 -76% Americas 14.5 7.0 -52% Middle East 0.8 0.0 -100% Asia (Indonesi
Slide 7: FY14 Financial Results – Segment Review
FY14 Financial Results – Segment Review Group Result: • The inconsistent business conditions flagged in February 2014 continued through to June 2014 • Australian mines are still producing at record levels, which is expected to lead to increased orders, as current constrained spending on equipment no
Slide 8: FY14 Financial Results – Segment Review
FY14 Financial Results – Segment Review Australia: • Revenue down $74.6m (-37%); EBITDA down $25.7m (-76%) versus pcp • Gross margin % increased, and overheads were below budget, but the magnitude of the sales volume decrease impacted EBITDA margins detrimentally • Comparison with pcp should take in
Slide 9: FY14 Financial Results – Segment Review
FY14 Financial Results – Segment Review Americas: • Revenue up $0.8m (+1%); EBITDA down $7.5m (-52%) versus pcp North America: • Revenue was on par with the pcp for Westech in a market with weak growth prospects • Due to the weakening market margins were squeezed, but still a reasonably good result
Slide 10: FY14 Financial Results – Segment Review
FY14 Financial Results – Segment Review South America (cont’d): • Colombia experienced difficult conditions due to coal prices and produced a result well below last year and internal budgets due to this • Peru produced a result below that achieved last year due to anticipated site service contracts
Slide 11: FY 13/14 Balance Sheet & Cash Flow
FY 13/14 Balance Sheet & Cash Flow • An increase in working capital over the period due to Jun-13 Jun-14 high inventories in South America and a reduction in Payables $m $m • Increased fixed asset base arising from the Working Capital 26.7 33.9 acquisition of Servigrut and further investment in Prop
Slide 12: Business Update - Australia
Business Update - Australia Queensland: Brisbane: • A very quiet 1H FY14 but a much stronger 2H in FY14 is encouraging for FY15 • Cost reductions and efficiencies have seen GM% improvements which will continue • Coal miners across the eastern seaboard are expected to remain tight with spending and w
Slide 13: Business Update - Australia
Business Update - Australia Western Australia: Perth: • A solid result for the year but not at 2013 levels • 2H FY14 not as strong as 1H due to expected orders not eventuating with an increase in repair projects as customers continued to delay spending on new/replacement equipment • 2H FY15 to be a
Slide 14: Business Update - Americas
Business Update - Americas North America – Westech: • Revenue on par with pcp, but lower profit due to tighter pricing caused by the market downturn • Coal mining activity in North America has continued at good levels, but like many other parts of the world, miners have cut back on spending • Some s
Slide 15: Business Update – Americas (cont’d) & Indonesia
Business Update – Americas (cont’d) & Indonesia South America (continued) Colombia: • FY15 expected to be much improved on FY14. Colombian coal exports starting to indicate positive signs which we believe will lead to tenders picking up especially in quantities of replacement products needed • New s
Slide 16: Safety
Safety • A continued focus on zero harm has yielded improved safety results in FY14 • The Global LTIFR for FY14 was 3.3 which is a significant improvement from 4.7 recorded for FY13
Slide 17: Expansion Plans Update
Expansion Plans Update Americas: • Brazilian company setup in the final stages • Due diligence to continue on a smaller acquisition in Brazil • A client system changeover / administration issues have continued to delay orders for Vale Africa: • VR Steel acquisition did not proceed due to the underly
Slide 18: Outlook
Outlook Industry themes: • Cost cutting measures have been implemented and our view is there will now be a re-focus by miners on productivity improvements • Production levels on mine sites continue to be at record levels, but customers have cut back on costs to maintain and replace the equipment use
Slide 19: Outlook
Outlook Results: • Focus on debt reduction through more efficient working capital management (especially steel stocks), cash-flow improvements and design/productivity improvements • FY15 will include a full-year result from the Servigrut and the South American contract wins announced during the year
Slide 20: 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 21: Austin’s Principal Services
Austin’s 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 22: Austin’s Brands
Austin’s 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 Inge