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19 ThAuCoLe20Sy
De 20 Ple9.4 YoTO BeCo En
9 February 2
he Managerustralian Stoompany Annevel 4 0 Bridge Streydney NSW
ear Sir
14 INTERIM
ease find att45am AEDS
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ASX On Lo. of Pages:
ommencing
d ralia
ine 35
at
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Toll Holdings Limited
2014 Interim Results Brian Kruger, Managing Director
Grant Devonport, Chief Financial Officer
19 February 2014
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Toll Holdings Limited – 2014 Interim Results 2
Project Forward cost savings on target - $8m generated in 1H14
Toll Global Resources performance demonstrates strength of business pipeline to offset
completion of ADF contract
Returns from TOPS’ continued to grow
New intermodal rail arrangements with Asciano
Successful implementation of GraysOnline B2C delivery contract
Major new terminal and depot developments all on schedule and budget
TWU EBA completed
Group purchasing benefits and continuous improvement initiatives continue to
gain traction
USPP refinancing completed and first tranche of Singapore facility completed
Good progress on key initiatives despite
challenging environment
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3
Safety performance becoming a key differentiator
For the 12 months to December
2013, Lost Time Injury Frequency
Rate reduced by 19% from 2.0 to 1.6
For the 12 months to December
2013, Total Recordable Injury
Frequency Rate reduced by 15%
from 19.0 to 16.1
Toll Holdings Limited – 2014 Interim Results
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Launching a road safety partnership with the
Amy Gillett Foundation
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Toll Holdings Limited – 2014 Interim Results 5
* Pre associates, acquisition accounting amortisation and non-recurring items
** Includes profit from associates and after acquisition accounting amortisation, but before non-recurring items
*** Return on invested capital is rolling 12 months net profit after tax before non-recurring items plus net interest divided by average net debt plus
shareholders equity
Group performance summary
6 months ended 31 December
$ million 2013 2012 change
Revenue $4,523 $4,546 0.5%
EBITDA* $391 $387 1.0%
EBIT** $259 $256 1.1%
Net profit after tax (before non-recurring items) $176 $174 1.4%
Net profit after tax (after non-recurring items) $176 $196 10.0%
Operating cash flow $308 $221 39.0%
EPS (before PPA and non-recurring items) 24.2 cps 25.4 cps 1.2 cps
Interim dividend per share (fully franked) 13.0 cps 12.5 cps 0.5 cps
Return on invested capital*** 7.7% 7.6% 0.1 pp For
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Toll Holdings Limited – 2014 Interim Results 6
Organic revenue growth in difficult environment
$ million
Revenue half year
ended 31 December 2012 4,546
Disposal of Auto and Refrigerated (19)
Fuel and carbon surcharges 1
Other including acquisitions 8
Foreign exchange impact 73
TGF rate reduction (132)
Net new business / contracts completed (7)
Net volume changes 53
Revenue half year
ended 31 December 2013 4,523
TGF rate reduction reflecting excess shipping
capacity
Net organic growth of approx 1% reflecting Timor
Leste contract completion and loss of Coles FNQ
contract, together with impact of customer down
trading in some markets
Recent contract wins will support future growth
Group tender levels of approx $1 billion for the
half
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Divisional results
Toll Group Toll Holdings Limited
2014 Interim Results
Divisional results
Toll Group Toll Holdings Limited
2014 Interim Results
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Toll Holdings Limited – 2014 Interim Results 8
Strong result given completion of ADF Timor Leste contract
in February 2013
Toll Energy continued to benefit from existing contracts, with
recent new wins including Inpex and Santos supporting
future growth
Toll Mining Services had an improved result but still faces
challenging conditions, especially in Queensland
Toll Offshore Petroleum Services (TOPS) now fully tenanted
with significant growth in earnings
Toll Remote Logistics affected by completion of the ADF
contract, but new contract wins helping to offset
Toll Marine Logistics in Australia facing significant
competitive issues but seeing growth in Far North
Queensland
Toll Marine Asia saw continued difficult environment but is
making good progress on its vessel divestment programme
with a further 12 vessels sold
Revenue – $ million
EBITA – $ million*
* Excludes PPA amortisation and non-recurring items, includes profits from associates
Toll Global Resources – benefits of market diversity Toll Mining Services, Toll Energy, Toll Marine Logistics, Toll Remote Logistics, TOPS
Return on capital employed (rolling 12 months)
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Toll Holdings Limited – 2014 Interim Results 9
Contract Logistics grew with successful contract renewals
and new contract wins including the expanded Coca-Cola
Amatil contract
NTS heavy haulage acquisition will provide increased
opportunities in the infrastructure sector
Customised Solutions had good operational performances.
New contract wins position this business well for future
growth
Domestic auto sector closures well anticipated and not
expected to have a material impact
Government Business Group in Singapore performed well,
growing new business to support core activities. A number
of customer contracts under tender
Singapore and Malaysia benefitted from one-off project
work
North Asia had an improved result due to customer wins
and improved performance from existing contracts
Revenue – $ million
EBITA – $ million*
Return on capital employed (rolling 12 months)
Toll Global Logistics – customer wins offsetting margin pressure Customised Solutions, Contract Logistics, Automotive Logistics, South and SE Asia,
Singapore/Malaysia, North Asia, Government Business Group
* Excludes PPA amortisation and non-recurring items, includes profits from associates
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Contract Logistics’ extended contract with
Coca-Cola Amatil
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Toll Holdings Limited – 2014 Interim Results 11
Markets remain challenging with capacity oversupply
in ocean freight and continuing trend of customers
moving from air freight to ocean freight
Ocean freight volumes were up 15% while air freight
volumes were down 9%
Gross profit margin increased from 19.2% to 20.2%
reflecting benefits of Project Forward
Business process benefits to accrue from systems
rollout
Project Forward on track for cost savings of $15-20
million in FY14
Revenue – $ million
EBITA – $ million*
Return on capital employed (rolling 12 months)
Toll Global Forwarding – focus on controllables Asia, ANZ, Americas, Africa, Europe, Middle East
* Excludes PPA amortisation and non-recurring items, includes profits from associates
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Toll Global Forwarding ‘s new site in
Heathrow, UK
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Toll Holdings Limited – 2014 Interim Results 13
Return on capital employed (rolling 12 months)
Australian revenue flat overall; key driver being customer
down trading in mining services sector in Western Australia,
exacerbated by lower average consignment weights
Margins impacted by peak period depot capacity constraints
causing increased handling costs
Toll IPEC affected by consignment size, with lower fleet costs
offset by higher depot handling costs. New Sydney depot
progressing well and will lead to significant handling
efficiencies. Planning well advanced for new Melbourne
facility
GraysOnline contract commenced September 2013
Toll Priority grew revenue and earnings, new customer wins
and benefits of increased charter work. Productivity initiatives
will provide benefits in the future
Toll Fast affected by highly competitive market resulting in
reduced revenue and earnings
Toll Global Express Japan’s earnings improved primarily as a
result of improved operating efficiencies
EBITA – $ million*
Revenue – $ million
Toll Global Express – resilient despite tough conditions Toll Priority, Toll IPEC, Toll Fast, Toll People, Japan
* Excludes PPA amortisation and non-recurring items, includes profits from associates
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Toll IPEC’s Bungarribee depot, NSW
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Toll Holdings Limited – 2014 Interim Results 15
Underlying container volumes flat
Ongoing competitive environment affected margins
Toll Intermodal affected by loss of FNQ contract partially
offset by cost savings from new terminals. Asciano FNQ
transaction to improve returns in 2H
Toll Shipping saw lower volumes due to down trading by a
number of customers despite benefits from the Linfox Trans
Bass acquisition
Vessel dry-docking to affect both FY14 and FY15
Toll Tasmania also benefitted from the Linfox Trans Bass
acquisition and saw contract wins to grow both revenue and
EBITA
New Tasmanian facility upgrades progressing well
Toll NZ grew revenue but earnings affected by one-off
property costs
Revenue – $ million
EBITA – $ million*
Return on capital employed (rolling 12 months)
Toll Domestic Forwarding – positioning for the future Toll Intermodal, Toll New Zealand, Toll Shipping, Toll Tasmania
* Excludes PPA amortisation and non-recurring items, includes profits from associates
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Toll Holdings Limited – 2014 Interim Results 16
Challenging trading conditions affected margins, with a
reduction in volumes from the higher margin mining
sector
Toll Express saw a reduced contribution from the
Western Australian project mining sector, and start up
costs associated with its Sydney depot expansion
Toll NQX also affected by mining sector weakness and
customer down trading
Toll Liquids results benefitted from new contract start
ups in the period and is well positioned to capitalise on
a strong pipeline of work on offer
Toll Transitions affected by reductions in Defence
movements
Revenue – $ million
EBITA – $ million*
Return on capital employed (rolling 12 months)
Toll Specialised & Domestic Freight – mining volumes down Toll NQX, Toll Express, Toll Liquids, Toll Transitions, Toll Linehaul and Fleet Services
* Excludes PPA amortisation and non-recurring items, includes profits from associates
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Financial results
Toll Group Toll Holdings Limited
2013 Interim Results
Financial results
Toll Group Toll Holdings Limited
2014 Interim Results Financial results
Toll Group Toll Holdings Limited
2014 Interim Results
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Toll Holdings Limited – 2014 Interim Results 18
$ million 1H14 1H13 Change
Revenue 4,523 4,546 (23)
EBITDA (pre associates) 391 387 4
Depreciation,
amortisation and PPA (140) (139) (1)
Associates and JV’s 9 8 1
EBIT (before non-
recurring items) 259 256 3
Net finance costs (19) (17) (2)
Income tax expense (64) (66) 2
Net profit after tax
(before non-recurring
items)
176 174 2
Non-recurring items net
of tax - 22 (22)
Net profit after tax 176 196 (20)
Earnings reconciliation
EBITDA growth despite lower revenue
Depreciation, amortisation and PPA flat reflecting
$11 million reduction in PPA offset by $12 million
increase in depreciation
EBIT before non-recurring items marginally up on
prior period despite lower revenue
Net interest costs higher due to lower interest
income and weakening Australian dollar
Effective tax rate lower due to tax concession on
coastal shipping
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Toll Holdings Limited – 2014 Interim Results 19
$ million 1H14 1H13 Change
EBITDA excluding non-cash
items 380 384 (4)
Working capital movement (76) (163) 87
Net operating cash flows 304 221 83
- Capital expenditure (205) (216) (11)
- Sale of PPE 55 19 36
Free cash flow 154 24 130
- Acquisitions & sale of
businesses 2 91 (89)
Net cash flow before
financing and tax 156 115 41
Net interest payments (15) (15) -
Tax payments (54) (82) (28)
Dividends (106) (92) (14)
Cash flow before movements
in net debt (19) (74) 55
Cash conversion 80% 57%
Operating cash flow continues to improve
Significant improvement in first half operating
cash conversion
Working capital improvement from both
receivables and payables
Capital expenditure continues to trend down
Sale of PPE consists of sales of vessels,
helicopters and properties
Tax payments reduced due to lower
instalment rate
Net dividends higher due to additional 1 cent per
share payment and lower dividend income
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Toll Holdings Limited – 2014 Interim Results 20
Capital expenditure – focus on fleet and property
$ million 1H14
Sustaining
1H14
Growth
1H14
Total
1H13
Sustaining
1H13
Growth
1H13
Total
Toll Global Resources 22 21 43 13 48 61
Toll Global Logistics 13 6 19 9 9 18
Toll Global Forwarding 3 5 8 3 1 4
Toll Global Express 38 2 40 25 8 33
Toll Domestic Forwarding 12 16 28 34 9 43
Toll Specialised & Domestic Freight 46 2 48 41 2 43
Corporate 10 9 19 14 - 14
TOTAL 144 61 205 139 77 216
% of depreciation 104% 110%
Toll Global Express includes $16 million on property and $14 million on replacement fleet
Toll Global Resources reduction reflects completed TOPS investment
Toll Specialised & Domestic Freight continues investing in fleet replacement program
Toll Domestic Forwarding reduction due to completion of Kewdale and Moolabin terminals
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Toll Holdings Limited – 2014 Interim Results 21
Return on capital is stable
EBIT $M
(rolling 12
months)
Average
capital
employed $M
Dec 2013
ROCE %
Dec 2012
ROCE %
Toll Global Resources 105.5 1,079 9.8 9.7
Toll Global Logistics 88.2 809 10.9 9.5
Toll Global Forwarding 6.0 759 0.8 1.3
Toll Global Express (Australia) 123.3 309 39.9 46.0
Toll Global Express (Japan) (1.3) 145 (0.9) (1.8)
Toll Domestic Forwarding 61.0 313 19.5 20.6
Toll Specialised & Domestic Freight 94.2 284 33.1 41.1
TOLL GROUP (after tax return on invested capital) 7.7 7.6
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Debt refinancing continuing to plan
Strong balance sheet position
$494 million in cash
$777 million in liquidity
Net debt position $1,344 million
Gearing 33.0%
Debt refinancing profile
USPP issuance funded in December; USD 250m
equivalent
SGD debt extension completed in December
Average debt maturity 2.9 years increased from 1.9
years at 30 June
Further $100m liquidity reduced through cancelling
undrawn facilities
Negotiation of HKD and JPY facilities to be
completed by April 2014
No material impact on net interest costs from refinancing
23% 45%
32%
Debt split
Bilateral Syndicated USPP
-
200
400
600
800
1,000
Group debt maturity profile ($ million)
Toll Holdings Limited – 2014 Interim Results 22
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Toll Holdings Limited – 2014 Interim Results 23
Toll Global Forwarding – delivering on cost savings
HK$ 1H14 1H13 $ change
Gross Profit 1,154 1,212 (58)
Gross Profit margin % 20.2% 19.2% +1.0%
G&A costs (1,034) (1,096) 62
EBITDA (excluding associates) 120 116 4
EBITA (including associates) 100 86 14
G&A Costs/Gross Profit % 89.6% 90.4% +0.8%
EBITA Conversion % 8.7% 7.1% +1.6%
Gross Profit dollars weaker due to air freight decline
Margins improved due to yield efficiency programs
G&A costs real reduction of 5.7% For
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Toll Holdings Limited – 2014 Interim Results 24
Cost management initiatives progress
Driving procurement benefits across the Group
Sustaining capital expenditure on depots to drive cost efficiencies
Sustaining capital expenditure on replacement fleet to gain savings on
rentals, repairs and maintenance costs
Back office efficiencies including Project Forward
Asset utilisation improvements
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Toll Holdings Limited – 2011 Interim Results 25
Outlook
Toll Group Toll Holdings Limited
2014 Interim Results
Outlook
Toll Group Toll Holdings Limited
2014 Interim Results
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Toll Holdings Limited – 2013 Full Year Results 26
External environment both in Australia and globally remains patchy
Overall volume growth is still relatively flat
Business and consumer confidence remains fragile, although expect currency
and interest rates to ultimately support some improvement in Australia
Competitive environment will continue
We will continue to achieve positive contributions from:
One Toll selling and procurement activities
Costs and productivity improvements driven by capital expenditure, restructuring
and continuous improvement initiatives, including Project Forward
Continued success with net new customer wins
Investments in new business sectors
Toll is positioned well for any improvement in economic activity in Australia and key
offshore markets
Overall we still expect underlying EBIT to be ahead of last year and EBITA to be in
line with last year
Outlook F
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Toll Holdings Limited – 2011 Interim Results 27
Questions & answers
Toll Group Toll Holdings Limited
2014 Interim Results
Questions and answers
Toll Group Toll Holdings Limited
2014 Interim Results
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Toll Holdings Limited – 2011 Interim Results 28
Appendix
Toll Group Toll Holdings Limited
2014 Interim Results
Appendix
Toll Group Toll Holdings Limited
2014 Interim Results
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Toll Holdings Limited – 2014 Interim Results 29
Toll
Global Resources
Toll
Global Logistics
Toll
Global Forwarding
Toll
Global Express
Toll
Domestic
Forwarding
Toll
Specialised
& Domestic
Freight
Provides logistics
services to the oil &
gas, mining, and
government and
defence sectors in
Australia Asia and
Africa
World class contract
logistics solutions
provider in the Asia
Pacific region
International freight
forwarding and
advanced supply
chain management
services
Market leading
express freight
operator in Australia
providing time
sensitive freight
distribution, and top
ten express logistics
provider in Japan
Domestic freight
forwarding across
Australia and New
Zealand
Provides a
comprehensive suite
of options Australia-
wide for palletised
freight, liquids
distribution, chemicals
distribution and
warehousing through
to relocation services
Toll Group
Appendix 1: Operating Divisions F
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Toll Holdings Limited – 2014 Interim Results 30
$ million As at 31 Dec 2013 30 Jun 2013
Current Assets
Cash 494 516
Receivables 1,329 1,241
Inventories 64 62
Assets held for sale 99 56
Other 101 92
Total Current Assets 2,087 1,967
Non-Current Assets
Receivables 11 13
Investments 186 175
Property, plant & equipment 1,989 1,999
Intangible assets 1,712 1,660
Deferred tax assets 132 139
Other 20 21
Total Non-Current Assets 4,050 4,007
Total Assets 6,137 5,974
Current Liabilities
Accounts payable 916 868
Interest bearing liabilities 432 934
Current tax liabilities 84 80
Provisions and other 353 371
Liabilities held for sale 2 -
Total Current Liabilities 1,787 2,253
Non-Current Liabilities
Interest bearing liabilities 1,407 854
Deferred tax liabilities 19 18
Provisions and other 195 153
Total Non-Current Liabilities 1,621 1,025
Total Liabilities 3,408 3,278
Net Assets 2,729 2,696
Appendix 2: Balance sheet F
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Toll Holdings Limited – 2014 Interim Results 31
Appendix 3: Local reporting currency
Toll Global Forwarding Hong Kong $ million
1H14 1H13 change
Revenue 5,714 6,305 -9.4%
Gross Profit 1,154 1,212 -4.8%
EBITA 100 86 +16.3%
EBITA margin 1.7% 1.4% +0.3pp
EBITA includes profit from associates
Toll Global Logistics Singapore $ million
1H14 1H13 change
Revenue 796 827 -3.7%
EBITA 58 59 -1.7%
EBITA margin 7.2% 7.1% +0.1pp
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Toll Holdings Limited – 2014 Interim Results 32
Appendix 4: Toll Global Forwarding volumes F
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Toll Holdings Limited – 2014 Interim Results 33
This presentation includes “forward-looking statements.” These can be identified by words such as “may”, “should”, “anticipate”, “believe”, “intend”, “estimate” and “expect”. Statements which are not based on historic or current facts may be forward-looking statements.
Forward-looking statements are based on assumptions regarding Toll’s financial position, business strategies, plans and objectives of management for future operations and development and the environment in which Toll will operate.
Forward-looking statements are based on current views, expectations and beliefs as at the date they are expressed and which are subject to various risks and uncertainties. Actual results, performance or achievements of Toll could be materially different from those expressed in, or implied by, these forward-looking statements. The forward-looking statements contained in this presentation are not guarantees or assurances of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of Toll, which may cause the actual results, performance or achievements of Toll to differ materially from those expressed or implied by the forward-looking statements. For example, the factors that are likely to affect the results of Toll include general economic conditions in Australia and Globally; exchange rates; competition in the markets in which Toll does and will operate; weather and climate conditions; and the inherent regulatory risks in the businesses of Toll. The forward-looking statements contained in this presentation should not be taken as implying that the assumptions on which the projections have been prepared are correct or exhaustive.
Toll disclaims any responsibility for the accuracy or completeness of any forward-looking statement. Toll disclaims any responsibility to update or revise any forward-looking statement to reflect any change in Toll’s financial condition, status or affairs or any change in the events, conditions or circumstances on which a statement is based, except as required by law.
The projections or forecasts included in this presentation have not been audited, examined or otherwise reviewed by the independent auditors of Toll. Unless otherwise stated, all amounts are based on A-IFRS and are in Australian Dollars. Certain figures may be subject to rounding differences. Any market share information in this presentation is based on management estimates based on internally available information unless otherwise indicated.
You must not place undue reliance on these forward-looking statements.
This presentation is not an offer or invitation for subscription or purchase of, or a recommendation of securities. The securities referred to in these materials have not been and will not be registered under the United States Securities Act of 1933 (as amended) and may not be offered or sold in the United States absent registration or an exemption from registration.
Disclaimer F
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Toll Holdings Limited – 2011 Interim Results 34
Thank you
Toll Group Toll Holdings Limited
2013 Interim Results
Thank you
Toll Group Toll Holdings Limited
2013 Interim Results
Thank you
Toll Group Toll Holdings Limited
2014 Interim Results
Thank you
Toll Group Toll Holdings Limited
2014 Interim Results
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