Murray & Roberts — Barnard Jacobs Mellet Energy Conference (2007)
27 slides from Murray & Roberts's conference presentation, 2007
Slide 1: Barnard Jacobs Mellet Energy Conference
Barnard Jacobs Mellet Energy Conference “WE HAVE BUILT A FORMIDABLE PERFORMANCE PLATFORM TO MEET THE FUTURE POTENTIAL OF ALL OUR MARKETS” 2007 Interim Report GlobalisingCapacity to Deliver Murray & Roberts
Slide 2: Introduction
Introduction • This presentation offers no detail on Murray & Roberts • Everything is available in the Annual Report or www.murrob.com • All economic data is available through various public sources • Information is used to establish trends rather than provide fact • Construction is a dog-eat-dog &
Slide 3: Energy is a Driver of Opportunity
Energy is a Driver of Opportunity Middle East Investment driven by free cash flow from oil & gas revenues Probably > $40 / barrel Trump Tower is new Iconic Building for Dubai Emirates Airlines enables Dubai Business Model Airports in Dubai V&A Waterfront in RSA GlobalisingCapacity to Deliver Murray
Slide 4: Clough in Australia
Clough in Australia “------- was consolidated into the Group’s accounts from 1 July 2007 and we are pleased to report that the company has delivered its budget performance for the first quarter to 30 September 2007. The new chief executive has set out a clear strategy for the company that primarily
Slide 5: Energy is a Driver of Opportunity
Energy is a Driver of Opportunity Clough is focused on Offshore and Coastal Upstream Oil & Gas Infrastructure EPC & Manufacture Engineering & Services Australasia & Asia Pacific Middle East Africa West Coast Gulf of Mexico Murray & Roberts > 60% GlobalisingCapacity to Deliver Murray & Roberts
Slide 6: South African Construction Works Investment
South African Construction Works Investment OPPORTUNITY TIMELINE 1946 to 2006 2000 = 100 1974 - 1988 Eskom! 1951 1967 1984 2000 Source: SAFCEC GlobalisingCapacity to Deliver Murray & Roberts
Slide 7: South African Construction Economy
South African Construction Economy GFCF vs GDP 1946 to 2006 2000 = 100 29% 21% 20% 15% Source: BER GlobalisingCapacity to Deliver Murray & Roberts
Slide 8: Future Construction Works: 1995 Scenario
Future Construction Works : 1995 Scenario ECONOMIST CONSENSUS 2000 = 100 2002 to 2006 2000=100 Stress for the unprepared 1994 - 2002 CIDB 60 63 66 69 72 75 78 81 84 87 90 93 96 99 2 5 8 11 14 17 20 Optimistic Pesimistic Reality Source: SAFCEC GlobalisingCapacity to Deliver Murray & Roberts
Slide 9: Future Construction Works: 2006 Scenario
Future Construction Works : 2006 Scenario ECONOMIST CONSENSUS 2010 to 2024 2000 = 100 ? GDP - 6% pa CFCF - 8% 2000=100 pa Const - 10% pa 60 63 66 69 72 75 78 81 84 87 90 93 96 99 2 5 8 11 14 17 20 Optimistic Pesimistic Reality Source: SAFCEC GlobalisingCapacity to Deliver Murray & Roberts
Slide 10: Murray & Roberts is South Africa's Leading Construction & Engineering Group
105 Years of Experience & Growth Murray & Roberts is South Africa’s Leading Construction & Engineering Group and has chosen to lead the market with sector guidance GlobalisingCapacity to Deliver Murray & Roberts
Slide 11: 2007 AGM Business Update
2007 AGM Business Update “The South African construction economy continues to grow faster than GDP and based on macro-economic commitments • from government through ASGISA, • state enterprise and public sector investment programs, and • the unabated global demand for natural resources, is in our opi
Slide 12: Critical Mass in the Market
Critical Mass in the Market RISK RELATIVE TO RATING Company Market Capitalisation P:E MUR R 32,0 billion 30,0 AEG R 26,0 billion 19,5 PPC R 25,0 billion 18,0 WBO R 8,5 billion 25,5 GRF R 7,5 billion 23,0 RBX* R 6,0 billion 43,0 SFB* R 4,0 billion - BSR R 3,0 billion 31,0 JSE-ALSI 40 16,0 JSE-CONM 22
Slide 13: Major Projects
Major Projects GlobalisingCapacity to Deliver Murray & Roberts
Slide 14: The Group Project Order Book
The Group Project Order Book “-------- was stable at about R 22 billion at 30 September 2007, including AUD 750 million in Clough. The current reservoir of project opportunity registered within the Group’s Opportunity Risk Management pipeline amounts to more than R 85 billion in about 120 projects.
Slide 15: Including power generation work
Including “-------- work associated with South Africa’s power generation program for which no major contracts have yet been awarded.” Power opportunities will be won or lost within November 2007 GlobalisingCapacity to Deliver Murray & Roberts
Slide 16: Energy is a Driver of Opportunity
Energy is a Driver of Opportunity Thermal Energy is the backbone of South Africa power generation Hydro Energy is a small peak load choice Gas Energy is the new peak load option Combined Cycle is the private sector input 35000 MW installed 20000 MW over 20 years GlobalisingCapacity to Deliver Murray
Slide 17: Energy is a Driver of Opportunity
Energy is a Driver of Opportunity Nuclear Energy is a primary future source of power in South Africa 20000 MW over 25 years PBMR @ 165 MW Units PWR @ 750 MW Units Requires totally different engineering construction culture & discipline Safety & Quality priority GlobalisingCapacity to Deliver Murray
Slide 18: Energy is a Driver of Opportunity
Energy is a Driver of Opportunity Cost of Power in SA will still be most competitive following this investment Attractive destination for energy intensive assets Aluminium smelting Deep level mining and minerals processing Heavy Industry BHP Billiton Hillside and Mozal to Alcan Coega GlobalisingCapa
Slide 19: There are Some Challenges
There are Some Challenges GlobalisingCapacity to Deliver Murray & Roberts
Slide 20: Globally, Resource Constraints
Globally, Resource Constraints “-------- now play a key role in the planning, procurement and implementation of capital projects. This challenge is significantly enhanced in South Africa where the Group has a number of initiatives to ensure it remains capable of meeting its contracted and performanc
Slide 21: Unpredictable Increases
Unpredictable Increases “-------- in most cost inputs into the construction process over the past four years have increased financial risks for clients and contractors alike. While global demand for construction skills and equipment is likely to intensify, we believe that new capacity investments wi
Slide 22: However
However “-------- the increasing costs of transportation logistics between fixed source and variable utilisation will remain unabated until the country’s road and rail networks are substantially improved.” [Logistics cost represents between 15% and 35% of revenues] Logistics cost increases averaged
Slide 23: Shareholders are Cautioned
Shareholders are Cautioned “-------- that significant delays are evident in the time taken by most clients to convert feasibility studies into tenders and then tenders into contracts. Many contracts commence with inadequate design information to allow optimum performance. These factors delay the dev
Slide 24: There is Increased Activity
There is Increased Activity “-------- evident in the Group’s construction materials, and fabrication and manufacturing operations, while a general slowdown in consumer demand has dampened performance in the building materials operations.” Significant growth possible in Fabrication & Manufacture Glob
Slide 25: Energy is a Driver of Opportunity
Energy is a Driver of Opportunity The SA Power Initiative and the Competitive Supplier Development Program (CSDP) seek to indigenise the fabrication and manufacture of key systems & components Better than World Class Private Public Partnership Murray & Roberts positioned for key role GlobalisingCapa
Slide 26: First Quarter Trading
FIRST QUARTER TRADING “-------- in the Group has continued from the benchmark set through the previous financial year. There is, however, some weakness in the industrial engineering market and the strong SA Rand is impacting the translation of international earnings. ” Margin > 7,5% but 2002 to 2003
Slide 27: Revenue Scenario to 2010
Revenue Scenario to 2010 Average R 32 billion 2008 to 2010 Margin 5,0% to 7,5% (Strategic) 7,5% to 10,0% (Short-term) Clough consolidated but excluding further acquisition GlobalisingCapacity to Deliver Murray & Roberts
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