Macmahon Holdings Limited · ASX:MAH
Macmahon — FY2011 Earnings Presentation
36 slides from Macmahon's earnings presentation, Aug 16, 2011
Slide 1: Macmahon 2011 Full Year Results
For personal use only Macmahon 2011 Full Year Results Nick Bowen – Chief Executive Officer Theresa Mlikota – Chief Financial Officer 16 August 2011
Slide 2: Overview
Overview • Full year profit after tax of $1.0 million For personal use only • First half significantly impacted by RGP5 Rail North contract write-down • Improved second half performance in accordance with earnings guidance – solid result given the impacts of the unprecedented wet weather events • Un
Slide 3: Underlying Profit and Loss
Underlying Profit and Loss $ millions June 11 June 10 Change % For personal use only Reported Net Profit After Tax (NPAT) 1.0 37.9 (97%) Add back significant items (before tax): - Write-down of RGP5 Rail North contract 48.9 - n/a - Wet weather impacts 9.0 - n/a Less tax on significant items (17.4) -
Slide 4: Addressing risks
Addressing risks • Strengthening of senior executive For personal use only team to inject further experience into the Group • Construction Business restructured into two regional businesses, East and West, to improve strategic focus in each market • Project tender process has been reviewed and upgra
Slide 5: Safety and People
Safety and People 14.0 Safety 12.7 12.9 For personal use only 12.0 • Delivered excellent industry-leading (per million hours worked) 10.0 safety performance Frequency Rate 8.0 7.4 • TRIFR improved 24% to 3.5 6.0 4.6 • LTIFR improved 50% to 0.2 4.0 3.5 1.9 2.0 • Construction, Underground Mining 2.0 0
Slide 6: Contract wins
Contract wins To 30 June - $1 billion, including: For personal use only • South Road Superway project, Department of Transport, Energy & Infrastructure, South Australia, $230 million • Combined Underground contracts, $210 million • Gladstone LNG, Bechtel Australia Pty Ltd, $150 million • Rio Tinto I
Slide 7: Record order book
Record order book 3,500 For personal use only 3,000 2,500 1,000 1,254 2,000 $m 1,500 678 2,215 1,000 2,013 2,013 1,412 500 1,081 - June 09 June 10 June 11 June 11 plus Run-of f FY12 Run-of f FY13 Run-of f FY14+ recent wins Note – Order book balance “June 11 plus recent wins” includes the revenue run
Slide 8: Financials
For personal use only Financials 8
Slide 9: Income statement
Income statement For personal use only $ million June 11 June 10 Change % Revenue 1,254.4 1,254.4 0% Underlying earnings before interest and tax 66.1 55.3 20% Net interest (12.0) (5.8) (107%) Underlying profit before tax (PBT) 54.1 49.5 9% Significant items – Write-down of RGP5 Rail North contract (
Slide 10: Underlying results
For personal use only Underlying results Revenue and underlying NPAT margin 10.0 Earnings per share 1,600 4.5% 3.9% 9.0 1,400 4.0% 3.5% 8.0 3.5% 1,200 3.1% 3.0% 7.0 3.0% 1,000 6.0 Cents per share 2.5% $m 800 5.0 1,486 2.0% 9.2 8.5 1,244 1,254 1,254 4.0 600 1.5% 966 3.0 400 5.2 5.3 1.2% 1.0% 2.0 3.1
Slide 11: Underlying results – half on half
For personal use only Underlying results – half on half $ million, underlying H2 FY11 H1 FY11 H2 FY10 Revenue 653.4 601.0 598.1 Earnings before interest and tax 34.7 31.4 21.9 Net interest (6.2) (5.8) (2.7) Profit before tax 28.5 25.6 19.2 Tax expense (8.6) (7.7) (2.4) Minorities 0.7 0.3 (0.4) Net p
Slide 12: Mining performance
Mining performance For personal use only $ million June 11 June 10 Change % Revenue 674.4 465.6 45% Underlying profit before tax (PBT) 51.1 34.8 47% Wet weather impacts (8.5) - n/a Profit before tax 42.6 34.8 22% Underlying PBT margin % 7.6% 7.5% Order book 1,079 1,530 (29%) • Revenue growth of 45%
Slide 13: Construction performance
Construction performance For personal use only $ million June 11 June 10 Change % Revenue 580.0 788.8 (26%) Underlying profit before tax (PBT) 13.7 34.8 (61%) Write-down of RGP5 Rail North contract (48.9) - n/a Wet weather impacts (0.5) - n/a Profit before tax (35.7) 34.8 (203%) Underlying PBT Margi
Slide 14: Cash flow
Cash flow For personal use only $ million June 11 June 10 Change % Operating cash flow 92.4 117.1 (21%) Disposals 1.1 4.5 (76%) Capital expenditure 82.1 51.7 59% Cash at hand 115.6 102.2 13% Op. cash flow per share - cents 12.6 16.0 • Strong operating cash flow generation in spite of RGP5 and wet we
Slide 15: Balance sheet and funding
Balance sheet and funding $ million June 11 June 10 Change % For personal use only Current assets 331.6 227.4 46% Non-current assets 354.2 353.4 0% Total assets 685.7 580.8 18% Net assets 323.1 339.7 (5%) Net cash/(debt) 39.5 43.8 (10%) Gearing (12.2%) (12.9%) Strong financial base to fund growth op
Slide 16: Low gearing base will facilitate growth
For personal use only Low gearing base will facilitate growth Gearing (Net Debt to Equity) 30.0% 26.0% 25.0% 20.0% 15.0% 11.6% 10.0% 5.0% 0.6% 0.0% FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 -5.0% -10.0% -12.2% -12.9% -15.0% • Net cash surplus over debt of $39.5 million at 30 June 2011 • Undrawn facili
Slide 17: Business overview
For personal use only Business overview 17
Slide 18: Australian Mining Business – major projects
Australian Mining Business – major projects For personal use only 18
Slide 19: International Mining – current projects
International Mining – current projects For personal use only 19
Slide 20: Mining Business growth – Tropicana Project
Mining Business growth – Tropicana Project • Ten year $900m surface mining For personal use only contract for the Tropicana Gold Project (TGP) • Joint venture between AngloGold Ashanti Australia Ltd (70%) and Independence Group NL (30%) • Largest single contract awarded to Macmahon • Provides a stro
Slide 21: Construction Business – Major projects
Construction Business – Major projects For personal use only 21
Slide 22: Construction Business growth – Rio Tinto
Construction Business growth – Rio Tinto 333 • Awarded three contracts with Rio For personal use only Tinto worth approximately $128 million • The work packages form part of Rio Tinto’s 333 expansion program and ongoing sustaining works • Projects are: • Hope Downs 4 - Rail Earthworks and Bridge Con
Slide 23: Construction Business growth – FMG Solomon Rail
Construction Business growth – FMG Solomon Rail • Preferred contractor for $300 million project to construct the first stage of the Solomon Rail Spur in the Pilbara region of Western Australia for Fortescue For personal use only Metals Group (FMG) • The contract will involve the construction of 81 k
Slide 24: Outlook
For personal use only Outlook 24
Slide 25: Our strategy
Our strategy Focus Areas: For personal use only Working Safely • Safety of our workforce is paramount • Maintaining industry leading safety performance is our licence to operate Winning Work • Mining • Grow domestic business through iron ore, coal, base and precious metals sectors • Grow internation
Slide 26: Growth opportunities
Growth opportunities For personal use only • Tendering activity remains high in Australia • Construction offers the greatest prospect for revenue growth in the short-term • Mongolia a significant opportunity • Africa and Asia offer further avenues for growth • Establishment of Macmahon Engineering B
Slide 27: Mining outlook
Mining outlook Market conditions For personal use only • Demand from Asia strong – prices for key Australian Iron Ore Exports 700.0 80,000 commodities remain elevated 600.0 70,000 • Substantial opportunities in iron ore, coal 500.0 60,000 and metals 50,000 A$m (real) 400.0 • Consistent pipeline of w
Slide 28: Construction outlook
Construction outlook Market conditions • Resources expansion plans driving pipeline of For personal use only Australian LNG Exports 45.0 20,000 construction work 40.0 18,000 • Mining related construction is forecast to almost 35.0 16,000 double over the next 4 yrs to $57bn 30.0 14,000 12,000 A$m (re
Slide 29: Company Snapshot
Company Snapshot • The Company’s operations are performing profitably For personal use only • Construction tendering activity remains extremely high and with the change in strategy and restructure, offers the greatest potential for growth in the short-term • Surface Mining in FY11 provided a steady
Slide 30: Company Outlook
Company Outlook For personal use only • Outlook is positive – record order book of $2.8 billion • $1.25 billion of revenue already secured for 2012 • Solomon and further new work will take 2012 revenue above $1.5 billion • Tendering activity remains high across Mining and Construction • Organisation
Slide 31: Macmahon 2011 Full Year Results
For personal use only Macmahon 2011 Full Year Results Nick Bowen – Chief Executive Officer Theresa Mlikota – Chief Financial Officer 16 August 2011
Slide 32: Appendix - current customers
Appendix - current customers For personal use only 32
Slide 33: Appendix - Profit after tax variance analysis
Appendix - Profit after tax variance analysis For personal use only 45.0 40.0 6 9 2 35.0 1 9 30.0 25.0 16 12 35 20.0 39 $m 38 15.0 10.0 5.0 3 6 1 0.0 33
Slide 34: Appendix - Cash flow analysis
Appendix - Cash flow analysis For personal use only 200.0 175.0 $ millions 82 150.0 92 125.0 11 3 17 100.0 $m 75.0 116 50.0 102 25.0 0.0 Balance at Operating Capital Net Drawdown Dividends Other Balance at 30 June 2010 Cashf low Expenditure of Borrowings Paid Cash Flow 30 June 2011 34
Slide 35: Appendix - order book at June
Appendix - order book at 30 June For personal use only Commodity % Client % Style of contract % Other Other Tin Peabody Fixed Copper 6% 11% 3% Energy 19% 5% Government 4% Government Diamonds 28% Yancoal 30% 7% Australia 7% Oil & Gas Bechtel 8% 8% Alliance Schedule of 19% rates Limestone A.P.M.C. 8%
Slide 36: 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. It is believed that the expectations reflected in these statements are reasonable but they may be affec