Macmahon Holdings Limited · ASX:MAH
Macmahon — 1H21 Earnings Presentation
30 slides from Macmahon's earnings presentation, Feb 23, 2021
Slide 1: Half Year Results FY 2021
MACMAHON oc. = ee | ee eg : ee Se a oleae Ba a ey cee Half Year Results FY 2021
Slide 2: Financial Highlights
Financial Highlights 1H21 Revenue 1H21 underlying EBITDA1 1H21 underlying EBIT(A)1 $652.5m $121.2m $46.5m q 5% on 1H20 p 6% on 1H20 p 5% on 1H20 1H21 reported NPAT 1H21 operating cash flow2 Order Book3 $44.8m $96.7m $4.2bn p 56% on 1H20 p 7% on 1H20 Net Tangible Assets ROACE / ROE4 1H21 Interim Divi
Slide 3: 1H21 Key Developments / FY21 Outlook
1H21 Key Developments / FY21 Outlook • Increased earnings and cashflow • Effectively managed COVID-19 impacts Financials • Solid balance sheet: gearing 20.0%, ND/EBITDA 0.5x, cash and available facilities of $255m • Capital discipline: cash conversion 79.8% and ROACE 13.4% • Interim dividend: 0.30 c
Slide 4: People, Safety & Sustainability
People, Safety & Sustainability Injury Frequency Rates and Workforce 7,040 7,059 6,284 5,649 5,572 4.70 0.13 1H19 FY19 1H20 FY20 1H21 TRIFR (Total Recordable Injury Frequency Rate) Contractors Employees LTIFR (Lost Time Injury Frequency Rate) • Safety and Wellbeing • Recruitment campaigns for skille
Slide 5: Key Projects
Key Projects End (unless Global Project Clients Location Commodity Type extended) Cost Curve1 Tropicana Surface 2023 Western Australia, Gold Australia Boston Shaker Underground May 2024 Western Australia, Telfer Gold Surface Jan 2023 Australia Western Australia, Mount Morgans Gold Surface Dec 2022 A
Slide 6: Batu Hijau Project
Batu Hijau Project Cornerstone project that underpins long term outlook Sumbawa Island • Macmahon has life of mine alliance contract for Batu Hijau Map location • Second largest copper-gold mine in Indonesia (behind Grasberg) • Commenced in 2017, successfully executing Phase 7 cut back Batu Hijau Ba
Slide 7: 1H21 Results
Deflector, WA (Silver Lake Resources) 1H21 Results MACMAHON – Half Year Results to 31 December 2020 7
Slide 8: Financial Performance
Financial Performance Revenue ($m) Underlying EBIT(A) ($m) 750 687 694 60 653 48 47 561 50 44 542 40 500 440 40 35 32 30 270 250 20 10 10 1H18 2H18 1H19 2H19 1H20 2H20 1H21 1H18 2H18 1H19 2H19 1H20 2H20 1H21 EBITDA margin Underlying EBITDA ($m) 18.0% 18.6% Underlying EBIT(A) Margin 16.6% 8% 7.4% 125
Slide 9: On track to deliver expected earnings
On track to deliver expected earnings Updated Revenue ($m) Guidance 1,300–1,400 1,400 Guidance 1,300–1,400 1,200 1,000 Guidance 950–1,050 800 Guidance 1,380 600 620–680 1,103 1H21 400 710 653 200 360 FY17 FY18 FY19 FY20 FY21 Guidance Underlying EBIT(A) ($m) unchanged 90–100 100 Guidance 85–95 80 Gui
Slide 10: Profit and Loss
Profit and Loss $ Millions 1H20 1H21 Change • Revenue decreased by 5% Revenue 686.7 652.5 q 5% ‒ Change in accounting treatment on certain client provided consumable EBITDA1 114.0 121.2 p 6% items at Batu Hijau. EBITDA margin 16.6% 18.6% ‒ Macmahon did not have control over the movement of tyres and
Slide 11: 1H21 Revenue Diversification
1H21 Revenue Diversification Commodity Clients 5% AMNT 9% 15% 7% 27% AngloGold Gold QCoal 11% Copper / Gold 53% Silver Lake Coking Coal 27% 12% Newcrest Other 20% Dacian 14% Other Country 1% Activity 3% 22% 27% Surface Australia Indonesia Underground Other 75% 72% MACMAHON – Half Year Results to 31
Slide 12: Cash Flow – Net Debt Waterfall
Cash Flow – Net Debt Waterfall -24.5 -15.8 -3.1 -138.9 121.2 $0 $0 Sustaining -46.1 -60.9 Extension -137.9 -33.5 -129.0 Operating Cash Flow $96.7m Growth -59.3 Net Operating Cash Flow $77.9m -7.4 3.4 -3.0 Net debt at 30 EBITDA Working capital Interest and tax M&A costs Capex Dividends Software Other
Slide 13: Balance Sheet
Balance Sheet $ Millions FY20 1H21 Cash 141.8 148.4 • Solid balance sheet and liquidity position Receivables 202.6 212.0 ‒ Gearing 20.0% Inventories 57.3 58.6 ‒ Net Debt / EBITDA of 0.5x Property, plant and equipment 457.0 508.8 ‒ Cash and available banking facilities of $255m Intangible assets and
Slide 14: Capital Allocation Policy & 1H21 Dividend
Capital Allocation Policy & 1H21 Dividend Policy adopted to balance growth and cash returns to shareholders Objectives 1. Maintain financial strength 2. Invest in growth 3. Return cash to shareholders 1. Maintain strong balance sheet 2. Ensure appropriate liquidity and gearing with regard to revenue
Slide 15: Strategy and Outlook
Byerwen, Queensland (QCoal) Strategy and Outlook MACMAHON – Half Year Results to 31 December 2020 15
Slide 16: Key Strategic Priorities
Key Strategic Priorities Mining Value Chain Develop Open-Cut Underground Rehab Civil / Operations / Operations / Process Process Operations / Engineering Engineering Engineering Engineering Explore Evaluate Process Plant & Maintenance Plant & Supply / Hire / Maintain Maintenance Key Strategic Focus
Slide 17: Sustainability - Completed materiality assessment
Sustainability - Completed materiality assessment Safety, Health and Wellbeing Environment Social & Community involvement Governance Medical supply donation: Safety performance Rehabilitation – Sponsor of The Perkins (raised $235k), 7 board members – New role of Environment LTIFR – 0.13 FY20 complet
Slide 18: Order Book $4.2 billion
Order Book1 $4.2 billion 1,600 Order Book Run-off ($m) Order Book Movement ($m) 5,000 1,400 Plus: Short-term work 4,500 4,500 220 1,200 4,208 Plus: 322 4,170 1,000 Short-term work No 220 4,000 earnings impact 3,768 800 653 401 3,500 600 400 1H21 3,000 653 200 0 2,500 June 20 Order 1H21 New Work Dece
Slide 19: Tender Pipeline $7 billion
Tender Pipeline $7 billion Expected Project Commencement 12–18 Months 2–3 Years Preferred / Batu Hijau Extensions Phase 81 Tender Pre Tender Bubbles represent = $200m Current Client New Client contract value • Well positioned to capitalise on additional growth opportunities • Over 20 tender opportun
Slide 20: FY21 Priorities and Outlook
FY21 Priorities and Outlook FY21 priorities: Revenue Guidance • Build on strong safety culture $1.3–$1.4bn • Effectively manage COVID-19 • Deliver FY21 contracted work • Secure additional contract expansions / new work $652.5m • Enhance and diversify earnings in civil, underground, engineering and r
Slide 21: Thank You
Thank You Contact Chris Chong Investor Relations and Corporate Development cchong@macmahon.com.au Mick Finnegan CEO & MD mfinnegan@macmahon.com.au Mount Monger, WA (Silver Lake Resources) Peter Pollard CFO ppollard@macmahon.com.au www.macmahon.com.au Perth Head Office – Solar Panels MACMAHON – Half
Slide 22: Appendix
Batu Hijau, Indonesia (PT AMNT) Boston Shaker, WA (AngloGold Ashanti / IGO) Byerwen, Queensland (QCoal) Cancer 200: Ride for Research Appendix MACMAHON – Half Year Results to 31 December 2020 22
Slide 23: Corporate Overview
Corporate Overview Capital Structure Share Price ($) – 3 years Share Price1 (ASX:MAH) $0.245 Fully paid ordinary shares (m) 2,155 0.35 Market Capitalisation $528.0m Cash (31 December 20) $148.4m 0.30 Debt (31 December 20) $277.4m Enterprise Value $657.0m 0.25 Net Tangible Assets per share (31 Decemb
Slide 24: Influence on Stakeholders
ESG Materiality Assessment • A sustainability materiality assessment 5.25 conducted in December Environment • Contacted internal and external Social Corporate governance stakeholders (investors, brokers, 5 Safety clients, suppliers) Governance • 15 material priorities identified Climate Change Healt
Slide 25: Map of Operations
Map of Operations MACMAHON – Half Year Results to 31 December 2020 25
Slide 26: Indonesia
Indonesia Ranked 11 out of 89 countries GDP current (US $bn) - Large growing economy 1,200 1,000 800 600 400 200 - 1992 2011 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2012 2013 2014 2015 2016
Slide 27: COVID-19
COVID-19 Protecting our People, Community and Clients • Communication and education • Health screening and physical distancing protocols • Sanitation and cleaning • Travel restrictions Ensuring Business Continuity Australia • Relocation of some interstate workers • Employee assistance programs • Men
Slide 28: Cash Flow
Cash Flow $ Millions 1H20 1H21 EBITDA 114.0 121.2 Movement in receivables (8.8) (12.2) Movement in inventory (2.9) (1.3) Movement in payables and provisions (13.0) (11.5) Other 1.4 0.5 Net Interest and tax (paid) / received (11.2) (15.8) M&A costs and earn-out related to previous acquisitions (1.3)
Slide 29: Reconciliation of Non-IFRS Financial Information
Reconciliation of Non-IFRS Financial Information $ Millions 1H20 1H21 Profit for the year (as reported) 28.7 44.8 Add back: • Share Based Payment expense 1.3 0.2 • M&A costs and earn-out related to previous acquisitions 1.3 3.1 • GBF customer amortisation (A) 0.2 0.2 Less: • Deferred Tax Asset (DTA)
Slide 30: Important Notice and Disclaimer
Important Notice and Disclaimer Disclaimer as to forward looking statements as to the accuracy or likelihood or fulfilment of any The Guidance should not be regarded as a forward looking statement, or any events or results representation or warranty with respect to its This presentation contains for