2018/19 FINANCIAL YEAR 1H, FY2019 DISCLAIMER The information in - - PowerPoint PPT Presentation

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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

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SHAREHOLDER UPDATE 2018/19 FINANCIAL YEAR SHAREHOLDER UPDATE 1H, FY2019

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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

DISCLAIMER

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RESTORING VALUE FOR SERVICE

  • Deep pricing analysis and thorough understanding of input pricing pressures and contract pricing formulae
  • Cost recovery for historically non-chargeable items

✔︐14% REVENUE GROWTH YOY FROM TOP 10 CLIENTS ✔︐ ENHANCED REVENUE PROFILE WITH HIGH MARGIN MAINTENANCE WORKS REPLACING LOWER MARGIN PROJECT WORKS (80% MAINTENANCE VS 60% MAINTENANCE YOY)

Value for Service EBITDA annualised uplift of $2.2m OPTIMISATION

  • Increase Fleet and people utilisation through live-track and trace/real-time
  • Digitisation of historical paper based operating systems i.e. timesheets, dockets
  • 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

ORGANIC GROWTH

  • Leverage existing suite of group services to current and new clients e.g. AllRoads
  • Extend existing services and footprint into previously serviced or new markets i.e. Victoria, South Auckland

✔︐ 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

FY2019 KEY INITIATIVES

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A RELENTLESS FOCUS ON QUALITY REVENUE

TOP 10 10 RE REVE VENUE INCREASED 14 14% YOY RE REVE VENUE E PROFILE E OF F TOP 10 10 IMPROVING, NOW 80 80% MAI AINTENANCE WORK RKS, PRIO RIOR YE YEAR AR 60 60% OUR R BI BIG CONTRA RACT WINS DELI DELIVERING BIG BEN ENEF EFIT – RM RMS, S, EQ, , ROADTEK, AUSG SGRI RID

RESTORING VALUE FOR SERVICE | TOP 10

CLIENT FY19 TOP 10 FY18 TOP 10

MAINTENANCE

$ 7,590,667 $ 6,464,485

⯅

MAINTENANCE

$ 4,566,229 $ 4,866,124

⯆

PROJECT

$ 3,626,991 $ 1,510,236

⯅

MAINTENANCE

$ 2,678,981 $ 2,005,652

⯅

MAINTENANCE

$ 2,485,166 $ 1,991,481

⯅

MAINTENANCE

$ 2,016,156 $ 820,215

⯅

MAINTENANCE

$ 1,999,487 $ 2,643,006

⯆

MAINTENANCE

$ 1,962,558 $ 331,027

⯅

PROJECT

$ 1,805,375 $ 4,347,972

⯆

MAINTENANCE

$ 1,493,835 $ 1,471,461

⯅

TOTAL

$ 30,225,449 $26,451,664

⯅

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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

ORGANIC GROWTH

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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

✔ ✔ ✔

Consider Allroads as the most advanced in this BD program and it demonstrates the opportunity exists for significant organic growth

PRODUCT/SERVICE MATRIX

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1H, FY2019 RESULTS OVERVIEW

All Figures In A$m

STATUTORY 1H 1H, FY2018(*

(*)

STATUTORY 1H 1H, FY2019 UNDERLYING 1H 1H, FY2 Y2018(1)

1)

UNDERLYING 1H 1H, FY2 Y2019 UNDERLYING CHANGE %

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)

Notes: FY2015 excludes pro forma adjustments for acquisitions, representing underlying earnings Numbers may not compute exactly due to rounding

5.1 5.7 4.2 7.7 5.5 5.5 4.0 7.1 4.1 3.0 3.8 5.0 2.0 3.4 3.5 6.1 2.0 1.4 1.6 4.0 4.6 3.4 2.3 4.7 3.6 3.1 3.6 7.6 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 Q1 Q2 Q3 Q4 ($m) FY13A FY14A FY15A FY16A FY17A FY18A FY19A FY19B

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PE PERI RIOD EN ENDED 31 31 DEC 2018 2018 31 31 DEC 20 2017 17 VS S PC PCP1

1 (%)

COMMENTS

All Figures In A$m

Ope peratin ing Revenue

58.3 58.5 (0.3)

Revenue flat due to project completions

Gros

  • ss Prof
  • fit

it

18.2 19.6 (7.0)

EB EBITDA

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

1H, FY2019 STATUTORY RESULTS OVERVIEW

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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

1H, FY2019 UNDERLYING RESULTS OVERVIEW

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PE PERI RIOD EN ENDED 1H 1H FY2 Y2019 YT YTD 28 28 FEB 19 19 MOVEMENT % COMMENTS

All figures in A$000s

Profi

  • fit

t or Los Loss

TRAFFIC 49,432 64,054 29.6

Growth in Jan & Feb in line with 1H FY2019

OTHER 8,861 12,050 36.0

Increase in revenue growth due to strong Civils performance

Total l un under erly lyin ing reve revenue

58,293 76,103 30.6 TRAFFIC 14,224 19,049 33.9

OTHER

4,002 5,171 29.2

Tot

  • tal

l un under erly lyin ing Gr Gross Pro rofit fit

18 18,225 24 24,220 32 32.9 TRAFFIC 5,381 7,827 45.5

Marked increase in EBITDA in Jan & Feb due to improved margins and lower overheads

OTHER 783 985 25.7

Total l un under erly lyin ing EB EBITDA

6,164 8,812 42.9

Upward trend with a $600k uplift on 1H FY2019 average

TRAFFIC 3,808 5,595 46.9 OTHER (48) 65

Total l un under erly lyin ing EB EBITA

3,760 5,660 50.5

Bala alance She heet

Net Debt

56,407 55,860 (1.0)

Reduced through amortisation of working capital loan

Net Tangible Asset Deficiency

34,439 31,903 (7.4)

Deficiency reduced through the conversion of the deferred consideration to shares

Working Capital Deficiency

16,916 12,414 (26.6)

As above as well as change to classification of term debt

Net Assets

5,428 7,957 46.6

Improved operating profits in Jan & Feb and conversion of deferred consideration to shares

1H, FY2019 vs YTD FEB19 RESULTS OVERVIEW

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OPTIM IMISATION

EVOLUTION “MATCH-FIT” PROGRAM

Over the past 12 months, Evolution has progressively transitioned towards digital operations, safety, administration, billing and payroll, supply chain, real-time tracking, human resources and training. Consequently, Evolution is now well-positioned to optimise staffing resources and fleet resources, as well as reduce costs in a number of areas across the business without impacting our ability to achieve significant growth, or impacting on our world-class safety performance.

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EVOLUTION “MATCH-FIT” PROGRAM

OBJECTIVES

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EVOLUTION “MATCH-FIT” PROGRAM

TARGETS

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A two-year journey

FLEET MANAGEMENT & OPTIM IMISATION

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World-class safety outcomes enabling us to retain high quality clients

SAFETY & TRAINING

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MATCH-FIT TRACKER

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0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19

$m

SUMMARY

TOTAL OVERHEAD EXPENSE ($m) CUMULATIVE SAVING ($m) PBT IMPACT GOAL

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Underlying financial information for represents profit and loss information derived from the audited financial statements for the relevant operating entities in respect of the half year ended 31 December 2018 and 31 December 2017 respectively adjusted as follows:

  • To exclude non recurring revenue and cost items
  • To exclude operating lease expense from EBITDA in line with new AASB16 standard adopted 1 July 2018

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.

UNDERLYING FINANCIAL INFORMATION

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