Qube Holdings Ltd. · ASX:QUB
Qube — FY2019 Earnings Presentation
39 slides from Qube's earnings presentation, Aug 22, 2019
Slide 1: Qube Holdings Limited Investor Presentation FY19 Full Year Results
Moorebank Precinct East (MPE) – Moorebank Logistics Park QUBE HOLDINGS LIMITED Investor Presentation FY 19 Full Year Results IMEX Rail Terminal at MPE Existing warehouses and Target Australia’s new NSW distribution centre at MPE
Slide 2: Disclaimer – Important Notice
Disclaimer – Important Notice The information contained in this Presentation or subsequently provided to the recipient whether orally or in writing by, or on behalf of Qube Holdings Limited (Qube) or any of its directors, officers, employees, agents, representatives and advisers (the Parties) is pro
Slide 3: Table of contents
Table of contents 1. FY 19 Results Highlights 2. Divisional Summary 3. Key Financial Information 4. Outlook and Guidance 5. Appendices – Additional Financial Information 3
Slide 4: FY19 Results Highlights
FY 19 Results Highlights Solid earnings growth achieved in FY 19 Year in review Key financial metrics • Strong market positions and diversification strategy enabled Qube to continue to achieve solid earnings growth and deliver on guidance despite headwinds in some Statutory revenue Underlying revenu
Slide 5: Underlying revenue and EBITA growth
FY 19 Results Highlights Solid earnings growth achieved in FY 19 Underlying revenue (+4.7%) Underlying EBITA (+9.5%) 190 1,740 1,728.6 (0.1) 185 1,720 8.4 180.5 180 (0.6) 1,700 6.1 175 $ million 69.6 $ million 1,680 170 10.2 1,660 1,650.7 164.8 165 1,640 160 1,620 155 1,600 150 FY 18 Operating Infra
Slide 6: Underlying NPATA and EPSA growth
FY 19 Results Highlights Solid earnings growth achieved in FY 19 Underlying NPATA (+13.4%) Underlying EPSA (+13.0%) 150 9.0 145 0.1 (0.1) 8.7 2.2 (2.3) 139.2 0.2 140 8.5 3.3 135 0.3 4.4 $ million cents per share 130 8.0 8.8 0.5 125 122.8 7.7 120 7.5 115 110 7.0 105 100 6.5 FY 18 Operating Infrastruc
Slide 7: Qube Geographical Presence
Malaysia KEY LOCATIONS QUBE Kuala Lumpur Jurong Port Brunei Labuan GEOGRAPHICAL Singapore PT Bintan Marine Centre Papua New Guinea PRESENCE Lae Morobe Province Port Moresby QUBE TODAY • Workforce of over 6,500 employees • Working across over 130 locations in Australia, New Zealand and South East Asi
Slide 8: Results benefitted from diversification of its business
FY 19 Results Highlights Qube’s results benefitted from the diversification of its business FY19 underlying revenue 1,4 FY19 underlying NPATA1,2 Qube’s revenue and earnings are Patrick 15.3% Patrick well diversified, including by: 21.2% Infrastructure Logistics • Business & Property 34.9% 5.1% • Geo
Slide 9: Solid results despite challenging industry/macro trends
FY 19 Results Highlights Solid results despite some challenging industry/macro trends in FY 19 12-month rolling container trade growth (TEU) at 4 ports Exports of Australian grains New vehicle sales in Australia 35,000 9.0% FY 17 :+3.9% -25.3% 1,500 8.0% 30,000 +1.3% -7.8% (c.1.6x GDP) 7.0% 1,250 Ne
Slide 10: Continued focus on Safety, Health and Sustainability
FY 19 Results Highlights Continued focus on Safety, Health and Sustainability Safety and Health Sustainability Lost Time Injury Frequency Rate (LTIFR)* Total Recordable Injury Frequency Rate 7 6.6 (TRIFR)** • Qube has undertaken a climate change risk assessment aligned with the Task Force on Climate
Slide 11: Divisional Summary – Operating Division
Divisional Summary Operating Division Financial highlights Average capital employed of $1,817.9 million* Underlying revenue Underlying EBITA (FY 18 $1,619.5 million) Total net capex +4.5% $1,624.6 million +6.8% $160.6 million $367.1 million ROACE of 8.8%* (10.7%**) in FY 19 Logistics $711.3 million
Slide 12: Indicative Revenue Segmentation – Logistics
Indicative Revenue Segmentation Logistics business unit Logistics revenue by region • Highly diversified business weighted FY 19 Global FY 18 towards the major capital cities SA Forwarding SA Global Forwarding 8.0% 7.9% 1.5% • Revenue growth in all states (including VIC, 1.7% QLD QLD when excluding
Slide 13: Indicative Revenue Segmentation – Ports & Bulk
Indicative Revenue Segmentation Ports & Bulk business unit Ports & Bulk revenue by region • Highly diversified business geographically and by product/service FY 19 Asia FY 18 Asia NZ 1.6% QLD NZ 1.8% QLD • Revenue growth in most regions with largest 12.2% 13.2% 11.9% 13.7% increase in WA reflecting
Slide 14: Divisional Summary – Infrastructure & Property
Divisional Summary Infrastructure & Property Financial highlights Underlying EBITA Average capital employed of $1,146.9 million* Underlying revenue Total net capex +8.8% $39.2 million (FY 18 $758.2 million) $103.8 million +18.4% $264.7 million ROACE of 3.4%* in FY 19 vs 4.4% in pcp *Note: Average ca
Slide 15: Moorebank Logistics Park – Development update
Moorebank Logistics Park Development update Key milestones achieved during FY 19 and FY 20 year to date Planning approvals Target Australia’s new NSW distribution centre Moorebank Precinct East (MPE) • Warehouse completed and operations started shortly after the end of the • All significant approval
Slide 16: Moorebank Logistics Park – Leasing update
Moorebank Logistics Park Leasing update W2 MPE (300,000 m2 of warehousing) W3 W4 MPE W6 W7 • W1 (37,830m2) – Target Australia • W2 (40,723m2) – Existing buildings (leased) • W3 (19,020m2) – BRW Logistics & Caesarstone W5 W8 • W4 (23,262m2) – Commercial terms agreed for part of this warehouse. Ongoin
Slide 17: Moorebank Logistics Park – Leasing update
Moorebank Logistics Park Leasing update Expected Actual or Site Warehouse Size construction Services provided by Qube Additional information potential tenant completion • Transport of freight to/from MLP 1 37,830 m2 Target Australia* Completed • Operations started shortly after the end of the financ
Slide 18: Moorebank Logistics Park – Capex update
Moorebank Logistics Park Capex update Development timeline Qube’s indicative total minimum development capex • At 30 June 2019, a total of approximately $461 million has been spent since financial close on CY 19 CY 20 CY 21 CY 22 CY23+ development capex including on precinct infrastructure, rail ter
Slide 19: Moorebank Logistics Park – Construction progress
Moorebank Logistics Park Construction progress MPE – Three new warehouses expected to be built MPE – First locomotive test at the IMEX MPE – IMEX Rail Terminal during FY 20 (W3,W4,W5) MPW – Land preparation MPW – Moorebank Avenue Overpass Glenfield Waste Services site – Connection to the SSFL 19
Slide 20: Divisional Summary – Patrick
Divisional Summary Patrick Volumes Financial highlights FY 19 volume growth Indicative volume (lift) Distributions to 8.0% segmentation – Patrick (FY19) 6.8% Qube’s share of Qube of Return of capital $33.0m 6.0% 5.8% Underlying revenue $100.0 million Fremantle East underlying NPAT pre- 17% Swanson +
Slide 21: Patrick – Review of the investment
Divisional Summary Patrick – Review of the investment Pleasing growth achieved since acquisition Volume (lifts) Patrick market share (lifts) Total revenue per lift • Challenging environment at the CAGR: +4.1% (market); +3.2% (Patrick) CAGR: +2.8% 48% 47% 300 time of the completion of the 5 4.5 4.8 4
Slide 22: Qube Statutory Results
Key Financial Information Qube Statutory Results FY 19 FY 18 Change (%) ($m) ($m) Revenue 1,838.9 1,770.1 3.9% EBITDA 425.7 413.2 3.0% EBITA 316.9 308.8 2.6% EBIT 305.7 297.2 2.9% Net Finance Costs (32.7) (15.0) (118.0%) Share of Profit of Associates 11.0 4.6 139.1% Non- Controlling Interest 0.9 0.3
Slide 23: Qube Underlying Results
Key Financial Information Qube Underlying Results FY 19 FY 18 Change (%) ($m) ($m) Revenue 1,728.6 1,650.7 4.7% EBITDA 289.3 269.2 7.5% EBITA 180.5 164.8 9.5% EBIT 169.3 153.2 10.5% Net Finance Costs (12.9) (11.2) (15.2%) Share of Profit of Associates 12.8 7.1 80.3% Non- Controlling Interest 0.9 0.3
Slide 24: Capital Expenditure – Overview
Key Financial Information Capital Expenditure – Overview FY 19 capex overview Major FY 19 capex items 400 • Acquisitions including Russell Park Industrial Estate, LCR and investment in 350 $59.0m Intermodal Group (49%) 300 250 $0.6m • Land and warehouses including practical completion of the Altona
Slide 25: Capital Expenditure – Key acquisitions
Key Financial Information Capital Expenditure – Key acquisitions Russell Park Industrial Estate Beveridge property call option Intermodal Group (IMG) – 49% interest (Operating Division) (Operating Division) (Infrastructure & Property Division) • Strategic property acquired in August • In September 2
Slide 26: Cashflow
Key Financial Information Cashflow Change in Net Debt for Twelve Months to 30 June 2019 1,600 1,400 1,338.5 20.5 134.5 Sub Note 1,200 37.6 305.0 51.6 1,000 871.1 $ million 800 631.8 Sub Note 305.0 (304.8) 600 Senior Debt (103.8) (net of cash) 1,033.5 400 Senior Debt (net of cash) 200 566.1 0 Net Deb
Slide 27: Capital management
Key Financial Information Capital management Key metrics Balance sheet position 5,000 Net assets Net Debt Cash and Undrawn Leverage 4,000 attributable to Qube $ 1,356.4 Debt Facilities* ratio** Operating Division (ex Associates) $2,814.6 million million $537.1 million 32.5% 3,000 $ million Intangibl
Slide 28: FY20 Outlook – Guidance
FY 20 Outlook Guidance Qube’s FY 20 outlook is based on the following key assumptions with respect to the global and domestic economies and Qube’s core markets: Market o No material change to economic conditions and competitive dynamics expected in FY 20 compared to FY 19 conditions o No significant
Slide 29: FY20 Outlook (continued) – Guidance
FY 20 Outlook (continued) Guidance • Market growth expected to remain subdued and below long term average growth levels • Notwithstanding this, solid growth is expected in underlying earnings contribution from Patrick (comprising interest income on shareholder loans and underlying share of profit) P
Slide 30: Additional Financial Information (Appendices)
Additional Financial Information (Appendices)
Slide 31: Reconciliation of FY19 Statutory Results to Underlying Results
Appendix 1 Reconciliation of FY 19 Statutory Results to Underlying Results Operating Infrastructure Corporate Patrick Consolidated Year Ended 30 June 2019 Division & Property and Other ($m) ($m) ($m) ($m) ($m) Statutory net profit / (loss) before income tax 187.4 139.9 (78.9) 35.6 284.0 Share of (pr
Slide 32: Reconciliation of FY18 Statutory Results to Underlying Results
Appendix 2 Reconciliation of FY 18 Statutory Results to Underlying Results Operating Infrastructure Corporate Logistics Ports & Bulk Patrick Consolidated Year Ended 30 June 2018 Division & Property and Other ($m) ($m) ($m) ($m) ($m) ($m) ($m) Statutory net profit / (loss) before income tax 57.4 110.
Slide 33: Segment Breakdown
Appendix 3 Segment Breakdown Operating Infrastructure Corporate FY 19 Total FY 18 Change Division & Property and Other ($m) ($m) ($m) (%) ($m) ($m) ($m) Statutory Revenue 1,625.3 213.4 0.2 1,838.9 1,770.1 3.9% EBITDA 296.2 151.0 (21.5) 425.7 413.2 3.0% EBITA 193.5 145.1 (21.7) 316.9 308.8 2.6% EBIT
Slide 34: Operating Division – Underlying Results
Appendix 4 Operating Division – Underlying Results FY 19 FY 18 Change (%) ($m) ($m) Revenue 1,624.6 1,555.0 4.5% EBITDA 263.3 248.4 6.0% Depreciation (102.7) (98.0) (4.8%) EBITA 160.6 150.4 6.8% Amortisation (7.5) (7.9) 5.1% EBIT 153.1 142.5 7.4% Share of Profit of Associates 0.8 (0.3) N/A EBITDA Ma
Slide 35: Infrastructure & Property Division – Underlying Results
Appendix 5 Infrastructure & Property Division – Underlying Results FY 19 FY 18 Change (%) ($m) ($m) Revenue 103.8 95.4 8.8% EBITDA 45.1 39.3 14.8% Depreciation (5.9) (6.2) 4.8% EBITA 39.2 33.1 18.4% Amortisation (3.7) (3.7) - EBIT 35.5 29.4 20.7% Share of Profit of Associates (1.3) (2.4) 45.8% EBITD
Slide 36: Patrick – Underlying Results
Appendix 6 Patrick – Underlying Results FY 19 FY 18 Change (%) ($m) ($m) 100% Revenue 624.3 576.1 8.4% EBITDA 210.1 201.2 4.4% Depreciation (67.0) (68.4) 2.0% EBITA 143.1 132.8 7.8% Amortisation (23.2) (22.6) (2.7%) EBIT 119.9 110.2 8.8% Interest Expense (Net) - External (34.2) (33.5) (2.1%) Interes
Slide 37: Other Associates – Underlying Results
Appendix 7 Other Associates – Underlying Results FY 19 FY 18 Qube Share of Profit of Associates Change (%) ($m) ($m) IMG 0.6 - N/A NSS 1.9 0.9 111.1% Prixcar (1.7) (1.2) (41.7%) Total – Operating Division 0.8 (0.3) N/A Quattro (1.3) (2.3) 43.5% TQ Holdings (0.0) (0.1) 100.0% Total – Infrastructure &
Slide 38: Corporate – Underlying Results
Appendix 8 Corporate – Underlying Results FY 19 FY 18 Change (%) ($m) ($m) Revenue 0.2 0.3 (33.3%) EBITDA (19.1) (18.5) (3.2%) Depreciation (0.2) (0.2) - EBITA (19.3) (18.7) (3.2%) Amortisation - - N/A EBIT (19.3) (18.7) (3.2%) The underlying information excludes certain non-cash and non-recurring i
Slide 39: Explanation of Underlying Information
Appendix 9 Explanation of Underlying Information • Underlying revenues and expenses are statutory revenues and expenses adjusted to exclude certain non-cash and non-recurring items such as fair value adjustments on investment properties, cost of legacy incentive schemes and impairments to reflect co