Macmahon Holdings Limited · ASX:MAH
Macmahon — Macquarie Emerging Leaders Conference 2008
34 slides from Macmahon's conference presentation, May 7, 2008
Slide 1: Macquarie Emerging Leaders Conference
For personal use only Macquarie Emerging Leaders Conference May 2008 Nick Bowen – Chief Executive Officer 1
Slide 2: 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. It is believed that the expectations reflected in these statements are reasonable but they may be affec
Slide 3: Company overview
Company overview For personal use only MACMAHON Mining Construction Rail Underground Water Surface Marine Surface Mine services Road Resource infrastructure 3
Slide 4: Revenue and earnings
Revenue and earnings For personal use only Revenue NPAT NPAT ($’m) ($’m) margin 1,200 40 4.0% 1,000 966 30 33 3.0% 800 864 27 24 600 637 610 20 2.0% 400 421 16 10 12 1.0% 200 0 0 0.0% FY04 FY05 FY06 FY07 HY08 FY04 FY05 FY06 FY07 HY08 Revenue NPAT NPAT Margin * Figures calculated on an underlying bas
Slide 5: Shareholder returns
Shareholder returns For personal use only EPS and DPS (cps) Total Shareholder Returns % cps TSR % 7 500 6.4 6 5.5 389% 400 5 4.5 4.2 300 4 3.5 3.0 3 200 2.0 2.0 2 1.0 100 1 0.5 0 0 LEI FY04 FY05 FY06 FY07 HY08 UGL ASL TSE BKN MAH MND CLO DOW EPS DPS •Based on 3 year dividend data to 30 June 2007 and
Slide 6: Order book strength
Order book strength For personal use only Order Book* ($m) 2,500 2,000 232 1,500 1144 2117 1,000 2005 1885 1218 500 784 925 741 741 0 FY04 FY05 FY06 FY07 Apr 08** Run off Run off Run off FY08 FY09 FY10+ * Excludes $1.1 billion Spinifex Ridge contract for Moly Mines ** April 08 estimated position 6
Slide 7: Our customers
Our customers For personal use only Blue chip customer base: Work for government agencies comprises 42% of current order book Work for BHP Billiton 22% Work for Rio Tinto 7% Long term relationships – repeat business Our customers operate long life, low cost mines 7
Slide 8: Market overview – Mining
Market overview – Mining For personal use only Australian mining industry continues to enjoy strong commodity prices and demand, underpinned by growth in China Pilbara is experiencing rapid growth in iron ore production Significant price increases (estimated 70%) and Chinese ownership interest w
Slide 9: Market overview – Construction
Market overview – Construction For personal use only QLD & NSW $3+ billion to be invested in Central Queensland's coal network to relieve capacity constraints Total engineering construction spend over the next five years expected $127+ billion $34+ billion for roads $8+ billion on rail projects
Slide 10: Industry dynamics
Industry dynamics For personal use only Industry challenge Macmahon strategy to overcome Project delays Increase business development Target more work Cost pressures Leveraging purchasing power China sourcing strategy Limiting exposure in contracts Equipment and tyre Significant forward ord
Slide 11: People initiatives
People initiatives People and Safety For personal use only Indigenous Mining Skills Program 457 visa professional program Extensive graduate program Macmahon Apprentice Program 11
Slide 12: Key opportunities
Key opportunities International For personal use only Growing opportunities in the Middle East & Asia QLD and NSW Coal infrastructure & mining Roads Water Infrastructure WA and NT Rail BHPB and Rio Tinto’s expansion projects New iron ore developments Roads SA Olympic Dam Expansion Governmen
Slide 13: The Pilbara
For personal use only The Pilbara 13
Slide 14: Pilbara projects
Pilbara projects For personal use only Cape Lambert/Dampier Ports – Rio Tinto Newman - BHPB Stockpiling/blending, concrete Concrete foundations for plant at Newman Hub works and stockyard development Pilbara Rail Projects– upgrade and reconfiguration Mesa A – Rio Tinto Region expected New 50km r
Slide 15: Pilbara expansions
Pilbara expansions BHPB’s iron-ore capacity growth For personal use only BHP Billiton Raising production from circa 120mtpa to 155mtpa by mid 2010 Targeting 300mtpa by 2015 mtpa Rio Tinto’s Pilbara port capacity Source: BHP BIlliton Iron Ore presentation, Jan 2008 Rio Tinto Raising its Pilbara ir
Slide 16: Newman Hub – BHP Billiton
Newman Hub – BHP Billiton For personal use only 16
Slide 17: Ore Body – BHP Billiton
Ore Body 18 – BHP Billiton For personal use only 17
Slide 18: Cape Lambert – Rio Tinto
Cape Lambert – Rio Tinto For personal use only 18
Slide 19: Queensland Coal
For personal use only Queensland Coal 19
Slide 20: Queensland coal projects
Queensland coal projects Goonyella to Abbot Point For personal use only Expansion Upgrade of the Pring Rail Yard and Abbot Point Coal Terminal Alliance with QR Jilalan Rail Yard Upgrade Increase the capacity of the Region expected Goonyella coal rail network to deliver $300+ Alliance with QR mil
Slide 21: Jilalan rail yard upgrade - QR
Jilalan rail yard upgrade - QR For personal use only 21
Slide 22: Goonyella Riverside - BMA
Goonyella Riverside - BMA For personal use only 22
Slide 23: East Coast Infrastructure
For personal use only East Coast Infrastructure 23
Slide 24: East coast infrastructure projects
East coast infrastructure projects Hale Street Link For personal use only New bridge - design and construction BCC Logan River Catchment Project Alliance based contract in partnership with QWI Kingsgrove to Revesby Quadruplication Expansion of the Sydney rail line TIDC Leura to Katoomba Hwy Re
Slide 25: Logan River Catchment - QWI
Logan River Catchment - QWI For personal use only 25
Slide 26: Kingston foreshore
For personal use only Kingston foreshore 26
Slide 27: Other major projects
Argyle Diamond Mine Other major projects For personal use only Block cave mining Rio Tinto Spinifex Ridge Molybdenum Open-cut mining Moly Mines Mitchell Freeway Extension Design and construct a 4km extension Main Roads WA Olympic Dam Underground Development, cabolting and shotcreting BHP Bil
Slide 28: Strategy
Strategy For personal use only Grow existing core businesses Outlook for the mining and construction sectors remains strong Enormous growth opportunities in coal, iron ore, resource infrastructure and east coast construction Pursue next stage of Macmahon development Overseas opportunities
Slide 29: Outlook
Outlook For personal use only FY08 full year profit growth in line with broker consensus: Profit of around $47 million (40% YOY increase) Revenue circa $1.2 billion Rain and project delays offset by margin improvements Outlook for FY09 and beyond – industry dynamics support 20% to 30% annual
Slide 30: Questions
For personal use only Questions 30
Slide 31: Appendix - Financial Performance
Appendix 1 - Financial Performance For personal use only Financial Summary $m HY08* 2007 2006 2005 2004 Total revenue 610.4 966.0 863.7 637.3 420.8 Underlying EBIT 37.1 59.7 46.9 27.4 18.7 Underlying NPAT 23.7 33.4 27.4 15.9 11.6 Underlying EPS (cps) 4.5 6.4 5.5 4.2 3.5 Dividend (cps) 2.0 3.0 2.0 1.
Slide 32: Appendix - Order Book
Appendix 2 - Order Book Duration of Contract (years) %* Style of Contract %* For personal use only >5 Fixed <2 4% 17% 22% Alliance SOR 43% 53% 3-5 years 27% 2-3years 34% Commodity %* Customer %* Rio Tinto Iron Ore 7% 19% BHP Billiton Government Nickel Government 22% 41% 5% 42% Diamonds 10% Lafarge 4
Slide 33: Appendix – Key Mining Contracts
Appendix 3 – Key Mining Contracts Underground Mining / Services Open Cut Mining (continued) For personal use only Argyle Diamond Mine - development of the new block cave Dampier / Cape Lambert - stock pile management and mine, Rio Tinto, WA, $215m iron ore hauling, Pilbara Iron, WA, $77m Olymp
Slide 34: Appendix – Key Construction Projects
Appendix 4 – Key Construction Projects Rail Water Infrastructure (cont) Jilalan Rail Yard Upgrade – An Alliance with Queensland Rail, to Kingston Foreshore – marine and foreshore For personal use only increase the capacity of the Goonyella coal rail network in QLD, development on Lake Burley Gri
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