Qube Holdings Ltd. · ASX:QUB
Qube — FY2018 Earnings Presentation
45 slides from Qube's earnings presentation, Aug 23, 2018
Slide 1: Qube Holdings Limited Investor Presentation FY18 Full Year Results
Qube Holdings Limited Investor Presentation FY 18 Full Year Results 1
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 18 Results Highlights 2 Divisional Summary 3 Key Financial Information 4 Outlook 5 Additional Financial Information (Appendices) 3
Slide 4: FY 18 Results Highlights
FY 18 Results Highlights anil ve Be il wl ul
Slide 5: Delivering on the strategy
Delivering on the strategy Year in review Key metrics • Solid earnings and cashflow from operating businesses despite headwinds in some parts of the business Statutory revenue Underlying revenue +17.0% $1,770.1 million +9.1% $1,650.7 million • Substantial progress made in planning, development, leas
Slide 6: Solid overall financial performance
Solid overall financial performance Underlying revenue (+9.1%) Underlying EBITA (+3.6%) 1,700 200 1,650.7 1,650 (0.2) 40.4 180 164.8 1,600 159.1 (0.8) 160 $ million 17.9 $ million 97.8 1,550 1,513.7 (22.2) 136.9 14.1 140 1,500 (3.3) (53.3) 1,460.4 52.3 + 13.0% 1,450 120 + 20.4% 1,400 100 FY 17 Net F
Slide 7: Solid overall financial performance (continued)
Solid overall financial performance (continued) Underlying NPATA***(+6.0%) Underlying EPSA*** (-3.8%) 130 10.0 122.8 +11.6% 7.7 (6.0) 115.9 0.3 9.0 120 8.0 12.5 8.0 7.7 110 (1.1) 6.9 (15.5) 7.0 $ million 100.4 10.5 cents per share 100 (2.6) 6.0 +22.3% 5.0 90 4.0 80 3.0 2.0 70 1.0 60 FY 17 Net FY 17
Slide 8: Continued diversification of the business
Continued diversification of the business (including Qube’s 50% proportional interest in Patrick’s financial metrics) FY18 underlying revenue 1 FY18 underlying NPATA1,2 Patrick 14.9% Logistics Patrick Logistics 36.8% 21.3% 27.0% Infrastructure & Property 4.9% Notes: 1. Indicative split excluding Inf
Slide 9: Continued focus on safety
Continued focus on safety Continued improvement in safety record Lost Time Injury Frequency Rate (LTIFR)* • Improvement of 67% and 43% in LTIFR and TRIFR between FY 17 and FY 18, 7 6.6 respectively, reflecting Qube’s ongoing investment in safety systems, training 6 and awareness 5 4.6 4 3.2 • 96% im
Slide 10: Divisional Summary
Divisional Summary 1 Operating Division 2 Infrastructure & Property 3 Associates – Patrick (50%) 10
Slide 11: Operating Division (comprising Qube Logistics + Qube Ports & Bulk)
Operating Division (comprising Qube Logistics + Qube Ports & Bulk) Financial highlights Average capital employed* Underlying revenue Underlying EBITA $1,619.5 million +10.7% +7.7% $1,555.0 million $150.4 million Indicative ROACE* 9.3% (11.5%**) *Note: Excluding Associates. **Note: Excluding the good
Slide 12: Operating Division
Operating Division Financial highlights by business Logistics Ports & Bulk Underlying Average capital Average capital Underlying Underlying Underlying EBITA employed* EBITA employed* revenue revenue +7.9% -5.0% $724.7 million +13.2% +19.2% $894.8 million $714.3 $62.8 $840.7 $87.6 million Indicative
Slide 13: Indicative Revenue Segmentation
Indicative Revenue Segmentation Ports & Bulk Revenue by region • Higher revenue contribution from QLD reflects higher car and fertiliser volumes Asia Asia FY 18 NZ 1.8% QLD FY 17 NZ QLD 13.7% 0.8% 11.9% 11.9% 12.3% • Higher revenue contribution from VIC NT NSW NT NSW reflects higher car and steel vo
Slide 14: Indicative Revenue Segmentation
Indicative Revenue Segmentation Logistics Revenue by region Global Global • Lower revenue contribution from FY 18 SA Forwarding FY 17 SA Forwarding NSW in FY 18 reflects: 7.9% 1.5% 7.2% 1.6% WA o Lower rail volumes from poor WA QLD QLD 10.4% 10.6% grain harvest (agriculture) 21.4% 21.5% o Impact of
Slide 15: Infrastructure & Property
Infrastructure & Property Financial highlights Average capital Underlying revenue Underlying EBITA employed* +73.5% +117.8% $758.2 million $95.4 million $33.1 million Indicative ROACE* 4.4% *Note: Excluding Associates and including revaluations of investment properties. • Increased revenue and earni
Slide 16: Infrastructure & Property
Infrastructure & Property Highlights by business AAT Minto Moorebank • Strong contribution to Qube’s results in FY 18: • Full development and leasing of the precinct • Modest increase in income from managing completed on time and on budget towards capital works on behalf of the Moorebank o Full peri
Slide 17: Moorebank
Moorebank Planning approvals Qube’s site MPE2 Moorebank Precinct East – Stage 2 (MPE2) • Approved (January 2018) • Ability to construct approximately 300,000 m2 of warehouses and IMEX terminal (250,000 TEU capacity in manual operations and 1.0 million TEU capacity IMEX once automated) Moorebank Prec
Slide 18: Moorebank
Moorebank Timeline update Substantial progress with construction and development activities IMEX Automation • Qube decided during the period to proceed with the automation of the IMEX rail terminal CY 18 CY 19 CY 20 CY 21 CY 22 CY23+ • Kalmar Global was appointed to deliver the equipment and associa
Slide 19: Moorebank
Moorebank Indicative development capex and leasing update Qube’s indicative total minimum development capex Leasing • Minimum expected capex for the Moorebank project over the first 5 years (FY 17-FY 21) is now Target Australia expected to be around $642 million (vs Qube’s previous estimate of $400
Slide 20: Moorebank
Moorebank Construction progress MPE – Target Warehouse MPE – IMEX Rail Remediation MPE – IMEX Administration Building MPE – Sales Suite and Cafe MPW – Moorebank Avenue Overpass MPW – Rail Access Loop 20
Slide 21: Associates – Patrick (50%)
Associates – Patrick (50%) Financial highlights Exceeds expectations on market share gains Exceeds expectations on earnings and cashflows Market volume Qube’s Average Total cash Indicative volume (lift) growth yoy* (TEU) *Note: 12 month Underlying share of capital distributions segmentation – Patric
Slide 22: Associates – Patrick (50%)
Associates – Patrick (50%) Operational highlights Operational highlights Rail automation project – Port Botany • Continued progress on planning during FY 18 • Pleasing announcement from the Commonwealth Government during the period regarding funding of the track duplication to/from Port Botany to su
Slide 23: Key Financial Information
Key Financial Information 23
Slide 24: Key Financial Information
Key Financial Information Statutory Results • Statutory earnings include the following major items FY 18 FY 17 Change (%) which have been excluded from the underlying ($m) ($m) earnings: o Fair value gains relating to the Minto and Revenue 1,770.1 1,512.8 17.0% Moorebank investment properties of $16
Slide 25: Key Financial Information
Key Financial Information Underlying Results FY 18 FY 17 • Increased revenue and earnings predominantly driven Change (%) by strong trading in Ports & Bulk and AAT ($m) ($m) • Prior period included consolidated AAT results for 7 Revenue 1,650.7 1,513.7 9.1% months (vs 12 months in FY 18) as well as
Slide 26: Key Financial Information
Key Financial Information Segment Breakdown Infrastructure Corporate FY 18 Logistics Ports & Bulk Total FY 17 Change & Property and Other ($m) ($m) ($m) ($m) ($m) (%) ($m) ($m) Statutory Revenue 714.3 840.7 214.8 0.3 1,770.1 1,512.8 17.0% EBITDA 89.3 187.0 156.8 (19.9) 413.2 253.3 63.1% EBITA 59.5 1
Slide 27: Key Financial Information
Key Financial Information Balance Sheet As at 30-Jun-18 30-Jun-17 Change ($m) ($m) ($m) Cash and equivalents 103.9 190.8 (86.9) Receivables 320.7 296.3 24.4 Other current assets 2.8 6.4 (3.6) • Qube’s balance sheet remains very strong with net assets diversified geographically and Total current asse
Slide 28: Key Financial Information
Key Financial Information Funding and liquidity at 30 June 2018 Debt Maturity Profile* Funding capacity • Qube completed several funding 1,800 1,000 938 initiatives during FY 18 increasing 104 Qube’s liquidity, diversifying its funding 900 1,600 Funding capacity of sources and extending the average
Slide 29: Key Financial Information
Key Financial Information Cashflow Change in Net Debt for Twelve Months to 30 June 2018 900 873.0 (6.5) • Businesses continued to generate 84.1 800 strong operating cashflow 26.0 44.3 700 Sub Note • Largest capital expenditure (cash 620.6 305.0 components) included the capex 600 for the development
Slide 30: Capital Expenditure
Key Financial Information Capital Expenditure FY 18 capex overview 140 • Total capex of approximately $410 million spent in the period. Key 120 items include: 100 o Logistics – the MCS acquisition and development of the Altona 80 99.9 72.6 warehouse $ million 134.5 60 o Ports & Bulk – investment in
Slide 31: Outlook
Outlook Market Conditions Operating Division • Reasonable growth in overall revenue and earnings expected • Qube’s FY 19 outlook is based on the following key in FY 19 reflecting: assumptions: o Modest growth in logistics contribution as full period o No material change to the domestic and global ma
Slide 32: Outlook (continued)
Outlook (continued) Infrastructure & Property Patrick • Expected to report an overall similar underlying contribution • Solid growth expected in Patrick’s contribution to Qube’s to Qube’s earnings in FY 19 as delivered in FY 18 underlying earnings in FY 19 (albeit below the high growth rate achieved
Slide 33: Outlook (continued)
Outlook (continued) Qube Group • Continued investment in people and resources across the group in a range of areas including operations, safety, IT/technology and risk management as well as to ensure that Qube continues to deliver on its major development projects and provides a superior customer se
Slide 34: Questions
Questions ouse
Slide 35: Additional Financial Information (Appendices)
Additional Financial Information (Appendices) 35
Slide 36: Appendix 1
Appendix 1 Reconciliation of FY 18 Statutory Results to Underlying Results Infrastructure Corporate Logistics Ports & Bulk Patrick Consolidated Year Ended 30 June 2018 & Property and Other ($m) ($m) ($m) ($m) ($m) ($m) Statutory net profit / (loss) before income tax 57.4 110.8 144.3 (58.8) 33.1 286.
Slide 37: Appendix 2
Appendix 2 Reconciliation of FY 17 Statutory Results to Underlying Results Infrastructure Corporate Logistics Ports & Bulk Patrick Consolidated Year Ended 30 June 2017 & Property and Other ($m) ($m) ($m) ($m) ($m) ($m) Statutory net profit / (loss) before income tax 61.7 64.9 11.7 (29.8) (3.8) 104.7
Slide 38: Appendix 3
Appendix 3 Operating Division – Underlying Results FY 18 FY 17 ($m) ($m) Change (%) Revenue 1,555.0 1,404.9 10.7% EBITDA 248.4 237.3 4.7% Depreciation (98.0) (97.7) (0.3%) EBITA 150.4 139.6 7.7% Amortisation (7.9) (8.6) 8.1% EBIT 142.5 131.0 8.8% Share of Profit of Associates (0.3) 1.7 N/A EBITDA Ma
Slide 39: Appendix 4
Appendix 4 Logistics – Underlying Results FY 18 FY 17 ($m) ($m) Change (%) Revenue 714.3 662.0 7.9% EBITDA 92.6 97.7 (5.2%) Depreciation (29.8) (31.6) 5.7% EBITA 62.8 66.1 (5.0%) Amortisation (2.2) (2.8) 21.4% EBIT 60.6 63.3 (4.3%) Share of Profit of Associates - - N/A EBITDA Margin (%) 13.0% 14.8%
Slide 40: Appendix 5
Appendix 5 Ports & Bulk – Underlying Results FY 18 FY 17 ($m) ($m) Change (%) Revenue 840.7 742.9 13.2% EBITDA 155.8 139.6 11.6% Depreciation (68.2) (66.1) (3.2%) EBITA 87.6 73.5 19.2% Amortisation (5.7) (5.8) 1.7% EBIT 81.9 67.7 21.0% Share of Profit of Associates (0.3) 1.7 N/A EBITDA Margin (%) 18
Slide 41: Appendix 6
Appendix 6 Infrastructure & Property – Underlying Results FY 18 FY 17 ($m) ($m) Change (%) Revenue 95.4 55.0 73.5% EBITDA 39.3 19.7 99.5% Depreciation (6.2) (4.5) (37.8%) EBITA 33.1 15.2 117.8% Amortisation (3.7) (2.4) (54.2%) EBIT 29.4 12.8 129.7% Share of Profit of Associates (2.4) 1.6 N/A EBITDA
Slide 42: Appendix 7
Appendix 7 Patrick – Underlying Results FY 18 FY 17* ($m) ($m) *Note: Underlying results for the 10.5-month period from 18 Change (%) August 2016 to 30 June 2017. (12 months) (10.5 months) Prima 100% facie tax adjustment (to make 30%) (1.4) -2.70 Underlying Revenue share of profit of associates 3.6
Slide 43: Appendix 8
Appendix 8 Other Associates – Underlying Results FY 18 FY 17 *Note: Five month contribution from AAT in FY 17. AAT has Qube Share of Profit of Associates been consolidated in Infrastructure & Property results from 1 ($m) ($m) Change (%) December 2016. AAT* - 3.1 N/A NSS 0.9 0.4 125.0% PEL - (1.3) N/
Slide 44: Appendix 9
Appendix 9 Corporate – Underlying Results *Note: FY 17 results reflect the impact of Asciano special FY 18 FY 17* dividend paid to Qube (excluding value of franking credits on ($m) ($m) Change (%) special dividend) and the loss on sale of Qube’s Asciano shares. Revenue 0.3 53.8 N/A EBITDA (18.5) 4.5
Slide 45: Appendix 10
Appendix 10 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 c