Keller Group Plc · LSE:KLR
Keller — FY2005 Earnings Presentation
28 slides from Keller's earnings presentation, March 2006
Slide 1: Keller Group plc Preliminary Results 2005
Keller Group plc Preliminary Results 2005 March 2006
Slide 2: Highlights
Highlights z Sales up 23% to £731.0m, representing excellent organic growth z Profit before tax increased 64% to £48.8m z EPS up 73% to 41.8p z Excellent cash generation z Total dividend increased by 10% to 12.0p z Record order book – over five months’ sales 1
Slide 3: Profit and Loss Account
Profit and Loss Account £m 2005 2004* % change Sales 731.0 595.9 +23% Operating profit 53.1 33.9 +57% Interest (4.3) (4.1) Profit before tax 48.8 29.8 +64% Taxation (19.8) (11.9) Profit after tax 29.0 17.9 Minority interests (1.7) (2.1) 27.3 15.8 Basic earnings per share 41.8p 24.2p +73% Dividends p
Slide 4: Operating Profit and Margin
Operating Profit and Margin 2005 2004 Operating Operating £m Sales Profit Margin Sales Profit Margin UK 89.2 (0.3) (0.4)% 108.3 1.9 1.8% USA 399.9 42.1 10.5% 280.2 21.0 7.5% Europe/Overseas 204.7 12.7 6.2% 175.0 11.8 6.8% Australia 37.2 1.8 4.7% 32.4 1.7 5.2% 731.0 56.3 7.7% 595.9 36.4 6.1% Central
Slide 5: Group Balance Sheet
Group Balance Sheet £m 2005 2004 Goodwill/intangibles 55.7 51.8 Property, plant & equipment 90.4 80.9 146.1 132.7 Inventories 24.4 24.3 Debtors 194.6 143.9 Creditors (168.5) (120.7) Working capital 50.5 47.5 Long-term liabilities (6.5) (2.9) Capital employed 190.1 177.3 Employee benefits (21.1) (17.
Slide 6: Group Cash Flow Statement
Group Cash Flow Statement £m 2005 2004 Cash from operating activities 73.4 33.6 Capex – net (13.9) (11.8) Tax (18.8) (7.4) Interest (3.8) (4.0) Free cash flow 36.9 10.4 Dividends (8.1) (9.4) Acquisitions (7.8) (3.4) Net cash flow 21.0 (2.4) Other (3.2) 4.4 Opening net debt (58.7) (60.7) Closing net
Slide 7: Cash Flow History
Cash Flow History 80 70 60 50 40 £m 30 20 10 0 -10 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 -20 EBITDA Working capital Other Group operating cash flow 6
Slide 8: 2006 Guidance
2006 Guidance z Strong H2 2005 continuing into H1 2006 Î 2006 to be more first half weighted than 2005 Î 35-40% in H1 in line with earlier years z US$ translation impact: 5c change in average rate = circa £1.0m Î 2006 budget at £1 = $1.85 (2005 actual: $1.82) z Expected effective tax rate of circa 4
Slide 9: North America – analysis of sales
North America – analysis of sales 2005 Sales by Product (total sales £399.9m) 9% Piling & Earth Retention 12% Post Tension Concrete 42% Grouting Ground Improvement 37% 2005 Sales by Company (total sales £399.9m) 14% Suncoast 14% 37% Hayward Baker Case McKinney 35% 8
Slide 10: North America – construction growth
North America – construction growth $bn $bn 300 1200 1100 250 1000 900 200 800 700 150 600 500 100 400 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Total US Private Non Residential Construction (LHS) Total US Construction (RHS) Total US Public Construction (LHS) Source: US Census, US Department
Slide 11: North America – more large contracts
North America – more large contracts 300 250 200 Sales $m 150 100 50 0 2004 2005 2004 2005 2004 2005 Case Foundation Hayw ard Baker McKinney Contracts > $1m Contracts < $1m z Average contract size $120k 10
Slide 12: North America – highlights
North America – highlights z Suncoast sales up by circa 30% Î Increased market share in California & Arizona Î Excellent performance from the high rise division Î Revenues and profits doubled in four years since acquisition z Excellent result from Hayward Baker Î Most broadly based of our US compani
Slide 13: North America – case studies
North America – case studies Case Foundation Large shafts Water intake shafts for new power station Lake Michigan, Wisconsin Hayward Baker Vibrocompaction, grouting, minipiles Casino, hotel and parking deck St Charles, Missouri 12
Slide 14: North America – Donaldson acquisition
North America – Donaldson acquisition z Donaldson, Rhode Island, New England z Initial consideration including debt $10.6m z Full year Donaldson sales in 2005 circa $50m z Integration of Hayward Baker’s Boston Office 13
Slide 15: Europe & Overseas – analysis of sales
Europe & Overseas – analysis of sales 2005 Sales by Product (total sales £204.7m) 23% Ground Improvement Grouting Piling & Earth Retention 51% 26% 2005 Sales by Geography (total sales £204.7m) Germany 20% 20% Spain France Overseas Eastern Europe 11% Other Europe 20% 14% 15% 14
Slide 16: Europe & Overseas – highlights
Europe & Overseas – highlights z Keller-Terra had another good year Î Additional techniques introduced into the Spanish market z France performed well Î Increased share of growing ground improvement sector z Further progress made in Eastern Europe Î Market leader in Poland z German profitability imp
Slide 17: Europe & Overseas – case studies
Europe & Overseas – case studies Keller Speciální Zakládání Underpinning works New shopping & office complex Prague, Czech Republic Keller Grundbau & Keller GeTec Site investigation & monitoring works New container terminal Bremerhaven, Germany 16
Slide 18: United Kingdom – highlights
United Kingdom – highlights z KGE result satisfactory Î Further success in offering packaged solutions Î Continues to be selective in piling opportunities Î Growth potential of earth retaining systems z Makers had a disappointing year Î Delays in getting work to site continued into H2 Î Several mult
Slide 19: Australia
Australia Results % % £m 2005 2004 Change Change £ AU$ Sales 37.1 32.4 +14.8% +10.2% Operating profit 1.8 1.7 +5.5% +1.3% Operating margin 4.9% 5.2% $ exchange rate 2.39 2.49 z Very busy year on the Gold Coast, Queensland z Margins broadly maintained on higher volumes z As expected, geotechnical sub
Slide 20: Strategy
Strategy z Our strategy remains unchanged - to continue our track record of growth within specialist ground engineering z Organic growth Î Examples in the US - Post tensioning on the West Coast - Soil mixing in very weak soils - Increased presence in New England Î Examples in Europe - Push into the
Slide 21: Outlook
Outlook z Current levels of demand in the US should remain at least through H1 z No major changes in our other key markets z Bolt on acquisition opportunities remain z Current Group order book is at a new record high z 2005 was an outstanding year z 2006 will be another good year 20
Slide 22: Appendix
Appendix KELLER
Slide 23: Ground Engineering Worldwide
Ground Engineering Worldwide Activities Applications z Specialty grouting z Control of building settlement z Groundwater control z Ground improvement z Seismic risk protection z Foundation support z Caissons & piling z Foundation support z Earth retention z Post-tension concrete z Slab-on-grade foun
Slide 24: Management Structure
Management Structure Justin Atkinson Chief Executive James Hind Finance Director Bob Rubright Wolfgang Sondermann MD - North America MD - Europe & Overseas US US Europe Middle East Far East Hayward Baker Suncoastr Keller Keller Keller Case Wannenwetsch McKinney LCM UK Keller UK Makers Australia 23
Slide 25: Business Model
Business Model Specialist with a tight focus Experienced people with deep industry knowledge Global business, but with strong local knowledge Well balanced with broad markets and customer base Broad range of industry–leading technologies and processes Good long-term growth record and prospects 24
Slide 26: Ten Year Track Record – Sales
Ten Year Track Record Sales 1996 - 2005 £m 731.0 800 37.1 700 595.9 567.5 89.2 600 511.0 32.4 27.9 422.2 108.3 500 26.1 104.0 18.3 106.7 400 314.9 313.0 399.9 266.9 100.1 239.0 244.60 20.8 14.2 280.2 300 270.4 12.3 82.3 91.0 242.6 41.7 65.1 67.7 188.8 200 87.2 107.4 110.1 85.1 98.5 100 175.0 204.7 1
Slide 27: Ten Year Track Record – Operating Profit
Ten Year Track Record Operating Profit 1996 - 2005 £m 53.1 60 1.8 50 34.3 32.8* 33.9 40 25.4 1.8 2.0 1.9 4.3 0.5 1.7 42.1 30 19.4 17.7* 0.5 17.0 3.4 14.3 19.3 21 12.8 0.7 20 0.9 3.0 4.3 22.3 3.4 17.4 3.4 4.3 12 9.9 10 9.7 6.1 7.7 13.8 11.9 12.7 5.5 5.1 5.9 8.1 3.9 3 4.1 0 -0.6 -0.7 -1.1 -1.8 -1.6 -1
Slide 28: Results History
Results History Operating margin Dividend per share 8% 12 11 7% 10 6% 9 8 5% 7 4% 6 5 3% 4 2% 3 2 1% 1 0% 0 19 9 6 19 9 7 19 9 8 19 9 9 2000* 2001 2002 2003 2004 2005 19 9 6 19 9 7 19 9 8 19 9 9 2000 2001 2002 2003 2004 2005 z Industry leading margins z Uninterrupted dividend growth 27