Southern Cross Electrical Engineering Limited · ASX:SXE
Southern Cross Electrical Engineering — H1 2013 Earnings Presentation
26 slides from Southern Cross Electrical Engineering's earnings presentation, Mar 25, 2013
Slide 1: Investor Presentation
For personal use only Investor Presentation 25 March 2013
Slide 2: Highlights
Highlights For personal use only Financial • Revenue up 43% on prior corresponding period to $120.6m • NPAT of $4.3m • Overhead base increased to support growth • Major contracts awarded later in H1 than expected but will ramp up in H2 • Strong balance sheet with cash of $46.9m Operational • LTI fre
Slide 3: About us
About us For personal use only Powering Australia’s resources industry • emerging Tier One provider of specialised electrical and instrumentation services • deliver life-of-project services to large-scale resource projects across Australia • strong reputation for safety and excellence • established
Slide 4: About us: three operating divisions
About us For personal use only Three operating divisions provide clients project life cycle support 4
Slide 5: Exposure to five sectors
Exposure to five sectors For personal use only SCEE operates in the following resource sectors: • Iron ore • Minerals and metals • LNG • CSG • Coal 5
Slide 6: Contract awards – FY13
Contract awards – FY13 For personal use only Rio Tinto Cape Lambert Phase A • Largest contract in Company’s history at over $100m • Awarded under existing framework agreement AngloGold Ashanti/Independence Tropicana Gold Project • Contract value over $40m Rio Tinto Yandi Expansion Project • Contract
Slide 7: Projects – FY13
Projects – FY13 Rio Tinto For personal use only Rio Tinto Services Rio Tinto Yandi CLB Phase A Sustaining Project TSJV Lake Rio Tinto Cape Vermont Lambert 33kV Lines Rockhampton MCC Sino Iron BP Services Rio Tinto Coastal Waters BHP Iron Ore Sustaining Capital Silver Lake Tuckabianna Gold Project An
Slide 8: HY financial results
HY financial results For personal use only HY13 HY12 Change $m $m % Revenue 120.6 84.2 43% • Significant increase in revenue from corresponding prior period Gross profit 24.0 17.8 35% • Overhead base grown to support Gross margin (%) 19.9 21.1 expected higher activity levels EBITDA 9.5 8.3 14% • Key
Slide 9: Revenues by operating division
Revenues by operating division For personal use only Main contributors: SCEE Infrastructure $15.3m • Rio Tinto Coastal Waters • Rio Tinto Yandi Expansion $35.9m • Rio Tinto Cape Lambert 33kV SCEE Construction • MCC Sino Iron • AngloGold Ashanti Tropicana $69.4m • QGC Early Works • TSJV Lake Vermont
Slide 10: Balance Sheet
Balance Sheet For personal use only Dec 12 Jun 12 $m $m Current assets 110.2 91.9 • 46.9m cash balance • $15.6m investment in plant and equipment Non current assets 47.8 34.7 • $5.4m debt Total assets 158.0 126.6 • $60.0m banking and bonding capacity of Current liabilities 61.2 33.4 which $35.7m on
Slide 11: Cashflow
Cashflow For personal use only 70 22.6 (11.1) • Strong operating cash 60 inflow in period (1.8) • $11.1m cash outflow on (0.3) (3.6) 50 plant and equipment 9.5 • FY12 dividend of $3.6m 40 paid in period 30 46.9 20 31.6 10 0 Opening EBITDA Working Capex Tax, Interest, Repayment Dividends Closing Cash
Slide 12: Historical results summary
Historical results summary For personal use only 2011 2012 2013 H1 H2 H1 H2 H1 $m $m $m $m $m Revenue 47.3 54.5 84.2 135.8 120.6 Gross profit 2.3 13.9 17.8 25.6 24.0 Gross margin (%) 4.9 25.5 21.1 18.9 19.9 EBITDA (5.4) 6.1 8.3 13.9 9.5 EBIT (6.3) 5.2 7.3 12.1 7.2 NPAT (4.8) 3.1 5.1 8.6 4.3 Net marg
Slide 13: Financial trends
Financial trends For personal use only Revenue ($m) Gross Profit ($m) and Gross Margin EBITDA ($m) 150 30 30% 15 25 25% 10 100 20 20% 5 15 15% 0 50 10 10% 5 5% -5 0 0 0% -10 H1 11 H2 11 H1 12 H2 12 H1 13 H1 11 H2 11 H1 12 H2 12 H1 13 H1 11 H2 11 H1 12 H2 12 H1 13 Gross Profit Gross Margin % NPAT($m)
Slide 14: Our vision
Our vision For personal use only SCEE’s vision statement communicates our future mid-to-long term aspirations for the business, it is a unified statement to our team and other stakeholders of both SCEE’s intent and direction: An emerging Tier One E&I contractor with first class systems, health and s
Slide 15: Order book
Order book For personal use only 200 Order book at 31 December 2012 includes 180 $46m of orders for FY14 160 Ongoing works: 140 • Rio Tinto Cape Lambert Phase A 120 • AngloGold Ashanti Tropicana Gold Project 100 • Rio Tinto Coastal Waters • Rio Tinto Yandi Expansion 80 • MCC Sino Iron 60 40 Order bo
Slide 16: Strong full year expectations
Strong full year expectations For personal use only • Revenue and NPAT to significantly improve in H2 as key projects ramp up • Overheads as a percentage of revenue in H2 to return to levels equal to or lower than FY12 • Ability to meet those expectations dependent on: • Volume of activity on key pr
Slide 17: Opportunity pipeline
Opportunity pipeline For personal use only Iron ore Rio Tinto Cape Lambert Phase B, Sino Iron Trains 3 to 6, Hancock Prospecting Roy Hill, BHP Sustaining Capital LNG Chevron Wheatstone, Inpex Ichthys, Chevron Gorgon, QCLNG, APLNG, GLNG CSG QCLNG facilities, APLNG facilities, GLNG facilities Minerals
Slide 18: LNG: Unprecedented growth potential
LNG For personal use only Unprecedented growth potential • Up to $7bn of E&I work to be performed in Australia over the next five years on projects with FID • Additional work expected from projects in FEED • Formed KSJV with highly regarded international E&I contractor Kentech in December 2012 • 50:
Slide 19: Growing recurring revenues
Growing recurring revenues For personal use only • Growth of services business fundamental to long term growth strategy • SCEE Services brand established from 1 July 2012 • Framework agreements in place with Rio Tinto and BHP • Targeting existing and new LNG facilities – Gorgon, Pluto and NWS 19
Slide 20: Health and safety
Health and safety For personal use only • Continual focus on performing our work safely • LTI free in the period • Eight years LTI free in Australia • Purpose built training facilities and training programs aimed at maintaining these high standards 20
Slide 21: Systems development
Systems development For personal use only • Project management system (SCEEtrak) development on schedule and on budget • New ERP selected and phase one of implementation scheduled to go live June 2013 21
Slide 22: Growing our people
Growing our people For personal use only Focus on recruitment and training • Return to growth in employee numbers 1400 Employee Numbers as activity increases in H2 1200 • Recruitment and training valuable part of company growth and development1100 914 1000 • Dedicated training managers, facilities 4
Slide 23: Client recognition
Client recognition For personal use only Rio Tinto Iron Ore Supplier Recognition Program • Winner of 2012 Construction Category • Recognition of the significant value added by SCEE • Demonstrates SCEE’s ongoing commitment to outstanding levels of client service 23
Slide 24: Conclusions
Conclusions For personal use only Set for second half surge • First half revenues 43% higher than corresponding prior period • Order book of $186m supports growth in full year revenues • Increased overhead base supporting growth in the business, overheads as a percentage of revenue expected to reduc
Slide 25: Non-IFRS financial information
Non-IFRS financial information 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 accordance with IFRS and there
Slide 26: 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 Southern Cross Electrical Engineering Limited’s current intentions,
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