Keller Group Plc · LSE:KLR
Keller — H1 2004 Earnings Presentation
31 slides from Keller's earnings presentation, August 2004
Slide 1: Interim results Half year ended 30 June 2004
Interim results Half year ended 30 June 2004 August 2004
Slide 2: Slide 2
Slide 3: Profit and Loss Account
Profit and Loss Account Half Year Half Year % Full Year £m 2004 2003 Change 2003 Turnover 294.1 278.7 +6% 567.5 Operating profit* 13.3 14.9 -11% 32.8 Interest (2.1) (2.1) (4.1) Profit before tax* 11.2 12.8 -13% 28.7 Exceptional items - (0.7) (3.1) Amortisation (1.4) (1.9) (10.8) 9.8 10.2 14.8 Taxati
Slide 4: Operating Profit and Margin
Operating Profit and Margin (before amortisation of intangibles and 2003 exceptionals) £m Half Year 2004 Half Year 2003 Full Year 2003 Operating Operating Operating Profit Margin Profit Margin Profit Margin UK (0.3) -0.6% 0.9 1.6% 0.5 0.5% USA 9.2 6.9% 9.1 7.0% 19.3 7.1% Europe/Overseas 5.0 5.7% 5.5
Slide 5: Balance Sheet
Balance Sheet £m June 2004 June 2003 Dec 2003 Goodwill/intangibles 58.1 66.6 57.0 Tangible assets 79.3 83.6 82.2 137.4 150.2 139.2 Stocks 21.8 17.4 16.9 Debtors 161.9 152.7 137.9 Creditors (129.1) (116.9) (113.0) Working capital 54.6 53.2 41.8 Provisions/long-term creditors (8.9) (8.5) (8.7) Capital
Slide 6: Cash Flow Statement
Cash Flow Statement £m Half Year 2004 Half Year 2003 Full Year 2003 Cash from operating activities 6.3 9.9 40.0 Capital expenditure - net (5.5) (7.5) (13.4) Financing costs (3.9) (2.4) (5.0) Taxation (1.4) (5.8) (12.8) Dividends (4.4) (4.4) (6.5) Free cash flow (8.9) (10.2) 2.3 Acquisitions (2.8) 0.
Slide 7: 2004 Guidance
2004 Guidance 2004 H1: H2 profit split consistent with earlier years typically 35%-40% in H1 Translation impact US$ 5c change = £0.5m impact € 5c change = £0.4m impact Full year tax rate similar to last year Working capital inflow in H2 Net debt expected to reduce in H2 in line with usual seasonalit
Slide 8: North America
North America Results £m Half Half % % Full Year Year Change Change Year 2004 2003 £ $ 2003 Sales 133.1 130.6 +2% +15% 270.4 Operating profit 9.2 9.1 +1% +14% 19.3 Operating margin 6.9% 7.0% 7.1% $ exchange rate 1.82 1.61 1.64 7
Slide 9: North America
North America Highlights Margins restored at Suncoast Selling price increases implemented Increased volumes Operating costs reduction Continued expansion outside Texas Renewed raw material cost pressures Improved second quarter result from Hayward Baker Actions taken to improve Western Region perfor
Slide 10: North America
North America Current position on steel and cement Steel Products Steel strand and rebar prices increased in H1 Recent sharp increase in steel scrap Further selling price increases to be implemented in H2 Cement Shortages A regional rather than a national problem Florida, California and North East m
Slide 11: Continental Europe & Overseas
Continental Europe & Overseas Results £m Half Half % % Full Year Year Change Change Year 2004 2003 £ € 2003 Sales 87.9 78.8 + 12% + 14% 165.2 Operating profit 5.0 5.4 - 8% - 6% 13.8 Operating margin 5.7% 6.9% 8.4% € exchange rate 1.49 1.46 1.45 10
Slide 12: Continental Europe & Overseas
Continental Europe & Overseas Highlights Strong result from Keller-Terra in Spain Action taken to cut costs in Portugal Continued geographical expansion in Italy and Poland Market share maintained in Germany on reduced margins Remaining 50% of LCM in Sweden purchased for £2.5m Strong contribution fr
Slide 13: Storm water management and road tunnel project Kuala Lumpur, Malaysia
Storm water management and road tunnel project Kuala Lumpur, Malaysia 12
Slide 14: Storm water management and road tunnel project Kuala Lumpur, Malaysia
Storm water management and road tunnel project Kuala Lumpur, Malaysia 13
Slide 15: Grouting to reduce water ingress
Grouting to reduce water ingress 14
Slide 16: Micropile wall and jet grouting in low headroom
Micropile wall and jet grouting in low headroom 15
Slide 17: Keller has now successfully extended its product range in Malaysia
Keller has now successfully extended its product range in Malaysia 16
Slide 18: United Kingdom
United Kingdom Highlights Makers result improved in the second quarter H1 adversely affected by old contracts in discontinued areas Volumes increased in the Social Housing business Business more focused; management strengthened; morale improved KGE sales declined, reflecting withdrawal from heavy pi
Slide 19: Australia
Australia Results % % Half Year Half Year Change Change Full Year 2004 2003 £ AU$ 2003 Sales 18.3 12.2 + 50% + 41% 27.9 Operating profit 0.9 0.8 + 8% + 1% 2.0 Operating margin 4.9% 6.6% 7.2% $ exchange rate 2.47 2.62 2.52 Highlights Good contributions from both Franki and Vibropile Lower margins on
Slide 20: Strategy
Strategy To continue to enhance our international leadership in specialist ground engineering By Organic growth Existing or new territories New technologies Acquisitions In United States Europe (inc UK) South East Asia Examples in H1: Suncoast growth outside Texas New offices New products in existin
Slide 21: Current Trading and Prospects
Current Trading and Prospects Unchanged outlook in our main markets Suncoast experiencing renewed raw material cost pressures Makers expected to return to sustained profitability in H2 Solid order book at around four months’ sales Anticipate full-year performance in line with expectations 20
Slide 22: Appendix
Appendix August 2004
Slide 23: Ground Engineering Worldwide
Ground Engineering Worldwide Activities Applications Specialty grouting Control of building settlement Groundwater control Cavity filling Ground improvement Seismic risk protection Foundation support Caisson & piling in specific Foundation support Earth retention Post-tension concrete Slab-on-grade
Slide 24: Ground Engineering Worldwide
Ground Engineering Worldwide Makers Refurbishment Local authority housing Car parks Water related structures 23
Slide 25: Geographical Coverage – US
Geographical Coverage – US WASHINGTON MAINE MONTANA NORTH DAKOTA MICHIGAN VERMONT MINNESOTA OREGON NH WISCONSIN NEW MASS IDAHO SOUTH DAKOTA MICHIGAN YORK WYOMING PENNYSYLVANIA CONNECTICUT IOWA NEBRASKA NEW JERSEY NEVADA OHIO ILLINOIS WEST UTAH INDIANA VIRGINIA MARYLAND CALIFORNIA KANSAS VIRGINIA COL
Slide 26: Geographical Coverage - Europe
Geographical Coverage - Europe SWEDEN UK NETHERLANDS POLAND GERMANY CZECH REP. SLOVAKIA FRANCE AUSTRIA HUNGARY SWITZERLAND SLOVENIA CROATIA ITALY PORTUGAL SPAIN 25
Slide 27: Geographical Coverage – ROW
Geographical Coverage – ROW PAKISTAN BAHRAIN EGYPT U.A.E TAIWAN INDIA SAUDI ARABIA HONG KONG PHILIPPINES MALAYSIA SINGAPORE INDONESIA AUSTRALIA 26
Slide 28: Business Model
Business Model Technological leadership, specialised equipment and people Autonomous and well incentivised business units Regionalisation offers clients a local presence Contract mix spreads risk and enhances margins Acquisitions sourced and integrated on a local basis 27
Slide 29: Competitive positioning
Competitive positioning Competition Global National Local No UK or US quoted peer Specialist contractor (people and equipment) Balanced contract portfolio 28
Slide 30: Ten Year Track Record
Ten Year Track Record Turnover 1994 - 2003 600 567.5 27.9 511.0 500 26.1 10 4 . 0 422.2 10 6 . 7 18 . 3 400 10 0 . 1 314.9 313.0 £m 300 266.9 20.8 14 . 2 270.4 244.6 12 . 3 82.3 9 1. 0 242.6 239.0 225.0 4 1. 7 67.7 200 202.0 33.3 35.8 65.1 18 8 . 8 69.1 87.2 10 7 . 4 110 . 1 58.7 85.1 98.5 100 16 5
Slide 31: Ten Year Track Record
Ten Year Track Record Operating Profit 1994 - 2003 40 34.3 32.8* 35 1. 8 2 .0 0 .5 4 .3 30 25.4 0 .5 25 19.4 3 .4 19 . 3 0 .7 17.7* 20 17.0 3 .0 2 2 .3 £m 14.3 0 .9 4 .3 15 11.5 12.8 3 .4 17 . 4 10.2 4 .3 1. 9 3 .4 12 . 0 10 1. 2 9 .7 9 .9 3 .8 5.0 6 .1 7.7 13 . 8 5 8 .1 5.6 5.4 5.5 5.1 5.9 3 .9 3 .