Emeco : 1H22 Results Presentation

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Emeco Holdings Limited 1H22 Results

16 February 2022

1H22 FINANCIAL HIGHLIGHTS

Revenue Operating EBITDA1

only	$373m	$122m
+16% vs 2H21 $322m	+2% vs 2H21 $120m
+25% vs pcp $298m	+3% vs pcp $118m
Growth in all operating segments, particularlyPit	Solid result within guidance range ($120-125m)
N Portal (+48% vs 1H22 and +120% vs pcp)	notwithstanding tight labour market and weather
use	ROC2	Free cash flow
16%	$29m
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17% 2H21	$43m 2H21
19% pcp	$44m pcp
Strong returns above cost of capital
Reflects growth investment, particularly in Pit N	Continued strong cash generation
Portal
Notes:

Operating EBIT1

$59m

Flat vs 2H21 and pcp

Solid EBIT performance

Net leverage3

1.0x

0.9x 2H21

1.0x pcp

Strong balance sheet allowing for sustainable capital investment in our business and capital management

Operating NPAT1

$32m

+3% vs 2H21 $31m

+23% vs pcp $26m

Solid and high quality result reflecting full tax rate Statutory NPAT of $30m

Capital mgmt

$11.1m

35% of 1H22 operating NPAT

Capital management includes 1.25 cent fully franked dividend and an on-market share buyback

1.	Operating f inancial metrics are non-IFRS measures. Ref er to Statutory to Operating reconciliations in the Appendix
2.	Return on capital calculated as LTM Operating EBIT ov er av erage capital employ ed
3.	Net debt / Operating EBITDA

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1H22 ACHIEVEMENTS AND OUTLOOK

Solid performance with good momentum across all operating segments and exceptional revenue growth in Pit N Portal. Operating EBITDA of $122m in line with guidance, FY22 outlook of $250-260m

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• TRIFR of 1.8 at 31 December 2021, down 14% from 2.1 at 30 June 2021
• Group revenue growth of 16% vs 2H21, largely attributable to contract wins in Pit N Portal, growth in Rental notwithstanding weather events and tight labour markets, and increased activity in the Force Workshops
• Group operating EBITDA of $122m, within guidance range of $120-125m. Solid performance reflecting growth across all operating segments.

1H22	Momentum in Eastern Region impacted by weather late in 1H. Western Region growth achieved despite labour tightness impacting
utilisation. Pit N Portal earnings growth from new projects
Achieve-	- Strong free cash flows of $29m before growth capex and capital management. 93% cash conversion. $9m working capital investment to
ments	support Pit N Portal growth. $72m sustaining and $12m growth capex in line with guidance
	- Return on capital 16% comfortably above cost of capital. Temporary dilution attributable to increased capital in Pit N Portal with EBIT to
	improve as projects enter the production phase and Rental utilisation increases
	- Capital management package of $11.1 million (35% of 1H operating NPAT), including 1.25 cent fully franked dividend and initial ~1% on-market
	share buyback, with flexibility to increase buyback within the parameters of our 10/12 buyback program		Copper
	- Continued commodity diversification, with metals revenue now 68% of Group, up from 62% in 2H21 and 57% in 1H21	Civil & other
	3%	<1%
	- Operating EBITDA guidance of $250-$260m reflects strong performance predominantly from Rental, with		Nickel
	steady growth in Pit N Portal and Force Workshops		8%
	- Expect good growth in Rental revenue and earnings from increasing demand for equipment by customers	Thermal
	gaining confidence in the strength of commodity prices	coal		Gold
Outlook	13%
- Margin expansion in Pit N Portal will build as projects move to production phase, with modest margin and			41%
and	earnings growth in 2H22 and substantial growth expected in FY23	Iron ore
Guidance	- Force Workshop activity remains strong and will continue to build	16%
	Metallurgical
	- Monitoring and managing the impact of COVID-19 on absenteeism (NSW stabilising, remain cautious on QLD		Coal
		19%

and SA). The impact of an eventual WA border opening will require close monitoring

- Continued strong cash generation; FY22 net sustaining capex remains unchanged at $140-150m, including	3
$25-30m allocated for asset replacement

onlySafety and sustainability

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SAFETY

Emeco reduced its TRIFR by a further 14% since June to 1.8 and remains LTI free for 5 years running

Totalrecordable injury frequencyrate (TRIFR)		Overview
only	4								▪	Emeco continues to be lost-time injury (LTI) free, extending the LTI free period
										to almost 6 years
									▪	TRIFR of 1.8 as at 31 December 2021, a 14% reduction since June 2021 (2.1
	3									TRIFR) and well below the industry average
use								▪ Emeco's well established COVID-19 systems and processes have prioritised
									the safety of our workforce, continuation of our operations and security of
									supply throughout the many changing Government Guidelines
2								▪ Digitising our HSE systems has been effective to standardise and more
									efficiently and effectively track and communicate key indicators
								▪	Continued to target leading indicators to drive proactive risk management, with
ersonal	1									a focus on elimination, substitution and engineering controls
-
	Jul-20	Nov-20	Feb-21	Jun-21	Sep-21	Dec-21

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