Macmahon Holdings Limited · ASX:MAH
Macmahon — Investor Presentation (May 2007)
37 slides from Macmahon's investor presentation, May 2, 2007
Slide 1: Investor Presentation — May 2007
MAGMAHON MINING & CONSTRUCTION Investor Presentation — May 2007
Slide 2: Contents
Q MACMAHON Contents « Background « Financial Snapshot « Strategy ~ Core Business — Opportunities ~ Focus Areas — Outcomes « Looking Forward
Slide 3: Background
Background = Founded in 1963 by Brian Macmahon - listed on the ASX in 1986 = 7,500 shareholders — approximately 90% Australian # Extensive experience in: - Open Cut / Underground Mining Operations - Civil Infrastructure Construction # 2006 Revenue = $864 million, 2007 tracking for $950 million x 3,0
Slide 4: Financial Snapshot: Revenue and Profit After Tax
QO MAGMAHON ae Financial Snapshot Revenue Profit After Tax (including Joint Ventures) (Normalised) 4000 30 900 500 25 cig 700 20 3 0 oi 5 = & = 500 Bis a 7 2 18 400 ATS. Gs 416 * 308 ‘0 200 5 “ A a o 2003 2004 2005 2006 #1 2007 2003 2004 2005 2006 Hi 2007 Note: June Financial Years
Slide 5: Financial Snapshot: Market Capitalisation, EPS and Dividend
QO MACMAHON Financial Snapshot Market Capitalisation EPS and Dividend (normalised) 450 8 400 413 420 § 350 300 4 34 & 250 g = 53 5 3 200 ° 2 150 2 180 101 1 1.0 50 Wa p= | Mh ° 9 Hi 2003, 2004 2005 2006 April 2007, 2003 2004 2005 H1 2007 W Oividend Per Share BEPS —& interim Dividend
Slide 6: Strategy
ware dion a : | / Strategy Construction
Slide 7: Core Business
Q Core Business MACMAHON Mining Provides a total mining service for open cut and underground operations, managing mines for some of the world’s largest resources groups. Construction Delivers key civil infrastructure projects for Government and resource sectors.
Slide 8: Capability: Mining
QO MACMAHON Capability Open Cut - Mine Design and Management - Load and Haul - Drill and Blast - Crushing - Processing Underground - Mine Design and Management - Mine Development - Mine Production - Ground Support - Raise Drilling (ARD) - Engineering (CRE)
Slide 9: QO
QO MACMAHON
Slide 10: Construction Capability
veace dan — Construction Capability Roads and Bridges Rail Ports Water Infrastructure Mine Infrastructure Maintenance
Slide 11: MACMAFON
?) MACMAFON i te
Slide 12: Major Customers
Major Customers 68 _ RIO. ARGYLE bhpbilliton PINTO DIAMONDS Peabody Government of NEWMONT Western The Gand Company ten : Australia i, ee ss Northern Territory Government Le Queensland y Government 12
Slide 13: Sector short of key skills and trades
QO Sector short of keys skills and trades Employee Numbers Major focus on: $500 - Staff retention 3060 . - Indigenous employment 2506 . - Apprentice programme 7000 - Non-traditional recruitment 1500 in 41066 2 500 8 2003 2004 2008 2006 Apri 2007 13
Slide 14: Order Book
MACMAHON Q ; : Order Book 2000 4 1800 4 1600 4 1400 4 1800 1200 4 1000 4 goo 4 925 184 600 4 400 4 B41 200 4 0 2003 2004 2005 2006 April 2007 $ Million 14
Slide 15: Secure Revenue
QO Secure Revenue MADMAHON 1400 + T 80% 1200 + yr + 60% 1000 + + 50% <4 & soot % 5 wn 7+ 40% 600 + + 30% 400 + + 20% 200 + + 10% od 0% Apri0d — 2005 Apri08 2006 Aprios 2007 April-07 2008 Ga Work secured by Aprii MMM Actual Full Year Revenue == % of Full Year Revenue secured by April of preceeding ye
Slide 16: Opportunities
MACMAHON QO Opportunities Core Business Opportunities Construction Mining > lron Ore » Coal » Base Metals » Diamonds infrastructure > Road > Rail >» Water » Ports » Mine Maintenance > Infrastructure
Slide 17: Mineral Production Bulk Commodities Australia
QO Mt Mineral Production Bulk Commodities Australia 960 Forecast B00 700 Tl 600 500 400 300 iron Ore 200 41997 1998 1999 2000 2001 2002 2003 2004 2005 2006e = 2007 2008 2009 2010 2017 Source: BIS Shrapnel 2606 ee... Cl. CCC 17 a
Slide 18: Market Conditions - Mining
woe on _ ___ Market Conditions - Mining Mineral Production Base Metals Australia Forecast Nickel Zig 1997 1998 1999 2000 2001 2002 2003 «2004 «= 2005 2006e §= 2007, 2008 «= 2008 = 2010 = 2011 Source: BIS Shrapnel 2005 ee... Cl. CCC 18 a
Slide 19: Market Conditions - Construction
QO MACMAHON arket Conditions - Construction Total Engineering Construction- Australia 25,000 20,000 15,000 10,060 AS'm 04/05 Prices §,000 Forecast 0 1997 1998 »=— 1999, 2000) 2001 2002, 2003) 2004 = 2005 = 2006 Source: BIS Shrapnet 2006 Railways 2007 = 2008 2009 Pipelines 2010 2011 19
Slide 20: Market Conditions - Construction
vance aon arket Conditions - Construction « Federal Government infrastructure Spend — Auslink: $15 billion to June 2009 — National Plan for Water Security: $3.5 billion for infrastructure « State Government Infrastructure Spend — Queensland: $66 billion over 20 years ~ New South Wales: $41 billion o
Slide 21: Focus Areas
sare duon a Focus Areas a Australia Mining » East Coast > lron Ore >» Coal » Coal » Base Metals Low Risk » Diamonds Overseas Projects Infrastructure Diversified Long » Road Term Contracts > Rail Construction » Water Leverage Existing > Ports Customer Base > Mine Maintenance Improved Margins > Infras
Slide 22: Customers
QO MACMAHON Customers BHP Billiton 31% Newmont 5% ARTC 4% Kimb. Diam eabody Energy 11% Diversified Contracts Commodity : ATK LATAWAHI Diamonds HT mi aa) Iron Ore 21%
Slide 23: Diversified Contracts
QO MACMAHON Diversified Contracts Contract Type Contract Duration Alliance > 5 Years 38% 24% Schedule of Rates , ares 58%: 23
Slide 24: Contract Life - Mining
QO Contract Life — Mining BHP Billiton » Orebody 18 : neem a BHP Billiton » Jimblebar ia ee BHP Billiton » Leinster (20ers CT | BHP Billiton >» Olympic Dam eee eee > Rio Tinto > Argyle ‘eee esses ae Rio Tinto » Cape Lambert / Dampier (eee eee > Peabody > Eaglefield es eel a incitee Pivot > Phosphate
Slide 25: Improved Margins
QO Improved Margins MACMAHON 124 104 9.9 10 8.4 3 a4 82 Bd é 6 5.4 47 44 43 3.6 24 o : . : T 1 2003 2004 2005 2006 H1 2007 -*-EBIT -@-EBITDA = Risk Management/contract style = Business improvement * Not sacrificing margins to win work = Supply chain management -— leveraging increased buying power ee
Slide 26: Balance Sheet Management
QO MACMAHON Balance Sheet Management Funding Capital Expenditure 120 426: # Restructuring debt portfolio _,,, # Move to utilisation of g a « 2 = operating leases for major °« ‘BT: plant ao # increased free cash flow * Lea 2003 2004 2005 2006 2007 @Ful Year Mall Year ee... Cl. CCC 26 a
Slide 27: Outcomes
sare duon _ Outcomes Objective mp Grow the Business ml) Secure Market Position ml) Increase Shareholder Returns Mining Australia Service Provider . » East Coast Of Choice on Ore » Coal : Bea Metal Reliable Revenue » Dianonde Low Risk Streams » Diamonds Overseas Projects Sustainable Returns infrastru
Slide 28: Where we are today
QO MACMAHON Where we are today Rapid growth during past three years Record Order Book at $1.8 billion 70 per cent of FY 08 revenue secured (compared to usual position of 50 per cent) Well established business in Western Australia and Northern Territory Foundations in place for Queensland and New Sou
Slide 29: Looking Forward
Looking Forward Focus on: — Growth » East Coast construction = Low risk overseas opportunities = Coal — Major resource companies and longer term contracts ~ Balance Sheet Management ... to increase shareholder returns! ee... Cl. CCC 29 a
Slide 30: Appendices
MAGMAHON MINING & CONSTRUCTION Appendices
Slide 31: Roads and Bridges Capability
QO MACMAHON Capability « Design Management = Construction = fVaintenance Projects « Mitchell Freeway (WA) = Leura (NSW) a Millstream Link (WA) » Eyre Highway (WA) « Term Network Maintenance (WA) Roads and Bridges
Slide 32: Water Infrastructure
sean dunn _ Water Infrastructure Capability » Design Management * Dam Construction # Dam Maintenance « Wastewater Infrastructure = Pipelines Projects # Logan River (Qld) « Ross River Dam (Qld) = Stirling Dam (WA) a > SaaS
Slide 33: Rail Capability
QO MACMAHON Capability « Design Management = Formation Construction #® Track Construction #® Track Maintenance Projects # Perth to Mandurah # SA Alliance (ARTC) » Kingsgrove to Revesby Quadruplication « Eyre Peninsula =» Broaclea to Watonga
Slide 34: Mining Infrastructure Capability
QO MACMAHON Capability « Site Preparation = Earthworks »® Concrete Foundations # Grushing and Screening Facilities # Offshore construction Projects # Alcan Gove G3 # Finucane island ® Boddington # Cape Lambert/Dampier Port Mining Infrastructure
Slide 35: Production & Contract Mining Value - Iron Ore
vance aon / _ . - Iron Ore Production & Contract Mining Vafue- iron Ore « Strong position in WA iron ws oso ore « Blue chip customers « Continuing demand driving increased capacity Agim Production. Mat Value of Contract Mining & New Fixed Gapex 1997 1462 1999 2000 201 N42 NOx a4 20 ODE 267 Dee sona
Slide 36: Production & Contract Mining Value - Coal
QO MACMAHON Production & Contract Mining Value- Coat « Large market sas available = Skills suited to increasing market share « Long life projects es ws = 3 3 & 8 Value of Contract Mining & New Fixed Capex Am ‘one 1999 2000 vont g0m2 2082 2084 2006s 2007 2008 208 9019 2011 Coat Franca Sa> Vaio of Goa
Slide 37: Copper and Nickel
QO MACMAHON Copper and Nickel Production & Contract Mining Valua- Copper 200 « Blue chip customers « Long life projects « Further expansion planned " Well placed for further opportunities ce 00 Production. kt Value of Contract Mining & New Fixed Capex asm: 00 fen7 4692 1959 2090 2001 2002 2002 2904