Southern Cross Electrical Engineering Limited · ASX:SXE
Southern Cross Electrical Engineering — H1 FY2024 Earnings Presentation
28 slides from Southern Cross Electrical Engineering's earnings presentation, Feb 27, 2024
Slide 1: Half Year Ended 31 December 2023 Results Presentation
Half Year Ended 31 December 2023 Results Presentation For personal use only 27 February 2024 Half Year FY24 Results Presentation 11
Slide 2: Introduction to SCEE
Introduction to SCEE Leading national electrical, instrumentation, …built by design through operational excellence and a communications and maintenance services group… disciplined M&A strategy • Established in 1978 in Perth and listed in 2007 (ASX:SXE) Historically focused on resources and industria
Slide 3: Electrification and decarbonisation
Electrification and decarbonisation Australia is undergoing an energy transition to achieve net zero emissions by 2050 Reduction in fossil fuel consumption will require a high degree of electrification in the For personal use only road transport and industrial sectors. Electrification is also expect
Slide 4: SCEE's strategy
SCEE’s strategy SCEE Group primarily sees itself as an electrical contractor diversified across the infrastructure, commercial, and resources sectors • Our growth strategy continues to be to deepen our presence in those sectors and broaden our geographic diversity through expanding our core For pers
Slide 5: Financial performance
For personal use only Financial performance 5
Slide 6: Financial highlights
Financial highlights Revenue $255.6m (H1 FY23: $255.4m) matched pcp Infrastructure revenue up 50.8% on pcp to cover major resources projects completed in FY23 For personal use only NPAT $9.6m (H1 FY23: $9.7m) matched the group record H1 profit performance of pcp Results included $1.1m (H1 FY23: $1.1
Slide 7: Profit and loss
Profit and loss Revenue of $255.6m (H1 FY23: $255.4m) matched prior Summary financials: corresponding period and consistent with guidance “targeting FY24 Revenue over $500m” H1 FY24 H1 FY23 % Revenue split by sector: Infrastructure $103.8m (PCP: $68.8m), For personal use only Commercial $78.9m (PCP:
Slide 8: Balance sheet
Balance sheet Cash decreased in period to $65.0m (30 June 2023: $77.7m) driven Balance sheet summary: by payments of Trivantage earn-outs, dividends and income tax instalments for close out of FY23 major resources projects For personal use only Remain debt free Dec 23 Jun 23 $61.1m of bank guarantee
Slide 9: Cashflow
Cashflow Payments out in the period included the final Trivantage acquisition payment of $7.3m in September for achieving their earn-out targets in full, $10.2m of fully franked dividends paid in October, and $13.6m of income tax paid – a significant portion of which related to the successful close-
Slide 10: Operational performance
For personal use only Operational performance 10
Slide 11: Operational highlights
Operational highlights Lost Time Injury (“LTI”) free across group for the period (1.2 million manhours LTI-free in H1 FY24) Western Sydney International Airport at high levels of activity For personal use only Infrastructure now largest contributor Order Book split (PCP) Infrastructure 52% (43%), Co
Slide 12: Data centres
Data centres Data centres have already been a strong area for SCEE in recent years and sector is now showing exponential growth with cloud computing and AI developments For personal use only • Global data centre market is estimated to grow at a compound annual growth rate of 9.6% during the period 2
Slide 13: Western Sydney Airport
Western Sydney Airport Western Sydney Airport is a $5 billion project to provide a full- service international and domestic airport handling 10 million passengers by 2031 For personal use only • Heyday initially awarded terminal works over $100m in late 2021 • Subsequently added Fuel Farm and Border
Slide 14: Investment proposition
For personal use only Investment proposition 14
Slide 15: Diversified across markets and operations
Diversified across markets and operations H1 FY24 Order Book H1 FY24 Order Book Revenue breakdown by Sector by Geography by Sector FY17-FY23 $m $m $m • Infrastructure over half of • Circa 80% of order book on • Resources fell back from FY22 as major iron ore projects completed For personal use only
Slide 16: Long-standing blue-chip client base
Long-standing blue-chip client base Seven selected clients – Woolworths, Coles, BHP, Rio These seven clients have long-standing and deep Tinto, Multiplex, CPB and Built – have consistently relationships with SCEE spanning decades and some provided over 40% on average of revenues over the last across
Slide 17: Growth of recurring revenues and earnings
Growth of recurring revenues and earnings Strong track record of recurring revenues and earnings Wide range of recurring works under services, growth - FY23 recurring revenues were 37% of total annual maintenance, sustaining capital, and framework revenue agreements, including: Recurring Revenues ($
Slide 18: Strong dividend yield and financial position
Strong dividend yield and financial position Shareholder returns over last seven years Strong cash position to support continued growth (1.0 cps franked interim dividend to be paid 10 April 2024) At 31 December: Dividends paid (cps) $m For personal use only FY17 FY18 FY19 FY20 FY21 FY22 FY23 3.0 0.0
Slide 19: Electrification and decarbonisation
Electrification and decarbonisation Australia is undergoing an energy transition to achieve net zero emissions by 2050: Targets are enshrined in law and require delivery of climate change and For personal use only energy transformation priorities, including: • Transforming Australia’s electricity su
Slide 20: Electrification and decarbonisation (cont.)
Electrification and decarbonisation (cont.) SCEE BUSINESS WHAT OUR CLIENTS SAY EXAMPLE SCEE PROJECTS BHP: “Achieve net zero operational greenhouse gas emissions….by 2050” • BHP Juwi Northern Goldfields Solar Project Rio Tinto: “We’re targeting net zero emissions from our operations by For personal u
Slide 21: Track record of successful acquisitions
Track record of successful acquisitions Completed value-accretive acquisitions of Datatel in 2016, Revenue contribution of acquisition in first full year of Heyday in 2017 and the Trivantage Group in 2020 consolidation Actively exploring range of further acquisition targets offering increased geogra
Slide 22: Conclusion and outlook
For personal use only Conclusion and outlook 22
Slide 23: Conclusion and outlook
Conclusion and outlook Revenue $255.6m (H1 FY23: $255.4m) matched pcp NPAT $9.6m (H1 FY23: $9.7m) matched pcp For personal use only Cash $65.0m and no debt Interim Dividend 1.0 cps declared and fully franked, to be paid 10 April 2024 Recurring revenues from services, maintenance, framework agreement
Slide 24: Q&A
For personal use only Q&A 24
Slide 25: Corporate summary
Corporate summary Capital Structure Shareholders at 19 February 2024 For personal use only ASX Code SXE Thorney Investments 15.6% Share Price (23 February 2024) 93.0c First Sentier Investors 6.7% No. of ordinary shares (23 February 2024) 263.1m Other Institutions in Top 30 Shareholders 13.4% Market
Slide 26: Appendix – IFRS reconciliation
Appendix 1 – IFRS reconciliation SCEE’s results are reported under International H1 FY24 H1 FY23 Financial Reporting Standards (IFRS). SCEE discloses certain non-IFRS measures that are not prepared in $m $m accordance with IFRS. The non-IFRS measures should For personal use only only be considered i
Slide 27: Appendix – selection of current projects
Appendix 2 – selection of current projects Rio Tinto Iron Ore Master Multiplex Western Sydney Services Agreement International Airport - Heyday Over $100m For personal use only Variable $5-10m per annum Ergon Energy Asset Inspection CPB Sydney Metro Pitt Street and Maintenance Services – Station and
Slide 28: Disclaimer
Disclaimer 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 beliefs of Southern Cross El
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