Results presentation For the year ending 31 December 2015

Transcription

1 Results presentation For the year ending 31 December Results Presentation March 2016

2 Agenda Overview & Business Priorities Update Chris Weston, CEO Financial & Operating Review Carole Cran, CFO Outlook Chris Weston, CEO 2 Results Presentation March 2016

3 Overview & Business Priorities Update Chris Weston, CEO 3 Results Presentation March 2016

4 Group summary A solid performance in face of challenging market conditions Full year profit before tax of 252m in line with expectations set out at the half year Diversity of sector and geography largely offsets impact of low commodity prices and lower emerging market growth Margins impacted by low oil price; Bangladesh contract extension and slower payments in two of our markets Strong balance sheet from continued high cash flow generation and capital discipline Full year dividend maintained New, focused organisational structure and management team in place and working well Good progress on our three business priorities: customer, technology and efficiency 4 Results Presentation March 2016

5 Operational summary Rental Solutions Sector diversity offsets decline in oil & gas Strong growth in temperature control; successful acquisition of ICS Power Solutions Industrial Good growth in key markets; challenges persist in Brazil Successful delivery of European Games in Baku Power Solutions Utility Revenue down; driven by Bangladesh and Panama Good progress with key extensions; strong order book Payment challenges in two of our markets 5 Results Presentation March 2016

6 Business priorities on track Confident that executing will deliver sustainable growth CUSTOMER Priority Tailor sales and service channels Focus on key sectors Pursue adjacencies Evaluate bolt-on M&A opportunities Status Initiatives underway, market / sector specific strategies and sales expertise Plan to enhance our CRM and provide a digital platform for our customer ICS acquisition completed; building pipeline of M&A opportunities TECHNOLOGY Priority Work with our strategic partners to develop market leading products Strengthen and expand strategic partnerships Reduce the overall cost of power for our customers Status Developing strategic relationships to support product development More fuel efficient gas engine in field trial Plan to further improve efficiency of the G3+ diesel engine Continue to evaluate HFO product offering EFFICIENCY Priority Streamlining our cost base Optimising deployment of resources Improving processes and systems Status On track to deliver 80m of cash savings by 2017 Deploying new systems to optimise fleet utilisation, fleet planning and allow remote monitoring Streamlining back office processes Improving efficiency of sites and project delivery 6 Results Presentation March 2016

7 Financial & Operating Review Carole Cran, CFO 7 Results Presentation March 2016

8 Solid performance in face of challenging market conditions m (pre-exceptional items) FY15 FY14 Reported Change Underlying Change 1 Revenue 1,561 1,577 (1)% (3)% Revenue excl. pass-through fuel 1,501 1,529 (2)% (3)% Trading profit (12)% (14)% Operating profit (11)% Net interest expense (23) (21) (8)% Profit before tax (13)% Tax (69) (74) 7% Profit after tax (15)% Diluted earnings per share 71.7p 82.5p (13)% Dividends per share (declared) 27.1p 27.1p -% Net Debt at period end Underlying excludes pass-through fuel and currency translation m (post-exceptional items) FY15 Trading profit 244 Profit before tax 226 Profit after tax 162 Diluted earnings per share 63.5p Revenue drop contained in face of challenging markets Margin pressure from low oil price, Bangladesh contract extension and debtor provisions Dividend maintained in line with 2014 Exceptional charge of 26m ( 16m cash) to deliver first phase of business priorities 8 Results Presentation March 2016

9 Rental Solutions Sector diversity offsets decline in O&G m Revenue by sector FY15 FY15 FY14 Reported Change Underlying Change 1 Revenue % -% Trading profit (7)% (9)% Trading margin 16% 17% ROCE 19% 22% 1 Underlying excludes currency translation Revenue flat despite 25% O&G decline Strong performance in temperature control, petrochemical & refining and events Margin impact contained to slightly down on prior year Acquisition of ICS in line with bolt-on M&A strategy 20% 18% 11% 10% 8% Petrochemical & Refining Oil and gas Events Utilities Services 7% 5% 5% 5% 11% Manufacturing Quarrying & Mining Contracting Construction Other 9 Results Presentation March 2016

10 Power Solutions: Industrial Good growth in key markets m FY15 FY14 Reported Change Underlying Change 1 Revenue % 10% Trading profit % 44% Trading margin 15% 11% ROCE 11% 7% Revenue by sector FY15 1 Underlying excludes currency translation Strong performances in Middle East, Russia and Africa Growth and margin aided by European games Brazil market remains difficult; further rationalised cost base Progress made on margins and returns; business priority focus area 27% 14% 12% 8% 7% Oil & Gas Events Construction Utilities Quarrying & Mining 7% 6% 6% 3% 10% Services Manufacturing Shipping Contracting Other 10 Results Presentation March 2016

11 Power Solutions: Utility Challenging conditions but progress with key extensions m (ex fuel) FY15 FY14 Reported Change Underlying Change 1 Revenue (7)% (11)% Trading profit (26)% (28)% Trading margin 22% 27% ROCE 18% 25% Revenue by sector FY15 1 Underlying excludes pass-through fuel and currency translation 86% 5% 5% 4% Revenue decline driven by Bangladesh and Panama Extensions in Argentina, Ivory Coast, Japan and Bangladesh Year end order book over 40,000MW months Off hire rate of 23% Order intake of 640MW Margin and returns impacted by Bangladesh and higher debtor provision Utilities Oil & Gas Quarrying & Mining Other 11 Results Presentation March 2016

12 Gearing in line with strategic range m FY15 FY14 Operating Profit Depreciation & Amortisation EBITDA Working Capital (80) (73) Cashflows relating to exceptional items (16) - Other 1 (1) Operating Cash Flow Tax (91) (77) Net Interest (24) (20) Purchase of Fixed Assets (254) (251) Proceeds from Fixed Asset Disposals Acquisitions (18) (4) Free Cash Flow Dividends (69) (70) Return of Value & Changes in Equity 1 (195) Net Cash Flow 23 (107) Exchange (18) (24) Movement in Net Debt 5 (131) Working capital driven by Power Solutions Utility debtors and Manufacturing inventory Capital expenditure managed tightly Net debt to EBITDA maintained at 0.9x Refinanced 535m of facilities in the year 12 Results Presentation March 2016

13 Capital allocation discipline maintained Power Solutions Rental Solutions FY15 FY14 FY15 FY14 Average utilisation 74% 73% 55% 57% Fleet Capex / Fleet Depreciation 89% 81% 96% 123% Fleet Capex 164m 140m 73m 86m Power Solutions utilisation up in Industrial & Utility Rental Solutions utilisation reduction contained to 2pp 235 more fuel efficient G3+ retrofits Refurbished sets now 35% of Power Solutions Utility diesel fleet Fleet age maintained around 5 years Power Solutions (Utility) Fleet at 31 Dec (MW) Power Solutions (Industrial) Fleet at 31 Dec (MW) Rental Solutions Fleet at 31 Dec (MW) , , , , , ,263 Diesel Gas 13 Results Presentation March 2016

14 Outlook Chris Weston, CEO 14 Results Presentation March 2016

15 2016 Outlook PBT slightly lower than prior year Power Solutions Utility Strong order book; 140MW of new work; healthy pipeline; expect off hire of around 30% Japan extended; plan to secure a number of other key extensions Geopolitical situation in Yemen, Libya and Venezuela being monitored Power Solutions Industrial Softer trading continues in some markets Continued good performances in the Middle East, Russia and Africa Rental Solutions Slow start in North America Rest of Rental Solutions has had a solid start Group Investing around 250m in fleet capex; more fuel efficient engines Expect PBT to be slightly lower than the prior year on a constant currency basis 1 ; in line with current consensus 1 The constant currency impact is a headwind of 16 million applying the end of January 2016 spot rates, including the step devaluation of the Argentinian peso. In relation to 2016 the Power Solutions Utility contracts in Argentina have contractual protection that offsets the impact of the devaluation. 15 Results Presentation March 2016

16 Appendix 16 Results Presentation March 2016

17 Diverse sector base and balanced geographic spread Revenue 1,501m FY15 Group Revenue (excl. pass-through fuel) 39% 15% 9% 7% 24% 19% 19% Utilities Oil & Gas Petrochemical & Refining Events North America Africa Latin America 5% 5% 5% 4% 11% 14% 14% 10% Quarrying & Mining Services Manufacturing Construction Other Europe Asia & Australasia Middle East 17 Results Presentation March 2016

18 Stable revenue mix FY15 m Revenue FY14 m Underlying 1 % FY15 m % of Revenue (ex fuel) FY14 m Change pp Power 1,036 1,062 (4)% 69% 70% (1) Temperature Control % 9% 8% +1 Oil-Free Air (8)% 2% 2% - Total Rental 1,199 1,210 (2)% 80% 80% - Service Revenue (6)% 20% 20% - Revenue excl pass-through fuel 1,501 1,529 (3)% 100% 100% - Pass-through fuel NA Total Revenue 1,561 1,577 (3)% 1 Excluding revenue from pass through fuel and currency. 18 Results Presentation March 2016

19 Strong financial ratios maintained FY15 FY14 EBITDA 1 556m 572m Capital investment 254m 251m Net borrowings 489m 494m Interest cover - EBITDA basis 1 24x 27x Net debt to EBITDA 1 0.9x 0.9x Effective tax rate 1 27% 26% Dividend cover (declared basis) 1 2.6x 3.0x Return on average capital employed 1 16% 19% 1 Pre-exceptional items 19 Results Presentation March 2016

20 Strong balance sheet m FY15 FY14 Intangible assets / goodwill Tangible fixed assets 1,139 1,177 Working capital Retirement benefit obligation (2) (7) Derivative financial instruments (6) (3) Provisions for taxes (59) (77) Net borrowings (489) (494) Net assets 1,115 1, Results Presentation March 2016

21 Power fleet stable MW in fleet Power Solutions Rental Solutions FY15 FY14 FY15 FY14 Diesel 6,101 6,115 1,973 2,013 Gas 1,492 1, Total 7,593 7,432 2,225 2, Results Presentation March 2016

22 Foreign exchange impact FY15 Average FX Rates January 2016 Closing FY15 Actual Revenue ( m) FY15 Actual at January 2016 Rates Variance % Variance US Dollar , % Euro % Australian Dollar % Argentinian Peso (36) (29%) Brazilian Real (7) (13%) Canadian Dollar (2) (4%) Russian Rouble (4) (15%) Other (3) (2%) Total Revenue 1,561 1, % Total Trading Profit (16) (6%) 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 Results Presentation March 2016

23 Argentinian Peso Worked example for 2016 The numbers on this slide use actual numbers for 2015 and illustrative ones for Peso revenues = 1,757m Peso revenues are translated into at the average 2015 fx rate of = 124m For constant currency purposes the 2015 Peso revenues are retranslated at the 2016 average fx rate (assumed for illustrative purposes) = 88m (1,757m/19.99) Constant currency translational impact = reduction of 36m 2016 Peso revenues = 2,479m ( 124m x 19.99) as contract is US$ pegged so Peso revenues increase by extent of currency devaluation Transactional impact on Peso revenues = increase of 36m Summary Revenues year on year on a constant currency would be: : 88m (1,757m/19.99) : 124m (2,479m/19.99) Revenues year on year on a reported basis would be: : 124m (1,757m/14.17) : 124m (2,479m/19.99) 23 Results Presentation March 2016

24 Disclaimer The information contained in this presentation has largely been extracted from the Results Announcement for the year ended 31st December 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. 24 Results Presentation March 2016