Downer Edi Limited · ASX:DOW
Downer Edi — CSFB Asian Conference 2004
21 slides from Downer Edi's conference presentation, Mar 26, 2004
Slide 1: Downer EDI Limited
CREDIT SUISSE Downer EDI Limited Presentation by:- Engineered for Success STEPHEN GILLIES Chief Executive Officer GEOFFREY BRUCE Chief Financial Officer Credit Suisse First Boston Australia Equities Limited Participating Organisation of the Australian Stock Exchange A.B.N. 36 068 232 708 AC.N. 068 2
Slide 2: Snapshot
Downer EDI — Snapshot M@ ASX Listed —- top 150 company by market capitalisation ™@ Leading provider of outsourced engineering services — design, project management, installation, operations and maintenance m@ Comprised of five business platforms — ail leaders in their chosen fields M@ Operate in ove
Slide 3: Vision
Downer EDI — Vision m@ DOW aims to be the leading provider of outsourced engineering services in the Australasian and selected Asian regions @ Outsourcing is a major growth industry and DOW intends being a strong participant in this emerging sector mM DOW’s leading market positions provide a robust
Slide 4: What We Do
Downer EDI — What We Do Products & Services Linkage Strengths Mining and Mine Infrastructure \ a \ Services Engineering Market Leadership {| Transport Infrastructure Services Capability & Client Relationships og. IP Energy & Communication Modern Plant & Equipment Infrastructure Services oe Deliverin
Slide 5: Financial Overview
Downer EDI — Financial Overview FY'03 A Operating Revenue 2680 +10% NPAT 67 +18% Total Assets 2033 +11% (A$ Millions measured against PCP) CREDIT FIRST H1'04 1542 25 1991 +16% 412% SUISSE SCSTON
Slide 6: Business Drivers: Mining & Mine Infrastructure Services
Downer EDI — Business Drivers MINING & MINE INFRASTRUCTURE SERVICES CREDIT FIRST SUISSE GOSTON
Slide 7: Business Drivers: Infrastructure Sectors #1
Downer EDI — Business Drivers INFRASTRUCTURE SECTORS: #1 CREDIT FIRST SUISSE GOSTON -
Slide 8: Business Drivers: Infrastructure Sectors #2
Downer EDI — Business Drivers INFRASTRUCTURE SECTORS: #2 CREDIT FIRST SUISSE GOSTON ;
Slide 9: What Are Our Strategies?
Downer EDI — What Are Our Strategies? @ Develop and Leverage iP M@ Selling Integrated Solutions M Capitalise on Outsourcing @ Financial Discipline @ Achieve Strong Market Share CREDIT FIRST SUISSE GOSTON ;
Slide 10: What Is Our IP?
Downer EDI — What Is Our IP? CREDIT SUISSE SEGMENT EXAMPLES: @ Master Planning Design @ Diagnostic Testing m Process Design Patents m@ FM Management Tools @ Train Operating Systems @ Freight Locomotive Design Patents @ Crash and Anti-roil Designs ® Patented Rollingstock Design ® Design Time Sold to
Slide 11: Selling Integrated Solutions
Downer EDI — Selling Integrated Solutions M™ Increased penetration rate for client disposable spend @ Partnering / Alliancing mM Co-Investing CREDIT FIRST SUISSE GOSTON =
Slide 12: Capitalise on Outsourcing
Downer EDI — Capitalise on Outsourcing @ Public > “Non Core” > Privatisation > PPP/PFi m@ Private >» Operations >» Maintenance > Full Service CREDIT FIRST SUISSE GOSTON >
Slide 13: Financial Discipline
Downer EDI — Financial Discipline @ Maintain Strong Balance Sheet M@ improve ROE / ROIC @ Reinvest Free Cash Flow in: >» R&D Investment eg Innovonics IP » Business Development > Strategic Positioning > Growth Options @ Recovery of Unproductive Capital = Capital Management CREDIT FIRST SUISSE GOSTON
Slide 14: Achieve Strong Market Share
Downer EDI — Achieve Strong Market Share M@ Organic mM&A M@ Geographic Expansion CREDIT FIRST SUISSE GOSTON 7
Slide 15: How Have We Developed?
Downer EDI — How Have We Developed? {All figures: A$ Millions) Engineering Mining & Resources 624 1036] 66% 1104 7% 1040] (6%) Infrastructure a i 426 425| - S77] 36% 630 9% Rail 240 362] 51% 319] (12%) 370] 16% Continuing Business 1503 2185| 45% 2568] 18% 3120] 21% Discontinued & Other 215 401 300 1
Slide 16: Where To?
Downer EDI — Where To? IMPROVING SHAREHOLDER RETURNS FY'02 FY'03 rN H1'03 H1'04 AN EPs* 22.16c 24.24c +9.4% 7.96 9.12¢ 414.6% DPSs** 10.80c 12.10¢ +11.3% 2.00c 4.00c + 100.0% Franking 0% 414% + 41 Apts 0% 50.0% + 50.0pts ROIC** 11.5% 12.7% +120bps 11.1% 13.1% +200bps (Rolling 12 months) *Fully Dilut
Slide 17: Leverage Strong Foundations
Downer EDI — Leverage Strong Foundations GEARING Vs REVENUE OUTLOOK Gearing (Net Debt/Equity) Order Book 120% : 110% 100% + Sy 90% 4 3% 80% $4 70% = fe 2 3 60% + zt 50% 2 40% 4 30% ot Dec-98 Dec@9 Dec-00 DecO1 Dec-02 Dec03 Jun04e Actual meme Preferred Target Maximum so Target Minimum Order Book CRED
Slide 18: Committed Sales Profile
Downer EDI — Committed Sales Profile Order Book as at 30 June 1999 Order Book as at 31 December 2003 3,600 3.000 8 8 A$ Millions, Fyeo Fyo1 eyo2 Pres FYoe Beyond Fy04 FYOS FYO8 Fyor Fyoe Beyond Forward Orders Forward Giders BHFOR CREDIT Fir SUISSE & 18
Slide 19: Growth Path
Downer EDI — Growth Path Leverage signilicant industry art geagranhic reach DIVERSIFICATION EARNINGS CONSISTENCY Increase share of growing infrastructure spend & outsourced C+M MARKET EXPANSION & EARNINGS GROWTH Selectively tackle high growth opportunities fe. privatisation. Complementary investment
Slide 20: Summary #1
Downer EDI — Summary #1 M@ Outlook for FY05 and beyond is very positive m Expected sales growth well ahead of CPI m@ No requirement for new share capital to fund expansion via continuing businesses and “bolt-on” acquisitions M@ Continued strong focus on: > Improving Group EBIT Margin Increasin > Wor
Slide 21: Summary #2
Downer EDI — Summary #2 m Founding shareholder stakes placed to institutions in late 2003 to improve free float —- now 73% mM Management took advantage of opportunity to invest. Self-funded entry into DOW. Holding 6% relevant interest m@ Attractive investment on a relative value basis CREDIT FIRST S