Sgh Limited · ASX:SGH
Sgh — Seven Group Holdings — H1 FY2016 Earnings Presentation
30 slides from Sgh's earnings presentation, Feb 23, 2016
Slide 1: Presentation of Results covering letter to ASX
23 February 2016 Company Announcements Office Australian Securities Exchange Limited Level 6, 20 Bridge Street Sydney NSW 2000 By electronic lodgment Total Pages: 30 (including covering letter) Dear Sir / Madam PRESENTATION OF RESULTS Following is a copy of the Presentation of Results for the financ
Slide 2: Results for the Six Months Ended 31 December 2015
RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2015 Presentation on 23 February 2016
Slide 3: Group Overview | Disclaimer
Group Overview | Disclaimer Basis of preparation of slides Included in this presentation is data prepared by the management of Seven Group Holdings Limited (“SGH”) and other associated entities and investments. This data is included for information purposes only and has not been subject to the sam
Slide 4: Group Overview | Our Businesses
Group Overview | Our Businesses Industrial Services SGH Ownership Business Description Strategic Position WesTrac Australia 100% Cat dealer in WA and NSW/ACT #1 equipment solution company in WA and NSW/ACT WesTrac China 100% Cat dealer in five provinces in China One of the leading equipment solution
Slide 5: Group Overview | Highlights
Group Overview | Highlights Result within guidance range Underlying EBIT of $167.2m down 4% on pcp and Statutory EBIT of $12.1m after Significant Items of $155.1m including $182.2m impairment of SWM investment Robust result reflects the strength of the mining production cycle and operating busin
Slide 6: Group Overview | Key Financials
Group Overview | Key Financials Underlying Results 1H FY16 1H FY15 % Change Trading revenue $ 1,368.6 m $ 1,397.8 m -2% 1 Earnings before interest and tax (excluding Significant Items) $ 167.2 m $ 175.0 m -4% 1 Underlying net profit after tax (excluding Significant Items) $ 111.6 m $ 118.7 m -6% Und
Slide 7: Financials | Profit and Loss
Financials | Profit and Loss $m 1H FY16 1H FY15 Change % Revenue 1,368.6 1,397.8 -2% Please refer to the Appendix 4D Other income 48.3 59.4 -19% for the detailed statutory results Significant Items are further Share of results from equity accounted investees 59.3 53.1 12% summarised on slide 7 T
Slide 8: Financials | Significant Items
Financials | Significant Items $m 1H FY16 1H FY15 Impairment – SWM equity (182.2) (195.5) Impairment – WesTrac China distribution network - (71.4) Gain on sale of investments and MtM on derivatives 2.3 8.5 Restructuring, redundancy, transaction and other costs (2.6) (6.1) Share of equity accounted i
Slide 9: Financials | Earnings Summary
Financials | Earnings Summary Total WesTrac WesTrac Allight Coates Media Other $m Energy Other Group Aus China Sykes Hire Invest. Invest. Revenue 1,368.6 1,067.2 258.2 39.4 - - 3.8 - - Statutory EBIT 12.1 85.1 7.8 (0.5) 2.5 (123.9) (4.8) 56.1 (10.2) Add unfavourable Significant Items Impairment – SW
Slide 10: Financials | Cash Flow
Financials | Cash Flow $m 1H FY16 1H FY15 Underlying EBIT 167.2 175.0 EBITDA cash conversion reflects improved inventory and contract Add: depreciation and amortisation 19.6 23.7 management in China Underlying EBITDA 186.9 198.7 Investing activities includes: Operating cash flow 201.9 238.4 – $2
Slide 11: Financials | Balance Sheet
Financials | Balance Sheet As at As at Change $m 31 Dec 15 30 Jun 15 % Decline in investments Trade and other receivables 514.9 489.2 5% largely due to SWM Inventories 933.7 929.2 0% impairment of $182m and mark-to-market of listed Investments 1,750.0 2,124.8 -18% investments within the Group’s en
Slide 12: Financials | Debt Maturity Profile
Financials | Debt Maturity Profile At 31 December 2015, the Group had $951m of available undrawn borrowing facilities Current “<1 year” debt includes a $109m USPP tranche that matures in August 2016 as well as a number of offshore facilities and short term OEM facilities that are regularly rolle
Slide 13: Financials | Capital Management
Financials | Capital Management Our aim is to Ensure an efficient capital structure by maintaining prudent levels of gearing and retaining access to multiple capital markets Retain sufficient balance sheet flexibility to fund the working capital needs ← Interim 20cps of operating businesses Enha
Slide 14: WesTrac Australia
WesTrac Australia WesTrac’s market-leading equipment and service delivers reliability to the mining production phase
Slide 15: Industrial Services | WesTrac Australia
Industrial Services | WesTrac Australia Maintenance opportunities Average mining fleet age of approximately 8 years Restricted mining capital expenditure and short term maintenance deferment programs will result in increased future maintenance Production volumes Commodity price volatility has
Slide 16: Industrial Services | WesTrac Australia
Industrial Services | WesTrac Australia Trading revenue and margins in line with pcp Product sales up 9% on the prior comparative period – New equipment sales up 5% on pcp Product – Used equipment sales up 54% on pcp sales Growth in maintenance opportunity as equipment progresses along the maint
Slide 17: WesTrac China
WesTrac China China has a growing need for engines and generators to supply power and backup systems to a range of industries
Slide 18: Industrial Services | WesTrac China
Industrial Services | WesTrac China Profitability and positive cash flow Delivered EBIT of US$7.8m and an EBIT margin of 4.1% The decline reflects a challenging market where the property sector is in a protracted downturn with hydraulic excavator sales down 36% YoY Rebuild centre disrupted as
Slide 19: Coates Hire
Coates Hire Coates Hire is a leading supplier of equipment to the infrastructure sector
Slide 20: Industrial Services | Coates Hire
Industrial Services | Coates Hire Trading conditions are competitive Competing aggressively to win back market share Revenue down 9% on pcp, particularly in WA and Queensland Construction and infrastructure opportunities seen in NSW Negatively impacted by slowdown of major mining projects an
Slide 21: Media
Media Seven West Media creates and owns the best content and delivers it to the widest multi-platform audience in Australia
Slide 22: Media | Seven West Media
Media | Seven West Media $m 1H FY16 1H FY15 Change Content strategy progressing – creation & delivery 1 Maintained leadership in television revenue and ratings share. SWM share of associate NPAT 57.5 43.6 32% Launched live 24/7 streaming of 7, 7mate, 7TWO and Racing.com Other investment income 2
Slide 23: Energy
Energy SGH Energy is positioned for future growth in East Coast and Asian demand for energy
Slide 24: Energy | Asset Overview
Energy | Asset Overview Energy demand set to grow in medium to long-term Energy Total $m 1H FY16 1H FY15 Recent developments in the East Coast market strengthen the case Revenue 3.8 5.2 for a gas shortage in the medium term Other income 3.8 0.3 Exposure to thematic provided by Gippsland assets (
Slide 25: Energy | Beach and Drillsearch Investment
Energy | Beach and Drillsearch Investment Investment rationale East Coast gas thematic was a key driver of the investment in Beach and Drillsearch, along with: – Processing and pipeline infrastructure already in place in the Cooper Basin – Quality asset positions in Western Flank oil and SACB / SW
Slide 26: Investments
Investments SGH continues to realise value from its property portfolio
Slide 27: Investments | Profit and Loss
Investments | Profit and Loss $m 1H FY16 1H FY15 Change % Revenue - - - Other income 19.2 20.9 -8% Share of results from equity accounted investees 0.2 0.3 -33% Total revenue and other income 19.4 21.2 -8% Expenses (excluding interest and corporate) (1.0) (1.2) -17% Segment EBITDA 18.4 20.0 -8% Depr
Slide 28: Investments | Property and Listed Portfolios
Investments | Property and Listed Portfolios Realising value from our existing property assets Delivered $37m in pre-tax profit from realisation of property assets Practical completion of Kings Square KS3 on 3 July 2015 KS4 settled on 22 September 2015 Development approval received for Kings
Slide 29: Outlook | Key Takeaways and Questions
Outlook | Key Takeaways and Questions Sustained focus on cost control and efficiency to ensure our businesses are well positioned and resilient to market circumstances Committed to enhancing shareholder value through capital management initiatives supported by improvement in net working capital and
Slide 30: 1H FY16 Results Presentation | 23 February 2016 | 29
1H FY16 Results Presentation | 23 February 2016 | 29
Seven Group Holdings — H1 FY2016 Earnings Presentation on 6ix