Downer Edi Limited · ASX:DOW

Downer Edi — HY17 Earnings Presentation

25 slides from Downer Edi's earnings presentation, Feb 2, 2017

  1. Slide 1: Downer Half Year Results

    DOWNER HALF YEAR RESULTS Investor presentation | 2 February 2017

  2. Slide 2: Overview

    OV ERV I EW Total revenue1 $3,603.0 million, up 1.7% Operating cash flow $243.6 million, EBITDA conversion 102.6% Earnings Before Interest and Tax (EBIT) $120.8 million, Net debt3 $22.2 million, up 6.7% down from $87.4 million at 30 June 2016 Net Profit After Tax (NPAT) $78.2 million, Gearing4 1.0%,

  3. Slide 3: Transport Services

    T RA N SPORT SERV I CES Total revenue1 $m EBIT $m EBIT margin ROFE2 1,000 911.2 50 6.0% 25% 41.4 21.0% 802.9 4.5% 800 40 5.0% 20% 31.6 3.9% 16.1% 4.0% 600 30 15% 3.0% 400 20 10% 2.0% 200 10 1.0% 5% 0 0 0.0% 0% HY17 HY16 HY17 HY16 HY17 HY16 HY17 HY16 OPPORTUNITIES  Revenue increase of 13% driven by

  4. Slide 4: Technology and Communications Services

    T ECH N OLOGY A N D COM M U N I CAT I ON S SERV I CES Total revenue1 $m EBIT $m EBIT margin ROFE2 300 30 10% 8.8% 200% 245.9 249.9 157.3% 250 25 21.7 8% 150% 200 20 5.6% 14.1 6% 150 15 100% 4% 58.9% 100 10 50% 50 5 2% 0 0 0% 0% HY17 HY16 HY17 HY16 HY17 HY16 HY17 HY16  Improved earnings performance

  5. Slide 5: Utilities Services

    U T I L I T I ES SERV I CES Total revenue1 $m EBIT $m EBIT margin ROFE2 22.8 13.2% 500 442.3 25 7% 6.1% 14% 20.8 376.5 6% 12% 10.8% 400 20 4.7% 5% 10% 300 15 4% 8% 200 10 3% 6% 2% 4% 100 5 1% 2% 0 0 0% 0% HY17 HY16 HY17 HY16 HY17 HY16 HY17 HY16  Revenue increase of 18% driven by new and existing co

  6. Slide 6: Rail

    RA I L Total revenue1 $m EBIT $m EBIT margin ROFE2 500 16.0 14.0 4% 3.5% 6% 5.4% 399.7 420.1 14.0 5% 400 12.0 3% 4% 3.6% 300 10.0 8.0 2% 3% 200 6.0 4.5 1.1% 2% 4.0 1% 100 1% 2.0 0 0.0 0% 0% HY17 HY16 HY17 HY16 HY17 HY16 HY17 HY16  Continuing strong performance on maintenance contracts e.g. Waratah

  7. Slide 7: Engineering, Construction & Maintenance

    EN GI N EERI N G, CON ST RU CT I ON & M A I N T EN A N CE Total revenue1 $m EBIT $m EBIT margin ROFE2 1200 30 27.1 5% 30% 25.1% 973.4 927.8 1000 25 20.6 4% 25% 21.2% 800 20 2.8% 20% 3% 15 2.2% 15% 600 2% 400 10 10% 200 5 1% 5% 0 0 0% 0% HY17 HY16 HY17 HY16 HY17 HY16 HY17 HY16  Continuing strong per

  8. Slide 8: Mining

    MINING Total revenue1 $m EBIT $m EBIT margin ROFE2 1,000 80 10% 20% 18.6% 67.7 8.7% 781.6 70 16.3% 800 8% 7.0% 635.4 60 15% 50 44.4 600 6% 40 10% 400 30 4% 20 5% 200 2% 10 0 0 0% 0% HY17 HY16 HY17 HY16 HY17 HY16 HY17 HY16  Expiry of Christmas Creek contract  Two year extension to Meandu Mine contr

  9. Slide 9: Group Financials

    GROUP FINANCIALS Relationships creating success

  10. Slide 10: Financial Performance

    FI N A N CI A L PERFORM A N CE $m HY17 HY16 Change (%) Total revenue1 3,603.0 3,543.4 1.7 EBITDA 225.8 241.2 (6.4) EBIT 120.8 113.2 6.7 Net interest expense (13.7) (15.8) 13.3 Tax expense (28.9) (25.3) (14.2) Net profit after tax 78.2 72.1 8.5 EBIT margin 3.4% 3.2% 0.2 Effective tax rate 27.0% 26.0%

  11. Slide 11: Summary of Earnings

    SU M M A RY OF EA RN I N GS $m Total Transport Tech & Comm Utilities Rail EC&M Mining Corp Statutory EBIT 120.8 41.4 21.7 20.8 14.0 27.1 44.4 (48.6) New Intercity Fleet bid costs 10.0 10.0 Settlement of contractual claims 5.0 5.0 Contract closure (6.5) (6.5) Adjusted EBIT (approx) 129.3 41.4 21.7 20

  12. Slide 12: Unallocated Costs (Corporate Costs)

    U N A L LOCAT ED COST S (CORPORAT E COST S) $m HY17 HY16 R&D incentives 4.2 5.0 New Intercity Fleet bid costs (10.0) - Capital Metro bid costs - (13.0) Settlement of contractual claims (5.0) - Corporate costs (37.8) (40.1) Total unallocated (48.6) (48.1) 12

  13. Slide 13: Operating Cash Flow

    OPERAT I N G CA SH FLOW $m HY17 HY16 EBIT 120.8 113.2 Add: depreciation & amortisation 105.0 128.0 EBITDA 225.8 241.2 Operating cash flow 243.6 178.1 Add: Net interest paid1 13.2 11.2 Tax received (25.1) (34.2) Adjusted operating cash flow 231.7 155.1 EBITDA conversion 102.6% 64.3% Add back project

  14. Slide 14: Cash Flow

    CA SH FLOW $m HY17 HY16 Total operating 243.6 178.1 Net capital expenditure (54.4) (100.0) AGIS and RPQ acquisitions (52.6) - IT Transformation and Other (16.4) (23.5) Total investing (123.4) (123.5) On-market share buy-back1 - (6.4) Net (repayment)/ proceeds of borrowings (32.8) 124.1 Dividends pai

  15. Slide 15: Debt Maturity Profile

    DEB T M AT U RI T Y PROFI L E By Limit (at 31 Dec 2016) 300 200 USPP A$m Equivalent Finance leases ECA finance 100 A$MTN 1 Syndicated bank facility Bilateral bank facilities 1 0 Jun-17 Jun-18 Jun-19 Jun-20 Jun-21 Jun-22 Jun-23 Jun-24 Jun-25 Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23 Dec-24 Dec

  16. Slide 16: Balance Sheet and Capital Management

    BA L A N CE SH EET A N D CA PI TA L M A N AGEM EN T $m Dec 16 Jun 16 Total assets 4,125.7 4,200.3 Total shareholders’ equity 2,118.4 2,088.5 Net debt1 22.2 87.4 Gearing: net debt to net debt plus equity 1.0% 4.0% Gearing (including off balance sheet debt)2 6.4% 9.4% Debtor days 20.8 23.6 WIP days 30

  17. Slide 17: Downer

    Downer Relationships creating success

  18. Slide 18: Downer Revenue Base

    DOWN ER REV EN U E BA SE 7% 11% 27% 42% 25% 58% 18% 12% Rail Public Transport Services Private Utilities Services Mining EC&M Technology & Communications Services 18

  19. Slide 19: Work-in-Hand: $21.1 Billion

    WORK -I N -H A N D: $ 2 1 .1 B I L L I ON By Service Line – December 2016 By Contract Type – December 2016 3% 2% 7% 25% 35% 34% 40% 17% 10% 7% 20% Transport Services Schedule of Rates Utilities Services Recurring EC&M Lump Sum / Fixed Price Mining Alliance / Target Cost Rail Cost Plus Technology & C

  20. Slide 20: Work-in-Hand: Boosted by Recent Rail Wins

    WORK -I N -H A N D: B OOST ED B Y RECEN T RA I L WI N S $m 25,000 20,000 15,000 10,000 5,000 0 FY14 FY15 FY16 Dec-16 20

  21. Slide 21: Work-in-Hand by Service Line

    WORK -I N -H A N D B Y SERV I CE L I N E $m 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Transport Utilities EC&M Mining Rail T&C Jun-16 Dec-16 21

  22. Slide 22: Outlook

    OU T LOOK Downer is targeting NPAT of around $175 million for the 2017 financial year. 22

  23. Slide 23: Relationships creating success

    Relationships creating success

  24. Slide 24: Debt and Bonding Facilities

    DEB T A N D B ON DI N G FACI L I T I ES Debt facilities $m Debt facilities by type % Total facilities 1,109.3 Syndicated bank facility 36 Drawn (624.3) A$MTN 36 Available facilities 485.0 USPP 15 Cash 602.1 Bilateral bank facilities 8 Total liquidity 1,087.1 ECA finance 3 Finance leases & other 2 10

  25. Slide 25: Segment Reporting

    SEGM EN T REPORT I N G HY17 Technology and Transport Utilities Communications Rail EC&M Mining Unallocated Total $m Services Services Services Segment revenue 885.5 245.9 442.3 202.0 951.6 612.2 (4.9) 3,334.6 Share of sales from JVs and Associates1 25.7 - - 197.7 21.8 23.2 - 268.4 Total revenue1 911

Downer EDI — HY17 Earnings Presentation on 6ix