Euroz Conference Presentation. Chris Sutherland, Managing Director 16 March 2017

Transcription

1 Euroz Conference Presentation Chris Sutherland, Managing Director 16 March 2017

2 Important notice and disclaimer The information contained in this presentation is for information purposes only and does not constitute an offer to issue, or arrange to issue, securities or other financial products. The information contained in this presentation is not investment or financial product advice and is not intended to be used as the basis for making an investment decision. This presentation has been prepared without taking into account the investment objectives, financial situation or particular needs of any particular person. Before making an investment decision, you should consider, with or without the assistance of a financial adviser, whether an investment is appropriate in light of your particular investment needs, objectives and financial circumstances. Past performance is no guarantee of future performance. 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. To the maximum extent permitted by law, none of Programmed Maintenance Services Limited, its directors, employees or agents, nor any other person accepts any liability, including, without limitation, any liability arising out of fault or negligence, for any loss arising from the use of the information contained in this presentation. In particular, no representation or warranty, express or implied, is given as to the accuracy, completeness, likelihood of achievement or reasonableness of any forecasts, projections, prospects or returns contained in this presentation. Such forecasts, projections, prospects or returns are by their nature subject to significant uncertainties and contingencies. This presentation should be read in conjunction with the Announcements issued to the ASX since the 2016 Annual Report which can be found on the Programmed website at AS PROGRAMMED FINANCIAL YEAR ENDS IN 15 DAYS TIME, THIS PRESENTATION ONLY PROVIDES EXISTING PUBLIC INFORMATION RELATING TO THE COMPANY S STRATEGY AND MARKETS AND NO INFORMATION IS PROVIDED RELATING TO THE FY2017 TRADING AND FINANCIAL PERFORMANCE 2

3 Safety Pause 3

4 Our Vision To be the leading provider of staffing, maintenance and facility management services, without injury

5 Our 4 Key Measures to be the leading provider are Safety: Total Injuries People: Staff Engagement Customer: Customer Satisfaction Financial: Total Shareholder Returns

6 Safety significant continuous improvement over more than 10 years K

7 Staff Engagement 2016 survey was completed 6 months following the acquisition of SKILLED considering the significant change across the organisation, maintaining a high staff engagement score was a great result Engagement Score Pre Skilled * Post Skilled Median Australian Score

8 Customer Satisfaction implementing a standard customer satisfaction measure and response system across the group using NPS (Net Promoter Score)

9 Shareholder Returns average 15 cents per share over last 11 years through two cycles: GFC and RESOURCES in the same period, we have paid a dividend each year and every year Growth in Painting programs was unsustainable. Need to plant the seeds for new areas to grow. Purchased Integrated Group to gain exposure to WA, resources and stronger cash flow. Net Debt at March 2008, $235m from funding of acquisition Resources boom was coming to an end. Need to plant the seeds for new areas to grow. Purchased Skilled Group to gain exposure to white collar employment, healthcare and industrial maintenance and to establish clear scale, efficiency and no.1 market position in staffing services. Net Debt at March 2016, $240m from funding of acquisition Dividends cps Geographic expansion of painting programs GFC Dividends reduced to repay debt for Integrated acquisition Resources expansion WA expansion (the seeds from the Integrated acquisition) Resources contraction Dividends reduced to repay debt for Skilled acquisition 11.5 Foundation set to maintain strong cash flow and grow in 10 areas including Health, Aged Care, Defence, and Infrastructure

10 Our Services

11 The Programmed Difference is our ability to Get safety right on the ground Recruit and develop people Deploy the right person with right competencies Manage HR in an increasingly regulated environment Operational improvements, flexibility and high levels of customer satisfaction

12 1H FY17 Revenue by Division / Business Unit 12.9% Property Services 20.7% Facility Management 8.3% Industrial Maintenance 6.4% Marine 51.3% Staffing 48.3% Maintenance 0.4% Unallocated Skilled Workforce 43.2% Professionals 8.1% 12

13 1H FY17 Revenue by State / Country even spread of revenue across all regions spreading risk and increasing opportunities 29.0% WA 23.8% NSW 19.7% VIC 12.4% QLD 5.4% NZ 5.1% SA 2.5% TAS 0.4% NT 1.7% Other 20.9% WA 28.4% NSW 24.0% VIC 16.8% QLD 0.6% NZ 4.0% SA 4.8% TAS 0.5% NT 0.0% Other 37.4% WA 19.0% NSW 15.3% VIC 7.8% QLD 10.4% NZ 6.4% SA 0.1% TAS 0.2% NT 3.4% Other 13

14 1H FY17 Revenue by Sector we provide services to all industry sectors enabling Programmed to continually adjust to different market conditions and seek growth from the sectors of the economy that are growing at any point in time 35.1% Government & Infrastructure 14.5% Retail & Commercial 13.8% Manufacturing & Industrial 12.6% Onshore Mining 7.5% Offshore Oil & Gas 5.1% Transport 11.4% Other 19.3% Government & Infrastructure 16.5% Retail & Commercial 17.9% Manufacturing & Industrial 19.0% Onshore Mining 2.0% Offshore Oil & Gas 8.4% Transport 16.9% Other 51.9% Government & Infrastructure 12.4% Retail & Commercial 9.5% Manufacturing & Industrial 5.8% Onshore Mining 13.4% Offshore Oil & Gas 1.6% Transport 5.4% Other 14

15 Integration of Skilled 1 st Wave people, structure & culture 2 nd Wave business systems 3 rd Wave sales growth plan in place 3 rd WAVE Sales Growth A 2020 WE ARE HERE 15

16 Sales Growth Plan we are now ready to commence the third and final phase of our plan targeting significant sales growth, leveraging the scale and diversity of our business Public Sector New outsourced public sector administration opportunities arising at all levels of government Defence Significant new expenditures in submarines and other assets White Collar White Collar employment growing Support white collar staffing needs across all of group customers Blue Collar Integration onto single business system now complete 63 branches Consolidation of suppliers Partnership pitch to major customers Health and Aged Care Aging Population Government Support Programs (consumer directed care) Plan to develop full service models - Health - Aged Care at Home - NDIS - Third Party Trauma Insurance Professionals Health Professionals Staffing Skilled Workforce Training Services Training A trusted brand Reskill existing candidates (initial target +100,000 workers) Reskill blue collar workers where displacement occurring due to automation or globalisation Facility Management Industrial Maintenance Maintenance Property Services Marine Industrial and Mining Many new assets built that must be maintained for next 50 years Focus on long term contracted O&M opportunities Infrastructure Growing population requires new infrastructure to be built. Aging infrastructure requires greater operations and maintenance expenditure. Long term contracts PPP s Property Schools, Universities, Retirement Villages, Sporting Fields, Resorts Demand is growing for a complete property maintenance service Offshore Oil & Gas Now only 7% of group revenue Expect FY17 to be bottom of earnings cycle 16

17 Staffing Market the Australian staffing market is highly fragmented Australian estimated staffing market share 1 Programmed Staffing revenue segmentation Estimated Australian staffing market segmentation ~>10% ~>5% ~<3% ~<3% ~<3% ~<3% ~<3% Programmed $1,200m 12.6% share $200m 5.5% share 26% 6% ~A$14b n 68% ~70% Programmed blue collar revenue Programmed white collar revenue Blue collar White collar Other white collar industries are forecast to grow at rates faster then GDP 8.3% 8.5% 16.4% 7.8% 14.8% 4.0% 8.5% 0.6% (5.3%) (14.1%) Mining Construction Transport Health Administration Manufacturing Professional/Technical Services Information Media & Technology Finance & Insurance Utilities White collar industries 1. Source: LMIP, ABS, Market share estimated by Programmed management. 17

18 Commercial Office Health Govt Buildings Water & wastewater Defence Education Retail Leisure & entertainment Ports Property Services / FM / Infrastructure Market $10.0bn non residential contracted maintenance is expected to rise by 12% over the next 5 years, driven by the Health and Education sectors. $8.0bn $6.0bn $6.1bn $5.5bn $4.0bn $3.1bn $2.0bn $1.6bn $1.6bn $1.6bn $1.6bn $0.8bn $0.3bn $.0bn In-house O&M Service Market Outsourced O&M Service Market Source: BIS Sharpnel 18

19 Actual capital expenditure (mining sector) Industrial / Resources Maintenance Market established Industrial Maintenance business as a larger and more capable service provider Over $100bn worth of capital expenditure has been invested in the Australian mining sector over the previous 2 years $25bn $20bn $100bn of capital investments will require maintenance $15bn $10bn $5bn $bn Source: BIS Sharpnel

20 Brent Crude Oil Price (US$ / bbl) Marine / Offshore Services Market expect our FY17 year to be the low point in the cycle Marine earnings 1 Brent Crude Oil Price (US$ /bbl) $354m $354m $307m $247m +40% FY16 YTD 20 $130m 0 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar FY12-FY15 as per Programmed s reported Resources segment. FY16 based on management estimates excluding Skilled acquisition. a substantial fall in workforce demand in past two years Aug-14 Aug-15 Aug-16 Offshore / marine Aust employees (Programmed and Skilled)