Speedy Hire Plc · LSE:SDY
Speedy Hire — FY2024 Earnings Presentation
32 slides from Speedy Hire's earnings presentation, June 2024
Slide 1: Full year results to 31 March 2024
Full year results to 31 March 2024 Transforming to drive sustainable growth
Slide 2: Presentation team
Presentation team Dan Evans Paul Rayner Chief Executive Chief Financial Officer 2
Slide 3: Highlights
Highlights General business • Launch of our five-year growth strategy, Velocity at our Capital Markets Day in July • Enabling phase progressing as expected (years 1 to 3) • Continued investment in our strategy despite challenging market backdrop • Resilient performance in the UK Hire business, with
Slide 4: Financial update
Financial update Paul Rayner, Chief Financial Officer
Slide 5: Financial highlights
Financial highlights • Hire revenue down 1.7%, with national customers up 0.2% and regional down 6% • High operational gearing impacts PBT • Services revenue excluding fuel down 1.6% • Fuel down 23%, impacted by wholesale fuel prices – no margin impact • Lloyds British revenue of £19.8m (FY23:£19.6m
Slide 6: Customer and revenue analysis
Customer and revenue analysis Total revenue by segment Trade and Hire segment analysis YOY Retail 1% Revenue Volume Rate National Regional 46% National Regional 53% Trade & Retail Customer segment • Pricing discipline maintained across all customer segments • National: • Growth in the year, with rat
Slide 7: Adjusted profit bridge
Adjusted profit bridge • Movement in profit/loss on disposal versus FY23, reflective of market conditions • £1.5m of additional non-itemised depreciation, policy now 7 years (previously 15 years) • Investment in base pay • Actions taken to control underlying overheads and realise supply chain effici
Slide 8: Balance sheet
Balance sheet • Increase in intangible assets due to Goodwill associated with the Green Power Hire (GPH) acquisition • Hire fleet • Itemised £182m, up 3% primarily due to the acquisition of GPH • Non-itemised £28m, down 12% due to increased depreciation and enhanced operational control • Continued f
Slide 9: Cash flow bridge
Cash flow bridge • Achieved strong operating cash flow1 of £95m (FY23 £89m), 98% conversion from EBITDA (FY23 85%), against target of 90% • Total net capex spend £33m – gross capex of £52m • FY25 capex guidance of c.£55m with flexibility to support further growth • Free cash flow of £24m, more than
Slide 10: Velocity financial metrics
Velocity financial metrics Total revenue Operating cash Itemised utilisation EPS £421.5m flow1 52.4% 2.35p £95.1m Profitable Cashflow Cashflow Assets Shareholder growth returns EBITDA Net debt to EBITDA ROCE DPS: 2.60 pence per share £96.8m (Leverage2) 9.9% 1.5x 1 Excludes £0.9m of M&A related fees
Slide 11: 5 year financial KPIs
5 year financial KPIs Through-cycle financial targets framework Revenue EBITDA Leverage Target revenue £650m Grow EBITDA margins to 28% Maintain sustainable leverage at 1.0 – 1.5x EBITDA • Launched at CMD in July 2023 • Progressing 'Enable' phase of strategy (years 1 to 3) • £3.2m of non-underlying
Slide 12: Business update
Business update Dan Evans, Chief Executive
Slide 13: Market overview
Market overview • Most recent PMI data showed positive signs and rose to 54.7 in from 53 in April, the highest since May 2022 • Construction output is estimated to have decreased in April 2024, however we have a diverse customer base and service a broad range of sectors • Evidence from ONS survey re
Slide 14: Key customers update
Key customers update Contract Wins Contract Renewals 14
Slide 15: People
People • Recognised as a Top 50 Inspiring Workplace • Voluntary attrition rate down to a record low 16.1% (FY23: 20.2%): • Largest investment in base pay of £7.2m • People engagement score of 75%, ahead of the external benchmark1, • Continued roll-out of flexible working - over a third of our collea
Slide 16: Health & Safety
Health & Safety • Awarded the President’s award by ROSPA for 10 consecutive Gold awards • Implemented our STOP1 campaign • Provided safety culture training to the senior leadership team • All company devices enabled for leading indicator reporting • Positive, record high leading indicators of 6,991,
Slide 17: Industry leading ESG
Industry leading ESG • Launched our Decade to Deliver strategy, as part of Velocity • 51% assets (itemised) are now eco up from 44% • 55% revenue from eco products • First in hire to have validated Net Zero science-based targets • Reduced Scope 1 and 2 emissions by 49%, versus a target of 51.6% by 2
Slide 18: Strategy and Transformation
Strategy and Transformation Dan Evans, Chief Executive
Slide 19: Velocity Strategy and Transformation
Velocity Strategy and Transformation Year 1 Continued mobilisation of our New Customer Voice Transformation programme platform Dynamics 365 Customer Solutions Restructuring and enhancing deployed into our Customer Trade and Retail re-engineered digital capabilities Solutions business to digital expe
Slide 20: Velocity Strategy and Transformation
Velocity Strategy and Optimising our network, logistics Transformation and assets Year 2 Predictive capital expenditure model Price optimisation developments PEAK's Audiences app Improved Digital Channels Launch of new CRM greater insight and understanding of our customer behaviour and segmentation
Slide 21: Summary and outlook
Summary and outlook
Slide 22: Summary and outlook
Summary and outlook • Challenging but manageable market backdrop • Diversified customers and sectors • Well positioned to capitalise on infrastructure opportunities • Significant contract wins and renewals during the year and post year end • Executing well and continuing to invest in our Velocity tr
Slide 23: Q&A
Q&A
Slide 24: Appendices
Appendices
Slide 25: Joint ventures
Joint ventures The Group has two joint ventures: • Kazakhstan JV performing behind the record performance in FY23 • Cash backed profits with £3.9m of dividends received • Speedy Hydrogen Solutions formed in November 2023 • Investment of £0.6m at 31 March 2024 25
Slide 26: Non underlying items
Non underlying items • £1.9m of professional and support costs: • GPH acquisition and formation of SHS • Restructuring costs of £3.9m • £2.7m - exiting all B&Q concessions • £1.2m - depot optimisation and restructuring projects • Transformation costs of £3.2m in support of the execution of the Veloc
Slide 27: Strategy and Transformation
Strategy and Transformation • Velocity is a five year transformation and growth strategy • There are two defined stages to drive sustainable long-term growth: Enable growth Deliver growth Deliver foundational improvements across Become the most efficient and technology and operational efficiency sus
Slide 28: Transforming Speedy Hire
Transforming Speedy Hire We are building a digital and data led business to step change our efficiency and power our growth We have mobilised a group-wide transformation programme to deliver the technical and operational changes required to establish our future platform Digitally and data driven… Ou
Slide 29: Our growth engines
Our growth engines Core hire Specialist Trade and products products and retail markets services Grow our market share with all A focus on niche products and Grow trade and retail customers, customer segments across all services with significant growth through conversion of sales into hire, geographi
Slide 30: Strategic pillars
Strategic pillars Foundational elements that will support everything we do to accelerate sustainable growth People First ESG Digital Modern experience workplace Aim to be a Top 100 employer Our “Decade to deliver,” Easy to do business with Intuitive user systems with AI by 2029 encouraging people to
Slide 31: Medium term capital allocation policy
Medium term capital allocation policy M&A activity Organic growth Efficient balance sheet Paying dividends Policy • Funds available for • Committed to • Investments to better acquisition with a maintaining net debt enable us to serve our • Regular dividend focus on specialist to EBITDA ratio in the
Slide 32: Disclaimer
Disclaimer £443M Total Market The information, opinions and statements contained in this presentation and any associated discussion (this “Presentation”) has been prepared Value by Speedy Hire PLC (the “Company”) and has not been independently verified. The Presentation is only intended for informat