Slide 1: Full Year Results Presentation
FULL YEAR RESULTS PRESENTATION Echuca Moama Bridge New South Wales/Victoria, Australia 23 August 2022
Slide 2: Agenda
HIGHLIGHTS A Sean Flanagan (Group CEO) G FINANCIAL REVIEW Adrian Macartney (Group CFO) E N OUTLOOK Sean Flanagan (Group CEO) D A KEY MESSAGES Sean Flanagan (Group CEO)
Slide 3: Highlights
HIGHLIGHTS Echuca Moama Bridge New South Wales/Victoria, Australia
Slide 4: Highlights | Group Performance
HIGHLIGHTS | GROUP PERFORMANCE Aveng continued to build sustainable profitable operations and de- Normalised risk the balance sheet through the disposal of non-core assets and Operating earnings for reduction of external debt Revenue earnings the year* R26,2bn R576m R204m • Normalised measures are u
Slide 5: Highlights | Levers for Growth
HIGHLIGHTS | LEVERS FOR GROWTH Moolmans plant Balance sheet McConnell Dowell’s optimisation and fleet People ESG optimisation specialist capabilities renewal program and systems framework • External debt reduced from • New work won of AUD2,4 • Analysis of optimal age profile • Skills shortage addres
Slide 6: Highlights | Operating Environment
HIGHLIGHTS| OPERATING ENVIRONMENT Headwinds impacted our operations We have been able to navigate and soften the impact through Business disruptions • Covid-19 restrictions in Southeast Asia until April 2022 • July 2021 riots and civil unrest in KZN Resilient business Risk management • Strike action
Slide 7: Highlights | McConnell Dowell Performance
HIGHLIGHTS | MCCONNELL DOWELL PERFORMANCE McConnell Dowell records highest revenue in six years Revenue – AUDm • Strong financial performance in FY22 1 474 1 723 980 • Revenue growth of 17% • Operating earnings up 23% and NPAT up 36% 2020 2021 2022 • Operating margin percentage improved to 2,0% • Wo
Slide 8: Highlights | Moolmans Performance
HIGHLIGHTS | MOOLMANS PERFORMANCE Moolmans profitable and cash generative Revenue vs Gross margin • Moolmans continued to focus on quality of contracts and project execution 2020 2021 2022 3 955 4 009 4000 3 349 14,00% • Revenue of R3,3 billion following completion of Nkomati, Lefa, Klipspruit and 1
Slide 9: Highlights | Trident Steel Performance
HIGHLIGHTS | TRIDENT STEEL PERFORMANCE Trident Steel maintained its positive momentum despite a Revenue challenging operating environment • Significant business disruptions 4 000 3 531 3 163 3 296 3 500 3 000 - Flood damaged inventory covered by insurance 2 500 2 000 1 500 - Additional claims for eq
Slide 10: Highlights | Providing a Better Life
HIGHLIGHTS | PROVIDING A BETTER LIFE Award-winning Empowering people Trident Steel environmental performance Reconciliation action plan progress affected by disability Contributing towards a sustainable Victoria, Australia Australia New South Wales/Victoria, Australia future for our stakeholders •
Slide 11: Highlights | Providing a Better Life
HIGHLIGHTS | PROVIDING A BETTER LIFE Moolmans Women in mining Uplifting the communities Saving potable water South Africa in which we operate Northern Cape, South Africa Group safety performance • Moolmans surveyed risks and opportunities • Level 2 BBBEE contributor • Our Moolmans team at Tshipi use
Slide 12: Highlights | Eastland Port Wharf 7 Upgrade
HIGHLIGHTS | EASTLAND PORT WHARF7 UPGRADE Design Phase Innovation and therefore the steel required decreased by of hardfill was no longer needed 2022 FULL YEAR RESULTS PRESENTATION 12
Slide 13: Financial Review
FINANCIAL REVIEW Tshipi é Ntle South Africa
Slide 14: Financial Review | Comprehensive Earnings
FINANCIAL REVIEW | COMPREHENSIVE EARNINGS FY 2022 FY 2021 Change Rm Rm Rm Commentary Revenue 26 178 25 709 469 Gross margin 2 112 1 965 147 Gross margin percentage 8,1% 7,6% 6,6% Operating earnings 576 536 40 • These are either income or expenses which do not occur regularly as part Non-rec
Slide 15: Financial Review | Normalised Earnings
FINANCIAL REVIEW | NORMALISED EARNINGS FY 2022 FY 2021 FY 2022 FY 2021 Rm Rm Rm Rm Earnings for the year 130 988 Exclude the following non-recurring Earnings before non-recurring items 576 536 items Impairment loss on intangible 8 - Trident Steel – PY IFRS 5 - (93) assets depreciation and amortisati
Slide 16: Financial Review | Segmental Results
FINANCIAL REVIEW | SEGMENTAL RESULTS NORMALISED OPERATING REVENUE EBITDA EARNINGS/(LOSS)* FY 2022 FY 2021 Change FY 2022 FY 2021 Change FY 2022 FY 2021 Change Rm Rm Rm Rm Rm Rm Rm Rm Rm McConnell Dowell 19 034 16 911 2 123 663 616 47 385 312 73 Moolmans 3 349 4 009 (660) 660 854 (194) 207 239 (32) O
Slide 17: Financial Review | Financial Position
FINANCIAL REVIEW | FINANCIAL POSITION FY 2021* FY 2022 Re-presented Change Rm Rm Rm Commentary Assets 12 475 12 445 30 Capital expenditure of R834 million offset by disposals of R328 million and Property, plant and equipment 2 479 2 534 (55) depreciation & impairment of R575 million New leases of R8
Slide 18: Financial Review | Financial Position
FINANCIAL REVIEW | FINANCIAL POSITION FY 2021* FY 2022 Re-presented Change Rm Rm Rm Commentary Liabilities and equity 12 475 12 445 30 Liabilities External borrowings and liabilities 481 879 (398) Continued reduction of external debt and ABF’s Increased by R88 million relating to new leases offset b
Slide 19: Financial Review | Working Capital
FINANCIAL REVIEW | WORKING CAPITAL FY 2021 FY 2022 Re-presented Change Rm Rm Rm Commentary Inventory 1 033 937 96 Increase in inventories due to lower than planned offtake by OEM’s and higher price of steel Trade and other receivables 856 802 54 Trade and other receivables remain well controlled Con
Slide 20: Financial Review | Contract Assets and Liabilities
FINANCIAL REVIEW | CONTRACT ASSETS AND LIABILITIES FY 2021 FY 2022 Re-presented Change Rm Rm Rm Uncertified revenue and variations 1 225 822 403 Contract contingencies (81) (50) (31) Contract and retention receivables 2 485 2 632 (147) Provision for contract receivables (3) (1) (2) Contract assets 3
Slide 21: Financial Review | Operating Free Cashflow
FINANCIAL REVIEW | OPERATING FREE CASHFLOW FY 2022 FY 2021 Change Rm Rm Rm Commentary McConnell Dowell 676 711 (35) In AUD terms, increased from AUD58 million to AUD 64 million Moolmans 91 480 (389) Impacted by end of contract outflows on 4 projects and component replacement Other and eliminations (
Slide 22: Financial Review | Liquidity
FINANCIAL REVIEW | LIQUIDITY FY 2022 FY 2021 Change Rm Rm Rm Commentary Net cash (including overdrafts) 2 617 2 519 98 External debt repayment of R350 million, debt service and additional working South African operations 249 666 (417) capital requirements • Settlement of legacy claim for AUD25 milli
Slide 23: Financial Review | Movement in Net Cash
FINANCIAL REVIEW | MOVEMENT IN NET CASH Cash - 30 Jun 2021 2 519 Cash generated from operations - core 995 Cash generated from operations - non core 477 Working capital change (4) Net finance charges (274) Taxation (47) Net capital expenditure (703) Proceeds on disposal of non-core assets 143 Repaym
Slide 24: Outlook
OUTLOOK Sishen South Africa
Slide 25: Outlook | Project Portfolio
OUTLOOK | PROJECT PORTFOLIO Work in hand Strong work in hand supports McConnell Dowell’s sustainable Business unit growth SEA 10% • Revenue growth expected in FY23 with 91% secured NZ 16% • 88 active projects with 85% performing at or above tender margin AUS • 71% of work in hand is with government
Slide 26: Outlook | Inflationary Cost Pressure
OUTLOOK | INFLATIONARY COST PRESSURE Inflation driven by close to full employment, rising commodity prices and ongoing supply chain disruption Interest rates rising from historical 0% levels Our response - proactive mitigation strategies are being applied in existing projects and new tenders 67% of
Slide 27: Outlook | Tender Pipeline
OUTLOOK | TENDER PIPELINE A clear pathway to continued growth into FY23 – FY24, with a robust tender pipeline in Australia and New Zealand AUD3,2bn AUD1,7bn Work in hand Current preferred status* AUD 2,5bn AUD1,3bn AUD8,7bn Submitted tenders Tenders in Total Pipeline outstanding preparation Snells A
Slide 28: Outlook | New Project Awards
OUTLOOK | NEW PROJECT AWARDS Bridgewater Bridge Healesville – Koo Wee Rup Road The Queen Elizabeth Hospital Gisborne Wastewater Treatment Plant Tasmania, Australia Victoria, Australia South Australia Gisborne, New Zealand AUD600 million AUD164 million AUD108 million AUD28 million South Geelong to W
Slide 29: Outlook | Plant Optimisation and Fleet Renewal
OUTLOOK |PLANT OPTIMISATION AND FLEET RENEWAL Fleet renewal remains a priority that requires investment in heavy Load, haul and dump mining equipment (HME) for both existing and new contracts trucks • HME will enhance our value offering to our customers Excavation of material by a primary loader (e.
Slide 30: Outlook | Tender Pipeline
OUTLOOK | TENDER PIPELINE Moolmans opportunities are in a diverse range of commodities and geographic locations in Africa • Focus on opportunities – Customer, Commodity, Country, Climate R3,5bn R11,4bn and Currency Work in hand Current preferred status • Mining contracts - Require a longer period to
Slide 31: Outlook | Trident Steel Performance
OUTLOOK | TRIDENT STEEL PERFORMANCE Trident Steel’s growth prospects remain positive, supported by significant new component supply awards and increasing production with existing OEMS • Readying operations for new Ford Ranger and VW Amarok model launches later this year • Increased production volume
Slide 32: Outlook | Group Performance – 2023 Guidance
OUTLOOK | GROUP PERFORMANCE – 2023 GUIDANCE Sustainable Growth Revenue • McConnell Dowell is expected to continue its growth trajectory. Both revenue and operating earnings are expected to increase 13% 13% 18% 17% 13% 10% • Moolmans performance is expected to remain steady 70% 74% 72% • Trident Stee
Slide 33: Key Messages
KEY MESSAGES Bauxite Waste Line 4 Replacement Queensland, Australia
Slide 34: Key Messages
KEY MESSAGES Balance sheet optimisation • External legacy debt reduced from R879 million to R481 million in FY22 • Balance of the external legacy debt to be extinguished in FY23 McConnell Dowell • Strong growth in WIH • Improved operational performance and cash generation • Engineering led focus on
Slide 35: Key Messages
KEY MESSAGES Trident • Strong growth prospects delivered by higher OEM volumes and new contract awards • Investment in working capital required • Disposal at an advanced stage of negotiation ESG • Baseline metrics established • FY23 performance targets tracked and forms part of management remunerati
Slide 36: Thank You Questions
THANK YOU QUESTIONS Tshipi é Ntle South Africa 23 August 2022
Slide 37: Appendix | Statement of Comprehensive Earnings
APPENDIX | STATEMENT OF COMPREHENSIVE EARNINGS FY 2022 FY 2021 Change FY 2022 FY 2021 Change Rm Rm Rm AUDm AUDm AUDm Revenue 26 178 25 709 469 2 356,9 2 418 (61,1) Cost of sales (24 066) (23 744) (322) (2 166,7) (2 233) (66,3) Gross earnings 2 112 1 965 147 190,2 185,0 5,2 Other earnings 140 268 (12
Slide 38: Appendix | Statement of Financial Position
APPENDIX | STATEMENT OF FINANCIAL POSITION FY 2022 FY 2021 FY 2022 FY 2021 Rm Rm AUDm AUDm Assets 12 475 12 445 1 107,1 1 161,8 Goodwill 100 100 8,9 9,3 Property, plant and equipment 2 479 2 463 220,0 230,0 Right-of-use assets 606 337 53,8 31,5 Investments 148 287 13,1 26,8 Deferred taxation 738 725
Slide 39: Appendix | Statement of Financial Position
APPENDIX | STATEMENT OF FINANCIAL POSITION FY 2022 FY 2021 FY 2022 FY 2021 Rm Rm AUDm AUDm Liabilities and equity 12 475 12 445 1 107,1 1 161,8 Liabilities External borrowings and liabilities 481 879 42,7 82,0 Deferred taxation 121 152 10,7 14,2 Lease liabilities 1 039 519 92,2 48,5 Working capital
Slide 40: Appendix | Reconciliation Earnings and Headline Earnings
APPENDIX | RECONCILIATION EARNINGS AND HEADLINE EARNINGS Reconciliation of issued shares ‘million Commentary Shares in issue on 31 December 2020 19 394 Increase in issued capital due to two corporate actions namely fully underwritten Shares in issue - 30 June 2021 64 742 rights offer and a follow-on