Emeco Holdings Limited · ASX:EHL
Emeco — FY2016 Earnings Presentation
23 slides from Emeco's earnings presentation, Aug 31, 2016
Slide 1: 2016 Full Year Results Information Pack
For personal use only 2016 FULL YEAR RESULTS INFORMATION PACK 31 AUGUST 2016 1
Slide 2: Summary
SUMMARY For personal use only TRIFR reduced by 25% over FY16 to 5.6 at 30 June 2016 Safety Continued zero-harm goal with pragmatic approach to health and safety EBITDA growth of 25% in FY16 to $54.2 million despite low operating utilisation Financial EBITDA margin improved to 26.1%, up from 17.9% in
Slide 3: Safety and Human Resources
SAFETY AND HUMAN RESOURCES For personal use only Best practice safety standards and building capabilities are key to the future success of Emeco HEALTH, SAFETY & ENVIRONMENT SAFETY PERFORMANCE TRIFR reduced by 25% over FY16 to 5.6 at 30 June 2016 12.0 Continued zero-harm goal with pragmatic approach
Slide 4: FY16 Overview
FY16 OVERVIEW For personal use only Group utilisation stable with earnings improvement driven by cost reduction initiatives, improving margins and cash flow GROUP UTILISATION1 FY16 PERFORMANCE SUMMARY2 100% Change A$million FY15 1H16 2H16 FY16 80% on FY15 Revenue3 242.8 109.6 98.4 208.0 (34.8) 60% E
Slide 5: Business Improvement: Cost reductions and operational excellence
BUSINESS IMPROVEMENT Cost reductions and operational excellence For personal use only Project Fit initiatives achieved sustainable annual cost reductions of $26.7 million (run rate) OVERVIEW OPERATING COSTS OVER TIME Significant operating cost reductions driven by lower: A$million Overheads by 18% t
Slide 6: Business Improvement: Innovation and technology
BUSINESS IMPROVEMENT Innovation and technology For personal use only EOS provides Emeco customers significant productivity benefits OVERVIEW Providing a performance improvement workflow service Benchmarks performance against comparable peers to assist with setting achievable required targets Perform
Slide 7: Balance Sheet
BALANCE SHEET Focus on improved cash flow and capital structure For personal use only Emeco is focused on improving capital structure flexibility to allow the business to take advantage of growth opportunities arising in the market as conditions improve NET DEBT1 Net debt reduced to $365.4m over FY1
Slide 8: Operational Performance: Overview
OPERATIONAL PERFORMANCE Overview For personal use only Group revenue down primarily due to Canadian performance, with cost reduction initiatives driving operating EBITDA margin expansion OPERATING REVENUE BY GEOGRAPHY OPERATING EBITDA BRIDGE 80 FY15 FY16 60 10.1 9.3 WA Canada WA 15% Operating EBITDA
Slide 9: Operational Performance: New South Wales
OPERATIONAL PERFORMANCE New South Wales For personal use only New South Wales remains strong with utilisation uplift driving earnings growth over FY16 OVERVIEW OPERATING REVENUE Average operating utilisation up to 59% in FY16 (from 56% in FY15), 50.0 driven by ramp-up across key customers 38.0 40.0
Slide 10: Operational Performance: Queensland
OPERATIONAL PERFORMANCE Queensland For personal use only Continued recovery with project wins increasing revenue on reduced cost base OVERVIEW OPERATING REVENUE Queensland continued strong recovery from a low during 2014 50.0 A number of projects commencing late in FY15 drove improved operating 40.0
Slide 11: Operational Performance: Western Australia
OPERATIONAL PERFORMANCE Western Australia For personal use only Challenges remain in highly competitive mining services market OVERVIEW OPERATING REVENUE WA struggled to fully recover from the completion of major projects at the 50.0 end of FY15 and commencement of FY16 40.0 Extended contracts with
Slide 12: Operational Performance: Canada
OPERATIONAL PERFORMANCE Canada For personal use only Business restructure driving positive earnings and cash flow over second half OVERVIEW OPERATING REVENUE The Canadian business was impacted by the sustained lower oil price 50.0 driving significantly lower utilisation and operating utilisation 40.
Slide 13: Operational Performance: Chile
OPERATIONAL PERFORMANCE Chile For personal use only Management have stabilised Emeco’s Chilean operations after operational challenges during FY15 OVERVIEW OPERATING REVENUE Increased utilisation at Encuentro during 1H FY16 and a wet-hire project 50.0 at AMSA’s Esperanza mine drove a 32.4% increase
Slide 14: Profit and Loss: FY16 performance
PROFIT AND LOSS FY16 performance For personal use only Group revenue down primarily due to Canadian performance, with cost reduction initiatives driving operating EBITDA margin expansion OVERVIEW P&L SUMMARY Operating revenue of $208.0 below FY15 due to reduced Change A$million FY152 1H16 2H16 FY16
Slide 15: Profit and Loss: Asset impairments
PROFIT AND LOSS Asset impairments For personal use only Impairments are a result of management now expecting a slower and softer market recovery, despite Emeco’s improved operating and financial performance OVERVIEW ASSET IMPAIRMENTS Asset impairments totalling $179.6 million over the year, primaril
Slide 16: Cash Flow
CASH FLOW For personal use only Significant improvement in underlying cash flow generation of the business OVERVIEW FY16 FREE CASH FLOW GENERATION Cost saving measures and working capital initiatives improved operating Change A$million FY152 1H16 2H16 FY16 cash flows over FY16 with an increase of $2
Slide 17: Strategy and Outlook
STRATEGY AND OUTLOOK Continued focus on strengthening Emeco’s business For personal use only Business stabilised and underlying cash generation improved Achieved a sustainable annual cost reduction run rate of $26.7 million Achievements Significant cost reductions driven by strategic partnerships ov
Slide 18: Further Information
For personal use only FURTHER INFORMATION Thank you for your interest in Emeco For enquiries please contact: Brendan Shalders General Manager, Strategy & Corporate Development +61 (0) 8 9420 0258 [email protected] 18
Slide 19: Appendices
For personal use only APPENDICES
Slide 20: Emeco Operational Footprint
EMECO OPERATIONAL FOOTPRINT For personal use only Canada Queensland $13.7M 2H16 revenue $15.0M 2H16 revenue Number of fleet: 61 Number of fleet: 58 Fleet WDV: $19M Fleet WDV: $65M 2H16 Revenue Composition 2H16 Revenue Composition Thermal Other Coal 14% Iron 10% Ore 5% Thermal Coal 30% Coking Other C
Slide 21: Group Financials
GROUP FINANCIALS For personal use only Profit & Loss3 Cashflow Change A$million 1H15 2H15 FY15 1H16 2H16 FY16 on FY15 110.7 132.3 242.8 109.6 98.4 208.0 (14.4%) Change Revenue A$million FY153 1H16 2H16 FY16 on FY15 EBITDA 16.2 27.2 43.4 23.2 30.9 54.2 24.8% Operating EBITDA 43.4 23.3 30.9 54.2 24.9%
Slide 22: Geographical Segment Financials
GEOGRAPHICAL SEGMENT FINANCIALS For personal use only New South Wales1 Australia1,2 Change Change A$million 1H15 2H15 FY15 1H16 2H16 FY16 on FY15 A$million 1H15 2H15 FY15 1H16 2H16 FY16 on FY15 Revenue 24.3 34.4 58.7 34.3 38.0 72.3 23.2% Revenue 62.1 74.9 137.0 64.1 68.1 132.2 (3.4%) EBITDA 5.4 14.0
Slide 23: Disclaimer
DISCLAIMER For personal use only Reliance on third party information The information and views expressed in this Presentation were prepared by Emeco Holdings Ltd (the Company) and may contain information that has been derived from publicly available sources that have not been independently verified.