Austin Engineering Limited · ASX:ANG
Austin Engineering — Shareholder Meeting (February 2016)
21 slides from Austin Engineering's shareholder meeting presentation, Feb 11, 2016
Slide 1: Austin Engineering Ltd AGM – Company Presentation
Austin Engineering Ltd AGM – Company Presentation
Slide 2: Agenda
Agenda • Commencement of meeting at 10:30am • Chairman’s address • Managing Director’s address and presentation • Questions on Managing Director’s address and presentation • AGM formalities • Close and opportunity to meet over refreshments
Slide 3: Key Items
Key Items 1. Continued improvement in safety – Global LTIFR for FY15 of 2.9 demonstrated further improvement on the FY14 result of 3.3 2. Profitability maintained in a challenging environment – Revenue and normalised* EBITDA ($15.0m) for the year was in line with statutory EBITDA for the PCP ($15.2m
Slide 4: Safety
Safety 12 10 8 6 FY14 FY15 4 2 0 No. of LTI's LTIFR • A continued focus on zero harm has yielded improved safety results in FY15 • The Global LTIFR (Lost Time Injury Frequency Rate) for FY15 was 2.9 which is an improvement from 3.3 recorded for FY14
Slide 5: Financials – FY15
Financials – FY15 FY14 FY15 $m $m Revenue 209.9 210.4 Margins maintained in Gross Margin % 35% 36% subdued environment Normalised EBITDA 15.2 15.0 Depreciation (10.5) (11.0) Amortisation / Impairment (0.9) (42.0) One-off due to soft Interest Income 0.1 1.3 trading, non-cash Interest Expense (3.9) (6
Slide 6: Current Trading
Current Trading Largest Businesses by Revenue Business unit Region Trading vs. Budget Perth Australia p Westech USA q Chile South America q COR Cooling Australia p Site Services (formerly Pilbara Australia p Hire) Indonesia Asia q
Slide 7: FY16 Guidance
FY16 Guidance • 1H16 trading has been soft • Market still subdued as customers defer capex • Revenue ahead of PCP • EBITDA %’s are under pressure • FY16 normalised* EBITDA expected to be between $14m to $16m • Mining sector capex recovery taking longer than expected • Continue to see customer delays
Slide 8: Debt Management Strategy
Debt Management Strategy The company is assessing all options to manage its debt 1 Steps taken thus far • $51.6m capital raising was successfully executed in July • $31.6m rights issue • $20.0m subordinated loan • Substantive reduction of $47.2m in senior debt 2 Current process underway • Senior deb
Slide 9: Operational Review – Australia
Operational Review Australia • West Australian manufacturing has a good base-load of work until March 16. Additionally this business is currently engaged in substantial tender activity for additional work from major clients • Austin Site Services (formerly Pilbara Hire) also have a good base-load of
Slide 10: Operational Review – Indonesia
Operational Review Indonesia • The first half of FY16 has seen a slow start with limited projects completed after an excellent FY15 • A number of recent project wins will allow the second half to commence with a steady start • We have been advised that our client, who supplied the major orders to th
Slide 11: Operational Review – Americas (USA)
Operational Review Americas USA • USA operation has had a poor start to the new financial year • There are currently a substantial amount of open tenders (USD 62m) we have participated in which are awaiting approval from the various client corporate offices • December (month) will see the operation
Slide 12: Operational Review – Americas (Colombia, Peru)
Operational Review Americas (con’t) Colombia • The site contract for Prodeco is continuing and discussions on the 3 year contract have now escalated to include additional projects (one additional project involving 12-22 people has already commenced and is to be added to the contract) • First product
Slide 13: Operational Review – Americas (Chile)
Operational Review Americas (con’t) Chile • Delays in contracted shutdowns in Chile has shifted revenue to the second half for Servigrut • The base contracts Servigrut holds, which extend over 3-5 years, provide an excellent foundation • Calama holds 4 base maintenance contracts which have terms bet
Slide 14: Outlook – Current Environment
Outlook Current Environment • Commodity prices are near multi year lows • Production levels consistent or increasing in some cases • The continued reduction in CAPEX budgets has led to our customers increasing their OPEX budgets significantly which has increased repair/maintenance work. However much
Slide 15: Outlook – Austin Engineering
Outlook Austin Engineering • Supplies consumable products (ongoing need) • Maintenance / repairs now forming a significant part of the Companies revenue (multi year contracts) • Once onsite, Austin is able to provide engineering solutions which generate productivity and efficiency increases • Austin
Slide 16: Outlook – Austin Engineering
Outlook Austin Engineering • The current restructuring as well as the quality of Austin’s customers, products and staff leave the Company very well positioned for future growth • Production levels dictate that the high levels of current equipment will have to be replaced. The delays to this replacem
Slide 17: Outlook – Austin Engineering
Outlook Austin Engineering • The Australian operations collectively are performing well • Indonesian operation forecasting strong second half • USA operation forecasting improved order intake • We believe the company has strong defences to the plaintiffs' assertions in the patent litigation, and we
Slide 18: Outlook – Austin Engineering
Outlook Austin Engineering • The company’s base loading is intact but the additional variable revenue associated with these contracts is being delayed • The reduction of the company senior syndicated debt is a major focus of the company • Full year forecast normalised EBITDA is now at the Company ba
Slide 19: 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 20: Austin Principal Services
Austin Principal Services Equipment Specialised Painting and repair and fabrication blasting maintenance Specialised On-site maintenance and shutdown machining and services (Austin Engineering Site Services) line boring
Slide 21: Austin Brands
Austin 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 Ingeni
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