half year 2012 results presentation monday, 20 february 2012 … · 2012-02-19 · • bidding...

Half Year 2012 Results PresentationMonday, 20 February 2012Sofitel Wentworth, Sydney

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OverviewRichard Leupen, Managing Director & CEO

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Group Highlights

• Diversified revenue streams delivering solid operating revenue of $2.4b and underlying NPAT of $72.2m• $3.4b in new wins and extensions – MainTrain renewal key win• Solid performance across all businesses – particular strength in Rail • Market share maintained across key sectors• Increased interim dividend up 6%

Steady Progress – Proven Model

• Acquisition of DTZ transforming property services – one of the most comprehensive integrated platforms globally• Further developing four core skill lines: Property, Project Construction, O&M, Project & Programme Management• Exploring international opportunities

Evolving Strategic Platform

• Record order book at $9.5 billion underpins future operations• Significant bidding activity• Improving market conditions globally support growth

Favourable Outlook Dynamics

• Significant ongoing investment in people, systems and processes• Constant focus on cost discipline• Financial strength with low capital intensity• Risk management focus delivering quality growth to order book

Core Foundations Unchanged

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Financial Highlights

Operating revenue, EBIT, Tax, NPAT & EPS in this presentation refer to underlying results. A reconciliation to reported results is detailed on slide 18.

Operating revenue

Operating cash flow

Reported NPAT

EPS

Capex

Gearing

DPS

$2.4b - up 5%

34¢ fully franked – up 6%

27%

$(5.9m)

$55.4m - down 15% Impact of DTZ transaction costs

43.4¢ - up 5%

$21m low capital intensity

Underlying NPAT $72.2m – up 6%

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Revenue & Profit Growth(underlying results)

Operating Revenue ($m) Net profit after tax ($m)

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EPS & DPS Growth(underlying results)

Earnings per share (¢) Dividends per share (¢)

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Divisional Overview

UGL Infrastructure

• Strong top line growth• Power generation and transmission opportunities supported by private

investment• Strengthened presence in communications sector with key win in Victoria• Bidding activity healthy in key sectors although water flat

UGLRail

• Consistent margin performance• Renewal of major maintenance contract with RailCorp a major win• Strong growth in freight locomotive demand supporting growth• Oscar 3 and MTM Melbourne train franchise performing well

UGLResources

• Strong recovery in financial performance• Absence of project issues • Substantial growth in asset management and maintenance projects• High levels of bidding activity with visible pipeline

UGLServices

• Solid operating performance impacted by adverse FX movement• US transaction volumes impacted by subdued macroeconomic conditions• Momentum in Asia and Australia & New Zealand businesses continue• DTZ integration progressing well with neutral impact on 1H12 earnings

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New Contract Wins & Extensions

• Solomon Mine power station• Regional Rail Link rail systems in Victoria• Halys 275kV substation• Weddell power station set 3

UGL Infrastructure

• MainTrain renewal• Orders for over 30 locomotives for supply to

Rio Tinto and other leading resources companies

• Long term locomotive maintenance service and support agreements

UGL Rail

• Maintenance projects with BHP Billiton at Olympic Dam and CP Mining at Sino Steel plant

• Multiple asset services projects across coal, iron ore and oil and gas sectors

UGL Resources

• NAB, DFAT and Sydney Airport renewals• Key FM agreements with Asian and

Australian government agencies• Key FM agreements for Tufts University and

Schlumberger

UGL Services

$3.4b in New Wins and Extensions

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Safety

*rolling 12-month average

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Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11

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Lost time injury frequency rate (LTIFR) Total recordable case frequency rate (TRCFR)

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Our People

Employee numbers* Breakdown by division

UGL Infrastructure 2,821 5.1%UGL Rail 2,242 4.1%UGL Resources 4,402 8.0%UGL Services 45,345 82.3%Shared Services 252 0.5%Group 62 0.1%

*includes contractors

Total55,125

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Drivers for Growth

Sustainable Earnings

Market Leadership

RiskManagement

FinancialStrength

BusinessPositioning

Sector Focus

• Balanced recurring revenues• Long term capital works alliances• Diverse earnings streams• Strong order book• Solid opportunity pipeline

• Balanced trading terms• Robust systems and processes• Alliance and cost-plus contracts• Blue-chip and government clients

• People• Safety• Technology partnerships • Intellectual property • Outstanding customer service

• Coal, iron ore, minerals processing• Oil and Gas• Transport and rail engineering• Infrastructure and

the environment• Property management

• Strong balance sheet• Low capital intensity• Robust cash flow• Flexibility to grow

• Exposure to long term growth trends• Significant market opportunities• Strong technical component• World class technology

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Transforming Property Services

Global Footprint

• Expanded footprint covering the UK, Europe and Asian markets• Increased exposure to high growth markets especially China, India and

Singapore

• Iconic brand with reputation for service excellence• Considering rebrand of combined property services as DTZ

• Continued trend to outsource and globalisation of clients creating significant opportunities for growth

• Comprehensive integration plan well advanced and on-track• Collaboratively working across regions and clients to secure new wins

• An integrated end-to-end service offering to clients globally and to global clients seeking a single solutions provider

• Combined platform being well received by clients

Expanded Capabilities

Favourable Industry

Dynamics

Branding

Integration Progress

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Global Footprint in Property Services

45Countries

194Cities

$1.9b¹Combined Revenue

45,000Personnel

24,000Employees

Combined UGL Services and DTZ

¹ Based on FY2011 revenue for UGL and FY2012 estimate for DTZ. Assumes an A$:£ exchange rate of 0.611

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Market Position in Property Services

Key attributes:• Global coverage• Single brand• Majority / equity ownership• Full service

Global / controlled

Local / alliance

Narrow Broad

Coverage

Scope of services

CBREJLL

UGL Services and DTZ

C&W

Colliers

SavillsKnight Frank

BNP Paribas REGrubb & Ellis

Cassidy TurleyNewmark

GVAAOS

Cresa PartnersStudley

Key players in property services

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Key Success Factors For Next 12 Months

Property Integration

• Becoming the world’s third largest property services company• Capitalising on unique service offering• Leveraging exposure to Asia – nearly 8,000 people in Asia with 4,000 in China

• Remain vigilant on cost management• Significant investment in people and systems ongoing• Risk management framework critical to support sustainable growth

• Globalising lines of business as a sector leader• Focus on building out global delivery systems

• Standardisation of project management delivery • Further developing four core skill lines in Property, Project Construction, O&M,

Project & Programme Management

Focus on Skill Lines

Exploring Global

Capabilities

Core FoundationsF

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Financial AnalysisRobert Bonaccorso, Chief Financial Officer

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Results Overview(underlying results)

$m HY12 HY11 Change

Operating revenue 2,379.8 2,273.7 5%

EBIT 110.3 104.6 5%

EBIT margin 4.6% 4.6%

NPAT 72.2 68.1 6%

NPAT margin 3.0% 3.0%

EPS 43.4 41.2 5%

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NPAT Waterfall Underlying to Reported NPAT

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Reconciliation to Underlying Results

Underlying JVs

Amort of intangibles

acquiredAcquisition

related costs Statutory$m $m $m $m $m

Revenue 2,379.8 (167.6) 0.0 0.0 2,212.2EBIT 110.3 (1.1) (4.7) (14.0) 90.5Net interest (11.5) 0.0 0.0 0.0 (11.5)Tax (26.5) 1.1 1.9 0.0 (23.5)

72.3 0.0 (2.8) (14.0) 55.5Non-controlling interests (0.1) 0.0 0.0 0.0 (0.1)NPAT 72.2 0.0 (2.8) (14.0) 55.4

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Operational Report - Infrastructure

• Sales at record levels

• High bidding activity

• Bidding pipeline up 30%

$m HY12 HY11 Change

EBIT $m

Sales - $m 595.1 495.6 20%

EBIT - $m 37.7 40.3 (6%)

EBIT / Sales 6.3% 8.1%

Order book - $b 1.4 1.9 (29%)

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Operational Report - Rail

$m HY12 HY11 Change

EBIT $m

Sales - $m 593.3 638.4 (7%)

EBIT - $m 36.4 38.5 (6%)


Order book - $b 3.9 3.1 28%

• Record Order Book

• Strong locomotive sales

• Increased bidding activity

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Operational Report - Resources

• Record half sales

• Strong growth in Asset Maintenance

$m HY12 HY11 Change

EBIT $m

Sales - $m 524.2 479.7 9%

EBIT - $m 30.1 11.6 160%


Order book - $b 0.8 0.9 (10%)

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Operational Report - Services

• FX impacting results

• DTZ acquisition completed 5 December

$m HY12 HY11 Change

EBIT $m

Sales - $m 677.8 667.7 2%

EBIT - $m 34.4 35.6 (3%)


Order book - $b 3.4 3.1 11%

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DTZ Acquisition

• UGL purchased the trading operations of DTZ for cash consideration of GBP77.5m and a GBP19.0m working capital adjustment (A$148.0m)

• Comprising: A$m– Goodwill 90.4– DTZ brand name 42.3– Customer relationships (amortised over 10 years) 25.4– Net assets and NCI (10.1)

148.0

• Funded with bridging facilities drawn to GBP108m (A$164m) including a working capital loan

• Refinancing will be completed before June 2012

• Acquisition has increased our gearing by 6% with Group gearing now 27%

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DTZ Acquisition

• Full year 2012 revenue is expected to be around $280m

• EBIT contribution in the Full Year 2012 expected to be $1m-$2m

• NPAT – small contribution

• Integration one-offs including restructure costs

• EBIT to sales targets consistent with industry average

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Operating Cash Flow

• Mobilisation fees impacting cash flow

• DSO 33 days – 30 days excluding DTZ

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Operating Cash Flow

• Mobilisation fees Utilised through FY11 and HY12

• Underlying cash generation remains solid

Billings in Advance ($m)

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Financial Position

• Low Gearing

• Gearing excluding DTZ is 21%

$m HY12 HY11

Net debt 435 189

Net debt to net debt plus equity 27.3% 14.3%

Interest cover (rolling 12 months) 13.4x 14.2x

Net debt to EBITDA 1.4x 0.7x

Total assets 2,685 2,320

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Financial Position

• Average term 3.4 years (excluding DTZ bridge facility 4.4 years)

• $314m available bank capacity

Bank Debt & USPP ($m)

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OutlookRichard Leupen, Managing Director & CEO

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Order Book • Reported $9.5b• Constant Currency $9.6b

Order Book

Historic growth ($m) Order book excludes significant value

Preferred tender status $1.4b• Property services• Rolling stock and maintenance• Power Generation

Options in existing contracts $3.4b• Rail maintenance• Property services• Locomotive orders

Recurring maintenance $4.9b• Historic renewal rate 90-95%• Value over five years• Excludes fixed term contracts

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Pipeline

Weighted and Qualified ($m) Status

Note: Weighted & Qualified – excludes any opportunities with a go-get less than 25%

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Order Book Breakdown

By year ($m) By divisionBy type

Alliance style projects $0.7b

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Divisional Outlook

• Significant pipeline opportunities in power, transport and communications

• Sector outlook supported by substantial private investment and government spend

• Solid business performance expected to continue driven by conversion of tendering activity

UGL Infrastructure

• Freight market opportunities support substantial growth

• Locomotive sales remain strong• Passenger rail investment in major urban centres

continues• Texmaco JV to commence production in 2H12 • Maintenance services continue to support

earnings stability

UGL Rail

Order Book

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Divisional Outlook

• Strong asset services growth continues to support earnings stability

• High levels of tendering activity provide future opportunities for growth

• Substantial opportunities coming to market in coal and iron ore, in addition to LNG

• Integration of DTZ progressing well• Collaborative tendering of new revenue

opportunities already taking place• US economic activity is stable while Europe will

remain subdued • Strong momentum across Asia, Australian and NZ

businesses continues • Middle East offers further upside for growth

UGL Resources

UGL Services

Order Book

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Group Outlook

• Record order book provides sustainable earnings growth• Ongoing significant investment in people, systems and

processes• Commitment to risk management and cost discipline

continues• Strong financial position with low capital intensity

Stability and discipline unchanged

• Property integration and capitalising on unique platform• Further developing four core skill lines: Property, Project

Construction, O&M, Project & Programme Management• Globalising lines of business as a sector leader• Leveraging exposure to Asia

Significant growth opportunities

• Continuing to forecast around 5% underlying NPAT growth in FY12

• Order book is growing at record levels with further upside • Bidding pipeline is solid and visible

Growth targets for FY12 confirmed

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Important Notice

This presentation and any oral presentation accompanying it:

• is not an offer, invitation, inducement or recommendation to purchase or subscribe for any securities in UGL Limited (“UGL”) or to retain any securities currently held;

• is for information purposes only, is in summary form and does not purport to be complete;

• 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, potential investor or any other person. Such persons should consider seeking independent financial advice depending on their specific investment objectives, financial situation or needs when deciding if an investment is appropriate or varying any investment;

• may contain forward looking statements. Any forward looking statements are not guarantees of future performance. Any forward looking statements have been prepared on the basis of a number of assumptions which may prove to be incorrect or involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of UGL, which may cause actual results, performance or achievements to differ materially from those expressed or implied in such statements. There can be no assurance that actual outcomes will not differ materially from these statements. Any forward looking statement reflects views held only as of the date of this presentation. Subject to any continuing obligations under applicable law or any relevant stock exchange listing rules, UGL does not undertake any obligation to publicly update or revise any of the forward looking statements or any change in events, conditions or circumstances on which any such statement is based.

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 and any oral presentation accompanying it. To the maximum extent permitted by law, UGL and its related bodies corporate, and their respective directors, officers, employees, agents and advisers, disclaim and exclude all liability (including, without limitation, any liability arising from fault or negligence) for any loss, damage, claim, demand, cost and expense of whatever nature arising in any way out of or in connection with this presentation and any oral presentation accompanying it, including any error or omission therefrom, or otherwise arising in connection with any reliance by any person on any part of this presentation and any oral presentation accompanying it.

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half year 2012 results presentation monday, 20 february 2012 … · 2012-02-19 · • bidding...

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