Aggreko 2011 Preliminary Results Presentation

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Aggreko 2011 Preliminary Results Presentation was hosted by Philip Rogerson - Chairman, Angus Cockburn - Finance Director and Rubert Soames - CEO.

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Aggreko 2011 Preliminary Results Presentation

  1. 1. Aggreko Annual Results 2011
  2. 2. 2011 ResultsPhilip Rogerson Chairman 2
  3. 3. 2011 Results • Underlying revenue up 22%; underlying trading profit up 26% • Reported revenue up 14%; reported trading profit up 8% • PBT up 6%; Diluted EPS up 10% • Tax credit of £29m treated as exceptional • Recommending final dividend per share increase of 10% to 13.59 pence • 55 pence per share / £148m return of capital completed in July 2011 • Both business segments performed well on an underlying basis – International Power Projects revenues up 25%; trading profit 33% – Local business revenues up 21%; trading profit 15% • Outlook: Overall, we expect to deliver further good growth in 2012(1) Underlying is adjusted for currency movements, pass - through fuel and major sporting events. Major sporting events comprised in 2010 the FIFA World Cup, the Vancouver Winter Olympics and the Asian Games, as well as a small amount of revenue from the Asian Games and the London Olympics which arose in 2011.(2) All numbers are stated pre-amortisation of intangible assets (2011: £3m pre-tax, £2m post-tax; 2010:£2m pre-tax, £1m post-tax) arising from business combinations and pre-exceptional tax credits of £29m (2010: nil) unless otherwise stated. 3
  4. 4. 2011 ResultsFinancial Review Angus Cockburn Finance Director 4
  5. 5. 2011 Results Pre-Exceptional Tax Credit 2011 2010 Movement £m £m As reported Underlying Revenue 1,396 1,230 14% 22% Revenue excl. pass-through fuel 1,288 1,156 11% Trading profit 341 314 8% 26% Operating profit 345 317 9% Net interest expense (18) (11) (85)% Profit before tax 327 306 6% Taxation (93) (92) (1)% Profit after tax 234 214 9% Dividends per share (declared) 20.79p 18.90p 10% Diluted Earnings Per Share 87.72 79.69 10%(1) All numbers are pre-amortisation of intangible assets arising from business combinations and pre-exceptional tax credits. Note: Post amortisation and exceptional items: 2011 PBT £324m, PAT £260m, D-EPS 97.49p; 2010 PBT £304m, PAT £213m, D-EPS 78.98p 5
  6. 6. 2011 Results Post-Exceptional Tax Credit 2011 2010 Movement £m £m As reported Underlying Revenue 1,396 1,230 14% 22% Revenue excl. pass-through fuel 1,288 1,156 11% Trading profit 341 314 8% 26% Operating profit 345 317 9% Net interest expense (18) (11) (85)% Profit before tax 327 306 6% Taxation (64) (92) 31% Profit after tax 263 214 23% Dividends per share (declared) 20.79p 18.90p 10% Diluted Earnings Per Share 98.83 79.69 24%(1) All numbers are pre-amortisation of intangible assets arising from business combinations Note: Post amortisation and exceptional items: 2011 PBT £324m, PAT £260m, D-EPS 97.49p; 2010 PBT £304m, PAT £213m, D-EPS 78.98p 6
  7. 7. 2011 Results Bridge Revenue Trading Profit £m £m 2010 1,230 314 Currency translation impact (26) (9) 2010 pass-through fuel (74) (2) 2011 pass-through fuel 108 2 Underlying growth incl events 158 36 2011 1,396 341 Headline growth 14% 8% Constant Currency growth 16% 12% Underlying growth in constant currency incl events 14% 12% 2010 FIFA World Cup, Asian Games & VANOC £(87)m 2011 revenue from Asian Games and London Olympics £6m Underlying growth in constant currency excl events 22% 26%• All numbers are pre-amortisation of intangible assets arising from business combinations.• The underlying growth percentages include the currency impact of the major sporting events (revenue £2m, trading profit £1m) and pass-through fuel (revenue £3m, trading profit £nil ) 7
  8. 8. 2011 ResultsBalance Sheet 2011 2010 £m £m Intangible assets/goodwill 81 77 Tangible fixed assets 1,087 859 Working capital 150 117 Retirement benefit obligation (6) (3) Derivative financial instruments (14) (10) Provisions for taxes (52) (94) Net borrowings (365) (132) NET ASSETS 881 814 8
  9. 9. 2011 Results Financial Indicators 2011 2010 EBITDA £531m £475m Capital investment £418m £269m Net borrowings £365m £132m Interest cover – EBITDA basis 28.4 times 47.1 times Net debt to EBITDA 0.7 times 0.3 times Effective tax rate* 28.5% 30.0% Gearing 42% 16% Dividend Cover (declared basis) * 4.2 times 4.2 times Return on average capital employed ** 28.7% 33.3%* Before amortisation of intangible assets arising from business combinations and exceptional tax credits.** Before amortisation and excluding the net book value of intangible assets arising from business combinations (2010 restated on this basis). 9
  10. 10. 2011 ResultsCash Flow from Operating Activities (£m) 2011 2010 Operating profit* 345 317 Depreciation & amortisation* 186 158 Changes in working capital (38) (24) Other non-cash movements 16 17 Net cash inflow from operating activities 509 468* Before amortisation of intangible assets arising from business combinations 10
  11. 11. 2011 Results Cash Flow Statement (£m) 2011 2010 Net cash inflow from operating activities 509 468 Net interest paid (17) (10) Taxation paid (89) (69) Acquisitions (14) (15) Purchase of fixed assets (418) (269) Proceeds from disposal of fixed assets 13 8 Dividends paid (52) (40) Cash (outflow)/inflow in year (68) 73 Issue of shares 2 2 Purchase of own shares held under trust (10) (27) Return of capital to shareholders (148) - Exchange (8) (5) Movement in net debt in year (232) 43 11
  12. 12. Capital Structure • Return of 55 pence per share to shareholders completed in July 2011 – Year end net debt to EBITDA of 0.7 times • Intention to have Net Debt to EBITDA around 1 times longer-term – Similar to historic average – Gives business flexibility it requires • Priority continues to be organic growth & bolt on acquisitions – 2011 fleet capex of £392m – Two bolt on acquisitions completed in last 15 months – 19 new locations opened in 2011, including 4 acquired as part of NZ Generator acquisition. 12
  13. 13. 2011 ResultsOperating Review Rupert Soames Chief Executive 13
  14. 14. Another strong performance• Highlights • 26% underlying profit growth; £200 million paid out to owners; 55% increase in capital investment • Both business segments performed well; IPP revenues +25%, Local +21% underlying • Over 1,200MW order intake in International Power Projects • 570 MW of Gas on rent at year end across Group - +97% year-on-year • Strong performance in North America • Preparations for London 2012 proceeding well • Local business expansion in new markets delivering strong revenue growth • Recent acquisitions fully integrated and performing well • Good momentum going into 2012• Lowlights • Trading Margin and ROCE weaken in Local business (but still at attractive levels) • Conditions in some markets remain difficult: Dubai, Qatar, Spain, Ireland • Middle East profits impacted by a change in contract mix • Volatility in IPP debtors 14
  15. 15. Underlying vs Reported Growth 2011 2010 Revenues as reported 14% 20% Revenues underlying (1) (2) 22% 11% Trading Profit as reported 8% 23% Trading Profit underlying (1) (2) 26% 10%(1) Underlying adjustments in 2011 were the Vancouver Winter Olympics ,FIFA World Cup, the Asian Games, the London Olympics, pass-through fuel and currency.(2) Underlying adjustments in 2010 were the Vancouver Winter Olympics, FIFA World Cup, the Asian Games, 2009 53 rd week, pass-through fuel and currency.(3) All numbers are stated pre-amortisation of intangible assets (2011: £3m pre-tax, £2m post-tax; 2010 : £2m pre-tax, £1m post-tax) arising from business combinations. 15
  16. 16. Underlying* segmental performance REVENUE TRADING PROFIT 2011 2010 Underlying 2011 2010 Underlying £m £m % £m £m % Local Business 728 604 21% 120 104 15% Trading Margin: 16.6% 17.2% Rolling 12-month ROCE: 18.8% 20.6% Int’nl Power Projects 554 444 25% 215 161 33% excl pass-through fuel Trading Margin: 38.8% 36.5% Rolling 12-month ROCE: 39.8% 40.1% Total 1,282 1,048 22% 335 265 26% Trading Margin: 26.2% 25.4% Rolling 12-month ROCE: 28.3% 29.2%* Pre-amortisation and excluding the net book value of intangible assets arising from business combinations. Also excluding revenue, trading profit and operating assets from Vancouver Winter Olympics, FIFA World Cup, Asian Games, London Olympics, pass-through fuel and currency. 16
  17. 17. Revenue Mix (£m) REVENUE % OF REVENUE EXCL PASS-THROUGH FUEL 2011 2010 Underlying* 2011 2010 Change % pp Power 899 806 24% 70% 70% - Temperature Control 116 110 8% 9% 9% - Oil-Free Air 27 25 13% 2% 2% - Total Rental 1,042 941 22% 81% 81% - Service Revenue 246 215 27% 19% 19% - Revenue excl pass- 1,288 1,156 22% 100% 100% through fuel Pass-through fuel 108 74 N/A Total Revenue 1,396 1,230 22%* excluding revenue from Vancouver Winter Olympics, FIFA World Cup , Asian Games, London Olympics, pass – through fuel and currency. 17
  18. 18. Local Business – North America REVENUE TRADING PROFIT* 2011 2010 Underlying 2011 2010 Underlying $m $m Change $m $m Change % % Full year 415 380 18% 83 72 27% Trading Margin 20.0% 19.0% Second half 230 205 12% 55 48 14% Trading Margin 24.1% 23.9% • Strong underlying performance: Revenue up 18%; Trading profit up 27% • Strong base business growth across all areas; investment in oil & gas sector paying off • Power rates back to pre recession levels, and volumes higher • $135m 3 year investment in emissionised fleet to be completed this year • Strong start to 2012; expect growth across the year*before amortisation of intangible assets arising from business combinations; Note: Underlying excludes currency & VANOC 18
  19. 19. Local Business – Europe & Middle East REVENUE TRADING PROFIT* 2011 2010 Underlying 2011 2010 Underlying £m £m Change £m £m Change % % Full year 302 262 15% 42 42 (3)% Trading Margin 13.8% 16.0% Second half 170 137 21% 32 28 6% Trading Margin 18.8% 20.3% • Europe revenue +12%; Middle East revenue +20% • Unfavourable mix: Rental revenue +11%; Services (mainly low-margin fuel) +23% • Middle East margins impacted by contract mix from power to temperature control • Continuing to expand footprint; Turkey and Iraq newest additions. Strong growth in Russia. • London Olympics contract expected to be worth +£40m; 200 MW of power generation and 1,200 kilometres of cable across 44 sites*before amortisation of intangible assets arising from business combinations; Note: Underlying excludes currency & London 2012 Olympics 19
  20. 20. Local Business – Aggreko International REVENUE TRADING PROFIT* 2011 2010 Underlying 2011 2010 Underlying £m £m Change £m £m Change % % Full year 173 188 37% 31 56 29% Trading Margin 17.8% 29.8% Second half 95 103 44% 16 32 33% Trading Margin 17.1% 31.2% • Very strong growth in most areas: Australia +27%, India +80%, Mexico +27%, South Africa +98% • 16 new locations opened; including 4 acquired as part of NZ Generator acquisition • N.Z. Generator acquisition completed in March 2011 and performing well • Very strong start to 2012; we intend to continue to build service centre network with 20 new locations planned; believe we will continue to deliver strong grow in 2012*before amortisation of intangible assets arising from business combinations; Note: Underlying excludes currency, FIFA World Cup & Asian Games 20
  21. 21. International Power Projects Excluding pass-through fuel REVENUE TRADING PROFIT* 2011 2010 Underlying 2011 2010 Underlying $m $m Change $m $m Change % % Full year 888 712 25% 344 260 33% Trading Margin 38.8% 36.5% Second half 469 375 25% 207 143 45% Trading Margin 44.2% 38.2% • 36 new contracts / over 1,200 MW of new work in 20 countries; 500 MW Asia, 300 MW Africa & ME, 330 MW Latin America & 80 MW other. • Bad debt provision H1 created £14m, H2 released £11m; debtor days of 67, 18 day drop y-o-y • Order book 21% higher at 1/1/2012; 14 months of revenue at current run rates • Fleet size over 4,400 MW at 1/1/2012; over 800 MW gas • Military continues to decline, and expected to be materially lower in 2012 • Strong start to year; expect to deliver continued strong growth for the year as a whole*before amortisation of intangible assets arising from business combinations 21
  22. 22. Outlook • Strong start to the year; rate of growth has accelerated in first two months • Almost 300MW new contracts year to date in International Power Projects • Given strong start fleet capital expenditure in 2012 is likely to be £30m million higher than previous guidance at around £350m • Confident that the business will deliver good growth in the first half of 2012; more cautious about second half when any downturn in economic activity is more likely to be felt and comparatives will be tougher. • Overall, we continue to believe that we will deliver another year of good growth in 2012. 22
  23. 23. Q&A 23

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