SHAREHOLDER UPDATE SHAREHOLDER UPDATE 2018/19 FINANCIAL YEAR 1H, FY2019
DISCLAIMER The information in this presentation is general information about Evolution Group Holdings Limited and is current only at the date of this presentation. This presentation: • is not an offer or recommendation to purchase or subscribe for securities in Evolution Group Holdings Limited, nor is it an invitation to any person to acquire securities in Evolution Group Holdings Limited; • is not personal advice and does not take into account the potential and current individual investment objectives or the financial situation of investors; and • contains information in summary form and does not purport to be complete. While all reasonable care has been taken in the preparation of this presentation, Evolution Group Holdings Limited is not responsible for any errors nor misstatements. To the full extent permitted by law, no representation or warranty is made, and any and all liability is disclaimed, in relation to the accuracy or completeness of any statement, opinion, forecast or information contained in this presentation. Any references in this presentation to “underlying” information is to non-IFRS financial information prepared in accordance with ASIC Regulatory Guide 230 (Disclosing Non-IFRS Financial Information). Non-IFRS financial information has not been subject to audit or review. Certain statements in this presentation may constitute forward-looking statements. Forward looking statements are neither promises nor guarantees and involve known and unknown risks, uncertainties and other factors which may cause actual results to vary materially from any projection, future results or performance expressed or implied by such forward-looking statements PAGE1
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FY2019 KEY INITIATIVES Deep pricing analysis and thorough understanding of input pricing pressures and contract pricing formulae • RESTORING Cost recovery for historically non-chargeable items • VALUE FOR ✔︐ 14% REVENUE GROWTH YOY FROM TOP 10 CLIENTS ✔︐ ENHANCED REVENUE PROFILE WITH HIGH MARGIN MAINTENANCE WORKS REPLACING LOWER MARGIN PROJECT WORKS SERVICE (80% MAINTENANCE VS 60% MAINTENANCE YOY) Value for Service EBITDA annualised uplift of $2.2m Leverage existing suite of group services to current and new clients e.g. AllRoads • ORGANIC Extend existing services and footprint into previously serviced or new markets i.e. Victoria, South Auckland • GROWTH ✔︐ ALLROADS CASE STUDY HIGHLIGHTS POTENTIAL WITHIN EXISTING CLIENT BASE ✔︐ CLIENTS NOW UTILISING EGH SUITE OF SERVICES EXTENDED TO INCLUDE APA, BROADSPECTRUM, FULTON HOGAN, ROADTEK AND VENTIA Cross Selling EBITDA annualised uplift of $1m Increase Fleet and people utilisation through live-track and trace/real-time • Digitisation of historical paper based operating systems i.e. timesheets, dockets • OPTIMISATION Automation of back end processes to create efficiencies and reduce overheads • ✔︐ MATCH-FIT PROGRAM SET TO DELIVER OVER $6m EBITDA UPLIFT Optimisation EBITDA annualised uplift of $1m PAGE3
RESTORING VALUE FOR SERVICE | TOP 10 A RELENTLESS FOCUS ON QUALITY REVENUE CLIENT FY19 TOP 10 FY18 TOP 10 ⯅ $ 7,590,667 $ 6,464,485 MAINTENANCE TOP 10 10 RE REVE VENUE INCREASED ⯆ $ 4,566,229 $ 4,866,124 MAINTENANCE 14% YOY 14 ⯅ $ 3,626,991 $ 1,510,236 PROJECT ⯅ MAINTENANCE $ 2,678,981 $ 2,005,652 REVE RE VENUE E PROFILE E OF F TOP 10 10 ⯅ IMPROVING, NOW 80 80% MAI AINTENANCE MAINTENANCE $ 2,485,166 $ 1,991,481 WORK RKS, PRIO RIOR YE YEAR AR 60 60% ⯅ MAINTENANCE $ 2,016,156 $ 820,215 ⯆ MAINTENANCE $ 1,999,487 $ 2,643,006 OUR R BI BIG CONTRA RACT WINS ⯅ DELI DELIVERING BIG BEN ENEF EFIT – RM RMS, S, MAINTENANCE $ 1,962,558 $ 331,027 EQ, , ROADTEK, AUSG SGRI RID ⯆ PROJECT $ 1,805,375 $ 4,347,972 ⯅ MAINTENANCE $ 1,493,835 $ 1,471,461 ⯅ TOTAL $ 30,225,449 $26,451,664 PAGE4
ORGANIC GROWTH Organic growth remains the primary focus for Evolution Additional investment in staff, sales toolkits and group-wide training to improve effectiveness of business development and account management activity National cross-sell team developed to replicate success of Allroads, APA, Broadspectrum, Roadtek and Ventia Strict focus and discipline on margins through value-driven sales methodology PAGE5
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PRODUCT/SERVICE MATRIX Consider Allroads as the most advanced in this BD program and it demonstrates the opportunity exists for significant organic growth CLIENT TRAFFIC CIVILS FLEET TRAINING ✔ ✔ ✔ ALLROADS ✔ ✔ ✔ ✔ APA ✔ ✔ BMD ✔ ✔ ✔ ✔ BROADSPECTRUM ✔ ✔ CMC ✔ ✔ CPB ✔ ✔ DOVAL ✔ ✔ ✔ FULTON HOGAN ✔ ✔ GOLDING ✔ ✔ HAZEL BROS ✔ ✔ LEND LEASE ✔ ✔ MACKAY COUNCIL ✔ ✔ MCILWAIN ✔ ✔ MORETON BAY COUNCIL ✔ ✔ PENSAR ✔ ✔ QBC ✔ ✔ RMS ✔ ✔ ✔ ROADTEK ✔ ✔ SEE CIVIL ✔ ✔ SEYMOUR WHYTE ✔ ✔ SHADFORTHS ✔ ✔ SUNSHINE COAST COUNCIL ✔ ✔ SUNSTATE ✔ ✔ TOOWOOMBA COUNCIL ✔ ✔ ✔ VENTIA PAGE7
1H, FY2019 RESULTS OVERVIEW STATUTORY 1H 1H, FY2018 (* (*) STATUTORY 1H 1H, FY2019 UNDERLYING 1H 1H, FY2 Y2018 (1) 1) UNDERLYING 1H 1H, FY2 Y2019 UNDERLYING CHANGE % All Figures In A$m REVENUE 58.5 58.3 58.6 58.3 (0.5) EBITDA 5.0 5.25 9.0 6.1 (31.6) EBITA 3.1 2.6 5.8 3.7 (36.7) PBT (2) (2.6) (2.7) (2.6) (2.7) (3.4) EBITDA margin % 8.6% 8.9% 15.3% 10.5% EBITA margin % 5.2% 4.5% 10.0% 6.3% Notes: * Restated to account for retrospective application of AASB 16. 1 Underlying comparative numbers are normalised to exclude non-recurring once off items and adjustments consistent with early adoption of AASB16 to enable comparison. 2 Underlying PBT values are statutory numbers with 1H, FY18 having been restated for retrospective AASB 16 application. UNE NERLYING EB EBITDA RESU SULTS S | QUARTER ON N QUARTER (A$m) 9.0 7.7 7.6 8.0 7.1 7.0 6.1 5.7 5.5 5.5 6.0 5.1 5.0 4.7 4.6 5.0 4.2 ($m) 4.1 4.0 4.0 3.8 3.6 3.6 3.5 3.4 3.4 4.0 3.1 3.0 3.0 2.3 2.0 2.0 1.6 1.4 2.0 1.0 0.0 Q1 Q2 Q3 Q4 FY13A FY14A FY15A FY16A FY17A FY18A FY19A FY19B Notes: FY2015 excludes pro forma adjustments for acquisitions, representing underlying earnings Numbers may not compute exactly due to rounding PAGE8
1H, FY2019 STATUTORY RESULTS OVERVIEW PCP 1 1 (%) PERI PE RIOD EN ENDED 31 31 DEC 2018 2018 31 31 DEC 20 2017 17 VS S PC COMMENTS All Figures In A$m Ope peratin ing Revenue 58.3 58.5 (0.3) Revenue flat due to project completions Gros oss Prof ofit it 18.2 19.6 (7.0) EBITDA EB 5.2 5.0 3.8 Reflects early momentum from cost-out program EB EBITA 2.8 3.0 (6.9) Reflects lower depreciation and lease costs as a result of fleet optimisation PB PBT (2.7) (2.6) (3.8) Includes net interest expense re: debtor financing facilities, term debt and notes Tax ax Bene nefit it 0.9 0.2 350.0 NP NPAT (1.8) (2.4) 25.0 1. PCP represents “previous corresponding period” NOTE: Numbers may not compute exactly due to rounding PAGE9
1H, FY2019 UNDERLYING RESULTS OVERVIEW PE PERI RIOD EN ENDED 31 31 DEC 20 2019 19 31 31 DEC 20 2018 18 VS S PC PCP (%) COMMENTS All Figures In A$000s TRAFFIC 49,432 47,719 3.6 Strong growth in NZ OTHER 8,861 10,195 (13.1) Reflects drop in RTO revenue due to changes in VET assessment plan Total l Und nder erly lyin ing Rev evenue 58,293 57,914 0.7 TRAFFIC 14,224 13,721 3.7 OTHER 4,002 5,667 (29.4) Total l un under erly lyin ing Gro ross Pro rofit fit 18,225 19,388 (6.0) TRAFFIC 5,381 5,961 (9.7) OTHER 783 2,956 (73.5) Total l Und nder erly lyin ing EB EBITDA 6,164 8,917 (30.9) TRAFFIC 3,808 4,029 (5.5) OTHER (48) 2,831 Total l Und nder erly lyin ing EB EBITA 3,760 6,860 (45.2) 1. Underlying comparative numbers are normalised to exclude non-recurring once off items and adjustments consistent with early adoption of AASB16 to enable comparison. 2. Evolution Traffic NT figures excluded from HY18 comparatives to allow a like for like comparison. 3. Numbers may not compute exactly due to rounding NOTE: References to “underlying” information is to non -IFRS financial information prepared in accordance with ASIC Regulatory Guide 230 (Disclosing non-IFRS financial information) Issued in December 2011. Non-IFRS financial information has not been subject to audit or review PAGE10
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