Slide 1: Downer Half Year Results
Downer Half Year Results | 21 February 2018 I N V ESTOR PRESEN TAT I ON
Slide 2: Overview
OV ERV I EW Total revenue1 $6.1 billion, up 69.3% (up 20.6% on a pro forma basis) Underlying Earnings Before Interest, Tax and Amortisation of acquired intangible assets (EBITA) $222.3 million, up 79.0% (up 14.5% on a pro forma basis) Underlying Earnings Before Interest and Tax (EBIT) $191.6 million
Slide 3: Overview (continued)
OV ERV I EW (c o n t i n u e d ) Operating cash flow $307.1 million, EBITDA conversion 88% Net debt1 $1,046.9 million (including $806.6 million from Spotless) Liquidity of $1,375.4 million (Downer $1,111.5 million; Spotless $263.9 million) Gearing (including Spotless) 24.6%2, 27.0% including off bal
Slide 4: Transport
T RA N SPORT Total revenue1 $m EBITA2 $m EBITA margin ROFE3 1,400 60 55.6 6.0% 30% 1,238.0 24.5% 1,200 50 5.0% 4.5% 4.5% 25% 41.4 21.0% 1,000 911.2 40 4.0% 20% 800 30 3.0% 15% 600 20 2.0% 10% 400 200 10 1.0% 5% 0 0 0.0% 0% HY18 HY17 HY18 HY17 HY18 HY17 HY18 HY17 Growth driven by: OPPORTUNITIES – s
Slide 5: Utilities
U T I L I T I ES Total revenue1 $m EBITA2 $m EBITA margin ROFE3 45.8 23.6% 1,000 50 42.5 7% 6.2% 25% 851.9 6% 5.4% 19.7% 800 688.2 40 20% 5% 600 30 4% 15% 400 20 3% 10% 2% 200 10 5% 1% 0 0 0% 0% HY18 HY17 HY18 HY17 HY18 HY17 HY18 HY17 Growth driven by increased nbnTM volumes Environment for Rene
Slide 6: Rail
RA I L Total revenue1 $m EBITA2 $m EBITA margin ROFE3 600 543.9 20.0 18.0 4% 3.5% 10% 3.3% 8.4% 500 14.0 8% 399.7 15.0 3% 400 5.4% 6% 300 10.0 2% 4% 200 5.0 1% 100 2% 0 0.0 0% 0% HY18 HY17 HY18 HY17 HY18 HY17 HY18 HY17 Major projects (Sydney Growth Trains, High Capacity Metro Trains) performing we
Slide 7: Engineering, Construction & Maintenance
EN GI N EERI N G, CON ST RU CT I ON & M A I N T EN A N CE Total revenue1 $m EBITA2 $m EBITA margin ROFE3 1500 40.0 36.7 4% 30% 26.9% 1,239.3 25.1% 3.0% 25% 27.1 2.8% 973.4 30.0 3% 1000 20% 20.0 2% 15% 500 10% 10.0 1% 5% 0 0.0 0% 0% HY18 HY17 HY18 HY17 HY18 HY17 HY18 HY17 Strong contributions from
Slide 8: Mining
MINING Total revenue1 $m EBITA2 $m EBITA margin ROFE3 800 689.5 50 44.4 8% 7.0% 20% 635.4 16.3% 700 40 600 6% 15% 500 30 9.5% 400 20.9 4% 3.0% 10% 300 20 200 2% 5% 10 100 0 0 0% 0% HY18 HY17 HY18 HY17 HY18 HY17 HY18 HY17 $77 million non-cash charge for impairment of Mining goodwill (announced 5 Fe
Slide 9: Spotless
SPOT L ESS Total Underlying revenue1 $m Underlying EBITA2 $m Underlying EBITA margin ROFE3 2,000 100 6% 16% 14.7% 14.5% 5.1% 1,542.5 78.6 4.8% 14% 1,455.4 80 69.9 5% 1,500 12% 4% 10% 60 1,000 3% 8% 40 6% 2% 500 4% 20 1% 2% 0 0 0% 0% HY18 HY17 HY18 HY17 HY18 HY17 HY18 HY17 Earnings for the six mont
Slide 10: Royal Adelaide Hospital
ROYA L A DEL A I DE H OSPI TA L Key Challenge ─ Higher number of FTEs to meet additional scope ─ Currently cash negative Commercial discussions ongoing Spotless improvement plan in action 10
Slide 11: Group Financials
# GROUP FINANCIALS Downer | Relationships creating success
Slide 12: Underlying Financial Performance
U N DERLY I N G FI N A N CI A L PERFORM A N CE Acquisition Combined Pro forma Change $m Downer Spotless1 Adjustment Group HY18 HY172 (%) Total revenue3 4,558.0 1,542.5 - 6,100.5 5,058.4 20.6 EBITDA 253.8 123.0 - 376.8 346.9 8.6 EBITA4 143.7 78.6 - 222.3 194.1 14.5 EBIT 139.2 73.1 (20.7) 191.6 185.6
Slide 13: Reconciliation of Underlying to Statutory Result
RECON CI L I AT I ON OF U N DERLY I N G TO STAT U TORY RESU LT Net Add back: 1H18 Tax EBIT interest NPAT Amortisation NPATA $m expense expense Post-Tax Underlying result 191.6 (41.0) (40.2) 110.4 21.6 132.0 Loss on divestment of freight rail (49.3) - 9.3 (40.0) - (40.0) Mining goodwill impairment (7
Slide 14: Operating Cash Flow
OPERAT I N G CA SH FLOW Combined Group $m Downer Spotless Pro forma HY17 HY18 EBIT 1 118.5 73.1 191.6 185.6 Add: depreciation & amortisation 135.3 49.9 185.2 161.3 EBITDA1 253.8 123.0 376.8 346.9 Operating cash flow 266.6 40.5 307.1 317.2 Add: Net interest paid2 18.1 16.2 34.3 30.8 Tax paid / (recei
Slide 15: Cash Flow
CA SH FLOW Combined Group $m Downer Spotless Pro forma HY17 HY18 Total operating 266.6 40.5 307.1 317.2 Net capital expenditure (151.1) (37.3) (188.4) (95.4) Spotless acquisition 1 (391.8) - (391.8) - Other acquisitions (17.6) (20.0) (37.6) (75.7) IT Transformation and Other (34.1) 4.5 (29.6) (17.3)
Slide 16: Debt Maturity Profile - Downer Only
DEB T M AT U RI T Y PROFI L E - DOWN ER ON LY (b y l i m i t a s at 3 1 De c e m b e r 2 0 1 7 ) 600 Syndicated bank bridge facility - 500 acquisition of shares in SPO Syndicated bank facility - general 400 corporate purposes A$m Equivalent A$MTN 300 USPP 200 Bilateral bank facilities - general 100
Slide 17: Debt Maturity Profile - Spotless Only
DEB T M AT U RI T Y PROFI L E – SPOT L ESS ON LY (b y l i m i t a s at 3 1 De c e m b e r 2 0 1 7 ) DEBT COVENANTS 800 Net Leverage Interest Cover 700 3.5x 600 2.9x 2.7x 2.8x 8.4x 500 7.3x 7.3x A$m Equivalent 400 300 200 130 100 55 3.0x 0 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20 Jun-21 1H17 FY17 1H
Slide 18: Balance Sheet and Capital Management
BA L A N CE SH EET A N D CA PI TA L M A N AGEM EN T $m Dec 17 June 17 4 Current assets 2,691.5 2,975.8 Non-Current assets 4,583.4 4,608.8 Goodwill 2,307.7 2,341.1 Acquired intangible assets 447.0 469.5 PP&E, software and other 1,828.7 1,798.2 Total liabilities (4,068.8) (3,998.1) Net Assets 3,206.1
Slide 19: Downer
Downer Relationships creating success
Slide 20: Work-in-Hand $39.2 Billion
WORK -I N -H A N D $ 3 9 .2 B I L L I ON 20 18 16 14 A$b 12 10 8 6 4 2 0 Transport Utilities EC&M Mining Rail Spotless Jun-17 Dec-17 20
Slide 21: Outlook
OU T LOOK Downer is targeting consolidated underlying net profit after tax and before amortisation of acquired intangible assets (NPATA) of $295 million before minority interests. This includes: - underlying NPATA of $202 million for Downer; and - underlying NPATA of $93 million for Spotless. 21
Slide 22: Downer
Downer Relationships creating success
Slide 23: Debt and Bonding Facilities
DEB T A N D B ON DI N G FACI L I T I ES Debt facilities $m DOW SPO Group Group debt facilities by type % Syndicated bank facilities : Total limit 1,351.81 1,070.5 2,422.3 - General corporate purposes 47 Drawn (651.8) (885.5) (1,537.3) - SPO acquisition 1 10 Available 700.0 1 185.0 885.0 A$MTN 17 Cas
Slide 24: Segment Reporting
SEGM EN T REPORT I N G HY18 Transport Utilities Spotless Rail EC&M Mining Unallocated Total $m Segment revenue 1,206.4 851.9 1,539.0 317.0 1,225.0 668.4 (4.6)1 5,803.1 Share of sales from JVs and 31.6 - 3.5 226.9 14.3 21.1 - 297.4 Associates2 Total revenue2 1,238.0 851.9 1,542.5 543.9 1,239.3 689.5