Slide 1: Investor Presentation – Full year results
Downer Group Downer u Relationships creating success e Investor Presentation Full year results 16 August 2018 HOSPITAL _——— Utilities Mining
Slide 2: Highlights
Downer FY18 Results Investor Presentation Highlight s Under l ying NPATA up 58.9% t o $296.5m St r ong balanc e sheet and liquidit y Up 6.7% on a pro forma basis1 Gearing (including Spotless) reduced to 22.7%3, down from 24.6% Guidance met for seventh consecutive year at 31 December 2017 Rev
Slide 3: Underlying trading performance
Downer FY18 Results Investor Presentation U n d e r l y i n g t r a d i n g p e r fo r m a n c e Change Change Pro forma1 Revenue of $12.6bn with increases $m FY18 Statutory Pro forma FY17 in all Divisions (%) (%) Total revenue2 12,620.2 10,818.6 61.5 16.7 Transport revenue +31%, Utilities +18%,
Slide 4: Operating cash flow
Downer FY18 Results Investor Presentation Op e r at i n g c a s h f l ow Pro forma1 Seventh year of cash flow $m FY18 FY17 conversion in excess of 88% of EBITDA EBIT 412.9 439.3 Despite the negative cash impacts of Add: depreciation and amortisation 370.2 323.0 nRAH and substantial “one off” cos
Slide 5: Spotless
Downer FY18 Results Investor Presentation Sp o t l e s s Underlying NPATA of $94 million, in line with 27 November 2017 market update Improved cash flow and EBITDA conversion $1.45 billion of contract renewals and extensions $500 million of new customers in core markets (e.g. Perth Zoo, Vict
Slide 6: Group Financials
OSPITAL Downer Relationships creating success (less) A
Slide 7: Reconciliation of underlying to statutory result
Downer FY18 Results Investor Presentation Re c o n c i l i at i o n o f u n d e r l y i n g t o s t at u t o r y r e s u l t Add back amortisation FY18 Net interest Tax FY18 HY18 EBIT NPAT of acquired $m expense expense NPATA NPATA intangibles post-tax Underlying result 412.9 (76.3) (86.9) 249.7 46.
Slide 8: Cash flow
Downer FY18 Results Investor Presentation Ca s h f l ow Pro forma1 $m FY18 FY17 Total operating 583.3 632.2 Net capital expenditure increased as a result of new Mining equipment and Rail Net capital expenditure (360.7) (261.0) projects Spotless acquisition9 (391.8) (636.1) Continued investment i
Slide 9: Group debt facility maturity profile
Downer FY18 Results Investor Presentation Gr o u p d e b t f a c i l i t y m at u r i t y p r o f i l e Weighted average debt A$m Pre Refinance duration increased from A$m Post Refinance 1000 2.3 years to 4.0 yearsi 1000 900 900 800 800 700 700 600 600 500 500 400 400 300 300 200 200 100 100 0 0 Jun
Slide 10: AASB 15
Downer FY18 Results Investor Presentation A A SB 1 5 Effective from 1 July 2018, new disclosure from FY19 onwards Downer has elected to apply the “cumulative approach”- no restatement of FY18 comparatives Most significant change is introduction of a “highly probable” threshold for revenue reco
Slide 11: AASB 15 – impact on Downer
Downer FY18 Results Investor Presentation A A SB 1 5 – i m p a c t o n Dow n e r Reduction in net assets and opening retained Estimated adjustment earnings on 1 July 2018 (FY19) $m at 1 July 2018 (after tax) Preliminary impact included in Note G1 of the Contract modifications (claims and FY18 Fi
Slide 12: Outlook
Ou t l o o k
Slide 13: Market outlook – Australia
Downer FY18 Results Investor Presentation M a r k e t o u t l o o k – Au s t r a l i a Road construction will drive increased Transport and Ro a d s a n d Ra i l Telc o Wa t e r a n d El e c t r i c i t y project work, road surfacing and Infrast ruc t ure Bridges Wa s t e w a t e r bituminous prod
Slide 14: Market outlook – Australia (continued)
Downer FY18 Results Investor Presentation M a r k e t o u t l o o k – Au s t r a l i a (c o n t i n u e d ) Population growth and Fa c i l i t i e s Ge n e r a l Transport Re s o u r c e s Leisure, Se r v i c e s Healt h Go v t . Ed u c a t i o n Sp o r t & De f e n c e government outsourcing will
Slide 15: Market outlook – Australia (continued)
Downer FY18 Results Investor Presentation M a r k e t o u t l o o k – Au s t r a l i a (c o n t i n u e d ) Expectation of growth has Co p p e r , Go l d , M i n i n g , En e r g y I r o n Or e Co a l Oi l & Ga s Si l v e r -L e a d -Z i n c returned to bulk commodities, and Indust rial & M i n e
Slide 16: Market outlook – New Zealand
Downer FY18 Results Investor Presentation Mar ket out look – New Zealand Road construction to reduce in the Ro a d s a n d Wa t e r a n d Non- New Zealand Ra i l Telc o El e c t r i c i t y Re s i short term with strong growth in rail Bridges Wa s t e w a t e r Building and light rail associated w
Slide 17: Work-in-hand $42.0 billion
Downer FY18 Results Investor Presentation Wo r k -i n -h a n d $ 4 2 .0 b i l l i o n 20 18 16 14 A$ billion 12 10 8 6 4 2 0 Transport Utilities EC&M Mining Rail Spotless Dec-17 Jun-18 17
Slide 18: Outlook
Downer FY18 Results Investor Presentation Ou t l o o k Dow ner is t ar get ing c onsolidat ed net pr ofit $m FY19 Outlook aft er t ax and befor e am or t isat ion of ac quir ed NPAT 291 int angible asset s (NPATA) Amortisation of acquired intangible assets (post-tax) 44 of $335 m illion befor e NPAT
Slide 19: Supplementary information
“ll Supplementary Downer information
Slide 20: Segment reporting
Downer FY18 Results Investor Presentation Se g m e n t r e p o r t i n g FY18 Transport Rail Utilities Spotless EC&M Mining Unallocated Total $m Segment revenue 2,743.2 732.0 1,783.0 3,093.7 2,382.9 1,309.4 (13.3)12 12,030.9 Share of sales from JVs and 73.8 437.2 - 8.1 21.2 49.0 - 589.3 Associates T
Slide 21: Service lines
Downer FY18 Results Investor Presentation Se r v i c e l i n e s Transport Total revenue2 $m EBITA5 $m EBITA margin ROFE6 142.9 5.8% 3,000 2,817.0 150 6.0% 30% 124.9 5.1% 24.2% 2,500 125 5.0% 4.5% 25% 22.2% 2,153.4 2,000 100 4.0% 20% 1,500 75 3.0% 15% 1,000 50 2.0% 10% 500 25 1.0% 5% 0 0 0.0% 0% FY1
Slide 22: Service lines (continued)
Downer FY18 Results Investor Presentation Se r v i c e l i n e s (c o n t i n u e d ) Utilities Total revenue2 $m EBITA5 $m EBITA margin ROFE6 2,000 100 94.8 6.0% 30% 1,783.0 5.4% 5.5% 5.3% 26.1% 84.1 1,750 1,517.3 5.0% 25% 22.7% 80 1,500 4.0% 20% 1,250 60 1,000 3.0% 15% 750 40 2.0% 10% 500 20 1.0%
Slide 23: Service lines (continued)
Downer FY18 Results Investor Presentation Se r v i c e l i n e s (c o n t i n u e d ) Engineering, Construction & Maintenance Total revenue2 $m EBITA5 $m EBITA margin ROFE6 3,000 80 4.0% 30% 70.6 27.0% 2,404.1 2,500 3.0% 25% 23.0% 2.9% 2,004.3 60 52.6 3.0% 2.6% 2,000 20% 1,500 40 2.0% 15% 1,000 10%
Slide 24: Debt and bonding facilities
Downer FY18 Results Investor Presentation De b t a n d b o n d i n g fa c i l i t i e s Debt facilities $m DOW SPO Group Debt facilities by type % Total limit 1,408.7 1,062.5 2,471.2 Syndicated bank facilities 61 Drawn (713.7) (832.5) (1,546.2) Medium term notes 21 Available 695.0 230.0 925.0 Bilate
Slide 25: Debt maturity profile – Downer only
Downer FY18 Results Investor Presentation De b t m at u r i t y p r o f i l e – Dow n e r o n l y (b y l i m i t a s at 3 0 J u n e 2 0 1 8 ) 500 Syndicated bank facilities 400 JPY MTN A$MTN 300 A$m Equivalent USPP 200 Bilateral bank facilities 100 ECA finance Finance leases 0 Jun-19 Jun-20 Jun-21 J
Slide 26: Debt maturity profile – Spotless only
Downer FY18 Results Investor Presentation De b t m at u r i t y p r o f i l e – Sp o t l e s s o n l y (b y l i m i t a s at 3 0 J u n e 2 0 1 8 ) DEBT COVENANTS Interest Cover Net Leverage 600 < 3.5x 2.9x 2.9x 2.8x 500 A$m Equivalent 7.3x 7.3x 7.5x 400 300 200 > 3.0x 100 0 FY17 1HFY18 FY18 FY17 1HF
Slide 27: Notes
Downer FY18 Results Investor Presentation Not es 1. References to ‘pro forma basis’ mean that Spotless’ contribution for the period 1 July 2016 to 30 June 2017 has been included to allow comparison of the combined Downer and Spotless results as if the acquisition had occurred on 1 July 2016. Include
Slide 28: Thank you
T h a n k yo u