Emeco Holdings Limited · ASX:EHL
Emeco — H1 2012 Earnings Presentation
30 slides from Emeco's earnings presentation, Feb 21, 2012
Slide 1: 2012 Interim Results
For personal use only 2012 Interim Results Keith Gordon, Managing Director & Chief Executive Officer Stephen Gobby, Chief Financial Officer
Slide 2: Presentation Overview
For personal use only Presentation Overview Highlights Financials Strategy & Outlook Questions Appendices
Slide 3: Highlights
For personal use only Kalgoorlie, Western Australia Highlights Keith Gordon Managing Director & Chief Executive Officer
Slide 4: Overview
Overview Business well positioned with strong balance sheet and growth prospects For personal use only 1H12 Overview Operating NPAT of $29.2M, comparable to PCP, up 10% on 2H11 Global fleet utilisation averaged 85%, currently at 92% $165M FY12 growth capex program progressing in-line with expe
Slide 5: Safety, People & Sustainability
Safety, People & Sustainability Our customers value Emeco’s OH&S performance LTIFR per million man hours For personal use only 12.0 Safety 10.0 8.0 Continuous improvement in Safety 6.0 Strong global OH&S focus 4.0 2.0 1.9 “Zero harm” safety objective - Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11
Slide 6: Regional Performance – Australian Rental
Regional Performance – Australian Rental Fleet strategy translating into improved earnings with strong underlying returns For personal use only EBIT R12 ROFE Utilisation 100 % Feb-12 53.9 90 % 93% 80 % 48.8 49.5 70 % 44.5 60 % 23.4% 23.8% 22.7% 50 % 19.1% 40 % 30 % 20 % WDV 10 % $436.0M –% 2H10 1H11
Slide 7: Regional Performance - Canada
Regional Performance - Canada Management of seasonality key strategic focus For personal use only EBIT (AUD) R12 ROFE Utilisation 7.7 100 % Feb-12 90 % 96% 6.3 80 % 5.0 11.3% 70 % 8.7% 60 % 8.4% 50 % 40 % 2.1 30 % 2.8% 20 % WDV 10 % $137.2M –% 2H10 1H11 2H11 1H12 Jun-10 Dec-10 Jun-11 Dec-11 Dec-09 J
Slide 8: Regional Performance - Indonesia
Regional Performance - Indonesia Positioning business to deliver sustainable high quality earnings For personal use only EBIT (AUD) R12 ROFE Utilisation 7.9 100 % 90 % Feb-12 6.2 73% 80 % 5.0 70 % R6 ROFE 60 % 14.4% 50 % 14.8% 14.8% 40 % 30 % Fleet 6.3% 20 % redeployment (1.1) 5.4% WDV 10 % post deb
Slide 9: Customer Developments
Customer Developments Targeting customers in each market which align with Emeco’s strategic objectives For personal use only Continued focus on customer mix, commodity exposure and credit quality Targeting low-cost producers who utilise Emeco’s equipment in commodity production Continue to exp
Slide 10: Financials
For personal use only Financials Stephen Gobby Chief Financial Officer
Slide 11: Financial summary
Financial summary Improving earnings, significant investment and sound balance sheet underpins positive financial outlook For personal use only Revenue up 7.7% PCP to $273.0M Operating NPAT $29.2M comparable with PCP, up 10.1% HoH Statutory NPAT $28.9M ROC at 11.4% with further improvement i
Slide 12: Group Financials
Group Financials Earnings recovering in 1H12 with strong momentum entering 2H12 For personal use only A$ Millions Variance 1H11 2H11 1H12 HonH % PCP % Revenue 253.6 248.9 273.0 9.7 7.7 EBITDA 113.7 109.6 119.9 9.3 5.5 EBIT 53.3 47.9 54.3 13.5 1.9 NPAT 29.5 26.5 29.2 10.1 (1.1) EPS (cps) 4.6 4.2 4.6
Slide 13: Earnings composition
Earnings composition Revenue growth continues while margins moderated due to short term cost factors For personal use only Revenue Profile Earnings & Margins Aus Rental Indonesia EBITDA EBIT A$M Canada REVENUE:WDV A$M EBITDA Margin EBIT Margin 50.0% 350 90.0% 140.0 45.0% 300 80.0% 120.0 40.0% CAPITA
Slide 14: Earnings Bridge
For personal use only Earnings Bridge 40 PCP Earnings Bridge 5.2 0.9 35 30 (3.1) (1.9) (0.1) (1.3) 25 A$m 20 NPAT NPAT 15 $29.5M $29.2M 10 5 0 1H11 AUS RENTAL SALES & CANADA INDONESIA CORPORATE INTEREST & 1H12 PARTS TAX HoH Earnings Bridge 40 6.4 35 2.5 0.2 (1.7) 30 (0.9) (3.8) 25 A$m 20 NPAT 15 $29
Slide 15: Cash Flow
Cash Flow Reinvestment of cash flow in growth capital program expected to deliver increased cash generation For personal use only 1H12 Cash Flow Historical Cash Flows 18.0 9.9 7.7 (52.6) (12.3) (18.9) 93.6 64.3 (65.6) (20.2) Operating Working Sales & Disposals SIB Other Cash flow Dividends Growth Fr
Slide 16: Gearing & Facilities Headroom
Gearing & Facilities Headroom Funding certainty and capacity in place to support medium term growth For personal use only Debt Facilities Headroom 600 Funding certainty with $450M senior 500 debt facility in place: 400 $160M $300M maturing Nov 2013 A$M 300 $150M maturing Nov 2015 200 100 Gea
Slide 17: FY12 Growth Capital Investment
FY12 Growth Capital Investment Delivering sustainable growth through investment in quality large mining assets Fleet Growth For personal use only Invest in 700 large mining Exit civil & small mining Growth capital commitments of $165M for 650 FY12 progressing as previously announced Current Fleet
Slide 18: Return on Capital
Return on Capital Improving returns to acceptable levels is primary objective of business strategy For personal use only R12 ROC ROC improvement to 11.4% 11.4% notwithstanding ‘in-transit’ growth capital 11.0% Further ROC improvements from: 6.0% Full benefit of growth capital in 2H12 and FY13
Slide 19: Strategy & Outlook
For personal use only Strategy & Outlook Keith Gordon Managing Director & Chief Executive Officer
Slide 20: The Emeco Strategy
The Emeco Strategy Strategy developed to drive business performance and growth For personal use only Ongoing optimisation of Grow without sacrificing invested capital to quality of earnings maximise earnings Leverage capabilities for Continue to evolve the growth business model to meet custo
Slide 21: Emeco's Strategic Focus
For personal use only Emeco’s Strategic Focus Improving our core businesses Growing from solid foundation Canada – reconfigure fleet and Organic growth through improve returns – in progress investment in large mining equipment in Australia & Indonesia – scale the fleet and Canada – $165M in FY
Slide 22: Market Outlook
Market Outlook Positive outlook for growth in commodity volumes For personal use only Volume of Earth Moved (millions of tonnes) AUSTRALIA CANADA 8,000 Coal CAGR: 4.9% CAGR: 7.4% 800 Iron Ore 6,000 Oil Sands Gold 600 4,000 400 2,000 200 - - 2009 2010 2011 2012F 2013F 2014F 2015F 2009 2010 2011 2012F
Slide 23: New Market - Chile
New Market - Chile Entry into the Chilean market provides a range of strategic benefits For personal use only Financial returns – fleet mix and mining practices provide platform for Emeco to generate acceptable returns Commodity diversification – Opportunity to diversify into low cost, copper pr
Slide 24: Emeco Outlook
Emeco Outlook Emeco well positioned to capitalise on strong sector fundamentals For personal use only Strong demand for mining equipment in an environment of long lead times Entering 2H12 with high levels of utilisation in each region Growth capex to contribute additional earnings and improve
Slide 25: Questions
For personal use only <INSERT PICTURE> Hitachi EX3600, Queensland Questions
Slide 26: Further Information
For personal use only Further Information Thank you for your interest in Emeco Further investor enquiries should be directed to: Keith Gordon CEO Stephen Gobby CFO Graham Borgerson Investor Relations emecogroup.com
Slide 27: Appendices
For personal use only Appendix Hitachi EX3600, Queensland Appendices
Slide 28: Detailed Financials
For personal use only Detailed Financials Profit & Loss Cash flow A$ Millions Variance A$ Millions 1H11 2H11 1H12 PCP 1H11 2H11 1H12 HonH % PCP % A$ m A$ m A$ m $ Revenue 253.6 248.9 273.0 9.7 7.7 Operating Cash flow 106.7 94.1 113.3 6.6 EBITDA 113.7 109.6 119.9 9.3 5.5 General Working Capital (5.0)
Slide 29: Global Customer & Commodity Profile
For personal use only Detailed financials Global Customer & Commodity Profile Australia 90.1% Thermal Coal 29.4% Miner Indonesia 67% Gold 19.5% 5.3% Coking Coal 18.5% Canada 4.6% Iron Ore 12.5% Australia 50.1% Oil Sands 9.3% Contractor Indonesia 23.4% 33% Zinc 7.8% Canada 26.5% Other 3.0% Average Eq
Slide 30: Disclaimer
For personal use only Disclaimer 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.