Slide 1: For the financial year ended 30 June 2022
_ for the financial year ended 30. June 2022 i 17 August 2022 ee VS ae
Slide 2: Summary of FY22 financial results
Summary of FY22 financial results Profit after tax and EPS Operational performance Balance sheet and dividend Underlying Statutory Urban Services $152.0m NPAT $508.1m EBITA1,3 1.6x Net Debt to EBITDA4 17.3% 3.0% 1.5x at June 2021 Statutory EBIT of $323.2m Statutory EBITA $358.0m Underlying Underl
Slide 3: FY22 Accomplishments
FY22 Accomplishments ▪ Ranked in top 15% of industry globally in the S&P Global (DJSI) 2021 Sustainability Yearbook Sustainability ▪ Achieved our Sustainability Linked Loan KPI targets ▪ Achieved a 97% landfill diversion rate ▪ Launched THRIVE, our women’s empowerment and capability building program
Slide 4: Levered to a Net Zero Economy and New Technology
Levered to a Net Zero Economy and New Technology ▪ A net zero emissions future will require significant adjustments to almost all urban infrastructure Capabilities across our portfolio in areas ▪ Downer’s capabilities, scale and asset knowledge puts us in required for the journey to net zero a uniqu
Slide 5: Diversified across the right end-markets
Diversified across the right end-markets Market leader in most categories in both Australia and New Zealand Resilience through diversity as sector specific factors are balanced out across the portfolio FY22 Urban Services Revenue $11.5 billion1,2 Lower capital intensity through Urban Services portfo
Slide 6: Transport – Roads
Transport – Roads ▪ Opened the new Sustainable Road Resource Centre at Rosehill, Sydney ▪ Awarded Transurban’s CityLink and West Gate 48% of 32% Roads 48% Rail & Transit Systems Tunnel road network management contract FY22 Transport Projects ▪ Secured $800m of road maintenance contracts in revenue 2
Slide 7: Transport – Rail & Transit Systems
Transport – Rail & Transit Systems ▪ Queensland Train Manufacturing Program bid submitted – if won, Downer will manage the largest rollingstock fleets in each State on the Eastern 20% of 32% Roads Australian seaboard. Award expected in December 48% Rail & Transit Systems 2022 FY22 Transport Projects
Slide 8: Transport – Projects
Transport – Projects ▪ Secured the Waurn Ponds rail alliance contract in Victoria ▪ Secured the Western Port Highway Upgrade in 32% of 32% Roads 48% Rail & Transit Systems Victoria – a new generation road contract FY22 Transport Projects ▪ Achieved the highest pre-qualification status from revenue 2
Slide 9: Utilities – Power & Gas
Utilities – Power & Gas ▪ Successful completion of the ACES program, deploying ~46MW of solar generation across ~550 Queensland schools, contributing to $26m in 36% of 30% 36% Power & Gas annual power savings for the entire program Water FY22 Utilities ▪ Secured a 5-year service contract for Transpo
Slide 10: Utilities – Water
Utilities – Water ▪ Loganholme Biosolids Gasification initiative won the Queensland Engineers Australia excellence award in August and also is a finalist in an 34% of 30% 36% Power & Gas International Water Association award in Water September FY22 Utilities Telco ▪ AWA National Safety Innovation Aw
Slide 11: Utilities – Telecommunications
Utilities – Telecommunications ▪ Expanded the Group’s customer base in Wireless Network deployment to be an industry leader providing program management services nationally 30% of 30% 36% Power & Gas including rural and remote locations Water FY22 Utilities ▪ Secured a 3-year Field Services Agreemen
Slide 12: Facilities – Government / Health & Education
Facilities – Government / Health & Education ▪ Successful negotiation and mobilisation of Reviewable Services for the Royal Adelaide Govt / H&E 43% of 18% Hospital and Bendigo Hospital PPPs – both for an Defence 43% additional 5-year term FY22 Facilities 18% P&E / I&M ▪ Achieved four key contract ex
Slide 13: Facilities – Defence
Facilities – Defence ▪ Secured and delivered a program of more than 300 individual upgrade and refurbishment projects Govt / H&E 21% of 18% across the Defence Estate Defence 43% ▪ Awarded a major program of works for Defence FY22 Facilities 18% P&E / I&M Capability & Sustainment Group (CASG) revenue
Slide 14: Facilities – Power & Energy / Industrial & Marine
Facilities – Power & Energy / Industrial & Marine ▪ Established the Downer Future Energy Team focussing on new technologies and alternative fuels Govt / H&E 18% of 18% ▪ Successful award and delivery of a large suite of 43% Defence decarbonisation projects for Santos FY22 Facilities 18% P&E / I&M ▪
Slide 15: $36.1bn of work-in-hand
$36.1bn of work-in-hand ~90% Government or ✓ Long-dated ✓ Diversified by industry ✓ Government related Work-in-hand by segment ($36.1bn) Work-in-hand profile ($bn) Utilities 14 $4.8bn 12 13% 10 8 Transport Facilities 6 $15.8bn $15.5bn 4 44% 43% 2 0 FY23 FY24 FY25 FY26 FY27 FY28+ Transport Utilities
Slide 16: Managing cost escalation
Managing cost escalation Services – 91% of work-in-hand Construction2 – 9% of work-in-hand ▪ 96% of Services work-in-hand1 has some form of ▪ Relatively short-term, bid with assumptions for price embedded price escalation mechanism escalation and contingencies ▪ Majority of contracts escalate at eit
Slide 17: Labour Challenges
Labour Challenges Frontline workforce by Total workforce by contract type employment type ▪ Downer has a 33,000 strong workforce1 ▪ Labour shortages have increased cost to serve in most Common Law 7% businesses Casual ̶ Increased overtime rates 26% EBA ̶ Sub-contract / Labour hire Aw ard 23% 70% Per
Slide 18: Group financials
Group financials
Slide 19: Group underlying financial performance
Group underlying financial performance ▪ Total revenue 2.0% lower to $12.0bn, primarily due to $m FY223 FY213 Change divestment of non-core businesses Total revenue1 11,987.1 12,234.2 (2.0%) ▪ Urban Services revenue1 increased 10.8% to $11.5bn EBITDA 706.6 899.1 (21.4%) ▪ Group underlying3 EBITA mar
Slide 20: Segment underlying performance overview
Segment underlying performance overview Transport Utilities Facilities1 ▪ Revenue of $5.7bn (+8.1%) ▪ Revenue of $1.8bn (-6.0%) ▪ Revenue of $4.0bn (+25.1%) ▪ EBITA of $254.6m (+1.8%) ▪ EBITA of $73.7m (-22.3%) ▪ EBITA of $179.8m (+0.7%) ▪ EBITA margin of 4.4% (-0.3pp) ▪ EBITA margin of 4.2% (-0.8pp
Slide 21: Reconciliation of underlying to statutory results
Reconciliation of underlying to statutory results Amortisation Net interest of acquired $m EBITA1 Tax expense 2 NPATA1 NPAT expense intangibles (post-tax) Underlying3 results 399.2 (85.4) (88.5) 225.3 (24.4) 200.9 Fair value increase on Downer Contingent 3.7 - - 3.7 - 3.7 Share Options (DCSO)4 Dives
Slide 22: Cash flow
Cash flow ▪ Statutory conversion of 83.9% $m FY22 FY21 Change ▪ Underlying cash conversion of 88.9% 1 when adjusted for $22.3m of cash Total operating cash flow 495.4 708.7 (30.1%) outflows related to items recognised in Net Capex (Core) (134.9) (154.0) (12.4%) FY20 and funded from the July 2020 Net
Slide 23: Group debt profile
Group debt profile ▪ Weighted average debt duration of 3.9 years1 Debt maturity profile (A$m) (3.8 years at 30 June 21) ▪ Recent refinancing activity, hedging and fixed rate debt mix sees Downer well placed to 800 absorb current rate increases in FY23 ▪ FY23 net interest costs expected to be $85-90m
Slide 24: Outlook
Outlook
Slide 25: Key messages and outlook
Key messages and outlook ▪ Q4 beat expectations, generating a favourable run rate into FY23 ▪ Demand remains robust in our markets, across existing contracts and pipeline ▪ Cost to serve still elevated but trending towards more normal levels ▪ Net Debt to EBITDA1 of 1.6x well below target range of 2
Slide 26: Supplementary information
Supplementary information
Slide 27: Board composition
Board composition New Board members in FY22 Continuing Board members Mark Chellew (Non-executive Chairman) Teresa Handicott (Non-executive Director) Over 40 years’ experience in building materials and Former corporate lawyer and Chairman of national related industries including roles as Chief Execut
Slide 28: Transport
Transport WIH profile ($bn) Top 5 Contracts Remaining Road Services 5.0 4.0 1. Maintaining Waratah trains until 2044 Rail & Transit Systems 3.0 Projects 2. Maintaining HCMTs until 2053 2.0 1.0 3. Maintaining Sydney Growth Trains until 2044 0.0 FY23 FY24 FY25 FY26 FY27 FY28+ 4. Operating Yarra Trams
Slide 29: Utilities
Utilities WIH profile ($bn) Top 5 Contracts Remaining 2.0 Telecommunications 1. Sydney Water until 2030 (Confluence Water JV) Water 1.5 Power and gas 1.0 2. AusNet (power) until 2024 (plus 6-year extension) 0.5 3. Transpower Grid Services (New Zealand) until 2027 (plus 5-year extension) 0.0 FY23 FY2
Slide 30: Facilities
Facilities WIH profile ($bn) Top 5 Contracts Remaining 7.0 Government 6.0 1. New Royal Adelaide Hospital PPP until 2046 Health & Education 5.0 (contract reset 30 June 2022) Defence 4.0 2. Bendigo Hospital PPP until 2042 Power & Energy 3.0 (contract reset 30 June 2022) 2.0 Industrial & Marine 1.0 3.
Slide 31: Scale and capacity in both Australia and New Zealand
Scale and capacity in both Australia and New Zealand 30% NZ split of BU revenue AU 25% 20% 7% % of Group Revenue 15% 4% 3% 10% 17% 12% 13% 5% 10% 2% 1% 1% 7% 6% 6% 4% 4% 3% 0% Road services RTS Infrastructure Power & gas Water Telco Govt / H&E Defence Building P&E / I&M Transport Utilities Facilitie
Slide 32: Business unit performance
Business unit performance ▪ Underlying Urban Services EBITA of $m FY22 FY21 Change $508.1m, down 3.0% ▪ Refer to slide 20 for commentary on Urban Transport 254.6 250.2 1.8% Services business performance Utilities 3 73.7 94.8 (22.3%) Facilities 3 179.8 178.6 0.7% Urban Services Businesses 508.1 523.6
Slide 33: Operating cash flow
Operating cash flow ▪ Core Urban Services business delivering $m FY22 FY21 Change strong cash flows across the portfolio ▪ Underlying1 EBITDA conversion of 88.9% Underlying1 EBIT 364.4 401.1 (9.1%) (statutory 83.9%) after adjusting for Add: Amortisation of acquired intangibles 34.8 66.2 (47.4%) $22.
Slide 34: Capital expenditure and D&A
Capital expenditure and D&A ▪ Core net capex decreased by 12.4% $m FY22 FY21 Change ▪ Maintenance capex broadly in-line with Net Capital expenditure – core 134.9 154.0 (12.4%) PP&E depreciation and IT amortisation expense Net Capital expenditure – non-core 8.8 74.3 (88.2%) ▪ Core D&A (excluding amor
Slide 35: Balance sheet
Balance sheet ▪ Net assets reduced by $123.4m or 4.2% $m Jun-22 Jun-21 since June 2021 to $2.8bn 3,028.0 3,403.2 Current assets ▪ Reduction in net assets primarily driven Non-current assets 4,433.0 4,668.9 by the divestment of Mining - Goodwill 2,285.0 2,280.8 - Acquired intangible assets 232.7 267.
Slide 36: Reconciliation to prior period financials
Reconciliation to prior period financials ▪ As disclosed at the HY22 result, Downer has finalised the structure of Transport, Utilities and Facilities which resulted in some business units being reclassified ▪ To provide comparable information and a reconciliation, the below table has been provided