For personal use only · • Open platform provider • NBN Greenfields rollout delayed •...
Transcript of For personal use only · • Open platform provider • NBN Greenfields rollout delayed •...
For
per
sona
l use
onl
y
FY11 ResultsPresented by Graham Twartz
For
per
sona
l use
onl
y
Headlines
• Operating results in line with previous guidance
• Many businesses performed well
• Under performers hurt the final result
• Fully franked final dividend of 4.5 cents per share
• Strong balance sheet with low gearing at 22.7%
• On market share buy back
• Steel business incurred an operating loss
• Restructure of Orrcon Steel operations
• Impairment of Orrcon Steel and Team Poly
• Further improvement in safety performanceFor
per
sona
l use
onl
y
Operating Profit
Year ended 30 June (A$m) 2011 2010 %
Revenue 1,095.8 1,156.3 (5.2%)
EBIT before unusual items 40.4 65.5 (38.3%)
EBIT after unusal items (74.5) 65.5 n/a
NPAT attributable to members before unusual items 25.3 40.2 (37.1%)
NPAT attributable to members after unusual items (75.0) 40.2 n/a
Operating cash flow 13.0 101.5 (87.2%)
Earnings per share (cents) before unusual items 10.2 16.7 (38.9%)
Earnings per share (cents) after unusual items (30.2) 16.7 n/a
Dividends per share (cents) 10.0 12.5 (20.0%)
Gearing (D/E) (%) 22.7% 10.1%For
per
sona
l use
onl
y
Cashflow and Balance Sheet
Year ended 30 June (A$m) 2011 2010
(Loss) / profit before tax (78.5) 62.1
Tax paid (16.4) (13.7)
Adjusted for non cash items:Depreciation and amortisation 23.1 23.9
Impairment (Pre tax) 108.8 8.9 Other non cash items (1.6) (8.7) (Loss) / profit adjusted for non cash items 35.4 72.5
Balance sheet movements: (Increase) / decrease in working capital (1) (22.4) 29.0
Net cash from operating activities 13.0 101.5
(1) Due to 13 steel payments in FY11
For
per
sona
l use
onl
y
Unusual Items – after tax
• Orrcon Steel $m
� Goodwill impairment 49.6
� Closure costs for Unanderra facility 30.0
� Review and restructure of Orrcon Steel 2.8
• Team Poly
� Goodwill and asset impairment 17.8
100.2
Includes after tax cash costs of $3.5m
For
per
sona
l use
onl
y
Underperformers and Startups
Many businesses performed well, but .......
• Orrcon Steel Unanderra Mill lost $7.0m (will be closed)
• DGTEC lost $3.4m (restructured)Hills Eco businesses lost $2.0m (restructured)
• Cygnus Satellite lost $0.8m (all start up costs expensed)
All of these losses are included in profit from operationsFor
per
sona
l use
onl
y
Electronics & Communications
For
per
sona
l use
onl
y
Electronics & Communications
ESE Sales and Margin
$0m
$40m
$80m
$120m
$160m
$200m
$240m
$280m
$320m
$360m
$400m
FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
Sales EBIT margin (%) (RHS)
ESE EBIT and Margin
$0m
$5m
$10m
$15m
$20m
$25m
$30m
$35m
$40m
FY04 FY05 FY06 FY 07 FY08 FY09 FY10 FY11
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
EBIT EBIT m argin (%) (RHS)
Y e a r e n d e d 3 0 J u n e ( A $ m ) 2 0 1 1 2 0 1 0 %
S a l e s 3 1 7 . 4 3 4 9 . 5 (9 . 2 % )
E B I T 2 8 . 0 3 2 . 5 ( 1 3 . 9 % )
E B I T m a rg in ( % ) 8 . 8 % 9 . 3 %
B e fo r e in d i v i d u a l l y s i g n i f ic a n t i te m s
For
per
sona
l use
onl
y
Electronics & Communications
• Highest profit margins and return on assets
• Results in line with expectations (other than DGTEC)
• Strategically important to Hills future direction
• Market leaders in most segments
• New (digital) products launched
• Acquisition activity focussed on this division
• Organic growth opportunities (fibre networks, security, SVL market share, installations, remote bandwidth)For
per
sona
l use
onl
y
Antenna & TV Systems
• Demand for Subscription TV and free to air steady
• Opportunities with switch to digital FTA (end of life December 2013, but followed by restacking of the spectrum)
• Installation opportunities in NBN and other new markets
• IPTV over network presenting opportunitiesFor
per
sona
l use
onl
y
Hills Sound, Vision & Lighting
• Strong performance despite low project work (increased market share)
• Education market growth
• Digital range expansion
• Strong partner in Crestron
• Export hurt by AUD
• New products added
• Legislated changes – hearing loop and wireless microphones
• Acquisitions under reviewFor
per
sona
l use
onl
y
OptiComm(50% owned)
• FTTH/FTTN opportunities
• Open platform provider
• NBN Greenfields rollout delayed
• Developers choosing OptiComm for features and availability in record numbers
• Westfield Sydney shopping project completed
• 70,000 homes passed in 21 estatesFor
per
sona
l use
onl
y
Cygnus Satellite
• Delivering the Telstra remote data products
• Contracted bandwidth
• National Coverage
• Key markets are mining and Government
For
per
sona
l use
onl
y
Hills Electronic Security
• Improved results
• Market leader
• Higher unit volumes offset by price deflation
• Project work subdued
• New product road map being delivered
For
per
sona
l use
onl
y
Lifestyle & Sustainability
For
per
sona
l use
onl
y
Lifestyle & Sustainability
HHE Sales and Margin
-$20m
$0m
$20m
$40m
$60m
$80m
$100m
$120m
$140m
$160m
$180m
$200m
$220m
$240m
FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
Sales EBIT m argin (%) (RHS)
HHE EBIT and Margin
-$4m
-$2m
$0m
$2m
$4m
$6m
$8m
$10m
$12m
$14m
FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
EBIT EBIT margin (%) (RHS)
Y e a r e n d e d 3 0 J u n e ( A $ m ) 2 0 1 1 2 0 1 0 %
S a l e s 1 6 0 .8 1 7 6 .3 ( 8 .8 % )
E B IT 9 .7 1 0 .2 5 .3 %
E B IT m a rg in ( % ) 6 . 0 % 5 .8 %
B e fo r e ind iv id ua l ly s ig n i f ic an t i te m s
For
per
sona
l use
onl
y
Lifestyle & Sustainability
• Steady results other than Team Poly
• Growth opportunities in Hills Healthcare
• Some mature market segments
• Water tank industry remains under stress. Losses incurred this year, but better results expected after restructure
For
per
sona
l use
onl
y
Hills Branded Products
• Market leader in laddersand clotheslines
• Master Home Improvements soon to commence
• Focus on product range andsupply chain
• New products launched
For
per
sona
l use
onl
y
Hills Healthcare
• Leader in rehabilitation, mobility and aged care equipment
• Steady trading result
• Additional nursing home facilities built
• Well placed to grow
For
per
sona
l use
onl
y
Hills Eco
• Rainfall causing continued low market demand
• Further insolvency amongst competitors
• Operational improvements under way, cost to make and cost to deliver
• Goodwill impaired
For
per
sona
l use
onl
y
Building & Industrial
For
per
sona
l use
onl
y
Building & Industrial – Includes Korvest
B&I Sales and Margin
$0m
$50m
$100m
$150m
$200m
$250m
$300m
$350m
$400m
$450m
$500m
$550m
$600m
$650m
$700m
FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
Sales EBIT margin (%) (RHS)
B&I EBIT and Margin
$0m
$5m
$10m
$15m
$20m
$25m
$30m
$35m
$40m
FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
EBIT EBIT margin (%) (RHS)
Y e a r e n d e d 3 0 J u n e ( A $ m ) 2 0 1 1 2 0 1 0 %
S a l e s 6 1 6 . 8 6 2 9 . 6 (2 . 0 % )
E B I T 3 . 2 2 6 . 3 ( 8 8 . 0 % )
E B I T m a rg in ( % ) 0 . 5 % 4 . 2 %
B e fo r e in d i v i d u a l l y s i g n i f ic a n t i te m s
For
per
sona
l use
onl
y
Fielders
• Market leader in innovative roll formed products
• Increased market share (but in a declining market)
• Improved result from Queensland
• Margins under pressure
For
per
sona
l use
onl
y
Orrcon Steel
• Industry demand reduced
• Price pressure due to AUD
• Growth in market share of imported tube at low prices
• Lack of Oil & Gas project work
• Restructuring under way
• Goodwill and fixed assets impaired
• Review of options to deliver better shareholder returnFor
per
sona
l use
onl
y
Other Matters
• Changes at the Board level
• New executives to strengthen the team
� Chief Operating Officer – Mike McKinstry
� Chief Finance Officer – Grant Logan
• M & A pipeline delivery opportunities
• A number of options for the Hills Steel business being reviewed
• Full year dividend of 10.0 cents fully frankedFor
per
sona
l use
onl
y
• Commercial building and steel sector to remain subdued
• Two speed economy and future of interest rates create uncertainty
• Improvement plans in place
• Difficult to provide specific guidance
• Highlighted losses not repeated
Outlook
For
per
sona
l use
onl
y
Questions
For
per
sona
l use
onl
y
Disclaimer
Statements contained in this presentation, particularly those regarding possible or assumed future performance, estimated company earnings, potential growth of the company, industry growth or other trend projections are or may be forward looking statements. Such statements relate to future events and expectations and therefore involve unknown risks and uncertainties. Actual results may differ materially from those expressed or implied by these forward looking statements.
For
per
sona
l use
onl
y
For
per
sona
l use
onl
y