FY21 Annual General Meeting Presentation
ASX: ABC ASX: GNG GR Engineering Services Limited Annual General Meeting Presentation 24 November 2021 Providing global mineral processing solutions FY21 Results ? GR Engineering reported record FY21 revenue of $392.4 million and EBITDA of $37.2 million. ? GR Engineering achieved revenue growth of 76% during FY21 as a result of strong contracting activity and solid operational performance in a challenging market environment. ? Cash generation was excellent and represented a high EBITDA conversion. During FY21, cash at bank increased by 84% to $69.0 million. ? GR Engineering’s strong order book and anticipated continued strong cashflow generation leaves it well placed to continue to deliver returns to its shareholders. ? The strategic acquisition of Mipac during FY21, provides GR Engineering with an opportunity to offer advanced standalone controls systems engineering, automation and technology solutions to its clients . ? The Total Reportable Injury Frequency Rate for FY21 was 9.51 . ? A final dividend of 7.0 cents per share (fully franked) was declared, resulting in total FY21 dividends of 12.0 cents per share (fully franked ). GR Engineering Services (ASX:GNG) 2 FY21 Results Summary GR Engineering Services (ASX:GNG) 3 Earnings Balance Sheet & Cash Flow Revenue EBITDA PBT Cash Net Operating Cash Flow Total Dividend *Underlying FY20 EBITDA excludes one - off bad debt expenses, miscellaneous inventory and debtor write - offs and Hanlon acquisition costs FY21 392.4 FY20 222.4 $0m $100m $200m $300m $400m FY21 37.2 FY20 11.3 $0m $10m $20m $30m $40m FY21 33.7 FY20 - 9.7 -$10m $0m $10m $20m $30m $40m FY21 69.0 FY20 37.5 $0m $20m $40m $60m $80m FY21 49.5 FY20 11.2 $0m $10m $20m $30m $40m $50m FY21 12.0 FY20 6.0 0cps 6cps 12cps Underlying EBITDA * Fully franked Unfranked Balance Sheet & Cashflows ? Strong balance sheet maintained at 30 June 2021 and this has continued into the first quarter of FY22. ? Cash: $69.0 million (30 June 2020: $37.5 million). ? High EBITDA to cash conversion - net operating cashflows: $49.5 million (30 June 2020: $11.2 million). ? The combined bank guarantee and bonding facilities total $155 million. There is significant headroom on these facilities. GR Engineering Services (ASX:GNG) 4 Mineral Processing ? GR Engineering’s design and construction order book of current work includes: GR Engineering Services (ASX:GNG) 5 Company Project Type ($’m) Northern Star Resources Limited Thunderbox 6 Mtpa Expansion Project EPC 101.0 Abra Mining Pty Ltd Abra Base Metals Project and Paste Plant EPC 89.5 Calidus Resources Limited Warrawoona Gold Project EPC 75.0 Aurenne Alt Resources Pty Ltd Mt Ida Gold Project EPC 73.0 RUC Cementation Mining Contractors Pty Ltd Newmont Tanami Gold Mine Rates 68.0 Pantoro Limited Norseman Gold Project EPC 59.5 Western Areas Limited Cosmos Nickel Operations EPC 48.0 Bluestone Mines Tasmania JV Renison Tin Operations EPC 31.7 Wiluna Mining Corporation Wiluna Gold Operation Project EPC 25.7 Mineral Processing ? GR Engineering’s pipeline of near term work opportunities includes, but is not limited to, the following projects: - Kimberley Sands JV – Thunderbird Mineral Sands Project - OZ Minerals Limited – West Musgrave Project - Geopacific Resources Limited – Woodlark Gold Project - Bellevue Gold Limited – Bellevue Gold Project - EcoGraf (Australia) Limited - WA Battery Graphite Manufacturing Facility - Australian Potash Limited – Lake Wells Project ? At 30 June 2021, GR Engineering was engaged on 30 studies across a broad range of commodities for projects in Australia, the Americas (including Hanlon Engineering) and abroad. ? One of GR Engineering’s core values is its ongoing commitment to innovation and quality. GR Engineering continues to provide innovative solutions to its clients including, but not limited to: - Vertical Roller Mills - Innovative designs in industries supporting the transition to clean energy such as the downstream battery graphite sector - Technology solutions involving process control systems GR Engineering Services (ASX:GNG) 6 Oil, Gas, Energy & Water - Upstream PS ? GR Engineering’s wholly owned subsidiary, Upstream PS, generates longer term operations and maintenance services revenue alongside project based design and construction work . ? During FY21, revenue contributions were primarily from: - Working with the Australian Government to maintain the Northern Endeavour FPSO (FPSO) in a non - producing state. Upstream PS continues to provide the Australian Government with operations, maintenance and project services in preparation for the disconnection and removal of the FPSO; - Wellsite and plant maintenance work (Santos and Origin) in the Bowen and Surat Basins. Upstream PS recently expanded its service offering to Santos Limited in the Surat Basin; - Upstream PS has recently executed a Master Services Agreement with Senex Energy to provide operations , maintenance and safety critical device certification; - Timor Sea operations and maintenance services (ENI), including through its Darwin base of operations; - Maintenance work on assets in the Perth Basin; - Supporting onshore clients in Victoria and South Australia with respect to carbon sequestration, operations and maintenance services. GR Engineering Services (ASX:GNG) 7 Process Controls Systems - Mipac ? In May 2021, GR Engineering successfully acquired the Mipac business, a leading global provider of controls systems engineering, automation and technology services. ? Mipac enhances GR Engineering’s control systems design capabilities and expands its service offering from its broader mineral processing design and construction business. ? Mipac has a proven business model and long term relationships with tier 1 and other clients requiring continuous control systems solutions for complex, business critical operations, primarily in the mineral, processing, energy and water industries. ? The post acquisition integration with GR Engineering has been seamless and Mipac’s management team have all remained in their roles post transaction. ? Earlier this month, Mipac was awarded a key contract with MESCO Inc., a listed Japanese conglomerate, to complete Stage 2 work on the Kyshtym Copper Electrolytic Plant. As part of the work, Mipac will supply in - house developed specialised monitoring technology and software solutions. GR Engineering Services (ASX:GNG) 8 Environmental Social Governance ? At GR Engineering we: - Favour local suppliers and supply chain ethics that are supported by our standards - Support engineering students with Curtin University scholarships - Support our communities via programs including Ronald McDonald House and Starlight Children’s Foundation - Provide Indigenous employment and training during the project construction phase to ensure local talent during the operational phase - P romote and encourage diversity in our workforce and operations - Maintain a proactive assessment towards potential environmental impacts GR Engineering Services (ASX:GNG) 9 FY22 Outlook ? GR Engineering continues to build its contracted and near term prospective pipeline of work across a diverse commodity base and also increase its revenue and earnings visibility for FY22 and future years. ? The consolidated entity has had a solid first quarter to 30 September 2021 and expects revenue for FY22 to be in the range of $540 million to $560 million, based on revised revenue guidance provided on 1 November 2021. ? GR Engineering’s strong balance sheet means that it is well capitalised to deliver its pipeline of work. GR Engineering Services (ASX:GNG) 10 Selected Clients GR Engineering Services (ASX:GNG) 11 GR Engineering Upstream Production Solutions Mipac Corporate Profile GR Engineering Services (ASX:GNG) 12 Capital Structure Directors & Management Phillip Lockyer Non - Executive Chairman Geoff Jones Managing Director Tony Patrizi Executive Director Peter Hood Non - Executive Director Joe Totaro Omesh Motiwalla Non - Executive Director Chief Financial Officer Share Price History Shares on issue m 161.2 Share price (GNG.ASX) (19 Nov 2021) $ 2.01 Market Capitalisation $m 324.1 Cash (30 June 2021) $m 69.0 Debt (30 June 2021) (excluding lease liabilities) $m 2.4 Enterprise Value $m 257.5 60% 22% 18% Directors, Founders & Senior Management Institutions Other Register Analysis 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 0.00 0.50 1.00 1.50 2.00 2.50 Share Price Volume Contact Details Geoff Jones Managing Director ? +61 8 6272 6000 ? email@example.com Omesh Motiwalla CFO & Company Secretary ? +61 8 6272 6000 ? firstname.lastname@example.org GR Engineering Services (ASX:GNG) 13 GR Engineering 71 Daly Street Ascot WA 6104 ? PO Box 258 Belmont WA 6984 ? +61 8 6272 6000 Building 3, Level 3, Kings Row Office Park 42 McDougall Street Milton QLD 4064 ? +61 7 3838 8000 Upstream PS Level 16, 350 Queen Street Melbourne VIC 3000 ? +61 8 6109 4000 Level 10, 345 Queen Street Brisbane QLD 4000 ? +61 7 3239 5800 Level 11, 99 St Georges Terrace Perth WA 6000 ? +61 8 6109 4000 29 Dawson Street East Arm NT 0822 ? +61 8 7979 2340 Mipac Level 4, East Tower 410 Ann Street Brisbane QLD 4000 ? +61 7 3212 5600 Hanlon Engineering 2502 N Huachuca Dr, Tucson Arizona USA 85745 ? +1 520 326 0062 Disclaimer GR Engineering Services (ASX:GNG) 14 RELIANCE ON THIRD PARTY INFORMATION This p resentation may contain Information that has been derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy , completeness or reliability of the information . No responsibility, warranty or liability is accepted by GR Engineering Services Limited ( Company ) , its officers, employees, agents or contractors for any errors, misstatements in or omissions from this presentation. PRESENTATION IS A SUMMARY ONLY This presentation is information in a summary form only and does not purport to be complete. It should be read in conjunction with the financial report for the year ended 30 June 2021 . Any information or opinions expressed in this presentation are subject to change without notice and the Company is not under any obligation to update or keep current the information contained within this presentation. NOT INVESTMENT ADVICE This presentation is not intended and should not be considered to be the giving of investment advice by the Company or any of its shareholders, Directors , officers, agents, employees or advisers. The information provided in this presentation has been prepared without taking into account the recipient’s investment objectives, financial circumstances or particular needs. Each party to whom this presentation is made available must make its own independent assessment of the Company after making such investigations and taking such advice as may be deemed necessary. NO OFFER OF SECURITIES Nothing in this presentation should be construed as either an offer to sell or a solicitation of an offer to buy or sell Company securities in any jurisdiction. FORWARD LOOKING STATEMENTS This presentation may include forward - looking statements. Although the Company believes the expectations expressed in such forward - looking statements are based on reasonable assumptions, these statements are not guarantees or predictions of future performance, and involve both known and unknown risks, uncertainties and other factors, many of which are beyond the Company’s control. As a result, actual results or developments may differ materially from those expressed in the statements contained in this presentation. Investors are cautioned that statements contained in this presentation are not guarantees or projections of future performance and actual results or developments may differ materially from those projected in forward - looking statements. NO LIABILITY To the maximum extent permitted by law, neither the Company nor its related bodies corporate, Directors , employees or agents, nor any other person, accepts any liability, including without limitation any liability arising from fault or negligence, for any direct, indirect or consequential loss arising from the use of this presentation or its contents or otherwise arising in connection with it. DISCLOSURE OF NON - IFRS FINANCIAL INFORMATION Throughout this presentation, there are occasions where financial information is presented not in accordance with accounting standards. There are a number of reasons why the Company has chosen to do this including to maintain a consistency of disclosure across reporting periods ROUNDING Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided.
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