Keller Group Plc · LSE:KLR
Keller — H1 2005 Earnings Presentation
25 slides from Keller's earnings presentation, August 2005
Slide 1: Keller Group plc Interim Results Half year ended 30 June 2005
Keller Group plc Interim Results Half year ended 30 June 2005 August 2005
Slide 2: Highlights
Highlights z Turnover increased by 14% to £335m z Half year operating margin increased to 5.2% from 4.5% z Profit before tax up 39% to £15.6m z Earnings per share up 50% to 12.9p z Excellent results from all four US businesses z Record order book z Interim dividend raised 5.5% to 3.8p 1
Slide 3: Profit and Loss Account
Profit and Loss Account June £m 2005 June 2004 % change Full Year 2004 Turnover 335.0 294.1 +14% 595.9 Operating profit 17.6 13.2 +33% 33.9 Interest (2.0) (2.0) (4.2) Profit before tax 15.6 11.2 +39% 29.7 Taxation (6.2) (4.7) (11.9) Profit after tax 9.4 6.5 17.8 Minority interests (1.0) (0.9) (2.1)
Slide 4: Operating Profit and Margin
Operating Profit and Margin £m June 2005 June 2004 Full Year 2004 Operating Operating Operating Profit Margin Profit Margin Profit Margin UK 0.4 0.9% (0.2) -0.4% 1.9 1.8% USA 13.6 7.6% 9.2 6.9% 21.0 7.5% Europe/Overseas 4.6 4.9% 5.0 5.7% 11.8 6.8% Australia 0.7 4.1% 0.8 4.7% 1.7 5.2% 19.3 5.8% 14.8
Slide 5: Balance Sheet
Balance Sheet £m June 2005 June 2004 December 2004 Goodwill/intangibles 53.5 52.2 51.8 Tangible assets 79.7 79.3 80.9 133.2 131.5 132.7 Stocks 23.7 21.8 24.3 Debtors 182.3 161.3 143.9 Creditors (144.0) (129.3) (118.5) Working capital 62.0 53.8 49.7 Provisions/long-term creditors (3.6) (1.7) (2.9) Ca
Slide 6: Cash Flow Statement
Cash Flow Statement £m June 2005 June 2004 Full Year 2004 Cash from operating activities 13.8 6.3 33.6 Capex – net (3.7) (5.5) (11.8) Tax (5.9) (1.4) (7.4) Interest (1.8) (2.1) (4.0) Free Cash Flow 2.4 (2.7) 10.4 Dividends* (5.7) (6.2) (9.4) Acquisitions (1.9) (2.8) (3.4) Net cash flow (5.2) (11.7)
Slide 7: Guidance
Guidance z Exceptional H1 result in US z Greater H1 weighting of profit expected than in previous years - probably 40-45% PBT in H1 2005 vs. 35-40% in recent years z Very strong current trading z Expected effective tax rate of circa 40% z Working capital inflow in H2 z Full year capital expenditure
Slide 8: Specialist with a tight focus
Specialist with a tight focus Keller performs specialty grouting works for Austria’s “Vienna valley sewer enhancement” project, which involves constructing a new tunnel beneath two 100-year-old sewers and connecting the old system to the new one. Our 7 of many such construction projects. specialist
Slide 9: Experienced people with deep industry knowledge
Experienced people with deep industry knowledge Case installs foundations for the new Trump International Tower, Chicago. This 92-storey skyscraper will take its place on the Chicago skyline beside many other landmarks, such as the Sears Tower and the John Hancock Building, which are also founded on
Slide 10: Global business, but with strong local knowledge
Global business, but with strong local knowledge Treating liquefiable ground to improve earthquake resistance at Club Meditérranée in Martinique, whilst observing a preservation order on the coconut trees! Keller’s structure of regional businesses 9 risk, small-to-medium-sized contracts. allows it t
Slide 11: Well balanced with broad markets and customer base
Well balanced with broad markets and customer base. Having installed the original foundations in 1998, Keller was invited back to London’s Millennium Dome this year to adapt the foundations for a variety of structures soon to be constructed within the shell of 10 of markets and clients. the Dome. De
Slide 12: Broad range of industry-leading technologies
Broad range of industry-leading technologies LCM and Keller work on the first ever stone column project in Sweden for a new road by-pass. Keller bought the Swedish business LCM in 2000 to acquire its specialist lime column technology. Now, in a reverse 11 flow of technology, other Keller specialist
Slide 13: Good long term growth record and prospects
Good long term growth record and prospects Concrete placement for a Suncoast post-tension foundation slab in Arizona. Revenues from outside Suncoast’s traditional Texan market are now three times the level in 2002, the first full year under Keller ownership, with good opportunities for further growt
Slide 14: North America
North America Highlights z Suncoast (38% of US revenues) z Further growth in residential sales z Accelerated growth in California and Arizona z Outstanding contribution from commercial high-rise z Successful strategy of growing outside traditional market - revenues outside Texas 3x the 2002 level z
Slide 15: North America
North America z Hayward Baker (33% of US revenues) z Especially strong on the West Coast z Recent operational improvements z Case (15% of US revenues) z Good H1, helped by progress on Trump Tower z $20m Elm Road Generating Station contract awarded z McKinney (14% of US revenues) z Well planned and e
Slide 16: Continental Europe & Overseas
Continental Europe & Overseas Highlights z Another strong result from Keller-Terra z Germany and Austria margins depressed z Adverse weather in January and February z Continued decline in German construction market z German cost base now reduced – will benefit H2 z Overcapacity in Austria z Sales an
Slide 17: United Kingdom
United Kingdom Highlights z Makers z Makers profitable, but on reduced margins z Low volumes in social housing z New management team now established z Good recent order intake z H2 expected to be better z KGE z Foundation Support division busy z Geotechnical division suffered from lack of major infr
Slide 18: Strategy
Strategy z To continue our long term track record of growth within specialist ground engineering Organic Growth z Existing and new territories z Further expansion into Eastern Europe z New products and technologies z Post-tensioning on West Coast of US z Soil mixing in Florida z Stone columns and je
Slide 19: Current Trading and Prospects
Current Trading and Prospects z Current trading very strong, with record order book z US markets expected to remain buoyant - confidence underpinned by SAFETEA z No major change envisaged in other markets z Improvements expected at Makers, and in Germany following management actions z Anticipate tha
Slide 20: Appendix
Appendix
Slide 21: 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 22: 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 21
Slide 23: Ten Year Track Record: Turnover 1995-2004
Ten Year Track Record Turnover 1995 - 2004 595.9 567.5 600 32.4 511.0 27.9 108.3 500 422.2 26.1 104 106.7 18.3 400 314.9 313.0 100.1 266.9 280.2 20.8 14.2 300 225.0 239.0 244.60 270.4 12.3 82.3 91 242.6 41.7 65.1 67.7 188.8 35.8 200 69.1 87.2 107.4 110.1 85.1 98.5 100 165.2 175 120.1 115 135.6 110.1
Slide 24: Ten Year Track Record: Operating Profit 1995-2004
Ten Year Track Record Operating Profit 1995 - 2004 34.3 32.8* 33.7 40 1.8 1.7 2 1.7 4.3 0.5 25.4 30 0.5 19.4 3.4 17.7* 19.3 17.0 21 0.7 20 12.8 14.3 3 22.3 0.9 4.3 11.5 3.4 17.4 4.3 1.9 3.4 12 10 9.7 9.9 5 6.1 7.7 13.8 11.9 8.1 5.4 3.9 4.1 5.5 5.1 5.9 3 0 -0.8 -0.6 -0.7 -1.1 -1.8 -1.6 -1.8 -2.2 -2.8
Slide 25: Results History
Results History Operating margin Dividend per share 7% 12 11 6% 10 9 5% 8 4% 7 6 3% 5 4 2% 3 2 1% 1 0% 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 1995 1996 1997 1998 1999 2000* 2001 2002 2003 2004 z Industry leading margins z Uninterrupted dividend growth 24