Macmahon Holdings Limited · ASX:MAH
Macmahon — Investor Presentation (December 2012)
35 slides from Macmahon's investor presentation, Dec 12, 2012
Slide 1: New Strategy & Equity Raising Investor Presentation
For personal use only New Strategy & Equity Raising Investor I t Presentation P t ti 12 December 2012 Not for release or distribution in the United States
Slide 2: Important notices and disclaimer
fãéçêí~åí=åçíáÅÉë=~åÇ=ÇáëÅä~áãÉê For personal use only Disclaimer: This presentation has been prepared by Macmahon Holdings Limited (ABN 93 007 634 406) (Macmahon). No party other than Macmahon has authorised or caused the issue of this presentation, or takes responsibility for, or makes any stateme
Slide 3: Important notices and disclaimer
fãéçêí~åí=åçíáÅÉë=~åÇ=ÇáëÅä~áãÉê For personal use only Not investment advice: The information provided in this presentation does not constitute investment or financial product advice (nor tax, accounting or legal advice) or any recommendation to acquire New Shares. It is not intended to be relied up
Slide 4: Overview
lîÉêîáÉï For personal use only Macmahon’s future growth strategy will be to leverage its current strong platform as a l di international leading i t ti l provider id off contract t t mining i i services i Mining – the core focus of Macmahon going forward • Strong and profitable historical performanc
Slide 5: New Strategy
For personal use only kÉï=píê~íÉÖó 4
Slide 6: Mining – the future business model
jáåáåÖ=Ó íÜÉ=ÑìíìêÉ=ÄìëáåÉëë=ãçÇÉä For personal use only Macmahon’s future business model will focus exclusively on its Mining Business and th pursuit the it off low l capital it l intensity i t it mining i i service i opportunities t iti The Old Macmahon Surface Underground International Constructi
Slide 7: The Mining Business continues to perform well and will form the core of strategy
jáåáåÖ=Ó íÜÉ=ÑìíìêÉ=ÄìëáåÉëë=ãçÇÉä For personal use only The Mining Business continues to perform well and will form the core of Macmahon’s strategy t t going i forward f d 9 End-to-end mining service model 9 Long-term relationships with blue-chip clients p 9 Diverse international footprint 9 Divers
Slide 8: Mining – trusted contractor to blue-chip clients
jáåáåÖ=Ó íêìëíÉÇ=Åçåíê~Åíçê=íç=ÄäìÉJÅÜáé=ÅäáÉåíë For personal use only An enviable blue-chip blue chip client base and a strong track record of successful project delivery Core platform for growth Key projects and clients • Significant mining order book ($1,947m at Oct 2012)1 Start End Project Commo
Slide 9: Mining – preferred contractor for Christmas Creek
jáåáåÖ=Ó éêÉÑÉêêÉÇ=Åçåíê~Åíçê=Ñçê=`Üêáëíã~ë=`êÉÉâ For personal use only U d t on status Update t t off M Macmahon’s h ’ role l att Fortescue’s F t ’ Christmas Ch i t Creek C k project j t Project Highlights Contract Status and Commencement of Works 9 At $1.8b would represent the largest ever • Forma
Slide 10: Mining – long-term client relationships
jáåáåÖ=Ó äçåÖJíÉêã=ÅäáÉåí=êÉä~íáçåëÜáéë For personal use only Macmahon has a track record of successful mining project delivery over 20+ years Ewekoro Quarry (Lafarge, Nigeria) Jimblebar (BHP, WA) Leinster Nickel (BHP, WA) Lhoknga (Lafarge, Indonesia) Tavan Tolgoi (Erdenes, Mongolia) Camebyy Downs (
Slide 11: Mining – history of project wins
jáåáåÖ=Ó Üáëíçêó=çÑ=éêçàÉÅí=ïáåë For personal use only The Mining Business has a strong track record of project wins, project delivery and contract t t renewall 1 (1) Christmas Creek project is subject to final contract award (Macmahon awarded preferred contractor status) 10
Slide 12: Mining – strong historical and forecast performance
jáåáåÖ=Ó ëíêçåÖ=ÜáëíçêáÅ~ä=~åÇ=ÑçêÉÅ~ëí=éÉêÑçêã~åÅÉ For personal use only A strong and profitable business historically. Future revenue underpinned by a significant i ifi t order d book b k off secured d and d expected t d work k 1,600 9% 8.2% 7.6% 1 1,400+ 1,400 7.5% 8% 7 5% 7.5% 1,200 7% 1,200 7.5
Slide 13: Mining – strength through diversity
jáåáåÖ=Ó ëíêÉåÖíÜ=íÜêçìÖÜ=ÇáîÉêëáíó For personal use only Mining order book1 will be well diversified by capability capability, geography and commodity Mining order book by capability Mining order book by location Mining order book by commodity Other Engineering 1% 1% NSW Other 2 Copper Internationa
Slide 14: Mining – limited reliance on new work
jáåáåÖ=Ó äáãáíÉÇ=êÉäá~åÅÉ=çå=åÉï=ïçêâ For personal use only Strong forward revenue visibility with mining order book at $1.9bn. FY13 revenue substantially b t ti ll securedd or preferred f d contractor t t status t t Total: 4,151 Total: 784 4,500 404 105 4,000 176 Impact of award of Total: 989 contr
Slide 15: Mining – Mongolia update
jáåáåÖ=Ó jçåÖçäá~=ìéÇ~íÉ For personal use only U d t on Tavan Update T T l i coall contract Tolgoi t t for f Erdenes Ed T Tavan T l i (ETT) iin M Tolgoi Mongolia li Contract Highlights Current Status 9 Macmahon currently has a 100% interest • As production is ramped up strategy is to debt 9 Contract
Slide 16: Construction exit
`çåëíêìÅíáçå=Éñáí For personal use only Decision made to exit Construction following an operational and strategic review The Old Macmahon Surface Underground International Construction1 Mining Mining Mining Exit of Construction The New Macmahon Low capital Underground International intensity Surface
Slide 17: Construction exit – review outcomes
`çåëíêìÅíáçå=Éñáí For personal use only A strategic and operational review of Construction was undertaken at the direction of new CEO Ross R Carroll C ll and d the th Board B d Strategic Outcomes Operational Outcomes Following consideration of a number of • Independent review group established to re
Slide 18: Construction exit – Leighton MoU
`çåëíêìÅíáçå=Éñáí=Ó iÉáÖÜíçå=jçr For personal use only MoU signed with Leighton for the transfer of the majority of current Construction projects to reduce risk and refocus capital and resources on new Mining Business model MoU signed with Leighton • Projects and assets to be sold: – All JVs with Le
Slide 19: The new Macmahon
qÜÉ=åÉï=j~Åã~Üçå For personal use only Macmahon will be repositioned as a leading ASX listed contract mining business which h a reduced has d d risk i k profile, fil secured d growthth and d will ill deliver d li more consistent i t t earnings i • Strong and profitable historical performance Grow co
Slide 20: Earnings guidance
b~êåáåÖë=ÖìáÇ~åÅÉ For personal use only FY13 to be affected by historical Construction issues. Christmas Creek is expected to b a positive be iti contributor t ib t tto b both th FY13 and d FY14 andd reaffirms ffi the th strength t th off Mining Mi i Current outlook FY13 ($m) 1H13 2H13 FY13 • Furthe
Slide 21: Equity Offer
For personal use only bèìáíó=lÑÑÉê 20
Slide 22: Background to Offer
_~ÅâÖêçìåÇ=íç=lÑÑÉê For personal use only The Offer addresses the capital requirements for Macmahon’s growing Mining Business and strengthens the balance sheet h t following f ll i majorj write-downs it d in i Construction C t ti Background to • Capital expenditures associated with Mining are signif
Slide 23: Details of the Offer
aÉí~áäë=çÑ=íÜÉ=lÑÑÉê For personal use only • Fully underwritten 2:3 accelerated pro pro-rata rata non non-renounceable renounceable entitlement offer to raise approximately $80 million Size and (Entitlement Offer) Structure • Approximately 504.7 million new Macmahon ordinary shares (New Shares) are
Slide 24: Indicative timetable
fåÇáÅ~íáîÉ=íáãÉí~ÄäÉ For personal use only Event Date1 Announcement Wednesday, 12 December 2012 Wednesday, 12 December 2012 to Institutional Entitlement Offer Thursday, y, 13 December 2012 Macmahon Shares recommence trading on ASX Friday, 14 December 2012 Record date for eligibility in the Entitleme
Slide 25: Impact on balance sheet and capital structure
fãé~Åí=çå=Ä~ä~åÅÉ=ëÜÉÉí=~åÇ=Å~éáí~ä=ëíêìÅíìêÉ For personal use only As at As at Impact of $80m Pro-forma as at $ million 30 June 20121 31 October 20122 Offer3 31 October 2012 Cash 134.9 136.6 - 136.6 Debt 217.5 233.1 ((77.0)) 156.1 Net debt 82.6 96.5 (77.0) 19.5 Equity 356.8 321.5 77.0 398.5 Gearing
Slide 26: Debt maturity profile
aÉÄí=ã~íìêáíó=éêçÑáäÉ For personal use only Pro-forma Pro-forma Drawn D Drawn D drawn d undrawn d as at as at as at as at 1 1,2 $ million Total facility 30 Jun 2012 31 Oct 2012 31 Oct 2012 31 Oct 2012 Term Working capital cash advance 75.0 64.0 60.0 Nil 75.0 3 years facility Equipment finance facili
Slide 27: Risks
oáëâë For personal use only Investors should be aware that there are risks associated with an investment in Macmahon. Some of the principal factors which may, either individually or in combination, combination affect the future operating performance of Macmahon are set out below below. Some are spec
Slide 28: Risks
oáëâë For personal use only • Macmahon Macmahon's s debt facilities are subject to covenants requiring Macmahon to comply with EBITDA interest cover, tangible net worth, total liabilities and contingent liabilities to total tangible assets, and net debt to EBITDA ratios. Macmahon has sought and obta
Slide 29: Risks
oáëâë For personal use only • Macmahon has entered into a memorandum of understanding with Leighton that provides for the parties to negotiate and work towards entering into definitive sale documentation for that business. As noted earlier in this presentation, the completion of that sale is subject
Slide 30: Risks
oáëâë For personal use only • Macmahon’s order book and profit guidance is partly based on current contracts in hand and Macmahon derives a significant proportion of its revenue from providing services under large contracts. The contractual relationship relating to such contracts often allows Macmah
Slide 31: Risks
oáëâë For personal use only • Macmahon has a number of finance facilities which need to be renewed or refinanced on or before various maturity dates. Depending D di on its it financial fi i l performance, f there th is i a risk i k that th t Macmahon M h will ill be b unable bl to t service i these
Slide 32: Risks
oáëâë For personal use only • Macmahon is party to joint ventures and, in some cases, may not be the manager of the joint venture. Macmahon is subject to the risks associated with joint ventures, ventures which include joint and several liability and disagreements with respect to Joint ventures oper
Slide 33: Risks
oáëâë For personal use only Recruitment and • Macmahon's g growth and p profitability y may y be limited by y any y loss of key y operating p gppersonnel,, the inability y to recruit and retain skilled and experienced employees or by increases in compensation costs associated with attracting and ret
Slide 34: Selling restrictions
pÉääáåÖ=êÉëíêáÅíáçåë For personal use only This presentation does not constitute an offer of New Shares in any jurisdiction in which it would be unlawful. New Shares may not be offered or sold in any country outside Australia except to the extent permitted below. Hong Kong WARNING: This presentation
Slide 35: Selling restrictions
pÉääáåÖ=êÉëíêáÅíáçåë For personal use only Singapore This presentation and any other materials relating to the New Shares have not been, and will not be, lodged or registered as a prospectus in Singapore with the Monetary Authority of Singapore. Accordingly, this presentation and any other document
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