Murray & Roberts — FY2019 Earnings Presentation
64 slides from Murray & Roberts's earnings presentation, Aug 29, 2019
Slide 1: Report to Stakeholders for the year ended 30 June 2019
REPORT TO STAKEHOLDERS FOR THE YEAR ENDED 30 JUNE 2019 29 August 2019 ENGINEERED EXCELLENCE
Slide 2: Henry Laas Daniël Grobler Henry Laas
Henry Laas Salient features Slide 3 A New Strategic Future Slide 4 Platform overview Slides 5-10 Order book Slides 11-13 Daniël Grobler Comparative financial performance Slide 15 Statement of financial performance Slide 16 Segmental analysis per platform Slides 17-20 Statement of financial position
Slide 3: Twelve months to 30 June 2019 salient features
TWELVE MONTHS TO 30 JUNE 2019 FY2019 FY2018 Comments Financial performance: Revenue R20,2 billion R21,8 billion • Record earnings delivered by the Underground Mining platform • Challenging year for both the Oil & Gas and Power & Attributable profit R267 million Water platforms R337 million • Loss in
Slide 4: Implementation of the Group's strategy showing strong delivery
The implementation of the Group’s strategy as a multinational provider of specialised engineering and construction services, primarily in the metals and minerals, oil and gas & power and water market sectors, is showing strong delivery A significantly increased quality order book of R46,8 billion an
Slide 5: Platform overview: Underground Mining
PLATFORM OVERVIEW Vancouver North Bay Salt Lake City Ulaanbaatar Market focus: Santee • Global: Underground mining services in global metals and minerals markets Accra Market conditions: • Commodity prices generally stable, markets are Kitwe buoyant Johannesburg • Capital expenditure expected to lev
Slide 6: Underground Mining supports long-term natural resources focus
SUPPORTS GROUP’S LONG-TERM NATURAL RESOURCES FOCUS Underground • Delivered outstanding result in a buoyant commodities environment, with project awards across all Mining jurisdictions • Although few greenfields projects have come to market, many mining houses have invested in brownfields projects ex
Slide 7: Platform overview: Oil & Gas
PLATFORM OVERVIEW Market focus: • Global: LNG and petrochemical sectors Calgary Ayrshire • Australasia: LNG, infrastructure and metals & minerals Busan Houston Market conditions: • USA: LNG and petrochemical buoyant • Australasia: LNG – early signs of opportunity Port Moresby • Australasia: Infrastr
Slide 8: Oil & Gas supports long-term natural resources focus
SUPPORTS GROUP’S LONG-TERM NATURAL RESOURCES FOCUS Oil & Gas • Order book and Category 1 pipeline opportunities are encouraging and reflective of the success of the platform’s strategy of domestic diversification and international oil and gas • Clough was selected as contractor (in joint venture wit
Slide 9: Platform overview: Power & Water
PLATFORM OVERVIEW Market focus: • Sub-Saharan Africa: Power and water, petrochemicals, metals and minerals, as well as paper and pulp Market conditions: • Lack of project opportunity in the African power and water sectors • Substantial investment in the short to medium term is expected in the transm
Slide 10: Power & Water supports long-term natural resources focus
SUPPORTS GROUP’S LONG-TERM NATURAL RESOURCES FOCUS Power & Water • Strategically, the platform has taken all the right steps to position it well for the future, but there is a lack of project opportunity in the African power and water sectors • Targeting maintenance contracts from Eskom for its agin
Slide 11: Commodity cycle dependent: order book
COMMODITY CYCLE DEPENDENT Underground Oil & Gas Power & Water Middle East Total Mining 46,8 31,7 30,1 25,7 23,1 22,8 22,1 6,4 4,4 1,5 1,6 0,9 0,1 0,0 0,0 Jun Dec Jun Jun Dec Jun Jun Dec Jun Jun Dec Jun Jun Dec Jun 18 18 19 18 18 19 18 18 19 18 18 19 18 18 19 1. Oil & Gas reflects significant order b
Slide 12: Geography & time distribution
GEOGRAPHY & TIME DISTRIBUTION Order book Order book Order book Platform % split Rbn Rbn SADC Int. June 2019 June 2018 FY Time Distribution 2020 4,0 Oil & Gas 100 23,1 6,4 2021 4,5 >2021 14,6 2020 9,2 Underground 61 39 22,8 22,1 2021 4,9 Mining >2021 8,7 2020 0,9 Power & Water 100 0,9 1,5 2021 >2021
Slide 13: Strong pipeline but timing uncertain
STRONG PIPELINE BUT TIMING UNCERTAIN Pipeline Rbn Order book Near orders Category 1 Category 2 Category 3 Oil & Gas 23,1 8,7 158,2 12,7 238,3 Underground Mining 22,8 5,2 36,7 48,4 32,7 Power & Water 0,9 0,5 5,5 12,1 23,2 30 June 2019 totals 46,8 14,4 200,4 73,2 294,2 30 June 2018 totals 30
Slide 14: Engineered Excellence
© Murray & Roberts 2019 | 14 ENGINEERED EXCELLENCE
Slide 15: FY2019 vs. FY2018
FY2019 VS. FY2018 Underground Mining Record earnings by the Underground Mining platform Oil & Gas The loss is primarily due to a delay in the award of new projects, resulting in insufficient earnings to cover overhead costs, as well as losses incurred on two largely completed projects Power & Wa
Slide 16: Statement of financial performance
STATEMENT OF FINANCIAL PERFORMANCE Rm FY2019 FY2018 Variance Revenue 20 167 21 847 (1 680) EBITDA 1 268 1 331 (63) EBIT 791 864 (73) Continuing operations excluding Middle East 847 898 (51) Middle East (56) (34) (22) Net interest expense (53) (41) (12) Taxation (297) (298) 1 (Loss)/Income from equit
Slide 17: Twelve months to 30 June 2019: Oil & Gas
TWELVE MONTHS TO 30 JUNE 2019 Oil & Gas Underground Mining Power & Water Bombela & Middle East Commissioning Corporate Rm Engineering Construction Global Marine & Maintenance & Other Total 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 Revenue 910 971 2 995 504 - - 2 496 6 894 327 173 6
Slide 18: Twelve months to 30 June 2019: Underground Mining
TWELVE MONTHS TO 30 JUNE 2019 Oil & Gas Underground Mining Power & Water Bombela & Middle East Rm Africa Australasia The Americas Total 2019 2018 2019 2018 2019 2018 2019 2018 Revenue 2 853 3 524 3 148 1 779 4 860 2 701 10 861 8 004 Operating profit 239 215 253 109 322 147 814 471 Operating margin (
Slide 19: Twelve months to 30 June 2019: Power & Water
TWELVE MONTHS TO 30 JUNE 2019 Oil & Gas Underground Mining Power & Water Bombela & Middle East Electrical & Corporate Rm Power1 Water O&G and R&I Instrumentation & Other Total 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 Revenue 2 025 4 180 21 95 434 412 37 138 - 4 2 517 4 829 Operati
Slide 20: Twelve months to 30 June 2019: Bombela & Middle East
TWELVE MONTHS TO 30 JUNE 2019 Oil & Gas Underground Mining Power & Water Bombela & Middle East Rm Bombela Investments Middle East Total 2019 2018 2019 2018 2019 2018 Revenue - - 54 468 54 468 Operating profit / (loss) 306 277 (56) (34) 250 243 Order book - - - 141 - 141 Operating results improvement
Slide 21: Statement of financial position
STATEMENT OF FINANCIAL POSITION Rm June 2019 June 2018 Variance Total assets 16 338 14 286 2 052 Property, plant and equipment 2 203 1 996 207 Other non-current assets 3 482 3 257 225 Current assets 7 177 6 518 659 Cash and cash equivalents 3 455 2 464 991 Assets classified as held for sale 21 51 (3
Slide 22: Prudent gearing level
PRUDENT GEARING LEVEL Total debt (1 659) Self servicing debt (1 167) Asset based finance - project specific (842) Group Debt BCC preference shares (325) Corporate debt (492) TNT acquisition (acquisition value R635 million) (319) Corporate (incl. overdrafts) (173) Total Equity 5 751 Total debt (1 659
Slide 23: Engineered Excellence
© Murray & Roberts 2019 | 23 ENGINEERED EXCELLENCE
Slide 24: Independent Board update
INDEPENDENT BOARD UPDATE Regulatory Process & • Implementation of ATON’s mandatory offer to acquire up to 100% of the issued ordinary shares of Recommendation Murray & Roberts, not already owned by ATON, remains subject to the approval of the South African Competition Tribunal • The South African Co
Slide 25: Key presentation takeaways
Strategy implementation showing strong delivery, with platforms making headway in consolidating their strategic positions, competitive advantages and growth prospects Strong cash position and debt within targeted range Strong quality order book of R46,8 billion, near orders of R14,4 billion undersco
Slide 26: Forward-looking statements
1. This presentation includes certain various “forward-looking statements” within the meaning of Section 27A of the US Securities Act 10 1933 and Section 21E of the Securities Exchange Act of 1934 that reflect the current views or expectations of the Board with respect to future events and financial
Slide 27: Report to Stakeholders
REPORT TO STAKEHOLDERS FOR THE YEAR ENDED 30 JUNE 2019 ENGINEERED EXCELLENCE
Slide 28: Appendix
REPORT TO STAKEHOLDERS FOR THE YEAR ENDED 30 JUNE 2019 APPENDIX ENGINEERED EXCELLENCE
Slide 29: Statement of financial performance
STATEMENT OF FINANCIAL PERFORMANCE Rm FY2019 FY2018 Variance Revenue 20 167 21 847 (1 680) EBITDA 1 268 1 331 (63) EBIT 791 864 (73) Continuing operations excluding Middle East 847 898 (51) Middle East (56) (34) (22) Net interest expense (53) (41) (12) Taxation (297) (298) 1 (Loss)/Income from equit
Slide 30: Statement of financial performance
STATEMENT OF FINANCIAL PERFORMANCE Rm FY2019 FY2018 Variance Revenue 20 167 21 847 (1 680) Revenue decreased by 8% EBITDA 962 1 774 (812) 1. Mainly due to lower contributions from Power & Water and Oil & Gas EBIT 487 1 275 (788) 2. Partly offset by an excellent performance by Underground Mining Cont
Slide 31: Statement of financial performance
STATEMENT OF FINANCIAL PERFORMANCE Rm FY2019 FY2018 Variance Revenue 20 167 21 847 (1 680) EBITDA 1 268 1 331 (63) EBIT EBITDA is reflected before: 487 1 275 (788) Continuing operations 1. Depreciation chargeexcluding of R418m (FY2018: R429m) 1 055 1 343 (288) 2. Amortisation Middle East of intangib
Slide 32: Statement of financial performance
STATEMENT OF FINANCIAL PERFORMANCE Rm FY2019 FY2018 Variance Revenue 20 167 21 847 (1 680) EBITDA 1 268 1 331 (63) EBIT 791 864 (73) Continuing operations excluding Middle East 847 898 (51) Middle East (56) (34) (22) Decrease in EBIT Net interest is mainly due to: expense (42) (71) 29 1. Taxation De
Slide 33: Statement of financial performance
STATEMENT OF FINANCIAL PERFORMANCE Rm FY2019 FY2018 Variance Revenue 20 167 21 847 (1 680) EBITDA 1 268 1 331 (63) EBIT 791 864 (73) Continuing operations excluding Middle East 847 898 (51) Middle East (56) (34) (22) Net interest expense (53) (41) (12) Marginal Taxationincrease in net interest expen
Slide 34: Statement of financial performance
STATEMENT OF FINANCIAL PERFORMANCE Rm FY2019 FY2018 Variance Revenue 20 167 21 847 (1 680) EBITDA 1 268 1 331 (63) EBIT 791 864 (73) Continuing operations excluding Middle East 847 898 (51) Middle East (56) (34) (22) Net interest expense (53) (41) (12) Taxation (297) (298) 1 Effective Incometax rate
Slide 35: Statement of financial performance
STATEMENT OF FINANCIAL PERFORMANCE Rm FY2019 FY2018 Variance Revenue 20 167 21 847 (1 680) EBITDA 1 268 1 331 (63) EBIT 791 864 (73) Continuing operations excluding Middle East 847 898 (51) Middle East (56) (34) (22) Net interest expense (53) (41) (12) Taxation (297) (298) 1 (Loss)/Income from equit
Slide 36: Statement of financial performance
STATEMENT OF FINANCIAL PERFORMANCE Rm FY2019 FY2018 Variance Revenue 20 167 21 847 (1 680) EBITDA 1 268 1 331 (63) EBIT 791 864 (73) Continuing operations excluding Middle East 847 898 (51) Middle East (56) (34) (22) Net interest expense (53) (41) (12) Taxation (297) (298) 1 (Loss)/Income from equit
Slide 37: Continuing revenue and EBIT by platform
CONTINUING REVENUE AND EBIT Revenue EBIT • Outstanding contribution (excluding Corporate, Middle East (excluding Corporate Cost, Middle East from Underground Mining and Bombela Civils Joint Venture) and Bombela Civils Joint Venture) platform • Investments relate to -3% 33% 13% Bombela Concession 31%
Slide 38: Continuing revenue and EBIT by geography
CONTINUING REVENUE AND EBIT Geographic Revenue Geographic EBIT • A multinational business (excluding Corporate, Middle East (excluding Corporate Cost, Middle East with 77% of revenue and and Bombela Civils Joint Venture) and Bombela Civils Joint Venture) 58% of EBIT generated 2% -2% outside of South
Slide 39: Continuing revenue and EBIT by life cycle
CONTINUING REVENUE AND EBIT Life Cycle Revenue Life Cycle EBIT • Meaningful contribution (excluding Corporate, Middle East (excluding Corporate Cost, Middle East from all segments of and Bombela Civils Joint Venture) and Bombela Civils Joint Venture) project life cycle -3% 7% 10% 7% 46% 2% 10% 35% 1
Slide 40: Statement of financial position
STATEMENT OF FINANCIAL POSITION Rm June 2019 June 2018 Variance Total assets 16 338 14 286 2 052 Property, plant and equipment 2 203 1 996 207 Other non-current assets 3 482 3 257 225 Current assets 7 177 6 518 659 Cash and cash equivalents 3 455 2 464 991 Assets classified as held for sale 21 51 (3
Slide 41: Statement of financial position
STATEMENT OF FINANCIAL POSITION Rm June 2019 June 2018 Variance Total assets 16 338 14 286 2 052 Property, plant and equipment 2 203 1 996 207 Increase in property,assets Other non-current plant and equipment 3 904 4 622 (718) 1. Current Capex assets (R816m) offset by depreciation (-R418m), disposal
Slide 42: Statement of financial position
STATEMENT OF FINANCIAL POSITION Rm June 2019 June 2018 Variance Total assets 16 338 14 286 2 052 Property, plant and equipment 2 203 1 996 207 Other non-current assets 3 482 3 257 225 Non-current assets comprise of: Current assets 6 722 8 185 1. Cash Deferred taxation and cash assets (R422m) equival
Slide 43: Statement of financial position
STATEMENT OF FINANCIAL POSITION Rm June 2019 June 2018 Variance Total assets 16 338 14 286 2 052 Property, plant and equipment 2 203 1 996 207 Other non-current assets 3 482 3 257 225 Current assets 7 177 6 518 659 Current assets Cash and cashcomprise: equivalents 2 813 2 891 (78) 1. Assets Contract
Slide 44: Statement of financial position
STATEMENT OF FINANCIAL POSITION Rm June 2019 June 2018 Variance Total assets 16 338 14 286 2 052 Property, plant and equipment 2 203 1 996 207 Other non-current assets 3 482 3 257 225 Current assets 7 177 6 518 659 Cash and cash equivalents 3 455 2 464 991 Cash consists Assets mainly classified of:
Slide 45: Statement of financial position
STATEMENT OF FINANCIAL POSITION Rm June 2019 June 2018 Variance Total assets 16 338 14 286 2 052 Property, plant and equipment 2 203 1 996 207 Other non-current assets 3 482 3 257 225 Current assets 7 177 6 518 659 Cash and cash equivalents 3 455 2 464 991 Assets classified as held for sale 21 51 (3
Slide 46: Statement of financial position
STATEMENT OF FINANCIAL POSITION Rm June 2019 June 2018 Variance Total assets 16 338 14 286 2 052 Property, plant and equipment 2 203 1 996 207 Other non-current assets 3 482 3 257 225 Current assets 7 177 6 518 659 Cash and cash equivalents 3 455 2 464 991 Assets classified as held for sale 21 51 (3
Slide 47: Statement of financial position
STATEMENT OF FINANCIAL POSITION Rm June 2019 June 2018 Variance Total assets 16 338 14 286 2 052 Property, plant and equipment 2 203 1 996 207 Other non-current assets 3 482 3 257 225 Current assets 7 177 6 518 659 Cash and cash equivalents 3 455 2 464 991 Assets classified as held for sale 21 51 (3
Slide 48: Net cash reconciliation
NET CASH RECONCILIATION 4 000 660 168 469 3 500 208 665 184 3 000 890 816 2 500 R millions 1 972 2 000 1 796 1 500 1 000 500 0 30 June EBITDA – Dividends Proceeds Working Other Interest, Acquisition Capex 30 June 2018 non-cash movements tax & of 2019 received on sale capital items dividends business
Slide 49: Discontinued operations
TWELVE MONTHS TO 30 JUNE 2019 Discontinued Operations I&B Businesses Genrec Rm & other* Clough Properties Engineering Total 2019 2018 2019 2018 2019 2018 2019 2018 Revenue - 269 23 3 68 253 91 525 Operating loss** (60) (143) (8) (2) (22) (128) (90) (273) Discontinued operations loss relates primaril
Slide 50: Engineered Excellence
© Murray & Roberts 2019 | 50 ENGINEERED EXCELLENCE
Slide 51: A multinational specialist engineering and construction group
A MULTINATIONAL SPECIALIST ENGINEERING AND CONSTRUCTION GROUP FOCUSED ON THE NATURAL RESOURCES MARKET SECTOR STOP.THINK.ACT.24/7: SAFETY FIRST IN EVERYTHING WE DO BUSINESS PLATFORMS OIL & GAS UNDERGROUND MINING POWER & WATER PURPOSE VISION VALUES Enabling fixed capital To be a leading Integrity inve
Slide 52: Essence of the new strategic future plan
ESSENCE OF THE NEW STRATEGIC FUTURE PLAN To be a multinational specialised engineering and construction Group focused on the natural resources sector (oil & gas, metals & minerals, power & water) To provide services across the project lifecycle To achieve Engineered Excellence in all aspects of the
Slide 53: A multinational, specialist engineering & construction group
3 4 2 Robust balance sheet to navigate through business Improved order book and cycles robust project pipeline 1 Clearly defined growth strategy & business Low gross gearing and model robust cash position is Diversified business model Growth through allowing Murray & Roberts has resulted in a better
Slide 54: Business model: service offering across project life cycle
BUSINESS MODEL: COMPREHENSIVE SERVICE OFFERING ACROSS PROJECT LIFE CYCLE IN SELECTED NATURAL RESOURCES MARKETS Geography Business Platform Capabilities(Project Life Cycle) Project Life Cycle (Multinational) • Detailed engineering • Americas Design and • Procurement • Asia Engineering / Oil & Gas • C
Slide 55: Underground Mining platform footprint
The Underground Mining platform’s geographic footprint covers six continents and its service offering spans the project life cycle, including feasibility studies, specialist engineering, vertical and decline shaft construction, mine development, specialist mining services such as raise boring and gr
Slide 56: Underground Mining businesses
Cementation Canada & USA is a leading provider of underground mining contracting and engineering services throughout North and South America. The company specialises in the design and construction of underground facilities including shaft, ramp accesses, mine development and raises, as well as large
Slide 57: Commodity order book breakdown
COMMODITY ORDER BOOK BREAKDOWN % Total Platform Total Platform The Americas Australasia Africa R22.1bn R22.8bn R5.6bn R3.4bn R13.8bn June 2018 June 2019 3% 11% 14% 48% Copper 7% Gold 42% 11% 36% Copper-Gold 21% 50% 7% Diamonds Silver 1% 3% Platinum 23% 11% 22% Nickel 1% 31% 2% Zinc 14% 1% 17% 5% Man
Slide 58: Oil & Gas platform service offering
The Oil & Gas platforms’ extensive service offering spans the full asset life cycle, including specialist engineering, construction & EPC, commissioning, and operations & maintenance. Services are provided on new build facilities (greenfields) and operating facilities (brownfields) In response to ch
Slide 59: Clough and Oil & Gas businesses
Clough works with some of the world’s largest companies to engineer, construct, commission and maintain a comprehensive range of facilities for oil and gas, metals and minerals, and infrastructure projects. The company’s full project lifecycle delivery model reduces risk and optimises safety, produc
Slide 60: Power & Water platform
The Power & Water platform operates predominantly in Southern Africa and sub-Saharan Africa. Its service offering includes feasibility studies, detailed engineering, procurement, construction, commissioning and repairs and maintenance work. The platform has a primary focus on the power sector and ex
Slide 61: Power & Water businesses
Murray & Roberts Power & Energy is the platform’s engineering, procurement and construction ("EPC") projects implementer, adding unique value to the constructability, integration and ultimate performance of the projects it undertakes. Murray & Roberts Power & Energy offers the full spectrum of multi
Slide 62: ADR programme details
Murray & Roberts has a sponsored Level 1 ADR programme (Since 2009) Bloomberg ticker: MURZY CUSIP: 626805204 Ratio: 1 ADR: 1 Ordinary Share Exchange Traded: Over-the-counter (OTC) market Depositary bank: Deutsche Bank Trust Company Americas Depositary bank contact: Begonia Roberts (begonia.roberts@d
Slide 63: Forward-looking statements
1. This presentation includes certain various “forward-looking statements” within the meaning of Section 27A of the US Securities Act 10 1933 and Section 21E of the Securities Exchange Act of 1934 that reflect the current views or expectations of the Board with respect to future events and financial
Slide 64: Report to Stakeholders
REPORT TO STAKEHOLDERS FOR THE YEAR ENDED 30 JUNE 2019 ENGINEERED EXCELLENCE
Murray & Roberts Holdings — FY2019 Earnings Presentation on 6ix