- Revenue: $313 million, up 21% from the previous year.
- Underlying EBITDA: $46.6 million, up 49% from the previous year.
- Statutory EBITDA: $47.7 million, up 135% from the previous year.
- Net Profit: $31 million, up 71% from the previous year.
- Operating Cash Flow: $36.6 million.
- Net Cash Position: $9.6 million, improved from a $14.1 million debt last year.
- Full Year Dividend: $0.012 per share.
- Order Book: $187 million, a multi-year record level.
- EPS Growth: Up 315% from $0.0122 per share to $0.051 per share.
- EBITDA Margin: Increased to around 15% in FY24.
- Return on Equity: 23%.
- Group Revenue: $330 million for FY24, a 21% increase compared to the previous year.
- Depreciation and Amortization Costs: Increased due to Austin 2.0 and additional facility for US expansion.
- Net Interest Expense: Decreased from reductions in the Mainetec acquisition term loan.
- Tax Expense: Reflects a tax payable position in the US, Indonesia, and Chile, with a tax credit of $3 million from Australia's carryforward tax losses.
- Revenue by Region: North America up 27%, South America up 26%, Asia Pacific up 17%.
- Profit Margin by Region: Chile 27%, Asia Pacific 11%, US 18%.
- Working Capital: Improved by $13 million from $47 million to $34 million.
- Free Cash Flow: $31 million after accounting for $9 million in interest and tax expenses and $5 million in capital expenditure.
- Net Debt Position: Net cash position of $9.6 million with net debt to capital ratio improving to a positive 8%.
- Order Book Growth: Compound annual growth rate of 44% over the past three years.
- Full Year Guidance: Revenue up 12% to $350 million, underlying EBIT of $50 million, up 30% from FY24.
Release Date: August 26, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Record revenue of $313 million, up 21% from the previous year.
- Underlying EBITDA increased by 49% to $46.6 million.
- Net cash position improved to $9.6 million from a $14.1 million debt last year.
- Order book reached a multi-year high of $187 million, indicating strong future demand.
- EPS growth of 315%, from $0.0122 per share to $0.051 per share.
Negative Points
- Increased depreciation and amortization costs due to expansion efforts.
- Tax expenses have risen, reflecting payable positions in multiple regions.
- Challenges in the US market due to tariffs and tariff protection.
- Potential headwinds in logistics and commodity prices.
- Continued need for significant investment in manufacturing and operational efficiencies.
Q & A Highlights
Q: Revenue guidance of $350 million with a current order book of $187 million. How much visibility do you have on the order book, and what's the likely first half-second half split in revenue this year?
A: Typically, we have an order book around six months of production ahead. Historically, our second half order book is equal to or slightly higher than the first half. We expect a modest outlook on revenue, with stronger revenue in the second half due to buying patterns of major customers in North America and Australia.
Q: Where are you in terms of capacity utilization in your three major regions?
A: Capacity utilization is very good across the group. Our focus has shifted to improving current capacity rather than expanding new units. In the US, we are repairing current facilities and expanding rented facilities. In Chile, we are investing $1-2 million to expand capacity. Australia and Indonesia have the necessary capacity for the order book.
Q: What is driving the uplift in margins to the 14% level implied in the FY25 guidance?
A: Improved efficiency in delivering products, manufacturing excellence, and the influence of AustBuy are key drivers. We have become more effective at delivering products, which helps increase operating margins. We believe the group can achieve an EBITDA margin in the range of 18% to 20%.
Q: Will AustBuy cause lumpiness in working capital?
A: There will be some growth in working capital as the business grows, but we expect it to remain tight relative to revenue growth. AustBuy has improved demand planning and forecasting, aligning deliveries and payments more effectively. We do not expect significant lumpiness in inventory.
Q: What is the expected tax rate for the coming year?
A: The tax expense will increase to the 20% to 25% range. However, from a cash flow perspective, we will continue to utilize tax losses in Australia, minimizing the cash impact.
Q: What are the major objectives for FY25?
A: Strengthening the order book, driving manufacturing systems and capacity, expanding AustBuy's influence, and building out leadership teams. We are also focusing on a significant new order from a major worldwide OEM, which could become our largest single customer order base.
Q: How do you see the macro environment affecting your business in FY25?
A: Despite some headwinds like logistics and commodity prices, the macro environment remains strong, especially from the perspective of large OEMs like Caterpillar and Komatsu. We have a strong view on the future and are excited about FY25.
Q: What is the impact of the new ERP system on your operations?
A: The new ERP system, which went live in Australia, has replaced five legacy systems with a single integrated system. This will be rolled out to the US and Chile, improving operational efficiency and effectiveness.
Q: How is the performance of different regions contributing to overall growth?
A: North America revenue grew by 27%, South America by 26%, and Asia Pacific by 17%. Key contributors include the turnaround of Perth, increased production in Indonesia, and growth in the US and Chile. The integration of AustBuy has also significantly reduced costs.
Q: What are the key factors behind the strong cash flow performance?
A: Strong revenue and profit growth, cost reduction initiatives, and working capital improvements have driven cash flow performance. We achieved a profit-to-cash conversion of 94%, allowing us to invest in plant and equipment, reduce debt, and increase dividends.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
