AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019
CONTENTS SUBJECT PRESENTER • Welcome Mike Wylie • Overview and highlights Louwtjie Nel • Operational review › Building and civil engineering Wolfgang Neff › Roads and earthworks Riaan De Necker › Australia Paul Foley › United Kingdom Paul Foley • Financial review Charles Henwood • Order book and project pipeline Louwtjie Nel • Outlook Louwtjie Nel WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 2
OVERVIEW AND HIGHLIGHTS Louwtjie Nel WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 3
GROUP RESULTS FY19 OVERVIEW AND HIGHLIGHTS 50 000 2 500 REVENUE (Rm) OPERATING PROFIT (Rm) 40,614 40 000 2 000 35,028 31,907 30,650 28,823 30 000 1 500 20 000 1 000 1,045 1 005 986 3.0% 3.3% 3.1% 768 10 000 500 2.7% 561 1.4% - - 2015 2016 2017 2018 2019 Revenue Operating profit • Revenue growth of 16% (2018: 10%) attributable to first time consolidation of UK operations • Revenue from African and Australian operations broadly in line with 2018 • 46% decline in operating profit due to significant provision for anticipated losses on WRU • Overall margin of 1.4% (2018: 3.0%) WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 4
CONTRIBUTION BY GEOGRAPHY FINANCIAL REVIEW 50 000 REVENUE (Rm) 40 614 40 000 35 028 31 907 30 650 28 823 30 000 21 941 21 713 18 600 18 113 20 000 15 351 11 454 10 650 9 796 9,739 10 856 10 000 3 676 5 684 2 798 2 437 1 853 2 361 - 2015 2016 2017 2018 2019 Total South Africa Rest of Africa Australia United Kingdom • Revenue growth over the last 5 years attributable to Australia and in FY19 to United Kingdom • No growth across combined African operations WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 5
CONTRIBUTION BY GEOGRAPHY FINANCIAL REVIEW REVENUE (Rm) % Growth 2019 2018 REVENUE (%) South Africa 2.1 10 10 85 856 10 650 14% 27% 2 2 36 361 Rest of Africa (4.0) 2 437 2019 Australia (1.0) 21 21 71 713 21 941 6% United Kingdom 5 5 68 684 - 53% TOTAL 15.9 40 40 61 614 35 028 OPERATING PROFIT (Rm) % Margin 2019 2018 30% South Africa 4.4 475 475 525 2018 Rest of Africa 8.3 193 193 185 7% 63% Australia (1.5) (335 335) 278 United Kingdom 4.0 228 228 57 South Africa Australia TOTAL 1.4 561 561 1 045 Rest of Africa United Kingdom WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 6
THE YEAR IN PERSPECTIVE OVERVIEW AND HIGHLIGHTS SOUTH AFRICA • The construction environment remained under severe pressure throughout the year with fewer opportunities across all major sectors • Capacity of the industry as a whole has been severely reduced with the spate of corporate failures and exits from the construction market • Unrest and disruptions from communities, business forums and taxi associations have become commonplace and increasingly threatening • Local building markets continued to decline in Gauteng • Civil markets yet to display any sign of meaningful recovery • Minimal activity from SANRAL – no new projects secured in 2019 • Mining and energy infrastructure projects offered some opportunities • Steel supply business profitable but market conditions remain difficult WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 7
THE YEAR IN PERSPECTIVE OVERVIEW AND HIGHLIGHTS REST OF AFRICA • Building and mining activity in West Africa remained heavily subdued • Increased activity in Botswana and Zambia • Award of first gas-related infrastructure projects in the region a positive sign AUSTRALIA • Construction markets remain buoyant • Revenue growth in Probuild purposefully constrained – focus on improved project execution • AU$50 million provision for anticipated losses on Western Roads Upgrade project within the infrastructure business • Results in significant first-time loss from Australian operations UNITED KINGDOM • Turn-around strategy for the Byrne Group complete • Acquisition of 60% of Russells Construction and 31.7% of Russell Homes on 18 July 2018 • Strong market conditions in Manchester supported a solid result from Russells Construction • Russell Homes also had a positive year WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 8
SAFETY PERFORMANCE OVERVIEW AND HIGHLIGHTS LTIFR (No. of lost time injuries per million man hours) 2.0 1.5 0.94 0.91 1.0 0.80 0.75 0.69 0.5 0.0 2015 2016 2017 2018 2019 • Improved safety performance statistics achieved in 2019 • Strong improvement from local building divisions and Australian operations • Three fatalities recorded in South Africa WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 9
TRANSFORMATION AND EMPOWERMENT OVERVIEW AND HIGHLIGHTS • WBHO proudly became a Level 1 contributor in 2018 • Recognised as second most empowered company on the JSE • WBHO spends 80% of its total measured procurement on B-BBEE compliant companies › Total B-BBEE spend of R7.5 billion › Black-owned spend of R3.7 billion › Black woman-owned spend of R1.2 billion › QSE spend of R1.9 billion › EME spend of 1.6 billion • Total black training spend of R40 million • R6.4 million spent on 18 companies on enterprise development programme • R5.3 million spent on socio-economic development initiatives • Support of three mid-tier black contractors through VRP programme WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 10
BUILDING AND CIVIL ENGINEERING Wolfgang Neff WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 11
BUILDING AND CIVIL ENGINEERING FY19 RESULT BUILDING AND CIVIL ENGINEERING 10 000 1 000 REVENUE (Rm) OPERATING PROFIT (Rm) 8,136 7,536 7,385 8 000 7,302 7,338 800 6 000 600 4 000 400 385 300 352 332 4.7% 304 4.8% 4.9% 2 000 200 4.5% 4.1% - - 2015 2016 2017 2018 2019 Revenue Operating profit • Revenue stable in 2019 (2018: decline of 10%) • Overall margin of 4.1% (2018: 4.5%) • 17% contribution to group revenue (2018: 21%) • Margin pressure prevalent across all sectors • 2% decline in South Africa • Consistent execution of projects with no major under-performing contracts is key to profitability in current environment • 20% increase from the rest of Africa WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 12
GEOGRAPHIC FOOTPRINT BUILDING AND CIVIL ENGINEERING REVENUE (Rm) 8 000 6 550 6 443 6 000 4 000 2 000 788 659 - 2019 2018 GHANA South Africa Rest of Africa OPERATING PROFIT (Rm) 300 245 239 200 ZAMBIA 93 MOZAMBIQUE 100 59 - SOUTH AFRICA 2019 2018 South Africa Rest of Africa WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 13 13
THE YEAR IN PERSPECTIVE BUILDING AND CIVIL ENGINEERING BUILDING • Division performed well to sustain activity levels • Concentration of work in commercial office sector – but sector is in decline due to over-supply • Increase in residential-only and mixed-use developments • Retail sector remains subdued • Revenue sustained in Gauteng despite fewer large-scale projects available • Diminishing building opportunities in KZN – industrial sector targeted to support activity • Majority of projects in the Western Cape negotiated • Healthy growth achieved in the Eastern Cape following improved order intake CIVIL ENGINEERING • No improvement in local civil engineering markets • Construction of the commercial crude oil terminal facility progressing well – contractual issues still to be resolved • Increased mining infrastructure activity following award of mid-sized project in Zambia WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 14
ORDER BOOK BUILDING AND CIVIL ENGINEERING ORDER BOOK UP 8% • Improved order intake locally over the second At June 2019 At June 2018 % growth six months • South Africa 6 34 6 348 5 374 18 Minimal building opportunities in West Africa – focus on Southern Africa Rest of Africa 98 98 611 (84) • Completion of mining infrastructure project in TOTAL 6 6 44 446 5 986 8 Zambia • Over R2 billion secured after the reporting ORDER BOOK BY SECTOR (%) period 7% 7% 9% 7% • Healthy order books in all regions 4% 12% 16% 25% ORDER BOOK BY SECTOR 18% • Reduction in proportion of commercial work 5% as activity in hotel and education sectors 2019 2018 increases • 10% Significant increase in industrial warehousing 13% in KZN and Eastern Cape 14% 14% • Increase in residential and healthcare projects 22% 17% • Imminent award of 9 500 man camp in Palma as gas-related infrastructure projects gain Retail Health, leisure and education Energy infrastructure traction (not included in order book) Commercial Mixed-use developments Civil works and mining infrastructure Residential Industrial WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 15
144 OXFORD STREET WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 16
155 WEST STREET WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 17
ABSA TOWERS WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 18
HATFIELD STUDENT ACCOMMODATION WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 19
DELOITTE HEAD OFFICE WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 20
JEWEL CITY – INNER CITY REGENERATION PROJECT WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 21
JORRISSON STREET WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 22
TRILOGY APARTMENTS WBHO AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2019 23
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