Macmahon Holdings Limited · ASX:MAH
Macmahon — FY2010 Earnings Presentation
39 slides from Macmahon's earnings presentation, Aug 17, 2010
Slide 1: 2010 Full Year Results
For personal use only 2010 Full Year Results Nick Bowen - Chief Executive Officer R Ross C Carroll ll - Chief Chi f Financial Fi i l Officer Offi 17 August 2010
Slide 2: Year in review
Year in review For personal use only Solid full year result delivered • Profit after tax of $38 million • EPS up 68% to 5.2 cents • Consolidated company’s position post GFC Impressive safety performance • Significant improvement across key metrics Strong operational performance • Successfully S f ll
Slide 3: Industry leading safety performance
Industry leading safety performance For personal use only G Group safety f performance f • 38% improvement in TRIFR to 4.6 14 • 50% improvement in LTIFR to 0.4 12 • Industry leading safety performance 10 across both the Mining and 8 Construction 6 • 2010 Systems Award winner for the 4 Chamber of Min
Slide 4: Our people
Our people For personal use only • Strong management team in place – embedding our safety culture • Focus on retention and attraction of employees – training and development a key priority • Increasing levels of Aboriginal employment and training • Apprentice Program and graduate intake is building
Slide 5: Business overview
For personal use only Business overview 5
Slide 6: Construction - delivering technical projects
Construction - delivering technical projects For personal use only • Building capability to deliver technically complex projects • The Go-Between Bridge completed on time and on budget • Completion of the Reid Highway extension in Western Australia • Current projects include the Tiger Brennan Drive
Slide 7: Construction - securing water projects
Construction - securing water projects For personal use only • Currently undertaking five government water infrastructure projects across Australia • Completed the Logan Early Works project in Queensland and the Stirling Dam in Western Australia • Established partnership with COMSA’s water ater busi
Slide 8: Construction - rail work underpinning revenue
Construction - rail work underpinning revenue For personal use only • Portfolio of rail work continuing to grow with nine projects underway • 55% of Construction’s 2010 revenue derived from rail related projects • Working on both resources related rail projects and urban contracts • Successfully com
Slide 9: Mining - winning work
Mining - winning work For personal use only • Awarded a number of new contracts including: contracts, o Renison Tin Mine o Cameby Downs • Building end to end expertise - operating and maintaining coal handling and preparation plant at C Camebyb Downs D • New work expanding on Macmahon’s geographical
Slide 10: Mining - cementing relationships
Mining - cementing relationships For personal use only • All five mining contracts up for renewal in the period were rolled over • Key extensions included the Orebody 18 / Wheelarra contract and the Olympic Dam contract • Strong partnerships with clients maintained Olympic Dam Extension, BHP Billito
Slide 11: International - expanding our horizons
International - expanding our horizons For personal use only • More than $300 million of overseas work awarded • Building on strong relationship with Lafarge • Moved into Africa - awarded the Ewekoro limestone quarry contract in Nigeria Lhok Nga , Lafarge, Indonesia 11
Slide 12: $2.1 billion of work won
$2.1 billion of work won For personal use only • Extensions - $1.2 billion • Orebody 18 / Wheelarra open cut iron ore, BHP Billiton, Western Australia, $500m • Eaglefield open cut coal mine, Peabody Energy, Queensland, $150m • Olympic Dam underground copper and uranium mine, BHP Billiton, South Aust
Slide 13: Strong order book growth
Strong order book growth For personal use only Order book 2,500 2 000 2,000 1,500 $m 1,000 500 - 2006 2007 2008 2009 2010 • Diverse spread of work across commodities, disciplines and locations 13
Slide 14: Financials
For personal use only Financials 14
Slide 15: Income statement
Income statement For personal use only $ millions 2010 2009 Change % Revenue 1 254 4 1,254.4 1 485 6 1,485.6 (16%) EBIT 55.3 29.8 86% Net interest (5.8) (8.9) 35% Profit before tax 49.5 20.9 137% Tax (10.7) (2.7) (296%) Net profit after tax & minorities 37 9 37.9 17 2 17.2 120% PBT margin 3.9 1.4 17
Slide 16: Construction overview
Construction overview For personal use only $ millions 2010 2009 Change % Revenue 788.8 840.7 (6%) Profit before tax 34.8 29.6 18% Profit before tax margin % 4.4 3.5 26% Order book 684 884 (23%) • Strong result on lower revenue • Improved PBT margins • Order book – the key 16
Slide 17: Mining overview
Mining overview For personal use only $ millions illi 2010 2009 Ch Change % Revenue 465.6 644.9 (28%) Profit before tax 34.8 11.7 197% Profit before tax margin % 7.5 1.8 317% Order book 1,531 528 190% • Very good year on lower revenue • PBT margins back to historical levels • Outstanding increase in
Slide 18: Consolidating our revenue base
Consolidating our revenue base For personal use only Revenue 1 600 1,600 1,400 1,200 1 000 1,000 $m 800 600 400 200 - 2006 2007 2008 2009 2010 • Construction revenue flat • Mining Mi i revenue down d as a resultlt off GFC 18
Slide 19: Solid NPAT and NPAT margin
Solid NPAT and NPAT margin For personal use only NPAT and NPAT margin 60 5.0% 50 3.9% 4.0% 3.5% 3.0% 3.2% 40 3.0% $m 30 2.0% 1 2% 1.2% 20 1.0% 10 0 0.0% 2006 2007 2008 2009 2010 Normalised profit after tax NPAT Margin % 19
Slide 20: Profit variance analysis
Profit variance analysis For personal use only Profit variance analysis 50 45 40 35 30 25 $m 20 15 10 5 0 20
Slide 21: Strong financial base to fund growth opportunities
Strong financial base to fund growth opportunities For personal use only Operating cash flow Gearing 140 50% 120 43.6% 40% 100 30% 80 25 9% 25.9% $m 20% 60 11.6% 10% 40 0.6% 20 0% 0 -10% -12.9% 2006 2007 2008 2009 2010 -20% • Net cash surplus over debt of $43.8 million at 30 June 2010 21
Slide 22: Cash flow
Cash flow For personal use only Cash at hand movement 250 200 150 $m 100 50 0 22
Slide 23: Dividends and payout ratio
Dividends and payout ratio For personal use only DPS and payout ratio 6 60% 70% 58% 5 60% 47% 49% 50% 4 36% 40% Cents 3 30% 1.5 2 20% 1 10% 1.5 0 0% 2006 200 2007 2008 2009 20 0 2010 Full year dividend Payout ratio 23
Slide 24: Strategy
For personal use only St t 24 Strategy
Slide 25: Our strategy
Our strategy For personal use only Key strategic components Two key sectors •Resources •Government Business mix •Construction •Surface mining End to end •Underground mining solutions Geographical growth •Australia •Overseas Construction • Build business on back of resource growth and government infr
Slide 26: The strategy - delivered to date
The strategy - delivered to date For personal use only Moved into the overseas market with operations now in Nigeria, Hong Kong, Malaysia and Indonesia Diversified portfolio of venue Significant move into work east coast infrastructure market with a number of Rev Improved capability to key contract
Slide 27: Key attributes that will deliver the next growth phase
Key attributes that will deliver the next growth phase For personal use only Capabilities & Financial Our people experience position • Excellent record of • Skilled and project delivery • Sound balance experienced • Outstanding safety sheet with no net employees performance performance, debt • Stron
Slide 28: Outlook
For personal use only Outlook 28
Slide 29: Iron ore and coal remains robust
Iron ore and coal remains robust For personal use only Resources outlook • Significant rebound in commodity prices • Short term outlook impacted by the uncertainty created t d by b th the MRRT • Despite this, BHP Billiton and Rio Tinto committed to further iron ore expansion plans in the Pilbara reg
Slide 30: Medium term infrastructure sector outlook is positive
Medium term infrastructure sector outlook is positive For personal use only Government infrastructure outlook • Short term outlook is uncertain, however medium to long term is forecast to be buoyant • Forecast Forecast’ss indicate that more than $700 million needs to be spent to upgrade and develop
Slide 31: Overseas presenting a platform for growth
Overseas presenting a platform for growth For personal use only International outlook Indonesia • Well established mining market and supporting infrastructure • Coal market forecast to grow substantially in FY11+ Africa • Nigeria providing a key entry point into Africa • Opportunities across all com
Slide 32: Solid base of work secured
Solid base of work secured For personal use only Order book run-off ($ million) 2,500 2,000 1,500 $m ` 1,000 500 0 FY10 R Run off ff FY11 R Run off ff FY12 R Run off ff FY13 FY13+ 32
Slide 33: Company outlook
Company outlook For personal use only • Achieved a solid profit result and rebuilt the order book • Strong pipeline of opportunities in both the resources and infrastructure sectors – solid growth prospects in the medium to long term • Macmahon remains cautious on the short term outlook • $1.0 billi
Slide 34: Questions?
For personal use only Questions?
Slide 35: Macmahon businesses structure
Macmahon businesses structure For personal use only 35
Slide 36: Appendix - major project locations
Appendix - major project locations For personal use only 36
Slide 37: Appendix - order book
Appendix - order book* For personal use only Duration of contract (years) % Style of contract % >5 17% Fixed <2 26% 44% Schedule of 3 - 5 years rates 20% Alliance 56% 18% 2 - 3 years 19% Customer % Commodity % Rio Tinto Limestone 3% 1% Iron Ore Governmentt G Government G 36% BHP Billiton 40% 39% 39%
Slide 38: Appendix - balance sheet
Appendix - balance sheet For personal use only Balance sheet 2010 2009 C Change % Current assets 225.6 313.3 (28%) Non current assets 353.4 319.5 11% Total assets 579.0 632.8 (9%) Net assets 339.7 311.0 9% Net debt (43.8) 1.8 NA Gearing (Net debt/equity) % (12.9) 0.6 NA Current ratio 13 1.3 14 1.4 (
Slide 39: 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 businesses. It is believed that the expectations reflected in these statements are reasonable but they m