Downer Edi Limited · ASX:DOW

Downer Edi — Investor Day (April 2021)

87 slides from Downer Edi's investor day presentation, Apr 28, 2021

1. Slide 1: Investor Day

   Investor Day 28 April 2021 GOVERNMENT Downer - Relationships creating success SCHOOL G< oooagd ee HOSPITAL aces) [ejsl| Grae] [Eee E|BRSHE|| || BBEE | — Tas coooor — a Qo =| =| 45, AEM PTE [ - poo rlaaee © (| -~-ig----------------- in-------------- G=b- --------------- Gap--- fen See | | ee | |e, Ve

2. Slide 2: Investor Day 2021 Introduction and Group Strategy

   Investor Day 2021 Introduction and Group Transport Utilities Asset Defence Facilities New Strategy Services Zealand Morning Tea 10:15 – 10:30 Q&A 12:40 – 13:00  Grant Fenn  Dante Cremasco Lunch 13:00  Trevor  Pat  Andrew  Peter  Steve Group CEO EGM Road Cohen Burke Foster Killeen Tompkins  J

3. Slide 3: Grant Fenn, Downer CEO

   _ f Grant Fenn . i Downer CEO

4. Slide 4: Understanding Downer

   Understanding Downer Our Purpose Our Pillars  To create and sustain the modern environment by building trusted relationships with our customers Our Promise  To work closely with our customers to help them succeed, using world leading insights and solutions 4

5. Slide 5: Urban Services journey

   Urban Services journey Revenue 2010 2015 Post-divestments Transport Utilities $6.1bn $7.4bn 49% Facilities 38% 41% Asset Services 15% 18% EC&M 26% 32% 27% Mining 17% 21% 6% Work-in-hand $20.4bn $18.5bn $36.2bn as at 31/12/20 5

6. Slide 6: Downer today

   Downer today % OF CORE REVENUE % AUSTRALIA/NZ TRANSPORT 49% 75/25 Road Services 24% 70/30 Rollingstock Services 12% 100/0 Projects 13% 60/40 UTILITIES 18% 75/25 Power and Gas 8% 85/15 Water 5% 75/25 Telecommunications 5% 60/40 FACILITIES 27% 70/30 Health and Education 5% 90/10 Government 10% 80/20 D

7. Slide 7: Urban Services work-in-hand $36.2 billion

   Urban Services work-in-hand $36.2 billion WIH by Service Line Customers 10% Facilities $12.7bn (35%) Utilities Transport $5.2bn (14%) $16.8bn (47%) 90% Asset Services $1.5bn (4%) Govt / Govt-backed Non Govt 7

8. Slide 8: WIH reflects long term contract profile

   WIH reflects long term contract profile WIH profile ($bn) 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 2H21 FY22 FY23 FY24 FY25 FY26+ Transport Utilities Facilities Asset Services 8

9. Slide 9: Strategy shaped by four major trends – Are they still relevant?

   Strategy shaped by four major trends – Are they still relevant? Growing population Increasing urbanisation Government outsourcing 9 Technology

10. Slide 10: Population

    Population  Australia’s population is expected to Components of Australian population growth be 667,000 smaller by FY25 than the pre-COVID trajectory  Net overseas migration (NOM) has been the largest contributor to population growth over the past 10 years, and has also been the hardest hit by COV

11. Slide 11: New macro trends

    New macro trends  Bigger Government at all levels ̶ Unprecedented levels of fiscal stimulus ̶ Infrastructure and services key delivery methods  Decarbonisation of the economy (accelerating) ̶ Driven by capital providers (banks and equity) ̶ Business way ahead of Government ̶ Significant opportunit

12. Slide 12: Key market outlook

    Key market outlook Australian economic growth Transport sector output Utilities sector output Construction sector output Source: Australian Bureau of Statistics; Deloitte Access Economics 12 © 2021 Deloitte Access Economics. Deloitte Touche Tohmatsu

13. Slide 13: Key market outlook

    Key market outlook Kilometres of major new road by completion date Government spending on transport and communication infrastructure Square metres of major new office facilities by completion date Source: 2020-21 Commonwealth Budget © 2021 Deloitte Access Economics. Deloitte Touche Tohmatsu Source:

14. Slide 14: Capital management

    Capital management  Maintenance of BBB Fitch rating  Net Debt managed within 2-2.5x EBITDA  Dividends increasing to 60-70 % of NPATA over time  On-market buy-back ~$400m  No major refinancing required in the next 24 months  Capital and covenant headroom available for growth 14

15. Slide 15: On-market buy-back

    On-market buy-back  ~$400m program launched 28 April  On-market buy-back is the most EPS accretive option for shareholders  Total number of shares purchased will depend on share price levels and other capital requirements  Leverage comfortably within target range of 2-2.5x Net Debt to EBITDA  H

16. Slide 16: Cash generation

    Cash generation  Diversified and resilient earnings from critical service revenues; unable to be turned off  Agile and robust risk systems and business model  Expectation of 90-100% normalised EBITDA cash conversion  No net reduction through the cycle in Free Cash Flow due to exit of Mining and

17. Slide 17: Immediate priorities

    Immediate priorities  FY21 Earnings and Cash performance ̶ Strong performance year to date  Sale of remaining non-core assets (Mining Open Cut East and Hospitality) ̶ Sale process underway for Open Cut East ̶ Information Memorandum for Hospitality currently in the market  FY22 – FY24 Business Pla

18. Slide 18: Immediate priorities

    Immediate priorities  Growth ̶ Organic o Take advantage of increased Government spend in Urban Services markets and opportunities in first generation Government outsourcing o Margin improvement (delivery execution, market position) o Investment in technology (cyber resilience, production facilities

19. Slide 19: Julie Wills, Head of Sustainability

    Julie Wills Head of Sustainability 19

20. Slide 20: Sustainability at Downer

    Sustainability at Downer  At Downer, Sustainability means: ̶ Sustainable and profitable growth ̶ Providing value to our customers ̶ Delivering our services in a safe and environmentally responsible manner ̶ Helping our people to be better ̶ Advancing the communities in which we operate  Continuing

21. Slide 21: Climate resilience and decarbonisation

    Climate resilience and decarbonisation  Downer’s Urban Services strategy delivers environmental and social benefits including a move to lower capital intensive and lower carbon activities, supporting Downer’s decarbonisation pathway  There are considerable opportunities for Downer that outweigh id

22. Slide 22: Downer's decarbonisation journey

    Downer’s decarbonisation journey • Scope 1 & 2 & 3 GHG emissions reduction target. Scope 1 & 2 - Net zero by 2050. First Sustainability Urban Services Science Based Target Initiative ISCA Membership TCFD Commitment Report Strategy Registration and Validation 2009 2015 2018 2020 2021 2008 2012/13 201

23. Slide 23: Climate resilience and decarbonisation

    Climate resilience and decarbonisation  Downer has committed to reduce our Scope 1 and 2 GHG emissions by 45-50% by 2035 and be net zero by 2050. This commitment was registered with the SBTi on 21/3/2021  Downer is well positioned to contribute to Australia and New Zealand’s energy transition  Do

24. Slide 24: Pathway to Net Zero

    Pathway to Net Zero Downer has a role to play in reducing its direct emissions profile, but also contributes to decarbonisation initiatives across the broader economy. Urban Services Scope 1 & 2 Strategy Divesting from high capital, high carbon Renewables, grid intensive industries Energy Efficiency

25. Slide 25: Scope 3 pathway

    Scope 3 pathway In 2021 Downer registered its Science Based Target with the SBTi, which includes a target for Scope 3 emissions. Customer and supplier EVs and Customer and Scope 3 Customer and Alternate Fuel supplier grid Low carbon supplier Vehicles emissions materials commitments ISCA IS ratings T

26. Slide 26: Transport: Road Services

    Transport Road Services Dante Cremasco EGM Road Services (Australia) 26

27. Slide 27: Road Services

    Road Services  Downer is the largest non- government owned road infrastructure services business in Australia and New Zealand  We maintain >36,000km of road in Australia and >25,000km in New Zealand  Very strong Government customer base: ̶ All Australia’s State road authorities ̶ NZ Transport Age

28. Slide 28: Road Services

    Total road maintenance (AU) Road Services  Government stimulus to boost road maintenance ̶ Our key customers are State and Local governments; over $1bn road maintenance revenue in Australia in FY20  Federal and State programs, plus maintenance backlogs, will see a jump in local road maintenance (s

29. Slide 29: Road Services

    Road Services Extensive, strategic footprint in both Australia and New Zealand ASPHALT PLANT Darwin DM ROADS DEPOT MULTISITE Cairns BITUMEN PRODUCTS PLANT Northern Territory Queensland Western Australia South Brisbane Geraldton Australia New South Wales Perth Sydney Adelaide ACT Canberra Victoria Me

30. Slide 30: Customers proposition

    Road Services Competitive advantage from leading positions in each part of the value chain  Government road authorities  Local councils Road Network Manager Customers  Waste businesses  Airports and ports Road, intelligent traffic systems and smart city asset and network management including lon

31. Slide 31: Road Services and the circular economy

    Road Services and the circular economy https://www.youtube.com/watch?v=E0LZ-Y16oXA 31

32. Slide 32: Transport: Rail & Transit Systems

    Transport Rail & Transit Systems Stephen Kakavas EGM Rail & Transit Systems 32

33. Slide 33: Major investment in rail projects drives market outlook for the next 5 years

    Major investment in rail projects drives market outlook for the next 5 years Pipeline of rail projects by status ($billion)  Federal and State Governments have not just announced major rail projects, they are proceeding $50 NSW with procurement within the next 5 years VIC $39.1 $40 Commonwealth NZ

34. Slide 34: Downer's competitive advantage positions Rail & Transit Systems for growth

    Downer’s competitive advantage positions Rail & Transit Systems for growth Unique breadth Innovative Leading market Expansion Strategic sites of capabilities solutions position Opportunities  Capability covers:  Sites strategically  Condition  Over 100 years’  International ̶ Rollingstock locat

35. Slide 35: Downer's strategic footprint in growth hubs

    Downer’s strategic footprint in growth hubs Maryborough Gold Coast Nowergup Claisebrook Cardiff Mandurah Newcastle Sydney Auburn Adelaide Service Delivery Centre Fleet Maintenance Centre Newport Pakenham Melbourne Project Office East Preston Light Rail Operations Heavy Rail Operations 35

36. Slide 36: Our urban asset management services deliver EPC projects with long-term accretive revenue

    Our urban asset management services deliver EPC projects with long-term accretive revenue Downer is focused on winning and delivering secure, long-term service revenue and leveraging its expertise to drive margin expansion over time Margin Revenue  Selective participation  Defensive, long term, pr

37. Slide 37: Rail & Transit Systems in New South Wales

    Rail & Transit Systems in New South Wales  Waratah Trains: ̶ 78 eight car sets ̶ Largest rollingstock order in Australia’s history  Sydney Growth Trains (SGTs; Waratah Series 2): ̶ 24 ordered in 2016; plus 17 in 2019 = 41 eight car set ̶ Fastest delivery of suburban trains in Australia  Fast deli

38. Slide 38: Rail & Transit Systems in Victoria

    Rail & Transit Systems in Victoria  High Capacity Metro Trains: ̶ 65 seven car sets ̶ New state-of-the art maintenance facility ̶ Light service facility ̶ Maintenance of trains until 2053 ̶ Interface with high-capacity signalling ̶ Largest rollingstock order in Victoria’s history  Delivering criti

39. Slide 39: Rail & Transit Systems in Queensland and WA

    Rail & Transit Systems in Queensland and WA Queensland  Modifying 75 New Generation Rollingstock trains until 2024  2020 Rail Fusion Alliance Agreement: range of services for Queensland Rail fleet including overhauling Tilt Trains and other enhancement and life extension works  R&D: conversion of

40. Slide 40: Rail & Transit Systems: Keolis Downer

    Rail & Transit Systems: Keolis Downer Keolis Downer is Australia’s largest private provider of multi-modal transport solutions, Australia’s largest light rail operator and a significant operator of buses  250 million passenger journeys each year  Operates and maintains: ̶ Melbourne: Yarra Trams, t

41. Slide 41: Transport: Projects (Australia)

    Transport Projects (Australia) Mark Mackay EGM Infrastructure Projects 41

42. Slide 42: Projects – Australia

    Projects – Australia Significant government Road, Rail and Power work done & forecast investment in transport and power infrastructure ($bn) Forecast (Public & Private) Roads and Rail 60  National Roads market of $27bn per annum, peaking in FY24 50  National Rail market of $14bn per annum, peaking

43. Slide 43: Projects – Australia

    Projects – Australia Very selective approach in a large market Commercial Model  Strategic “swim lanes” guide our pursuit of opportunities. Criteria include: – Commercial model – Customer – Capability  We are prepared to say “no” Strategic  More “risk sharing” contracts are coming to market align

44. Slide 44: Delivering For Success

    Delivering For Commercial Operating Model Success 44

45. Slide 45: Transmission projects

    Transmission projects  Large demand for new HV transmission lines  ElectraNet’s Eyre Peninsula Link will provide a new 262km, double circuit 132kV Transmission Line from Cultana to Port Lincoln on the Eyre Peninsular. Downer commenced delivery of this $245m project in February 2021  Alinta Energy

46. Slide 46: Transport projects

    Transport projects  $220 million Newcastle Light Rail for Transport for NSW – Managing Contractor model  ~$170 million to date for Transport for NSW’s Access Program (upgrading train stations to improve accessibility for disabled persons) – Managing Contractor framework  $220 million Warrnambool

47. Slide 47: Utilities

    Utilities 47

48. Slide 48: Utilities in Australia – a balanced portfolio

    Utilities in Australia – a balanced portfolio Revenue Work-in-hand Water Telco & New Water Telco & New ~40% Energy ~40% Energy ~25% ~25% Power and Power and Gas Gas ~35% ~35%  As NBN construction contracts have rolled off, Downer has won significant new contracts: ̶ NBN Unified Field Operations (~$

49. Slide 49: Utilities in Australia

    Utilities in Australia Power Networks Gas Networks Water Telco New Energy 49

50. Slide 50: Power networks

    Power networks Power distribution Outsourced market ~$1.1B maintenance market ~$7B 15% 25% 75% 85% Outsourced Insourced Downer Opportunity 50

51. Slide 51: Gas networks

    Gas networks Gas distribution maintenance market ~$1B Outsourced market ~$550M 30% 45% 55% 70% Outsourced Insourced Downer Opportunity 51

52. Slide 52: Power and Gas – customers

    Power and Gas – customers Victoria 52

53. Slide 53: AusNet Services case study

    AusNet Services case study  2000 – Downer awarded contract to operate and maintain the central region of AusNet’s electricity distribution network  2004 – Downer awarded contract to operate and maintain AusNet’s gas distribution network  2019 – Downer awarded contract to operate and maintain more

54. Slide 54: AusNet Services case study

    AusNet Services case study 54

55. Slide 55: Water

    Water Major Water Minor Water Local Councils Authorities ~$1.5B Authorities ~$650M ~$600M 5% 20% 25% 75% 80% 95% Opportunity Downer 55

56. Slide 56: Water

    Water Major Capital Works  Market $4 billion  Major capital works includes dams, treatment plants and pipelines  Downer and JV partners share $40m or 1% of the total market  Downer selectively participates in projects associated with wastewater treatment plants and with customers that mutually s

57. Slide 57: Water – customers

    Water – customers Victoria 57

58. Slide 58: Telco and New Energy

    Telco and New Energy Telco market ~$1.8B (NBN, New Energy (including Telstra and Optus) Smart Meters ~$700M) 5% 15% 85% 95% Downer Opportunity Downer Opportunity 58

59. Slide 59: Telco and New Energy – customers

    Telco and New Energy – customers National All states other than WA 59

60. Slide 60: Asset Services

    Asset Services Power and Industrial Future Energy and Marine Energy Pat Burke EGM Asset Services 60 Image courtesy of BHP

61. Slide 61: Asset Services

    Asset Services As a trusted partner with a leading safety record, we optimise the reliability, efficiency and whole-of-life costs of our customers’ assets through long term relationship based contracts. Power and Energy  Maintenance and Shutdown services for over 18GW of Australia’s power generatio

62. Slide 62: Our current markets are diverse with ample room to grow

    Our current markets are diverse with ample room to grow Asset Services holds ~9% of the $6bn outsourced maintenance market Asset Services Market Share FY20 Total Maintenance Market was $11bn with $6bn outsourced Oil & Gas Asset Services current market share is less than 10% of the $2.2bn pa outsourc

63. Slide 63: Decarbonisation

    Decarbonisation Our extensive capabilities and experience means we are in a strong position to help our customers on their decarbonisation journey  All our customers are now actively investing in decarbonisation projects, and most are investigating hydrogen opportunities  There are many pathways t

64. Slide 64: Hydrogen

    Hydrogen Downer is investing in expertise and capability to ensure we have the necessary skills to participate wholly in the new Hydrogen economy  Downer is an executive member of the Australian Hydrogen Council  Our investment in Hydrogen capability includes: ̶ Member of the COAG National Hydroge

65. Slide 65: Downer in Defence

    Downer in Defence Downer has been working with Defence since 1941 and this year celebrates 80 years supporting Defence.

66. Slide 66: Defence Market Drivers

    Defence Market Drivers 1. Security situation across our region is deteriorating – referred to as “grey zone” warfare. Some examples include aggressive behind the scenes posturing, cyber and information / intelligence based warfare etc. 2. Australian Fed Gov has responded with significant future spen

67. Slide 67: Defence customer landscape

    Defence customer landscape Where we play Defence customer groups E&IG CASG CIOG Service Arms & Other Above the Professional Services Consulting Program Management, Assurance, Cyber, Systems Engineering, ILS, Test & Evaluation, Commercial, etc line Facilities Maintenance Below (EMOS) the line Estate

68. Slide 68: Defence – our services

    Defence – our services Today, Downer provides a range of professional and managed services, asset sustainment and estate upkeep services to the Australian Defence Force, the New Zealand Defence Force and other government agencies. 68

69. Slide 69: Downer Defence business

    Downer Defence business Growth potential 69

70. Slide 70: Defence – "above the line"

    Defence – “above the line” With hundreds of security-cleared resources, we provide solutions for Defence and national security customers  Today Downer’s defence business – Downer Defence Systems (DDS) – delivers a range of professional and managed services and solutions to Defence and other governm

71. Slide 71: Defence – "above the line"

    Defence – “above the line”  Downer has established itself as a major contributor to the modernisation of the land, maritime, air, space and joint communications and information systems across the Australian Defence Force and other government agencies  Downer executes highly complex projects across

72. Slide 72: Facilities

    Facilities Health Education Government Defence Peter Tompkins CEO Spotless 72

73. Slide 73: Key Market Outlook

    Key Market Outlook GOVERNMENT MAINTENANCE HEALTH MAINTENANCE DEFENCE BUILDING LIGHT INDUSTRIAL EDUCATION MAINTENANCE ANNUAL SPEND $bn ANNUAL SPEND $m MAINTENANCE MAINTENANCE ANNUAL SPEND $m ANNUAL SPEND $m ANNUAL SPEND $m 8 3,500 720 5,000 5,000 7 700 4,500 4,500 3,000 680 4,000 4,000 6 2,500 660 3,

74. Slide 74: Government Portfolios

    Government Portfolios Downer’s Facilities service line is the largest provider of Government Portfolio FM Services, ideally positioned to support pandemic recovery and stimulus work. Market Position Key Advantages  Leading services provider in Australia across Government  Market dominant positions

75. Slide 75: Single Service Line Specialisation

    Single Service Line Specialisation Technical and soft single line service specialisation and large, agile workforces differentiates Downer’s Facilities service line from its competitors. Market Position Key Advantages  Ability to rapidly mobilise, train and supervise large  Specilialised single se

76. Slide 76: Public Private Partnerships

    Public Private Partnerships Greatest number of PPP projects under management and self delivery of hard and soft services, making Downer’s Facilities service line a highly desirable PPP partner. Market Position Key Advantages  Unique in market as specialist delivery provider of all scopes  Pre-emin

77. Slide 77: Defence

    Defence As one of the few remaining Australian providers to Defence, Downer Group is poised to expand its below the line business in scale, footprint and service. Market Position Key Advantages  One of the few remaining Australian owned contractors  One of three providers to Defence Estate Operati

78. Slide 78: New Zealand

    New Zealand

79. Slide 79: Leading market position

    Leading market position  Largest provider of services to asset owners in New Zealand  Market leader in all of our sectors  $4.5bn of work in hand  Focused pipeline of $37.7bn over next 5 years Transport Utilities Facilities 30% market share 25% market share 15% market share of outsourced across

80. Slide 80: Strong market opportunities

    Strong market opportunities Supporting New Zealand urban growth in the main centres and regions  High demand on transport infrastructure  Aged water assets University of Waikato  Shift to whole of life investment (build and maintain of facilities)  Investing in social infrastructure (housing, sc

81. Slide 81: Robust customer relationships

    Robust customer relationships Focus on developing long term relationship beyond contractual terms  Local and central Government  Institutional customers (universities, power, telco, etc.)  Collaboratively developing business models that deliver the best outcomes for customers and communities “If

82. Slide 82: New Zealand case study

    New Zealand case study https://www.youtube.com/watch?v=0ixORg_RpIo 82

83. Slide 83: Key Government and council customers

    Key Government and council customers 83

84. Slide 84: Key institutional customers

    Key institutional customers 84

85. Slide 85: Key utilities customers

    Key utilities customers Power and Gas Water Telco 85

86. Slide 86: Delivering sustainable growth

    Delivering sustainable growth Integrated business approach to drive new revenue  Meeting our customers’ needs by combining capabilities in our contracts  Integration of services through build or maintenance Christchurch Townhall conservation resulting into optimised performance for our customers a

87. Slide 87: Investor Day

    Investor Day 28 April 2021 GOVERNMENT Downer - Relationships creating success SCHOOL G< oooagd ee HOSPITAL aces) [ejsl| Grae] [Eee E|BRSHE|| || BBEE | — Tas coooor — a Qo =| =| 45, AEM PTE [ - poo rlaaee © (| -~-ig----------------- in-------------- G=b- --------------- Gap--- fen See | | ee | |e, Ve

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