Slide 1: Presentation to Stakeholders
PRESENTATION TO STAKEHOLDERS 30 November 2020 Oval Hotel - Adelaide
Slide 2: Agenda
OVERVIEW Sean Flanagan Group Chief Executive Officer AGENDA OPERATIONAL PERFORMANCE Sean Flanagan Group Chief Executive Officer FINANCIAL OVERVIEW Adrian Macartney Group Finance Director OUTLOOK Sean Flanagan Group Chief Executive Officer 2
Slide 3: Overview
OVERVIEW • Aveng is an international infrastructure, resources and contract mining group operating in selected markets and geographies • Improved FY20 financial results in comparison to prior year, notwithstanding the impact of COVID-19 • Performance trajectory has continued into Q1 FY21 • Significa
Slide 4: Strategic Journey
STRATEGIC JOURNEY WHAT ACTIONS WERE WHAT DID WE NEED WHERE WERE WE WHERE DO WE TAKEN IMMEDIATELY? TO DO TO FIX IT? PRE COVID? WANT TO GET TO? • Significant changes to the • Capital restructure: • Core businesses starting to • Core operations delivering board to re-establish perform (H1 FY20 results)
Slide 5: Overview | COVID-19 Response
OVERVIEW | COVID-19 RESPONSE • Set-up a COVID-19 response team with Standard Operating Procedures • Ensured all offices & sites had necessary procedures in place ahead of lockdown • Tested connectivity at all sites and loaded collaboration tools to ensure all staff remained productive • Daily engage
Slide 6: Overview | COVID-19 Response
OVERVIEW | COVID-19 RESPONSE • Pandemic resulted in a R400 million liquidity shortfall in South Africa R200 million raised though short term bank facility repaid in August 2020 R168 million from Board, management and employees foregoing one month salary • Disposals of non-core businesses disrupt
Slide 7: Plans to Manage the Risk of COVID-19 in SA
PLANS TO MANAGE THE RISK OF COVID-19 IN SA COVID-19 risk is potentially contained by our geographic diversification across South Africa and Africa MOOLMANS FOOTPRINT TRIDENT SA FOOTPRINT Branches Current operations Previous presence Rosslyn Roodekop, Germiston Durban Dishaba Platreef Union Cape
Slide 8: Plans to Manage the Risk of COVID-19 in McConnell Dowell
PLANS TO MANAGE THE RISK OF COVID-19 IN McCONNELL DOWELL • McConnell Dowell has successfully navigated the impact of the COVID-19 pandemic throughout H2 FY20 and now into FY21 • The business has successfully leveraged its existing strengths and implemented timely and effective mitigation strategies
Slide 9: Overview | Safety, Health & Environment
OVERVIEW | SAFETY, HEALTH & ENVIRONMENT GROUP 12 MONTH ROLLING LTIFR • No fatalities in FY20 financial year • Group LTIFR 0,19 – target 0,18 0,30 0,22 0,21 5 years LTI free at Built Environs 0,19 0,19 Kolomela - 1 218 LTI free days Union mine – 782 LTI free days • Group TRIFR 0,74 – target 0,8
Slide 10: How Were We Performing H1 FY20 | Looking Positive
HOW WERE WE PERFORMING H1 FY20 | LOOKING POSITIVE Revenue EBIT Cash Flow Cost Management H1:2020 H1:2020 H1:2020 • Group Corporate headcount Total +1.5% +132% +169% reduction from 200 to under 30 core R6.9bn R99m R383m • Relocation - saving of R11 million p.a (1H2019: R6.8bn) (1H2019: -R307m) (1H201
Slide 11: Overview | Financial Results
OVERVIEW |FINANCIAL RESULTS FOR THE YEAR ENDED 30 JUNE 2020 COMMENTARY H1 2020 FY 2020 FY 2019 Revenue R11,2 billion R20,9 billion R25,7 billion EBIT of (R546 million) in H2 2020 included: • Settlement of two legacy claims in McConnell Dowell which resulted in Non-cash impairment of AUD19 million (R
Slide 12: Overview | Financial Results (Q1 FY21)
OVERVIEW |FINANCIAL RESULTS FOR THE QUARTER ENDED 30 SEPTEMBER 2020 (UNAUDITED) NET OPERATING OPERATING FREE REVENUE EARNINGS/(LOSS) CASH FLOW COMMENTARY Q1 FY21 Q1 FY21 Q1 FY21 Rm Rm Rm • Revenue at 5 year high levels McConnell Dowell 4 243 67 631 Q1 (y-o-y) revenue growth 48% • >80% of projects
Slide 13: Overview | Restructure & Recapitalisation
OVERVIEW | RESTRUCTURE & RECAPITALISATION • In August 2019, Aveng renegotiated its debt, extending the maturity profile to June 2021 and September 2021 • At the time, the intention was to renegotiate the debt package in the last quarter of the FY20 in order to achieve a sustainable level of debt • S
Slide 14: Operational Performance
OPERATIONAL PERFORMANCE SPJ Onshore – Malaysia
Slide 15: 60 Years of Creative Construction
60 years of creative construction In 1961 two young entrepreneurial New Zealand engineers sat down with a vision to do things better than the company they worked for. In that moment McConnell Dowell was born SAFETY & CARE HONESTY & INTEGRITY CUSTOMER FOCUS WORKING TOGETHER PERFORMANCE EXCELLENCE 15
Slide 16: A Year of Achievements
A YEAR OF ACHIEVEMENTS 23 New Work Won to % 50 Cash in Hand to % World Record Tallest CLT* building Increase in Increase in AUD1.65 billion AUD140 million Broken in the Southern Snells Algies, NZ – longest direct pipe drive Hemisphere Auckland City Mission 60 Work in Hand to % 17 Preferred & ECI % W
Slide 17: Why We Believe in McConnell Dowell
WHY WE BELIEVE IN MCCONNELL DOWELL Competitive advantage Specialist capabilities Geographic Footprint • Brand reputation • Strong management • Engineering and innovation excellence Rail Tunnel and underground Marine • Collaborative and reliable delivery partner • Specialist capabilities • Diversity
Slide 18: Operational Performance
OPERATIONAL PERFORMANCE Gamsberg – South Africa
Slide 19: For more than 60 years Moolmans has delivered specialised mining services
For more than 60 years Moolmans has delivered specialised mining services throughout Africa in a range of commodities for several reputable clients SAFETY & CARE HONESTY & INTEGRITY CUSTOMER FOCUS WORKING TOGETHER PERFORMANCE EXCELLENCE 19
Slide 20: Highlights
HIGHLIGHTS R38m R191m R4,9bn Net operating profit inflow Work in hand Operating Free Cashflow Turn-around from R327m loss from R321m outflow in Secured 81% revenue June 2019 June 2019 for FY21 Appointment of Contract Safety Key management renegotiation and care personnel and extensions Kolomela -1 2
Slide 21: Why We Believe in Moolmans
WHY WE BELIEVE IN MOOLMANS Competitive advantage Specialist capabilities Geographic Footprint • Brand reputation • African leader in open-cut contract mining • Experience in remote and difficult environments Mali • Relationships with established mining houses Burkina Faso • R2,3 billion fleet to ser
Slide 22: Non-Core Assets
Providing a better life NON-CORE ASSETS
Slide 23: Non-Core Asset | Performance
NON-CORE ASSET | PERFORMANCE Aveng Construction and Steel Manufacturing Engineering South Africa • Net operating earnings of R14 million • Disposal of Dynamic Fluid Control • R545m cash outflow despite challenging operating completed • Disposed of Grinaker-LTA environment • Disposal of Duraset compl
Slide 24: Financial Overview
FINANCIAL OVERVIEW Wynyard Edge Alliance – New Zealand
Slide 25: Financial Performance
FINANCIAL PERFORMANCE FY 2020 FY 2019 Results Rm Rm Revenue 20 878 25 676 Gross margin % 4,7 4,1 Operating expenses (1 647) (2 247) Net operating earnings/(loss) (532) (1 119) Net interest (429) (406) Impairment of PPE and equity-accounted investment (168) (292) Loss for the period (1 116) (1 680) H
Slide 26: Segmental Results
SEGMENTAL RESULTS REVENUE NET OPERATING EARNINGS/(LOSS) OPERATING FREE CASH FLOW FY 2020 FY 2019 FY 2020 FY 2019 FY 2020 FY 2019 Rm Rm Rm Rm Rm Rm McConnell Dowell 10 297 9 527 (162)** 110 506 (362) Moolmans 3 955 4 143 38 (372) 191 (201) Other eliminations (67) (122) (193) (327) (245) 190* Total co
Slide 27: Financial Position
FINANCIAL POSITION Jun’20 Jun’19 Jun’20 Jun’19 Rm Rm Rm Rm Liabilities & equity 11 636 12 282 Assets 11 636 12 282 Liabilities Goodwill and intangible assets 115 139 Borrowings and liabilities 1 883 2 145 Borrowings and liabilities (IFRS 16) 497 - Property, plant and equipment 3 180 2 814 Working ca
Slide 28: Working Capital
WORKING CAPITAL Core Assets Non-core Assets Jun’20 Jun’19 Jun’20 Jun’19 Rm Rm Rm Rm Inventory 187 214 839 1 658 Trade and other receivables 358 194 459 1 277 Amounts due from contract customers 2 531 2 621 8 401 Trade and other payables (2 764) (2 683) (461) (2 194) Amounts due to contract customers
Slide 29: Uncertified Revenue and Claims
UNCERTIFIED REVENUE AND CLAIMS Jun’20 * Jun’19 * Rm Rm Uncertified claims and variations 660 1 316 Contract contingencies (290) (638) Contract and retention receivables 2 169 2 347 Provision for contract receivables - (3) Amounts due from customers 2 539 3 022 Progress billings received (1 284) (977
Slide 30: Movement in Net Debt
MOVEMENT IN NET DEBT 810 366 247 221 (50) (287) (332) (430) (540) (557) (552) Net debt Cash from Cash from Working Net finance Taxation Net capital Proceeds Repayment of Foreign * Net debt 30 Jun ‘19 operations operations capital change charges expenditure disposal of external exchange 30 Jun ‘20 co
Slide 31: Liquidity
LIQUIDITY Jun’20 Jun’19 SOUTH AFRICA BOND EXPOSURE Rm Rm 4 000 Net Cash (including overdrafts) 1 331 1 605 3 500 South African operations (342) 581 3 000 McConnell Dowell 1 673 1 024 2 500 2 000 Borrowings (1 883) (2 145) South African operations (1 762) (1 967) 1 500 McConnell Dowell (121) (178) 1
Slide 32: Restructure & Recapitalisation
RESTRUCTURE & RECAPITALISATION The pro-forma impact of this transaction will be: • An increase of stated capital of R700 million Introduction of R300 million of new capital by way of rights offer at 1.5cps, fully underwritten by Aveng’s largest shareholder Settlement of R400 million of debt by w
Slide 33: Pro Forma | Balance Sheet Post Restructure
PRO FORMA | BALANCE SHEET POST RESTRUCTURE 30 June Cash Effect of Pro forma 2020 settled Restructure Rm Rm 31 Aug’20 Borrowings 1 708 848 Overdraft (assume fully 605 205 drawn at all times) • R210m early cash settlement of debt Total CTA debt 2 313 (200) (1 060) 1 053 • R400m debt settled by equity
Slide 34: Outlook & FY21 Focus Areas
OUTLOOK & FY21 FOCUS AREAS Marina Bay Sands – Singapore
Slide 35: Overview | Work in Hand
OVERVIEW | WORK IN HAND WIH BY GEOGRAPHY Rest of Africa 1% FY 2020 FY 2019 South Africa Rm Rm 18% McConnell Dowell 21 794 11 686 Moolmans 4 996 7 322 Southeast Australia 53% Asia 15% TOTAL 26 790 19 008 New Zealand 13% WIH BY SECTOR Mining 19% Tunnel 4% Pipeline 1% Civil 51% Building 7% Rail 11% Mar
Slide 36: The Year Ahead
THE YEAR AHEAD • Implementation of the Restructure and Recapitalisation Plan • Continued improvement of operational performance in McConnell Dowell and Moolmans • Grow and optimise quality of work in hand • Navigate COVID-19 challenges for the foreseeable future Managing liquidity Protect liveli
Slide 37: Thank You
THANK YOU Platreef – South Africa