ANALYST BRIEFING 2015 Full Year Results
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ANALYST BRIEFING 2015 Full Year Results 1st March 2016 Empowered by science, inspired by humans DISCLAIMER All information contained in this presentation belongs to UEM Edgenta Berhad (formerly known as Faber Group Berhad) (“UEM Edgenta”) and may not be copied, distributed or otherwise disseminated in whole or in part without the written consent of UEM Edgenta. This presentation has been prepared on the basis of information that is believed to be correct at the time the presentation was prepared, but that may not have been independently verified. UEM Edgenta makes no express or implied warranty as to the accuracy or completeness of any such information. UEM Edgenta is not acting as an advisor or agent to any person to whom this presentation is directed. Such persons must make their own independent assessment of the contents of this presentation, should not treat such content as advice to legal, accounting, taxation or investment matters and should consult their own advisers. Nothing in this presentation is intended to be, or should be construed as an offer to buy or sell, or invitation to subscribe for, any securities. Neither UEM Edgenta nor any of its their directors, employees or representatives are to have any liability (including liability to any person by reason of negligence or negligent misstatement) from any statement, opinion, information or matter (express or implied) arising out of, contained in or derived from or any omission from the presentation, except liability under statute that cannot be excluded. 1 Contents 1. Key Highlights 2. Financial Overview 3. Key Business Division Updates 3.1 Asset Consultancy 3.2 Infra Services 3.3 Healthcare Services 3.4 Property Services 3.5 Others 4. Strategic Direction and Outlook 5. Discussion / Q&A Section 1 Key Highlights RECAP OF FY2015 Year of integration, consolidation and rationalisation for UEM Edgenta Key milestones includes, amongst others: New business model & expansion of commercial sector business Formation of Edgenta Energy Services with RDM Asia; Set up of Utilities relocation unit - expected to generate encouraging business traction with completion of installation revenue in 2016 of energy management system in 33 MOH hospitals in the Set up of UEM Edgenta’s Research and Development Northern region Centre to produce innovative product for UEM Sunrise Edgenta TMS (UEMSET) and Medini commercialisation Iskandar (M) Sdn Bhd formed JV company to undertake Creation of Environmental and Material Testing township management of Medini Iskandar (“EMT”) Services to expand into environmental testing New Consultancy contracts secured in UAE and Saudi Secured Selangor Zone III State Road maintenance Arabia contract (5 years - RM109 million) – marked first foray Awarded three-year contract for routine maintenance of into state road maintenance Cikampek-Palimanan highway. In good position to tender Strengthened Facilities Management market share in for more highway projects Malaysia and Middle East via proposed acquisition of KFM Holdings Sdn Bhd Signing ceremony with Township Management Services Sdn Bhd (“TMS”) for management of Proposed UEM Edgenta’s Research and Medini Township Development Centre 4 RECAP OF FY2015 (Cont’d) Year of integration, consolidation and rationalisation for UEM Edgenta Key milestones includes, amongst others: Corporate recognition Rationalisation & Integration Frost & Sullivan Asia Pacific - Integrated Facilities Acquisition of 40% Healthtronics’ share from SSP Management Competitive Strategy Innovation and Medical Technologies Sdn Bhd Leadership Award Implemented Mutual Separation Scheme (“MSS”) - Forbes - Asia’s ‘Best Under a Billion’ list cost of RM30.6 mil Inclusion in FTSE4Good Bursa Malaysia Index - Strong Rationalised vendors and outsourcing of cleansing Environmental Social & Governance Practices services Productivity & Innovation Conference (APIC) – Gold HR Initiatives Awards Malaysian Construction Industry Excellence Award Launch of EDGE20 programme (MCIEA) - Best Project Award (Infrastructure-Major) for the Design, Revised KPI & PMS framework and implemented Construction, Completion, Testing & Commissioning (Special performance-based incentives Mention) - Electrified Double Track Between Ipoh & Padang Besar Project 2015 Frost & Sullivan Asia Pacific - Forbes Asia’s ‘Best Under a Billion’ list EDGE 20 Launch event Integrated Facilities Management Competitive Strategy Innovation and Leadership Award 5 KEY FINANCIAL HIGHLIGHTS • Commendable performance in light of challenging REVENUE market condition RM 3.12 bil Revenue grew marginally by 1.1% ▲ 1.1% Normalised PBT up by 17.4% after excluding one-off cost of RM45.4 mil Normalised PAT up by 11.6% Normalised PBT Normalised PATANCI up by 19.4% RM 350.8 mil ▲ 17.4% • Declared interim dividend of 15 sen, representing payout ratio of 64% Normalised PAT RM 247.3 mil ▲ 11.6% • Strong Balance Sheet Cash and cash equivalent1 of RM798 mil Normalised PATANCI Net cash(1) of RM423 mil RM 223.2 mil Gearing ratio of 0.24x ▲ 19.4% (1) Includes investment securities 6 SELECTED PROJECT WINS IN 2015 Selangor Zone III State Road Consultancy Services to KKR: Supply, Install, Testing Maintenance Performance Based Contract for Commissioning, Training & Federal Roads in Peninsular Maintenance of Medical Equipment Malaysia for Women and Child Hospital RM109 mil over a period of 5 years RM12 mil over a period of 19 months RM20 mil over a period of 5 years Huntly Section, Waikato West Coast Network Outcome Water Management Services for Expressway, NZ Contract, NZ Saint John Clean Drinking Water Program, Canada Capital Value NZD458 mil1 Capital Value NZD115 mil1 Capital Value NZD215 mil1 Note: 1) Total capital value (NZD), won in conjunction with other parties 7 Section 2 Financial Overview REVENUE AND GROSS PROFIT CAGR OF 6.6% and 6.7% respectively Revenue and gross profit (ex-East Malaysia concession and property) grew by CAGR of 9.2% and 10.0% respectively Revenue (RM mil) 3,089 3,123 19 25 2,699 339 282 2,516 34 2,415 306 357 400 157 222 281 300 370 762 891 416 335 660 518 2,731 2,816 505 2,359 1,977 1,994 1,612 1,329 1,525 1,057 1,141 2011 2012 2013 2014 2015 Gross Profit (RM mil) 981 1,021 6 8 858 883 69 788 12 73 58 93 59 96 73 87 82 122 137 83 94 84 82 67 68 902 944 798 722 714 646 675 622 495 526 2011 2012 2013 2014 2015 Asset Consultancy (AC) Infra Services (IS) IFM (ex-East Msia Concession) IFM (East Msia Concession) Property Development (PD) Note: IFM includes contribution from healthcare services, environmental & material testing services, facilities services and energy services 9 FINANCIAL HIGHLIGHTS (FY2015 vs FY2014) Normalised PATANCI increased by 19.4% to RM223.2 mil; Normalised PATANCI Margin improved by 1.0% to 7.1% Figures in RM Million unless otherwise stated FY2015 FY2014 Variance Amount % Reported Financials Revenue 3,123.0 3,089.3 33.7 ▲ 1.1% Gross Profit 1,021.8 981.3 40.5 ▲ 4.1% Gross Margin (%) 32.7% 31.8% ▲ 0.9% EBITDA 363.4 364.9 (1.5) ▼ -0.4% EBITDA Margin (%) 11.7% 11.8% ▼ -0.1% PBT 305.4 324.5 (19.1) ▼ -5.9% PBT Margin (%) 9.8% 10.5% ▼ -0.7% PAT 209.5 241.9 (32.4) ▼ -13.4% PAT Margin (%) 6.7% 7.8% ▼ 1.1% PATANCI 191.2 202.4 (11.2) ▼ -5.5% PATANCI Margin (%) 6.1% 6.6% ▼ -0.5% Normalised Financials Normalised EBITDA 408.8 339.2 69.6 ▲ 20.5% Normalised EBITDA Margin (%) 13.1% 11.0% ▲ 2.1% Normalised PBT 350.8 298.8 52.0 ▲ 17.4% Normalised PBT Margin (%) 11.2% 9.7% ▲ 1.5% Normalised PAT 247.3 221.5 25.8 ▲ 11.6% Normalised PAT Margin (%) 7.9% 7.2% ▲ 0.7% Normalised PATANCI 223.2 186.9 36.3 ▲ 19.4% Normalised PATANCI Margin (%) 7.1% 6.1% ▲ 1.0% 10 FINANCIAL HIGHLIGHTS (FY2015 vs FY2014) Strong balance sheet with net cash of RM423.2 mil Figures in RM Million unless otherwise stated FY2015 FY2014 Variance Amount % Balance Sheet Property, plant and equipment 213.0 188.1 24.9 ▲ 13.3% Intangible assets 453.4 475.0 (21.6) ▼ -4.5% Trade and other receivables 955.0 752.2 202.8 ▲ 27.0% Cash and investment securities 797.5 1,068.9 (271.4) ▼ -25.4% Borrowings 374.3 351.2 23.1 ▲ 6.6% Trade and other payables 656.9 724.4 (67.5) ▼ -9.3% Shareholders' equity (Excl. non-controlling interest) 1,339.9 1,159.4 180.5 ▲ 15.6% Cash Flow Statement Cash flow from operating activities 1.1 337.0 (335.9) ▼ -99.7% Cash flow from investing activities 6.2 (265.9) 272.1 ▼ -102.3% Cash flow from financing activities (228.9) 68.9 (297.8) ▼ -432.2% Net increase / (decrease) in cash (221.6) 140.0 (361.6) ▼ -258.2% Basic EPS (Sen) 23.50 24.88 (1.38) ▼ -5.5% BVPS 1.65 1.43 0.22 Gearing Ratio 0.24x 0.26x -0.01x Return on Equity (ROE) 15.3% 15.9% -0.6% Return on Invested Capital (ROIC) 13.9% 16.5% -2.6% 11 BREAKDOWN OF REVENUE FY2015 revenue contribution from services and sectors remained comparable to FY2014 2015 2014 1% 1% 4% 1% 6% 21% 10% 22% 1% 6% 38% 12% 4% 36% Services 49% 52% Sectors Geography 53% 55% 64% 62% 25% 25% 24% 28% AC IS Malaysia NZ IFM PD Non-Concession Concession Canada & USA UK Others Australia Others 12 YOY REVENUE & PBT Revenue increased marginally by 1%; Reported PBT dropped by 6% mainly due to one-off costs (goodwill impairment and MSS cost) YoY Revenue (FY2015 vs FY2014) YoY PBT (FY2015 vs FY2014) Figures in RM’mil +17% 324.5 +1% +36% 128.4 +35% 6.5 3,123.0 28.0 -6% (10.3) (3.6) 305.4 3,089.3 (2.4) +38% -2% -16% -40% (6.5) +9% +65% 8.6 (46.9) (87.3) -32% -5% FY14 AC IS IFM PD Others FY15 FY14 AC IS IFM PD Others FY15 AC recorded lower revenue by 5% due to overall weak economic condition in Australia, coupled with the continued decline in oil and gas prices affecting project commencement in Opus Stewart Weir IS revenue increase by 17% due to higher work progress and certifications for North-South Expressway (“NSE”) fourth lane widening and Bayan Lepas Expressway project.