Macmahon Holdings Limited · ASX:MAH
Macmahon — Macquarie WA Conference 2011
29 slides from Macmahon's conference presentation, Nov 8, 2011
Slide 1: Macquarie WA Conference 2011
For personal use only Heading to go here MACQUARIE WA CONFERENCE 2011 8 November 2011 Nick Bowen - Chief Executive Officer
Slide 2: Overview
Overview • Founded in 1963 – listed on the ASX in 1983 For personal use only • Employs more than 3,700 people • The Company operates two key businesses – Mining and Construction • Operations throughout Australia, New Zealand, South East Asia and Africa • Blue-chip client base includes BHP Billiton,
Slide 3: Macmahon Strategy
Macmahon Strategy For personal use only Grow the business to maximise profits to shareholders By a combination of: • Balanced mix of mining and construction projects • Broad geographical footprint – both domestically and overseas • Blue chip client base with long life / low cost mines • Low gearing
Slide 4: Changes made over the last months
Changes made over the last 12 months For personal use only • Focus on winning work, being safe and making profit • Strengthened senior management team • Construction reorganisation, East and West • Recently separated engineering capability into a separate business • Improved contract risk management
Slide 5: Map of operations
Map of operations For personal use only Mining Project Kanthan Construction Project Lhoknga Rawang / Preferred contractor Calabar NIGERIA Ewekoro Shoal Bay Waste Plant Waste mgmt – Darwin City Council Darwin, NT George Fisher Darwin Marine Zinc mine – Xstrata Supply Base Mt Isa, QLD Construction – N
Slide 6: Winning Work Construction
Winning Work Construction For personal use only
Slide 7: Continuous growth
For personal use only Continuous growth
Slide 8: Continuous growth
For personal use only Continuous growth
Slide 9: Continuous growth
For personal use only Continuous growth
Slide 10: Continuous growth
For personal use only Continuous growth
Slide 11: Continuous growth
For personal use only Continuous growth
Slide 12: Tropicana Gold Project
Tropicana Gold Project • Awarded Tropicana Gold Project contract, $900 million over 10 years For personal use only • Greenfield mine operation located 330 kilometres east-north-east of Kalgoorlie • Joint venture between AngloGold Ashanti Australia Ltd (70%) and Independence Group NL (30%) • Alliance
Slide 13: Tavan Tolgoi Project Mongolia
Tavan Tolgoi Project Mongolia • Five year US$500 million coal mining contract at the Tavan Tolgoi Coal Mine in Mongolia For personal use only • 50:50 joint venture with Germany’s Operta GmbH • Provides access into one of the world’s largest emerging mining regions • Contract activities include suppl
Slide 14: People
People • In a constrained labour market, people have become our major focus For personal use only • Highly skilled workforce of more than 3,700 people • Expected to grow to 5,000 in FY2012 to support major new contracts Macmahon employee numbers . 5,000 5,000 >40% growth 4,000 3,628 3,536 3,037 3,09
Slide 15: Recruitment and retention strategies
Recruitment and retention strategies • Adequate access to labour is crucial to delivering on key client contracts For personal use only • Plans focused on the reduction in turnover and strategies to attract key personnel
Slide 16: Safety
Safety • Industry-leading safety performance For personal use only • Safety record a key differentiator with clients • As our workforce numbers increase, managing our safety record becomes more challenging 25.0 (per million hours worked) 20.0 Frequency rate 15.0 12.7 12.9 10.0 7.4 4.6 5.0 3.5 1.9 2.
Slide 17: Improved contract/project risk management
Improved contract/project risk management For personal use only • Greater accountability at all levels • Enhanced project selection and tendering • Project performance through people and systems • Applying lessons learnt from past projects • Monitoring and responding to external factors
Slide 18: Balance sheet and funding
Balance sheet and funding For personal use only Strong financial base to fund growth opportunities • Balance sheet remains in a solid position • Net cash position of $39.5 million at 30 June 2011 • Negative gearing of 12% • Excellent funding capacity with ample headroom in debt facilities • Refinanc
Slide 19: Outlook
For personal use only Q&A session Outlook 19
Slide 20: Order book
Order book For personal use only 3,500 3,000 2,500 2,000 $m 1,500 3,100 2,138 2,215 1,000 2,006 2,013 1,412 1,400 500 0 2007 2008 2009 2010 2011 Oct-11 2012 run-off
Slide 21: Investment case
Investment case For personal use only Attractive – Large and diversified mix of contracts minimise impact of business cyclicality and contract mix and weather related events geographic – Macmahon operates in all states in Australia and has a growing international diversification business in 6 countr
Slide 22: Summary
Summary • Order book at a record $3.1 billion For personal use only • Large and diversified mix of contracts • Blue-chip client base and well placed for repeat business • Diversified commodity exposure • For the full year, revenue in excess of $1.6 billion and profit after tax in excess of $45 milli
Slide 23: For personal use only
For personal use only to go here Heading
Slide 24: Current clients
For personal use only Current clients
Slide 25: Contract service sector outlook
Contract service sector outlook • Uninterrupted growth in the market for contract mining services (construction, For personal use only contract mining and contract maintenance) • Value of contract mining services to mining sector est. at $32.7 billion in 2010/11 • Demand for contractors has grown st
Slide 26: Outlook
Outlook Strong demand for Australian iron ore expected to continue, … And similarly, Australian thermal coal exports are forecast For personal use only with volume growth c.7% CAGR (2010-16F) … to grow c.10% CAGR (2010-16F) 2010-16F 350 2010-16F 25 700 70 c.7% CAGR c.10% CAGR Export value (A$bn) 300
Slide 27: International outlook
International outlook • For personal use only Globalisation of mining services continues to increase as Australian contract mining operators pursue opportunities overseas • Key international markets include Africa and Mongolia • Mongolia is expected to experience one of the fastest rates of economic
Slide 28: Order book diversity
Order book diversity Diversified blue-chip client base Diversified commodity exposure For personal use only NewmontOther Other 2% 4% 2% Glencore DiamondsLNG Peabody 5% Santos/ 4% AngloGold/ 4% Gold Petronas 2% Limestone Independence 31% 4% 6% 30% Yancoal Coal 4% 6% Lafarge Order book: Order book: 5%
Slide 29: Disclaimer and important notice
Disclaimer and important notice For personal use only This presentation contains forward looking statements that are subject to risk factors associated with the mining and construction businesses. While Macmahon considers the assumptions on which these statements are based to be reasonable, whether