Slide 1: 2020 Interim Results Presentation
2020 INTERIM RESULTS PRESENTATION 25 February 2020
Slide 2: Agenda
AGENDA 01 OVERVIEW & STRATEGIC REVIEW Eric Diack Executive Chairman 02 FINANCIAL OVERVIEW Adrian Macartney Group Finance Director 03 Sean Flanagan OPERATIONAL PERFORMANCE Group Chief Executive Officer 02 OUTLOOK Sean Flanagan Group Chief Executive Officer Nkomati - South Africa 2
Slide 3: Strategy Implementation
STRATEGY IMPLEMENTATION The Group’s risk profile has been and will continue to be reduced via the execution of the strategic plan Start Aug 2017 Strategic review Implemented Sustainable future Where we started Outcome of review Achievements In progress • Requirement to develop a • Difficult decision
Slide 4: Execution of Strategic Plan | Disposal update
EXECUTION OF STRATEGIC PLAN | Disposal update Anticipated completion Commenced March 2018 NON-CORE DISPOSAL PROCEEDS IN LINE WITH EXPECTATIONS June 2020 Cash to date R750m Deals announced Deals in negotiation Achievements: Sales announced to market: • Steel • Jet Park R215m • Infraset R180m • ACS •
Slide 5: Strategic Journey | Core business performance
STRATEGIC JOURNEY | Core business performance 01 02 03 04 Revenue Net operating profit Core businesses both Cost management R6,9 billion R99 million cash positive • McConnell Dowell • McConnell Dowell • McConnell Dowell • Corporate • Meeting expectations • R59 million profit • R110 million • Headcou
Slide 6: Financial Overview
FINANCIAL OVERVIEW Platreef – South Africa
Slide 7: Salient Features
SALIENT FEATURES SALIENT FEATURES Group Revenue Net operating profit Core businesses R11,2 billion R14 million both cash positive • McConnell Dowell sustained profitability • Moolmans returned to profitability • Non-core operations reduced net loss SAFETY & CARE HONESTY & INTEGRITY CUSTOMER FOCUS WO
Slide 8: Salient Features
SALIENT FEATURES SALIENT FEATURES R750 million Diversified core R450 million non-core assets order book debt repaid sales proceeds 72% International; • R400 million of Super Senior Liquidity Facility received to date 28% South Africa • R50 million of Term Loan • R2,5 billion reduction in performance
Slide 9: Financial Performance
FINANCIAL PERFORMANCE H1 2020 H1 2019 Results Rm Rm Revenue 11 185 13 367 Gross margin % 6,9 4,5 Operating expenses (886) (1 125) Net operating earnings/(loss) 14 (484) Net interest (217) (255) Impairment of PPE and equity-accounted investment (11) (163) Loss for the period (170) (920) Headline loss
Slide 10: Segmental Results
SEGMENTAL RESULTS REVENUE NET OPERATING EARNINGS/(LOSS) OPERATING FREE CASH FLOW H1 2020 H1 2019 H1 2020 H1 2019 H1 2020 H1 2019 Rm Rm Rm Rm Rm Rm McConnell Dowell 4 636 4 818 59 55 110 (198) Moolmans 2 287 2 035 117 (166) 261 (145) Other eliminations (37) (69) (77) (196) *12 (212) Total core 6 886
Slide 11: Financial Position
FINANCIAL POSITION Dec’19 Jun’19 Dec’19 Jun’19 Rm Rm Rm Rm Assets 11 455 12 282 Liabilities & equity 11 455 12 282 Liabilities Goodwill and intangible assets 134 139 Borrowings and liabilities 1 945 2 145 Property, plant and equipment 3 284 2 814 Borrowings and liabilities (IFRS 16) 488 - Working ca
Slide 12: Working Capital
WORKING CAPITAL Core Assets Non-core Assets Dec’19 Jun’19 Dec’19 Jun’19 Rm Rm Rm Rm Inventory 220 214 1 121 1 658 Trade and other receivables 281 194 656 1 277 Amounts due from contract customers 2 229 2 621 119 401 Trade and other payables (2 285) (2 683) (1 272) (2 194) Amounts due to contract cus
Slide 13: Uncertified Revenue and Claims
UNCERTIFIED REVENUE AND CLAIMS Dec’19 * Jun’19 * Dec’19 C&E Australia Mining Non-core TOTAL Rm Rm and Asia Uncertified claims and variations 1 289 1 316 Contract claims 828 - 5 833 Contract contingencies (410) (638) Uncertified variations 302 46 108 456 (timing) Contract and retention receivables 1
Slide 14: Movement in Net Debt
MOVEMENT IN NET DEBT 527 222 118 35 52 (20) (69) (119) (219) (200) (336) (540) (549) Net debt Cash from Cash from Non-cash Working Net finance Taxation Net capital Proceeds IFRS 16 Repayment of Other & * Net debt 30 Jun ‘19 operations operations movements capital change charges expenditure disposal
Slide 15: Liquidity
LIQUIDITY Dec’19 Jun’19 Rm Rm Net Cash 1 396 1 605 South African operations 294 581 McConnell Dowell 1 102 1 024 Borrowings (1 945) (2 145) South African operations (1 768) (1 967) McConnell Dowell (177) (178) Net debt (549) (540) IFRS 16 Finance lease liability (488) - Post IFRS 16 net debt (1 037)
Slide 16: Operational Performance
OPERATIONAL PERFORMANCE Northern Gas Pipeline - Australia
Slide 17: Safety, Health & Environment
SAFETY, HEALTH & ENVIRONMENT • Zero fatalities 12 MONTH ROLLING LTIFR No of LTI's 12 m Rolling LTIFR LTIFR Target • LTIFR & TRIFR tracking below targets 1 0.15 • Built Environs achieved 5 years LTI free record 0.10 0.06 0.05 0 0.00 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-1
Slide 18: McConnell Dowell | Overview
MCCONNELL DOWELL │ Overview • Maintained profitability for fifth consecutive CONTRACT PERFORMANCE reporting period Loss making jobs Not making budget profit on > bid profit 150 • Positive Cash flows Number of projects 79 79 100 • Improved project execution enhances margin 66 50 performance 50 54 58
Slide 19: McConnell Dowell | Overview (cont.)
MCCONNELL DOWELL │ Overview (cont.) • Current order book AUD1,6 billion • AUD604 million of new orders secured to 31 December 2020 • Further AUD350 million secured in January 2020 • 96% of FY20 and 61% of FY21 revenue secured • AUD1,9 billion of preferred contractor status Sembcorp tunnel– Singapore
Slide 20: McConnell Dowell | Portfolio mix
MCCONNELL DOWELL │ Portfolio mix REVENUE FY20 GEOGRAPHY ORDER BOOK AS AT JAN 2020 10% Australia 18% Southeast Asia 43% New Zealand and Pacific Islands 29% 14% Built Environs 57% 11% 18% REVENUE FY20 ORDER BOOK AS AT JAN 2020 CONTRACT TYPE 3% 4% Alliance 32% 34% Construct only 33% 36% Design and Cons
Slide 21: Wynyard Edge Alliance | New Zealand
WYNYARD EDGE ALLIANCE | New Zealand • First alliance led by Auckland City Council • The Wynyard Edge Alliance will contribute over AUD100 million in revenue to the business in 2 years • The project enables the 36th America’s Cup to be held in New Zealand, an event that is important in drawing touris
Slide 22: McConnell Dowell | Specialist capabilities
MCCONNELL DOWELL │ Specialist capabilities South East Asia Rail Civils Marine Pacific Islands Pipelines Tunnel & Underground Hydropower and Dams Australia New Zealand Building SAFETY & CARE HONESTY & INTEGRITY CUSTOMER FOCUS WORKING TOGETHER PERFORMANCE EXCELLENCE 22
Slide 23: Jane and Mulgoa Street Bridge | Australia
JANE AND MULGOA STREET BRIDGE | Australia • NSW project achieved major milestone and Australian construction first • Involved demolition of existing rail bridge and replacement with a new longer concrete bridge built off-site • Used self-propelled modular units to move complete new bridge (2500 tonn
Slide 24: Operational Performance
Providing a better life OPERATIONAL PERFORMANCE Sishen – South Africa
Slide 25: Safety, Health & Environment
SAFETY, HEALTH & ENVIRONMENT • Zero fatalities 12 MONTH ROLLING LTIFR No of LTI's 12 m Rolling LTIFR LTIFR Target • Zero environmental incidents 3 0.60 • TRIFR tracking below target of 0,78 2 0.30 0.40 • Commendable performance at: 1 0.20 • Kolomela Mine with 1036 LTI free days 0 0.00 Jan-19 Feb-19
Slide 26: Moolmans | Overview
MOOLMANS │ Overview • Turnaround strategy gaining traction: • Net operating profit increase significantly y-o-y from R166 million loss to R117 million profit • Five Contract extensions completed • 96% of FY20 revenue secured and 53% of FY21 • 25% of FY21 revenue in near orders • Improved performance
Slide 27: Moolmans | Capabilities
MOOLMANS │ Capabilities TWO-YEAR ORDER BOOK FOOTPRINT CAPABILITY COMMODITY SPLIT Excavators / Face Shovels Mass range : 170 – 700 tonnes 3% 17% Mali 34% Burkina Dump Trucks 2% Faso Mass range : 100 – 200 tonnes Guinea 9% Ghana Drill Rigs 8% Tanzania 27% Mozambique Zambia Iron Ore & Waste Nickel Nami
Slide 28: Platreef | South Africa Fast Facts
PLATREEF | South Africa FAST FACTS • Customer: Platreef Resources • Commodity: Platinum • Five underground stations • Final shaft depth of 982m • Duration: 2014 to current SAFETY & CARE HONESTY & INTEGRITY CUSTOMER FOCUS WORKING TOGETHER PERFORMANCE EXCELLENCE 28
Slide 29: Project Management Office
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Slide 30: Non-Core Performance
NON-CORE PERFORMANCE Non-Core Assets • Aveng Construction: South Africa – underlying R142 million net operating loss and R400 million cash outflow • Mainly impacted by Leonardo project • Four live construction contracts in Group being managed to completion • Manufacturing – R7 million net operating
Slide 31: Establishment of Project Management Office
ESTABLISHMENT OF PROJECT MANAGEMENT OFFICE • Tasked with overseeing the phase out of all SOUTH AFRICA BOND EXPOSURE non-core assets 4 000 • Ensure remaining active projects and projects subject to 3 500 defect liability periods are managed to completion 3 000 • Collection of all outstanding performa
Slide 32: Outlook
OUTLOOK Modbury Hospital upgrade Render – Australia
Slide 33: Market Conditions | McConnell Dowell
MARKET CONDITIONS | McConnell Dowell 01 02 03 04 New Zealand Built Environs Australia and Pacific Islands South East Asia Australia & New Zealand • Industry forecast 3% • Construction market • Construction industry • Commercial construction in growth for next three remains buoyant forecast 6% growth
Slide 34: Market Conditions | Moolmans
MARKET CONDITIONS | Moolmans Legend: 01 02 Sub-Saharan Africa Central Africa West Africa Sub-Saharan Africa Central Africa Mauritania • Opportunities coming on stream • Opportunities coming on stream Mali • Coal & Zinc • Copper, Gold & Cobalt Burkina Faso • 19% (CAGR*) increase to 2025 • 52% (CAGR*)
Slide 35: Two-Year Order Book | Core
TWO-YEAR ORDER BOOK │ Core TWO-YEAR ORDER BOOK BY GEOGRAPHY TWO-YEAR ORDER BOOK HY 2020 FY 2019 South Africa, 28% Australia, Rm Rm 41% McConnell Dowell 12 851 11 686 Moolmans 5 072 5 980 Southeast TOTAL 17 923 17 666 Asia, 12% New Zealand and Pacific Islands; 19% TWO-YEAR ORDER BOOK BY SECTOR Mining
Slide 36: Key Focus Areas Over Next Six Months
KEY FOCUS AREAS OVER NEXT SIX MONTHS • Continuously improving operational performance on both core assets • Optimise quality of order book • Size and embedded margins • Positive cash generation • Further reduction in costs • Reduce debt and finance charges • Complete the disposal process Nkomati– So
Slide 37: Thank You
IN IWENG Providing a better life “3 sare, ‘\ : Nea : S ie ——