Keller Group Plc · LSE:KLR
Keller — FY2002 Earnings Presentation
30 slides from Keller's earnings presentation, March 2003
Slide 1: Preliminary results Year ended 31 December 2002
Preliminary results Year ended 31 December 2002 March 2003
Slide 2: Highlights
Highlights • Sales break through £500m barrier • Operating profit* up 35% to £34.3m; margins up to 6.7% (2001: 6.0%) • Profits before tax* up 29% to £30.4m (2001: £23.6m) • Earnings per share* increased 27% to 32.7p (2001: 25.8p) • Strong cash flow with EBITDA interest cover of 11 times • Five acqui
Slide 3: Management Changes
Management Changes Tom Dobson Chief Executive Justin Atkinson Chief Operating Officer Bob Rubright TBA Rob Ewen Foundation Services MD Finance Director Specialist Services MD Foundation Services Specialist Services USA Europe & UK Australia USA Europe & Overseas UK Hayward Baker Overseas Keller Fran
Slide 4: Profit and Loss Account
Profit and Loss Account £millions 2002 2001 % Change Turnover 511.0 422.2 +21 Operating profit pre-goodwill 34.3 25.4 +35 Operating profit post goodwill 31.2 24.2 +29 Interest (3.9) (1.8) Profit before tax 27.3 22.4 +22 Taxation (10.7) (8.7) Profit after tax 16.6 13.7 +21 Profit before tax pre-goodw
Slide 5: Acquisitions in 2002
Acquisitions in 2002 Company Month Total 2002 Contribution 2002 Contribution acquired Investment(1) to Sales to Operating Profit £m £m £m Wannenwetsch Jan/Oct 2.7 1.7 0.4 Accrete August 4.0 2.0 0.2 Vibropile August 2.2 4.9 0.8 Keller-Terra(2) December 9.1 Nil Nil McKinney(2) December 17.7 Nil Nil To
Slide 6: Balance Sheet
Balance Sheet £millions 2002 2001 Fixed assets Intangible assets 66.7 61.0 Tangible assets 79.8 59.2 146.5 120.2 Current assets Stocks 15.1 12.5 Debtors 143.9 120.3 Cash 16.2 12.2 175.2 145.0 Creditors: due within one year (141.4) (129.1) Net current assets 33.8 15.9 Total assets less current liabil
Slide 7: Cash Flow Statement
Cash Flow Statement £millions 2002 2001 Net cash inflow from operating activities 43.2 32.2 Returns on investment and servicing of (4.4) (3.3) finance Taxation (9.0) (8.2) Capital expenditure (12.7) (10.3) Acquisitions and disposals (32.0) (67.3) Equity dividends paid (5.6) (5.0) Net cash outflow (2
Slide 8: Operating Cash Flow
Operating Cash Flow 50 40 30 £m 20 10 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 -10 Operating profit Depreciation and amortisation Working capital Other Group operating cash flow • 16% compound growth in operating cash flow 1994 - 2002 7
Slide 9: Accounting Developments
Accounting Developments • FRS 17 impact on UK pension scheme • Year end net deficit of £4.6m • Scheme closed to new members since 1999 • Contributions into the scheme increased • UITF 34 on pre contract costs • All bid costs expensed to profit • Captive insurance company set up during the year • Int
Slide 10: Results History
Results History Turnover Operating profit 600 40 35 500 30 400 25 £m 300 £m 20 15 200 10 100 5 0 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000* 2001 2002 *pre restructuring costs • Buy out in 1990 • Flotation in 1994 • Benef
Slide 11: Results History
Results History Operating margin Dividend per share 7.0% 12 6.0% 10 5.0% 8 4.0% GBp 6 3.0% 4 2.0% 1.0% 2 0.0% 0 1994 1995 1996 1997 1998 1999 2000* 2001 2002 1994 1995 1996 1997 1998 1999 2000 2001 2002 *pre restructuring costs • Industry leading margins • Dividend per share more than doubled since
Slide 12: Geographical Analysis
Geographical Analysis 2002 turnover 2002 operating profit Australia Australia 5% 5% Continental Continental Europe and Europe and Overseas Overseas 27% USA 22% 47% USA UK 61% 12% UK 21% • Increased margins in all major foundation business units • German sales 8% of Group 11
Slide 13: Product / Customer Analysis
Product / Customer Analysis 2002 turnover Products Customers Ground Refurbishment Improvement Concrete post private tension New build Products 13% 17% public 18% 22% Refurbishment 12% Refurbishment public 21% Geotech 31% New build Piling private 22% 44% • Foundation Services:Specialist Services spli
Slide 14: Foundation Services
Foundation Services £millions 2002 2001 % Change Sales 361.4 347.8 +4% Operating profit pre-goodwill 27.7 23.5 +18% Margin 7.7% 6.8% +13% • Sales 71% of Group • Operating profit 76% of Group (pre-head office costs) • All major business units increased operating margins 13
Slide 15: Foundation Services
Foundation Services 60 50 40 Sales 30 ($m) Gross Gross Gross 20 margin margin margin 30% 25% 20% 10 0 Under $250k Between $250k and $1m Over $1m Contract size • Average of 2000 - 2002 Hayward Baker contracts 14
Slide 16: Foundation Services
Foundation Services Trading Highlights • Another record year for US business • Small and medium sized contracts predominate, but: • Jet grouting at Wickiup Dam, Oregon • Caissons at Cooper River, South Carolina • German margins increased in difficult market • Another successful year in France • Exce
Slide 17: Foundation Services
Foundation Services KELLER 16
Slide 18: Foundation Services
Foundation Services 17
Slide 19: Specialist Services
Specialist Services £millions 2002 2001 % Change Sales 149.6 74.4 +101% Operating profit pre-goodwill 8.8 3.7 +138% Margin 5.9% 5.0% +18% • Sales 29% of Group • Operating profit 24% of Group (pre-head office costs) • Full year impact of Suncoast 18
Slide 20: Specialist Services
Specialist Services Trading Highlights Makers • Business structured around key markets • Social housing now accounts for 50% of turnover • First new build car park completed Wannenwetsch • Wannenwetsch returned double digit margins Suncoast • Push to grow sales outside of Texas market • New offices
Slide 21: Specialist Services
Specialist Services 20
Slide 22: Specialist Services
Specialist Services 21
Slide 23: Strategy
Strategy • Further consolidate our global leadership in Foundation Services • Strengthen and broaden our offering of Specialist Services • Invest wisely in our existing businesses • Take advantage of selective acquisition opportunities • Continue successful business model 22
Slide 24: Business model
Business model • Lean head office • Autonomous and well incentivised business units • Specialized equipment and people support niche positions • Regionalisation offers clients a local presence • Contract mix spreads risk and enhances margins • Acquisitions sourced and integrated on a local basis 23
Slide 25: Current Trading and Prospects
Current Trading and Prospects • Year end order book at four months’ sales • US infrastructure and housing markets remain good • Continued growth in Europe; expansion of European Union • Growth opportunities within Makers and Suncoast • Clear market leader in Australia • 2003 prospects enhanced by re
Slide 26: Summary
Summary • Record set of results continues impressive track record • Industry leading margins increased to 6.7% • Profit quickly converted to cash • Increased dividend well covered • Succession plans combine continuity with fresh perspective 25
Slide 27: Preliminary results Year ended 31 December 2002
Preliminary results Year ended 31 December 2002 March 2003
Slide 28: Appendix
Appendix KELLER % 27
Slide 29: Ten year track record: Turnover 1993-2002
Ten year track record Turnover 1993 - 2002 600 511.0 500 26.1 422.2 10 6 . 7 18 . 3 400 10 0 . 1 314.9 313.0 £m 300 266.9 20.8 14 . 2 239.0 244.6 12 . 3 82.3 9 1. 0 242.6 225.0 202.0 4 1. 7 67.7 200 33.3 35.8 65.1 18 8 . 8 148.4 69.1 87.2 10 7 . 4 110 . 1 24.1 58.7 85.1 98.5 100 29.6 12 0 . 1 13 5 .
Slide 30: Ten year track record: Operating Profit 1993-2002
Ten year track record Operating Profit 1993 - 2002 40 34.3 35 1. 8 4 .3 30 25.4 0 .5 25 3 .4 19.4 0 .7 20 17.0 3 .0 17.7* 2 2 .3 £m 14.3 0 .9 4 .3 15 11.5 12.8 3 .4 17 . 4 4 .3 10.2 1. 9 3 .4 12 . 0 10 8.3 1. 2 9 .7 9 .9 0 .7 5.0 3 .8 6 .1 2 .2 7.7 5 8 .1 5.6 5.6 5.4 5.5 5.1 5.9 3 .9 4 .1 3 .0 0 - 0