Macmahon Holdings Limited · ASX:MAH
Macmahon — H1 2019 Earnings Presentation
27 slides from Macmahon's earnings presentation, Mar 12, 2019
Slide 1: First Half Year Results 2019 Roadshow Presentation
FIRST HALF YEAR RESULTS 2019 ROADSHOW PRESENTATION
Slide 2: 1H19 Highlights
1H19 HIGHLIGHTS Significant uplift in financial performance • 1H19 Revenue of $542.2m, up 101% on 1H18 • 1H19 Underlying EBIT1 of $39.9m, up 311% on 1H18 • 1H19 Underlying EBITDA1 of $89.1m, up 94% on 1H18 • 1H19 Underlying NPAT1 of $32.3m, up 304% on 1H18 • Underlying basic EPS1 of 1.53cps, up 27
Slide 3: Financial Performance
FINANCIAL PERFORMANCE * * * FY18 has been restated for consistency with the current year’s presentation MACMAHON – First Half Results to 31 December 2018 3
Slide 4: Key Contracts
KEY CONTRACTS Project / Location Commodity / Comments Client Type Tropicana • Alliance life-of-mine contract WA Gold AngloGold Ashanti / • Achieved reduction in unit cost by ~37% from 2015 Australia Open-pit Independence Group • Phase 1 of Long Island commenced Telfer WA Copper-gold • Commenced Febr
Slide 5: People
PEOPLE 1 • Employee increase driven by ramp up of existing projects to steady state • Recruitment initiatives now include a new-to-industry “greenie program” and a defence force intake program • In Australia, 5% of our total workforce is Indigenous. In Indonesia, workforce 99% national, 10% from loc
Slide 6: Safety
SAFETY • Safety performance continues to improve • TRIFR on track to be better than industry average by end of FY19 • No permanent disabling injuries or fatalities recorded • Ongoing rollout of successful Mental and Physical Health Program MACMAHON – First Half Results to 31 December 2018 6
Slide 7: Work in Hand
WORK IN HAND • Order book of ~$4.8bn • Excellent visibility and solid platform • Operating at revenue run rate of ~$1bn MACMAHON – First Half Results to 31 December 2018 7
Slide 8: Tender Pipeline
TENDER PIPELINE • 19 tender opportunities worth ~$7bn, split between Australia and Indonesia, and gold, base metals, lithium and coal • $5bn+ (~70%) – preferred tenderer • $4bn+ (~60%) – current clients • $1.5bn potentially to be awarded in 2019 MACMAHON – First Half Results to 31 December 2018 8
Slide 9: Potential Revenue Growth
POTENTIAL REVENUE GROWTH • Note: the figures in this graph are indicative only and should not be treated as guidance MACMAHON – First Half Results to 31 December 2018 9
Slide 10: Profit & Loss
PROFIT & LOSS $ Millions 1H18 1H19 Change Sales revenue 270.0 542.2 +101% 1 EBITDA 45.9 89.1 +94% EBITDA margin 17.0% 16.4% EBIT1 9.7 39.9 +311% EBIT margin 3.6% 7.4% Net finance costs (0.7) (4.8) 1 PBT 9.0 35.1 +290% PBT margin 3.3% 6.5% Tax expense (1.0) (2.8) 1 NPAT 8.0 32.3 +304% NPAT margin 3.0
Slide 11: Cash Flow
CASH FLOW $ Millions 1H18 1H19 EBITDA 45.9 89.1 Interest and tax 9.4 (10.0) Class Action Settlement - (7.6) Working capital and other (32.5) (54.4) Net operating cash flow 22.8 17.1 Proceeds from sale of assets 0.6 0.2 Capital expenditure (cash) (13.6) (25.4) Net repayment of borrowings and finance
Slide 12: Balance Sheet
BALANCE SHEET $ Millions FY18 1H19 Cash 109.6 77.4 Receivables 152.3 183.0 Inventories 42.0 45.8 Property, plant and equipment 380.1 408.2 Other assets 39.3 76.8 Total assets 723.3 791.2 Payables 175.0 175.0 Borrowings 106.3 158.6 Other liabilities 32.2 33.2 Total liabilities 313.5 366.8 Shareholder
Slide 13: FY19 Outlook & Strategy
FY19 OUTLOOK & STRATEGY Positive outlook supported by: Strong order book of $4.8bn FY19 work in hand of $1bn Significant $7bn tender pipeline Robust balance sheet Greater scale, diversity and improving market conditions Reiterate Earnings guidance for FY191 • Expected Revenue of $0.95 - $1
Slide 14: Thank You
THANK YOU For further information contact: Chris Chong Investor Relations and Corporate Development cchong@macmahon.com.au Mick Finnegan CEO mfinnegan@macmahon.com.au Giles Everist CFO geverist@macmahon.om.au www.macmahon.com.au Insert pic MACMAHON – First Half Results to 31 December 2018 14
Slide 15: Appendix
APPENDIX 15
Slide 16: Corporate Overview
CORPORATE OVERVIEW Capital Structure Share Price Share price ( February 2019) $0.26 Fully paid ordinary shares (m) 2,155 Market Capitalisation $560.3m Cash $77.4m Debt $158.6m Enterprise Value $641.5m Directors and Senior Management Jim Walker Non-executive Chairman Eva Skira Non-executive Director
Slide 17: People - Remuneration
PEOPLE - REMUNERATION FY19 • Prior to FY19 some staff had not received an increase in fixed pay for the previous 4 years and overall staff were paid below the 50th centile of industry peers • FY19 fixed pay adjusted to be on average at the 50th centile • In addition, the FY19 Short Term Incentive Pl
Slide 18: 1H19 Revenue Diversification
1H19 REVENUE DIVERSIFICATION MACMAHON – First Half Results to 31 December 2018 18
Slide 19: Our Services
OUR SERVICES UNDERGROUND CIVIL / MINING SURFACE PLANT & MINING SERVICES MINING MAINTENANCE Mine development Mining infrastructure Mine planning and analysis Service and maintain Mine production Overburden stripping Mine management equipment Raise drilling Bulk earthworks Drill and blast Rebuild comp
Slide 20: Our Equipment
OUR EQUIPMENT Dump Trucks Drill Rigs 268 72 Excavators and Loaders 112 MACMAHON – First Half Results to 31 December 2018 20
Slide 21: Map of Operations
MAP OF OPERATIONS MACMAHON – First Half Results to 31 December 2018 21
Slide 22: Indonesia
INDONESIA Ranked 11 out of 89 countries GDP current (US $Bn) - Large growing economy Source: Resource Governance Institute 2017 RGI Source: World Bank • Indonesia has a long successful mining history • Macmahon has successfully operated in Indonesia for many years • Currently at Martabe (since 2015)
Slide 23: Batu Hijau
BATU HIJAU AMNT SUMBAWA ISLAND • AMNT is an Indonesian mining company that acquired 82.2% of Batu Hijau mine from Newmont and Sumitomo in November 2016 • Supportive shareholder and two board representatives Batu Hijau Elang Nangka Rinti • Open pit, copper-gold porphyry located on Sumbawa Island, Ind
Slide 24: Batu Hijau
BATU HIJAU Life-of-mine Alliance Style contract • Approved by shareholders in July 2017 and commenced in August 2017 • Cost reimbursable with a management fee and gain/pain share mechanism subject to cost and production targets • Management fee payable if 90% of production target achieved • US$2.9 b
Slide 25: Digital Transformation
DIGITAL TRANSFORMATION Optimising performance and equipment health through deployment of next generation operational technology • Increasing visibility of business performance – implemented phase 1 of our ERP digital transformation project • Improving decision making through near real time actionabl
Slide 26: Reconciliation of Non-IFRS Financial Information
RECONCILIATION OF NON-IFRS FINANCIAL INFORMATION $ Millions 1H18 Restated1 1H19 Profit for the year (as reported) 8.4 23.5 Add back: Loss from discontinued operations (net of tax) - 0.1 Less: Profit from discontinued operations (net of tax) (0.2) - Net profit after tax from continuing operations (as
Slide 27: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER Disclaimer as to forward looking statements The forward looking statements in this Non- IFRS Financial Information presentation reflect views held only as at the date This presentation uses non-IFRS financial This presentation contains forward looking of this presenta