Downer Edi Limited · ASX:DOW
Downer Edi — Investor Day (May 2012)
44 slides from Downer Edi's investor day presentation, May 9, 2012
Slide 1: ASX cover letter: Downer EDI 2012 Investor Day
9 May 2012 For personal use only Company Announcements Office ASX Limited Exchange Centre Level 4, 20 Bridge Street SYDNEY NSW 2000 Dear Sir/Madam RE: Downer EDI 2012 Investor Day Please find attached a copy of the presentation to be made to investors today at the company’s annual Investor Day. Your
Slide 2: Downer Group 2012 Investor Day
For personal use only Downer Group 2012 Investor Day 9 May 2012
Slide 3: Disclaimer
Disclaimer For personal use only Reliance on third party information This presentation may contain information that has been derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the
Slide 4: Format for the day
Format for the day For personal use only Time Event Room 8.00 – 8.30 Opening presentation Room 6B 8.35 – 9.25 Session 1 Various 9.30 – 10.20 Session 2 Various 10.25 – 11.15 Session 3 Various 11.20 – 12.10 Session 4 Various 12.20 – 13.10 Session 5 (includes lunch) Various 13.30 Bus to CBD Main Entry
Slide 5: Breakout sessions
Breakout sessions For personal use only • Downer Infrastructure – Session: • Electrical & Instrumentation • Asset Management – Session: • Christchurch Alliance update • Telecommunications • Downer Rail – Locomotive and passenger maintenance • Downer Mining – Open cut mining, blasting services and Ot
Slide 6: Opening presentation
For personal use only Opening presentation Grant Fenn, CEO 5
Slide 7: Agenda
Agenda For personal use only • Safety moment • Transformation update • Looking forward • Outlook 6
Slide 8: Safety moment
Safety moment For personal use only • Significant improvement in LTIFR and TRIFR statistics in recent years, Zero Harm now embedded in Downer culture • However, two fatalities on Downer work sites in the past six months – both involving reversing vehicles, both involving site supervisors • Further c
Slide 9: Transformation update
Transformation update For personal use only Priority Progress • Eight trains in service, ninth due to be presented for PC on 11 May Deliver Waratah project within program and cost • Initial reliability hurdles addressed • Deliver first six trains • 26 trains by 31 December 2012 • Achieve reliability
Slide 10: Transformation update
Transformation update For personal use only Priority Progress • Substantial improvement in performance at Christmas Creek (CCK) Management and delivery of – Blasting and overburden removal existing major projects ahead of target – Surface mining transferred to FMG • Recover wet weather impact on – D
Slide 11: Transformation update
Transformation update For personal use only Priority Progress • Targeted drive by Downer Australia has generated an additional $1bn in Drive growth in core markets with work-in-hand key customers • Higher degree of focus on forward • Focus Downer Australia on key revenue opportunities and capture –
Slide 12: Transformation update
Transformation update For personal use only Priority Progress Continued focus on risk • Appointed Chief Risk Officer management • Integrated business and risk planning • Fixed price contracts limited to projects with low execution risk • Enhanced risk processes Board/Corporate/Businesses/Project • A
Slide 13: Transformation update
Transformation update For personal use only Priority Progress • Bonding, ECA and lease facilities completed Funding for growth • Refinance $260m Waratah Syndicated • Working capital management vastly Bonding Facility improved and a key focus • Complete ECA funding for Mining • Fitch has confirmed ra
Slide 14: Transformation update
Transformation update For personal use only Priority Progress Simplify/consolidate/enable • Fit 4 Business now integral to how we run the business/opportunities significant • Fit 4 Business • Exit underperforming, non-core/ • CPG Asia sold/Downer UK closing subscale businesses • Consulting businesse
Slide 15: Downer Infrastructure
Downer Infrastructure For personal use only • Significant next step in driving efficiency and performance – Benchmark performance across infrastructure businesses – Drives best practice – Opportunity to align Zero Harm, Risk and Project Management and key business systems – Best use of talent • Offe
Slide 16: Downer Infrastructure
Downer Infrastructure For personal use only • Downer Infrastructure has work-in-hand of $8.2 billion and contributes around half of Downer Group’s revenue and EBIT • Downer Infrastructure will consist of five divisions: – Australia East – Australia West – New Zealand – Infrastructure Services – Spec
Slide 17: Looking forward
Looking forward For personal use only • Downer Infrastructure to extend road expertise to industrial Asset • Solid base to extend reach Management • Rail to focus on “life cycle” rolling stock maintenance • Mining to grow services business • Careful consideration Footprint/ • Resources based – exist
Slide 18: Full year guidance
Full year guidance For personal use only • Downer confirms full year guidance – underlying EBIT of around $340 million and NPAT of around $180 million • As previously advised, the full year statutory result will be affected by the transfer of the equity accounted Reliance Rail hedge reserve of $72.5
Slide 19: Downer Infrastructure
Downer Infrastructure For personal use only
Slide 20: Downer Infrastructure
Downer Infrastructure For personal use only Downer Infrastructure Presence Opportunities • $5 billion business • Market leader in • Leverage synergies in Electrical & Instrumentation Transport Infrastructure, • Contributes more than half across both the east and Water, Communications of Downer Group
Slide 21: Work-in-hand Australia: $5.7 billion
Work-in-hand Australia1: $5.7 billion For personal use only Work-in-hand by division2 Work-in-hand by contract type East3 45% Alliance 6% West3 27% Cost plus 9% Specialist Services4 15% Fixed price/lump sum 22% Infrastructure Services5 13% Schedule of rates 18% Asia <1% Recurring/annuities 45% 1 At
Slide 22: Work-in-hand New Zealand: $2.5 billion
Work-in-hand New Zealand1: $2.5 billion For personal use only Work-in-hand by business2 Work-in-hand by contract type Maintenance 50% Alliance <1% Construction 42% Cost plus 1% Surfacing 8% Fixed price/lump sum 6% Other <1% Schedule of rates 41% Recurring/annuities 51% 1 At 31 March 2012 2 Excludes
Slide 23: Electrical & Instrumentation
Electrical & Instrumentation For personal use only Capabilities Presence Opportunities • Over 70 years’ electrical • Servicing a loyal customer • Expanding our contracting experience with base across Australia and instrumentation offering a highly experienced New Zealand and by management team invit
Slide 24: Asset Management
Asset Management For personal use only • Small scale - higher margin • Proactive services – redesign/value focus Strategic Asset • Asset up time – growth drivers Advice Management • Knowledge and system enablers • High customer alignment Services • Delivers Asset system performance Lifecycle Advice
Slide 25: Operations
For personal use only Operations
Slide 26: Downer Infrastructure New Zealand
Downer Infrastructure New Zealand For personal use only
Slide 27: Work-in-hand New Zealand: $2.5 billion
Work-in-hand New Zealand1: $2.5 billion For personal use only Work-in-hand by business2 Work-in-hand by contract type Maintenance 50% Alliance <1% Construction 42% Cost plus 1% Surfacing 8% Fixed price/lump sum 6% Other <1% Schedule of rates 41% Recurring/annuities 51% 1 At 31 March 2012 2 Excludes
Slide 28: Christchurch Alliance update
Christchurch Alliance update For personal use only • Infrastructure damage of more than NZ$2 billion • Five year timeframe to rebuild • Alliance formed with NZTA, CCC and five contractors including Downer • IRMO SCIRT • H&S/Traffic Management • Political involvement/funding • Resources competing wit
Slide 29: Telecommunications
Telecommunications For personal use only • Telecom, Chorus, TelstraClear, Vodafone, 2 Degrees, Maritime NZ, NZ Police, TeamTalk, Huawei, ZTE, Alcatel-Lucent Customers • Long term contractor, sustained relationships • Planning & Design – ESRI Design Tool/China Communications Shanghai Capabilities • A
Slide 30: Telecommunications (continued)
Telecommunications (continued) For personal use only • Only “full service” National Provider in NZ • Diversity across Fixed Line (legacy) and 4G LTE Presence • High level architecture and design – scalable services • Uniquely skilled and distinctive workforce and service delivery tools/ systems • Te
Slide 31: Operations
For personal use only Operations
Slide 32: Downer Mining
For personal use only Downer Mining
Slide 33: Work-in-hand: $7.1 billion
Work-in-hand1: $7.1 billion For personal use only Work-in-hand by division Work-in-hand by contract type West 45% Alliance 4% Queensland and Pacific 30% Cost plus <1% South East 20% Schedule of rates 96% Mining Services 5% 1 At 31 March 2012 2
Slide 34: Year of consolidation
Year of consolidation For personal use only • Record low LTIFR of 0.4 and TRIFR of 6.7 YTD • Building bench strength • Managing expansion of existing contracts and ramp-up of new ones • $570 million contract with Karara Metals Limited • Growth in services businesses – Blasting $90 million Jellinbah
Slide 35: Open cut mining – East
Open cut mining – East For personal use only • Open cut coal truck/shovel operations using ultra-class excavators Capabilities • Maintenance services • Site infrastructure construction team • Queensland – Goonyella Riverside (BMA Coal), Millennium (Peabody Pacific), Commodore (Millmerran Power Partn
Slide 36: Blasting Services
Blasting Services For personal use only • Offer a complete range of blasting services to the Australian mining industry • 50 Mobile Processing Unit trucks, four emulsion manufacturing facilities Capabilities and 400 employees • Tailored and flexible blasting solutions, increased security of supply •
Slide 37: Otraco International
Otraco International For personal use only • Leading global tyre management company Capabilities • Extending tyre life safely and productively • Expanding suite of services – DASA, OTRACOM, Rimtec • 600+ people in Australia/NZ, South Africa, South America • $100 million revenue – CAGR 40%, 100% cont
Slide 38: Operations
For personal use only Operations
Slide 39: Downer Rail
For personal use only Downer Rail
Slide 40: Work-in-hand: $5.1 billion
Work-in-hand1: $5.1 billion For personal use only Work-in-hand by business Work-in-hand by contract type Passenger maintenance2 63% Fixed price/lump sum 88% Passenger build 19% Schedule of rates <1% Freight maintenance 12% Recurring/annuities 12% Freight build 6% 1 At 31 March 2012 2 Includes Downer
Slide 41: Whole of life asset management
Whole of life asset management For personal use only • At Downer Rail, our mission is to provide world class, whole of life, rolling stock solutions for our customers – Best practice in asset management to help customers meet their business, operational, regulatory and statutory obligations • An Ass
Slide 42: Freight maintenance
Freight maintenance For personal use only Capabilities Presence Opportunities • Comprehensive whole of life • National maintenance facility • Demand continues to be driven freight maintenance service network by sustained growth in the offering including: resources sector – opportunities - Over 20 ma
Slide 43: Passenger maintenance
Passenger maintenance For personal use only Capabilities Presence Opportunities • Fleet maintenance • NSW – Waratah and Millennium • Age of current passenger fleet fleets and increasing patronage • Component maintenance driving demand • KDR – operates Yarra Trams • Vehicle rebuild and future operato
Slide 44: Operations
For personal use only Operations