Sgh Limited · ASX:SGH
Sgh — Seven Group Holdings — H1 FY2024 Earnings Presentation
35 slides from Sgh's earnings presentation, Feb 14, 2024
Slide 1: Presentation of Half Year Results ASX announcement
14 February 2024 Company Announcements Office Australian Securities Exchange Limited 20 Bridge Street SYDNEY NSW 2000 PRESENTATION OF HALF YEAR RESULTS Seven Group Holdings Limited (ASX: SVW) attaches the Results Presentation for the six months ended 31 December 2023. This release has been authorise
Slide 2: Seven Group Holdings HY24 Results Presentation
Seven Group Holdings HY24 Results Presentation 14th February 2024 HY24 Results Presentation 1
Slide 3: Group Overview - Who We Are
Group Overview - Who We Are Seven Group Holdings (ASX:SVW) • Sole CAT dealer in WA & NSW/ACT • Leading ASX Industrial business • ~50k machines in territory • +22m parts sold annually Industrial Services • ASX100, ~$13 billion market cap • 15,000 employees over 5 core businesses • Australia’s largest
Slide 4: Group Overview – HY24 Key Results
Group Overview – HY24 Key Results SGH HY24 Sankey Diagram ($m) $5,386m 17% $1,017m 21% Revenue EBITDA $764m 28% $474m 31% EBIT NPAT 119cps 27% $715m 25% EPS Op Cashflow • This presentation refers to underlying results unless otherwise specified HY24 HY24Results ResultsPresentation Presentation 3
Slide 5: Strategic Sector Exposures
Strategic Sector Exposures Infrastructure and Transitional Mining Production Construction Energy • Exposure through WesTrac • Exposure through Coates and Boral • Gas/LNG critical transitional energy • Customer activity linked to mining • Exposure through Beach and SGHE • $1.7t seven-year project pip
Slide 6: Group POV, Operating Model
Group POV, Operating Model Group Purpose, Objective and Values Accountable, Scalable Operating Model n Fro e atio nt- n lin eli Purpose Recognising and serving d e exceptional BU fo businesses cu p& se Strategic Grou d Maximise return to Objective stakeholders through long term sustainable value cre
Slide 7: Safety and Sustainability
Safety and Sustainability Safety performance continues to improve LTIFR2 TRIFR3 Dec Dec Dec Dec 2023 2022 2023 2022 • HY24 12m LTIFR of 1.3, improved 47% WesTrac 0.4 0.3 4.5 6.7 Coates 0.7 2.3 2.9 5.9 • HY24 12m TRIFR of 4.5, improved 48% Boral 2.1 3.9 5.2 11.1 Group Total 1.3 2.4 4.5 8.6 • Driving
Slide 8: Group Overview – Earnings Growth
Group Overview – Earnings Growth Above-trend growth continues HY24 Group EBIT Result ($m) • Seven consecutive years of Group earnings growth ↑ 28% • EBIT of $764m up 28%, ahead of 12% 10-year CAGR ↑ 111% Driven by Industrial Services (IS) segment • IS revenue growth of 17% on strong customer activit
Slide 9: Group Overview – Key Financials
Group Overview – Key Financials $m1 HY24 HY23 % Change Revenue 5,386 4,607 17% Earnings before interest, tax, depreciation and amortisation 1,017 842 21% Earnings before interest and tax (EBIT) 764 595 28% Statutory EBIT Impact (236) (17) - 5,386 4,607 764 595 Statutory EBIT 528 578 (9%) 17% 28%
Slide 10: WesTrac – Business Unit Overview
WesTrac – Business Unit Overview HY24 Results Presentation 9
Slide 11: Industrial Services – WesTrac Highlights
Industrial Services – WesTrac Highlights Above-trend growth continues WesTrac Revenue Split by Half 3,000 • Total sales up 27% on new machines and product support Capital sales 2,500 Product support • Machine sales up 23%, with strong deliveries across mining 2,000 and construction 1,500 • Product s
Slide 12: Industrial Services – WesTrac Financials
Industrial Services – WesTrac Financials Revenue up 27% to $2,907m • EBIT margin up 38bp to 11.4% • EBIT up 31% to $333m, ahead of 10-year CAGR of 8% Investing to support customer demand and growth 2,907 • Targeted investment in working capital/inventory to meet growing 2,296 333 254 customer demand
Slide 13: Coates – Business Unit Overview
Coates – Business Unit Overview HY24 Results Presentation 12
Slide 14: Industrial Services - Coates Highlights
Industrial Services - Coates Highlights Coates Market Share and Addressable Market Customer activity remains robust 4.50 30.0% Addressable Rental Market ($b) 28.3% 4.00 Total Australian construction work done up 8.5% YoY Coates Market Share (%) • 25.0% 3.50 to Sep-23 (latest ABS release) 3.00 20.7%
Slide 15: Industrial Services - Coates Financials
Industrial Services - Coates Financials Financial result reflects customer activity and cost focus • Revenue of $585m up 2% • EBIT of $164m, up 10% Improving operating leverage and yield • Driven by pricing and cost discipline • 44.1% EBITDA margin, up 245bp 164 585 149 575 2% 10% • 28.0% EBIT ma
Slide 16: Boral – Business Unit Overview
Boral – Business Unit Overview HY24 Results Presentation 15
Slide 17: Industrial Services - Boral Highlights
Industrial Services - Boral Highlights Sales volume and pricing holding in HY24 Boral Revenue Split by Segment HY24 External Volumes FY21-HY24 (% ) • Total HY24 sales volumes marginally up 2 2 2 2 Quarries +2% • Pricing traction maintained or improved across all products 11 12 13 Internal optimisati
Slide 18: Industrial Services - Boral Financials
Industrial Services - Boral Financials Strong first half financial result • Revenue of $1,840m up 9% • EBIT margin expansion of 525bp to 10.9% • EBIT of $201m, up 111% • ROFE of 18.1% up 960bp 1,840 Revenue $m 1,681 201 OCF growth strengthening financial position 111% 95 9% HY23 HY24 HY23 HY24 •
Slide 19: Energy – Business Unit Overview
Energy – Business Unit Overview HY24 Results Presentation 18
Slide 20: Beach and SGH Energy Highlights
Beach and SGH Energy Highlights Beach Energy (30%) • HY24 production of 8.8mmboe down 11% • NPAT of $173m down 10%, on margin compression • Increasing production into tightening east coast gas market through Otway well connections 173 941 • Competitive GSA signed with Origin for Enterprise gas 191 8
Slide 21: Media – Business Unit Overview
Media – Business Unit Overview HY24 Results Presentation 20
Slide 22: Seven West Media (40%) & Other Media
Seven West Media (40%) & Other Media Revenue of $775m down 5% • Market share up 1.7 points, offsetting 9% softer ad market • EBITDA of $124m, down 40% • NPAT of $63m, down 49% Balance sheet strength maintained 124 775 40% 205 816 Net Debt (ND) up slightly (3%) to $257m • HY23 HY24 5% HY23 HY24 •
Slide 23: Group Finances
Seven Group Holdings HY24 Results Presentation Group Finances Richard Richards, CFO HY24 Results Presentation 22
Slide 24: Financials – Profit and Loss
Financials – Profit and Loss $m HY24 HY23 Change % Revenue 5,385.8 4,607.0 16.9% Other income 22.1 20.2 9.4% Share of results from equity accounted investees 85.5 114.0 (25.0)% Revenue and other income 5,493.4 4,741.2 15.9% Expenses (excluding. depreciation, amortisation and interest) (4,476.5) (3,8
Slide 25: Financials – Significant Items
Financials – Significant Items $m HY24 HY23 Fair value adjustments on acquisition of Boral (2.2) 6.9 Net gain on disposal of contolled entities 32.6 - Property EBIT 3.6 - Transformation and restructure (costs)/benefits (2.9) 6.8 Impairment of investment in equity accounted investees (91.2) (50.7) Si
Slide 26: Financials – Business Unit Earnings
Financials – Business Unit Earnings $m Total Group WesTrac Coates Boral Energy Media Investments Corporate Revenue from continuing operations 5,394 2,907 585 1,840 1 - 61 - Statutory EBIT 528 333 161 182 (105) (66) 39 (15) Add: unfavourable significant items 272 - 3 19 155 94 - - Subtract: favourabl
Slide 27: Financials – Cash Flow
Financials – Cash Flow $m HY24 HY23 Key Commentary Underlying EBIT 763.7 594.6 • Disciplined working capital focus enabled $138m increase in Operating Cash Add: depreciation and amortisation 253.2 247.2 • Cash conversion of 110% at Boral and 98% at Underlying EBITDA 1,016.9 841.8 Coates supported a
Slide 28: Financials – Balance Sheet
Financials – Balance Sheet $m HY24 FY23 Change % Trade and other receivables 1,518.5 1,649.3 (7.9)% Inventories 2,063.2 1,846.7 11.7% Assets held for sale 3.5 3.2 9.4% Investments 1,607.3 1,797.5 (10.6)% Property, plant and equipment 3,526.1 3,497.9 0.8% Oil and gas assets 537.8 476.5 12.9% Intangib
Slide 29: Financials – Capital Management
Financials – Capital Management Net Debt and Leverage Facility Maturity as at 31 Dec 2023 ($m) • Strong cash flow utilised to reduce net debt (ND) by 8% to $3,709m 1,656 • Adjusted 1 ND/EBITDA (leverage) down 15% to 1.9x • Deleveraging supported by Industrial Services earnings growth and sale of non
Slide 30: Closing Messages & Outlook
Seven Group Holdings HY24 Results Presentation Closing Messages & Outlook Ryan Stokes, MD & CEO HY24 Results Presentation 29
Slide 31: Track Record of Delivery
Track Record of Delivery Group EBIT History and Initial Guidance EBIT Margin History by Business Unit 1,400 600 WesTrac EBIT Underlying EBIT Initial Guidance YoY Delta (%) 1,200 +20% Coates EBIT 500 Boral EBIT +25% 500 Linear (WesTrac EBIT) 1,000 Linear (Coates EBIT) +7% 400 426 +1% 400 800 +46% 371
Slide 32: Key Messaging and Outlook
Key Messaging and Outlook Group Level Guidance • Strong 1H performance supports upgrading Group guidance to “Mid to high-teen EBIT growth in FY24” Strong start to FY24 for Industrial Services • Bulk commodity production outlook and 1H investment in inventory underpin positive WesTrac outlook • Resil
Slide 33: Q&A
Seven Group Holdings HY24 Results Presentation Q&A 14th February 2024 HY24 Results Presentation 32
Slide 34: Appendix – Businesses & Markets
Appendix – Businesses & Markets Industrials Industrials Industrials Energy Media 100% 100% 72% Beach 30% SGHE 100% 40% WesTrac is one of the largest Coates is Australia’s largest Boral is Australia’s largest Beach Energy is a leading mid- Seven West Media is a leading CAT® dealers globally (by sales
Slide 35: Disclaimer
Disclaimer Basis of preparation of slides Included in this presentation is data prepared by the management of Seven Group Holdings Limited (“SGH”) and other associatedentities and investments. This data is included for information purposes only and has not been subject to the same level of review by
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