Emeco Holdings Limited · ASX:EHL
Emeco — FY2017 Earnings Presentation
23 slides from Emeco's earnings presentation, Aug 31, 2017
Slide 1: 2017 Full Year Results
2017 FULL YEAR RESULTS 31 August 2017
Slide 2: FY17 Highlights
FY17 HIGHLIGHTS Improved safety Enhanced Continued Innovation to Stronger Positive outlook record financial operational expand value balance sheet and clear performance improvement priorities Zero LTIFR Operating EBITDA Geographical, Additional EOS project Extension of debt Focus on growing $83.5m,
Slide 3: Health & Safety
HEALTH & SAFETY Safety remains a priority and underpins Emeco’s long term success • Zero long term injury frequency rate Injury frequency rates • 61% reduction in total recordable injury frequency rate over FY17 (down 10 from 5.6 to 2.2) • Pragmatic approach to health and safety with a continued zer
Slide 4: FY17 Results Overview
FY17 RESULTS OVERVIEW Emeco improves its financial performance, with FY17 buoyed by increased operating utilisation, the merger with Andy’s and Orionstone and leverage reduction Group operating utilisation1 Financial performance 100% FY16 FY17 Change Operating revenue $208.0m $233.0m 12.0% 80% Opera
Slide 5: Operational Performance
Operational Performance
Slide 6: Operational Performance: Queensland
OPERATIONAL PERFORMANCE QUEENSLAND Queensland benefited from strong coking coal market conditions and expanded fleet from the merger with Orionstone and asset swap transactions Overview Operating revenue • Queensland business has significantly improved, driven by strong market 60 52.8 conditions Rev
Slide 7: Operational Performance: New South Wales
OPERATIONAL PERFORMANCE NEW SOUTH WALES NSW business continues to perform strongly, building on existing projects through excellent service and strong customer relationships Overview Operating revenue • NSW business is a very stable business, with improved operating utilisation 100 86.0 and earnings
Slide 8: Operational Performance: Western Australia & South Australia
OPERATIONAL PERFORMANCE WESTERN AUSTRALIA & SOUTH AUSTRALIA Western Australia saw a significant up-tick in utilisation, driven by increased activity in iron ore and coal, with the South Australian business acquired as part of the Andy’s merger Overview Operating revenue • WA business secured project
Slide 9: Operational Performance: Victoria & Contract Mining
OPERATIONAL PERFORMANCE VICTORIA & CONTRACT MINING Emeco is focused on reducing costs in the Victorian business and winding out the contract mining projects – two businesses acquired as part of the merger Victoria Victoria financial performance • Victorian fleet is predominantly a civil earthmoving
Slide 10: Operational Performance: Canada & Chile
OPERATIONAL PERFORMANCE CANADA & CHILE Emeco reduced its exposure to the Canada and Chile markets, and in doing so, generated $25.6 million cash and added 108 pieces to the Australian fleet Overview Operating revenue • Additional high demand machines in Australia acquired via the Canada 150 Chile Ca
Slide 11: Financial Performance
Financial Performance
Slide 12: Financial Performance: Profit and Loss
FINANCIAL PERFORMANCE PROFIT AND LOSS In FY17, Emeco achieved its first positive operating EBIT since FY13, driven by stronger operational performance and the merger with Andy’s and Orionstone • Group operating revenue from continuing operations increased in FY17 to Operating financial performance $
Slide 13: Financial Performance: Balance Sheet
FINANCIAL PERFORMANCE BALANCE SHEET Balance sheet strength provides a strong platform for future growth • Fleet growth of ~80% during FY17, with ~800 machines in the Australian fleet Leverage metrics significantly improved as at 30 June 2017 with a written down value of $339.6 million 10.0x 9.5x • K
Slide 14: Financial Performance: Cash Flow
FINANCIAL PERFORMANCE CASH FLOW Emeco’s free cash flow generation impacted by one-offs and working capital outflows • Free cash inflow of $36.4 million in FY17 (vs. $43.1 million in FY16) Cash flow summary A$ million FY16 FY17 • One-off cash impacts associated with redundancies and expensed transact
Slide 15: Strategy and Outlook
Strategy and Outlook
Slide 16: Mining Sector Conditions Update
STRATEGY & OUTLOOK MINING SECTOR CONDITIONS UPDATE Emeco well positioned to benefit from recent growth in commodity prices and production • Market improving with customer demand increasing and further Commodity price and production forecasts work expected in coal with the return of pre-strip overbur
Slide 17: Australian Equipment Market Update
STRATEGY & OUTLOOK AUSTRALIAN EQUIPMENT MARKET UPDATE Expanded fleet and market position has Emeco well placed to benefit from equipment supply tightening Market dynamics ─ Australian used equipment inventory peaked in 2013 at over 2,000 units 1. Reduced equipment ─ Current estimate of ready to work
Slide 18: Historical Australian Fleet Profile and Profitability
STRATEGY & OUTLOOK HISTORICAL AUSTRALIAN FLEET PROFILE AND PROFITABILITY Emeco believes Australian equipment rental market can again achieve significant returns for stakeholders • Emeco’s Australian rental business previously generated pre-corporate Historical Australian fleet and pre-corporate cost
Slide 19: FY18 Outlook and Beyond
STRATEGY & OUTLOOK FY18 OUTLOOK AND BEYOND Emeco is strategically well positioned in the Australian market, offering significant opportunity for future earnings growth Market • Increased activity and a strong pipeline of projects coming to market, particularly in thermal/coking coal, base metals (in
Slide 20: Appendix
Appendix
Slide 21: Operating to Statutory Reconciliation
APPENDIX OPERATING TO STATUTORY RECONCILIATION FY17 FY17 Financial results Statutory Operating Revenue $233.0m $233.0m EBITDA1 $69.6m $83.5m EBITDA1 margin 29.9% 35.8% EBIT2 ($115.2m) $12.0m NPAT3 ($180.5m) ($90.9m) 1. Operating Results excludes $7.5m in redundancy and restructuring costs and $6.4m
Slide 22: Thank you
Technology Thank you em roup.com
Slide 23: Disclaimer and Important Notice
DISCLAIMER AND IMPORTANT NOTICE Reliance on third party information The information and views expressed in this Presentation were prepared by Emeco Holdings Ltd (the Company) and may contain information that has been derived from publicly available sources that have not been independently verified.