Euroz Conference Presentation Chris Sutherland, Managing Director - - PowerPoint PPT Presentation

Euroz Conference Presentation

Chris Sutherland, Managing Director 16 March 2017

Important notice and disclaimer

The information contained in this presentation is for information purposes only and does not constitute an offer to issue,

• r arrange to issue, securities or other financial products. The information contained in this presentation is not

investment or financial product advice and is not intended to be used as the basis for making an investment decision. This presentation has been prepared without taking into account the investment objectives, financial situation or particular needs of any particular person. Before making an investment decision, you should consider, with or without the assistance of a financial adviser, whether an investment is appropriate in light of your particular investment needs,

• bjectives and financial circumstances. Past performance is no guarantee of future performance.

No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation. To the maximum extent permitted by law, none

• f Programmed Maintenance Services Limited, its directors, employees or agents, nor any other person accepts any

liability, including, without limitation, any liability arising out of fault or negligence, for any loss arising from the use of the information contained in this presentation. In particular, no representation or warranty, express or implied, is given as to the accuracy, completeness, likelihood of achievement or reasonableness of any forecasts, projections, prospects or returns contained in this presentation. Such forecasts, projections, prospects or returns are by their nature subject to significant uncertainties and contingencies. This presentation should be read in conjunction with the Announcements issued to the ASX since the 2016 Annual Report which can be found on the Programmed website at www.programmed.com.au. AS PROGRAMMED FINANCIAL YEAR ENDS IN 15 DAYS TIME, THIS PRESENTATION ONLY PROVIDES EXISTING PUBLIC INFORMATION RELATING TO THE COMPANY’S STRATEGY AND MARKETS AND NO INFORMATION IS PROVIDED RELATING TO THE FY2017 TRADING AND FINANCIAL PERFORMANCE 2

Safety Pause

3

Our Vision To be the leading provider of staffing, maintenance and facility management services, without injury

Our 4 Key Measures to be the “leading provider” are

Safety: Total Injuries People: Staff Engagement Customer: Customer Satisfaction Financial: Total Shareholder Returns

Safety

… significant continuous improvement over more than 10 years

K

Staff Engagement

62 63 68 70 71 71

2010 2012 2013 2014 2015 2016

Engagement Score

… 2016 survey was completed 6 months following the acquisition of SKILLED … considering the significant change across the organisation, maintaining a high staff engagement score was a great result *

Median Australian Score - 59

Pre Skilled Post Skilled

Customer Satisfaction

… implementing a standard customer satisfaction measure and response system across the group using NPS (Net Promoter Score)

Shareholder Returns

… average 15 cents per share over last 11 years through two cycles: GFC and RESOURCES … in the same period, we have paid a dividend each year and every year

17.0 18.5 20.0 14.5 9.0 9.0 13.0 15.0 17.0 18.0 11.5 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Dividends cps

Growth in Painting programs was unsustainable. Need to plant the seeds for new areas to grow. Purchased Integrated Group to gain exposure to WA, resources and stronger cash flow. Net Debt at March 2008, $235m from funding of acquisition Resources boom was coming to an end. Need to plant the seeds for new areas to grow. Purchased Skilled Group to gain exposure to white collar employment, healthcare and industrial maintenance and to establish clear scale, efficiency and no.1 market position in staffing services. Net Debt at March 2016, $240m from funding of acquisition Geographic expansion

• f painting programs

GFC Dividends reduced to repay debt for Integrated acquisition Resources expansion WA expansion (the seeds from the Integrated acquisition) Resources contraction Dividends reduced to repay debt for Skilled acquisition Foundation set to maintain strong cash flow and grow in 10 areas including Health, Aged Care, Defence, and Infrastructure

Our Services

The Programmed Difference is our ability to…

Recruit and develop people Manage HR in an increasingly regulated environment Deploy the right person with right competencies Operational improvements, flexibility and high levels of customer satisfaction Get safety right

• n the ground

1H FY17 Revenue by Division / Business Unit

12

51.3% Staffing 48.3% Maintenance 0.4% Unallocated 12.9% Property Services 20.7% Facility Management 8.3% Industrial Maintenance 6.4% Marine Skilled Workforce 43.2% Professionals 8.1%

1H FY17 Revenue by State / Country

13

20.9% WA 28.4% NSW 24.0% VIC 16.8% QLD 0.6% NZ 4.0% SA 4.8% TAS 0.5% NT 0.0% Other 29.0% WA 23.8% NSW 19.7% VIC 12.4% QLD 5.4% NZ 5.1% SA 2.5% TAS 0.4% NT 1.7% Other 37.4% WA 19.0% NSW 15.3% VIC 7.8% QLD 10.4% NZ 6.4% SA 0.1% TAS 0.2% NT 3.4% Other

… even spread of revenue across all regions spreading risk and increasing

• pportunities

35.1% Government & Infrastructure 14.5% Retail & Commercial 13.8% Manufacturing & Industrial 12.6% Onshore Mining 7.5% Offshore Oil & Gas 5.1% Transport 11.4% Other 19.3% Government & Infrastructure 16.5% Retail & Commercial 17.9% Manufacturing & Industrial 19.0% Onshore Mining 2.0% Offshore Oil & Gas 8.4% Transport 16.9% Other

1H FY17 Revenue by Sector

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51.9% Government & Infrastructure 12.4% Retail & Commercial 9.5% Manufacturing & Industrial 5.8% Onshore Mining 13.4% Offshore Oil & Gas 1.6% Transport 5.4% Other

… we provide services to all industry sectors enabling Programmed to continually adjust to different market conditions and seek growth from the sectors of the economy that are growing at any point in time

15

3rd WAVE Sales Growth

A 2020

… 1st Wave – people, structure & culture  … 2nd Wave – business systems  … 3rd Wave – sales growth – plan in place

WE ARE HERE

Integration of Skilled

… we are now ready to commence the third and final phase of our plan – targeting significant sales growth, leveraging the scale and diversity of our business

White Collar

White Collar employment growing Support white collar staffing needs across all of group customers

Health and Aged Care

Aging Population Government Support Programs (consumer directed care) Plan to develop full service models

• Health
• Aged Care at Home
• NDIS
• Third Party Trauma Insurance

Blue Collar

Integration onto single business system now complete 63 branches Consolidation of suppliers Partnership pitch to major customers

Training

A trusted brand Reskill existing candidates (initial target +100,000 workers) Reskill blue collar workers where displacement occurring due to automation or globalisation

Property

Schools, Universities, Retirement Villages, Sporting Fields, Resorts Demand is growing for a complete property maintenance service

Infrastructure

Growing population requires new infrastructure to be built. Aging infrastructure requires greater operations and maintenance expenditure. Long term contracts PPP’s

Offshore Oil & Gas

Now only 7% of group revenue Expect FY17 to be bottom of earnings cycle

Industrial and Mining

Many new assets built that must be maintained for next 50 years Focus on long term contracted O&M opportunities

Public Sector

New outsourced public sector administration opportunities arising at all levels of government

Defence

Significant new expenditures in submarines and other assets

Professionals Skilled Workforce Staffing Maintenance Marine Industrial Maintenance Facility Management Property Services Training Services Health Professionals

Sales Growth Plan

16

68% 26% 6% Blue collar White collar Other

Staffing Market

17

(14.1%) 8.3% 8.5% 16.4% 7.8% (5.3%) 14.8% 4.0% 8.5% 0.6%

Mining Construction Transport Health Administration Manufacturing Professional/Technical Services Information Media & Technology Finance & Insurance Utilities

White collar industries

… the Australian staffing market is highly fragmented

~>10% ~>5% ~<3% ~<3% ~<3% ~<3% ~<3% ~70% Programmed

Australian estimated staffing market share1

… white collar industries are forecast to grow at rates faster then GDP

$1,200m $200m Programmed blue collar revenue Programmed white collar revenue Estimated Australian staffing market segmentation Programmed Staffing revenue segmentation

~A$14b n

• 1. Source: LMIP, ABS, Market share estimated by Programmed management.

12.6% share 5.5% share

18

… non residential contracted maintenance is expected to rise by 12% over the next 5 years, driven by the Health and Education sectors.

$.0bn $2.0bn $4.0bn $6.0bn $8.0bn $10.0bn Commercial Office Health Govt Buildings Water & wastewater Defence Education Retail Leisure & entertainment Ports In-house O&M Service Market Outsourced O&M Service Market

$6.1bn $5.5bn $3.1bn $1.6bn $1.6bn $1.6bn $1.6bn $0.8bn $0.3bn Source: BIS Sharpnel

Property Services / FM / Infrastructure Market

$bn $5bn $10bn $15bn $20bn $25bn Actual capital expenditure (mining sector)

Over $100bn worth of capital expenditure has been invested in the Australian mining sector over the previous 2 years

$100bn of capital investments will require maintenance

Industrial / Resources Maintenance Market

… established Industrial Maintenance business as a larger and more capable service provider

Source: BIS Sharpnel

$354m $354m $307m $247m $130m

20 40 60 80 100 120 140 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Brent Crude Oil Price (US$ / bbl)

20

+40% FY16 YTD Aug-14 Aug-15 Aug-16

Offshore / marine Aust employees (Programmed and Skilled) 3048 2200 340

… a substantial fall in workforce demand in past two years

Marine earnings1 Brent Crude Oil Price (US$ /bbl)

• 1. FY12-FY15 as per Programmed’s reported Resources segment.

FY16 based on management estimates excluding Skilled acquisition.

Marine / Offshore Services Market

… expect our FY17 year to be the low point in the cycle.