Macmahon Holdings Limited · ASX:MAH
Macmahon — H1 FY2013 Earnings Presentation
30 slides from Macmahon's earnings presentation, Feb 27, 2013
Slide 1: Half Year Results 27 February 2013
For personal use only 27 February 2013
Slide 2: Contents
Contents For personal use only 1. Highlights 2. Sale of Construction 3. Mining 4. Financials 5. Outlook / Strategy 2
Slide 3: Highlights
Highlights For personal use only Mining operations achieve record $533.3 million revenue (up 26% on pcp) and record $23.1 million net profit after tax (up 70% on pcp) Net loss of $60.7 million for discontinued Construction operations, leading to overall loss of $37.6 million for the first half o
Slide 4: Sale of Construction – discontinued operations
Sale of Construction – discontinued operations For personal use only Sale of majority of Construction projects to Leighton $ millions Dec-12 Dec-11 Change % Group approved by shareholders at EGM held in Segment revenue 503.6 405.8 24% February 2013, following strategic review PBT (110.1) 14.2 -875
Slide 5: Construction overview – legacy projects
Construction overview – legacy projects For personal use only Retained projects mostly nearing completion • Solomon – team demobilised in December • Hope Downs 4 – rehabilitation works substantially complete with full demobilisation in April • Gladstone LNG (day works only), ULAN Alliance (April 2
Slide 6: Mining operational update – Surface Mining
Mining operational update For personal use only Surface Mining Fraser Ramsay appointed Chief Operating Officer – Surface and Infrastructure Services in February 2013 $1.8 billion Christmas Creek Mine expansion awarded in January bringing current order book to a record $3.6 billion – approximatel
Slide 7: Mining operational update – Underground, International and Engineering
Mining operational update For personal use only Underground, International and Engineering Nick Cernotta appointed Chief Operating Officer – Underground, International and Engineering in February Awarded 3 year, $200 million Olympic Dam contract extension Underground works commenced at Ranger
Slide 8: Tavan Tolgoi coal contract update
Tavan Tolgoi coal contract update For personal use only Contract Highlights Macmahon As production is ramped up strategy is to currently has a debt fund the acquisition of additional 100% interest equipment through stand-alone facility – Contract style is requires long-term funding being ‘cost
Slide 9: People and safety
People and safety For personal use only Employee numbers Employee numbers reduced due to completion of construction projects 4,791 4,349 3,536 Christmas Creek ramp-up will see 3,098 3,021 numbers increase in January Jun-09 Jun-10 Jun-11 Jun-12 Dec-12 Construction transfers and redundancies wil
Slide 10: Financials
For personal use only Financials
Slide 11: Income statement
Income statement For personal use only $ millions Dec-12 Dec-11 % Change Total revenue from continuing operations 533.3 423.2 26% Earnings before interest and tax (EBIT) from continuing operations 43.2 27.6 57% Interest (10.8) (7.6) 42% Profit before tax from continuing operations 32.4 20.0 62% Tax
Slide 12: Financial highlights – continuing operations
Financial highlights – continuing operations For personal use only Group PAT ($ million) and EPS (cents per share) Viable business model 23.1 Profit after tax from continuing operations of $23.1 million, up 70% on pcp 13.6 Earnings per share from continuing operations of 3.0 cents per share, u
Slide 13: Mining performance
Mining performance For personal use only $ millions Dec-12 Dec-11 Change % Record revenue of $533.3 million, up 26% on pcp Segment revenue 533.3 423.2 26% PBT 38.4 32.0 20% Record profit before tax of $38.4 million PBT margin % 7.2 7.6 Order book 1,840 2,219 -17% Slight decrease in margins to
Slide 14: Corporate cost savings initiatives
Corporate cost savings initiatives For personal use only Review of organisational structure completed in October 2012 Conducted by external consultants and coincided with an internal focus on cost savings across the business in response to changing market conditions Key corporate and support s
Slide 15: Cash flow
Cash flow For personal use only $ millions Dec-12 Dec-11 % Change Cash from operations for both periods Operating cash flow 77.5 85.3 -9% includes significant timing differences. Disposals 37.6 6.1 516% Reduction in normalised cash from Capital expenditure1 80.4 46.3 74% operations due to Constr
Slide 16: Balance sheet and gearing
Balance sheet and gearing For personal use only 25% 23.1% $ millions Dec-12 Jun-12 Change 20% Gearing Current assets 531.8 528.9 5% 15% 9.4% Non-current assets 427.7 460.1 -7% 10% Total assets 959.4 989.0 -3% 5% 0.6% Net assets 344.5 356.8 -3% 0% Jun-09 Jun-10 Jun-11 Jun-12 Dec-12 -5% Net debt/(cash
Slide 17: Funding facilities
Funding facilities For personal use only Significant headroom in funding facilities Of the remaining $223.5 million headroom $86.0 million is for equipment financing, $55.0 million is for working capital and $82.5 million for bank guarantees All banking covenants remain within limits 1.Drawn d
Slide 18: Post sale earnings guidance
Post sale earnings guidance For personal use only As previously advised, guidance provided in December assumed a wind down of construction and did not $ million (figures shown are net of tax) FY13 include impacts of a sale Previous NPAT guidance 0 – 25 (Construction wind down assumed) Risks to g
Slide 19: New Strategy
For personal use only New Strategy
Slide 20: The New Macmahon
The New Macmahon For personal use only Underground International Infrastructure Surface Mining Engineering Mining Mining Services Low capital intensity growth opportunities End-to-end mining service model Long-term relationships with blue-chip clients Diverse international footprint Diverse
Slide 21: Opportunities
Opportunities Increase service offering through existing relationships and skill base For personal use only Continue to expand international operations in new and existing jurisdictions, particularly in underground works Expand Engineering Business into surface EPC infrastructure market Low
Slide 22: Order Book
Order Book For personal use only Record order book of $3.6 billion (including Christmas Creek contract won January 2013) Eaglefield/Lenton, Orebody 18 and George Fisher currently under negotiation for renewal1 Almost 70% of forecast FY14 revenue secured – assuming contract extensions Mining or
Slide 23: Map of operations
23 For personal use only Map of operations
Slide 24: Mining Business investment case
Mining Business investment case For personal use only New strategy implemented to de-risk the business and provide consistent earnings and increased shareholder returns Strong historical and forecast mining performance Record order book of $3.6 billion (including Christmas Creek contract won J
Slide 25: Half Year Results 2013 Macmahon
ersonal use only Halt Year Results 2013 Q MACMAHON
Slide 26: Diversified order book
Diversified order book For personal use only Mining order book by capability1 Mining order book by location1 Mining order book by commodity1 (1) Mining order book as at 31 December 2012 plus Christmas Creek Mine expansion contract awarded in January 2013 (2) Other commodity exposures include tin, ur
Slide 27: Mining revenue performance
Mining revenue performance For personal use only (2) 1,400 7.5% 7.2% 8.2% 1,200 7.5% 7.6% GFC impacts (1) 6.3% 880 645 674 466 1.8% FY09 FY10 FY11 FY12 FY13F FY14F Revenue (A$m) Underlying PBT margin (%) Floods affected PBT margin (%) (1) FY11 PBT margin normalised to underlying level to reverse imp
Slide 28: Key projects and clients
Key projects and clients For personal use only Project Commodity Value Start Date End Date Christmas Creek (WA) Iron Ore $1,800m 2012 2017 Orebody 18 & Wheelara (WA) Iron Ore $975m 2006 2013 Tropicana Project (WA) Gold $900m 2012 2022 Eaglefield (QLD) Coal $550m 2003 2013 Olympic Dam (SA) Uranium/Co
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
Slide 30: Half Year Results 2013 Macmahon
ersonal use only Halt Year Results 2013 Q MACMAHON