Macmahon Holdings Limited · ASX:MAH
Macmahon — FY2008 Earnings Presentation
20 slides from Macmahon's earnings presentation, Aug 20, 2008
Slide 1: Full Year Results 2008
For personal use only Full Year Results 2008 Nick Bowen – Chief Executive Officer Ross Carroll – Chief Financial Officer1 Disclaimer and important notice This presentation does not constitute investment advice. Neither this presentation nor the information contained in it constitutes an offer, invit
Slide 2: Record performance / Key performance indicators
Record performance For personal use only Record revenue $1,244.4 million Record profit after ta tax $48 8 million $48.8 illi Record EPS 9.2 cents per share Record DPS 5.5 cents per share Record order book $2 138 million $2,138 3 Key performance indicators Commitment $ millions Delivered Change Resul
Slide 3: People and safety
For personal use only Newman Hub, Western Australia People and safety 5 People and safety Group employee numbers Group safety performance 4,000 , 25 3,000 20 15 2,000 10 1,000 5 - 0 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 LTIFR TRIFR Workforce expanding in line with growth strategy Con
Slide 4: Financials: Record profits
For personal use only Financials 7 Record profits Income Statement $ millions 2008 2007* Change % Revenue 1,244.4 966.0 28.8% ▲ $ millions HY08 HY07 EBIT 74.7 59.7 25.1% ▲ Interest (7.5) (11.0) (31.8%) ▼ Profit before tax 67.2 48.7 38.0% ▲ Tax (17.8) (15.3) 16.3% ▲ Net profit after tax & minorities
Slide 5: Profit waterfall / Solid growth
Profit waterfall For personal use only Profit variance analysis 5.5 (1.7) (5.4) 13.1 (5 5) (5.5) 3.5 (2.5) (0.6) 48.8 9.1 33.4 FY07 Volume Margin Volume Margin Allplant* Corporate Interest Tax Minority FY08 Profit Construction Construction Mining Mining Costs interest Profit * Allplant sold in 2007
Slide 6: Increasing profits / Strong cash flows
Increasing profits For personal use only NPAT – NPAT margin (%) 60 4.5% 3.9% 4.0% 50 3.5% 3.2% 3.5% 40 3.0% 2.8% 2.5% 2.5% $m 30 2.0% 48.8 20 1.5% 33.4 27.4 1.0% 10 15 9 15.9 0.5% 11.6 0 0.0% 2004 2005 2006 2007 2008 Normalised profit after tax NPAT Margin % 11 Strong cash flows Cash Dec 07 Flow Dec
Slide 7: Gearing / Driving improved returns
Gearing For personal use only Gearing % Net debt ($M) 80.0 70% 70.0 60% 51.8% 50.7% 60.0 50% $m 43.6% 50.0 40% 75.0 40.0 61.3 30% 54.8 26.0% 51.5 20% 30.0 11.6% 29.2 10% 20.0 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 Targeted gearing levels 30 – 50% Improving net debt and gearing levels –
Slide 8: Delivering value / Construction – financial performance
Delivering value For personal use only One year total shareholder returns % Five year shareholder returns % Five year total shareholder returns % 1200% 1000% 800% 40% 600% 30% 20% 400% 10% 200% 0% 0% -10% TSE UGL BKN MND DOW ASL LEI MAH CLO CLO DOW TSE ASL UGL LEI MAH MND -20% -30% • Based on 5 year
Slide 9: Mining – financial performance / Order book
Mining – financial performance For personal use only $ millions 2008 2007 Change % Revenue 616.4 559.5 10.2% ▲ EBIT 54.4 50.6 7.5% ▲ EBIT margin % 8.8 9.1 (3.3%) ▼ Capex 36.9 86.0 (57.1) ▼ Order Book 1,164 1,073 8.4% ▲ Employees 2,337 2,102 11.2% ▲ Ongoing revenue growth with new contract wins and
Slide 10: The winning way / Strong order book sustained
The winning way People and Safety For personal use only Award of over $1,370 million of new and extended contracts New contracts: Rail track upgrade for BHP Billiton‘s RPG4 – Pilbara, Western Australia Mesa A Project – Pilbara, Pilbara Western Australia Newman Hub contract - Pilbara, Western
Slide 11: Order book depth / Diverse operations
Order book depth Duration of contract (years) % Style of contract % For personal use only Fixed 3% <2 >5 14% 19% 2- 3 29% Alliance SOR 45% 52% 3- 5 38% Customer % Commodity % Rio Tinto Iron Ore Nickel 15% 16% Govt. Govt 5% Govt. 37% 38% BHP Billiton Diamonds 23% 16% Other Other Coal 21% 14% 11% Laf
Slide 12: Construction / Mining
Construction For personal use only Newman Hub, BHP Billiton, Pilbara – Western Australia Mitchell Freeway Extension, Main Roads WA - Western Australia Artists impression of Hale St Bridge, Brisbane City Council - Queensland 23 Mining Argyle, Rio Tinto, Pilbara – Western Australia Orebody 18, BHP Bil
Slide 13: Industry outlook: Infrastructure pipeline
For personal use only Industry outlook 25 Infrastructure pipeline State engineering construction activity 2008 – 2012e Total = $259 billion 80,000 70,000 60,000 OTHER 50,000 A$'billion NSW 40,000 VIC 30,000 QLD 20,000 10,000 WA - s er er ds es ay ur s es tr y oa dg at in us th R ri ilw rbo W el d O
Slide 14: Commodity strength / Overcoming industry challenges
Commodity strength Value of contract mining – by commodity (current prices) For personal use only Total = $53 billion 14,000 12,000 A$'billion 10,000 8,000 Other 6,000 Coal 4,000 Iron Ore 2,000 Precious and base metals 0 e 09 10 11 12 13 08 20 20 20 20 20 20 Source: BIS Shrapnel 2008 Iron ore prod
Slide 15: Overcoming industry challenges - equipment / cost pressures
Overcoming industry challenges - equipment For personal use only TAISHAN ¾ Strategic partnership secured with Chinese tyre Critical manufacturer equipment ¾ Forward ordering of in demand equipment ¾ Strong relationships maintained with key suppliers shortages ¾Efficient management of equipment to in
Slide 16: Overcoming industry challenges – credit crisis / people
Overcoming industry challenges – credit crisis For personal use only ¾ Recently refinanced, including a new Credit operating lease facility. Allows for: ¾ Reduced cost of term debt and funding crisis ¾ Strong balance sheet ¾ Increased flexibility to consider acquisitions or raise dividends Strong ab
Slide 17: Increased takeover offer for Ausdrill
Increased takeover offer for Ausdrill For personal use only Macmahon has INCREASED its Offer for Ausdrill Limited Now offering 1.65 Macmahon shares for each Ausdrill share The Price is FINAL - subject to a competing proposal emerging and Macmahon’s determination in relation to the Ausdrill fin
Slide 18: Business outlook and strategy
For personal use only Business outlook and strategy 35 Business strategy • Established market position as a leading Long contractor throughout Australia Term • Profitable overseas operations with rep table bl reputable blue-chip e chip clients • Large infrastructure projects – MOU with Leighton Medi
Slide 19: Business outlook: Positioned for growth
Business outlook For personal use only Positioned for growth Strong outlook, with ongoing demand for contract services driving growth Emerging overseas opportunities Expanding E di iinto t SSouth th E Eastt A Asia i Entry into Africa Pursuit of acquisition opportunities which meet the comp
Slide 20: Appendix - balance sheet management
Appendix 1 - balance sheet management For personal use only Balance Sheet $ millions 2008 2007 Change % C Current t assets t 334 8 334.8 278 1 278.1 20 4% ▲ 20.4% Non current assets 295.5 282.0 4.8% ▲ Total assets 630.3 560.1 12.5% ▲ Net assets 251.0 211.1 18.9% ▲ Net debt 29.2 54.8 (46.7%)▼ Gearing