Murray & Roberts — H1 FY2020 Earnings Presentation
60 slides from Murray & Roberts's earnings presentation, February 2020
Slide 1: Six Months to 31 December 2019
SIX MONTHS TO 31 DECEMBER 2019
Slide 2: Presentation Overview
PRESENTATION OVERVIEW Henry Laas Salient Features Slide 3 A New Strategic Future Slide 4 Platform overview Slides 5-7 Order book Slides 8-10 Daniël Grobler Comparative financial performance Slide 12 Implementation of IFRS 16 Slide 13 Statement of financial performance Slide 14 Net interest expense a
Slide 3: Salient Features
SALIENT FEATURES SIX MONTHS TO DECEMBER FY2020 H1 FY2019 H1 Comments Financial performance: Revenue R10,8 billion R9,7 billion# • Strong performance by the Underground Mining platform • Performance maintained by the Oil & Gas and EBIT Power & Water platforms R419 million R365 million # (continuing o
Slide 4: A New Strategic Future
A NEW STRATEGIC FUTURE Over the past few years, a stable foundation was established through the implementation of the Group’s New Strategic Future plan and the Group is starting to gain momentum as evidenced by the significant growth in its order book. The strong order book is expected to support gr
Slide 5: Oil & Gas Platform Overview
OIL & GAS PLATFORM OVERVIEW Ayrshire Market focus: Calgary • Global: LNG and petrochemical sectors Busan • Australasia: LNG, infrastructure and metals & Houston minerals Market conditions: • USA: LNG and petrochemical buoyant Port Moresby • Australasia: LNG – early signs of opportunity. Infrastructu
Slide 6: Underground Mining Platform Overview
UNDERGROUND MINING PLATFORM OVERVIEW Vancouver Market focus: North Bay • Global: Underground mining services and Salt Lake City material logistics, in global metals and minerals Ulaanbaatar markets Santee Market conditions: Accra • Growth in client capital expenditure expected to level off over the
Slide 7: Power & Water Platform Overview
POWER & WATER PLATFORM OVERVIEW Market focus: • Sub-Saharan Africa: Power and water, complementary petrochemicals, metals and minerals, as well as paper and pulp markets Market conditions: • Limited investment in main and complementary markets in South Africa; other than • Substantial investment in
Slide 8: Order Book
ORDER BOOK DEPENDENT ON MARKET CYCLICALITY Underground Oil & Gas Power & Water Total Mining 50,8 46,8 30,6 31,7 25,7 23,1 22,8 19,6 4,4 1,6 0,9 0,6 Dec Jun Dec Dec Jun Dec Dec Jun Dec Dec Jun Dec 18 19 19 18 19 19 18 19 19 18 19 19 1. Oil & Gas reflects significant order book growth following award
Slide 9: Order Book: Geography & Time Distribution
ORDER BOOK GEOGRAPHY & TIME DISTRIBUTION Order book Order book Order book Platform % split Rbn Rbn SADC Int. Dec 2019 Dec 2018 FY Time Distribution 2020 5,0 Oil & Gas 100 30,6 4,4 2021 9,2 >2021 16,4 2020 5,1 Underground 65 35 19,6 25,7 2021 5,5 Mining >2021 9,0 2020 2020 0,5 Power & Water 100 0,6 1
Slide 10: Order Book, Near Orders & Pipeline
ORDER BOOK, NEAR ORDERS & PIPELINE STRONG PIPELINE Pipeline Rbn Order book Near orders Category 1 Category 2 Category 3 Oil & Gas 30,6 0,1 27,4 46,0 440,3 Underground Mining 19,6 6,1 35,3 22,0 43,9 Power & Water 0,6 0,2 7,8 13,9 31,1 31 December 2019 totals 50,8 6,4 70,5 81,9 515,3 PIPELINE DEFINITI
Slide 11: Financial Results & Segmental Analysis
FINANCIAL RESULTS & SEGMENTAL ANALYSIS VENETIA DIAMOND MINE PROJECT - SOUTH AFRICA 11
Slide 12: Comparative Financial Performance
COMPARATIVE FINANCIAL PERFORMANCE FY2020 H1 VS. FY2019 H1 Underground Mining Strong performance across all three regional businesses Oil & Gas Break-even result in line with expectations Power & Water Marginal improvement in line with expectations Investments Bombela Concession Company con
Slide 13: New Accounting Standard: Implementation of IFRS 16
NEW ACCOUNTING STANDARD IMPLEMENTATION OF IFRS 16 IFRS 16 – Leases 1. Effective date: Periods beginning on or after 01 January 2019 (supersedes IAS 17) 2. “At the commencement date, a lessee shall recognise a right-of-use asset and a lease liability (paragraph 22)” In terms of IFRS 16, all leases ar
Slide 14: Statement of Financial Performance
GROUP FINANCIALS STATEMENT OF FINANCIAL PERFORMANCE Rm FY2020 H1 FY2019 H1# Variance Revenue 10 772 9 716 1 056 EBITDA 812 589 223 EBIT 419 365 54 Net interest expense (91) (9) (82) Taxation (124) (140) 16 Loss from equity accounted investments (2) (1) (1) Income from continuing operations 202 215 (
Slide 15: Net Interest Expense Analysis
GROUP FINANCIALS NET INTEREST EXPENSE ANALYSIS R’m FY2020 H1 FY2019 H1 Variance Net interest paid from continuing operations 91 9 (82) Implementation of IFRS 16 (24) Acquisition of additional 17% shares in Bombela Concession Company, financed post December 2018 (20) TNT acquisition funding (13) Work
Slide 16: Segmental Analysis: Oil & Gas
SEGMENTAL ANALYSIS SIX MONTHS TO DECEMBER Oil & Gas Underground Mining Power & Water Bombela Engineering Commissioning Corporate Rm & Construction Global Marine & Maintenance & Other Total 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 Revenue 3 035 1 479 10 - 280 1 667 60 210 3 385 3 356 Operati
Slide 17: Segmental Analysis: Underground Mining
SEGMENTAL ANALYSIS SIX MONTHS TO DECEMBER Oil & Gas Underground Mining Power & Water Bombela Rm Africa Australasia The Americas Total 2019 2018 2019 2018 2019 2018 2019 2018 Revenue 1 636 1 340 1 922 1 378 2 656 2 231 6 214 4 949 Operating profit 98 107 50 77 205 162 353 346 Operating margin 6% 8% 3
Slide 18: Segmental Analysis: Power & Water
SEGMENTAL ANALYSIS SIX MONTHS TO DECEMBER Oil & Gas Underground Mining Power & Water Bombela Transmission Rm Power1 Water & Distribution Other2 Corporate Total 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 Revenue 615 1 143 7 14 136 - 414 251 - - 1 172 1 408 Operating profit / (loss) 6
Slide 19: Segmental Analysis: Bombela Investments
SEGMENTAL ANALYSIS SIX MONTHS TO DECEMBER Oil & Gas Underground Mining Power & Water Bombela Rm Bombela Investments 2019 2018 Revenue - - Operating profit 197 114 Order book - - Operating results improvement on prior period 1. Bombela Concession Company: The increase in earnings is due to a revaluat
Slide 20: Segmental Analysis: Discontinued Operations
SEGMENTAL ANALYSIS SIX MONTHS TO DECEMBER Discontinued Operations Rm Middle East Other Total 2019 2018# 2019 2018 2019 2018# Revenue 126 66 35 45 161 111 Operating (loss) / profit (31) 11 (17) (37) (48) (26) Discontinued operations include: 1. Operating loss in Middle East, primarily due to negative
Slide 21: Statement of Financial Position
GROUP FINANCIALS STATEMENT OF FINANCIAL POSITION Rm Dec 2019 Jun 2019# Variance Total assets 17 694 16 390 1 304 Property, plant and equipment 2 833 2 203 630 Other non-current assets 3 519 3 515 4 Current assets 8 245 7 196 1 049 Cash and cash equivalents 3 097 3 455 (358) Assets classified as held
Slide 22: Debt Analysis
DEBT ANALYSIS PRUDENT GEARING LEVEL Total Debt (Rm) (3 225) Self servicing debt (1 196) Corporate debt (1 143) IFRS 16 (886) Group Gearing Ratios Total Equity (Rm) 5 527 Gearing (excl. IFRS 16 & self servicing debt) 21% Gearing (excl. IFRS 16) 42% Gearing (incl. IFRS 16) 58% Total Debt (Rm) (3 225)
Slide 23: Key Presentation Takeaways
KEY PRESENTATION TAKEAWAYS SNOWY HYDRO 2.0 PROJECT (TALBINGO DAM) - AUSTRALIA 23
Slide 24: Key Presentation Takeaways
KEY PRESENTATION TAKEAWAYS Murray & Roberts has established a stable base from which it can grow organically and through acquisition The current financial year is a period of consolidation for all three business platforms, with the focus on growing the order book and on successful project delivery R
Slide 25: Disclaimer
DISCLAIMER 1. This presentation includes certain various “forward-looking statements” within the meaning of Section 27A of the US Securities Act 10 1933 and Section 21E of the Securities Exchange Act of 1934 that reflect the current views or expectations of the Board with respect to future events an
Slide 26: Six Months to 31 December 2019
SIX MONTHS TO 31 DECEMBER 2019
Slide 27: Appendix
SIX MONTHS TO 31 DECEMBER 2019 APPENDIX
Slide 28: Statement of Financial Performance
GROUP FINANCIALS STATEMENT OF FINANCIAL PERFORMANCE Rm FY2020 H1 FY2019 H1# Variance Revenue 10 772 9 716 1 056 EBITDA 812 589 223 EBIT 419 365 54 Net interest expense (91) (9) (82) Taxation (124) (140) 16 Loss from equity accounted investments (2) (1) (1) Income from continuing operations 202 215 (
Slide 29: Statement of Financial Performance
GROUP FINANCIALS STATEMENT OF FINANCIAL PERFORMANCE Rm FY2020 H1 FY2019 H1# Variance Revenue 10 772 9 716 1 056 Revenue EBITDAincreased by 11% 962 1 774 (812) 1. Mainly due to a strong contribution from Underground Mining EBIT 487 1 275 (788) Continuing operations excluding 1 055 1 343 (288) Middle
Slide 30: Statement of Financial Performance
GROUP FINANCIALS STATEMENT OF FINANCIAL PERFORMANCE Rm FY2020 H1 FY2019 H1# Variance Revenue 10 772 9 716 1 056 EBITDA 812 589 223 EBITDA is reflected before: EBIT 487 1 275 (788) 1. Depreciation Continuing of R346m operations (FY2019 H1: R204m) excluding 1 055 1 343 (288) 2. Amortisation Middle Eas
Slide 31: Statement of Financial Performance
GROUP FINANCIALS STATEMENT OF FINANCIAL PERFORMANCE Rm FY2020 H1 FY2019 H1# Variance Revenue 10 772 9 716 1 056 EBITDA 812 589 223 EBIT 419 365 54 Increase in EBIT Net interest : expense (42) (71) 29 1. Taxation Mainly due to a strong contribution from Underground Mining and Bombela (161)Concession
Slide 32: Statement of Financial Performance
GROUP FINANCIALS STATEMENT OF FINANCIAL PERFORMANCE Rm FY2020 H1 FY2019 H1# Variance Revenue 10 772 9 716 1 056 EBITDA 812 589 223 EBIT 419 365 54 Net interest expense (91) (9) (82) Increase Taxationin net interest expense mainly due to: (161) (296) 135 1. Income Increased fromworking capital andinv
Slide 33: Statement of Financial Performance
GROUP FINANCIALS STATEMENT OF FINANCIAL PERFORMANCE Rm FY2020 H1 FY2019 H1# Variance Revenue 10 772 9 716 1 056 EBITDA 812 589 223 EBIT 419 365 54 Net interest expense (91) (9) (82) Taxation (124) (140) 16 Effective Incometax rate from of 38% equity high mainly accounted due to: investments 7 18 (11
Slide 34: Statement of Financial Performance
GROUP FINANCIALS STATEMENT OF FINANCIAL PERFORMANCE Rm FY2020 H1 FY2019 H1# Variance Revenue 10 772 9 716 1 056 EBITDA 812 589 223 EBIT 419 365 54 Net interest expense (91) (9) (82) Taxation (124) (140) 16 Loss from equity accounted investments (2) (1) (1) Loss reflective Income fromof: continuing o
Slide 35: Statement of Financial Performance
GROUP FINANCIALS STATEMENT OF FINANCIAL PERFORMANCE Rm FY2020 H1 FY2019 H1# Variance Revenue 10 772 9 716 1 056 EBITDA 812 589 223 EBIT 419 365 54 Net interest expense (91) (9) (82) Taxation (124) (140) 16 Loss from equity accounted investments (2) (1) (1) Income from continuing operations 202 215 (
Slide 36: Platform Contribution
PLATFORM CONTRIBUTION CONTINUING REVENUE AND EBIT Revenue EBIT • Strong contribution from (excluding Corporate) (excluding Corporate Cost) Underground Mining platform 11% • Investments relate to 31% 3% Bombela Concession Company 35% • Diversification across three core market sectors brings resilienc
Slide 37: Geographic Diversification
GEOGRAPHIC DIVERSIFICATION CONTINUING REVENUE AND EBIT Geographic Revenue Geographic EBIT • A multinational business (excluding Corporate) (excluding Corporate Cost) with 76% of revenue and 54% of EBIT generated 1% 11% -2% outside of South Africa 11% 30% • Geographic diversification 2% 22% also brin
Slide 38: Project Life Cycle Distribution
PROJECT LIFE CYCLE DISTRIBUTION CONTINUING REVENUE AND EBIT Life Cycle Revenue Life Cycle EBIT • Meaningful contribution (excluding Corporate) (excluding Corporate Cost) from all segments of project life cycle 9% 6% 8% 40% 16% 1% 23% 2% 59% 23% 1% 12% Planning & Engineering Construction Commissionin
Slide 39: Statement of Financial Position
GROUP FINANCIALS STATEMENT OF FINANCIAL POSITION Rm Dec 2019 Jun 2019# Variance Total assets 17 694 16 390 1 304 Property, plant and equipment 2 833 2 203 630 Other non-current assets 3 519 3 515 4 Current assets 8 245 7 196 1 049 Cash and cash equivalents 3 097 3 455 (358) Assets classified as held
Slide 40: Statement of Financial Position
GROUP FINANCIALS STATEMENT OF FINANCIAL POSITION Rm Dec 2019 Jun 2019# Variance Total assets 17 694 16 390 1 304 Property, plant and equipment 2 833 2 203 630 Increase in property,assets Other non-current plant and equipment 3 904 4 622 (718) 1. Current Mainly assets due to IFRS 16 implementation (R
Slide 41: Statement of Financial Position
GROUP FINANCIALS STATEMENT OF FINANCIAL POSITION Rm Dec 2019 Jun 2019# Variance Total assets 17 694 16 390 1 304 Property, plant and equipment 2 833 2 203 630 Other non-current assets 3 519 3 515 4 Non-current assets comprise of: Current assets 6 722 8 185 1. Cash Deferred taxation and cash assets (
Slide 42: Statement of Financial Position
GROUP FINANCIALS STATEMENT OF FINANCIAL POSITION Rm Dec 2019 Jun 2019# Variance Total assets 17 694 16 390 1 304 Property, plant and equipment 2 833 2 203 630 Other non-current assets 3 519 3 515 4 Current assets 8 245 7 196 1 049 Current assets Cash and cashcomprise: equivalents 2 813 2 891 (78) 1.
Slide 43: Statement of Financial Position
GROUP FINANCIALS STATEMENT OF FINANCIAL POSITION Rm Dec 2019 Jun 2019# Variance Total assets 17 694 16 390 1 304 Property, plant and equipment 2 833 2 203 630 Other non-current assets 3 519 3 515 4 Current assets 8 245 7 196 1 049 Cash and cash equivalents 3 097 3 455 (358) Cash consists Assets main
Slide 44: Statement of Financial Position
GROUP FINANCIALS STATEMENT OF FINANCIAL POSITION Rm Dec 2019 Jun 2019# Variance Total assets 17 694 16 390 1 304 Property, plant and equipment 2 833 2 203 630 Other non-current assets 3 519 3 515 4 Current assets 8 245 7 196 1 049 Cash and cash equivalents 3 097 3 455 (358) Assets classified as held
Slide 45: Statement of Financial Position
GROUP FINANCIALS STATEMENT OF FINANCIAL POSITION Rm Dec 2019 Jun 2019# Variance Total assets 17 694 16 390 1 304 Property, plant and equipment 2 833 2 203 630 Other non-current assets 3 519 3 515 4 Current assets 8 245 7 196 1 049 Cash and cash equivalents 3 097 3 455 (358) Assets classified as held
Slide 46: Statement of Financial Position
GROUP FINANCIALS STATEMENT OF FINANCIAL POSITION Rm Dec 2019 Jun 2019# Variance Total assets 17 694 16 390 1 304 Property, plant and equipment 2 833 2 203 630 Other non-current assets 3 519 3 515 4 Current assets 8 245 7 196 1 049 Cash and cash equivalents 3 097 3 455 (358) Assets classified as held
Slide 47: Strategy Overview & Platform Capability
STRATEGY OVERVIEW & PLATFORM CAPABILITY POLOKWANE SO2 ABATEMENT PROJECT, SOUTH AFRICA 47
Slide 48: The Murray & Roberts Group
THE MURRAY & ROBERTS GROUP A MULTINATIONAL SPECIALIST ENGINEERING AND CONSTRUCTION GROUP FOCUSED ON THE NATURAL RESOURCES MARKET SECTOR STOP.THINK.ACT.24/7: SAFETY FIRST IN EVERYTHING WE DO BUSINESS PLATFORMS OIL & GAS UNDERGROUND MINING POWER & WATER PURPOSE VISION VALUES Enabling fixed capital To
Slide 49: A New Strategic Future
A NEW STRATEGIC FUTURE ESSENCE OF THE NEW STRATEGIC FUTURE PLAN To be a multinational specialised engineering and construction Group focused on the natural resources sector (oil & gas, metals & minerals, power & water) To provide services across the project lifecycle To achieve Engineered Excellence
Slide 50: A New Strategic Future Unfolding
A NEW STRATEGIC FUTURE UNFOLDING 3 4 2 Robust balance sheet to navigate through business Improved order book and cycles robust project pipeline 1 Clearly defined growth strategy & business Low gross gearing and model robust cash position is Diversified business model Growth through allowing Murray &
Slide 51: Strategic Direction
STRATEGIC DIRECTION BUSINESS MODEL: COMPREHENSIVE SERVICE OFFERING ACROSS PROJECT LIFE CYCLE IN SELECTED NATURAL RESOURCES MARKETS Geography Business Platform Capabilities(Project Life Cycle) Project Life Cycle (Multinational) • Detailed engineering • Americas Design and • Procurement • Asia Enginee
Slide 52: Oil & Gas
OIL & GAS The Oil & Gas platforms’ extensive service offering spans the full asset life cycle, including specialist engineering, construction & EPC, commissioning, and operations & maintenance. Services are provided on new build facilities (greenfield) and operating facilities (brownfield) In respon
Slide 53: Oil & Gas
OIL & GAS Clough works with some of the world’s largest companies to engineer, construct, commission and maintain a comprehensive range of facilities for oil and gas, metals and minerals, and infrastructure projects. The company’s full project lifecycle delivery model reduces risk and optimises safe
Slide 54: Underground Mining
UNDERGROUND MINING The Underground Mining platform’s geographic footprint covers six continents and its service offering spans the project life cycle, including feasibility studies, specialist engineering, vertical and decline shaft construction, mine development, specialist mining services such as
Slide 55: Underground Mining
UNDERGROUND MINING Cementation Canada & USA is a leading provider of underground mining contracting and engineering services throughout North and South America. The company specialises in the design and construction of underground facilities including shaft, ramp accesses, mine development and raise
Slide 56: Underground Mining Platform: Commodity Order Book Breakdown
UNDERGROUND MINING PLATFORM COMMODITY ORDER BOOK BREAKDOWN % Total Platform Total Platform The Americas Australasia Africa R25.7bn R19.6bn R4.1bn R2.7bn R12.8bn December 2018 December 2019 2% 12% 12% 23% Copper 6% Gold 42% 36% 5% 51% 12% Copper-Gold Diamonds 18% Silver 3% 23% Platinum 11% 1% Nickel
Slide 57: Power & Water
POWER & WATER The Power & Water platform operates predominantly in Southern Africa and sub-Saharan Africa. Its service offering includes feasibility studies, detailed engineering, procurement, construction, commissioning and repairs and maintenance work. The platform has a primary focus on the power
Slide 58: Power & Water
POWER & WATER Murray & Roberts Power & Energy is the platform’s engineering, procurement and construction ("EPC") projects implementer, adding unique value to the constructability, integration and ultimate performance of the projects it undertakes. Murray & Roberts Power & Energy offers the full spe
Slide 59: Disclaimer
DISCLAIMER 1. This presentation includes certain various “forward-looking statements” within the meaning of Section 27A of the US Securities Act 10 1933 and Section 21E of the Securities Exchange Act of 1934 that reflect the current views or expectations of the Board with respect to future events an
Slide 60: Six Months to 31 December 2019
SIX MONTHS TO 31 DECEMBER 2019
Murray & Roberts Holdings — H1 FY2020 Earnings Presentation on 6ix