Macmahon Holdings Limited · ASX:MAH
Macmahon — FY2023 Earnings Presentation
30 slides from Macmahon's earnings presentation, August 2023
Slide 1: Full Year Results FY23
Slide 2: FY23 Financial Highlights
FY23 Financial Highlights Record underlying operating earnings delivered Revenue Underlying EBITDA1 Underlying EBIT(A)1 (Record) (Record) FY24 Secured Revenue5 $1.9bn p 12% $308.7m p 6% $116.6m p 16% $1.6bn 15.7% margin 6.1% margin Underlying NPAT(A)1 Underlying operating cash flow2 Total Dividend F
Slide 3: Guidance Performance
Guidance Performance Achieved guidance for 6th consecutive year Revenue ($m) Underlying EBIT(A) ($m) 1,706 excl. BH7* Original Guidance 1,600–1,700 (Aug-22) Updated Original Guidance Guidance 1,850–1,950 105–125 (Feb-23) (Aug-22) Updated Guidance Updated Guidance Guidance Guidance Guidance Guidance
Slide 4: Expanding into Lower Capital Intensity Services
Expanding into Lower Capital Intensity Services Executing filtered tender pipeline to progress towards long term targets FY18 Revenue Mix FY23 Revenue Mix 7% 3% 9% TARGET 25% $710m $1.9b 66% 90% Revenue Mix Year End Tender Pipeline FY18 Pipeline 1% 29% 21% 35% $5.4bn $10.6bn EBIT(A) ROACE Margin 78%
Slide 5: Pathway to Target Underlying EBIT(A) Margin
Pathway to Target Underlying EBIT(A) Margin 8.1% Approaching 8%, or greater, 0.8% 7.2% EBIT(A) margin 6.8% 1.0% 6.4% ✓ Batu Hijau Phase 7 zero margin pass through costs removed on 5.4% commencement of Phase 8 (1 April 2023) ✓ Inflation moderating allowing rise and fall mechanisms to catch-up ✓ Unsea
Slide 6: FY23 Key Highlights
FY23 Key Highlights Execution of existing contracts while managing industry headwinds and securing highly filtered new work Mining Support Services Surface Mining Underground Corporate & Civil Infrastructure • Telfer performing well and record • FY23 revenue at 25% of group • Fimiston TSF project •
Slide 7: Key Projects
Key Projects Diversified client portfolio CLIENT END (UNLESS EST. MINE COST CLIENT PROJECT COMMODITY SINCE EXTENDED) END DATE1 CURVE1 Tropicana, WA Gold 2012 Life of mine 2031 Q2 Telfer, WA Gold 2016 Life of mine 2026 Q4 Byerwen, QLD Met Coal 2017 June 2025 2069 Q1 Batu Hijau, Indonesia Copper / Gol
Slide 8: Revenue Diversification
Revenue Diversification Continued improvement in business revenue mix Commodity Client Gold Anglogold Ashanti 4% Copper/Gold Calidus 6% 4% 19% Gold Met Coal 21% Newcrest Other Red 5 11% Silver Lake 3% St Barbara 4% Copper PT AMNT 4% 9% Gold 19% 56% PT Agincourt 4% Anglo America 9% Coal 14% Met Qmetc
Slide 9: Greenbushes Lithium Project
Greenbushes Lithium Project Contract win enhances commodity diversification Our newest Surface Mining Contract About Talison Lithium • Secured a 7+2 year contract which commenced on 1 July 2023 • Greenbushes is owned by Talison Lithium, a private company owned by • Scope consists of Load & Haul and
Slide 10: Safety & People
Safety & People Investing in our people and continued safety improvement Safety & Wellbeing Injury Frequency Rates & Workforce • TRIFR decreased from 4.8 in FY22 to 3.9 in FY23 8,368 • External review and strengthening of the Critical Risk Management Program 7,848 • Education and training in risk as
Slide 11: Sustainability
Sustainability Evolving commitment and enhancing contribution Baselining of our Sustainability FY23 GHG emissions Land rehabilitated Tyre Recycling Environment Environmental Framework developed, 56 hectares in Program (tonnes per CO2-e) Footprint roadmap and execution Australia 662 tonnes underway p
Slide 12: FY23 Results
| | MACMAHON FY23 Results
Slide 13: Financial Performance
Financial Performance Revenue ($m) Underlying EBIT(A) ($m) 1,906 117 1,698 101 92 96 1,380 1,351 75 1,103 710 42 1 FY18 FY19 FY20 FY21 FY22 FY23 FY18 FY19 FY20 FY21 FY22 FY23 Underlying EBITDA ($m) Underlying EBIT(A) Margin 309 7.1% 291 6.8% 6.6% 5.9% 6.1% 250 5.8% 239 181 119 EBITDA Margin 16.8% 16
Slide 14: Underlying Profit and Loss
Underlying Profit and Loss $ Millions 1H22 2H22 FY22 1H23 2H23 FY23 Change • Revenue increased by 12% Revenue 809.7 888.3 1698 987.2 919.0 1906.2 p 12% ‒ Ramp up of existing underground projects (Deflector, Boston Shaker), the inclusion of 12 months revenue for projects commenced in FY22 (King of Un
Slide 15: Capital Management
Capital Management Underlying EBITDA cash conversion and ROACE Underlying Operating Cash Flow ($m) Return on Average Capital (ROACE)2 108% 350 99% 110.0% 17.2% 16.5% 92% 93% 15.6% 14.5% 300 306 90.0% 13.9% 250 70% 269 270 70.0% 200 218 50.0% 150 30.0% 100 127 10.0% 50 -10.0% FY19 FY20 FY21 FY22 FY23
Slide 16: Cash Flow and Capex
Cash Flow and Capex Underlying Interest and Net Capex Free cash flow Operating Cash Tax $235.8m $34.7m Flow $306.0m $35.6m Operating Cash flow • Strong underlying operating cash flow of $306m delivered • EBITDA cash conversion of 99.1% • Free cash flow (after interest and tax) of $34.7m Capex • FY23
Slide 17: Balance Sheet
Balance Sheet Solid financial position $ Millions FY22 FY23 • Strong financial discipline during high growth phase Cash 198 218 Receivables 322 378 ‒ Net Debt / EBITDA of 0.65x is below internal threshold of <1.0x Inventories 90 92 ‒ Gearing at 24.9%, down from FY22 and from 29.9% at end of 1H23 is
Slide 18: Strategy and Outlook
Strategy and Outlook
Slide 19: Strategic Overview
Strategic Overview Building a sustainable diversified scalable business STRATEGIC THEMES 1. Improve margins 2. Invest in future relevance 3. Focused expansion in 4. Diversify through new 5. Assess corporate value and execution and competitive advantage current markets business growth drivers Consist
Slide 20: Order Book $5.1bn & Tender Pipeline $10.6bn
Order Book1 $5.1bn & Tender Pipeline $10.6bn Order book provides a high level of secured revenue $5.1bn Work in Hand Tender Pipeline Order Book Runoff ($m) Commentary • $1.6bn of FY24 revenue secured 1,560 1,400 • $5.1bn order book secured as at 30 1,300 29% 2023 and excludes short term civil 35% an
Slide 21: Capital Allocation Policy to Balance Growth and Shareholder Returns
Capital Allocation Policy to Balance Growth and Shareholder Returns Our Priorities ✓ Maintain resilient balance sheet, ensure appropriate liquidity and gearing ✓ Retain flexibility to fund organic growth and accretive acquisitions ✓ Increased cash return to shareholders and increased payout ratio ra
Slide 22: Priorities and Outlook
Priorities and Outlook FY24 PRIORITIES FY24 GUIDANCE1 • Optimise operations and continue to deliver for clients safely • Deliver earnings, margin growth and free cash flow from recent capital investments Revenue EBIT(A) • Accelerate ROACE growth and reduce capital employed by $1.7bn – $1.8bn4 $130m
Slide 23: Thank You
Thank You CONTACT Mick Finnegan CEO & MD mfinnegan@macmahon.com.au Ursula Lummis CFO ulummis@macmahon.com.au Donald James CCO djames1@macmahon.com.au www.macmahon.com.au 23
Slide 24: Appendix
| | MACMAHON Appendix
Slide 25: Corporate Overview
Corporate Overview Capital Structure Macmahon Share Price – 3 Years Share Price1 (ASX:MAH) $0.155 0.35 Fully paid ordinary shares (m) 2,155 Market Capitalisation1 $334.0m 0.30 Cash (30 June 23) $218.0m 0.25 Net Debt (30 June 23) $201.9m Enterprise Value $535.9m 0.20 Net Tangible Assets per share (30
Slide 26: Corporate Overview – Directors
Corporate Overview – Directors MICHAEL FINNEGAN DAVID GIBBS DENISE McCOMISH Managing Director Non-Executive Director Independent, Non-Executive Director and Chief Executive Officer EVA SKIRA BRUCE MUNRO HAMISH TYRWHITT Independent, Non-Executive Chair Independent, Non-Executive Director Independent,
Slide 27: Map of Operations
K Hills Telfer Tropican: Warrawoona Boston Shaker Daisy Milano Deflector Granny Smith Gwalia King of the Hills Leinster Nicolsons Batu Hijau 11) Martape Tujuh Bukit Hu’u Project and Civil Infrastructure (2 MACMAHON
Slide 28: Cash Flow
Cash Flow $ Millions FY22 FY23 1 Underlying EBITDA 291.4 308.7 Movement in receivables (77.8) (60.3) Movement in inventory (24.9) (2.3) Movement in payables and provisions 83.9 60.0 Cash payments for SaaS customisation costs (5.0) (2.9) Other (2.8) - Net Interest and tax (paid) / received (36.6) (35
Slide 29: Reconciliation of Non-IFRS Financial Information
Reconciliation of Non-IFRS Financial Information $ Millions FY22 FY23 Profit for the year (as reported) 27.4 57.7 Add back: • LTI share based payment expense 0.1 0.9 • corporate development costs and earn-out related to previous acquisitions 22.3 0.7 • Customer contracts amortisation (A) 7.2 5.1 • S
Slide 30: Important Notice and Disclaimer
Important Notice and Disclaimer Disclaimer as to forward looking statements The forward looking statements in this presentation reflect views Non-IFRS Financial Information held only as at the date of this presentation. This presentation contains forward looking statements, including This presentati