Robin Levison Industrea Limited

Transcription

1 Robin Levison Industrea Limited

2 ASX Conference, Hong Kong Robin Levison Managing Director & CEO 29 October 2009

3 Disclaimer This presentation for Industrea Limited is designed to provide a high level overview of aspects of Industrea Limited. The material set out in the presentation is current as at October It is information in a summary form and does not purport to be complete. The presentation may contain forward looking statements about assumptions, prior year corresponding period, estimates and outcomes, which are based on internal business data and external sources. Given the nature of the industry, business risks, and other factors, the assumptions, estimates and outcomes are uncertain. They may be affected by internal and external factors and involve known and unknown risks, many of which are beyond the control of Industrea Limited, that may cause actual results and business performance to differ materially from those expressed or implied in such statements. No assurance or guarantee is, or should be taken to be, given in relation to the future business performance or results of Industrea Limited or the likelihood that the assumptions, estimates or outcomes will be achieved. While management has taken every effort to ensure the accuracy of the material in the presentation, the presentation is provided for information purposes only. Industrea Limited, its officers and management exclude and disclaim any liability in respect of anything done in reliance on the presentation. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. These should be considered, with or without professional advice, when deciding if an investment is appropriate. Please note that all references to $ or dollars herein are references to Australian dollars, unless otherwise indicated. 65

4 66 Agenda

5 About Industrea Industrea Limited is headquartered in Queensland, Australia and is involved in the global provision of mining products & services. The Group s products and services are sold on a wide geographical footprint that includes USA, South Africa, Russia, Indonesia, Papua New Guinea with Industrea offices in five Australian locations, Santiago in Chile, South America and Beijing China. The customers based in these areas include BHP, Anglo American, Rio Tinto, Barrick Gold, Vale and the major Chinese mining clients including the Shenhua, Jincheng, Shanxi Coal and Energy Groups. 67

6 Our Mining Products Our current range of mining products includes but is not limited to: Collision Avoidance Systems Underground Directional Drilling and methane gas drainage systems Underground flameproof and explosion proof diesel vehicles Contractor Management Mobile Asset Tracking Driver Safety performance index Fully integrated outsourced mining services division: Mine planning Project supervision Heavy mining equipment hire Trained equipment operator hire Overburden, coal and ore body mining and transportation Drill and blast planning and activity 68

7 Mining products key markets The underground coal mining sector is the largest market for Industrea s products Chinese coal demand 3,500 Global demand remains strong 8.9% CAGR 3,000 particularly developing countries Chinese demand for coal continues to grow, driven by: thermal power (75-80% of total power generation) crude steel output cement output Coal is more cost effective than oil and gas Massive coal infrastructure expanding globally Clean coal technologies Chinese Government tax on coal to fund the purchase of safety equipment Millions of tonnes 2,500 2,000 1,500 1, ,893 2,040 2,370 2,583 2,733 2,938 3, E 2009E 2010E Source: sxcoal, UBS estimates, September 2008 Key drivers of Chinese coal demand CAGR FY07A FY10E Cement output 5.6% Crude steel output 9.7% Total power generation 11.0% Source: UBS estimates, September

8 Mining Products key markets and customers Financially strong customer base with expanding operations across a diverse range of regions Russia USA Mexico China: WADAM sales office Indonesia PNG Chile: Permanent operations South Africa Australia New Zealand 70

9 Operational Overview - Industrea Mining Services Diesel Equipment Technology International Head office support 71

10 Industrea Mining Services Description Huddy s acquired February 2008 (founded 1986) Contract open cut mining services Mine planning and design Mine management Provision of equipment and operators Earthmoving equipment hire Drill and blast planning and operation Civil earthworks contracts Operational bases in Mt Isa, Bowen Basin and Hunter Valley Operations Contracts with Xstrata Mt Isa Barrick Gold Mt Isa BHP Mt Isa Rio Tinto Bowen Basin - new Cockatoo Coal Bowen Basin - new Rio Tinto Hunter Valley new Strong organic growth opportunities Regional diversification strategy underway 72

11 Industrea Diesel Equipment Description Industrea Mining Equipment acquired August 2007 (founded 1978) design, manufacture, sales, service and support of heavy underground mining equipment i.e. longwall rental fleet PJ Berriman & Co acquired 2006 (founded 1977) design, manufacture, sales, service and support of specialised coal mining vehicles produces range of flameproof, explosion proof vehicles and accessories Kade Engineering acquired February 2009 (founded 1993) metal fabrication services Operations Contracts signed FY09 $80m Tripled manufacturing capacity new premises in Thornton NSW Major client sales to Australia Anglo Coal, BHP, Rio Tinto China Shenhua, Jincheng, Shanxi Current new market opportunities in South Africa and India Acquisition of Kade Engineering integrated manufacturing and increased margin capture 73

12 Industrea Technologies Description AMT acquired 2005 (founded 1993) Provides design, manufacture, sales, service and support of systems and technology for mine safety and efficiency Collision avoidance systems (CAS-CAM/RD) open cut mines Methane gas drainage systems (DGS) GPS Online GPS based vehicle fleet monitoring systems and software Operations Global productivity and safety emphasis non discretionary spend Collision avoidance system CAS CAM/RF major client sales include BHP Energy Coal South Africa Billiton Mitsubishi Alliance Shenhua Energy Group Dominant methane gas drainage technology DGS Used extensively in Australia, China and USA Facilitates maximum gas velocity and energy conversion of coal seam gas 74

13 Industrea International Description Wadam Industries acquired 2006 (founded 1992) Distributes best of breed coal mining equipment into China including Industrea and 3 rd party products Sale of Industrea products to numerous overseas markets including South America, Indonesia, South Africa and Russia. Multiple product sales in China to major coal bureaus Shenhua Energy Group Jincheng Shanxi Asian American Coal Operations Establishment of Chinese product support centre Senior management appointments in China and Chile Focus on increased recurring revenue for spares, service and support Strong interest for equipment in India New OEM arrangements additional opportunities for sales growth through Industrea s existing sales channels 75

14 Management Team Corporate Vision Finance Management Robin Levison CA GDBA GAICD Managing Director & Chief Executive Officer - 12 years Public Company management experience - Previously Managing Director at Spectrum Resources and has held Senior roles at KPMG, Barclays Bank and Merrill Lynch Kieran Wallis B Bus CA Chief Financial Officer - Broad management experience in Public and Private companies, locally and internationally - Previous Senior roles with ASX listed GBST Holdings Limited and Ernst & Young David Cahill BEc MBA Chief International Officer - Previous Senior roles with BP over 20 years in Australia, China, Europe and North America Technology Dr Chris Doran PHD Chief Technology Officer - Previous Senior roles with Maptek, Mine Radio Systems, Inc (Canada) and Mount Isa Mines Ltd (Queensland) Compliance Phillip Hourigan LLB LLM MAICD Group General Counsel/Company Secretary - Former corporate partner with Deacons law firm, over 25 years private practice as a commercial lawyer. Also a Director of Help Enterprises Limited 76

15 FY09 Highlights Platform for future growth Diversification strategy of Huddy s Mining Services New contracts won in Bowen Basin, Queensland and Hunter Valley, New South Wales contract Collision avoidance technology (CAS-CAM/RF) gains global recognition Client base includes BHP, Anglo, Vale, Shenhua Energy Group Geographical footprint includes Australia, Chile, Indonesia, South Africa and China Continuing strength of China demand for productivity and safety products $100m new product contracts signed in last 12 months $20m new product contracts signed since 1 July Strengthening of senior support team in China Establishment of product support centre to grow recurring revenue Tripling of manufacturing capacity in Hunter Valley for export products Continued manufacturing vertical integration and margin capture via Kade Engineering acquisition 77

16 FY09 Corporate Highlights Platform for future growth Listing on US OTCQX share trading platform (ticker code IULTY) Global trading volume in Industrea shares up 20% since US listing Strengthening of Management team Appointment of new Chief Financial Officer, Chief International Officer and General Counsel/Company Secretary Strengthening of Board by appointment of new director Tim Netscher Executive experience includes Billiton, Vale and currently Newmont Mining Debt syndicate expanded to include NAB, CBA and Caterpillar Financial 78

17 FY09 Financial Highlights Change Revenue $'m up 35.1% EBITDA $'m up 29.7% Adjusted NPAT* $'m up 8.3% Adjusted EPS cents down -4.6% Dividend cents up 25.0% * Net profit after tax pre amortisation and impairment of intangible assets and unrealised movements in the fair value of interest rate hedging agreements 79

18 Financial Result - Income Statement June (A$m) Change (%) Revenue: Gross % Intercompany sales (0.4) (0.7) (21.4) Reported Revenue % EBITDA % margin (%) 25.2% 40.4% 38.8% EBITA % margin (%) 23.9% 34.8% 32.1% Adjusted profit before tax % Adjusted NPAT % Strong growth in inter company sales through the Wadam China distribution business EBITDA and EBIT margins maintained in line with FY08 80

19 Balance Sheet June (A$m) Cash and deposits Receivables Inventory Property, plant & equipment Intangible assets - identifiable Intangible assets - goodwill Other assets Total assets Trade and other creditors Borrowings Convertible Bonds - fair value Deferred consideration on acquisitions Provision for tax Other liabilities Total liabilities Net assets Net assets increased by $34m to $162.9m. Increase in Receivables and Inventory reflects strong export activity Intangible assets decreased by $42.8 due to non-cash amortisation and impairment of customer contracts Reduction in deferred acquisition consideration following Huddy s payments during the year. 81

20 Outlook - Underlying business strategy unchanged Mining Services Organic growth Geographic diversification Commodity diversification Disciplined fleet management and maintenance Building on areas of strength (Bowen Basin Hunter Valley) existing infrastructure Top tier 2 mining services contractor lower overhead provider Diesel, Technology, International Buying high quality private companies to add capital, expertise and international sales channel Export emphasis Both organic and bolt on acquisition growth Continued IP development and development of export channel Strengthening of service, spare and support offering to drive recurring revenues 82

21 Industrea outlook Entered FY10 with strong product and technology order book Manufacturing capability expanded to meet growing export demand for diesel equipment Acceptance of leading technology solutions leading to increased demand in China, South America, South Africa and India New product support centres in China and Chile will drive recurring revenue from after sales service and support Mining services well positioned to benefit from expected upturn in mining activity and increased client production targets Expecting improved profitability in FY10 based on current view of opportunities 83