NRW Holdings Limited (ASX:NWH) FY2014 Full Year Results 20th August - - PowerPoint PPT Presentation

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20th August 2014

FY2014 Full Year Results

NRW Holdings Limited (ASX:NWH)

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FINANCIAL OVERVIEW

• Revenue of $1.1 billion
• EBITDA – $123.0M, 10.8% of

Revenue

• EBIT of $65.5M; NPAT of $44.2M
• Strong cash position of $155.5M
• Net Debt – $34.0M a reduction of

$54.6M

• Order book maintained at $1.0 billion
• Final fully franked dividend

– 5 cents per share (9 cents for the full year) – Payout ratio 57.0%

• Net Debt / Equity at 9.1%

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Roy Hill Rail Project Section 4

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OPERATIONAL OVERVIEW

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• Awarded largest ever civil contract by Samsung C&T at the Roy Hill Project ($620

million) – 50% complete as at June 14

• Awarded $200 million concrete and civil package for the Roy Hill minesite
• Awarded Ore Car Repair Shop civil earthworks contract for BHP Billiton
• Action Drill & Blast awarded three year contract for drill and blast operations at the

Middlemount Coal Mine in Queensland

• Awarded early works contract at Fortescue's Iron Bridge Project in joint venture with

Njamal ICRG JV Pty Ltd

• Continued Improvement of Group Safety performance: (TRIFR at 2.36 end June 14)

Footings for a conveyor at the Roy Hill Concrete Works Package.

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• Continued improvement and focus on safety performance across the business,

sustaining a positive trend.

• The “A Safe Day. Every Day” Program has been refreshed with increased focus on the

quality of the leading indicators.

• TRIFR currently at an industry leading 2.36 (June 14), a significant improvement from

5.47 at the same time last year.

• LTIFR currently at 0.17 (June 14), an improvement from 0.55 at June 13.
• Established The 5 Golden Rules determined by historical industry incidents which form

the basis of a minimum standard of safety behaviour.

SAFETY, HEALTH & ENVIRONMENT

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Frequency rates

2 4 6 8 10 12 14 FY11 FY12 FY13 FY14

LTIFR TRIFR

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• As of the end of June 2014 NRW employed a

workforce of 3,092 (compared to 2,283 end June 13)

• Key achievements in the year include:

– Successful mobilisation of workforce to Roy Hill Rail and Concrete Projects. – Improved mobilisation system and reduced training expenditure during pre-mobilisation – Maintained minimal labour hire/agency usage

• Maintained an industry leading 8%

Indigenous participation (almost double the industry average of 4.2%*) and high retention rates. – 4 Powerup Programs completed for Roy Hill Rail Project.

PEOPLE

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*CME Discovery Newsletter, 20 November 2013.

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Business unit performance

Financial Overview

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SUMMARY FINANCIALS

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• Revenue in line with FY14 guidance
• EBITDA margin at 10.8% compared to

12.1% reflects more competitive market

• Impairment (AMS) relates to downturn in

client Opex and lower product sales

• Interest costs slightly lower – Debt

mostly fixed over 4 to 5 years

• Effective tax rate at 14% includes credits

received in the first half.

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CASHFLOW

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• Improved Net debt from $88.6M to

$34.0M

• Full conversion of EBITDA

($123.0M) into operating cashflow

• Capex spend – $29.6M reflects

completion of current investment cycle

• Systems development
• Buy out of expensive
• perating leases
• Business critical

equipment

• Gearing ratio at 9.1%
• Other movements include

equipment disposals ($5.1M)

(88.6) 123.0 (29.6) 2.3 (21.2) (20.0) (34.0)

• 100
• 80
• 60
• 40
• 20

20 40 60

Nebt debt FY13 EBITDA CAPEX Working capital Net interest & Tax Dividends & Other Net debt FY14

$m's

Nebt Debt Movement - FY14

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BALANCE SHEET

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Strong balance sheet with increasing value of cash and net owned equipment.

• Net Tangible Assets per share of $1.22

cents

• Cash Balances provide risk mitigation and

allow fast response to changing market

• Funding access to support growth
• Available undrawn asset

financing – $71M

• Undrawn bonding at circa

$72M

• Undrawn working capital $35M
• Balance sheet and debt equity position

support dividend payout ratio increase to 57% − Final Dividend declared at 5 cents per share fully franked

165.3 354.8 189.5 155.5 18.9 339.6

• 50.0

100.0 150.0 200.0 250.0 300.0 350.0 400.0 Property, Plant & Equipment Debt Cash at bank Working capital Net tangible assets

Net Tangible Assets - June 14

Net value of

• wned equipment

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Business unit performance

Business Unit Performance

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CIVIL DIVISION

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CIVIL

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Highlights

• Continued improvement in safety performance –

TRIFR to 2.1 (previously 2.5 at June 13)

• Revenue similar level to FY13, Margin at 7.1%

reflects more competitive market

• Secured a $620M contract for the Roy Hill Rail

Project to construct approximately 330 kilometres of main line heavy haul rail formation and associated works.

• Growth on existing contracts

Looking Forward

• Delivery of Roy Hill Concrete Package for the Iron ore

processing facility – contract awarded in April ($200M)

• Successful delivery of Roy Hill Rail
• Build on relationships with Blue Chip Miners
• Tendering NPI prospects
• Bidding government infrastructure projects in JV

9.8% 10.8%

842.3 860.6 59.8 92.0

20 40 60 80 100 120 140 160

• 100.0

200.0 300.0 400.0 500.0 600.0 700.0 800.0 900.0 1,000.0 FY 14 FY 13 FY 14 FY 13 Revenue EBIT $m’s $m’s 72%

Revenue Contribution

7.1% 10.7%

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MINING DIVISION

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MINING

Highlights

• Revenue impacted by major client transitioning to

dry hire during 2013 and higher activity in the first half of FY13

• Awarded contract for ERA at Ranger
• Awarded Iron Bridge bulk earthworks for Fortescue

Looking Forward

• Market conditions expected to remain competitive

during FY15

• Tendering opportunities in base metals for mid-tier

Miners

• Full utilisation of existing mining fleet capable of

delivering an additional ~ $150M revenue pa

7.8% 5.5%

186.9 404.5 13.1 17.9 10 20 30 40 50 60

• 50.0

100.0 150.0 200.0 250.0 300.0 350.0 400.0 450.0 FY 14 FY 13 FY 14 FY 13 Revenue EBIT

16% Revenue Contribution

7.0% 4.4%

$m’s $m’s

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ACTION DRILL & BLAST

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ACTION DRILL & BLAST

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Highlights

• Revenue at $110M reflects downturn in market and

reduced civil drill & blast activity

• Margins impacted by lower revenues and asset

utilisation

• Awarded a three year contract valued at $60M for drill

and blast operations at the Middlemount Coal Mine in Queensland.

• Awarded a three year contract valued at $11M for

Talison Lithium Greenbushes Mine in WA

Looking Forward

• Current market remains very competitive
• Opportunities under review include both Domestic and

Overseas projects

• Focus on smaller mining contracts for underutilised civil

drill fleet

15.3% 2.3%

110.0 150.5 7.0 16.8 5 10 15 20 25 30

• 20.0

40.0 60.0 80.0 100.0 120.0 140.0 160.0 FY 14 FY 13 FY 14 FY 13 Revenue EBIT

9% Revenue Contribution

6.4% 11.2%

$m’s $m’s

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ACTION MINING SERVICES

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ACTION MINING SERVICES

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Highlights

• Revenue and results impacted by significant

maintenance expenditure cut-backs

• Restructure and reduction in overhead costs

Looking Forward

• Strategic review undertaken resulting in:
• Expanded business model approved to increase

revenue and profit opportunities

• Focus on employee and customer engagement to

drive strategic agenda

• Market conditions are expected to remain subdued near

term

• In the medium term the equipment maintenance cycle is

expected to recover

28.0 41.8 (0.8) 3.3

• 5

5 10 15 20 25 30 35 40 45 (5.0)

• 5.0

10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 FY 14 FY 13 FY 14 FY 13 Revenue EBIT

2% Revenue Contribution

(2.9)%

7.9%

$m’s $m’s

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Business unit performance

Tender Pipeline & Summary

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TENDER PIPELINE

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• Order book maintained at $1 billion following award
• f Roy Hill Rail and Roy Hill Concrete Package

contracts and various contract extensions in FY14

• Secured work for delivery in FY15 circa $0.7 billion
• Robust Tendering activity valued at $2.4 billion:
• Civil

$0.9b

• Mining

$1.0b

• Drill & Blast $0.2b
• International $0.3b
• In addition $1b to $2b of new resource related rail

infrastructure works anticipated to be tendered during FY15

1.0 0.7 0.3

0.2 0.4 0.6 0.8 1 1.2 Total WIH FY15 FY16 + $ billions

Work in Hand – Delivery Profile

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OUTLOOK

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• Although the industry continues to face some headwinds, NRW is well placed

commencing FY15 with a strong balance sheet and solid order book of $1 billion.

• The Group’s balance sheet, funding facilities and solid cash position provide a

strong foundation for future organic growth and to continue to review potential acquisitions or to implement Capital Management program.

• Continuing investigation of sectors that are not directly correlated to the mining

industry (e.g. energy, infrastructure).

• Ongoing focus on cost management programs, efficiencies and continuous

improvement processes.

• Revenues in FY15 which remain dependent on the timing of new work are

expected to be between $1.0b to $1.2b of which circa $0.7b is currently in the

• rder book.

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FY14 PROJECT LOCATIONS

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DISCLAIMER AND IMPORTANT NOTICE

Information, including forecast financial information in this presentation should not be considered as a recommendation in relation to holding, purchasing or selling shares, securities of other instruments in NRW Holdings Limited or any other company. Due care and attention has been used in the preparation of forecast information. However, actual results may vary from forecast and any variation may be materially positive or negative. Forecasts, by their very nature, are subject to uncertainty and contingencies may occur which are outside the control of NRW Holdings Limited. Before making or varying any decision in relation to holding, purchasing or selling shares in NRW Holdings Limited, investors should consider the appropriateness of that investment in light of their individual investment objectives and financial situation and should seek their own independent professional advice. All currency is denominated in Australian dollars.

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