Southern Cross Electrical Engineering Limited · ASX:SXE
Southern Cross Electrical Engineering — H1 FY2014 Earnings Presentation
26 slides from Southern Cross Electrical Engineering's earnings presentation, Apr 1, 2014
Slide 1: Investor Presentation - Half Year Results Roadshow
For personal use only Investor Presentation Half Year Results Roadshow 1 April 2014
Slide 2: Highlights
Highlights For personal use only H1 Revenue of $110.7m and gross margin of 23.5% Financial H1 NPAT of $6.2m Maintaining strong balance sheet Successful completion and close out of key contracts on time and on budget Operational Order book of $135.9m at 28 February 2014 with $20m in advanced negotiat
Slide 3: About SCEE
About SCEE For personal use only Emerging Tier One provider of specialised Project life cycle support electrical and instrumentation services Delivers services to large-scale resource projects across Australia and overseas throughout the project life cycle Capex Early Phase Capex Strong reputation f
Slide 4: Exposure to six sectors
Exposure to six sectors For personal use only Australia 3
Slide 5: FY14 projects
For personal use only FY14 projects 4
Slide 6: Half year financial results
Half year financial results For personal use only HY14 HY13 Change 45% increase in NPAT from PCP $m $m % Strong gross margins in H1 from a Revenue 110.7 120.6 -8% project mix weighted towards large scale Gross profit 26.0 24.0 8% lump sum works and the capacity to utilise owned rather than hired Gro
Slide 7: Revenues by operating division
Revenues by operating division For personal use only Main Contributors: SCEE Infrastructure BHP Sustaining Capital Rio Tinto Yandi Expansion 14.2 24.1 SCEE Construction Rio Tinto Cape Lambert Port B AngloGold Ashanti Tropicana Gold 72.4 SCEE Services Rio Tinto Services Rio Tinto EIR prog
Slide 8: Balance sheet
Balance sheet For personal use only Dec 13 Jun 13 Maintained a strong balance sheet $m $m throughout the period Current assets 86.8 106.7 Cash of $31.3m and minimal debt of $3.6m at 31 December 2013 Non current assets 50.4 51.0 Total assets 137.2 157.7 Over $30m of short term receivables as a Curren
Slide 9: Cashflow
For personal use only Cashflow 8
Slide 10: Historical results summary
Historical results summary For personal use only H1 12 H2 12 H1 13 H2 13 H1 14 $m $m $m $m $m Revenue 84.2 135.8 120.6 157.4 110.7 Gross profit 17.8 25.6 24.0 37.3 26.0 Gross margin 21.1% 18.9% 19.9% 23.7% 23.5% EBITDA 8.3 13.9 9.5 21.7 12.3 EBIT 7.3 12.1 7.2 18.1 8.8 NPAT 5.1 8.6 4.3 13.0 6.2 Net m
Slide 11: Financial trends
For personal use only Financial trends 10
Slide 12: Dividends
Dividends For personal use only Dividend policy to pay up to 50% of retained earnings FY12 and FY13 dividend payout of 25% retained earnings No interim FY14 dividend declared Franking account balance at 31 December 2013 of $5.6m 11
Slide 13: Contract wins
Contract wins For personal use only Rio Tinto Cape Lambert Port B Phase B Approximately $80m of E&I works awarded Follows successful completion of Phase A works Civmec Nammuldi Subcontracting to Civmec at Rio Tinto’s Nammuldi project Award value of over $10m Rio Tinto Electrical Infrastructu
Slide 14: Order book
Order book For personal use only Order book at 28 February 2014 over $135m with a further $20m in advanced stages of negotiations Successfully converting opportunities to contract wins Continuing to experience high level of tendering activity Order book excludes work under recurring framework agreem
Slide 15: Order book and near term targets
Order book and near term targets For personal use only 14
Slide 16: Market conditions
Market conditions For personal use only Continuing to see clients become more commercially focussed Increased competition for pool of available work Contractors under margin pressure Large scale projects are being replaced by smaller expansion and sustaining capital projects Shift from EPCM model to
Slide 17: Full year expectations
Full year expectations For personal use only FY14 forecasts impacted by delays in anticipated award and commencement of contracts and reduction in gross margins Forecast FY14 revenue in the range of $235-255m Forecast FY14 NPAT in the range of $7-10m Achievement dependent on award and execution of w
Slide 18: Sector outlook
Sector outlook For personal use only Iron ore Remains a core business for SCEE Framework agreements with Rio Tinto and BHP Tendering for significant work at Sino and Roy Hill Targeting sustaining capital works as a growth area Minerals and metals Viewed as a spot market Domestic market s
Slide 19: Sector outlook
Sector outlook For personal use only LNG KSJV formed with Kentech in December 2012 Demonstrated capability with first award at Australia Pacific LNG on Curtis Island, QLD Large volume of work to be performed on Australian LNG projects will require additional capacity Optimistic LNG will beco
Slide 20: Recurring revenues
Recurring revenues For personal use only Growth of recurring revenues fundamental to long term strategy Making good progress in growth of recurring iron ore work with framework agreements in place with Rio Tinto and BHP Billiton Targeting operations & maintenance and sustaining capital opportunities
Slide 21: Solid operational and financial platform
Solid operational and financial platform For personal use only Proven operational processes and systems which successfully delivered CLB Phase A and Tropicana Gold on time and on budget Over $30m invested in systems and fixed assets since FY12 Expansion and renewal of plant and equipment fleet provi
Slide 22: Health and safety
Health and safety For personal use only Lost Time Incident free in the period Over nine years LTI free in Australia Reflective of the emphasis placed on safety from the Board through to our project teams We place a priority on creating a proactive safety culture across the whole of SCEE Mick Garston
Slide 23: Training and people
Training and people For personal use only Dedicated training centre provides cost effective and flexible training schedules to ensure efficient mobilisation of project teams Recruitment handled by in-house capability Strong commitment to indigenous participation Award winning apprenticeship program
Slide 24: Conclusion
Conclusion For personal use only Solid H1 financial result in increasingly challenging market conditions Successfully completed and closed out key projects on time and on budget FY14 forecasts impacted by delays in anticipated award and commencement of contracts and reduction in gross margins Pipeli
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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