2 AUGUST Results. Presentation. For the half year ending 30 June Results Presentation August 2017

Transcription

1 2 AUGUST 2017 Results Presentation For the half year ending 30 June

2 Chris Weston CEO 2

3 Agenda 1H17 Operating & Financial Review and Outlook Carole Cran, CFO Market Overview Chris Weston, CEO 3

4 The first six months Changes to the business are delivering results Delivering growth, Argentina aside Business priorities are repositioning Aggreko, and making it more competitive Markets mixed, opportunities in each business unit Changes to the management team Stephen Beynon joins as MD of Power Solutions Search for successor to Carole Cran underway 4

5 1H17 Operating & Financial Review Carole Cran CFO 5

6 Group summary PBT in line with market expectations m pre-exceptional items 1H17 1H16 CHANGE Movement CHANGE excluding pass-through fuel and currency Revenues % 0% Operating profit (3)% (11)% Net interest expense (16) (11) (41)% Profit before tax (10)% Taxation (18) (20) 10% Profit after tax (10)% Diluted earnings per share (10)% Operating margin 10% 12% (2)pp ROCE (rolling 12 months) 12% 14% (2)pp Group revenues up 6%, excluding Argentina Exceptional charge of 10 million relating to completion of the business priorities Tax rate of 28%, in line with prior year 6

7 Business performance RENTAL SOLUTIONS REVENUE (% OF GROUP) 42% FLEET at 30 June (MW) pre-exceptional items 1H17 1H16 CHANGE Movement CHANGE excluding currency Revenue ( m) % 2% Operating profit ( m) % 14% Operating margin 5% 4% ROCE (rolling 12 months) 8% 14% Fleet capital expenditure ( m) Revenue excluding oil & gas up 7% Majority of sectors performing well Strong growth in temperature control 52% 1H17 2,287 1H16 2,322 51% 24 MW of next generation gas contracts won Seasonal nature of business means majority of profits are delivered in the second half DIESEL GAS UTILISATION 7

8 Business performance POWER SOLUTIONS INDUSTRIAL REVENUE (% OF GROUP) 22% FLEET at 30 June (MW) 67% DIESEL 1H17 2,633 GAS 62% 1H16 2,494 UTILISATION pre-exceptional items 1H17 1H16 CHANGE Eurasia, Middle East & Africa drive growth Restructured business to improve performance Redeployed fleet Rationalised depot infrastructure Reduced capital employed and costs Movement CHANGE excluding currency Revenue ( m) % 20% Operating profit ( m) % 76% Operating margin 14% 8% ROCE (rolling 12 months) 9% 9% Fleet capital expenditure ( m)

9 Business performance POWER SOLUTIONS UTILITY REVENUE (% OF GROUP) 36% FLEET at 30 June (MW) 75% 1H17 76% 1H16 DIESEL 4,822 GAS HFO 4,828 UTILISATION pre-exceptional items & excluding pass-through fuel 1H17 1H16 CHANGE Ex Argentina, revenues and margins grow Increase in debtor provision of $10 million 430 MW order intake year to date 28 MW of next generation gas engines Initial HFO & solar-diesel contracts signed KBT adds 200 MW Movement CHANGE excluding passthrough fuel and currency Revenue ( m) % (11)% Operating profit ( m) (28)% (33)% Operating margin 17% 23% ROCE rolling 12 months) 16% 16% Fleet capital expenditure ( m)

10 Cashflow m 1H17 1H16 EBITDA Working capital (38) (101) Cashflows relating to exceptional items (10) (15) Other 2 (3) Operating cash flow Tax (33) (22) Net Interest (17) (11) Acquisitions (28) - Purchase of fixed assets (128) (98) Other fixed asset movements 4 14 Free Cash Flow (18) (17) Dividends (45) (45) Changes in Equity - (8) Net Cash Flow (63) (70) Exchange 29 (75) Movement in Net Debt (34) (145) Net Debt (683) (634) Capital expenditure of 128 million 90% of spend on fleet capex Dividend maintained Net debt to EBITDA of 1.3 times 10

11 Working capital Improvement programme underway Payables 65 million net inflow Consolidation of supply chain allows improvements in supplier terms Inventory Analysis phase complete; plan in place and underway Receivables Continues to be a challenge Utility provision increases $10 million One of the main pillars of the improvement project Reviewing processes, reducing time to invoice & improving customer interactions 11

12 Outlook Full year guidance unchanged Guidance for profit before tax unchanged Third quarter is important Loss making nature of Younicos offset by KBT acquisition and slower off-hires in Argentina Guidance implies growth across the business, excluding the impact of Argentina 12

13 Market Overview Chris Weston CEO 13

14 Rental Solutions Markets largely favourable North American oil & gas improved on Q Temperature control growing well, bolt-on acquisitions increase capabilities OBJECTIVE: Improve the customer journey Increase sector expertise Implement new systems and applications Enhance our digital platform PROGRESS: New website CRM rolling out across geographies Operations system to improve productivity and utilisation 14

15 Power Solutions Utility Emerging economies expected to grow at 4.5% in 2017 Power deficits persist and are growing in many areas Prospect pipeline remains healthy OBJECTIVE: Reduce the total cost of energy Improve fuel efficiency of existing fleet Add new products to the mix Enhance sales capability Strategy and actions will maintain market leading position PROGRESS: HFO, new gas and solar/diesel contracts won Further upgrade to diesel engine in scope Training & recruiting in sales 15

16 Power Solutions Industrial Growing ahead of GDP Middle East largest part of the Industrial business Strategies delivering growth in a competitive region Eurasia opportunities strong in Russian Oil & Gas Our solutions preserve balance sheets and perform well in challenging environments Revenues increased 71% OBJECTIVE: Understand customer needs Increase sales presence Restructure the business Refine depot infrastructure Remove cost PROGRESS: Optimised footprint Right sized infrastructure and headcount Redeployed equipment Focus on profitable work 16

17 Long term market trends Global energy markets are changing 17

18 Conclusion The business priorities are repositioning Aggreko and improving competitiveness We continue to target returns in the medium term of around 20% Evolving energy markets provide exciting opportunities both now and in the future 18

19 Appendix 19

20 Capital allocation discipline maintained Power Solutions Industrial Power Solutions Utility Rental Solutions 1H17 1H16 1H17 1H16 1H17 1H16 Average utilisation 67% 62% 75% 76% 52% 51% Fleet Capex / Fleet Depreciation 33% 83% 124% 55% 57% 90% Fleet Capex 11m 23m 80m 32m 24m 36m POWER SOLUTIONS (UTILITY) FLEET at 30 June (MW) HFO POWER SOLUTIONS (INDUSTRIAL) FLEET at 30 June (MW) RENTAL SOLUTIONS FLEET at 30 June (MW) 1H17 4,822 1H17 2,633 1H17 2,287 1H16 4,828 1H16 2,494 1H16 2,322 DIESEL GAS DIESEL GAS DIESEL GAS 20

21 Business performance Revenue by sector 1H 2017 POWER SOLUTIONS INDUSTRIAL POWER SOLUTIONS UTILITY RENTAL SOLUTIONS 39% OIL & GAS 11% MANUFACTURING 10% CONSTRUCTION 82% UTILITIES 7% OIL & GAS 7% QUARRYING & MINING 18% PETROCHEMICAL & REFINING 11% UTILITIES 10% OIL & GAS 7% QUARRYING & MINING 7% SERVICES 6% EVENTS 4% OTHER 10% EVENTS 8% MANUFACTURING 8% CONTRACTING 6% UTILITIES 4% CONTRACTING 10% OTHER 8% SERVICES 7% CONSTRUCTION 20% OTHER 21

22 FX impact on 2017 at July average rates FY16 Average FX RATES July 2017 FYF Average FY16 Average REVENUE ( m) 2016 Restated at July 2017 FYF Average Rates Variance % Variance US Dollar % Euro % Australian Dollar % Argentinian Peso (8) (6)% Brazilian Real % Canadian Dollar % Russian Rouble % Other % Total Revenue 1,515 1, % Total Operating Profit % Note: UAE Dirhams included within US Dollar as it is pegged to the US dollar; Argentinian Peso includes Power Solutions Utility contracts which are pegged to the US Dollar but paid and reported in Argentinian Pesos. 22

23 Disclaimer The information contained in this presentation has largely been extracted from the Results Announcement for the six months ended 30 June This presentation may contain certain forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Actual outcomes and results may differ materially from any outcomes or results expressed or implied by such forward-looking statements. Any forward-looking statements made by or on behalf of Aggreko speak only as of the date they are made and no representation or warranty is given in relation to them, including as to their completeness or accuracy or the basis on which they were prepared. This presentation is published solely for information purposes. The distribution of this presentation in jurisdictions other than the UK may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than the UK should inform themselves about, and observe, any applicable requirements. All opinions expressed in this presentation are subject to change without notice and may differ from opinions expressed elsewhere. 23