Downer Edi Limited · ASX:DOW
Downer Edi — Investor Day (May 2013)
44 slides from Downer Edi's investor day presentation, May 7, 2013
Slide 1: ASX cover letter: Downer EDI 2013 Investor Day
7 May 2013 For personal use only Company Announcements Office ASX Limited Exchange Centre Level 4, 20 Bridge Street SYDNEY NSW 2000 Dear Sir/Madam RE: Downer EDI 2013 Investor Day Please find attached a copy of the presentation to be made to investors today at the company’s annual Investor Day. Your
Slide 2: Downer Group 2013 Investor Day
For personal use only Downer Group 2013 Investor Day 7 May 2013
Slide 3: Today's sessions
Today’s sessions For personal use only Topic Presenters • Sergio Cinerari – COO Downer Infrastructure East Road Infrastructure • David Cattell – CEO Downer Infrastructure • Cos Bruyn – CEO Downer New Zealand New Zealand/SCIRT • Roger Jarrold – CFO Downer New Zealand • David Overall – CEO Downer Mini
Slide 4: The Value Cycle
The Value Cycle • All businesses are questioning and challenging every aspect For personal use only of their operations to optimise value − overheads − direct costs − supply chain − business shape and size • We must work with our customers • Downer has been proactive − investing in operational produ
Slide 5: 2013 guidance
2013 guidance For personal use only Downer expects to deliver underlying EBIT of around $370 million and NPAT of around $210 million for the 2013 financial year. 4
Slide 6: Format for the day
Format for the day For personal use only Time Event Room 7:40 – 8:00 Welcome from Grant Fenn Room 6B, Level 1 8:05 – 8:45 Session 1 Various rooms, Level 1 8:50 – 9:30 Session 2 Various rooms, Level 1 9:35 – 10:15 Session 3 Various rooms, Level 1 10:15 – 10:30 Morning tea Served on Level 1 10:35 – 11
Slide 7: Road infrastructure
For personal use only Road infrastructure Sergio Cinerari Chief Operating Officer, Downer Infrastructure East
Slide 8: Road infrastructure – background
Road infrastructure – background We are continually reinventing ourselves, our ‘go-to-market’ offering and our For personal use only fleet/plant, in order to stay competitive and provide our clients with efficient road network infrastructure management solutions. • Asset maintenance (>40,000 lane km
Slide 9: From road maintenance to network management
From road maintenance to network management Over 25 years the road asset market has evolved from pure road For personal use only • maintenance activity to intelligent network management • In the pure road maintenance phase, the value chain is heavily reliant upon an ability to manage small to medium
Slide 10: Developing competitive strategic partnerships
Developing competitive strategic partnerships For personal use only • DownerMouchel JV formed 2008 • Mouchel brings a global perspective • Model is always evolving to meet the changing needs of customers and markets • DownerMouchel has secured three WA ISA contracts • ISA contracts have grown by mor
Slide 11: Innovation in road infrastructure
Innovation in road infrastructure For personal use only • Downer is a leading innovator with respect to ‘clean’ technology, lower energy usage and High Recycle Technology (HRT) • First of its kind globally – Downer, with its supply partners, has developed new concepts in pavement recycling with the
Slide 12: World leading asphalt technology
World leading asphalt technology For personal use only 11
Slide 13: Driving efficiencies in provision of services
Driving efficiencies in provision of services Stabilisation Project For personal use only • Moved away from traditional model of stabilisation with small crews in many locations • Benefits include: – Increased average daily productivity through specialist plant and specialist crews – Reduced rework,
Slide 14: SCIRT update
For personal use only SCIRT update Cos Bruyn Chief Executive Officer, Downer New Zealand
Slide 15: Land damage map after 4 September 2010
Legend Areas of observed liquefaction Port Hills area For personal use only Approx Scale 1:50,000 0 500 1000 1500 2000 2500 (m) Canterbury DRAWN Notes: Low-resolution aerial photos sourced from Google Earth (Copyright: 2009). DRAFTING CHECKED CERA Earthquake APPROVED High-resolution aerials provided
Slide 16: Aggregated land damage after 22 February 2011
Legend Areas of observed liquefaction Port Hills area For personal use only Approx Scale 1:50,000 0 500 1000 1500 2000 2500 (m) Canterbury DRAWN Notes: Low-resolution aerial photos sourced from Google Earth (Copyright: 2009). DRAFTING CHECKED CERA Earthquake APPROVED High-resolution aerials provided
Slide 17: Transition from emergency response to recovery
Transition from emergency response to recovery For personal use only Sept 2010 May 2011 Aug 2011 Sept 2011 Sept 2012 CCC Infrastructure Rebuild Management Office (IRMO) SCIRT Interim SCIRT Emergency Response Transition Phase Planned Prioritised Programme 16
Slide 18: Key client needs
Key client needs Commercial model developed to deliver: For personal use only • Independent validation of project estimated cost, and of open book cost inputs • Best practice Program Management process • Competitive tension between non owner participants • Design consistency across entire program •
Slide 19: Resulting model
Resulting model For personal use only CERA CCC NZTA • CCC, CERA and NZTA are clients, collaborating through Scope and Client Governance Group Standards Review Committee Client Client Governance Management • SCIRT is the delivery team Group Team Funding Team • The contractual framework is SCIRT Board
Slide 20: Estimate
Estimate For personal use only • Initial estimate – developed by clients following February EQ – updated after June EQ – based on limited initial factual knowledge • SCIRT estimate – November 2012 – based on approx 50% asset assessment, 30% design – range from $2.283 billion (P5) to $3.189 billion (
Slide 21: Program level prioritisation
Program level prioritisation For personal use only 20
Slide 22: Progress – March 2013
Progress – March 2013 For personal use only 179 Projects valued at $976 million currently being designed 109 Projects valued at $384 million currently being constructed Projects valued at $97 million currently being handed back to the asset 185 owners 36 Projects valued at $194 million being estimat
Slide 23: Progress – March 2013
Progress – March 2013 For personal use only Total Damage Repaired % Repair Network Network complete 11,761,807 m2 1,320,375 m2 164,372 m2 14% Road pavement 1,613 km 659 km 144 km 22% Wastewater pipe 2,843 km 69 km 22 km 32% Fresh water pipe 329 km 26 km 9 km 35% Storm water pipe 22
Slide 24: Progress
Progress For personal use only • Ramping up the volume of work in the field – 1,150 in the field – peak 1300 – 150 delivery management – 280 asset investigation – 180 designers – 110 Program Management – 1,870 total 23
Slide 25: Challenges ahead
Challenges ahead For personal use only • Deliver a ‘whole of network’ outcome that provides an equivalent level of service, asset life and O&M regime to pre-September 2010 conditions • Demonstrate value – means different things to different stakeholders • Keep a focus on ‘critical resources’ • Conta
Slide 26: Keolis Downer
For personal use only Keolis Downer Peter Reidy – Chief Operating Officer, Downer Infrastructure Services Kieran Street – Business Development Manager, Keolis
Slide 27: Who we are
Who we are Keolis Downer is an unincorporated joint venture (Keolis 51%, Downer 49%) established in 2008 For personal use only To be the leading public and private sector transportation asset manager and Our vision operator across Australia and New Zealand Ownership: 70% SNCF (French National Railwa
Slide 28: What do we do
What do we do Keolis Downer has been successful in two major opportunities in Australia For personal use only The world’s largest operating Greenfield light rail for the Gold tram network Coast 15 year franchise (2024) $1 billion PPP awarded in 2009 18 year contract awarded in 2011 2000+ staff Desig
Slide 29: Our business model
Our business model For personal use only • State Governments driving a reform agenda with private participation for key infrastructure and transport assets Key market drivers • Growing population density on roads/public transport • Private funding reduces pressure on State budgets • Integrating Keol
Slide 30: Opportunity pipeline
Opportunity pipeline LEK: in 2008/09 the Australian public transport market was worth ~$5.5billion For personal use only Mode Project Type Region Growing Population (Australia): approx Rail Cross River PPP (New) QLD 23m, forecast ~30m in 2030 NSW Rail -Sydney O&M (existing) NSW Strong public transpo
Slide 31: Downer Mining
For personal use only Downer Mining David Overall Chief Executive Officer, Downer Mining
Slide 32: Ongoing improvement in Zero Harm
Ongoing improvement Ongoing improvement in Zero in Zero HarmHarm For personal use only • Ongoing improvement in TRIFR 18 TRIFR 16 • LTIFR <1 14 • Focus on High Potential Risks 12 10 • Collision avoidance – 8 SafeMINE rolled out at 6 Commodore and Boggabri 4 5.48 • Working at heights 2 0 • Isolations
Slide 33: Cost reduction strategies – plant
Cost reduction Cost-reduction strategies strategies – plant – Plant For personal use only “Doing more with less” • Standardising fleet/fleet matching • Ultra class machines Reduction in hired gear/relocation • FY12 FY12 plan FY11 • Disposal of aged fleet • Back to Basics maintenance • Strengthening
Slide 34: Cost reduction strategies – operations
Cost reduction strategies – operations For personal use only • Operations excellence and business improvement • Strategic partners • Focus on people and training •FY12Procurement andFY12 sourcingFY11 FY12 FY11 FY12 FY11 33
Slide 35: Delivering something different
Delivering something different For personal use only • Otraco tyre training centre in Perth – 106 graduates to date; unique certifications • DBS waste oil trials – proven success substituting up to 50% waste oil for diesel in ANFO; fragmentation trials now underway • Kidney looping – rear axle oil l
Slide 36: Major contracts
Major contracts For personal use only Customer Mine/s Location Contract Duration Start Services provided value date Fortescue Christmas Pilbara, WA A$3.0 6 years Oct Load & haul of overburden, drill & blast, Creek billion 2010 design, manufacture, installation and maintenance of mine infrastructure.
Slide 37: Growth opportunities
Growth opportunities Growth opportunities For personal use only • Otraco – $32 milion new contracts and renewals; especially new work in Southern Africa and South America − Cerro Colorado – BHPB − Los Bronces – Anglo American − Sishen – new contract – Anglo American FY12 − Debswana FY12 – De Beers/B
Slide 38: Downer Rail
For personal use only Downer Rail Ross Spicer Chief Executive Officer, Downer Rail
Slide 39: Waratah Train Project (WTP) update
Waratah Train Project (WTP) update For personal use only Status Train Set No. Status Train Set No. Passenger service 3,4,5,6,7,8,9, In transit / at Dalian Port 53,54,55 10,11,14,15,16,17,18, 19,20,21,22,23,24, 25,26,27,28,29,30, 31,32,33,34,35,36,37, 38,39,40 Being prepared for 41,42 At CRC ready fo
Slide 40: WTP Through Life Support (TLS) contract
WTP Through Life Support (TLS) contract • 30-year TLS contract provides opportunities for Downer Rail For personal use only • Continued development of TLS team • Life Cycle Cost (LCC) analysis for Waratah trains is well in progress • LCC drives component and overhaul strategies for the WTP fleet • D
Slide 41: Integration of WTP and Downer Rail
Integration of WTP and Downer Rail Initial focus: For personal use only • Put the customer at the heart of everything we do • Measure success by the performance and reliability of our locomotive and passenger fleets • Drive efficiencies • Retain key people • Maintain focus on Zero Harm 40
Slide 42: Freight
Freight • Five year agreement with Electro Motive Diesel (EMD) signed June For personal use only 2012 – further strengthens Downer’s 60+ year relationship with our key partner EMD • Offshore manufacturing of locomotives will enable Downer and EMD to maintain competitiveness, with a global-leading an
Slide 43: Overview
Overview • Downer Rail has stabilised over the past two years with a strong focus For personal use only on safety improvement and governance • Rapidly changing market - slow-down in demand from mining sector and increasing low cost international competition • The integration of WTP and Downer Rail i
Slide 44: Disclaimer
Disclaimer Reliance on third party information For personal use only This presentation may contain information that has been derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the