K & S Corporation Limited · ASX:KSC
K & S — FY2009 Earnings Presentation
23 slides from K & S's earnings presentation, Sep 24, 2009
Slide 1: Full Year Results September 2009
For personal use only Full Year Results September 2009
Slide 2: Important Notice
IMPORTANT NOTICE For personal use only THIS PRESENTATION IS NOT AND DOES NOT FORM PART OF ANY OFFER, INVITATION OR RECOMMENDATION IN RESPECT OF SECURITIES. ANY DECISION TO BUY OR SELL K&S CORPORATION LIMITED SECURITIES OR OTHER PRODUCTS SHOULD BE MADE ONLY AFTER SEEKING APPROPRIATE FINANCIAL ADVICE.
Slide 3: K&S – Full Year Result
K&S – FULL YEAR RESULT For personal use only • Revenue $440.7 million – 5.4% ↓ • Profit after Tax $18.2 million – 7.7% ↓ • EPS 26.1 cents per share – 8.7% ↓ • Normalised Profit after Tax excluding Non Trading Items was $17.7 million – 9.7% www.ksgroup.com.au
Slide 4: For personal use only
K&S – FULL YEAR RESULT For personal use only • Result was negatively impacted by $1.8 million before tax due to the restatement of interest rate swaps to fair value under IFRS. • We experienced the onset of the Global Financial Crisis and its impact on the Australian economy. www.ksgroup.com.au
Slide 5: For personal use only
K&S – FULL YEAR RESULT For personal use only • Demand for logistics and transport services were significantly impacted in the second half as customers reacted to the slowing economy by reducing production levels and destocking of inventories. www.ksgroup.com.au
Slide 6: For personal use only
K&S – FULL YEAR RESULT For personal use only • The reductions in revenue occurred across most business areas but particularly in steel, timber, paper, aluminium and automotive sectors. • The consumer products sector of our business showed growth as a result of the stimulus packages. www.ksgroup.com.
Slide 7: For personal use only
K&S – FULL YEAR RESULT For personal use only • With the decline in demand we restructured the cost base of the business by reducing significantly the variable costs from our operations. • These reductions included Subcontractors, Agency Labour and Overtime Payments. www.ksgroup.com.au
Slide 8: For personal use only
K&S – FULL YEAR RESULT For personal use only • Some staff reductions were necessary however we made a conscious decision to maintain our skills base and protect jobs wherever possible. • We reviewed capital expenditure levels and significantly reduced them in line with customer demand. www.ksgroup.c
Slide 9: For personal use only
K&S – FULL YEAR RESULT For personal use only • We maximised the productivity of Company owned assets so as to conserve cash. • We proactively managed working capital to maximise cash generation. • We repaid $9.4 million in debt and reduced our gearing to 34.8%. www.ksgroup.com.au
Slide 10: For personal use only
K&S – FULL YEAR RESULT For personal use only • We generated $39.2 million in operating cash which was a record for the Company. • In June we successfully renegotiated our funding lines with our bankers and now these facilities are extended out to June 2012. www.ksgroup.com.au
Slide 11: For personal use only
K&S – FULL YEAR RESULT For personal use only • We have declared a fully franked final dividend of 5.0 cents per share to be paid on 30 October 2009. • The reduction in level of dividend is to assist in maintaining the strength of our Balance Sheet. www.ksgroup.com.au
Slide 12: Our Safety Target Remains Zero Harm
OUR SAFETY TARGET REMAINS ZERO HARM For personal use only Lost Time Injuries (LTI) per Financial Year Medical Treated Injuries (MTI Claims) per Financial Year 140 80 250 120 120 70 200 100 60 Number of LTI's Number of MTI's 100 50 80 MTIFR's 80 150 LTIFR 40 60 60 30 100 40 40 20 20 50 20 10 0 0 0 0
Slide 13: Key Performance Ratios
K&S – FULL YEAR RESULT For personal use only Key Performance Ratios Year Ended 30 Year Ended 30 Variance June 2009 June 2008 Revenue -5.4% 440.7 466.1 EBITDA -4.8% 50.2 52.7 EBITDA / Revenue 11.4% 11.3% EBIT -9.0% 30.4 33.4 EBIT / Revenue 6.9% 7.2% Profit after tax -7.7% 18.2 19.7 NTA per share 6.3%
Slide 14: Key Liquidity Ratios
K&S – FULL YEAR RESULT For personal use only Key Liquidity Ratios Year Ended 30 Year Ended 30 Year Ended 30 Year Ended 30 Variance June 2009 June 2008 June 2007 June 2006 Gearing (Net Debt / NTA) 34.8% 46.6% 44.7% 37.5% Interest Cover (EBIT / Interest Exp) 5.7 6.2 5.9 7.9 Operating cash flow 39.2 31
Slide 15: Share Price - NTA
K&S – SHARE PRICE - NTA For personal use only $3.80 $3.60 $3.70 $3.60 Share Price $3.40 $3.50 $3.45 NTA $3.39 $3.20 $3.20 $3.15 $3.00 $3.00 $2.80 $2.60 $2.40 $2.50 $2.39 $2.20 $2.20 $2.00 $1.83 $1.87 $1.77 $1.76 $1.80 $1.68 $1.60 $1.45 $1.40 $1.40 $1.40 $1.14 $1.19 $1.20 $0.95 $1.00 $0.80 Jun-04 Dec
Slide 16: The Year Ahead
K&S – THE YEAR AHEAD For personal use only • The last financial year proved to be very challenging, with demand exacerbated by dramatic product cuts and destocking by customers of inventories. • The June quarter has seen a stabilisation in level of customer demand. www.ksgroup.com.au
Slide 17: The Year Ahead
K&S – THE YEAR AHEAD For personal use only • This trend has continued in July and August. • The economy appears to be strengthening. • We are hopeful that our recent customer contract signing will underpin earnings in the new financial year. www.ksgroup.com.au
Slide 18: The Year Ahead
K&S – THE YEAR AHEAD For personal use only • New contracts include:- – Coca Cola Brisbane – Smart Logistics / News Print – Nippon Paper – Tas Paper – Bluescope Steel www.ksgroup.com.au
Slide 19: The Year Ahead
K&S – THE YEAR AHEAD For personal use only • Construction of a new transport terminal and warehouse facility at Kewdale, suburb of Perth. • The $11 million facility is expected to be completed by July 2010. www.ksgroup.com.au
Slide 20: Our Carbon Footprint
K&S – OUR CARBON FOOTPRINT For personal use only • We will be able to pass on higher carbon costs to customers in much the same way as existing fuel surcharges. • Our modern fleet together with our safety standards will provide a competitive advantage when compared with smaller operators. www.ksgrou
Slide 21: Our Carbon Footprint
K&S – OUR CARBON FOOTPRINT For personal use only • Regardless of the mode of transport, Road, Rail & Sea, we will be able to make margin. We are a major intermodal customer of Asciano. • Customers will demand further rationalisation as they seek only to deal with complaint suppliers. www.ksgroup.com
Slide 22: Strategy
K&S – STRATEGY For personal use only • We continue to grow the business through:- – Tenders – Organic Growth – Acquisitions provided that they deliver benefits to Shareholders. www.ksgroup.com.au
Slide 23: Questions?
For personal use only QUESTIONS? www.ksgroup.com.au