Downer Edi Limited · ASX:DOW
Downer Edi — H1 2025 Earnings Presentation
31 slides from Downer Edi's earnings presentation, Feb 13, 2025
Slide 1: 1H25 Results Presentation
1H25 Results Presentation For the six months ended 31 December 2024 13 February 2025
Slide 2: The Downer advantage
The Downer advantage Diversified exposure to growth sectors building long-term value Energy transition Defence spending Population growth Local industry revitalisation Differentiators Sovereign provider with Robust risk management Market leadership with capabilities Strong culture of performance end
Slide 3: Key takeaways
Key takeaways Turnaround is on track with more work to realise full potential Performance culture reset Positive earnings Margin growth driven by focus Accelerated delivery of cost supported by new improvement achieved on revenue quality, enhanced reductions exceeded targets, leadership, strengthene
Slide 4: Turnaround on track
EBITA margin Turnaround on track 3.7% Performance driven by higher quality work, cost out and improved delivery EBITA Cost out Revenue Cash conversion +37% $180m $5.5bn 94% 1H25 3.7% Pro forma1,2 $204.4m Target upsized to $200m Pro forma1,4 Normalised underlying6 by end of FY25 down 5.2% on 1H24 +65
Slide 5: Transport
Transport Positioned for ongoing profitability improvement with good Road Services, Rail & Transit Systems, Projects, and Airports underlying sector fundamentals in the medium-term Performance overview Sector fundamentals and key drivers • Improvement in profitability driven by NZ Transport & Infras
Slide 6: Energy & Utilities
Energy & Utilities Turnaround on track and positioned to benefit from key macro Telecommunications, Water, Power & Gas, and Industrial & Energy trends to target above cycle growth in power and water Performance overview Sector fundamentals and key drivers • Merged Utilities and Industrial & Energy b
Slide 7: Facilities
Facilities Predictable long-term contracts delivering essential services to Government, Health & Education, and Defence customer base Performance review Sector fundamentals and key drivers • Improving operating leverage driven by enhanced contract performance management, and pricing • Fundamental dr
Slide 8: $37.4bn work-in-hand
$37.4bn work-in-hand ~90% Long-dated government related • Diversified portfolio of businesses with long-term contracts drives resilience during cycles and underpins a solid order book Diversified ~90% • Targeted improvement in risk profile of work-in-hand (WIH) with focus on quality of revenue, risk
Slide 9: ESG update
ESG update Environmental 159.7 ktCO2-e Zero Sustainability Linked Loan (SLL) Maintain our license to Absolute Scope 1 and 2 Significant environmental Progressing towards achieving the Cat 4+ incidents sustainability performance target thresholds operate and focus on planned GHG emissions GHG emissio
Slide 10: Financial performance
Financial performance 10 Downer 1H25 Results 10 10
Slide 11: Group financials
Group financials Underlying9 Pro forma1 Statutory (excl. ISI) (excl. divestments) ($m) 1H25 1H24 Change 1H25 1H24 Change 1H25 1H24 Change Total revenue4 5,221.2 5,583.2 (6.5%) 5,505.7 6,025.9 (8.6%) 5,486.7 5,785.3 (5.2%) EBITA2 150.1 139.2 7.8% 204.3 150.5 35.7% 204.4 149.1 37.1% EBITA2 % 2.9% 2.5%
Slide 12: Reconciliation to statutory result
Reconciliation to statutory result Pro forma to statutory EBITA ($m) 1,2,9 - Net loss of divestment of Catering NZ business $16.5m - Other exit costs, include divestment program related costs, $3.3m 250 Costs incurred in business reset: - Redundancy and severance $7.2m - Transformation program (incl
Slide 13: Ongoing improvement in cash conversion
Ongoing improvement in cash conversion Disciplined back to basics focus – contract management, cash collection, resolution of variations and claims 1,200 1 2 3 4 5 1,000 (40.8) (74.8) 220.1 (3.9) 11.9 (80.1) 800 (2.7) (227.5) 600 400 837.6 Free cash flow increased to $112.5m in 1H25 from $19.9m in 1
Slide 14: Progress on capital allocation framework
Progress on capital allocation framework Cash generated from Interest / tax business performance • Operating cash flow – achieved target average cash conversion >90% Securing Operating cash flow • Improved free cash flow has driven a further reduction in leverage balance sheet • Target leverage rati
Slide 15: Group debt profile
Group debt profile • Compliant with all financial covenants • Weighted average debt facility duration of 2.5 years10 (2.9 years at 30 June 2024) • Weighted average cost of debt of 5.6% in 1H25 • Commenced a strategic review of capital and funding structure • Committed to maintaining Fitch BBB invest
Slide 16: Priorities and outlook
Priorities and outlook 16 Downer Investor Presentation 2025 16 16
Slide 17: Momentum in our turnaround
Momentum in our turnaround Transformation update: on target Progress in 1H25 • Refreshed leadership: 75% of ELT and 26% of SLT promoted / new to Downer Driving a performance culture Leadership • Launch of 'The Downer Difference' in 1H25 with embedment of new performance culture underway & culture FY
Slide 18: FY25 Group outlook
FY25 Group outlook 1H25 performance was in line with expectations. We are continuing to focus on building a high-quality order book with adherence to enhanced risk guardrails and Management target EBITA margin12 operating disciplines. We are targeting ongoing improvement in EBITA margin ≥4.2% perfor
Slide 19: Supplementary information
Supplementary information 19
Slide 20: Purpose, Pillars & Culture
Purpose, Pillars & Culture Downer 1H25 Results 20
Slide 21: Diversified portfolio across Transport, Energy & Utilities and Facilities
Diversified portfolio across Transport, Energy & Utilities and Facilities 1H25 1H25 Segment Total Revenue Transport EBITA 51% $5.5bn1,4 $253.7m1,2 All numbers are pro forma unless stated otherwise. Refer to footnote 1 on slide 29. Downer 1H25 Results 21
Slide 22: Queensland Train Manufacturing Program (QTMP) ramp up
Queensland Train Manufacturing Leading provider of rollingstock asset management services in AU, with expertise across every project phase from design and Program (QTMP) ramp up manufacture to through life support, fleet maintenance and overhaul • Largest investment in new rollingstock in Queensland
Slide 23: $180m cumulative annualised cost out achieved
$180m cumulative annualised cost out3 achieved >$100m target by end of FY25 Announced 27-Feb-23 $180m Cumulative annualised gross cost 1H24 $80m $20m out achieved since transformation program initiated in Feb-23 $175m target by end of FY25 Announced 14-Feb-24 On track to achieve upsized target FY24
Slide 24: Reconciliation of pro forma to statutory result
Reconciliation of pro forma to statutory result Amortisation of acquired intangibles Reconciliation of pro forma to statutory result ($m) EBIT EBITA2 Net finance cost Tax expense13 NPATA2 (post-tax) NPAT Pro forma result 194.2 204.4 (40.4) (36.7) 127.3 (7.1) 120.2 Net divestment contribution (0.1) (
Slide 25: Reconciliation pro forma to underlying result
Reconciliation pro forma to underlying result 1H25 1H24 Pro forma, which excludes results of divested operations, provides 1H25 1H25 1H24 1H24 additional information on the impact of the divestment program over the ($m) Divestments Divestments Pro forma Underlying9 Pro forma Underlying9 impact impac
Slide 26: Group underlying financial performance
Group underlying financial performance Underlying9 performance ($m) 1H25 1H24 Change Underlying9 segment performance ($m) 1H25 1H24 Change Total revenue4 5,505.7 6,025.9 (8.6%) Transport 128.8 100.8 27.8% EBITDA 357.6 309.1 15.7% Energy & Utilities 52.6 38.7 35.9% Depreciation and amortisation15 (15
Slide 27: Cash flow
Cash flow Change in cash ($m) 1H25 1H24 Change Cash conversion ($m) 1H25 1H24 Change Total operating cash flow 220.1 168.2 30.9% Underlying9 EBIT 194.1 138.9 39.7% Net capex (40.8) (46.4) 12.1% Add: Depreciation and amortisation15 163.5 170.2 (3.9%) Payment of principal lease liabilities (74.8) (79.
Slide 28: Reclassification of BU segments
Reclassification of BU segments Pro forma Underlying 1H24 1H24 Impact of 1H25 Business unit 1H24 1H24 1H24 Business unit 1H24 Reconciliation ($m) Reported Divestments14 reclassifications Restated Reconciliation ($m) Reported reclassifications Restated Segment Revenue EBITA Revenue EBITA Revenue EBIT
Slide 29: Notes
Notes 1. Pro forma reflects the statutory results adjusted for individually significant items (ISI) and excludes the revenue and EBITA contribution relating to completed divestments to provide a like for like comparison between reporting periods. The pro forma result is a non-IFRS measure that is us
Slide 30: Important notice and disclaimer
Important notice and disclaimer The information in this presentation has been prepared by Downer EDI Limited ABN 97 003 872 848 (Downer or the Company) and includes general background information about Downer’s activities current as at the date of this presentation. This information is given in summ
Slide 31: Downer 1H25 Results
Downer 1H25 Results 31