Murray & Roberts — FY2013 Earnings Presentation
50 slides from Murray & Roberts's earnings presentation, September 2013
Slide 1: Report to Stakeholders for the Year Ended 30 June 2013
REPORT TO STAKEHOLDERS FOR THE YEAR ENDED 30 JUNE 2013 FROM RECOVERY TO GROWTH
Slide 2: Salient Features and Group Overview agenda
Group Overview & Competition Safety Salient Features Business Model Commission Performance Financial Segmental Order Book & A New Strategic Performance Performance Outlook Future RECOVERY & GROWTH 2
Slide 3: A Return to Profitability
A RETURN TO PROFITABILITY Attributable Clough Health & Safety Health & Safety Revenue Revenue HEPS Acquisition earnings Returned to LTIFR – 0.82 LTIFR – 0.82 Proposed Profit R1,0bn R34.6bn R34,6bn Profit 186 cents Profitability (Jun 2012: 1.14) (Jun 2012: 1.14) acquisition of Fatalities – 2 Fataliti
Slide 4: 1902 to Present – A Proud Heritage
1902 TO PRESENT – A PROUD HERITAGE 1902 1920s 1951 1970s 1990s 2011 – James Stewart Douglas Murray, Roberts Murray & Roberts Murray & Roberts A three year arrives in South John Murray’s Construction starts diversifying commits to its Recovery & Africa and son, meets Holdings lists on its fields of i
Slide 5: Our Core Competence is Engineering and Construction
OUR CORE COMPETENCE IS ENGINEERING AND CONSTRUCTION A Group of world class companies and brands aligned to the same purpose and vision, and guided by the same set of values with a common owner, Murray & Roberts Holdings Ltd Stop.Think.Act.24/7: Safety first in everything we do Regional Operating Pla
Slide 6: Our Core Competence is Engineering and Construction
OUR CORE COMPETENCE IS ENGINEERING AND CONSTRUCTION Regional Operating Platforms International Operating Platforms 4 Construction Operating Construction Africa Engineering Africa Construction Global Australasia Oil & platforms and Middle East Underground Mining Gas and Minerals 3 Infrastructure Mini
Slide 7: Zero Tolerance for Anti-Competitive Behaviour
ZERO TOLERANCE FOR ANTI-COMPETITIVE BEHAVIOUR Murray & Roberts regrets and rejects any form of anti-competitive or collusive conduct June 2013 – Fast-Track Settlement Process (FTSP) concluded and fined R309m Five historic incidents of alleged collusion still to be settled – penalty provided for Rema
Slide 8: Together to Zero Harm
TOGETHER TO ZERO HARM Fatalities Group Safety Initiatives LTIFR LTIFR(1) – 2006 – Stop.Think Record low 18 4.65 2011 – Zero Harm Through Effective Leadership 5.00 2012 – Stop.Think.Act.24/7 Fatalities – 16 4.50 Record low 14 4.00 Good progress – Zero Harm Through 3.05 3.50 12 Effective Leadership 2.
Slide 9: From Recovery to Growth
FROM RECOVERY TO GROWTH Rm Attributable earnings Cents Group successfully 1 000 300 resolved its liquidity challenges during the 181 Recovery year 175 160 200 (FY2012) 500 392 64 Group returned to 100 profitability during the 83 576 522 179 350 first of its two Growth 0 years (FY2013) (636) (1 099)
Slide 10: Jeffreys Bay Wind Farm
Jeffreys Bay Wind Farm RECOVERY & GROWTH 10
Slide 11: Statement of Financial Performance
STATEMENT OF FINANCIAL PERFORMANCE Rm 2013 2012 ¹ Variance Revenue 34 575 31 668 2 907 EBITDA 2 446 243 2 203 Operating profit/(loss) 1 706 (358) 2 064 Net interest expense (115) (248) 133 Taxation (545) (221) (324) Income from equity accounted investments 165 143 22 Discontinued operations ² 259 92
Slide 12: Statement of Financial Performance
STATEMENT OF FINANCIAL PERFORMANCE Rm 2013 2012 Variance Revenue 34 575 31 668 2 907 EBITDA 2 446 243 2 203 Operating profit/(loss) 1 706 (358) 2 064 Net interest expense (115) (248) 133 Taxation (545) (221) (324) Income from equity accounted investments 165 143 22 Discontinued operations 259 92 167
Slide 13: Statement of Financial Performance
STATEMENT OF FINANCIAL PERFORMANCE Rm 2013 2012 Variance Revenue 34 575 31 668 2 907 EBITDA 2 446 243 2 203 Operating profit/(loss) 1 706 (358) 2 064 Net interest expense (115) (248) 133 Taxation (545) (221) (324) Income from equity accounted investments 165 143 22 Discontinued operations 259 92 167
Slide 14: Statement of Financial Performance
STATEMENT OF FINANCIAL PERFORMANCE Rm 2013 2012 Variance Revenue 34 575 31 668 2 907 EBITDA 2 446 243 2 203 Operating profit/(loss) 1 706 (358) 2 064 Net interest expense (115) (248) 133 Taxation (545) (221) (324) Income from equity accounted investments 165 143 22 Discontinued operations 259 92 167
Slide 15: Statement of Financial Performance
STATEMENT OF FINANCIAL PERFORMANCE Rm 2013 2012 Variance Revenue 34 575 31 668 2 907 EBITDA 2 446 243 2 203 Operating profit/(loss) 1 706 (358) 2 064 Net interest expense (115) (248) 133 Taxation (545) (221) (324) Income from equity accounted investments 165 143 22 Discontinued operations 259 92 167
Slide 16: Statement of Financial Performance
STATEMENT OF FINANCIAL PERFORMANCE Rm 2013 2012 Variance Revenue 34 575 31 668 2 907 EBITDA 2 446 243 2 203 Operating profit/(loss) 1 706 (358) 2 064 Net interest expense (115) (248) 133 Taxation (545) (221) (324) Income from equity accounted investments 165 143 22 Discontinued operations 259 92 167
Slide 17: Statement of Financial Performance
STATEMENT OF FINANCIAL PERFORMANCE Rm 2013 2012 Variance Revenue 34 575 31 668 2 907 EBITDA 2 446 243 2 203 Operating profit/(loss) 1 706 (358) 2 064 Net interest expense (115) (248) 133 Taxation (545) (221) (324) Income from equity accounted investments 165 143 22 Discontinued operations 259 92 167
Slide 18: Statement of Financial Performance
STATEMENT OF FINANCIAL PERFORMANCE Rm 2013 2012 Variance Revenue 34 575 31 668 2 907 EBITDA 2 446 243 2 203 Operating profit/(loss) 1 706 (358) 2 064 Net interest expense (115) (248) 133 Taxation (545) (221) (324) Income from equity accounted investments 165 143 22 Discontinued operations 259 92 167
Slide 19: Statement of Financial Performance
STATEMENT OF FINANCIAL PERFORMANCE Rm 2013 2012 Variance Revenue 34 575 31 668 2 907 EBITDA 2 446 243 2 203 Operating profit/(loss) 1 706 (358) 2 064 Net interest expense (115) (248) 133 Taxation (545) (221) (324) Income from equity accounted investments 165 143 22 Discontinued operations 259 92 167
Slide 20: Statement of Financial Position
STATEMENT OF FINANCIAL POSITION Rm 2013 2012 Variance Total assets 24 532 22 442 2 090 Property, plant and equipment 3 055 3 600 (545) Other non-current assets 4 107 4 794 (687) Current assets 9 307 9 755 (448) Cash and cash equivalents 6 284 3 388 2 896 Assets classified as held-for-sale 1 779 905
Slide 21: Statement of Financial Position
STATEMENT OF FINANCIAL POSITION Rm 2013 2012 Variance Total assets 24 532 22 442 2 090 Property, plant and equipment 3 055 3 600 (545) Other non-current assets 4 107 4 794 (687) Current assets 9 307 9 755 (448) Cash and cash equivalents 6 284 3 388 2 896 Assets classified as held-for-sale 1 779 905
Slide 22: Statement of Financial Position
STATEMENT OF FINANCIAL POSITION Rm 2013 2012 Variance Total assets 24 532 22 442 2 090 Property, plant and equipment 3 055 3 600 (545) Other non-current assets 4 107 4 794 (687) Current assets 9 307 9 755 (448) Cash and cash equivalents 6 284 3 388 2 896 Assets classified as held-for-sale 1 779 905
Slide 23: Statement of Financial Position
STATEMENT OF FINANCIAL POSITION Rm 2013 2012 Variance Total assets 24 532 22 442 2 090 Property, plant and equipment 3 055 3 600 (545) Other non-current assets 4 107 4 794 (687) Current assets 9 307 9 755 (448) Cash and cash equivalents 6 284 3 388 2 896 Assets classified as held-for-sale 1 779 905
Slide 24: Net Cash Reconciliation
NET CASH RECONCILIATION Rm 5 000 281 4 321 1 784 174 4 000 2 053 (4) (483) (1 089) 3 000 403 2 000 1 202 1 000 0 Cash EBITDA Working Interest, Capex Disposal Disposal Other Effect Cash June Cash items capital Tax and of of investing of June 2012 Dividends non-core investment activities exchange 2013
Slide 25: Net Cash Reconciliation
NET CASH RECONCILIATION Rm 5 000 281 4 321 1 784 174 4 000 2 053 (4) (483) (1 089) 3 000 403 2 000 1 202 1 000 0 Cash EBITDA Working Interest, Capex Disposal Disposal Other Effect Cash June Cash items capital Tax and of of investing of June 2012 Dividends non-core investment activities exchange 2013
Slide 26: Net Cash Reconciliation
NET CASH RECONCILIATION Rm 5 000 281 4 321 1 784 174 4 000 2 053 (4) (483) (1 089) 3 000 403 2 000 1 202 1 000 0 Cash EBITDA Working Interest, Capex Disposal Disposal Other Effect Cash June Cash items capital Tax and of of investing of June 2012 Dividends non-core investment activities exchange 2013
Slide 27: Net Cash Reconciliation
NET CASH RECONCILIATION Rm 5 000 281 4 321 1 784 174 4 000 2 053 (4) (483) (1 089) 3 000 403 2 000 1 202 1 000 0 Cash EBITDA Working Interest, Capex Disposal Disposal Other Effect Cash June Cash items capital Tax and of of investing of June 2012 Dividends non-core investment activities exchange 2013
Slide 28: Platform Revenue by Operating Platform
Regional International Construction Construction Africa Construction Global Engineering Africa Australasia Oil & Gas Total and Middle East Underground Mining and Minerals Platform revenue in 2012 Strong year-on-year 34.6bn inclusive of R2.5bn for revenue growth in Clough Aquarius, terminated by 31.7
Slide 29: Year Ended 30 June 2013 – Construction Africa and Middle East
YEAR ENDED 30 JUNE 2013 Regional International Construction Construction Africa Africa Construction Global Construction Australasia Engineering Africa and and Middle Middle East East Underground Mining Oil & Gas and Minerals Construction Rm Africa (1) Marine Middle East Total 2013 2012 2013 2012 201
Slide 30: Year Ended 30 June 2013 – Engineering Africa
YEAR ENDED 30 JUNE 2013 Regional International Construction Africa Construction Global Construction Australasia Engineering Engineering Africa Africa and Middle East Underground Mining Oil & Gas and Minerals Power Rm Programme (1) Engineering (2) Total 2013 2012 2013 2012 2013 2012 Revenue 4 008 4 3
Slide 31: Year Ended 30 June 2013 – Underground Mining
YEAR ENDED 30 JUNE 2013 Regional International Construction Africa Construction Construction Global Global Construction Australasia Engineering Africa and Middle East Underground Underground Mining Mining Oil & Gas and Minerals Rm Africa Australasia The Americas Total 2013 2012 2013 2012 2013 2012 2
Slide 32: Year Ended 30 June 2013 – Oil & Gas and Minerals
YEAR ENDED 30 JUNE 2013 Regional International Construction Africa Construction Global Construction Construction Australasia Australasia Engineering Africa and Middle East Underground Mining Oil Oil & & Gas Gas and Minerals Minerals Commissioning Fabrication, and Overheads Rm Engineering Projects As
Slide 33: Year Ended 30 June 2013 – Discontinued Operations
YEAR ENDED 30 JUNE 2013 Regional International Construction Africa Construction Global Construction Australasia and Middle East Discontinued Engineering Africa Operations Underground Mining Oil & Gas and Minerals Clough Construction Johnson Steel Marine Serv. Properties Products Rm Arabia Business &
Slide 34: On Track
ON TRACK FY Criteria Method FY2014 aspiration 2013 Margin EBIT 5% - 7.5% Revenue Gearing Total Interest Bearing Debt 20% - 25% Ordinary Shareholders Equity Return on Equity Net Profit Attributable to Ordinary Shareholders 17.5% through cycle (ROE) Average Ordinary Shareholders Equity Return on Inves
Slide 35: Medupi Power Station (July 2013)
Medupi Power Station (July 2013) RECOVERY & GROWTH 35
Slide 36: International Platform Growth
INTERNATIONAL PLATFORM GROWTH Regional International Construction Construction Africa Construction Global Engineering Africa Australasia Oil & Gas Total (1) and Middle East Underground Mining and Minerals 52.3bn 45.7bn 44.0bn 20.6bn 19.4bn 16.7bn 14.2bn 10.0bn 9.0bn 11.4bn 9.9bn 8.7bn 8.8bn 6.8bn 6.
Slide 37: Commodity Order Book Breakdown %
COMMODITY ORDER BOOK BREAKDOWN % Total Platform Total Platform The Americas Australasia Africa June 2013 June 2012 This platform 9% contains no exposure to opencast 25% 28% mining projects 36% 50% 22% Copper 32% Gold 94% 5% Copper-Gold 31% 7% Diamonds 10% Silver 8% 17% 23% 6% Platinum 6% Coal 14% 5%
Slide 38: Strong Order Book Secured
STRONG ORDER BOOK SECURED FY2013 order book Order book(1) Order book Rbn % split Rbn FY Time Distribution SADC Int. Jun 2013 Jun 2012 2014 5.8 Construction Africa 80 20 8.7 9.0 2015 2.8 and Middle East Regional >2015 0.1 2014 3.4 Engineering 100 0 6.5 6.8 2015 2.0 Africa >2015 1.1 2014 4.9 Construct
Slide 39: Positive Earnings Trend
POSITIVE EARNINGS TREND FY2013 order book Order book(1) Medium-to-long- Market % EBIT % split Rbn term relative % prospects margin SADC Int. Jun 2013 Jun 2012 EBIT contribution aspiration Construction Africa 80 20 8.7 9.0 ±10 < 5.0 and Middle East Regional Engineering 100 0 6.5 6.8 ±15 5.0 - 7.5 Afr
Slide 40: Opportunity in International Platforms
OPPORTUNITY IN INTERNATIONAL PLATFORMS • Will in the short term be marginally profitable • Participation in SA Government’s major infrastructure development programme (roads, dams, Construction Africa power stations, railway lines, sea ports, schools and hospitals) • Well positioned to take advantag
Slide 41: Risks and Uncertainties Facing South African Operations
South African • In the short term marginally profitable Operations Competition • Threat of potential civil claims and reputational damage Commission • Slow resolution of claims and uncertainty about recoverability of R2.1bn Major claims uncertified revenues (Gautrain, Dubai Airport and GPMOF) Gautra
Slide 42: Complex and Protracted Process
COMPLEX AND PROTRACTED PROCESS Gautrain Rapid Rail Link GPMOF Dubai International Airport Delay & Disruption On-going arbitration(s) Claim respondents Claim • Principle of design claim legally identified • Commercial Closeout – – ruled in MUR favour in Protracted arbitration 2016 May 2012 process Wa
Slide 43: Recovery Year and Growth Years Strategy
• Recovery initiatives implemented and Growth strategy developed • No significant structural changes • Addressing issues of - Liquidity Recovery Year - Capacity FY2012 - Management structures - Alignment - Performance - Culture shift • Sale of Clough Marine and Johnson Arabia • Focus on core compete
Slide 44: Strategic Rationale
STRATEGIC RATIONALE Secures control of 100% of Clough’s operations, assets, cash flow and strategy Increases exposure to market sectors which present medium-long term growth potential Murray & Roberts and Clough to better leverage Clough’s oil & gas capabilities and expertise into opportunities in A
Slide 45: Transaction Detail & Timeline
TRANSACTION DETAIL & TIMELINE Category 1 transaction announced Recommended proposal to acquire all the shares in Clough, in exchange for A$1.46 cash per share Consideration expected to consist of a cash payment of A$1.32 by Murray & Roberts and a proposed dividend of A$0.14 per share paid by Clough
Slide 46: Transaction Detail & Timeline
TRANSACTION DETAIL & TIMELINE The proposal is subject to a number of important conditions including: Australian court approval regulatory approvals (including FIRB,SARB) Clough and Murray & Roberts shareholder approvals no material adverse change or prescribed occurrence in respect of Clough the Ind
Slide 47: Strategy on Track – Engineering Africa
STRATEGY ON TRACK Unique risks and opportunities TUNISIA Office opened in ALGERIA LIBYA EGYPT WESTERN • Accra, Ghana SAHARA • Kitwe, Zambia MAURITANIA MALI NIGER CAPE VERDE SENEGAL CHAD ERITREA • Maputo, Mozambique THE GAMBIA SUDAN BURKINA GUINEA-BISSAU GUINEA FASO BENIN DJUBOUTI Engineering Africa
Slide 48: Presence & projects on five continents
Presence & projects on five continents Several regional platform subsidiary companies North Bay consolidated at Group Salt Lake corporate office – City Dubai Murray & Roberts Campus Accra Five African offices Globally employing Maputo Kitwe more than 25 000 Gaborone Kalgoorlie Brisbane people Windho
Slide 49: Forward-looking statements
This presentation includes certain various “forward-looking statements” within the meaning of Section 27A of the US Securities Act 10 1933 and Section 21 E of the Securities Exchange Act of 1934 that reflect the current views or expectations of the Board with respect to future events and financial a
Slide 50: Report to Stakeholders
REPORT TO STAKEHOLDERS FOR THE YEAR ENDED 30 JUNE 2013 This presentation is available on www.murrob.com FROM RECOVERY TO GROWTH
Murray & Roberts Holdings — FY2013 Earnings Presentation on 6ix