Slide 1: Full Year Results 2008
For personal use only Full Year Results 2008 21 August 2008 Geoff Knox, Chief Executive Officer and Peter Reichler, Chief Financial Officer
Slide 2: Agenda
Agenda For personal use only Zero Harm Highlights & Group Overview Group Financials & Divisional Results Outlook 1
Slide 3: Zero Harm
Zero Harm For personal use only Safety performance improving 2 .6 Lost Time Injury Frequency Rate (per million man hours worked) 2 .5 2 .4 2 .3 2 .2 2 .1 2 .0 1.9 1.8 Jul A ug Sep Oct N o v D ec Jan F eb M ar A p r M ay Jun LTIFR 12-month rolling average LTIFR is improving and our aim is zero harm.
Slide 4: Group highlights
Group highlights For personal use only EBIT $281m, Profit $166m and full-year dividend of 25.5 cents Third consecutive half of strong cash flow Strong performance by Works, Engineering and Rail Mining recovery continues Rail PPP on track Delivering our strategic plan Strong footprint i
Slide 5: Divisional highlights
Divisional highlights For personal use only Overall divisional EBIT margins of 6%¹ Engineering – revenue grew 16% and strong EBIT growth Works – strong year with revenue up 10% and EBIT up 48% Rail – revenue grew 14% and EBIT up 10% Mining – strong stable order book of $2.6bn 1 excluding M
Slide 6: Delivering on commitments
Delivering on commitments For personal use only Full Year to 30 June ($m) 2008 2007 % Turnover 5,5881 5,422 3.1% EBIT 281 129 119% Net Profit After Tax 166 102 63% DPS (cents) 25.5 21.0 21% Increased profit and dividend 1 Excludes revenue from Century Resources subsequent to its sale on December 31
Slide 7: Performance improvement
Performance improvement For personal use only Net profit after tax $m Earnings per share EPS (cents) 166 2008 2007 % 51.3 104 102 36.3 32.0 82 29.6 -25 -8.4 04 05 06 07 08 04 05 06 07 08 Dividend per share (cents) Operating cashflow $m 25.5 2008 2007 % 276 20 21 18 186 15.6 181 106 90 04 05 06 07 08
Slide 8: Business momentum continues
Business momentum continues For personal use only Turnover $b Employee Numbers 5.6 5.4 1,000 24.1 4.7 4.0 22.3 3.4 21.0 17.5 14.6 04 05 06 07 08 EBIT $m 281 189 157 129 -64 04 05 06 07 08 041 05 06 07 08 1 EBITA pre IFRS Engineering Mining Works Rail 7
Slide 9: Markets remain strong
Markets remain strong For personal use only Order Book FY08 Order Book $b by Division $b 11.5 9.3 33.8 6.9 6.4 6.5 4.7 2.6 2.1 2.1 04 05 06 07 08 Engineering Mining Works Rail 8
Slide 10: Focusing on shareholder value
Focusing on shareholder value For personal use only 17.6 ROE 16.31 ROFE 15.5 14.0 9.9 11.5 13.9 10.21 7.9 8.7 -2.6 -4.3 04 05 06 07 08 04 05 06 07 08 ROE = NPAT/Equity ROFE = EBIT/AFE; AFE = Average Net Debt + Average Equity last 3 half-years 1 Excluding ROADS 9
Slide 11: Group Financials & Divisional Results
For personal use only Group Financials & Divisional Results Peter Reichler, CFO
Slide 12: Solid performance
Solid performance For personal use only Full Year to 30 June ($m) 2008 2007 % Revenue 5,4631 5,330 2.5% EBIT 281 129 119% Net Interest (49) (56) 12% Profit Before Tax 232 73 219% Tax (Expense)/Benefit (66) 29 - Net Profit After Tax 166 102 63% EPS (cents) reported2 51.3 32.0 60% DPS (cents) 25.5 21.
Slide 13: Third consecutive half year of strong cash flow
Third consecutive half year of strong cash flow For personal use only $million June 2008 June 2007 Net Profit after tax 166) 102 Depreciation & amortisation 119) 137 Working capital movement 94 (114) Other (103) (19) Operating cash flow 276 106 Investments (net) 34 (128) Capital expenditure (net) (1
Slide 14: Strong balance sheet – well positioned for growth
Strong balance sheet – well positioned for growth For personal use only June net debt of $407m Gearing134.0% and interest cover2 of 5.7 times $390 million Australian dollar syndicated loan facility refinanced Operating cash flow $276m – 98% of EBIT Net capex $181m – investing in future gro
Slide 15: Works – another strong performance
Works – another strong performance For personal use only Full Year to 30 June ($m) 2008 2007 % Revenue 1,770 1,610 10% EBIT 110 74 48% EBIT/Sales 6.2% 4.6% - ROFE 17.1% 15.4% - Order Book 2.1bn 1.2bn 75% HIGHLIGHTS STRATEGY Scale player in our markets Continued expansion in Asia-Pacific markets
Slide 16: Works – another strong performance
Works – another strong performance For personal use only Revenue $b EBIT $m 110 1.8 1.6 74 07 08 07 08 ROFE % EBIT Sales Margin % 17.1 6.2 15.4 4.6 07 08 07 08 14
Slide 17: Rail – PPP on track and base business performing strongly
Rail – PPP on track and base business For personal use only performing strongly Full Year to 30 June ($m) 2008 2007 % Revenue 613 537 14% EBIT 46 42 10% EBIT/Sales 7.5% 7.8% - ROFE 33.8% 35.0% - Order Book 4.7bn 4.7bn - HIGHLIGHTS STRATEGY Base business grew 12% Realising the opportunities throu
Slide 18: Rail – base business performing strongly
Rail – base business performing strongly For personal use only Revenue $m EBIT $m 613 46 42 537 07 08 07 07 08 08 ROFE % EBIT Sales Margin % 35.0 33.8 7.8 7.5 07 07 08 08 07 08 16
Slide 19: Engineering – revenue and margin growth
Engineering – revenue and margin growth For personal use only Full Year to 30 June ($m) 2008 2007 % Revenue 1,822 1,569 16% EBIT 96 3 >100% EBIT/Sales 5.3% 0.2% - ROFE 22.9% 2.9% - Order Book 2.1bn 1.6bn 31% HIGHLIGHTS – Engineering STRATEGY – Engineering Solid trading in Transmission and Two gr
Slide 20: Engineering – revenue and margin growth
Engineering – revenue and margin growth For personal use only Revenue $b EBIT $m 96 1.8 1.6 3 07 08 07 08 ROFE % EBIT Sales Margin % 5.3 22.9 2.9 0.2 07 08 07 08 18
Slide 21: Mining – turnaround continues
Mining – turnaround continues For personal use only Full Year to 30 June ($m) 2008 2007 Change Revenue1 1,308 1,653 (21%) EBIT 66 5 >100% EBIT/Sales 5.1% 0.3% - ROFE 11.1% (21.4%) - Order Book 2.6bn 1.8bn 44% HIGHLIGHTS STRATEGY Major new contract wins Re-establish the fundamentals – back to bas
Slide 22: Mining – turnaround continues
Mining – turnaround continues For personal use only Revenue $b EBIT $m 66 1.7 1.3 4.8 5 07 08 07 08 ROFE % EBIT Sales Margin % 11.1 5.1 -21.4 0.3 07 08 07 08 20
Slide 23: PPP progress
PPP progress For personal use only Design & Prove Deliver Procure 100% Tier 1 & 2 contracts On track for 4 car prototype Sets 7 to 78 let, Tier 3 contracting on network in 2009 Dedicated build facility process underway Sets 1 to 6: systems integration, ->completed at CRC 74% of material
Slide 24: Outlook
For personal use only Outlook
Slide 25: Back-to-basics approach
Back-to-basics approach For personal use only Sustain a Zero-Harm Environment Optimise our Focus on Empower Portfolio & Shareholder our People Performance Value Engage The Downer Clients Spirit 22
Slide 26: Strong presence in Asia-Pacific
Strong presence in Asia-Pacific For personal use only 23
Slide 27: Global markets
Global markets For personal use only Group presence in strong physical markets Mining/Metals Iron Ore 2,772 MT1 4% growth rate (2020 volumes) Coal 10,203 MT1 4% growth rate Infrastructure $US 1.9 trillion1 4% growth rate (5 year spend) Energy $US 4.2 trillion1 4% growth rate (5 year spend) 1. ISS In
Slide 28: Our Asia-Pacific Markets
Our Asia-Pacific Markets For personal use only Group presence in strong physical markets Mining/Metals Iron Ore 1,329 MT1 (2020 volumes) Coal 4,988 MT1 Infrastructure $US 1.3 trillion1 (5 year spend) Energy $US 1.0 trillion1 (5 year spend) 1. ISS International 25
Slide 29: Delivering our Strategic Plan
Delivering our Strategic Plan For personal use only Making the whole greater than the sum of the parts 26
Slide 30: Carbon economy creates opportunities
Carbon economy creates opportunities For personal use only Energy efficiency across the firm Renewable energy work for key clients Upgrading existing industrial facilities and infrastructure for our clients The renaissance of rail as a transport mode Water treatment and recycling Green b
Slide 31: Outlook
Outlook For personal use only Strong physical markets Double-digit NPAT growth in FY09 Ongoing double-digit growth for the 5 year plan Delivering group synergies - margin and ROFE improvements looking forward Downer EDI well placed to deliver greater shareholder value 28
Slide 32: Full Year Results 2008
For personal use only Full Year Results 2008 21 August 2008