Slide 1: Investor presentation
Investor presentation | 4 August 2016 invest Downer Relationships creating success
Slide 2: Overview
OV ERV I EW Total revenue1 $7,394 million, down 0.5% Operating cash flow $447.8 million, EBITDA conversion 92.8% Earnings Before Interest and Tax (EBIT) $276.9 million, Net debt3 $87.4 million, $91.6 million decrease down 10.6%. Down 1.5% adjusting for $13 million from 30 June 2015 Capital Metro bid
Slide 3: Transport Services
T RA N SPORT SERV I CES Total revenue1 $m EBIT $m EBIT margin ROFE2 120 6.0% 5.6% 25% 2,500 103.7 1,849.5 1,924.2 100 88.3 5.0% 4.6% 19.3% 2,000 20% 16.7% 80 4.0% 1,500 15% 60 3.0% 1,000 10% 40 2.0% 500 20 1.0% 5% 0 0 0.0% 0% FY16 FY15 FY16 FY15 FY16 FY15 FY16 FY15 HIGHLIGHTS OUTLOOK OPPORTUNITIES
Slide 4: Technology and Communications Services
T ECH N OLOGY A N D COM M U N I CAT I ON S SERV I CES Total revenue1 $m EBIT $m EBIT margin ROFE2 29.9 600 30 7% 6.2% 100% 485.5 495.5 25.7 83.4% 500 6% 5.2% 25 80% 5% 400 20 4% 60% 44.6% 300 15 3% 40% 200 10 2% 100 5 20% 1% 0 0 0% 0% FY16 FY15 FY16 FY15 FY16 FY15 FY16 FY15 HIGHLIGHTS OUTLOOK Stro
Slide 5: Utilities Services
U T I L I T I ES SERV I CES Total revenue1 $m EBIT $m EBIT margin ROFE2,3 50 7% 20% 18.8% 1000 41.5 5.8% 788.8 6% 5.3% 800 40 34.0 5% 15% 583.5 11.9% 600 30 4% 10% 400 20 3% 2% 5% 200 10 1% 0 0 0% 0% FY16 FY15 FY16 FY15 FY16 FY15 FY16 FY15 HIGHLIGHTS OUTLOOK Strong performance in Power and Gas C
Slide 6: Rail
RA I L Total revenue1 $m EBIT $m EBIT margin ROFE2 1000 30 27.5 4% 7% 6.5% 873.5 826.2 3.1% 25 6% 800 3% 20 5% 600 14.4 4% 3.4% 15 2% 1.7% 400 3% 10 2% 1% 200 5 1% 0 0 0% 0% FY16 FY15 FY16 FY15 FY16 FY15 FY16 FY15 HIGHLIGHTS OUTLOOK Exceptional Waratah reliability driving TLS profitability Impro
Slide 7: Engineering, Construction & Maintenance
EN GI N EERI N G, CON ST RU CT I ON & M A I N T EN A N CE Total revenue1 $m EBIT $m EBIT margin ROFE2 2500 70 5% 30% 59.4 24.2% 1,887.1 1,979.2 60 25% 22.9% 2000 48.2 4% 50 3.0% 20% 1500 3% 2.6% 40 15% 1000 30 2% 20 10% 500 1% 5% 10 0 0 0% 0% FY16 FY15 FY16 FY15 FY16 FY15 FY16 FY15 HIGHLIGHTS OUTLOO
Slide 8: Mining
MINING Total revenue1 $m EBIT $m EBIT margin ROFE2 130.0 132.6 19.0% 2,000 140 10% 20% 17.2% 1,595.2 8.1% 8.3% 1,589.7 120 8% 1,500 100 15% 80 6% 1,000 10% 60 4% 500 40 5% 2% 20 0 0 0% 0% FY16 FY15 FY16 FY15 FY16 FY15 FY16 FY15 HIGHLIGHTS OUTLOOK Excellent operational performance Continued press
Slide 9: Group Financials
GROUP FINANCIALS Relationships creating success
Slide 10: Financial Performance
FI N A N CI A L PERFORM A N CE $m FY16 FY15 Change (%) Total revenue1 7,393.9 7,430.1 (0.5) EBITDA 535.6 562.8 (4.8) EBIT 276.9 309.7 (10.6) Net interest expense (33.0) (29.9) (10.4) Tax expense (63.3) (69.6) 9.1 Net profit after tax 180.6 210.2 (14.1) EBIT margin 3.7% 4.2% (0.5) Effective tax rate
Slide 11: Summary of Earnings
SU M M A RY OF EA RN I N GS Tech & $m Total Transport Utilities Rail EC&M Mining Corp Comm Statutory EBIT 276.9 103.7 29.9 41.5 14.4 48.2 130.0 (90.8) Capital Metro bid costs 13.0 13.0 Restructuring costs 24.5 8.2 10.6 2.1 3.6 Former employee entitlements 10.8 10.8 Loss on sale of Rimtec 2.3 2.3 Con
Slide 12: Unallocated Costs (Corporate Costs)
U N A L LOCAT ED COST S (CORPORAT E COST S) FY16 FY15 R&D incentives - 15.1 Capital Metro bid costs write off (13.0) - Restructuring costs (3.6) (2.6) Corporate costs (74.2) (70.3) Total unallocated (90.8) (57.8) 12
Slide 13: Operating Cash Flow
OPERAT I N G CA SH FLOW $m FY16 FY15 EBIT 276.9 309.7 Add: depreciation & amortisation 258.7 253.1 EBITDA 535.6 562.8 Operating cash flow 447.8 486.5 Add: Net interest paid1 26.5 25.2 Tax (received) / paid 35.9 49.0 Waratah Train Project net cash (inflow)2 (13.4) (62.6) Adjusted operating cash flow
Slide 14: Cash Flow
CA SH FLOW $m FY16 FY15 Total operating 447.8 486.5 Net capital expenditure (165.3) (98.3) Tenix, ATE and VEC acquisitions - (368.3) IT Transformation and Other (40.2) (31.6) Total investing (205.5) (498.2) On-market share buy-back1 (26.5) (11.7) Net proceeds of borrowings 93.8 79.7 Dividends paid (
Slide 15: Debt Maturity Profile
DEB T M AT U RI T Y PROFI L E By limit (as at 30 June 2016) 300 250 200 A$m Equivalent Finance leases / other 150 USPP ECA finance 100 A$MTN Syndicated bank facility 50 Bilateral bank facilities } Undrawn $525m 0 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23 Dec-24 Dec-25 Jun-17 Jun-18 Jun
Slide 16: Balance Sheet and Capital Management
BA L A N CE SH EET A N D CA PI TA L M A N AGEM EN T $m FY16 FY15 Total assets1 4,200.3 4,004.4 Total shareholders’ equity 2,088.5 2,035.3 Net debt2 87.4 179.0 Gearing: net debt to net debt plus equity 4.0% 8.1% Gearing (including off balance sheet debt)3 9.4% 14.0% Debtor days 23.6 25.7 WIP days 34.
Slide 17: Downer
Downer Relationships creating success
Slide 18: Downer Revenue Base
DOWN ER REV EN U E BA SE 7% 11% 25% 25% 44% 56% 21% 11% Rail Public Transport Services Private Utilities Services Mining EC&M Technology Communications Services 18
Slide 19: Work-in-Hand: $18.6 Billion
WORK -I N -H A N D: $ 1 8 .6 B I L L I ON By Service Line – June 2016 By Contract Type – June 2016 3% 4% 8% 10% 26% 23% 37% 13% 25% 18% 33% Rail $4.7b Transport Services $4.7b Schedule of Rates $6.8b Utilities Services $3.3b Fixed Price / Lump Sum $6.3b Mining Recurring $4.3b $2.5b EC&M Cost Plus $0
Slide 20: Work-in-Hand: Stabled despite resource downturn
WORK -I N -H A N D: St a b l e d e s p i t e r e s o u r c e d ow n t u r n $m 25,000 20,000 15,000 10,000 5,000 - FY10 FY11 FY12 FY13 FY14 FY15 FY 16 20
Slide 21: Work-in-Hand by Service Line
WORK -I N -H A N D B Y SERV I CE L I N E $m 6,000 5,000 4,000 3,000 2,000 1,000 - Rail Transport Mining EC&M Utilities T&C Jun-16 Jun-15 21
Slide 22: Outlook
OU T LOOK Whilst Downer faces continued pressure in its resources based businesses, the company is progressing well in repositioning to service increased investment and outsourcing in Roads and Rail, Public Transport, Utilities, Defence and Communications. Downer anticipates that the company’s diver
Slide 23: Relationships creating success
Relationships creating success
Slide 24: Debt and Bonding Facilities
DEB T A N D B ON DI N G FACI L I T I ES Debt facilities $m Debt facilities by type % Total facilities 1,181.8 Syndicated bank facility 34 Drawn (656.8) A$MTN 34 Available facilities 525.0 USPP 14 Cash 569.4 Bilateral bank facilities 11 Total liquidity 1,094.4 ECA finance 4 Finance leases & other 3 1
Slide 25: Segment Reporting
SEGM EN T REPORT I N G FY16 Technology and Transport Utilities Communications Rail EC&M Mining Unallocated Total $m Services Services Services Segment revenue 1,786.7 485.5 788.8 421.8 1,856.7 1,548.9 (38.4) 6,850.0 Share of sales from JVs and Associates1 62.8 - - 404.4 30.4 46.3 - 543.9 Total reven
Slide 26: Disclaimer
DI SCL A I M ER RELIANCE ON THIRD PARTY INFORMATION independent assessment of the Company after making any liability, including without limitation any liability arising from This Presentation may contain information that has been such investigations and taking such advice as may be fault or negligen