Macmahon Holdings Limited · ASX:MAH
Macmahon — H1 FY2004 Earnings Presentation
22 slides from Macmahon's earnings presentation, Mar 1, 2004
Slide 1: 2004 Half Year Financial Results & Update
MACMAHON 2004 HALF YEAR FINANCIAL RESULTS & UPDATE February 2004 NICK BOWEN Chief Executive Officer
Slide 2: Contents
CONTENTS MACMAHON » Surmmary » Financials » Order Book » Operating Divisions / investments » Civil » Open Cut » Underground » Services » Malaysia » APT » Outlook » Appendices: v v vow v wv
Slide 3: Summary
SUMMARY MACMAHON » Profit $3.4 million up 21% on 2002 ($2.8 million) » EBIT Margin on Total Revenue of 3.8% » Total Revenue (including attributable JV revenue) down 32% to $184 million reflecting timing of completion/commencement of contracts » $630 million of new work and contract extensions - orde
Slide 4: Financials
MACMAHON FINANCIALS
Slide 5: Capital Raising — January 2004
CAPITAL RAISING — JANUARY 2004 $20 million placement @ 26 cents $7.5 million Share Purchase Plan @ 26 cents $3.0 million from exercise of ANZ options High cost debt retired and financial strength increased Following capital raising im Total Shares on issue 373,952,403 ie Total Options 7,676,860 Majo
Slide 6: Revenue & Profit
REVENUE & PROFIT TOTAL REVENUE (inciuding Jv} * Reduced revenue reflects timing of 300.0 - 2500 $234 $246 a sora completed contracts (ADrail) and = 2000 : $184 commencement of new work ° = 150.0 » 2nd half revenue expected to exceed $220 100.0 : | / | : million delivering +$400 million for 03/04 50.
Slide 7: Margins/Cashflow
MARGINS/CASHFLOW 5.0% EBITTOTAL REVENUE + EBIT margin @ 3.8% an increase on 0% 40% 48% | 4.0% 41% 3.8% corresponding period eee | | 26% » Expect to maintain EBIT margin in second 2.5% 4 half 2.0% 4 a | a toe 71 | * Targeting 5% EBIT for 04/05 O%4 | 05% 4 | 0.0% DecO1 HY June Q2HY DecO2HY JuneO3HY De
Slide 8: Capital
CAPITAL 2B CAPITAL EXPENDITURE $21 gs 15 = 40 $6 87 8 bal $4 DecOIHY JuneO2HY DecOZHY June03HY DecOsHY 20.0% RETURN ON CAPITAL % 18.0% 16.0% 14.0% 18.4% 12.9% 12.0% 7 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 1 1 June 02 FY June 03 FY Dec 03 HY Capex of $20.6 included $6.5 million of assets previously under op
Slide 9: Borrowings
BORROWINGS NET BALANCE SHEET DEBT 90,000 $8: 5 80,000 4 7 69 $68 70,000 4 $68 - 60,000 J ] ] S §S0,000 4 $39 8 40,000 4 30,000 7 20,000 4 10,000 7 y - T T T T June 02 HY Dec 02 HY June 03 HY Dec 03 HY 31 Dec 2003 After Capital Raising DEBT TO EQUITY RATIO 250% 200% he 180% sd 100% 11% 50% 43% 0% Dec
Slide 10: Market Capitalisation and Earnings per Share
MARKET 120 MARKET CAPITALISATION +8110 » Following capital raising market cap now 400 4 $64 g a] $72 $120 million 2 ©] gs $46 $39 = 44 [| * Shares traded over last 2 months has =| UI - Ea : 7 1, 1, i, averaged 10% of issued capital Dec 01 June 02 Dec 02 June 03 Dec 03 Feb 04 . ae . HY HY HY HY HY Af
Slide 11: Order Book / New Contracts
MACMAHON ORDER BOOK / NEW CONTRACTS
Slide 12: Order Book
ORDER BOOK 7 Order Book In first 6 months this year awarded $630 million of new work Order book underpins next 2 years Additional $37 million contracts wen since December By Division As at 31.12.03 : $832m $8. $241 BCivil Underground Open Cut OMalaysia $480 $69 @Hire/Other 42
Slide 13: Order Book & Run-off
ORDER BOOK & RUN-OFF $832 s475+ 339) 31.12.03 2003/04 2004/05 2005+ Order Book Total Revenue - Forecast [EEE Order book run-off ZEEE work completed 43
Slide 14: Order Book Profile
ORDER BOOK PROFILE MACMAHON [ Underground Open Cut @ Civil B Malaysia @ Other Gold G Coat Giron Ore Copper @ Phosphate B Diamonds/Other B Civil G Limestone @ Nickel By Client 19% By Contract Duration 12% 20% 58% a Government | Company Market Capitalisation >$1 billion I Company Market Capitalisation
Slide 15: Operating Divisions/Investments
MACMAHON OPERATING DIVISIONS/INVESTMENTS
Slide 16: Civil
¥ ¥ ¥ ¥ MACMAHON Successful completion of Alice Springs to Darwin Railway Revenue down in period due to timing of completion of contracts and commencement of new work Major contracts at Burnett Dam (Alliance JV) and Tonkin Highway utilising ADrail staff and equipment Major earthworks contract underw
Slide 17: Open Cut
OPEN CUT ¥ ¥ ¥ ¥ P MACMAHON Major period of change with 3 contracts completed and 4 major new contracts awarded and mobilised during the period Contract completion and commencement had a negative impact on earnings in the period Pre 2000 contract still delivering losses — completion in December 2005
Slide 18: Underground
UNDERGROUND ¥ ¥ MACMAHON Underground turnover now circa $50 million pa following completion of works at Bendigo Returms from Division (EBIT and ROC) are exceeding internal hurdie rates Extension of Leinster Nickel contract and new contract won at Olympic Dam both for WMC Resources Outlook is for str
Slide 19: Services
SERVICES MACMAHON » First 6 months of independent operation of business » Delivering excellent profits (EBIT and ROC exceeding internal hurdle rates) » Current turnover (excluding internal maintenance services) $15 million pa but. increasing to +$20 million pa from January 04 * All equipment current
Slide 20: Malaysia
MALAYSIA ’ % - ra re MACMAHON Awarded 6 year contract for limestone mining at Kanthan cement / clinker operation Client Lafarge has annual sales exceeding A$25 billion pa and produces 100 million tpa of cement in some 75 countries Contract commenced December 03. Profitable and cashflow positive from
Slide 21: Alice Springs to Darwin Railway - APT
ALICE SPRINGS TO DARWIN RAILWAY - APT » Macmahon 7.5% shareholder ($26.5 million investment) » Asia Pacific Transport Assets (50 year concession) » Track from Tarcoola in SA to Darwin » Freight and Logistics Business (Freight Link) » Freight operations commenced January 2004 with ramp-up to full pro
Slide 22: Outlook
OUTLOOK MACMAHON 2003/04 » Contracts in hand will deliver +$400 million Total Revenue in 03/04 » Target to exceed last years $8.5 million PAT » Open Cut contract commencement and equipment delivers biggest risk to June 04 result » Capex for 04/05 $55 million — June 04 Debt/Equity circa 80% 2004/05 »