Downer Edi Limited · ASX:DOW
Downer Edi — HY16 Earnings Presentation
24 slides from Downer Edi's earnings presentation, Feb 4, 2016
Slide 1: Supplementary Information
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Slide 2: Overview
OV ERV I EW Total revenue1 $3,543.4 million, Operating cash flow $178.1 million, down 1.2% investing cash flow $123.5 million Earnings Before Interest and Tax (EBIT) Net debt3 $188.4 million, $9.4 million $113.2 million, down 20.1% (including $13 increase from 30 June 2015 million pre-tax write off
Slide 3: Transport Services
T RA N SPORT SERV I CES Total revenue1 $m EBIT $m EBIT margin ROFE2 1000 40 5% 20% 18.9% 915.3 35.0 900 802.9 35 18% 16.1% 31.6 3.9% 3.8% 800 4% 16% 30 700 14% 25 3% 12% 600 500 20 10% 400 15 2% 8% 300 6% 10 200 1% 4% 5 2% 100 0 0 0% 0% HY16 HY15 HY16 HY15 HY16 HY15 HY16 HY15 OPPORTUNITIES ▪ New Zea
Slide 4: Technology and Communications Services
T ECH N OL OGY A N D COM M U N I CA T I ON S SERV I CES Total revenue1 $m EBIT $m EBIT margin ROFE2 300 16 6% 5.6% 70% 14.1 249.9 245.1 58.9% 14 60% 250 5% 12 3.7% 50% 200 9.1 4% 10 40% 150 8 3% 30% 6 18.9% 100 2% 20% 4 50 1% 10% 2 0 0 0% 0% HY16 HY15 HY16 HY15 HY16 HY15 HY16 HY15 ▪ Strong delivery
Slide 5: Utilities Services
U T I L I T I ES SERV I CES Total revenue1 $m EBIT $m EBIT margin ROFE2 400 376.5 25 22.8 7% 16% 14.6% 6.1% 350 14% 13.2% 6% 20 300 5% 4.7% 12% 250 15 10% 205.0 4% 200 8% 9.7 3% 10 6% 150 2% 100 4% 5 50 1% 2% 0 0 0% 0% HY16 HY15 HY16 HY15 HY16 HY15 HY16 HY15 ▪ Current period includes an additional f
Slide 6: 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 EBIT $m EBIT margin ROFE2 1200 30 28.0 5% 25% 21.2% 20.4% 927.8 971.0 1000 25 4% 20% 20.6 800 20 2.9% 3% 15% 600 15 2.2% 2% 10% 400 10 1% 5% 200 5 0 0 0% 0% HY16 HY15 HY16 HY15 HY16 HY15 HY16 HY15 ▪ Continued decline in Meta
Slide 7: Mining
MINING Total revenue1 $m EBIT $m EBIT margin ROFE2 900 824.6 80 10% 20% 18.6% 781.6 67.7 8.7% 16.8% 800 70 9% 18% 59.9 8% 7.3% 16% 700 60 7% 14% 600 50 6% 12% 500 40 5% 10% 400 30 4% 8% 300 3% 6% 20 200 2% 4% 100 10 1% 2% 0 0 0% 0% HY16 HY15 HY16 HY15 HY16 HY15 HY16 HY15 ▪ Strong performance despite
Slide 8: Rail
RA I L Total revenue1 $m EBIT $m EBIT margin ROFE2 450 420.1 424.4 20 5% 9% 8.4% 17.5 400 18 4.1% 8% 350 16 4% 7% 14 300 6% 12 3% 250 5% 10 3.6% 200 4% 8 2% 150 3% 6 4.5 1.1% 100 4 1% 2% 50 2 1% 0 0 0% 0% HY16 HY15 HY16 HY15 HY16 HY15 HY16 HY15 ▪ Lower core Rail revenue reflects the completion of ma
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Slide 10: Financial Performance
FI N A N CI A L PERFORM A N CE $m HY16 HY15 Change (%) Total revenue1 3,543.4 3,586.0 (1.2) EBITDA 241.2 263.7 (8.5) EBIT 113.2 141.7 (20.1) Net interest expense (15.8) (13.8) (14.5) Tax expense (25.3) (33.2) 23.8 Net profit after tax 72.1 94.7 (23.9) EBIT margin 3.2% 4.0% Effective tax rate 26.0% 2
Slide 11: Summary of Earnings
SU M M A RY OF EA RN I N GS Tech & $m Total Transport Utilities EC&M Mining Rail Corp Comm Statutory EBIT 113.2 31.6 14.1 22.8 20.6 67.7 4.5 (48.1) Capital Metro bid costs 13.0 - - - - - - 13.0 Restructuring costs 13.7 - - - 5.7 - 5.7 2.3 Former employee 10.8 - - - - 10.8 - - entitlements Lo
Slide 12: Operating Cash Flow
OPERA T I N G CA SH FL OW $m HY16 HY15 EBIT 113.2 141.7 Add: depreciation & amortisation 128.0 122.0 EBITDA 241.2 263.7 Operating cash flow 178.1 257.9 Add: Net interest paid1 11.2 12.0 Tax (received) / paid (34.2) 21.9 Waratah Train Project net cash (inflow)2 – (18.9) Adjusted operating cash flow 1
Slide 13: Cash Flow
CA SH FL OW $m HY16 HY15 Total operating 178.1 257.9 Net capital expenditure (100.0) (78.6) Tenix and VEC acquisitions – (318.5) IT Transformation and Other (23.5) (7.0) Total investing (123.5) (404.1) On-market share buy-back1 (6.4) (11.7) Net proceeds of borrowings 124.1 159.7 Dividends paid (56.7
Slide 14: Debt Maturity Profile
DEB T M A T U RI T Y PROFI L E 500 Finance leases ECA finance 400 Bilateral bank facilities A$MTN Syndicated bank facility 300 A$m Equivalent USPP (USD and AUD Notes) 200 100 0 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23 Dec-24 Dec-25 Jun-16 Jun-17 Jun-18 Jun-19 Jun-20 Jun-21 Jun-22 Jun-
Slide 15: Balance Sheet and Capital Management
B A L A N CE SH EET A N D CA PI T A L M A N A GEM EN T $m Dec15 Jun15 Total assets 4,090.6 4,004.4 Total shareholders’ equity 2,056.5 2,035.3 Net debt1 188.4 179.0 Gearing: net debt to net debt plus equity 8.4% 8.1% Gearing (including off balance sheet debt)2 13.8% 14.0% Debtor days 21.7 25.7 WIP da
Slide 16: Outlook
OUTLOOK
Slide 17: Work-in-Hand: $18 Billion
WORK -I N -H A N D: $ 1 8 B I L L I ON By Service Line – December 2015 By Contract Type – December 2015 6% 10% 3% 24% 16% 36% 24% 12% 25% 13% 31% Rail $4.4b Fixed Price / Lump Sum $6.5b Transport Services $4.5b Schedule of Rates $5.6b Mining $2.4b Recurring $4.2b EC&M Services $2.0b Target Cost / Al
Slide 18: Outlook
OU T L OOK Downer stated at its full year results in August 2015 that it was targeting NPAT of around $190 million for the 2016 financial year. As announced on 1 February 2016, the ACTivate consortium was not successful in its bid for Capital Metro and, as a result, Downer has written off $13 millio
Slide 19: Slide 19
Slide 20: Segment Reporting
SEGM EN T REPORT I N G December 2015 Technology and Dec-15 Transport Utilities Communications EC&M Mining Rail Unallocated Total $m Services Services Services Segment revenue 771.8 249.9 376.5 912.1 758.2 211.5 (15.4) 3,264.6 Share of sales from JVs and 31.1 - - 15.7 23.4 208.6 - 278.8 Associates1 T
Slide 21: Debt and Bonding Facilities
DEB T A N D B ON DI N G FA CI L I T I ES Debt facilities $m Debt facilities by type % Total facilities 1,205.7 Syndicated bank facility 33 Drawn (677.7) A$MTN 33 Available facilities 528.0 USPP 14 Cash 489.5 Bilateral bank facilities 11 Total liquidity 1,017.5 ECA finance 6 Finance leases & other 3
Slide 22: Unallocated Costs (Corporate Costs)
U N A L L OCA T ED COST S (CORPORA T E COST S) HY16 HY15 Settlement of - 10.5 contractual claims R&D incentives 5.0 10.2 Capital Metro pre-tax (13.0) - bid costs Corporate costs (40.1) (38.2) Total unallocated (48.1) (17.5)
Slide 23: Disclaimer
DI SCL A I M ER RELIANCE ON THIRD PARTY INFORMATION independent assessment of the Company after any liability, including without limitation any liability This Presentation may contain information that making such investigations and taking such advice arising from fault or negligence, for any direct,
Slide 24: Downer
Downer Relationships creating success Downe 4 Fepruary 2016 at Poy -—