Slide 1: Investor Update August 2012
For personal use only Investor Update August 2012
Slide 2: Disclaimer
Disclaimer For personal use only This presentation has been prepared by EVZ Limited for professional investors. The information contained in this presentation is for information purposes only and does not constitute an offer to issue, or arrange to issue, securities or other financial products. The
Slide 3: Corporate Overview
For personal use only Corporate Overview EVZ Limited is a group of engineering services businesses operating across the construction, mining, petrochemical and commercial property segments with a strong and growing asset management portfolio. It has an emerging clean energy capability and the Group
Slide 4: Corporate snapshot
Corporate snapshot For personal use only Corporate statement Share price performance and volume Price A$0.03 0.08 ASX Code EVZ 0.07 0.06 Shares issued 207.9m 0.05 0.04 Market capitalisation A$6.2m 0.03 Real value A$26.5m 0.02 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-
Slide 5: Is EVZ undervalued?
Is EVZ undervalued? For personal use only With a strong recurring maintenance book with blue chip client base and a strong position in the clean energy market, EVZ is undervalued based on FY2013 forecast which should have it at over 12cents-recent trading has it valued at circa 3 cents EBIT m ultipl
Slide 6: Investment Case
Investment Case For personal use only EVZ is undervalued based on F2013 forecast and its current value does not reflect the opportunities and forward orders in its business’ and particularly in the TSF Engineering business. The strategy for the “re-engineering” of EVZ is well advanced and provides a
Slide 7: Recent history
Recent history For personal use only New Board of directors appointed (Jan 04 – Mar 04) New interim CEO Acquisition of Divestment of National Engineering National Engineering Name changed to Announcement of Announcement of net Strategic Review Envirozel Ltd maiden net profit of profit of $6m for FY0
Slide 8: Strategy priorities FY2013
Strategy priorities FY2013 For personal use only Challenge Strategy Communicate restructure to marketplace. National Engineering sold, Danum Engineering restructured and merged with Brockman, strategic review Reposition completed and internal efficiencies implemented EVZ to the New CEO appointed
Slide 9: Financials – Profile FY07 to FY13
Financials – Profile FY07 to FY13 For personal use only Profit & Loss 30-Jun-07 30-Jun-08 30-Jun-09 30-Jun-10 30-Jun-11 30-Jun-12 30-Jun-13 #039;000s Forecast Sales 48,148 88,164 80,779 78,896 82,187 73,069 80,342 Cost of Sales / Direct Costs (36,044) (66,836) (63,007) (64,551) (67,469) (60,765) (63,15
Slide 10: FY12 – Restructure and reposition
FY12 – Restructure and reposition For personal use only Brockman Corporate Profit & Loss - 2012 Syfon Syfon Asia TSF Engineering TSF Maintenance National TOTAL (inc Danum) (inc Consolidated) #039;000s FY12 Sales 12,919 2,369 7,716 3,011 36,533 10,507 14 73,069 Cost of Sales / Direct Costs 9,543 1,396 6
Slide 11: Forecast Earnings by business unit FY13
Forecast Earnings by business unit FY13 For personal use only Brockman Corporate Profit & Loss - 2013 Syfon Syfon Asia TSF Engineering TSF Maintenance TOTAL (inc Danum) (inc Consolidated) #039;000s FY13 Sales 13,550 4,650 19,995 3,650 38,497 - 80,342 Cost of Sales / Direct Costs 9,789 3,007 16,232 2,25
Slide 12: EBIT Bridge – by business unit
EBIT Bridge – by business unit For personal use only $6.7m turnaround with over 50% already achieved in closure of National, forward orders for Asia and TSF, savings in Corporate Expenses and redundancies at Brockman… EBIT Bridge by Business 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,00
Slide 13: Balance Sheet
Balance Sheet For personal use only Balance Sheet Notes: #039;000s 30-Jun-12 30-Jun-11 30-Jun-10 Deteriorating Net Asset position due to: Current Assets ̶ Divestment of National Engineering Cash and cash equivalents 4,304 4,211 4,442 Trade and other receivables 11,551 17,502 18,048 ̶ Impairment on TS
Slide 14: Forecast 2013 highlights
For personal use only Forecast 2013 highlights $6.7m EBIT turnaround with over 50% delivered in shutdown of National Engineering, reduced corporate costs and Asian forward orders in Syfon business Modest growth targets in legacy Australian Business Units reflecting continuing soft economy Desi
Slide 15: EVZ Power Group
For personal use only EVZ Power Group EVZ Power is to be repositioned as the core business proposition for the EVZ Group to reflect the Group’s capabilities in energy and power design and construct as well as creating opportunities in clean energy. TSF Engineering was established in 1966 and now
Slide 16: Strategy for growth
Strategy for growth For personal use only Design and Customer Product Construct ESCO BOO Expansion Expansion Maintenance Strong presence in Expansion into Unitised solution Acquisition for Acquisition for new building and Industrial and Mining End to end expertise expertise and retail refurbishment
Slide 17: Business Description EVZ Power
Business Description EVZ Power For personal use only EVZ Power provides a full suite of specialist services including design and construction of power generators, energy facility maintenance in addition to remote energy solutions through its 3 core businesses: TSF Engineering, TSF Maintenance and EV
Slide 18: Recent Projects EVZ Power
Recent Projects EVZ Power For personal use only TSF Engineering and Maintenance, together with EVZ Energy, continue to be involved in blue chip projects. Area Project and Description Value TSF Engineering The Star Casino $8.3m TSF Engineering Charlestown Square $3.0m TSF Engineering NBN Digital Habo
Slide 19: Strategy EVZ Power
Strategy EVZ Power For personal use only Priorities for 2013 already well underway… Design and Construction: Geographic and industry expansion into the mining, industrial and coal seam gas areas Release of unitised cogeneration and tri-generation solution for building refurbishments, Green accre
Slide 20: 2013 Forecast Highlights TSF
2013 Forecast Highlights TSF For personal use only FY2013 commences with design work commenced on Melbourne Airport Tri-Generation and $135m in live tenders….. $13.4m growth in TSF engineering revenue due to key contracts being awarded Gross margin improvement in TSF engineering from improved re
Slide 21: FY2013 Outlook TSF Engineering
FY2013 Outlook TSF Engineering Considerable upside on tenders are currently live, however spending decisions have been slow with For personal use only re-pricing common Outlook 2013 Sales projection $20m Tenders currently live $135m Tenders in active negotiation $70m Page 20
Slide 22: Background – Co-Generation and Tri-Generation
Background – Co-Generation and Tri-Generation For personal use only The strength of the Power Strategy… TSF had a proven capability in backup diesel generator solutions. This has evolved to turnkey solutions for cogeneration and tri-generation power through existing relationships with engine manuf
Slide 23: What is Cogeneration/Trigeneration?
What is Cogeneration/Trigeneration? For personal use only Cogeneration or combined heat and power (CHP) technology converts gas into both electricity and heat in a single process at the point of use The heat that is generated is done so from the waste heat of the generator, making it a no cost g
Slide 24: Why is CoGeneration/TriGeneration gaining momentum?
Why is CoGeneration/TriGeneration gaining momentum? For personal use only Increasingly escalating electricity prices, peak electricity demand and electricity shortages are a fact with or without the impost of a carbon tax Companies with large electricity and other energy usage recognize that the
Slide 25: Who is using Co-Gen/Tri-Gen Energy Systems
For personal use only Who is using Co-Gen/Tri-Gen Energy Systems Tooheys Brewery (2.1Mw) Mars Food (1.45Mw) Fonterra Burnie (2Mw) Coopers Brewery (4.4Mw) Westfield Centrepoint (3.6Mw) Charlestown Square (3Mw) NAB Wantirna Data Centre (2Mw) Simplot Australia (7.9Mw) Crown Casino (6Mw) Symmex (4.4Mw)
Slide 26: EPC's and BOO's EVZ Power
EPC’s and BOO’s EVZ Power For personal use only The evolution to ESCO-Energy Services Contractor from existing Design and Construct model provides greater market opportunity and margin Energy Performance Contracting Increasing in popularity due to the guaranteed outcomes that the ESCO provides P
Slide 27: Strategy – Unitized Solution
Strategy – Unitized Solution For personal use only 300kW and 600kW package solutions Engineered end 2 end solution Page 26
Slide 28: Earnings Profile FY07 to FY13 TSF Consolidated
Earnings Profile FY07 to FY13 TSF Consolidated For personal use only FY2011 and FY2012 marked the transition from traditional Telstra work TSF Consolidated: Sales v Gross Margin TSF Consolidated: Key Financial Ratios 35% 30,000 30% 25,000 25% 20% 20,000 15% 10% 15,000 5% 10,000 0% -5% 5,000 -10% -15
Slide 29: Facilities Maintenance TSF Maintenance
Facilities Maintenance TSF Maintenance For personal use only TSF Maintenance boasts a strong portfolio of Facilities Maintenance customers and is actively growing this customer base Commercial Model Term Contract Usually based on a management fee and cost reimbursable components Typically for 1
Slide 30: Customer Profile TSF Maintenance
Customer Profile TSF Maintenance For personal use only TSF Maintenance has consistently grown its maintenance portfolio and is forecasting to expand its presence in this segment through the employment of a dedicated resource for general management of this area and assuming responsibility for the mai
Slide 31: Facility Maintenance Projects EVZ Power
Facility Maintenance Projects EVZ Power For personal use only TSF supplied and installed a large high reliability emergency plant to ensure that Telstra Pitt Street Exchange, the heart of Telstra’s data network in Sydney, remains operating at all times. The generators fully cover the electrical load
Slide 32: Design and Construction Projects EVZ Power
Design and Construction Projects EVZ Power For personal use only The Charlestown Square Tri-generation Plant is currently the biggest in NSW. It is a breakthrough, innovative project, synchronising via high voltage to the main grid Charlestown Square Trigeneration Plant Charlestown, NSW Page 31
Slide 33: Design and Construction Projects EVZ Power
Design and Construction Projects EVZ Power For personal use only TSF supplied and installed a one-off 2600MVA MWM standby generator and 3 1750KVa MWM diesel generators as part of the installation of a 100% reliable emergency generating plant as part of major upgrade works to The Star City Casino. TS
Slide 34: Business Divisions – Brockman
For personal use only Business Divisions – Brockman The Brockman Engineering traditional business was construction and maintenance of steel storage tanks with a particular expertise in the petrochemical and water sectors. Recently, the Danum Engineering business was merged into the business adding
Slide 35: Business description Brockman
Business description Brockman For personal use only Design and Construction Facilities Maintenance Activities The design and construction of welded steel bulk liquid The repair of welded steel bulk liquid storage tanks including storage tanks and pipework systems and the fabrication and repairs to p
Slide 36: Recent Projects Brockman
Recent Projects Brockman For personal use only Brockman have cemented their position in the industry as a leading provider of fully-integrated design, construction and maintenance services across the water, petroleum, mining and oil and gas industries. Area Project Value Design and Construction Barw
Slide 37: Strategy Brockman
Strategy Brockman For personal use only Design and Construction: Expansion into clean energy solutions including Biomass and cogeneration pipe support and manufacture of solar skids Concentrate on higher margins by undertaking larger and more complex projects including multi-discipline tank proj
Slide 38: Key features of 2013 Forecast Brockman
Key features of 2013 Forecast Brockman For personal use only FY2013 Forecast 5% growth forecast reflects continuing weak outlook for capital projects Margin improvement from increased efficiency initiatives and redundancies already undertaken Decrease in administrative costs reflect redundanci
Slide 39: FY2013 Outlook Brockman
FY2013 Outlook Brockman For personal use only Outlook 2013 Brockman’s strategy is to realise higher margins through expanding Sales projection $38.5m opportunities in the chemical and mining industries by providing fully Tenders currently live $31.5m integrated, multi-discipline services Tenders sub
Slide 40: Earnings Profile - FY07 to FY13 Combined Brockman & Danum
Earnings Profile - FY07 to FY13 Combined Brockman & Danum For personal use only On 1 July 2011, Danum Engineering was incorporated into Brockman Engineering to take advantage of the synergies between the two companies and to improve overall gross margin levels by reducing costs through the associate
Slide 41: Facilities Maintenance Brockman
Facilities Maintenance Brockman For personal use only Brockman continues to expand its Facilities Maintenance capabilities and is actively pursuing a greater % of facilities maintenance contracts as a proportion of total revenue Commercial Model Term Contract Usually based on a management fee and
Slide 42: Customer Profile Brockman
Customer Profile Brockman For personal use only Brockman have continued to build a capability in facilities maintenance and recurring contract income. Customers are largely blue chip petrochemical and mining companies 2010 2011 2012 2013 – Forecast Total Revenue $17.6 $25.5 $36.5 $38.5 Split of Faci
Slide 43: Design and Construction Projects Brockman
Design and Construction Projects Brockman For personal use only Brockman continues to win major projects in its segment Barwon Water Project Tank Torquay, VIC Value $5.8m Page 42
Slide 44: Design and Construction Projects Brockman
Design and Construction Projects Brockman For personal use only Focus on water for 2012 and 2013 Tank Design and Construction Yarra Valley Water Greenvale Sewage Tank Greenvale, VIC Value $2.3m Page 43
Slide 45: Fabrication and Construction Projects Brockman
Fabrication and Construction Projects Brockman For personal use only Full service package Materials Handling Solutions Boral Plasterboard Ship Unloader and Conveyors Port Melbourne, VIC Value $2.0m Page 44
Slide 46: Facility Maintenance Projects Brockman
Facility Maintenance Projects Brockman For personal use only Tank maintenance including the jacking of tanks to repair annular plates and foundations RioTinto Alcan Gove Tank Repairs Northern Territory Value $1.8m Page 45
Slide 47: Facility Maintenance Projects Brockman
Facility Maintenance Projects Brockman For personal use only The ISO Certification has positioned Brockman for complex specialised fabrication GLP LNG Skid Victoria Value $200k Page 46
Slide 48: Business Divisions – Syfon
For personal use only Business Divisions – Syfon Syfon Systems is a design and construct company, specialising in the design, Siphonic Roof Drainage presentation supply and installation of Syfonic Roof Drainage Systems and rainwater harvest solutions. Established in 1992, it employs over 120 sta
Slide 49: Business Description Syfon
Business Description Syfon For personal use only Activities Design, supply and installation of Syfonic Roof Drainage Systems for high rainfall applications in Australia and Asia which are designed by in- house engineers then prefabricated using a range of proprietary products and installed by dedi
Slide 50: Recent Projects Syfon
Recent Projects Syfon For personal use only Projects span Australia and Asia. The focus is on expanding into and targeting new Asian markets particularly in Asia while maintaining the existing solid position in the Australian commercial building market Project Value Melbourne Market Relocation, VIC
Slide 51: Strategy Syfon
Strategy Syfon For personal use only The business strategy focuses on stronger growth in the Asian market by geographic expansion and broadening the product offering while reducing costs by utilising its Asian manufacture base Create a network capable of servicing the entire country, with particul
Slide 52: Key features of F2013 forecast Syfon
Key features of F2013 forecast Syfon For personal use only 2013 initiatives are well underway… F2013 Over 70% of forecast Asian revenue already contracted Over 50% of forecast Australian revenue already contracted 2% increase in Australian margin from “One Syfon” initiatives offset by continue
Slide 53: Earnings Profile FY07 to FY13 Syfon - Australia
Earnings Profile FY07 to FY13 Syfon - Australia For personal use only Whilst the Australian construction industry remains challenging, it is expected that an increased sales network in Queensland, South Australia and Western Australia, together with supply chain improvements out of Asia will enable
Slide 54: Financials – Profit & Loss FY07 to FY13 Syfon - Asia
Financials – Profit & Loss FY07 to FY13 Syfon - Asia For personal use only The EBIT position will become increasingly stronger as we move into the Asian markets by rolling out the full breadth of Syfonic Systems and by targeting larger projects with higher margins. The first quarter of 2013 in parti
Slide 55: Financials – Profit & Loss FY07 to FY13 Syfon - Consolidated
Financials – Profit & Loss FY07 to FY13 Syfon - Consolidated For personal use only As product lines are expanded into Asia and the sales presence is expanded in the Western Australian and South Australian markets, growth rates are expected to hold despite a backdrop of soft industry conditions Syfon
Slide 56: Financial metrics Syfon
Financial metrics Syfon For personal use only Strong EBIT growth is expected through already identified geographic and project expansion in Asia and reduced cost of goods sold and transport costs by prefabrication of products to Asia Key Financial Statistics - Syfon Australia Notes: #039;000s 30-Jun-07
Slide 57: FY2013 Outlook Syfon
FY2013 Outlook Syfon For personal use only Australia Asia Expansion into Western Australian market with a Outlook $000’s $000’s permanent sales office Sales projection 13,550 4,650 New Business Development manager Tenders currently live 31,138 7,145 “ex Geberit” for Queensland Tenders submitted
Slide 58: Customer Profile Syfon
Customer Profile Syfon For personal use only Syfon Australia has a consistent portfolio of repeat customers which comprise of industry leader such as Lend Lease, Hansen Yunken, Probuild, Built, John Holland and Westfield 2010 2011 2012 $000’s $000’s $000’s Total Revenue 9,918 11,039 12,919 Total num
Slide 59: Design and Construction Projects Syfon
Design and Construction Projects Syfon For personal use only As work continues on Stage II of the Canberra International Airport Project, the Project will contribute considerably to first quarter revenue targets Canberra International Airport Canberra, ACT Value $0.6m Page 58
Slide 60: Design and Construction Projects Syfon
Design and Construction Projects Syfon For personal use only We are currently finalising the design phase of the New Royal Adelaide Hospital Project. Inground works will commence within the first quarter of FY13 and it is expected that the Project will contribute consistently to revenue targets thro
Slide 61: Design and Construction Projects Syfon
Design and Construction Projects Syfon For personal use only Serving large infrastructure projects such as Marina Bay Sands, continues to form part of our forward growth strategy. These projects are vital in providing credibility and presence in new markets Marina Bay Sands Singapore Value $1.0m Mar
Slide 62: Design and Construction Projects Syfon
Design and Construction Projects Syfon For personal use only “Signature” buildings such as the completed Kuala Lumpur Convention Centre continue to provide forward marketing opportunities and help position the brand as a market leader KL Convention Centre Kuala Lumpur, Malaysia Page 61
Slide 63: Board and Key Management Personnel
Board and Key Management Personnel For personal use only EVZ’s Board Composition Name Title Comments Appointed on 14 May 2008 Maxwell Findlay Non-Executive Chairperson Previously Managing Director of Programmed Maintenance Services Ltd Raelene Murphy Interim Chief Executive Officer Scott Farth