Southern Cross Electrical Engineering Limited · ASX:SXE
Southern Cross Electrical Engineering — H1 FY2009 Earnings Presentation
17 slides from Southern Cross Electrical Engineering's earnings presentation, Feb 23, 2009
Slide 1: Half-Year Result 2009 Presentation
For personal use only Half-Year Result 2009 Presentation Monday 23 February 2009 Monday,
Slide 2: Overview
For personal use only Overview S h P Stephen Pearce, MD 2
Slide 3: Group Highlights
Group Highlights For personal use only • 0 LTI’s • Revenue up 16% to $57.7m • EBITDA up 11% to $10.3m • EPS up 5% to 6.0cps • Interim dividend 2.0cpsff (FY08 2.0cpsff) • Generated $4.6m cash from operating activities • Strong balance sheet with net cash of $23 $23.7m 7m • Key appointment of GM Busin
Slide 4: Financial Highlights
Financial Highlights For personal use only Key Projects: • Cape Lambert • Hope Downs Dec 08 • Buzwagi • Cerro Corona Revenue $m 57.7 EBITDA $m 10.3 NPAT $m $ 7.2 . Expected p to be stronger in second half Operating cash flow $m 4.6 Intention for full year EPS cps 6.0 to be consistent with FY08 DPS c
Slide 5: Historical Financial Performance
Hi t i l Fi Historical Financial i lPPerformance f For personal use only SCEE Five Year Revenue SCEE Five Year Gross Profit 100 40 ns ns Million Million 80 30 60 20 40 20 10 0 0 FY05 FY06 FY07 FY08 H1 FY05 FY06 FY07 FY08 H1 FY09 FY09 SCEE Five Year EBITDA SCEE Five Year NPAT 20 12 Millions s Million
Slide 6: Historical Margins
Hi t i l M Historical Margins i For personal use only SCEE Five Year GP % SCEE Five Year EBITDA Margin % age % ge % 40% 30% Percentag Percenta 30% 20% 20% 10% 10% 0% 0% FY05 FY06 FY07 FY08 H1 FY05 FY06 FY07 FY08 H1 FY09 FY09 Margin affected by uunrealised FX losses SCEE Five Year NPAT Margin % e% Pe
Slide 7: Financial Analysis
For personal use only Financial Analysis S h FFewster, CFO Stephen 7
Slide 8: Financial Performance
Financial Performance For personal use only $m Dec 08 Dec 07 • Change in contract mix has affected gross Revenue 57.7 49.8 margin (38% cost plus) • Corporate salaries Gross profit 18 6 18.6 17 2 17.2 i increase in i line li with ih Gross margin 32% 35% revenue increase and exec appointments EBITDA 1
Slide 9: Balance Sheet
Balance Sheet For personal use only The e key ey ba balance a ce ssheet eet items te s aare: e: • Net cash $23.7m • $1.6m WIP balance associated with Cerro Corona reduced to nil f ll i completion following l ti off project j t • Derivative financial asset has become a derivative financial liability
Slide 10: Cash Flow
Cash Flow For personal use only $m Dec 08 • Working capital affected by timing of project start NPAT 7.2 dates around April 08 • Materials ordered at start Non - cash items 36 3.6 off project j and d reduce d Working capital movement over life of project • Receivables have been Receivables (3 4) (3.
Slide 11: Operations
For personal use only Operations Stephen Pearce, MD 11
Slide 12: Major Project Overview
Major Project Overview For personal use only Cape Lambert Upgrade • Contributed approx 38% of revenue • Cost plus margins in line with expectations t ti • Demobilisation commences March • Zero LTI’s to date Hope Downs • Contributed approx 23% of revenue • Lump sum margins in line with expectations •
Slide 13: Major Project Overview
Major Project Overview For personal use only Cerro Corona • Contributed approx 8% of revenue • Lump sum margins in line with expectations t ti • Completed project in second quarter • > 670,000 , man hours & zero LTI’s Buzwagi • Contributed approx 17% of revenue • Lump sum margins in line with expect
Slide 14: FY09 Outlook
FY09 Outlook For personal use only • Given global economic events it is very difficult to forecast • Selected as preferred contractor for early phase electrical work at Cape Preston • Pending g award and commencement of above, SXE’s revenue is expected to exceed $94m (FY08: $84m) • Margins are track
Slide 15: FY10 Outlook
FY10 Outlook For personal use only • Reiterate global economic events make it very difficult to forecast • Substantial amount of work expected from oil and gas sector • Mining capex has wound back but there are still a number of quality projects j proceeding g • Current tender book exceeds $300m • F
Slide 16: The Value Metrics
The Value Metrics For personal use only Dec 08 Closing share price 20th Feb $0.55 Shares on issue 120 0m 120.0m Market Capitalisation $66.0m Net cash ($23 7m) ($23.7m) Enterprise value $42.3m FY09 NPAT guidance id $14 5 $14.5m Price Earnings Multiple 2.9x 16
Slide 17: Conclusion
Conclusion For personal use only • SXE has maintained its outstanding safety record of zero LTI’s • Current projects are in line with expectations from a safety, quality and financial basis • FY09 earnings g expected to increase byy 28% • Company is generating positive cash flows from operating acti
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