Aj Lucas Group Limited · ASX:AJL
Aj Lucas — Salomon Smith Barney investor forum (April 2003)
22 slides from Aj Lucas's conference presentation, Apr 1, 2003
Slide 1: Cover letter to ASX Company Announcements Office
LUCAS NW iS? Church Street PO Bers &78 Ryde NSW 2112 Austrailia Tel P61 2 98G9 GAGs 1 April 2003 Fax +61 29807 60RE WWE TEC TS.COML AU Company Announcements Office Australian Stock Exchange 20 Bridge Street SYDNEY NSW 2000 Dear Sir, Please find attached a copy of an investor presentation to be deliv
Slide 2: AJ Lucas Group - Australia's leading infrastructure services partner
WN AJ Lucas Group Australia’s leading infrastructure services partner April 2003
Slide 3: AJ Lucas Group
LUCAS AJ Lucas Group YN Leading infrastructure partner to the water and energy sectors % Founded 1957 and Australian public company (ASX: AJL) * Australian market leader in Pipelines, HDD and CBM Services * Significant sector prospects for next five years * Strong revenue and EPS growth forecast 4 A
Slide 4: Our Success is Built On
LUCAS 4 Our Success is Built On IN * Strong relationships with our clients and our people * Consistently effective innovation * Minimising risks for our clients and ourselves %* Subcontractor Alliances to minimise our exposure to - Large labour force - Equipment which is not specialised * Partnershi
Slide 5: History and strategy progression
LUCAS < History and strategy progression YY) PHASE Iil Growth - Consistent cash flow from core businesses - Increase market penetration PHASE li into SE Asia PHASE | Consolidation - Building annuity - Capital investment income streams - New systems - Leverage technology into Build - Restructure of b
Slide 6: Pipelines
LUCAS Pipelines IN %* End to End Solution Capability - Engineering Procurement Environmental management Construction Testing and commissioning Operation and maintenance * Australian market leader - Last five years 45% by value & 54% by number - Superior sector knowledge % Alliance based - Clients (A
Slide 7: Horizontal directional drilling (HDD)
LUCAS N Horizontal directional drilling (HDD) WN * Fastest, safest and most environmentally benign way to install infrastructure underground * Considered world leader - technology - capability - equipment *« Competitive advantage - high barriers to entry specialist equipment unique technology superi
Slide 8: Coal Bed Methane (CBM)
Coal Bed Methane (CBM) %* Huge reserves of gas trapped in NSW and Qld coals * requires new technology to extract + all based on HDD techniques + Lucas a world leader * Strong partnerships and well positioned * Leader in technology (MRD and TRD) * Member CMTE * Negotiations with leading industry part
Slide 9: Customers
LUCAS Customers YN End Users Engineering/ Construction Firms Utilities Large Corporates + AGL + BHP Billiton * McConnell Dowell * Sydney Water + Anglo Coal + Leighton * Origin Energy + Santos * Transfield * China Light & Power + BP * Telstra Boral + Optus + Duke Energy Walter Vivendi Group « Brisban
Slide 10: Prospects
LUCAS Prospects IW % Order Book at 31/12/02 ($124m) Very buoyant market conditions in each area of activity % Market receptivity to Lucas’ approach - Full service - Partner based - Technological, innovative, value added 8 AJ LUCAS GROUP LIMITED
Slide 11: Pipelines
LUCAS NW Pipelines b % SEA Gas going well. On track for budget and programme * Telfer Pipeline and Broome extension ($180 million) % Central Ranges (Agility/APT) ($25 million) * Kangaroo Paw preliminary engineering ($5 million) % Project specific pipeline opportunities 9 AJ LUCAS GROUP LIMITED
Slide 12: Projected pipeline market
LUCAS Projected pipeline market q Significant pipelines planned in Australia next 5 years Project Length Value Year Status SEA Gas Natural Gas Pipeline {Turnkey} 680km $341m Current Spie Lucas Commence Construction Sept 2002 BassGas Yolla Gas Field Development 32km $15m Current Clough awarded head c
Slide 13: Horizontal Directional Drilling
LUCAS N Horizontal Directional Drilling YY) % Sewerfix/Waterplan 21 - $3 billion over 10 years * NSW Water infrastructure upgrade — underway now % CLP in Hong Kong, BP in SER of PRC, Indonesian projects % Technological developments, greater acceptance of HDD 1 AJ LUCAS GROUP LIMITED
Slide 14: Coal Bed Methane
LUCAS Coal Bed Methane YY) * Technical services and drilling management contracts %* Market trend toward SIS and MRD/TRD technologies % Effective gas management by mines in future * Market acceptance of coal bed methane as energy source * Gloucester Basin —- commence in April 2003 42 AJ LUCAS GROUP
Slide 15: Map of Gloucester Basin PEL
LUCAS N Map of Gloucester Basin PEL 285 A) CLARENCE MORETON, 43 AJ LUCAS GROUP LIMITED
Slide 16: Growth Opportunities
LUCAS < Growth Opportunities YY) % South East Asia — numerous prospects for HDD * Infrastructure Trust — leverage returns * Asset and facilities management opportunities % Coal bed methane — Full service gas management capability — Commercialise new drilling technologies — Gloucester Basin PEL285 14
Slide 17: Half Year Results
Half Year Results Total Revenue EBITDA Depreciation/Amortisation EBIT Interest Expense (Net) Profit Before Tax EPS (Cents) 31/12/02 1.8 ———l Profitskewedto Second Halt 45 AJ LUCAS GROUP LIMITED
Slide 18: Financial Position
LUCAS Financial Position YN *« Recent Capital Raising - Private Placement net $4.6m - Rights Issue net $4.2m % 31 December 02 Balance Sheet after Rights Issue - Total Assets $92.9m - Net Assets $24.6m - Net Liquid Assets $6.1m * Share Capital - Shares on issue 45,199,990 - 2000 + shareholders - Mark
Slide 19: The Next Two Years - Operating Revenue
LUCAS The Next Two Years - Operating Revenue YY) Actual Secured Work Business Unit so/ogio2 | 31/12/02 | 30/06/03 | 30/06/04 ‘6 mths} mths! $m “sm ) $m $m Pipelines 32.6 67.9 40.0 57.3 HDD 25.1 5.3 19.0 2.5 Coal 3.8 44 4.0 1.0 Discontinued 5.3 - - - Total 66.8 72.6 63.0 60.8 17 AJ LUCAS GROUP LIMITE
Slide 20: Ready For Phase III
RXR x KX KR LUCAS < Ready For Phase III YY) Management team Management information systems Certification - ISO 9001:2000 (Quality) and NATA (Testing) - 180/4001 (Environmental) By 30/6/03 - ASINZS 4801:2001 (OH&S) By 30/6/03 Good clients and strong alliance partnerships Reputation, track record and
Slide 21: Summary
LUCAS Summary WW % On track to achieve budget for 2003 — earnings skewed to second half Two year forward order book % Forecast strong revenue and EPS growth %* Substantial opportunities in Australia and S.E. Asia % Franking credits in 2004 49 AJ LUCAS GROUP LIMITED
Slide 22: www.lucas.com.au
www.lucas.com.au AJ LUCAS GROUP LIMITED
AJ Lucas Group — Salomon Smith Barney investor forum (April 2003) on 6ix