Slide 1: Downer Full Year Results Investor Presentation
Downer Relationships creating success Downer Full Year Results Investor Presentation 12 August 2020
Slide 2: Urban Services - continue to deliver
Urban Services - continue to deliver Downer’s strategy to focus on its core Urban Services businesses is delivering: ̶ Demonstrated strength and resilience ̶ Underlying EBITA1,2 FY20 $511m (FY19 $525m) despite COVID-19 ̶ Leading market positions ̶ High proportion of Government and Government-relat
Slide 3: Reshaped Urban Services portfolio
Reshaped Urban Services portfolio Downer Group Core Non-core Transport Utilities Facilities Asset Services Wind down / re-scope Road Services Telecommunications Government Oil & Gas Infrastructure & Construction (Facilities) Rollingstock Water Health & Power Generation Services Education Engineering
Slide 4: FY20 performance overview
FY20 performance overview Change $m FY19 FY20 % Core Urban Services businesses continue Transport 242.4 235.6 (2.8) to perform, showing resilience of earnings Utilities 136.1 114.6 (15.8) despite the COVID-19 challenges Facilities 133.6 133.9 0.2 Total revenue of $13.4bn flat on prior year Asset
Slide 5: Transport
Transport Road Rollingstock Transport Services Services Projects 5
Slide 6: Transport
Transport EBITA1 and margin % Work-in-hand COVID-19 impact 300 Total of $16.9bn, in line with FY19 No material impact on demand in 5.6% 5.0% 250 Comprises 97% Government or Australia 200 150 Government-backed contracts Impact on Yarra Trams fare box 100 242.4 235.6 Long term profile, led b
Slide 7: Transport – $16.9bn work in hand
Transport – $16.9bn work in hand WIH Government v Non-Government WIH profile ($bn) 5.0 3% 4.0 3.0 2.0 97% 1.0 - Govt Non Govt FY21 FY22 FY23 FY24 FY25 FY26+ Secured Recurring Top 5 Contracts Remaining Top 5 Contract Wins in FY20 1. Maintaining Waratah trains until 2044 1. METRONET (JV with CPB), all
Slide 8: Utilities
Utilities Power and Water Telco Gas 8
Slide 9: Utilities
Utilities EBITA1 and margin % Work-in-hand COVID-19 impact 160 5.4% Total of $5.2bn, in line with FY19 No material impact on demand in 140 120 4.3% Proven history of extensions and Australia 100 80 renewals Impact in NZ from Level 4 restrictions 60 136.1 114.6 partially offset by Government
Slide 10: Utilities – $5.2bn work in hand
Utilities – $5.2bn work in hand WIH Government v Non-Government WIH profile ($bn) 2.0 26% 1.5 1.0 74% 0.5 - Govt Non Govt FY21 FY22 FY23 FY24 FY25 FY26+ Secured Recurring Top 5 Contracts Remaining Top 5 Contract Wins in FY20 1. Sydney Water until 2030 (Confluence Water JV) 1. AusNet (power) for 5 ye
Slide 11: Facilities (Core)
Facilities (Core) Defence Health and Building Education; Government 11
Slide 12: Facilities (Core)
Facilities1 (Core) EBITA2,3 and margin % Work-in-hand COVID-19 impact 160 5.7% 5.8% Total of $12.6bn, in line with FY19 No material impact on demand in 140 120 Comprises 94% Government or Australia or New Zealand 100 80 Government-backed contracts Long term profile, led by various 133.6 133.
Slide 13: Facilities (Core) – $12.6bn work in hand
Facilities1 (Core) – $12.6bn work in hand WIH Government v Non-Government WIH profile ($bn) 6.0 6% 5.0 4.0 3.0 2.0 94% 1.0 - Govt Non Govt FY21 FY22 FY23 FY24 FY25 FY26+ Secured Recurring Top 5 Contracts Remaining Top 5 Contract Wins in FY20 1. New Royal Adelaide Hospital PPP until 2046 1. Dept of D
Slide 14: Asset Services
Asset Services Oil and Gas Power Industrial Generation 14 Image courtesy of BHP
Slide 15: Asset Services
Asset Services EBITA1 and margin % Work-in-hand COVID-19 impact 30 4.0% Total of $1.6bn Delays to non-essential 25 Government and blue-chip private maintenance and capital works 20 15 1.7% customers 27.1 10 13.4 5 0 FY19 FY20 Oil and Gas Power Generation Industrial Optimising the reliability
Slide 16: Asset Services – $1.6bn work in hand
Asset Services – $1.6bn work in hand WIH Government v Non-Government WIH profile ($bn) 0.5 19% 0.4 0.3 0.2 81% 0.1 - Govt Non Govt FY21 FY22 FY23 FY24 FY25 FY26+ Secured Recurring Top 5 Contracts Remaining Top 5 Contract Wins in FY20 1. CS Energy until 2024 1. CS Energy for 5 years 2. BHP Port Headl
Slide 17: Construction businesses in wind down
Construction businesses in wind down Infrastructure Engineering and and Construction Construction (Facilities) (EC&M) 17
Slide 18: Construction businesses
Construction businesses Infrastructure & Construction Engineering & Construction (Facilities) (EC&M) excluding Asset AE Smith and Nuvo: services include Services mechanical, electrical, HVAC (heating, Significant construction losses in FY20 result ventilation, air conditioning, refrigeration), e
Slide 19: Businesses under review or to be sold
Businesses under review or to be sold Mining Laundries Hospitality (Facilities) (Facilities) 19
Slide 20: Businesses under review or to be sold
Businesses under review or to be sold Mining Laundries Hospitality Contract wins and extensions Private hospital volumes hit by Worst COVID-19 affected part of during the year: restrictions on elective surgery Downer Group ˗ Goonyella (2 years, ~$200m Volumes returning, business Virtually
Slide 21: Group financials
Group financials 21
Slide 22: Overview of results
Overview of results FY19 FY20 Total revenue1 $13.4 billion $13.4 billion Underlying EBITA2,3 $560.6 million $416.0 million Statutory EBITA2 $532.6 million $30.0 million Underlying NPATA2,3 $340.1 million $215.1 million Statutory NPATA2 $325.6 million $(105.8) million Operating cash flow $630.2 milli
Slide 23: Underlying financial performance
Underlying financial performance Pro forma AASB16 Change FY20 includes adoption of $m FY193 FY203 Pre impact (%) AASB163 AASB16 – no material impact on Total revenue1 13,448.3 13,417.9 - 13,417.9 (0.2) NPATA EBITDA 850.2 862.0 (175.8) 686.2 (19.3) Revenue flat, with growth in Depreciation and am
Slide 24: Summary of earnings
Summary of earnings Deduct: Net Tax Amortisation of $m EBITA1 interest NPATA NPAT expense2 acquired intangibles expense (post-tax) Underlying3 result 416.0 (112.0) (88.9) 215.1 (49.9) 165.2 Spotless goodwill impairment (165.0) - - (165.0) - (165.0) Historical contract claims adjustments (18.8) - 5.5
Slide 25: Operating cash flow
Operating cash flow Substantial improvement in 2H20 EBITDA Change $m FY19 1H20 2H20 FY202 conversion to 74.2% (%) Underlying1 EBIT 490.2 180.4 164.3 344.7 (29.7) Operating cash flow, particularly 1H20, was impacted by Murra Warra wind farm, NBN winding Add: depreciation and down and the Waratah
Slide 26: Cash flow
Cash flow Net capital expenditure reduction of $m FY19 FY20 Change 23.4% (%) Total operating 630.2 178.8 (71.6) Mining and Laundries represent 65.2% of total capital expenditure Net capital expenditure1 (395.1) (302.8) 23.4 Other acquisitions represent Business acquisitions (71.5) (29.8) 58.3
Slide 27: Balance sheet and capital management
Balance sheet and capital management Gearing increase due to lower $m Jun-193 Jun-20 operating cash flow Current assets 3,164.7 3,404.7 Reduction in net assets a result of Non-current assets 4,850.7 5,267.8 adoption of AASB 16 Leases and items outside of FY20 underlying - Goodwill 2,454.5 2,281.
Slide 28: Group debt profile
Group debt profile Weighted average debt duration of 3.4 years1 A$m (3.6 years at 30 June 19) 1,600 Downer intends to review and replace 1,400 Spotless’ financing upon increasing its ownership to 100% of Spotless 1,200 The combined debt platform will be more 1,000 efficient and allow the Group
Slide 29: Grant Fenn
Grant Fenn 29
Slide 30: Supplementary information
Supplementary information 30
Slide 31: Work-in-hand overview
Work-in-hand overview Total Group work-in-hand (WIH) of $42.2bn A$bn FY19 FY20 (compared to $44.3bn at Jun-19) Transport 17.7 16.9 Core urban services WIH remains strong Utilities 4.7 5.2 Facilities (core)1 12.6 12.6 Asset Services (EC&M) 2.1 1.6 Core Urban Services Businesses 37.1 36.3 Work-in-
Slide 32: Reconciliation to segment financials
Reconciliation to segment financials Underlying EBITA1,2 ($m) FY19 FY20 Asset Services (EC&M) 13.4 27.1 Engineering & Construction (EC&M) 19.9 (69.2) EC&M Segment EBITA 33.3 (42.1) Facilities (core) 133.6 133.9 Infrastructure & Construction (Facilities) (3.1) (9.0) Laundries (Facilities) 17.5 9.1 Ho
Slide 33: Reconciliation of Facilities to Spotless result
Reconciliation of Facilities to Spotless result Less: Add: Facilities Spotless Spotless Hawkins Spotless segment FY20 FY19 Building Utilities Total Revenue 3,315.7 (413.6) 158.1 3,060.2 3,025.1 Underlying EBITA1,2 114.3 (5.5) 12.2 121.0 170.0 EBITA margin 3.4% 1.3% 7.7% 4.0% 5.6% Amortisation of acq
Slide 34: Transport and Utilities
Transport Revenue $m EBITA $m EBITA margin ROFE 4,692.3 300 7% 30% 26.4% 5,000 4,348.3 242.4 5.6% 250 235.6 6% 25% 22.4% 5.0% 4,000 5% 200 20% 3,000 4% 150 15% 3% 2,000 100 10% 2% 1,000 50 1% 5% 0 0% 0% 0 FY19 FY20 FY19 FY20 FY19 FY20 FY19 FY20 +7.9% v FY19 (2.8)% v FY19 (0.6)pp v FY19 (4.0)pp v FY1
Slide 35: Facilities
Facilities Revenue $m EBITA1 $m EBITA1 margin ROFE2 5.0% 4,000 200 5% 25% 3,392.7 3,315.7 170.5 19.1% 3,000 150 4% 3.4% 20% 16.4% 114.3 3% 15% 2,000 100 2% 10% 1,000 50 1% 5% 0 0 0% 0% FY19 FY20 FY19 FY20 FY19 FY20 FY19 FY20 (2.3)% v FY19 (33.0)% v FY19 (1.6)pp v FY19 (2.7)pp v FY19 1 The underlying
Slide 36: Mining and EC&M
Mining Revenue $m EBITA $m EBITA margin ROFE 2000 100 6% 16% 14.5% 14.8% 5.2% 5.1% 1,549.8 76.7 79.0 14% 1,478.5 80 5% 1500 12% 4% 10% 60 1000 3% 8% 40 6% 2% 500 4% 20 1% 2% 0 0 0% 0% FY19 FY20 FY19 FY20 FY19 FY20 FY19 FY20 +4.8% v FY19 +3.0% v FY19 (0.1)pp v FY19 +0.3pp v FY19 EC&M Revenue $m EBITA