Macmahon Holdings Limited · ASX:MAH
Macmahon — FY2005 Earnings Presentation
28 slides from Macmahon's earnings presentation, Aug 18, 2005
Slide 1: 2005 Financial Results Presentation
MAC MAHON WHEN EXPERIENCE COUNTS 2005 FINANCIAL RESULTS PRESENTATION 16 AUGUST 2005 NICK BOWEN Chief Executive Officer
Slide 2: Performance Highlights
lights Performance High » Profit after Tax $19.6 million >» Order Book $925 million A RECORD YEAR
Slide 3: Total Revenue and PAT
$ (million) $ (million) $421 2002 2003 2004 $641 2005, w Operating Revenue m Joint Veniure Revenue PAT $17.0 $18.7 - ths $29.2 2002 2003 BEBIT PAT 2004 2005 wi $19.6 7 TOTAL Revenue increased 52% to a record $641 million Strong growth in all divisions Second half revenue at $353 million confirms fur
Slide 4: Margins and Return on Capital & Equity
% % 2% 0% 2002 2003 2004 @ EBT w PAT Return on Capital & Equity 18% o 18% 14.8% 14% 12.6% 12% 117% 14.8% 10% 8% 8% 4% 2% 0% 2002 2003 2004 RCC BROE I / Total Revenue & PAT / Total Revenue 4A > 4.6% 2005 16.8% 2005 Improved EBIT margin of 4.6% but still below target of 5% » All recent tenders deliver
Slide 5: Capital & Cashflow
Capital & Cashflow incon REED CAPEX 70 60 $67.5 $57.5 » Replacement and growth capex of $57.5 million ° >» Capex invested in Open Cut ($22 million), Underground ($11 million) and Allplant ($21 million) 20 $10.4 $10.5 ° | || P| > In last 2 years total capex of $115 million 2004 2005 compared to depre
Slide 6: Borrowings, Debt to Equity and Interest Cover
$ (million) Borrowings 140 420 + 100 + 2 3S t ° t 2Q So t - toy t 20 2002 2003 Wl Net Balance Sheet Debt 2004 2005 Net Debt to Equity 4.4 . ; Net interest Cover 5.0 4.0 3.0 2.0 2.1 2.0 : | | 60+ Times 100 2002 2003 2004 2005 Significant growth funded from existing balance sheet and debt facilities A
Slide 7: EPS / Market Cap
i EPS / Market Cap EPS / Onidend Per Share 5.2 g o 8 y ° Cents per share 2002 2003 2004 2005 MEPS B Dividends Market Capitalisation / Share Price 45.50 $ (million) wn 8 $72 SF + + + 2002 2603 2004 2005 Gs Market Capitalisation Share Price tali sati 48% increase in eps to 5.2 cents Final year fully f
Slide 8: People
People 3000 5 2500 4 2000 4 % 1500 J 1000 4 1865 Number of Employees 1184 1686 g 5 Hl 2002 2093 2004 Group Safety Performance 38.5 26.7 22.4 18.6 33 29 24 i 2002 2003 2004 2005 mg TRIFR Employee number increased by 857 Increased numbers of graduate engineers and apprentices Successful commencement o
Slide 9: Order Book and Run-Off
$ (rvillion) $ (million $784 800 800) gag0 400 $341 i} T 2002 2003 2004 Order Book Run-Off $1 billion+ $660 $260 $160 7 _ Aug-05 2006 2007 2008 Order Book Run-Off ll Work Completed Total of $740 million of contract extensions and new work taking 30 June order book to $925 million 90% of order book a
Slide 10: Order Book — Analysis June 2005
Order Book — Analysis 30 June 2005. ©2 va Over 5 years OOO a 10
Slide 11: Macmahon Project Locations
©2 MACMAHOR WATERFRON. : 4 LEGEND DARWIN CITY WASTE Macmahon Offices Civil Projects Open Cut Projects Underground Projects Allplant Workshop RFH TO MANDURAH RAIL) TONKIN HIGHWAS ane alee SYONEY 41
Slide 12: Open Cut
©2 e pen Cut a MACMAHOIN Financial (Resulis before corporate overheads) » 60% of Revenue from iron ore and coal. » Improved EBIT from increased fleet utilisation, new equipment and productivity improvements. >» Major contracts include Eaglefield (Coal), Moura (Coal), Mt Whaleback (Iron Ore), Nifty (
Slide 13: Civil Financial
Financial {Results before corporate overheads} » Revenue increased to a record $287 million. >» EBIT of $7.4 million well below required target. » Low EBIT as a result of increased costs (labour & materials) on short term fixed price contracts and increased revenue without additional margin from Bur
Slide 14: Civil (continued)
©2 MACMAHCIN — Cc Iv \ | icentinued) eee te OIE » Acquired Northern Territory Civil business from Henry Walker Eltin ~ $50 million pa revenue. » Significant work available in resources sector and from government infrastructure (currently 50/50 split). » Major contracts include Burnett River Dam, Gov
Slide 15: Underground
©2 Underground MACMAHON Financial (Resulis before corporate overheads) >» > >» > Increased revenue from new contracts and increased scope on existing contracts. Improved EBIT from productivity improvements, benefit of new equipment and cost control. Major contracts include Olympic Dam (Copper), Mt I
Slide 16: Allplant
©2 Allplant — MAGMAHON Financial {Results before corporate overheads) Significant 135% revenue growth mainly from plant hire (200% growth). EBIT of $10.2 million, with EBIT margin of 23% demonstrates strength of business. Internal capacity to refurbish/rebuild second hand machinery cost effectively
Slide 17: FreightLink
©2 MACMAHCIN _ FreightLink » Business ramp up continues with 604,000 tonnes of freight (2004: 221,000 in 5 months). » Regular 5 services per week each way. » Railway has 85% market share of Darwin domestic freight business. ®» 2006 will see addition of minerals (Bootu Creek Manganese) and bulk liqui
Slide 18: Market Overview
larket Overview ee a §( billion) 2000 2001 2002 2003 2004 2005 2006 2007 Total Engineering Construction Austratia includes Heavy Industry Water Storage, Harbours, Railways, Bridges & Roads > Increased road funding — Public and Private » Strong growth in Heavy Civil Industry driven by infrastructure
Slide 19: Value of Contract Mining and Mining Maintenance Expenditure
Value of Contract Mining a Mining Maintenance Expenditure 7 6 6 ee B 3. ° 2 14 0- 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2000 2001 2002 2003 2004 2005 2006 2007 2008 Contract @ Owner » Substantial growth in mineral production » Increased production in minerals from new and especially coal
Slide 20: Risk Management
Risk Management » Increased focus by board and management » Focus on existing client relationships — extend contracts and new work » Align contract style with risk profile » More rigour in tender process » Improved escalation analysis » High frequency of internal audits and project reviews » New inf
Slide 21: Strategy
» Continued focus on targeted commodities (coal, iron ore, copper, nickel) for major mining companies at long life mines. » Target large Government infrastructure projects. >» Expand Allplant business with focus on maintenance >» Seek opportunities to increase EBIT margins and reduce risk. >» Expand
Slide 22: Targets
- 15% 22
Slide 23: Outlook - 2006
Outlook - 2006 incon » $1 billion order book will deliver $660 million of revenue for 2006 » Forecast contract extensions and new work expected to take TOTAL revenue to $800+ million >» Improved Civil result will lift Group EBIT margin » Capex $70 to $80 million » Tax rate for 2006 at 30% (up from 8
Slide 24: Appendices
©2 MACMA HCN Appendices
Slide 25: Company Structure
© Company Structure MACMAHON ae 25
Slide 26: Price Comparison
©2 har MAGMAHEIN Price Comparison C EG MAH vs Competitors rebased to 0 at 30 June 2001 400% 300% 200% 100% O% 78 eo FS SF SF SFP Fr FP FS some MAH,.Close —— LEI.Clese DOW.Close —— CLO.Chlse
Slide 27: Summary Statistics Information
, ©2 Summary Statistics Information —— macmanon FINANCIAL Total Revenue Including JV $641.3m $420.8m 52% EBIT $29.2m $18.7m 56% PBT $21.2m $12.2m 74% PAT $19.6m $71.6m 69% Shareholders Equity $117.9m $99.4m 19% Net Borrowings $61.5m $51.5m 19% Debt/Equity 52.2% 51.8% Capital Expenditure $57.5m $57.5
Slide 28: 2005 Financial Results Briefing
MACMAFION WeHEM EXPERIENCE [Club Tss 2005 FINANCIAL RESULTS BRIEFING Year Ended 30 June 2005