GROWING GLOBALLY FY – 2017 FULL YEAR RESULTS PRESENTATION: 22 AUGUST 2017
Disclaimer • The information in this presentation, dated 22 August 2017, may contain forward-looking statements and projections. These reflect thl’ s current expectations, based on what it thinks are reasonable assumptions. However, for any number of reasons, the future could be different and the assumptions on which the forward-looking statements and projections are based could be wrong. thl gives no warranty or representation as to its future financial performance or any future matter. Except as required by law or NZX listing rules, thl is not obliged to update this presentation after its release, even if things change materially. • This presentation may contain a number of non-GAAP financial measures. Because they are not defined by GAAP or IFRS, thl ’s calculation of these measures may differ from similarly titled measures presented by other companies and they should not be considered in isolation from, or construed as an alternative to, other financial measures determined in accordance with GAAP. • This presentation does not take into account any specific investors objectives, and does not constitute financial or investment advice. Investors are encouraged to make an independent assessment of thl . • The information contained in this presentation should be read in conjunction with thl ’s latest financial statements, which are available at: www.thlonline.com FY17: Full Year Results Presentation 2
Important Note El Monte Acquisition • The purchase of the El Monte RV Rental and Sales business in the USA was effective from 1 January 2017 and settled on 6 January 2017. • Throughout this presentation we have shown the impact of the El Monte acquisition, where appropriate, to aid the understanding of the results. • The peak season for El Monte is from July-September, and the half-year ending 30 June is predominately off-season, with corresponding low profits. • The financial impact of the El Monte acquisition on the results of the group in H2 of FY17 is: Average funds employed NZD $102M ($51M annualised) Estimated incremental interest cost (net of tax) NZD $1.1M Earnings Before Interest and Taxation (EBIT) NZD ($33k) Net Profit after Taxation (NPAT) NZD ($1.1M) General • All financials in NZ dollars unless stated otherwise (throughout presentation). • All comparisons are against prior corresponding period. • The average NZD:AUD cross-rate (average of the 12 month rates) for FY17 was 0.9706 (FY16 0.9361). • The average NZD:USD cross-rate (average of the 12 month rates) for FY17 was 0.7331 (FY16 0.6836). • Return On Funds Employed (ROFE) is a non-Gaap measure that thl uses to measure performance of business units, and the Group, in relation to the financial resources utilised. ROFE is calculated as EBIT divided by average monthly net funds employed. Net funds employed are measured as total assets, less non-interest bearing liabilities and cash on hand. The calculation is done in NZ dollars. FY17: Full Year Results Presentation 3
OUR BUSINESS IS CONNECTING PEOPLE TO UNFORGETTABLE EXPERIENCES IN UNIQUE AND REMARKABLE PLACES AROUND THE WORLD. In FY17 we have progressed our strategy to become truly global and position ourselves as the largest RV rental operator in the world. We have balanced growth in our core business with new investments, in El Monte and Roadtrippers, to cement our place as the second largest RV rental operator in the USA. We have continued to invest in our digital services and sharing economy platforms, while continuing to grow our financial returns. No. We have achieved our goal of $30M NPAT, originally targeted for FY19, and reset our new target to $50M for FY20. FY17: Full Year Results Presentation 4
Financial Highlights Revenue Earnings before to interest and tax Net profit after tax $341M $47.7M $30.2M Up by 22% Up by 23% Up by 24% Return on average Earnings per funds employed 1 share Full year dividend 14.3% 25.6c 21cps (76% imputed) 2 Last year 15.1% Up by 20% Up from 19cps (50% imputed) Note 1: ROFE down on pcp due to half year of El Monte purchase, with off-season earnings (peak season is H1 for northern hemisphere). ROFE excluding El Monte was 16.7%. Note 2: Interim dividend 10cps 50% imputed, final dividend 11cps, 100% imputed. FY17: Full Year Results Presentation 5
Trends REVENUE EBIT EBIT MARGIN 33 1.4% 15.5% 48 341 14.1% 308 39 13.9% 13.7% 279 32 237 228 23 10.1% FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 El Monte Impact Group (including El Monte FY17) Excl El Monte El Monte EBITDA NPAT GROUP ROFE 5 1 2.4% (Average Funds) 16.7% 88 30 83 15.1% 74 14.3% 24 66 60 12.9% 20 11 8.6% FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 El Monte impact Group (including El Monte FY17) El Monte Impact Group (including El Monte FY17) Excl El Monte El Monte FY17: Full Year Results Presentation 6
Financial Highlights • Growth across all operating divisions in operating currency. NZD $M FY17 FY16 VAR • Strong growth in EBIT from Rentals Operating revenue 340.8 278.9 61.9 NZ. Reflects flex-fleet and market Earnings before interest 47.7 38.7 9.0 growth. and tax • Road Bear (USA) EBIT up 6% in USD, Operating profit before tax 43.7 36.5 7.2 but down $0.2M in NZD due to FX movement. El Monte EBIT ($33k) – Profit after tax 30.2 24.4 5.8 ahead of expectations. • Group Services and Other costs up OPERATING PROFIT BEFORE TAX (NZD$M) $1.0M, including Mighway ($0.6M). 1.0 • JV & associates – strong growth in 0.8 1.1 0.2 8.8 0.7 2.5 0.3 Action Manufacturing and Just go, offset by Roadtrippers losses. 43.7 • Interest increase mainly due to El Monte acquisition. 36.5 Profit Rentals Rentals Rentals Tourism Group Non- JV & Interest Profit Before NZ AU USA Group Services & recurring Associates Before Tax Tax FY16 Other FY17 FY17 FY17: Full Year Results Presentation 7
Key Achievements FY17 Progress against our FY17 theme of ‘deliver’ Inorganic growth Organic growth Mighway Delivered Delivered Model Progressed • El Monte acquisition completed. • Summer flex fleet in NZ and AU • NZ business well established, with successful. over 500 vehicles. • Roadtrippers investment and JV completed. • Revenue growth of 10% from • USA pilot launched. existing business units. • EBIT growth of 23%. Technology TCEx The fundamentals Delivering results – more to come In progress & on track Delivered & more to come • Booking system development • Telematics delivering in Australia. • Strong customer service metrics. progressing well. • Tablet technology in all NZ and AU • Improvement in staff engagement. • Now fully cloud-based. vehicles. • Health and safety programmes on • First modules live. • Ongoing product development with track and working well. Roadtrippers. • Full roll-out in FY18. • Sustainability reporting commenced. • Governance in line with NZX code. FY17: Full Year Results Presentation 8
Return On Funds Employed • Continued growth in ROFE for all RETURN ON AVERAGE FUNDS FY17 FY16 VAR EMPLOYED operating business units. • El Monte reduces overall ROFE due Rentals NZ 18.3% 13.0% +5.3% to half year of off-season earnings. Rentals Australia 11.8% 11.6% +0.2% Rentals USA – Road Bear 28.0% 27.7% +0.3% Total Rentals before El Monte 18.3% 15.6% +2.7% Rentals USA – El Monte (0.1%) Tourism Group 40.4% 37.1% +3.3% TOTAL GROUP 14.3% 15.1% (0.8%) TOTAL GROUP excl. El Monte 16.7% 15.1% +1.6% FY17: Full Year Results Presentation 9
Dividend • Current dividend is fully imputed, Final Dividend FY17 Full Year Dividend due to available imputation credits. Ongoing dividends will return to a 11 cents 21 cents lower imputation rate, due to mix of earnings. • This represents a payout ratio of per share 100% imputed per share 76% imputed 1 84% NPAT. +10% +11% • Dividend will be eligible for Dividend Reinvestment Plan, with issue price at a 2% discount from five day volume weighted share price after record date. Earnings per share Dividends • Record date and DRP election date: 3 October 2017. Interim Final • Payment date: 16 October 2017. 11 10 8 25.6 21.4 6 17.9 10 9 10.0 7 5 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 Note 1: Interim dividend 10cps 50% imputed, final dividend 11cps, 100% imputed. FY17: Full Year Results Presentation 10
Capital Expenditure Gross Capex $M Fleet Sale Proceeds $M Net Capex $M 60 200 200 175 175 50 150 150 40 125 125 30 100 100 75 75 20 50 50 10 25 25 0 0 0 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 Core Flex El Monte Core Flex El Monte Core Flex El Monte 1 • Gross CAPEX of $171M ($17M under buyback 2 ). • Net CAPEX $59M ($6M under buyback). • FY17 net CAPEX in line with half-year forecast. • El Monte net CAPEX $5M – 300 new fleet, sales ahead of expectations. • Core net CAPEX of $35M. • Flex fleet net CAPEX $19M. Note 1: Flex fleet refers to motorhome fleet with a stock turn of under 18 months, and typically under 12 months. Core refers to all other fleet and non-fleet CAPEX. Note 2: Fleet purchased under buyback arrangements are not treated as fixed assets additions/sales, but are treated as operating leases under IFRS reporting. For the purposes of the above, the purchases and sale values under buy-back arrangements are included. FY17: Full Year Results Presentation 11
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