1 Results presentation For the year ending 31 December 2016 Results Presentation March 2017
2 Chris Weston, CEO 1 Results Presentation March 2017
3 Agenda FY16 Operating & Financial Review Business Priorities and 2017 Outlook 1 Carole Cran, CFO 2 Chris Weston, CEO Results Presentation March 2017
4 4 Overview A challenging year for the business Number of significant issues to manage • − North American oil & gas − Venezuela debtors − Argentina contract extensions • A number of achievements in year − New HFO, gas and solar diesel products − 1.3GW order intake − Commonwealth Games & Winter Olympic wins − Significant cost base reduction on track − Implemented a CRM system; digital platform progressing well Taking the right actions and making progress • − Excluding Argentina impact business set to grow in 2017 Results Presentation March 2017
5 FY16 Operating & Financial Review 2 Carole Cran, CFO Results Presentation March 2017
6 2016 (63) 158 61.9p 248 1,515 currency and through fuel pass- Change excl (27) Change 221 £m Movement 16% 13% Group summary PBT in line with market expectations • Group margins & returns slightly down; impacted by lower oil price pre-exceptional items 2015 • Exceptional charge to deliver Business Priorities & NAM Revenues 1,561 (3)% (10)% asset impairment Operating profit 275 (10)% (11%) Net interest expense (23) (17)% • Tax rate of 28% Profit before tax 252 (12)% • Dividend maintained Taxation (69) 8% Profit after tax 183 (13)% Diluted earnings per share 71.7p (14)% Operating margin 18% (2)pp ROCE 16% (3)pp Results Presentation March 2017
7 Rental Solutions & Refining Oil & Gas Utilities Events Operating profit Manufacturing 43% Group revenue 52 £m FY16 Change Change excluding currency Revenue 629 Petrochemical Contracting Services 8% 11 Business performance Revenue by sector FY16 Other & Mining Quarrying Construction 11 18 8% 11 13 (ex pass through fuel) pre-exceptional items FY15 618 2% (8)% 102 (50)% (55)% Operating margin 16% ROCE 19% 9 % 18 % 11 % 11 % 11 % 8 % 8 % 6 % 5 % 13 % Results Presentation March 2017
8 Change Manufacturing Events 18% Group revenue Revenue by sector FY16 £m FY16 Change Construction excluding currency Revenue 262 Operating profit 32 12% 7% Services Power Solutions Industrial Oil & Gas Contracting 12 & Mining Utilities Shipping Other 10 32 Business performance Quarrying (ex pass through fuel) pre-exceptional items FY15 267 (2)% (9)% 41 (21)% (28)% Operating margin 15% ROCE 10% 7 % 32 % 12 % 9 % 8 % 7 % 5 % 5 % 5 % 10 % Results Presentation March 2017
9 £m 19% 29% 164 Operating profit 564 Revenue fuel through pass- currency & excluding Change FY16 Change Power Solutions Utility Other Business performance 85 Utilities Quarrying & Mining Oil & Gas Revenue by sector FY16 39% Group revenue (ex pass through fuel) pre-exceptional items & excluding pass-through fuel FY15 616 (9)% (13)% 133 23% 37% Operating margin 22% ROCE 18% 85 % 6 % 6 % 3 % Results Presentation March 2017
(64) (5) (3) Operating Cash Flow 388 (160) Gearing in line with strategic range (26) (263) 23 (119) (22) Free Cash Flow 31 (69) (8) Net Cash Flow (46) (114) (23) Movement in Net Debt FY16 285 533 248 EBITDA £m FY15 • Working capital increase; driven by Operating Profit 275 receivables & inventory Depreciation & Amortisation 281 • Progress with Venezuela means debt 556 provision at similar levels to 2015 Working Capital (80) • Working capital initiative underway Cashflows relating to exceptional items (16) Other 1 • Net debt/EBITDA: 1.2x, mainly FX 461 related Tax (91) Net Interest (24) Purchase of Fixed Assets (254) Purchase of other intangible assets - Proceeds from Fixed Asset Disposals 17 Acquisitions (18) 91 Dividends (69) Changes in Equity 1 23 Exchange (18) 5 10 Results Presentation March 2017
£37m 2,465 82% 2,255 Capital allocation discipline maintained £136m 2016 £68m 2015 2016 2016 2016 4,946 2016 2016 Rental Solutions Fleet 2015 112% 64% 2015 Power Solutions 52% Industrial Power Solutions Utility 79% Rental Solutions FY16 63% FY16 FY16 FY15 FY15 FY15 Average utilisation 65% 77% 55% Fleet Capex / 78% 93% 96% Fleet Depreciation Fleet Capex £43m £121m £73m Power Solutions (Utility) Fleet Power Solutions (Industrial) Fleet at 31 Dec (MW) at 31 Dec (MW) at 31 Dec (MW) 2015 5,194 2015 2,399 2015 2,225 Diesel Gas 11 Results Presentation March 2017
Business Priorities and 2017 Outlook 3 Chris Weston, CEO 12 Results Presentation March 2017
Mining MARKET PLACE Oil & Gas Petrochemical & Refining Utilities Events Rental Solutions • North American oil & gas sector looking more positive − E&P capex forecasts increased − Activity remains focused on grid − Improvements in volume & price over last few months • Immediate outlook is more positive • Turnarounds forecast to increase • Outlook varies by commodity • Support for renewables and distributed generation an opportunity • Hold strong position and strengthening focus 13 Results Presentation March 2017
What we said Efficiency What we’ve done Bolt-on acquisitions Efficiency Customer BUSINESS PRIORITIES Bolt-on acquisitions Customer Rental Solutions 14 • Key sector focus Surveyed over 1000 customers in key sectors • Develop digital offering Mapped customer journey; re-worked processes and sourced most appropriate systems Implementing new CRM Wider digitisation of organisation • Deploy new systems and automation in the field Remote monitoring across whole Rental fleet • Streamline back office processes Acquisition of Dryco 14 Results Presentation March 2017
Industrial revenues 8.5GW 32 41 51 113 £m 262 Global power deficit GW 115 Power Solutions Total 25 2017 2016 MARKET PLACE Utility Industrial • Operates in local markets of developing countries Middle East • Expect good progress in Eurasia and growth in Latin America Middle East & Africa Eurasia • Challenging in Asia & Latin America Asia Other • Structural power deficit drives demand • Pricing stabilised and utilisation improved in industry • Competition stable 150 GW currently addressed by Aggreko and competitors 2020 forecast 15 Results Presentation March 2017
What we said Technology What we’ve done Power Solutions Customer Customer Efficiency Technology Efficiency BUSINESS PRIORITIES • Reduce the cost base Removed £80 million in costs to date • Optimise the depot Plans to right-size or close a third of depots footprint Review of overhead and functional structures 5 year technology road map, supported by suppliers • Improve cost of power Upgraded around 300 G3 diesel engines to G3+, upgrade path to next • Leverage strategic supplier generation of this engine progressing relationships Investment in new gas engine, upgrade path to next generation of this • Explore options in engine progressing renewables First 16 medium speed HFO engines built during 2016 and under trial Solar diesel solution available to market Work to understand customers by country & type • Improve sales expertise & customer service Recruiting new sales force; upskilling existing team • Global account CRM introduced across the business management 16 Results Presentation March 2017
17 Outlook Growth offset by Argentina reprice • Power Solutions Utility − Significant impact from Argentina repricing − Order intake 81MW, lower than this time last year − Expected off-hire rate of 25 to 30% • Power Solutions Industrial − Eurasia, Africa & Middle East expected to drive performance • Rental Solutions − North America: Most sectors up on last year − Cautiously optimistic • Reducing cost base, annualised incremental savings of £25m with similar one off charge − Total cash saving now increased from £80m to around £100m • Fleet capex expected of £300m • Growth and incremental savings will be more than offset by Argentina repricing; profit before tax to be lower than 2016 17 Results Presentation March 2017
legacy contracts new engines Repricing of & systems new technology Investment in focus Working capital Benefits of utilisation Pricing & savings Cost Medium term targets 18 Group margins and returns of around 20% 20 % Returns and Margins 18 Results Presentation March 2017
Appendix 19 Results Presentation March 2017
Business priorities CUSTOMER TECHNOLOGY EFFICIENCY Progressing well Priority • Tailor sales and service channels • Focus on key sectors • Pursue adjacencies • Evaluate bolt-on M&A opportunities Priority • Work with our strategic partners to develop market leading products • Strengthen and expand strategic partnerships • Reduce the overall cost of power for our customers Priority • Streamlining our cost base • Optimising deployment of resources • Improving processes and systems 20 Results Presentation March 2017
Recommend
More recommend
