Keller Group Plc · LSE:KLR
Keller — H1 2006 Earnings Presentation
29 slides from Keller's earnings presentation, August 2006
Slide 1: Keller Group plc Interim Results Half year ended 30 June 2006
Keller Group plc Interim Results Half year ended 30 June 2006 August 2006
Slide 2: Highlights
Highlights z Sales of £450.0m (2005: £335.0m) up 34%, mainly organic z Record H1 operating margin of 7.9% (2005: 5.2%) z Good first time contributions from recent acquisitions z Profit before tax up 114% to £33.4m (2005: £15.6m) z Earnings per share up 135% to 30.3p (2005:12.9p) z Interim dividend i
Slide 3: Profit and Loss Account
Profit and Loss Account £m June 2006 June 2005 % change Full Year 2005 Turnover 450.0 335.0 +34% 731.0 Operating profit 35.7 17.6 +103% 53.1 Interest (2.3) (2.0) (4.3) Profit before tax 33.4 15.6 +114% 48.8 Taxation (13.1) (6.2) (19.8) Profit after tax 20.3 9.4 29.0 Minority interests (0.4) (1.0) (1
Slide 4: Regional Analysis
Regional Analysis £m June 2006 June 2005 Operating Operating Sales Profit Margin Sales Profit Margin UK 60.0 0.9 1.4% 46.1 0.4 0.9% USA 241.1 27.8 11.5% 177.7 13.6 7.6% Europe/Overseas 125.8 7.0 5.6% 93.8 4.6 4.9% Australia 23.1 2.2 9.7% 17.4 0.7 4.1% 450.0 37.9 8.4% 335.0 19.3 5.8% Central costs -
Slide 5: Half Year Trends
Half Year Trends 2004 2005 2006 H1 H2 H1 H2 H1 Sales 294.1 301.8 335.0 396.0 450.0 Sales Growth (¹) 13% 10% 15% 31% 31% Operating Profit: Reported 13.2 20.7 17.6 35.5 35.7 Adjustments (²)(³) - - - (7.0) (8.0) Normalised 13.2 20.7 17.6 28.5 27.7 Operating Margin: Reported 4.5% 6.9% 5.2% 9.0% 7.9% Nor
Slide 6: Group Balance Sheet
Group Balance Sheet £m June 2006 June 2005 December 2005 Goodwill/intangibles 58.9 53.5 55.7 Property, plant & equipment 93.5 79.7 90.4 152.4 133.2 146.1 Inventories 25.7 23.7 24.4 Debtors 236.0 182.3 194.6 Creditors (204.3) (144.3) (168.5) Working capital 57.4 61.7 50.5 Capital employed 209.8 194.9
Slide 7: Cash Flow Statement
Cash Flow Statement £m June 2006 June 2005 Full Year 2005 Cash from operating activities 28.8 13.8 73.4 Capex – net (11.9) (3.7) (13.9) Tax (15.9) (5.9) (18.8) Interest (2.2) (1.8) (3.8) Free Cash Flow (1.2) 2.4 36.9 Dividends* (6.2) (5.7) (8.1) Acquisitions (5.9) (1.9) (7.8) Net cash flow (13.3) (5
Slide 8: 2006 Guidance
2006 Guidance z Excellent start to H2 z aiming to repeat exceptional 2005 H2 z full-year result expected to exceed current expectations z US $ translation impact: 5c change in average rate – circa £1.5m z budgeted rate £1 = US $1.85 z Expected effective tax rate of circa 39% z Working capital inflow
Slide 9: North American Markets
North American Markets Analysis of Sales (2005) by market sector Private new build excl. resid. 6% 5% Residential (single family homes) 23% 38% Public new build Private refurbishment Public refurbishment 28% z Growth in commercial and public infrastructure sectors remains strong z National slowdown
Slide 10: North America – Highlights
North America – Highlights z All four businesses performed well in good market conditions z market share gains and significant margin enhancement z Hayward Baker regions all performed very well z contribution from Donaldson surpassed expectations z Good progress on large Case contracts z Excellent p
Slide 11: Suncoast – Regional Growth
Suncoast – Regional Growth $m $m $m 80 160 50 140 120 40 60 100 30 80 40 20 60 40 10 20 20 0 0 0 2002 2003 2004 2005 H105 H106 2002 2003 2004 2005 H105 H106 2002 2003 2004 2005 H105 H106 CENTRAL EAST WEST = Slab on grade States 10
Slide 12: North America – Case Studies
North America – Case Studies Hayward Baker Dry soil mixing & jet grouting New flood defence gates New Orleans, Louisiana Hayward Baker Dry soil mixing Levee reconstruction Buras, Louisiana 11
Slide 13: North America – Case Studies
North America – Case Studies Case Large diameter piles Goldman Sachs HQ Lower Manhattan, NY 12
Slide 14: Europe & Overseas – Highlights
Europe & Overseas – Highlights z Improved performance from Germany reflecting strengthening market z Excellent result in France, in a buoyant market z Further strong sales growth in Spain z some margin slippage in H1 z Sales in Eastern Europe up 50% on H1 2005 z Middle East working at full capacity
Slide 15: Europe & Overseas – Case Studies
Europe & Overseas – Case Studies Artist’s impression of Universal (oil) Terminal, Jurong Island, Singapore Keller-Terra, ground improvement with stone columns, Campa de los Ingleses, Bilbao Vibro compaction in progress at Universal Terminal, Jurong Island, Singapore 14
Slide 16: United Kingdom
United Kingdom z Makers result improved from H2 2005 z cost base reduced in spite of increased volumes z Martech division sold z Good performance from KGE z foundation support division very busy z geotechnical division quieter, but outlook improving z good first time contribution from Phi 15
Slide 17: United Kingdom - Phi
United Kingdom - Phi Blackwood retail development, Gwent Timber crib wall during construction z KGE’s exisiting earth retention division now integrated into Phi z Good national coverage z Cross-selling products with the other KGE divisions 16
Slide 18: Australia
Australia z Excellent first half z very strong market conditions z sales up 30% on H1 2005 z operating profit trebled z Ground engineering business, in its third year, trading profitably z illustrates transfer of skills & technology across regions z Acquisition of Piling Contractors in August z stro
Slide 19: Australia – Piling Contractors
Australia – Piling Contractors Various piling Major road/bridges Northern NSW Bored piles Inner northern busway Brisbane 18
Slide 20: Strategy
Strategy z Our strategic intent z To continue our long term track record of growth within specialist ground engineering markets z Our current position z The undisputed market leader in North America & Australia z Keller has < 20% market share of fragmented U.S. market z A market leader in many Europ
Slide 21: Recent Acquisitions > £5m
Recent Acquisitions > £5m Sales in Forecast Date Total year of sales in Company acquired investment acquisition 2006 CAGR Suncoast Oct 2001 $90m $134m $300m 18% Keller-Terra* Dec 2002 €14m €22m €75m 36% McKinney Dec 2002 $30m $60m $105m 15% Donaldson Sep 2005 $12m $40m $50m 25% Phi Apr 2006 £6m £10m
Slide 22: Outlook
Outlook z US commerical and infrastructure markets continue to grow z Suncoast growth beginning to slow z Other main markets remain good z Further bolt on acquisition opportunities going forward z Group order book about six months’ budgeted sales z 2006 will be another outstanding year 21
Slide 23: Appendix
Appendix
Slide 24: Ground Engineering Worldwide
Ground Engineering Worldwide Activities Applications z Piling (35%)* z Foundation support z Earth retention z Ground improvement (25%)* z Seismic risk protection z Foundation support z Speciality grouting (14%)* z Control of building settlement z Groundwater control z Post-tension concrete (20%)* z
Slide 25: Keller’s History
Keller’s History 1958 1960's 1974 1984 1990 1994 1996 2001 2002 2005 2006 Now Acquired Phi (UK) Acquired Makers (UK) Management Acquired Donaldson (US) Est. 1958 Acquired Johann Keller buyout from GKN plc Ground test srvs. in Germany, marking international expansion Acquired Suncoast (US) Acquired C
Slide 26: Our Business Model
Our Business Model z Specialist with a tight focus z Experienced people with deep industry knowledge z Global business, but with strong local knowledge z Well balanced with broad markets and customer base z Broad range of industry-leading technologies and processes z Good long-term growth record and
Slide 27: Financial Performance
Financial Performance Turnover 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.
Slide 28: Financial Performance (cont)
Financial Performance (cont) 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
Slide 29: Financial Performance (cont)
Financial Performance (cont) 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 1996 1997 1998 1999 2000* 2001 2002 2003 2004 2005 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 z Industry leading margins z Uninterrupted dividend growth 28