Sgh Limited · ASX:SGH
Sgh — Seven Group Holdings — H1 FY2017 Earnings Presentation
31 slides from Sgh's earnings presentation, Feb 21, 2017
Slide 1: Results for the Six Months Ended 31 December 2016
RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2016 Presentation on 21 February 2017 Agility Meeting Change
Slide 2: Group Overview | Disclaimer
Group Overview | Disclaimer Basis of preparation of slides Included in this presentation is data prepared by the management of Seven Group Holdings Limited (“SGH”) and other associated entities and investments. This data is included for information purposes only and has not been subject to the sam
Slide 3: Group Overview | Our Businesses
Group Overview | Our Businesses Industrial Services SGH Ownership Business Description Strategic Position WesTrac Australia 100% CAT dealer in WA and NSW/ACT #1 equipment solution company in WA and NSW/ACT WesTrac China 100% CAT dealer in five provinces in China One of the leading equipment solution
Slide 4: People | Safety and Culture
People | Safety and Culture Safety focus An important benchmark for the success of our businesses and leadership team LTIFR and TRIFR are down across WesTrac and Coates Hire – Driving our safety culture with initiatives such as the Take 5 Program to push accountability and effective leadership a
Slide 5: Group Overview | Highlights
Group Overview | Highlights Result consistent with AGM guidance Underlying EBIT of $176m is 5% ahead of pcp Mining production cycle continues to drive customer maintenance activity Momentum building through infrastructure demand and recovery in commodity and energy prices Statutory net loss
Slide 6: Market | Economic Backdrop
Market | Economic Backdrop Key themes for SGH Our industrial businesses are operating in markets that provide attractive long-term fundamentals when looking through the cycle We have managed our businesses prudently, re-setting the cost base where appropriate, and are now poised to benefit from
Slide 7: Group Overview | Key Financials
Group Overview | Key Financials Underlying Results 1H FY17 1H FY16 % Change Trading revenue $ 1,302.7 m $ 1,368.6 m -5% 1 Earnings before interest and tax (excluding Significant Items) $ 175.8 m $ 167.2 m 5% 1 Underlying net profit after tax (excluding Significant Items) $ 104.0 m $ 111.6 m -7% 1 Un
Slide 8: Financials | Profit and Loss
Financials | Profit and Loss $m 1H FY17 1H FY16 Change % Revenue 1,302.7 1,368.6 -5% Other income 32.7 48.3 -32% Share of results from equity accounted investees 69.2 59.3 17% Total revenue and other income 1,404.6 1,476.2 -5% Expenses (excl. depreciation, amortisation and interest) (1,212.8) (1,289
Slide 9: Financials | Significant Items
Financials | Significant Items $m 1H FY17 1H FY16 Impairment – SWM equity (139.6) (182.2) Gain / (Loss) on sale of investments and MtM on derivatives (1.2) 2.3 Restructuring, redundancy, transaction and other costs (4.7) (2.6) Share of equity accounted investees' Significant Items (9.9) 18.1 Other i
Slide 10: Financials | Earnings Summary
Financials | Earnings Summary Total WesTrac WesTrac Allight Coates Media Energy Other Other $m Group Aus China Sykes Hire Invest. Invest. Revenue 1,302.7 1,026.3 239.3 33.3 - - 2.3 1.5 - Statutory EBIT 22.7 69.9 18.8 (2.1) 6.7 (133.5) 27.3 36.7 (1.1) Add unfavourable Significant Items Restructuring,
Slide 11: Financials | Cash Flow
Financials | Cash Flow Lower underlying EBITDA cash conversion $m 1H FY17 1H FY16 of 48% predominantly impacted by: – $40m increase in inventory mainly in Underlying EBIT 175.8 167.2 WesTrac Australia $25m (parts) and Add: depreciation and amortisation 16.0 19.6 WesTrac China $20m (equipment) offs
Slide 12: Financials | Balance Sheet
Financials | Balance Sheet As at As at Change $m 31 Dec 16 30 Jun 16 % Trade and other receivables 547.2 542.7 1% Decline in investments mainly due to Inventories 853.6 824.8 3% unfavourable mark-to-market movement of the investment in SWM Investments 1,774.6 1,972.6 -10% and the listed investment
Slide 13: Financials | Debt Maturity Profile
Financials | Debt Maturity Profile At 31 December 2016, the Group had $924m of available undrawn borrowing facilities in addition to $295m of cash Current “<1 year” debt includes a number of uncommitted offshore bank and short-term OEM facilities that are regularly rolled over for further terms
Slide 14: Financials | Capital Management
Financials | Capital Management Dividend unchanged Ordinary interim dividend maintained at 20c per share fully franked reflecting the Group’s confidence in underlying free cash generation ← Interim 20cps Attractive yield on both ordinary shares and TELYS4 shares – 62% underlying payout ratio and
Slide 15: WesTrac Australia
WesTrac Australia Autonomous 793F mining trucks have delivered productivity gains to FMG
Slide 16: Industrial Services | WesTrac Australia
Industrial Services | WesTrac Australia Value proposition WesTrac enables a reduction in equipment lifecycle costs, thereby minimising investment in new equipment while maximising production Advancements we have made in parts logistics and velocity are allowing rapid and accurate delivery to cus
Slide 17: Industrial Services | Case Studies
Industrial Services | Case Studies Customer 1 WesTrac’s on-site maintenance team at a major iron ore mine has helped the customer to improve truck utilisation, reduce downtime and reduce fuel consumption: – In-pit servicing eliminates transit time to workshop – Time needed for regular maintenance
Slide 18: Industrial Services | WesTrac Australia
Industrial Services | WesTrac Australia Product support revenue up 10% on pcp Driven by strong parts sales growth of 14% given increased maintenance activity by customers Product NSW impacted by discontinued truck body business and ongoing trend of sales customers in-sourcing their service activ
Slide 19: WesTrac China
WesTrac China CAT generators provide backup power for a range of uses in the energy sector and data centres
Slide 20: Industrial Services | WesTrac China
Industrial Services | WesTrac China Positive momentum continues in China Robust industrial activity in China seen through recent economic indicators – Coal production up 12% in past six months – Building construction starts up 8% in past year – Steel production within 5% of all time high set in ea
Slide 21: Coates Hire
Coates Hire Coates Hire is a leading supplier of equipment to the infrastructure sector
Slide 22: Industrial Services | Coates Hire
Industrial Services | Coates Hire Strong performance driven by East Coast infrastructure NSW and VIC businesses continue to benefit from infrastructure and construction activity, offsetting weaker trading conditions in WA and QLD Coates has delivered on its strategy of improving price realisatio
Slide 23: Media
Media Seven West Media creates world class content and delivers it to the widest multi-platform audience in Australia
Slide 24: Media | Seven West Media
Media | Seven West Media Leadership in TV and growth in new revenue streams $m 1H FY17 1H FY16 Change Ranked #1 for 21 consecutive half year ratings periods SWM share of associate NPAT 38.5 57.5 -33% Ranked #1 in revenue and ratings share Other investment income 0.7 2.9 -76% Global footprint i
Slide 25: Media | Seven West Media
Media | Seven West Media Creating and exporting world class media content SWM leveraging strength of brands and content to establish leadership in new markets Largest production company in Australia with increased program sales in UK and US MKR’s global footprint expanding – UK,NZ, Germany and
Slide 26: Energy
Energy SGH’s investment in Beach Energy has benefited from an improving oil price and tightening East Coast gas market
Slide 27: Energy | Highlights
Energy | Highlights Improving market dynamics $m 1H FY17 1H FY16 Oil and gas prices improved during the six months to 31 December: Revenue 2.3 3.8 Other income - 3.8 – Brent crude up 14% to US$57/bbl, WTI crude up 11% to US$54/bbl Share of Beach Energy NPAT 18.5 - – Victorian wholesale gas price a
Slide 28: Investments
Investments Former Channel 7 studio in Dianella / Perth now being redeveloped as “Seven Hills”
Slide 29: Investments | Property and Listed Portfolios
Investments | Property and Listed Portfolios Property portfolio impacted by soft WA market $m 1H FY17 1H FY16 Revenue 1.5 - Stage 1 of Seven Hills (Dianella) continues with 28 lots sold to date Other income 19.2 19.3 Sale of additional REVY buildings in Pyrmont completed in 1H FY17 Associate NPA
Slide 30: Outlook | Key Takeaways and Questions
Outlook | Key Takeaways and Questions Strong balance sheet; Coates Hire and Beach Energy WesTrac Australia to Operating cash flow WesTrac China profiting from higher capture maintenance to improve in H2 providing upside production and price opportunities Cash flow together with We are pleased with t
Slide 31: H1 FY17 Results Presentation | 21 February 2017 | 31
H1 FY17 Results Presentation | 21 February 2017 | 31
Seven Group Holdings — H1 FY2017 Earnings Presentation on 6ix