Keller Group Plc · LSE:KLR
Keller — H1 2012 Earnings Presentation
36 slides from Keller's earnings presentation, June 2012
Slide 1: Interim Results
Keller Group plc Interim Results Half year ended June 2012
Slide 2: Highlights
Hi hli ht Highlights • Much improved Group result, with three out of four regions ahead of last year – revenue up by 13% – operating profit more than doubled • Continued market recovery in the US, the Group’s biggest single market – US revenue up by 27% in constant currency • Good progress on busine
Slide 3: Group Income Statement
Group Income Statement £m H1 2012 H1 2011 %change FY2011 Revenue up 12% on a constant currency Revenue 613.8 545.5 +13% 1154.3 basis EBITDA 35.0 27.9 +25% 71.4 Operating profit 13 3 13.3 64 6.4 +108% 28 9 28.9 Average exchange A h Net finance costs (2.3) (3.0) (7.0) rates: - US$1.58 (H1 2011: $1.62)
Slide 4: Operating Profit and Margin
Operating Profit and Margin H1 2012 H1 2011 Constant currency Op Op revenue up 12% £m Revenue Profit Margin Revenue Profit Margin − N America: +27% − EMEA: -11% North America 270 1 270.1 76 7.6 2 8% 2.8% 207 9 207.9 (1 8) (1.8) (0 9)% (0.9)% − Asia: +50% − Australia: +13% EMEA¹ 160.6 (2.8) (1.7%) 19
Slide 5: Group Balance Sheet
G Group Balance B l Sh Sheett £m June 2012 June 2011 Dec 2011 Comparisons Goodwill/intangibles 99.3 107.2 100.6 impacted by Property/plant/equipment 253.0 270.2 266.1 exchange rates 352.3 377.4 366.7 . Inventories 40.3 39.2 37.3 Continued focus on cash Receivables 375.7 360.5 334.7 collection and Pa
Slide 6: Group Cash Flow Statement
G Group Cash C h Fl Flow St Statement t t £m H1 2012 H1 2011 FY 2011 Cash from operations Cash generated from operations 9.0 0.2 54.8 includes usual Capex – net (12.5) (15.5) (37.4) seasonal working capital outflows Tax (2 4) (2.4) (6 2) (6.2) (3 8) (3.8) Interest (2.4) (2.4) (5.1) Free cash flow (8
Slide 7: Group Financing Position
G Group Financing Fi i P Position iti • Over £230m of committed facilities, mainly: Key Financial Covenants – £170m bank facility expiring April 2015 – US$70m private placement placement, repayable October 2014 Test Status* Status Net debt < 3x EBITDA 1.8x • Comfortably within all financial covenant
Slide 8: Group Contract Awards
Group Contract Awards Monthly contract awards Record R d H1 contract t t £m (rolling 3 month average at constant currency*) awards helped by a 160 number of major projects 140 Crossrail; Victoria Station; LNG MOF 120 100 Ju e order June o de boo book 27%% up from last year at constant 80 Wheatstone;
Slide 9: 2012 Guidance
2012 Guidance • Full year now expected to be slightly ahead of previous expectations • Main driver is much improved US performance – extent of H1 year on year improvement will not be repeated in H2 – remain cautious about 2013 • EMEA to be profitable in full year – Poland to have a much better H2 •
Slide 10: Group Revenue by End Market
G Group Revenue R by b EEnd dMMarket k t H1 2012 FY 2008 Keller K ll operatest across allll Total revenue £614m Total revenue £1,197m sectors of the construction market 17% 18% 35% Infrastructure/Public 15% 44% Buildings consistently the 24% largest sector 24% 23% - reflects construction spending p
Slide 11: North America Non-residential Construction Market
North America Non-residential Construction Market $bn US Construction Put-in-Place Total non-residential market up 400 11% YTD (2% down in 2011) - private up 25%, public down 3% 350 300 Infrastructure/Public Buildings flat 250 year on year 200 150 Office/Commercial up 9% 100 - privately funded secto
Slide 12: North America Revenue by End Market
N th A North America i R Revenue b by E End dMMarket k t H1 2012 FY 2008 Relative movements Total revenue $427m Total revenue $990m reflect US construction spend 23% 22% 32% 41% Infrastructure/Public 11% B ildi Buildings revenue up 10% 24% vs 2008 22% - all others down 25% Infrastructure/Public Buil
Slide 13: North America Foundations
N th A North America i F Foundations d ti Excellent revenue growth as construction markets continue to improve Markets remain competitive but margins starting to increase Results gradually improving at Hayward Baker - management refocusing the business - increasing position in Canada Strong turnarou
Slide 14: North America Case Studies
N th A North America i C Case St Studies di Piling, transmission line project Soil mixing, tank expansion project New Jersey, US Alberta, Canada 13
Slide 15: North America Suncoast
N th A North America i Suncoast S t US Housing Starts (000s) US housing starts appear to have begun 800 slow recovery 700 − at or above 700k for last 8 months − April A il 2010 peakk due d tot first fi t time ti b buyer ttax 600 credit 500 400 Overhang of foreclosed properties now 300 less of an iss
Slide 16: EMEA Revenue by End Market
EMEA¹ R Revenue b by E End dMMarket k t H1 2012 FY 2008 Revenue from Total revenue €196m Total revenue €629m Infrastructure/ Public Buildings most resilient 14% 15% - still till 20% d down since i 2008 33% 42% 23% 19% Total revenue down circa 21% 33% 40% since 2008 - Poland only large country with h
Slide 17: EMEA Regional Split
EMEA¹ Regional Split H1 2012 RRevenue bby R Region i H1 2011 Revenue R b by R Region i Over 50% of H1 revenue Total revenue €196m Total revenue €220m from Germany, UK & Poland 16% 20% 17% 23% 5% 4% Trading in the Middle East 6% remains relativelyy 9% subdued 20% 14% 10% 10% 10% 12% Extending product
Slide 18: EMEA Highlights
EMEA Hi Highlights hli ht Another good performance from Germany - extending product range Improving position in Poland after quiet Q1 - major Gdansk road tunnel job now progressing well S Spanish i h markets k t continue ti tto decline d li - revenues now 80% down on peak Cost reduction programme in
Slide 19: EMEA Case Studies
EMEA Case C St Studies di Specialty grouting, Victoria Station Upgrade Compensation grouting, Crossrail London, UK London, UK 18
Slide 20: Asia Highlights
A i Hi Asia Highlights hli ht S$m Asian revenues by country Resource Piling acquired late 2009 250 200 Lumpy growth inevitable given large contracts 150 100 Higher margins than Group average 50 Targeting Vietnam and Indonesia 0 2007 2008 2009 2010 2011 H1 2011 H1 2012 Singapore Malaysia India Other
Slide 21: Asia Highlights
A i Hi Asia Highlights hli ht Strong turnaround t rnaro nd from Reso Resource rce Piling - Singapore market has rebounded - management team strengthened Ground improvement business in Singapore also performed well Large contract in Malaysia on track - now started piling operations with Group support
Slide 22: Australia Revenue by End Market
A t li R Australia Revenue b by E End dMMarket k t H1 2012 H1 2011 The “two speed” economy Total revenue A$190m Total revenue A$168m continues - resource and related sectors remain very strong 11% 9% 9% - commercial and 11% infrastructure markets are much weaker 24% 58% 19% 59% Resources now around
Slide 23: Australia Highlights
A t li Hi Australia Highlights hli ht Good turnaround at Piling Contractors - strong focus on contract selection - more efficient use of equipment Strong H1 performance from Waterway - excellent momentum on LNG MOF in Queensland Wheatstone to start in H1 2013 Offshore piling, materials offloading fa
Slide 24: Business Improvement
Business Improvement • Increase revenue and profit from large contracts – more large projects underway than at any previous time – major projects won on this year ear in A Australia, stralia Mala Malaysia, sia Poland and US • Accelerate technology transfer – piling ili ttransfer f tto IIndia, di M M
Slide 25: Outlook
O tl k Outlook • Continued improvement in the US construction market – caution needed on sustainability of recent growth given macro backdrop • Challenging outlook for Europe • Asian prospects remain positive • Two speed economy continues in Australia • Total order book up 27% • Stronger second half
Slide 26: Appendix
Appendix LLER
Slide 27: Introduction to Keller
I t d ti tto K Introduction Keller ll • The world’s largest independent ground engineering contractor – ground engineering is a small, niche sub-sector of construction – sector growing faster than construction, reflecting: − more pressure tot build b ild on brownfield b fi ld andd marginal i l lland
Slide 28: Ground Engineering Worldwide
G Ground dEEngineering i i W Worldwide ld id % of 2011 Activities revenue Regions of use Applications Piling 38% North America/UK Foundation support Eastern Europe Earth retention Middle East Asia & Australia Ground improvement 26% North America Foundation support EMEA Seismic risk protection Asia A
Slide 29: History of Keller
Hi t History off K Keller ll 1958 1960’s 1974 1984 1990 1994 2001 2002 2006 2007 2008 2009 2010 NOW Acquired Phi Acquired Acquired Est. 1958 Acquired Management (UK) Resource Acquired Systems Ground test Johann Keller buyout from Piling Suncoast Geotechnique services in Germany GKN plc (Singapore) (
Slide 30: Strategy
St ategy Strategy •Our Objective – to extend our global leadership in specialist ground engineering through: – organic growth, particularly in developing markets – targeted acquisitions • Our Execution – transfer of technologies and techniques within our current geographic regions – offering design
Slide 31: US Geographic Coverage
US G Geographic hi CCoverage MAINE WASHINGTON NORTH VERMONT MONTANA DAKOTA NEW HAMPSHIRE MINNESOTA OREGON WISCONSIN MASSACHUSETTS IDAHO NEW YORK SOUTH RHODE ISLAND DAKOTA MICHIGAN CONNECTICUT WYOMING PENNSYLVANIA NEW JERSEY IOWA NEBRASKA OHIO WASHINGTON D.C. DELAWARE NEVADA ILLINOIS INDIANA MARYLAND
Slide 32: Europe Geographic Coverage
E Europe Geographic G hi CCoverage SWEDEN UK NETHERLANDS GERMANY POLAND UKRAINE CZECH REP. SLOVAKIA FRANCE SWITZERLAND AUSTRIA HUNGARY HUNGARY ROMANIA PORTUGAL SERBIA SPAIN ITALY GREECE 31
Slide 33: Ten Year Track Record: Revenue
T Year Ten Y Track T k Record R d £ £m Revenue 2002 – 2011 1400 (Continuing Operations) 1,196.6 1200 00 1,154.3 1,037.9 1,068.9 1000 955.1 857.7 800 685.2 600 526.2 505.4 447.5 400 200 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 North America EMEA Asia Australia 32
Slide 34: Ten Year Track Record: Operating Profit
T Year Ten Y Track T k Record R d £ £m Operating Profit 2002 – 2011 (Continuing Operations) 140 119.4 120 107 4 107.4 100 89.3 77.3 80 55.3 60 43.3 33.8 * 33.4 40 31 5 31.5 28 9 28.9 20 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 -20 Head Office Costs North America EMEA Asia Australia *pre-e
Slide 35: Financial Performance
Financial Performance O Operating ti margin* i * Di id d per share Dividend h (pence) ( ) Operating O ti 12% 0.25 margin at historic low 10% 0.20 8% 0.15 Dividend 6% increased every year since 1994 0.10 4% flotation until 2011 0.05 2% 0% 0.00 02 03 04 05 06 07 08 09 10 11 02 03 04 05 06 07 08 09 10
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