24 slides from Southern Cross Electrical Engineering's earnings presentation, Aug 30, 2017
Slide 1: Full Year Results Presentation
For personal use only Full Year Results Presentation Year Ended 30 June 2017 30 August 2017
Slide 2: About SCEE
About SCEE For personal use only Southern Cross Electrical Engineering (SCEE) is an ASX listed electrical, instrumentation, communication and maintenance services company recognised for our industry leading capabilities Established in 1978 in Western Australia, the combination in 2016 with Datatel C
Slide 3: Highlights
Highlights For personal use only Statutory revenue $199.9m, EBITDA $6.3m and NPAT loss of $0.4m Activity in H1 negatively impacted by slower award of work in several sectors Strong H2 turnaround with Underlying H2 EBITDA of $8.2m* and Underlying H2 NPAT Financial profit of $4.1m* in line with guidan
Slide 4: Underlying full year financial performance
Underlying full year financial performance For personal use only Activity in first half slow due to delayed mobilisation to projects, lower than anticipated release of work in iron ore sector and NBN delays In second half strong turnaround with impact of acquisition of Heyday, expansion of Datatel i
Slide 5: Reconciliation of underlying to statutory FY17 results
Reconciliation of underlying to statutory FY17 results * For personal use only 1. Organisation restructuring represents the costs incurred, primarily redundancies, as management took actions to ensure an efficient operating structure in a strongly cost focused market 2. M&A costs represents external
Slide 6: Balance sheet
Balance sheet For personal use only Strong balance sheet throughout the period Cash of $40.6m and negligible debt at 30 June Further $9.25m of cash due to Heyday vendors in September 2017 Available bank guarantee and surety bond facilities of $75.5m of which $42.9m used. 5
Slide 7: Cashflow
Cashflow For personal use only $5.9m cash expended on restructuring the business to drive future savings, investing in growth and expansion initiatives and on M&A activity Capex remained low at $2.0m and forecast to remain at these levels for time being Payment of final FY16 dividend made in H1 FY17
Slide 8: Health, safety and people
Health, safety and people For personal use only Workforce increased from 600 employees in June 2016 to currently over 1400 and recruitment is continuing Thirteen years LTI free in Australia Ongoing commitment to indigenous participation Restructuring of the organisation during the year to ensure eff
Slide 9: Order book by sector
Order book by sector For personal use only Transformational growth in order book from $55m at end FY16 to over $480m end FY17. Grown in all sectors including resources. Organic diversification into infrastructure, defence, renewables and utilities. Acquisitive entry into commercial, telecommunicatio
Slide 10: Order book by geography
Order book by geography For personal use only Order book grown from $55m at end FY16 to over $480m end FY17. Held steady in WA and grown in Queensland. Organic entry into NT and acquisitive entry into NSW and ACT. Order book: $55m Order book: $480m 9
Slide 11: Leading national diversified electrical contractor
Leading national diversified electrical contractor For personal use only The combined Group will have a diversified portfolio of projects across Australia and over 1400 employees Commercial Public Infrastructure and defence Resources – mining, oil & gas Telecommunications and data centres Industrial
Slide 12: Strategy
Strategy For personal use only Recognising the cyclical nature of the resources construction market, from early 2016 we implemented a strategy to: • transition to a sustainable resources business through exposure to sustaining capital and maintenance markets; and • grow through expansion into adjace
Slide 13: Diversification by sector
Diversification by sector For personal use only Sector diversification has begun in FY17 as resources-derived revenues in WA and Queensland declined from FY16 to be replaced with commercial, telco and infrastructure work. Order book indicates those declining sectors will turn around in FY18 combined
Slide 14: Diversification by geography
Diversification by geography For personal use only Geographic diversification also has begun in FY17 as revenues in WA and Queensland declined from FY16 to be replaced mainly with work in NSW and ACT. Order book indicates WA decline will halt in FY18 with strong growth elsewhere. Revenue: $207.6m Re
Slide 15: Heyday acquisition – March 2017
Heyday acquisition –March 2017 For personal use only Business established in 1978 as a specialist electrical contractor Heyday is a leading provider of electrical services to the building industry and major private clients Established client relationships with some of the most prominent participants
Slide 16: Sector outlooks
Sector outlooks For personal use only Whilst SCEE remains a major supplier, flow of work from iron ore clients to be subdued in the short term but there is now visibility of upcoming replacement tonnage projects LNG activity expected to continue through FY18 Resources Commenced over $25m of work at
Slide 17: Sector outlooks (continued)
Sector outlooks (continued) For personal use only Strong commercial sector growth forecast over the next five years particularly in NSW and ACT Commercial Office developments and fit-outs and shopping centre refurbishments driven by population growth Potential to leverage combined Group’s customer r
Slide 18: Business Development pipeline
Business Development pipeline For personal use only Tendering at high level with over $400m of submitted tenders with clients pending decision Business development pipeline strong with immediate prospects of further $900m currently being estimated in tendering departments Order book and pipeline ind
Slide 19: Conclusion and outlook
Conclusion and outlook For personal use only • Transformational year for SCEE • Activity in H1 impacted by slow award of work but strong H2 turnaround with result of Underlying H2 EBITDA of $8.2m and Underlying NPAT profit of $4.1m* in line with guidance • Incurred significant restructuring, M&A and
Slide 20: Appendices
For personal use only Appendices Appendix 1-Underlying to statutory results FY16 reconciliation Appendix 2-Underlying to statutory results H2 FY17 reconciliation Appendix 3-Heyday transaction terms 19
Slide 21: Appendix 1 – FY16 Underlying to statutory results reconciliation
Appendix 1–FY16 Underlyingto statutory results reconciliation For personal use only SCEE’s results are reported under International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. The Company discloses certain non-IFRS measures that are not prepared in
Slide 22: Appendix 2 – H2 FY17 Underlying to statutory results reconciliation
Appendix2–H2 FY17Underlying to statutory resultsreconciliation * For personal use only 1. Organisation restructuring represents the costs incurred, primarily redundancies, as management took actions to ensure an efficient operating structure in a strongly cost focused market 2. M&A costs represents
Slide 23: Appendix 3 – Heyday transaction terms
Appendix 3– Heyday transaction terms For personal use only Acquisition of 100% of Heyday5 Pty Ltd Acquisition Completed on 9 March 2017 Up to a total of $54.1m payable as follows: 1. Initial Cash Consideration: $18m in cash paid at completion on 9 March 2017 2. Further Consideration: $2.25m in cash
Slide 24: Disclaimer
Disclaimer For personal use only Some of the information contained in this presentation contains “forward-looking statements” which may not directly or exclusively relate to historical facts. These forward-looking statements reflect the current intentions, plans, expectations, assumptions and belief