FY2014 Results Presentation By Chris Sutherland, Managing Director 28 May 2014
Important notice and disclaimer The information contained in this presentation is for information purposes only and does not constitute an offer to issue, or 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, objectives 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 of 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 2014 Annual Report which can be found on the Programmed website at www.programmed.com.au. 2
Welcome to the world of Programmed 3
Safety pause Programmed starts every formal meeting with a safety pause. Today, I wish to focus on General Housekeeping “A PLACE FOR EVERYTHING AND EVERYTHING IN ITS PLACE” 4 4
Group FY14 highlights Safety – 34% reduction in LTIFR (lost time injury frequency rate) to 1.99 Revenue of $1,435 million, down 5% EBIT 1 of $51.8 million, similar to last year Profit before Tax 1 of $44.4 million, up 5.5% Profit after tax of $31.1 1 million, down 3% Earnings per share of 26.3c 1 , down 3% Fully franked final dividend of 11 cents per share Gross operating cash flow was $80.6 million or 129% of EBITDA Net debt down 37% to $42.2 million 1 Before share of loss ($0.68 million) of associates accounted for 5 using the equity method (OneShift)
Group results Year Ended 31 Year Ended 31 Group Results March 2014 March 2013 % change $m $m Revenue 1,434.9 1,517.4 (5.4%) EBITDA 1, 2 64.0 67.0 (4.5%) Depreciation and amortisation (11.2) (12.4) 9.7% Restructuring costs (1.0) (2.6) EBIT 2 51.8 52.0 (0.4%) Interest (7.4) (9.9) 25.3% Profit before Tax 2 44.4 42.1 5.5% Income tax expense 3 (13.2) (9.9) (33.3%) Profit after Tax 2 31.1 32.1 (3.1%) Share of net loss of associates (OneShift) (0.7) 0.0 0.0% Profit after Tax (statutory basis) 30.5 32.1 (5.2%) Earnings per Share 2 26.3 27.2 (3.2%) Earnings per Share (statutory basis) 25.8 27.2 (5.2%) Weighted Average Shares on Issue (million) 118.2 118.2 1 Before restructuring costs 2 Before share of loss of associates accounted for using the equity method (OneShift) 3 2013 includes $2.7m tax benefit from utilisation of tax losses carried forward from previous years 6
Group revenue by region WA 41% New Zealand 6% Other 1% VIC 18% NSW 15% SA 5% QLD 14% 7
Group revenue by sector Other 9% Transport 4% Offshore Oil & Gas (8% pcp) 20% Onshore Mining 4% (5% pcp) Retail & Commercial 7% Manufacturing & Industrial 12% Government & Infrastructure 44% (42% pcp) 8
Group cash flow Year Ended 31 Year Ended 31 Group Cash Flow % change March 2014 March 2013 $m $m Gross Operating Cash Flow 80.6 90.6 (11%) Interest paid (7.8) (9.5) 18% Income tax paid (17.0) (24.2) 30% Net Operating Cash Flow 55.8 56.9 (2%) Net purchases of non current assets (4.9) (6.6) Payment for businesses (5.1) (8.9) Other investing cash flows 0.4 0.5 Net Investing Cash Flow (9.6) (15.0) 36% Net borrowings / (repayments) (36.7) (22.9) Dividends paid (18.9) (15.4) Net Financing Cash Flow (55.6) (38.3) (45%) Net Increase / (Decrease) in Cash (9.4) 3.6 (363%) Cash at beginning of year 38.3 34.7 Exchange Rate Variances 0.6 0.1 Cash at End of Period 29.5 38.3 (23%) 9
Group balance sheet Balance Sheet 31 Mar 2014 31 Mar 2013 % change $m $m Cash 29.5 38.3 (23%) Trade and other receivables 201.4 222.9 (10%) Contract recoverables 110.2 113.6 (3%) Inventories 73.0 63.7 15% Property, plant & equipment 26.4 27.6 (4%) Goodwill & other intangible assets 260.2 259.9 0% Other assets 33.3 27.2 22% Total Assets 734.0 753.2 (3%) Trade and other payables 162.4 159.9 2% Borrowings 71.7 105.4 (32%) Provisions and other liabilities 89.5 96.3 (7%) Total Liabilities 323.6 361.6 (11%) Total Equity 410.4 391.6 5% Net Debt 42.2 67.1 (37%) Net Debt / Equity 10.3% 17.1% (40%) 10
Property & Infrastructure division Margins increased through improved operational controls Painting volumes similar to FY2013 but margins higher due to lower overheads and improved job management Facility management revenue higher due to new contracts, but increased business development resulted in lower margins KLM electrical business and Turnpoint specialist turf business rebranded as Programmed Electrical Technologies and Programmed Turnpoint Exposure to new commercial building electrical works reduced, and focus on fit-out, maintenance and upgrades of electrical, data and communication systems increased, improving profitability despite lower revenue Increasing opportunities as governments outsource operations and maintenance of public infrastructure Property & Infrastructure Revenue ($m) Property & Infrastructure EBIT ($m) 751.7 751.9 28.0 FY13 FY14 FY13 FY14 23.1 17.0 14.8 381.3 379.6 372.1 370.6 11.0 8.3 1H 2H Full Year 1H 2H Full Year 11
Resources division Revenue and earnings lower due to completion of onshore mining project Offshore oil and gas sector’s results in line with FY2013 and contributed all the division’s earnings Demand for vessel management, manning, catering and logistical services remained strong Major contract secured for works associated with Inpex’s Ichthys project Negotiations for new Australian marine EBA continue and there remains some risk of industrial action with associated short term revenue and cost impacts. Resources EBIT ($m) Resources Revenue ($m) 354.3 31.0 FY13 FY14 FY13 FY14 306.9 24.4 17.0 179.2 175.1 158.5 14.0 148.4 12.5 11.9 12 1H 2H Full Year 1H 2H Full Year
Integrated Workforce division Margins increase through reducing costs More than $2 million invested in upgrading core business system to enhance ability to find and support job seekers and improve customer service Costs to be lowered through using the upgraded system to centralise recruitment functions in each state, expand the mobile account/sales network and reduce the number of branches Customers encouraged to value the “Programmed Difference” Acquired a 27.5% equity stake in OneShift, a start-up online business which matches temporary workers with businesses on a fee per candidate basis Workforce Revenue ($m) Workforce EBIT ($m) 407.1 10.7 10.5 FY13 FY14 FY13 FY14 372.8 6.1 5.6 204.6 202.5 192.2 4.9 180.6 4.6 1H 2H Full Year 1H 2H Full Year 13
Strategy To achieve our vision, we have a plan built on 4 key components. 1 . Safety 2 . People and Culture 3 . Systems and Integration 4. Growth a) marketing and customer development b) build scale c) expansion in resources d) expansion in public infrastructure 14
Strategy To achieve our vision, we have a plan built on 4 key components. 1 . Safety • critical risk standards 2 . People and Culture • life saving rules 3 . Systems and Integration • behavioural tools 4. Growth • risk assessments a) marketing and customer development b) build scale c) expansion in resources d) expansion in public infrastructure 15
Strategy To achieve our vision, we have a plan built on 4 key components. 1 . Safety • education and promotion of the Programmed Difference 2 . People and Culture is now wide spread 3 . Systems and Integration • our customer service culture program under 4. Growth development a) marketing and customer development • common customer satisfaction measurement b) build scale and reporting pilot running c) expansion in resources and will be fully implemented by end of year d) expansion in public infrastructure 16
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