Downer Edi Limited · ASX:DOW
Downer Edi — Investor Day (June 2008)
65 slides from Downer Edi's investor day presentation, Jun 11, 2008
Slide 1: ASX cover letter: Investor Presentation 11 June 2008
For personal use only 11 June 2008 Company Announcements Office Australian Stock Exchange Limited Exchange Centre 20 Bridge Street Sydney NSW 2000 Subject: Investor Presentation – 11 June 2008 Please find attached a slide presentation to be provided by Mr Geoff Knox, Managing Director and CEO of Dow
Slide 2: Investor Day 11 June 2008
For personal use only Investor Day 11 June 2008
Slide 3: Contents
Downer EDi Investor Day June 11 2008 For personal use only Contents Corporate 01 RailCorp Public Private Partnership 25 Consulting 31 Engineering 36 Mining 40 Rail 45 Works 50
Slide 4: Value Creation
For personal use only Value Creation June 2008
Slide 5: Today's Purpose
For personal use only Today’s Purpose ■ Update on Strategic Development Program ■ Update on PPP ■ Meet Team
Slide 6: Zero Harm
Zero Harm How are we tracking on safety? For personal use only LTIFR is improving, and our aim is zero harm.
Slide 7: Great Potential in Downer
For personal use only Great Potential in Downer ■ Assets ■ People ■ Markets
Slide 8: Our Global Markets
Our Global Markets Group presence in strong markets For personal use only Mining/Metals Iron Ore 2444 MT1 (2010 volumes) Coal 1027 MT1 Infrastructure $US 3.2 trillion2 1. AME Mineral Economics Reports for Iron Ore, Coal and Aluminium. April 2008 2. Factiva Database. ‘Exporting Services’, Austmine qu
Slide 9: Our Asian-Pacific Markets
Our Asian-Pacific Markets Group presence in strong markets For personal use only Mining/Metals Iron Ore 1482 MT1 (2010 volumes) Coal 605 MT1 Infrastructure $US980 billion2 1. AME Mineral Economics Reports for Iron Ore, Coal and Aluminium. April 2008 2. Factiva Database. ‘Exporting Services’, Austmin
Slide 10: Where do we operate?
Where do we operate? Strong presence in Asia Pacific with client focused off-shore For personal use only presence
Slide 11: Focusing Question: How do we create more value?
Focusing Question How do we create more value? For personal use only
Slide 12: Transformation Journey
Transformation Journey We have been working on three levels in the first 100 days For personal use only Shareholder Value Planning Future DIRECTION Acting Early MOMENTUM Engaging People ENGAGEMENT People overestimate what they can achieve in one year … and underestimate what they can achieve in thre
Slide 13: Engaging People: We have listened to our key stakeholders
Engaging People: We have listened to our key stakeholders Engaging them in open conversation, not one way telling For personal use only ■ Shareholders ■ Clients ■ Our People Our aim is to make Downer EDi a more open and engaging organisation and to ground our strategy in real experience.
Slide 14: Early Actions: We have built momentum
Early Actions: We have built momentum through early changes For personal use only Our aim is to create momentum through action not just words, and to rebuild credibility with our stakeholders.
Slide 15: Planning the Future: five year direction and vision
Planning the Future: We have created a five year direction and vision for the Group For personal use only Strategic Conversations Future Vision Present Situation ■ Involved top 100 people. (Perception) Design (Invention) (Imagination) ■ Structured around common language of AcdB®. Connections and Con
Slide 16: The business we're in
The business we’re in What we do: For personal use only Provide key services to clients’ critical infrastructure and assets. Why us? Working with owners, we can extract more value than either of us alone. How we do it - Working with our clients. ■ We better understand our clients’ asset performance.
Slide 17: Our roadmap to create value for the Group
Our roadmap to create value for the Group Making the whole greater than the sum of the parts For personal use only This roadmap explains how our Divisions will develop, and it guides us on how we will organise ourselves, and our service delivery in the future.
Slide 18: What Value can we create by doing this?
What Value can we create by doing this? SHAREHOLDER VALUE For personal use only SHAREHOLDERS ■ Growing market positions/share. ■ In-fill ‘white spaces’. Five year growth ■ Grow out to adjacencies. trajectory will emulate ■ Innovation and organic growth. historic growth rates. ■ Synergies of system,
Slide 19: How we do this?
For personal use only How we do this? Vision Portfolio Operational Market Logic Logic Logic People Heuristics help us to maintain focus on what we’re doing.
Slide 20: Align the business around a common vision and purpose
Align the business around a common vision and purpose We will…ENGAGE our people around a common Why Us: For personal use only PURPOSE Our unique advantage is connecting ■ Zero harm in all we do. scale with local know how. ■ To enhance the standard of living and working ■ We better understand our cli
Slide 21: Align the business around common values
For personal use only Align the business around common values Large organisations that outperform are aligned around strong shared values. *Diagram adapted from the Competing Values Framework by Quinn and Rorbaugh (1983)
Slide 22: Portfolio Logic
Portfolio Logic We are the logical owners of these businesses: For personal use only ■ Use Consulting Division to leverage upstream in the Asset Lifecycle for our clients. ■ Use Consulting as major platform to Asia. ■ Use Consulting to develop innovative Downer Solutions with our Divisions. ■ Contin
Slide 23: Portfolio Logic: Cross-Divisional Synergies
Portfolio Logic Aggressively deliver Cross-Divisional Synergies For personal use only Large Cross-Division Synergies ■ Bundle value propositions to big clients. ■ Combine approaches in Asia. ■ Lifting client relationships to Downer-wide focus. ■ Innovation through cross fertilisation. Large cost and
Slide 24: Operational Logic
Operational Logic Create stronger accountability and focus for Divisions For personal use only ■ Significant opportunities to generate value within each Division. Operational Effectiveness Opportunities to Growth Opportunity unlock value range (Revenue, Margins & Returns) across these areas in each
Slide 25: Market Logic
Market Logic Create a market-focused organisation For personal use only FROM Skills and Project Client Services TO Market Client Downer Dynamics Needs Solutions Supported by the Right Skills and Services
Slide 26: Unlock Our People
For personal use only Unlock Our People Shared Beliefs and Language. Right Levels of Clear Roles, Work and Domes Accountabilities of Discretion. and Measures. Strong Leadership across the Team.
Slide 27: 3rd Quarter Market Update
For personal use only 3rd Quarter Market Update No material change to current guidance.
Slide 28: For personal use only
For personal use only
Slide 29: RailCorp Public Private Partnership
For personal use only RailCorp Public Private Partnership June 08
Slide 30: RailCorp Public Private Partnership
RailCorp Pubic Private Partnership Guy Wannop, CEO Downer EDi Rail For personal use only
Slide 31: Premier celebrates official opening of CRC facilities
Premier Iemma celebrates official opening of CRC facilities, May 2008 For personal use only
Slide 32: Design & Procurement in progress, next step: Proving
For personal use only Design & Procurement in progress, next step: Proving
Slide 33: De-Risk delivery by building via CRC
For personal use only De-Risk delivery by building via CRC
Slide 34: Design & Procure, Prove, Deliver
Design & For personal use only Prove Deliver Procure
Slide 35: For personal use only
For personal use only
Slide 36: For personal use only
For personal use only
Slide 37: Consulting: Turning knowledge into value for clients
Continue to lead the way in shaping Sustainable Innovative Thinking for For personal use only the future of our clients and Downer EDi Our KNOWLEDGE Communities CONNECTION TASKS Outside-In Thinking K1 Transforming our New Geographies K1 knowledge into DOWNER EDi Core Products & Services* Our Clients
Slide 38: Consulting: Connecting knowledge across Downer EDi
Continue to lead the way in shaping Sustainable Innovative Thinking for For personal use only the future of our clients and Downer EDi KNOWLEDGE Works Our Communities CONNECTION TASKS Outside-In Engineering Thinking K1 Transforming our New Geographies knowledge into K2 DOWNER EDi Core Products & Ser
Slide 39: Consulting well-positioned in core and emerging markets
Provide thought leadership and beachhead positions across For personal use only Downer EDi’s sectors and geographies Consulting is well-positioned in Downer EDi’s core and emerging markets AUSTRALIA NEW ZEALAND SINGAPORE Market Size Middle East Ne Consulting w Si Vietnam Au Canada ng Services Ze Chi
Slide 40: Connect strategic and tactical knowledge for whole-of-life services
Connect strategic and tactical knowledge, enabling Downer EDi to For personal use only provide ‘whole-of-life’ client services Opportunity to add annuity revenue stream to balance our Opportunities to bring additional value to Downer EDi operational portfolio risk capability through a shared knowled
Slide 41: Drive growth strategies to achieve scale in niche sectors
We will drive growth strategies to achieve scale and capability in niche For personal use only sectors relevant to current Group and sector types Focus on building differentiation and balance in our portfolio to manage counter-cyclical forces STEP 1: CONNECT Prototyping opportunities across the Cons
Slide 42: Downer EDi Engineering
Downer EDi Engineering
Slide 43: Our businesses
Our businesses For personal use only Contracting Technical Services Projects We are a leading supplier of We maintain distributed We deliver upstream, with mechanical and electrical services assets via our service focused IP and complete to our fixed asset customers. management centres. EPCM solutio
Slide 44: Our redesign for growth
Our redesign for growth For personal use only From separate businesses To integrated operations We have traditionally acted independently, giving us a selection of diverse offerings. Shared systems Shared Delivery IP • Financial We will share a formidable • Commercial ability to deliver to specifica
Slide 45: Five-year view of our markets
Five-year view of our markets For personal use only We are niche players in very big Projects Total market opportunity: markets with big opportunities. Coal $11bn + + = $30.5bn Metals EPCM Construction market: $250bn Upstream In the petrochemical industry, we deliver and maintain assets that are cri
Slide 46: Our growth in these markets
Our growth in these markets For personal use only We will pursue two basic Projects growth strategies across Continue to steadily our three markets. deliver + Whenever possible, Keep growing Extend into adjacent we will service clients current businesses Metals industries We will further build seaml
Slide 47: For personal use only
For personal use only
Slide 48: People and community
People and community For personal use only Our people Local community Broader community Downer EDi rowing team at full power. Downer EDi promotes skill development and employment opportunities in Rehabilitation work is part of Indigenous communities where it operates. Downer EDi’s Mining service. En
Slide 49: Our markets
Our markets For personal use only Proportion of our revenue by commodity type Proportion of our revenue by location Downer EDi Mining has a significant presence in Coal and is increasing its share in traditional Downer EDi Mining has a significant presence in the East Coast of Australia. Western Aus
Slide 50: The services we offer – Mine to mill
The services we offer – Mine to mill For personal use only We are #2 in the Australian market, but with the broadest capabilities across the value chain. Maintenance Services Blasting Tyre Management Design Crushing Mineral Technology Open Cut Coal Wash Exploration Drilling Underground Relative reve
Slide 51: Our presence
Our presence For personal use only Mt Isa Drilling Global Presence Ernest Henry George Fisher Black Star FMG Century Jellinbah Paulsens Blackwater Pillara Redmont Yarrabee Brockman Argyle Diamonds Minerva Mt Whaleback Millennium Cape Preston Paraburdoo Broadlea Telfer Norwich Park Tom Price Goonyell
Slide 52: Foundations for success
Foundations for success For personal use only Where we want to be How do we get there? Other Growth Leverage Environmental Issues $ $ CONTEXT $ $ $ Domestic Growth Smart Capital Usage Unlock Our People $ Re-implement Systems + Disciplines INTERNAL Critical Supplier Relationships Strong Customer Rela
Slide 53: For personal use only
For personal use only
Slide 54: Safer Cleaner Greener
Safer Cleaner Greener For personal use only Safer Each passenger train in Sydney carries 1,000 commuters at rush hour. That’s 600 fewer cars on the road. Train freight is 20 times safer than road freight, and is a healthier option for communities than road transport.* Cleaner One freight train betwe
Slide 55: Core business
Core business For personal use only What we do Who we do it for We are Asset Managers working across our clients’ We service freight and passenger clients. Whole of Life value chains. How we do it We are a Systems Integrator, configuring our Freight transport for BHPB in Western Australia suppliers’
Slide 56: Our markets
Our markets For personal use only We are a strong player in Passenger and Loco markets, and are ideally positioned to grow in the adjacent Wagon market. We are also poised to enter the total Rail Solutions and Infrastructure markets. LOCO MANF LOCO MNCE WAGON MANF WAGON MNCE PASS MANF PASS MNCE RAIL
Slide 57: Trends we're facing
Trends we’re facing For personal use only Customer strain Industry trends Rail customers are strained Rail demand will continue to increase well into the next decade. because of increased demand and decreased supply. Hunter Valley and Bowen Basin coal (million tonnes per annum) Pilbara iron ore prod
Slide 58: Realising our opportunity
Realising our opportunity For personal use only Deliver all Projects, including PPP • Deliver Locos • Deliver Passenger cars • Ongoing Loco and Rolling Stock maintenance • Ongoing Passenger car maintenance SCT Loco leaving our plant in Cardiff Passenger train waiting at a platform in Perth Grow the
Slide 59: For personal use only
For personal use only
Slide 60: We deliver infrastructure solutions for sustainable futures
We deliver infrastructure solutions for sustainable futures For personal use only We value and invest in processes that help us to create products using reduced energy, high levels of recycling and a low carbon footprint. Warm Asphalt Mix and Recycled Asphalt Product (RAP) are just two ways Works is
Slide 61: Division developed through organic growth and acquisitions
Our division has developed through a combination of organic growth and acquisitions For personal use only $1.6b division in nine years Works revenue and acquisitions in the last nine years LOGISTICS PTY LT L D. Revenue KERB QIC & CO. 1996 1999 2000 2001 2002 2003 2004 2005 2006 2007 Works bought fro
Slide 62: We operate in significant markets
We operate in significant markets For personal use only Road Infrastructure Market 2008 New Zealand Road Infrastructure Market 2008 Australia $1.5b $14.7b Existing New Existing New $0.7b $0.8b $3.9b $10.8b Insourced Outsourced Outsourced Insourced Insourced Outsourced Outsourced Insourced Accessible
Slide 63: Our market coverage is broad and diverse
Our market coverage is broad and diverse, but there is significant opportunity For personal use only Where are we now? Where do we want to be? Our Noble Purpose Specialist Bituminous Technical We work with our clients to enhance the Maintenance Civil Surfacing Rail standard of living for communities
Slide 64: We work to enhance the standard of living in our communities
We work to enhance the standard of living in our communities and countries For personal use only Asphalt paving of Riverside Expressway, Brisbane, QLD Bulk product delivery, AUS Waste water treatment plant, NZ Bulk (20,000 tonnes) bitumen storage and importation facility Rail sleeper replacement usi
Slide 65: Our strong customer focus helps build a cohesive and agile team
Our strong customer focus helps us to build a cohesive and agile team For personal use only Mornington contract, VIC Asphalt manufacturing plant, Somerton, VIC Overhead electrification installation for rail, NSW Precast beam fabrication and installation, Auckland, NZ Road maintenance incident respon