Downer Edi Limited · ASX:DOW
Downer Edi — Investor Day (April 2023)
40 slides from Downer Edi's investor day presentation, Apr 27, 2023
Slide 1: ASX cover letter: Downer 2023 Investor Day
Downer EDI Limited ABN 97 003 872 848 Triniti 3, Triniti Business Campus 39 Delhi Road North Ryde NSW 2113 1800 DOWNER www.downergroup.com For personal use only 27 April 2023 Company Announcements Office ASX Limited Exchange Centre Level 4, 20 Bridge Street SYDNEY NSW 2000 Dear Sir/Madam RE: Downer
Slide 2: Downer Investor Day
27 April 2023 Downer Investor Day
Slide 3: Agenda
Agenda For personal use only Murray Robertson Stephen Kakavas Jim Kafanelis Transport Transport – RTS Utilities Jacob Bonisch Pat Burke Facilities Facilities – I&E Peter Peter Tompkins Tompkins (CEO) Presentation and Q&A with the heads of Downer’s Business Units (CEO) Lunch Introduction and Trading
Slide 4: Purpose, promise, pillars
Purpose, promise, pillars For personal use only Our purpose is Enabling communities to thrive. Our promise: Our pillars: Our customers' success is our success. Downer Investor Day 2023 | 3
Slide 5: Strategies to realise value for shareholders
Strategies to realise value for shareholders For personal use only We have announced our plan and communicated key targets Targeting >4.5% Reset EBITA margin operating model Continue to Operational (in FY25) and cost base – simplify current excellence and Targeting portfolio risk management As annou
Slide 6: Focusing on actions that drive improved performance
Focusing on actions that drive improved performance For personal use only Our recent performance does not reflect the quality of our business. The Board and Management are united on the need for change and we are focusing on actions that will drive improved performance Current focus of the business
Slide 7: Reset operating model and cost base: transformation program update
Reset operating model and cost base Transformation program update For personal use only The new operating model: simplification, efficiency, accountability Transformation phases Rapid reset Implement and simplify Full growth potential Update – rapid reset ▪ Completed culture survey (top 500 leaders)
Slide 8: Reset operating model and cost base: transformation program
Reset operating model and cost base Transformation program For personal use only We have a clear line of sight on our cost out initiatives Other initiatives Improve & automate ▪ Revised IT systems Operating model & ▪ Automation of key roadmap functional optimisation processes and scaling ▪ Property
Slide 9: Continue to simplify current portfolio: core portfolio
Continue to simplify current portfolio Core portfolio provides strong foundation for future growth For personal use only Core portfolio of outstanding assets ▪ Downer’s core Transport, Utilities and Facilities businesses are diversified across capabilities, markets and geography, and are underpinned
Slide 10: Portfolio assessment and refinement ongoing
Continue to simplify current portfolio Portfolio assessment and refinement ongoing For personal use only Portfolio initiatives to simplify, lower risk and maximise shareholder value Completed Announced Ongoing simplification Capital intensity Transport Cyclicality ▪ Portfolio simplification ongoing
Slide 11: Disciplined approach to risk management
Operational excellence and risk management Disciplined approach to risk management For personal use only Prioritising risk management – adherence to policy and strengthening the control environment Risk management framework Tendering and execution Three Lines of Defence ▪ The Downer Standard (TDS) i
Slide 12: Focus on performance
Operational excellence and risk management Focus on performance For personal use only We have made changes to enhance risk management and improve performance Job selection Goal of implemented changes More selective about Increased focus on what we bid – more commercial terms Ensuring we price for th
Slide 13: Key takeaways
Key takeaways For personal use only We are making progress on our strategies to realise value for shareholders focusing on a rapid reset Reset of the operating model will drive efficiency, accountability and long-term value creation Reset operating model and Plans completed and ready to execute agai
Slide 14: Business Unit updates
Business Unit updates For personal use only Focus areas Utilities Our team will share with Jim Kafanelis Performance you the path forward for Power & Gas their Business Units Telecommunications Water Transport Facilities Risk management Jacob Bonisch Murray Robertson Defence Roads & Projects Health
Slide 15: Transport
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Slide 16: Market leading trans-Tasman franchise in Transport
Market leading trans-Tasman franchise in Transport For personal use only We create thriving communities. Committed to fulfilling our organisational purpose across Australia and New Zealand. Foundational strengths supporting opportunities Leader in the bitumen and 1 Significant demand in asphalt mark
Slide 17: Optimising our integrated ANZ Transport business
Optimising our integrated ANZ Transport business For personal use only Performance ▪ Enable a culture of high performance – customer, operations, risk management and people ▪ Improved proactive resource allocation in response to market opportunities and external factors (labour and mobile equipment
Slide 18: Leading airport pavements provider
Case study Leading airport pavements provider For personal use only Integrated airport services ▪ Strong forward pipeline post-COVID ▪ Clear competitive advantage, cost base efficiencies and growth potential through trans-Tasman operating model across airport capabilities ▪ Selective projects, align
Slide 19: New Zealand East Coast Infrastructure Recovery
Case study New Zealand East Coast Infrastructure Recovery For personal use only Cyclone Gabrielle recovery ▪ Downer invited to participate as a critical recovery and rebuild partner to Government, recently formalised through an Interim Alliance Agreement ▪ Building on local and national relationship
Slide 20: Transport – Rail & Transit
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Slide 21: Australia's #1 rollingstock service provider
Australia’s #1 rollingstock service provider For personal use only Foundational strengths supporting opportunities Opportunities across the rollingstock 1 design, manufacturing and through life Unique breadth of support capabilities capabilities NSW Tangara V/Line fleet TLS fleet replacement Respon
Slide 22: Focused on maintaining highest delivery standards
Focused on maintaining highest delivery standards For personal use only Performance ▪ Asset and fleet performance ▪ Project/contract performance ▪ People performance – development of a diverse, engaged and empowered workforce to support growth Risk ▪ Focus on commercial, technical, project and inter
Slide 23: Queensland Train Manufacturing Program (QTMP)
Queensland Train Manufacturing Program (QTMP) For personal use only ▪ Preferred applicant on Queensland Train Manufacturing Program (QTMP) – announced 6 February 2023. Target contract close and mobilisation in Q4 FY23 ▪ Largest investment in new rollingstock in Queensland history ▪ Downer will deliv
Slide 24: Bi-mode and tri-mode technologies
Case study Bi-mode and tri-mode technologies For personal use only Long-standing reputation within the rail industry ▪ Downer is proud to have designed and manufactured solutions for the rail sector for more than 100 years, including both locomotives and wagons ▪ With the commitment to reduce emissi
Slide 25: RTS digital capability
Case study RTS digital capability For personal use only Long-standing reputation within the rail industry ▪ Over the past 10 years Downer has begun to harness its asset management capability to now offer customers a best-in-class digital-based offering ▪ TrainDNAis an industry standard asset managem
Slide 26: Utilities
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Slide 27: Diversified Utilities services provider across ANZ
Diversified Utilities services provider across ANZ For personal use only Foundational strengths supporting opportunities ▪ Accelerated investment in Significant design capability and experience renewable energy through the Power & Gas energy transition ▪ Large growth in transmission, ANZ’s largest p
Slide 28: Optimising our integrated ANZ business
Optimising our integrated ANZ business For personal use only ▪ Focused on a business-wide performance enhancement program reducing variability in delivery outcomes and Performance leveraging operational opportunity to create margin growth ▪ Utilising the best technical, workforce and asset managemen
Slide 29: Renegotiation of the power maintenance contract
Case study Renegotiation of the power maintenance contract For personal use only Downer is viewed as a long-term strategic partner by the customer Project scope ▪ Operation and maintenance of Victoria’s electrical distribution network (>43,000km of distribution assets, servicing ~700,000 customers)
Slide 30: Powerlink Queensland
Case study Powerlink Queensland For personal use only Downer’s capability and long-standing relationship means we are critical to the customer’s future plans Customer scope ▪ Construction and maintenance of high voltage transmission lines ▪ Design and construction of substations ▪ Downer has perform
Slide 31: Facilities
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Slide 32: Unparalleled Facilities Management positions
Unparalleled Facilities Management positions For personal use only Foundational strengths supporting opportunities 1 The Commonwealth is committed to a period of Largest sovereign, significant repositioning of Australia’s Defence multidisciplinary Defence posture – this is accompanied by a transform
Slide 33: Optimising our integrated ANZ business
Optimising our integrated ANZ business For personal use only ▪ One trans-Tasman business with common platforms and simplified support structures will enable us to leverage technology that automates labour intensive tasks, pool and share resources and get the best IP from our business Performance to
Slide 34: Riverina Redevelopment Program
Case study Riverina Redevelopment Program For personal use only Innovation to accelerate delivery and reduce cost Unique opportunity to transform and sustain the capabilities of RAAF Base Wagga, Albury Wodonga Military Area and Blamey Barracks Kapooka. ▪ Selected to oversee the upgrade of facilities
Slide 35: Industrial & Energy: Carbon capture
Industrial & Energy For personal use only Case study: Carbon capture Foundational strengths supporting opportunities Santos Moomba Plant ▪ Target cost estimate model Trusted partner to 1 Uniquely positioned to take ▪ ECI, construction and commissioning some of Australia’s most advantage of the energ
Slide 36: Trading update key messages
‘Trading update key messages
Slide 37: ICAC inquiry update
ICAC inquiry update For personal use only Key facts What we have done about it ▪ On 2 March 2023, the ICAC announced a public inquiry into the ▪ Downer has at all times conduct of employees of Inner West Council, Transport for NSW, and cooperated closely with the others (including Downer) ICAC’s inv
Slide 38: Trading update
Trading update For personal use only ▪ 27 February 2023 guidance statement “Downer now expects underlying FY23 NPATA to be between $170 million – $190 million assuming no further material COVID-19, weather, labour shortages or other disruptions, and excluding restructuring costs” ▪ Trading condition
Slide 39: Timeline and what to expect from here
Timeline and what to expect from here For personal use only 22 February 2023 1 July 2023 Transport Projects New operating model 20 February 2023 divestment Targeting the new operating model Trans-Tasman integration to be effective at the beginning of Announced the merged Australian FY24 and New Zeal
Slide 40: Reflections and the path forward
Reflections and the path forward For personal use only ▪ The past ~4 months have been a particularly challenging Downer is undergoing a period of period for the company significant organisational change. ▪ The Board and the Management Team are united in the need This multi-year transformation journe