Downer Edi Limited · ASX:DOW
Downer Edi — Investor Day (April 2023)
39 slides from Downer Edi's investor day presentation, Apr 27, 2023
Slide 1: Downer Investor Day
2/ A), 2023 . E ee Downer Investor Day
Slide 2: Agenda
Agenda Murray Robertson Stephen Kakavas Jim Kafanelis Transport Transport – RTS Utilities Jacob Bonisch Pat Burke Facilities Facilities – I&E Peter Peter Tompkins Tompkins (CEO) Presentation and Q&A with the heads of Downer’s Business Units (CEO) Lunch Introduction and Trading update, transformation
Slide 3: Purpose, promise, pillars
Purpose, promise, pillars Our purpose is Enabling communities to thrive. Our promise: Our pillars: Our customers' success is our success. Downer Investor Day 2023 | 3
Slide 4: Strategies to realise value for shareholders
Strategies to realise value for shareholders We have announced our plan and communicated key targets Targeting >4.5% Reset EBITA margin operating model Continue to Operational (in FY25) and cost base – simplify current excellence and Targeting portfolio risk management As announced on 27 February 20
Slide 5: Focusing on actions that drive improved performance
Focusing on actions that drive improved performance Our recent performance does not reflect the quality of our business. The Board and Management are united on the need for change and we are focusing on actions that will drive improved performance Current focus of the business Downer’s fundamentals
Slide 6: Transformation program update
Reset operating model and cost base Transformation program update The new operating model: simplification, efficiency, accountability Transformation phases Rapid reset Implement and simplify Full growth potential Update – rapid reset ▪ Completed culture survey (top 500 leaders) and collectively ackn
Slide 7: Transformation program
Reset operating model and cost base Transformation program We have a clear line of sight on our cost out initiatives Other initiatives Improve & automate ▪ Revised IT systems Operating model & ▪ Automation of key roadmap functional optimisation processes and scaling ▪ Property rationalisation activi
Slide 8: Core portfolio provides strong foundation for future growth
Continue to simplify current portfolio Core portfolio provides strong foundation for future growth Core portfolio of outstanding assets ▪ Downer’s core Transport, Utilities and Facilities businesses are diversified across capabilities, markets and geography, and are underpinned by Downer’s strong ma
Slide 9: Portfolio assessment and refinement ongoing
Continue to simplify current portfolio Portfolio assessment and refinement ongoing Portfolio initiatives to simplify, lower risk and maximise shareholder value Completed Announced Ongoing simplification Capital intensity Transport Cyclicality ▪ Portfolio simplification ongoing Mining Sector exposure
Slide 10: Disciplined approach to risk management
Operational excellence and risk management Disciplined approach to risk management Prioritising risk management – adherence to policy and strengthening the control environment Risk management framework Tendering and execution Three Lines of Defence ▪ The Downer Standard (TDS) is ▪ Downer’s Delivery
Slide 11: Focus on performance
Operational excellence and risk management Focus on performance We have made changes to enhance risk management and improve performance Job selection Goal of implemented changes More selective about Increased focus on what we bid – more commercial terms Ensuring we price for the Improve delivery of
Slide 12: Key takeaways
Key takeaways We are making progress on our strategies to realise value for shareholders focusing on a rapid reset Reset of the operating model will drive efficiency, accountability and long-term value creation Reset operating model and Plans completed and ready to execute against $100m+ cost out ta
Slide 13: Business Unit updates
Business Unit updates Focus areas Utilities Our team will share with Jim Kafanelis Performance you the path forward for Power & Gas their Business Units Telecommunications Water Transport Facilities Risk management Jacob Bonisch Murray Robertson Defence Roads & Projects Health & Education Government
Slide 14: Transport
Slide 15: Market leading trans-Tasman franchise in Transport
Market leading trans-Tasman franchise in Transport We create thriving communities. Committed to fulfilling our organisational purpose across Australia and New Zealand. Foundational strengths supporting opportunities Leader in the bitumen and 1 Significant demand in asphalt market across ANZ, growth
Slide 16: Optimising our integrated ANZ Transport business
Optimising our integrated ANZ Transport business Performance ▪ Enable a culture of high performance – customer, operations, risk management and people ▪ Improved proactive resource allocation in response to market opportunities and external factors (labour and mobile equipment can be deployed taking
Slide 17: Leading airport pavements provider
Case study Leading airport pavements provider Integrated airport services ▪ Strong forward pipeline post-COVID ▪ Clear competitive advantage, cost base efficiencies and growth potential through trans-Tasman operating model across airport capabilities ▪ Selective projects, aligned to high-return valu
Slide 18: New Zealand East Coast Infrastructure Recovery
Case study New Zealand East Coast Infrastructure Recovery Cyclone Gabrielle recovery ▪ Downer invited to participate as a critical recovery and rebuild partner to Government, recently formalised through an Interim Alliance Agreement ▪ Building on local and national relationships as an integrated ass
Slide 19: Rail & Transit
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Slide 20: Australia's #1 rollingstock service provider
Australia’s #1 rollingstock service provider Foundational strengths supporting opportunities Opportunities across the rollingstock 1 design, manufacturing and through life Unique breadth of support capabilities capabilities NSW Tangara V/Line fleet TLS fleet replacement Responsible for the 2 Once e
Slide 21: Focused on maintaining highest delivery standards
Focused on maintaining highest delivery standards Performance ▪ Asset and fleet performance ▪ Project/contract performance ▪ People performance – development of a diverse, engaged and empowered workforce to support growth Risk ▪ Focus on commercial, technical, project and interface management excell
Slide 22: Queensland Train Manufacturing Program
Queensland Train Manufacturing Program (QTMP) ▪ Preferred applicant on Queensland Train Manufacturing Program (QTMP) – announced 6 February 2023. Target contract close and mobilisation in Q4 FY23 ▪ Largest investment in new rollingstock in Queensland history ▪ Downer will deliver: ̶ 65 six-car passe
Slide 23: Bi-mode and tri-mode technologies
Case study Bi-mode and tri-mode technologies Long-standing reputation within the rail industry ▪ Downer is proud to have designed and manufactured solutions for the rail sector for more than 100 years, including both locomotives and wagons ▪ With the commitment to reduce emissions by 2030 and net ze
Slide 24: RTS digital capability
Case study RTS digital capability Long-standing reputation within the rail industry ▪ Over the past 10 years Downer has begun to harness its asset management capability to now offer customers a best-in-class digital-based offering ▪ TrainDNAis an industry standard asset management application, consu
Slide 25: Utilities
: 2 Jim ) Kafanelis Utilities
Slide 26: Diversified Utilities services provider across ANZ
Diversified Utilities services provider across ANZ Foundational strengths supporting opportunities ▪ Accelerated investment in Significant design capability and experience renewable energy through the Power & Gas energy transition ▪ Large growth in transmission, ANZ’s largest provider of end-to-end
Slide 27: Optimising our integrated ANZ business
Optimising our integrated ANZ business ▪ Focused on a business-wide performance enhancement program reducing variability in delivery outcomes and Performance leveraging operational opportunity to create margin growth ▪ Utilising the best technical, workforce and asset management expertise across ANZ
Slide 28: Renegotiation of the power maintenance contract
Case study Renegotiation of the power maintenance contract Downer is viewed as a long-term strategic partner by the customer Project scope ▪ Operation and maintenance of Victoria’s electrical distribution network (>43,000km of distribution assets, servicing ~700,000 customers) ▪ Responsible for faul
Slide 29: Powerlink Queensland
Case study Powerlink Queensland Downer’s capability and long-standing relationship means we are critical to the customer’s future plans Customer scope ▪ Construction and maintenance of high voltage transmission lines ▪ Design and construction of substations ▪ Downer has performed well in substation
Slide 30: Facilities
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Slide 31: Unparalleled Facilities Management positions
Unparalleled Facilities Management positions Foundational strengths supporting opportunities 1 The Commonwealth is committed to a period of Largest sovereign, significant repositioning of Australia’s Defence multidisciplinary Defence posture – this is accompanied by a transformative Services Provide
Slide 32: Optimising our integrated ANZ business
Optimising our integrated ANZ business ▪ One trans-Tasman business with common platforms and simplified support structures will enable us to leverage technology that automates labour intensive tasks, pool and share resources and get the best IP from our business Performance to all customers ▪ Establ
Slide 33: Riverina Redevelopment Program
Case study Riverina Redevelopment Program Innovation to accelerate delivery and reduce cost Unique opportunity to transform and sustain the capabilities of RAAF Base Wagga, Albury Wodonga Military Area and Blamey Barracks Kapooka. ▪ Selected to oversee the upgrade of facilities and infrastructure se
Slide 34: Industrial & Energy
Industrial & Energy Case study: Carbon capture Foundational strengths supporting opportunities Santos Moomba Plant ▪ Target cost estimate model Trusted partner to 1 Uniquely positioned to take ▪ ECI, construction and commissioning some of Australia’s most advantage of the energy ▪ Major procurement
Slide 35: Trading update
Trading update key messages
Slide 36: ICAC inquiry update
ICAC inquiry update Key facts What we have done about it ▪ On 2 March 2023, the ICAC announced a public inquiry into the ▪ Downer has at all times conduct of employees of Inner West Council, Transport for NSW, and cooperated closely with the others (including Downer) ICAC’s investigation ▪ Counsel A
Slide 37: Trading update
Trading update ▪ 27 February 2023 guidance statement “Downer now expects underlying FY23 NPATA to be between $170 million – $190 million assuming no further material COVID-19, weather, labour shortages or other disruptions, and excluding restructuring costs” ▪ Trading conditions in Q3 have been in-l
Slide 38: Timeline and what to expect from here
Timeline and what to expect from here 22 February 2023 1 July 2023 Transport Projects New operating model 20 February 2023 divestment Targeting the new operating model Trans-Tasman integration to be effective at the beginning of Announced the merged Australian FY24 and New Zealand operating model 17
Slide 39: Reflections and the path forward
Reflections and the path forward ▪ The past ~4 months have been a particularly challenging Downer is undergoing a period of period for the company significant organisational change. ▪ The Board and the Management Team are united in the need This multi-year transformation journey is necessary in orde