Murray & Roberts — H1 FY2014 Earnings Presentation
48 slides from Murray & Roberts's earnings presentation, 2014
Slide 1: Report to Stakeholders: Six Months to 31 December 2013
REPORT TO STAKEHOLDERS SIX MONTHS TO 31 DECEMBER 2013 FROM RECOVERY TO GROWTH
Slide 2: Recovery & Growth agenda
Recovery & Salient Safety Financial Growth Features Performance Performance Financial Impact Major Claims & Order Book & Platform A New Strategic Competition Outlook Prospects Future Commission RECOVERY & GROWTH 2
Slide 3: H1 FY2014 Salient Features
H1 FY2014 Attributable HEPS Health & Safety Revenue earnings (Continuing) Returned to LTIFR – 0.82 Profit R724m R19bn Profit 62 cents Profitability (Dec 2012: 0.85 Fatalities – 2 R16.3bn Profit R262m Profit 44 cents (Dec 2012: 0) Clough Net cash Order Book* Disposals Acquisition R2.0bn R44.9bn Compl
Slide 4: Together to Zero Harm
TOGETHER TO ZERO HARM Fatalities LTIFR1 Regrettably, two 18 5.00 fatalities recorded in 4.65 H1 FY2014 16 4.50 LTIFR of 0.82 14 4.00 Visible Felt Leadership 3.05 Launch of Group-wide 3.50 12 Philisa Health and 2.86 3.00 2.44 Wellness Programme 10 2.50 8 2.07 2.00 6 1.28 1.50 1.14 4 0.85 0.82 1.00 2
Slide 5: Financial Years 2012, 2013 and 2014
FINANCIAL YEARS 2012, 2013 AND 2014 Disposal of Clough becomes Clough’s 36% Debt package a wholly-owned investment in subsidiary Forge R4bn R4.4bn R1.8bn Up to Mar Oct Mar 2012 2013 2014 Nov Mar Dec 2011 2013 2013 Proceeds from Disposal of Hall Rights Issue disposal of Longmore companies R2bn Net bo
Slide 6: Two Different Halves
TWO DIFFERENT HALVES Financial Year 2013 Financial Year 2014 Attributable income • Inclusive of six month’s Attributable income • No contribution from Forge associate Forge income (R67m) Half 1 Continuing HEPS • Inclusive of six month’s Continuing HEPS • No contribution from Forge associate Forge in
Slide 7: Profitable Growth Maintained
PROFITABLE GROWTH MAINTAINED Rm Attributable earnings by Half Year Cents Forge Income 1 000 175 300 175 160 181 FY2013 – H1 six 64 200 500 111 392 463 months; H2 three 545 83 100 465 350 261 months and profit on 0 (23) 72 20 179 (314) (228) 0 sale (600) (500) (322) (895) (53) (100) Clough Income (16
Slide 8: PNG LNG Jetty Project
PNG LNG Jetty Project RECOVERY & GROWTH 8
Slide 9: Statement of Financial Performance
STATEMENT OF FINANCIAL PERFORMANCE Rm 2013 2012 Variance Revenue 18 982 16 344 2 638 EBITDA 1 017 764 253 EBIT 669 400 269 Net interest income/(expense) 2 (76) 78 Taxation (271) (109) (162) Income from equity accounted investments - 112 (112) Discontinued operations 463 93 370 Non-controlling intere
Slide 10: Statement of Financial Performance: Revenue
STATEMENT OF FINANCIAL PERFORMANCE Rm 2013 2012 Variance Revenue 18 982 16 344 2 638 EBITDA 1 017 764 253 EBIT 669 400 269 Net interest income/(expense) 2 (76) 78 Taxation (271) (109) (162) Income from equity accounted investments - 112 (112) Discontinued operations 463 93 370 Non-controlling intere
Slide 11: Statement of Financial Performance: EBITDA
STATEMENT OF FINANCIAL PERFORMANCE Rm 2013 2012 Variance Revenue 18 982 16 344 2 638 EBITDA 1 017 764 253 EBIT 669 400 269 Net interest income/(expense) 2 (76) 78 Taxation (271) (109) (162) Income from equity accounted investments - 112 (112) Discontinued operations 463 93 370 Non-controlling intere
Slide 12: Statement of Financial Performance: EBIT
STATEMENT OF FINANCIAL PERFORMANCE Rm 2013 2012 Variance Revenue 18 982 16 344 2 638 EBITDA 1 017 764 253 EBIT 669 400 269 Net interest income/(expense) 2 (76) 78 Taxation (271) (109) (162) Income from equity accounted investments - 112 (112) Discontinued operations 463 93 370 Non-controlling intere
Slide 13: Statement of Financial Performance: Net Interest
STATEMENT OF FINANCIAL PERFORMANCE Rm 2013 2012 Variance Revenue 18 982 16 344 2 638 EBITDA 1 017 764 253 EBIT 669 400 269 Net interest income/(expense) 2 (76) 78 Taxation (271) (109) (162) Income from equity accounted investments - 112 (112) Discontinued operations 463 93 370 Non-controlling intere
Slide 14: Statement of Financial Performance: Taxation
STATEMENT OF FINANCIAL PERFORMANCE Rm 2013 2012 Variance Revenue 18 982 16 344 2 638 EBITDA 1 017 764 253 EBIT 669 400 269 Net interest income/(expense) 2 (76) 78 Taxation (271) (109) (162) Income from equity accounted investments - 112 (112) Discontinued operations 463 93 370 Non-controlling intere
Slide 15: Statement of Financial Performance: Equity Income
STATEMENT OF FINANCIAL PERFORMANCE Rm 2013 2012 Variance Revenue 18 982 16 344 2 638 EBITDA 1 017 764 253 EBIT 669 400 269 Net interest income/(expense) 2 (76) 78 Taxation (271) (109) (162) Income from equity accounted investments - 112 (112) Discontinued operations 463 93 370 Non-controlling intere
Slide 16: Statement of Financial Performance: Discontinued Operations
STATEMENT OF FINANCIAL PERFORMANCE Rm 2013 2012 Variance Revenue 18 982 16 344 2 638 EBITDA 1 017 764 253 EBIT 669 400 269 Net interest income/(expense) 2 (76) 78 Taxation (271) (109) (162) Income from equity accounted investments - 112 (112) Discontinued operations* 463 93 370 Non-controlling inter
Slide 17: Statement of Financial Performance: Non-controlling Interests
STATEMENT OF FINANCIAL PERFORMANCE Rm 2013 2012 Variance Revenue 18 982 16 344 2 638 EBITDA 1 017 764 253 EBIT 669 400 269 Net interest income/(expense) 2 (76) 78 Taxation (271) (109) (162) Income from equity accounted investments - 112 (112) Discontinued operations 463 93 370 Non-controlling intere
Slide 18: Statement of Financial Position
STATEMENT OF FINANCIAL POSITION Rm 2013 2012 Variance Total assets 20 252 22 697 (2 445) Property, plant and equipment 3 177 2 980 197 Other non-current assets 4 318 5 092 (774) Current assets 7 796 8 383 (587) Cash and cash equivalents 4 263 4 039 224 Assets classified as held-for-sale 698 2 203 (1
Slide 19: Statement of Financial Position: Capex
STATEMENT OF FINANCIAL POSITION Rm 2013 2012 Variance Total assets 20 252 22 697 (2 445) Property, plant and equipment 3 177 2 980 197 Other non-current assets 4 318 5 092 (774) Current assets 7 796 8 383 (587) Cash and cash equivalents 4 263 4 039 224 Assets classified as held-for-sale 698 2 203 (1
Slide 20: Statement of Financial Position: Non-current Assets
STATEMENT OF FINANCIAL POSITION Rm 2013 2012 Variance Total assets 20 252 22 697 (2 445) Property, plant and equipment 3 177 2 980 197 Other non-current assets 4 318 5 092 (774) Current assets 7 796 8 383 (587) Cash and cash equivalents 4 263 4 039 224 Assets classified as held-for-sale 698 2 203 (1
Slide 21: Statement of Financial Position: Held for Sale
STATEMENT OF FINANCIAL POSITION Rm 2013 2012 Variance Total assets 20 252 22 697 (2 445) Property, plant and equipment 3 177 2 980 197 Other non-current assets 4 318 5 092 (774) Current assets 7 796 8 383 (587) Cash and cash equivalents 4 263 4 039 224 Assets classified as held-for-sale 698 2 203 (1
Slide 22: Net Cash Reconciliation
NET CASH RECONCILIATION 8 000 593 236 55 (4 395) 1 150 6 000 1 068 10 4 321 4 000 (581) (488) 1 969 2 000 0 Cash Cash EBITDA Disposal June EBITDA Disposalof Working Disposal of Disposal Working Effects Effectsof of Other Other Acquisition Aqcuisition Interest, Interets, Capex Capex Cash Finish June
Slide 23: Net Cash Reconciliation: Working Capital
NET CASH RECONCILIATION 8 000 593 236 55 (4 395) 1 150 6 000 1 068 10 4 321 4 000 (581) (488) 1 969 2 000 0 Cash Cash EBITDA Disposal June EBITDA Disposal of Working Disposal of Disposal Working Effects Effectsof of Other Other Acquisition Aqcuisition Interest, Interets, Capex Capex Cash Finish June
Slide 24: Net Cash Reconciliation: Clough Minorities
NET CASH RECONCILIATION 8 000 593 236 55 (4 395) 1 150 6 000 1 068 10 4 321 4 000 (581) (488) 1 969 2 000 0 Cash Cash June EBITDA Disposal of Disposal EBITDA Disposal Disposal of Working Working Effects Effectsof of Other Acquisition Other Aqcuisition Interest, Interets, Capex Capex Cash Finish June
Slide 25: Net Cash Reconciliation: Tax
NET CASH RECONCILIATION 8 000 593 236 55 (4 395) 1 150 6 000 1 068 10 4 321 4 000 (581) (488) 1 969 2 000 0 Cash Cash June EBITDA Disposal of Disposal EBITDA Disposal Disposal of Working Working Effects Effectsof of Other Other Acquisition Aqcuisition Interest, Interets, Capex Capex Cash Finish June
Slide 26: Net Cash Reconciliation: Capex
NET CASH RECONCILIATION 8 000 593 236 55 (4 395) 1 150 6 000 1 068 10 4 321 4 000 (581) (488) 1 969 2 000 0 Cash Cash June EBITDA Disposal of Disposal EBITDA Disposal Disposal of Working Working Effects Effectsof of Other Other Acquisition Aqcuisition Interest, Interets, Capex Capex Cash Finish June
Slide 27: Six Months to December: Revenue by Platform
SIX MONTHS TO DECEMBER Regional International Construction Construction Africa Construction Global Engineering Africa Australasia Oil & Gas Total and Middle East Underground Mining and Minerals 19.0bn 16.3bn 15.0bn 9.6bn 6.3bn 4.4bn 4.7bn 4.0bn 3.5bn 3.8bn 3.3bn 3.6bn 2.3bn 2.5bn 2.3bn 2011 2012 201
Slide 28: Six Months to December: Construction Africa and Middle East
SIX MONTHS TO DECEMBER Regional International Construction Construction Africa Africa Construction Global Construction Australasia Engineering Africa and and Middle Middle East East Underground Mining Oil & Gas and Minerals Construction Rm Africa (1) Marine Middle East Total 2013 2012 2013 2012 2013
Slide 29: Six Months to December: Engineering Africa
SIX MONTHS TO DECEMBER Regional International Construction Africa Construction Global Construction Australasia Engineering Engineering Africa Africa and Middle East Underground Mining Oil & Gas and Minerals Power Rm Programme (1) Engineering (2) Total 2013 2012 2013 2012 2013 2012 Revenue 1 971 2 01
Slide 30: Six Months to December: Underground Mining
SIX MONTHS TO DECEMBER Regional International Construction Africa Construction Construction Global Global Construction Australasia Engineering Africa and Middle East Underground Underground Mining Mining Oil & Gas and Minerals Rm Africa Australasia The Americas Total 2013 2012 2013 2012 2013 2012 20
Slide 31: Six Months to December: Oil & Gas and Minerals
SIX MONTHS TO DECEMBER Regional International Construction Africa Construction Global Construction Construction Australasia Australasia Engineering Africa and Middle East Underground Mining Oil Oil & & Gas Gas and Minerals Minerals Commissioning Fabrication, and Overheads Rm Engineering Projects Ass
Slide 32: Six Months to December: Discontinued Operations
SIX MONTHS TO DECEMBER Regional International Construction Africa Construction Global Construction Australasia and Middle East Discontinued Engineering Africa Operations Underground Mining Oil & Gas and Minerals Steel Reinforcing Clough Marine Properties Construction Rm Products Serv. & Prop. SA Pro
Slide 33: Criteria, Method and FY2014 Aspiration
2014 Criteria Method FY2014 aspiration H1* Margin EBIT 5% - 7.5% Revenue Gearing Total Interest Bearing Debt 20% - 25% Ordinary Shareholders Equity Return on Equity Net Profit Attributable to Ordinary Shareholders 17.5% through cycle (ROE) Average Ordinary Shareholders Equity Return on Invested (Tax
Slide 34: Kusile Chimneys – Flue Can Installation
Kusile Chimneys – Flue Can Installation RECOVERY & GROWTH 34
Slide 35: Order Book by Platform
Regional International Construction Construction Africa Construction Global Engineering Africa Australasia Oil & Gas Total (1) and Middle East Underground Mining and Minerals 47.4bn 45.7bn 44.7bn 22.0bn 20.6bn 20.4bn 8.6bn 8.7bn 8.6bn 9.1bn 9.9bn 9.5bn 7.7bn 6.5bn 6.2bn Dec 12 Jun 13 Dec 13 Dec 12 J
Slide 36: Robust Order Book
ROBUST ORDER BOOK Order book % split Order book(1) Order book Rbn Rbn FY Time Distribution SADC Int. Dec 2013 Jun 2013 2014 3.1 Construction Africa 80 20 8.6 8.7 2015 4.5 and Middle East Regional >2015 1.0 2014 2.0 Engineering 100 0 6.2 6.5 2015 2.1 Africa >2015 2.1 2014 2.6 Construction Global 50 1
Slide 37: Order Book and Medium-to Long Term Prospects
Order book % split Order book(1) Medium-to long Market % EBIT Rbn term relative % prospects margin SADC Int. Dec 2013 Jun 2013 EBIT contribution aspiration Construction Africa 80 20 8.6 8.7 ±5 < 5.0 and Middle East Regional Engineering 100 0 6.2 6.5 ±15 5.0 - 7.5 Africa Construction Global 50 100 50
Slide 38: Complex and Protracted Process
COMPLEX AND PROTRACTED PROCESS Gautrain Rapid Rail Link GPMOF Dubai International Airport Delay & Disruption Claim On-going arbitration(s) Arbitration ruling on • Commercial Closeout – • Principle of design claim claim respondent in 2016 – ruled in MUR’s favour March 2014 in May 2012 Water Ingress C
Slide 39: Zero Tolerance for Anti-Competitive Behaviour
ZERO TOLERANCE FOR ANTI-COMPETITIVE BEHAVIOUR Murray & Roberts rejects any form of anti-competitive or collusive conduct Five historic incidents of alleged collusion still to be settled – penalty provided for Remaining risk related to possible civil action Current executives not implicated in any fo
Slide 40: Platform Outlook and Prospects
• Platform returned improved profit in H1 • Local market is highly competitive with low margins Construction Africa • Middle East secured its first project award in more than two years in Abu Dhabi and Middle East Regional • Murray & Roberts Projects is well positioned in the renewable energy sector
Slide 41: H1 FY2014 Revenue and EBIT split
H1 FY2014 Revenue EBIT (Before Corporate and Clough Transaction Costs) 16% 20% 6% 50% 12% 12% 66% 18% Construction Australasia Oil & Gas and Minerals Construction Global Underground Mining Engineering Africa Construction Africa and Middle East RECOVERY & GROWTH 41
Slide 42: Our Core Competence Is Engineering and Construction
OUR CORE COMPETENCE IS ENGINEERING AND CONSTRUCTION Regional Operating Platforms International Operating Platforms 4 Construction Operating Construction Africa Engineering Africa Construction Global Australasia Oil & platforms and Middle East Underground Mining Gas and Minerals 3 Infrastructure Mini
Slide 43: FY2015 and Beyond
FY2015 AND BEYOND Increased engineering focus in natural resources markets Grow international platforms All platforms to expand in value chain by growing contribution from engineering and operations & maintenance segments Gorgon LNG Tanks RECOVERY & GROWTH 43
Slide 44: Strategy on Track
STRATEGY ON TRACK Unique risks and opportunities TUNISIA Office opened in ALGERIA LIBYA EGYPT WESTERN • Accra, Ghana SAHARA • Kitwe, Zambia MAURITANIA MALI NIGER CAPE VERDE SENEGAL CHAD ERITREA • Maputo, Mozambique THE GAMBIA SUDAN BURKINA GUINEA-BISSAU GUINEA FASO BENIN DJUBOUTI Engineering Africa
Slide 45: Presence & Projects on Five Continents
Presence & projects on five continents Several regional platform subsidiary companies North Bay consolidated at Group Salt Lake corporate office – City Dubai Murray & Roberts Campus Accra Five African offices Globally employing Kitwe more than 25 000 Gaborone Maputo Kalgoorlie Brisbane people Windho
Slide 46: Sponsored Level 1 ADR Programme
Murray & Roberts has a sponsored Level 1 ADR programme (Since 2009): Bloomberg ticker: MURZY CUSIP: 626805204 Ratio: 1 ADR: 1 Ordinary Share Exchange Traded: Over-the-counter (OTC) market Depositary bank: Deutsche Bank Trust Company Americas Depositary bank contact: Stanley Jones ADR broker helpline
Slide 47: Forward-looking statements
This presentation includes certain various “forward-looking statements” within the meaning of Section 27A of the US Securities Act 10 1933 and Section 21 E of the Securities Exchange Act of 1934 that reflect the current views or expectations of the Board with respect to future events and financial a
Slide 48: Report to Stakeholders
REPORT TO STAKEHOLDERS SIX MONTHS TO 31 DECEMBER 2013 This presentation is available on www.murrob.com FROM RECOVERY TO GROWTH
Murray & Roberts Holdings — H1 FY2014 Earnings Presentation on 6ix