Emeco Holdings Limited · ASX:EHL
Emeco — Conference Presentation (November 2019)
14 slides from Emeco's conference presentation, Nov 27, 2019
Slide 1: Emeco Holdings Limited Investor Conference Presentation
Emeco Holdings Limited Investor Conference Presentation 27 November 2019
Slide 2: Important Notices and Disclaimers
IMPORTANT NOTICES AND DISCLAIMERS Reliance on third party information No offer of securities The information and views expressed in this Presentation were prepared by Emeco Holdings Ltd (the Nothing in this Presentation should be construed as either an offer to sell or a solicitation of an offer to
Slide 3: FY19 recap
FY19 recap $214.0m 46.1% $125.4m 27.0% $63.2m Operating Operating Operating Operating Operating EBITDA EBITDA margin EBIT EBIT margin NPAT ▲40% ▲590bps ▲51% ▲520bps ▲214% $90.1m $114.8m US$33.8m 2.0x 21.0% Free cash flow Workshops Debt Net Return on (pre-growth capex) activity reduction Leverage cap
Slide 4: FY19 – Investing in growth while deleveraging
FY19 – INVESTING IN GROWTH WHILE DELEVERAGING Emeco delivered $90m in free cash flow in FY19 before growth capex Strong cash flow in FY19 drove key initiatives in the year • Reduced our gross debt by US$33.8 million, decreasing our ongoing interest expense • Reduced our net leverage to below 2.0x, a
Slide 5: Efficiencies through asset management
EFFICIENCIES THROUGH ASSET MANAGEMENT Asset management and in-house maintenance extends component lives and saves costs and capex • Emeco’s asset management tools ensure we monitor component • We successfully extend the useful life of many of our major health and optimise our major component replace
Slide 6: FY20 Outlook – on track for further growth
FY20 OUTLOOK – ON TRACK FOR FURTHER GROWTH Strong start to FY20 – 1H20 operating EBITDA guidance of $118m to $120m (up 15% to 17% on 1H19) – Further growth expected in 2H20 as Western Region gains momentum • Strong demand in Eastern Region, particularly in metallurgical coal, with utilisation and ra
Slide 7: Focus on deleveraging & strengthened balance sheet
FOCUS ON DELEVERAGING & STRENGTHENED BALANCE SHEET Using strong free cash flow to deleverage and refinance notes on more favourable terms • Focus on further generating strong free cash flows and achieve net leverage of Leverage (net debt / operating EBITDA) 1.5x by 30 June 2020, 1.0x by 30 June 2021
Slide 8: Emeco has a large fleet suited to Australian mining
EMECO HAS A LARGE FLEET SUITED TO AUSTRALIAN MINING With the 3rd largest fleet in Australia (including all miners and service providers), our fleet is configured to meet the demands of operations in all commodities Emeco fleet vs industry peers1 Emeco fleet composition BHP Rio Tinto Trucks 357 Emeco
Slide 9: Emeco's fleet has significant life remaining
EMECO’S FLEET HAS SIGNIFICANT LIFE REMAINING Emeco’s fleet is 53% younger than industry average with no significant impending replacement capex 140 1,400 Emeco average Industry average 25,700 hrs ~55,000 hrs 120 1,200 100 1,000 80 800 Number 60 600 40 400 20 200 - - 5 10 15 20 25 30 35 40 45 50 55 6
Slide 10: Emeco's rental fleet can work harder
EMECO’S RENTAL FLEET CAN WORK HARDER Industry equipment utilisation is significantly higher than Emeco’s 64% (FY19) highlighting the substantial potential to increase fleet usage and grow earnings 350 Emeco Australian Average 64% 112% Australian Utilisation Frequency (Primary Machines) 300 250 200 1
Slide 11: Growth opportunities
GROWTH OPPORTUNITIES Emeco can achieve significant future growth in Australia through the following initiatives • Organically grow our rental fleet to meet customer demand through additional fleet acquisitions (whilst continuing our deleveraging trajectory) • Further bolt-on acquisition of competito
Slide 12: Appendix
Appendix @ Emeco
Slide 13: Company snapshot
COMPANY SNAPSHOT Emeco Holdings Limited (ASX:EHL) Capital structure Shareholders Share price (as at 22 November 2019) $2.08 Management and Private employees and other 5% holders 52-week price range $1.63 - $2.90 Black Diamond 11% Capital Mgt 24% Shares outstanding (undiluted) 323.2m Market capitalis
Slide 14: Thank you
Thank you Investor enquiries Sam Byford Investor Relations Manager +61 8 9420 0222 emecogroup.com
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