Slide 1: Downer EDI Limited 2004 Results and Outlook
Downer EDI Limited 2004 Results and Outlook STEPHEN GILLIES - MANAGING DIRECTOR. GEOFF BRUCE - CHIEF FINANCIAL OFFICER Downer EDI:
Slide 2: Overview & Highlights
OVERVIEW & HIGHLIGHTS Stephen Gillies Downer Downer EDI Limited 2004 Full Year Financial Results EDi g
Slide 3: Overview
Overview FY04 delivered our 7 consecutive year of earnings growth, in line with market guidance. Importantly, this reflects a doubling of sustainable profits over the last 4 years. Downer Downer EDI Limited 2004 Full Year Financial Results EDi g
Slide 4: Overview: Improving Business Metrics
Overview improving Business Metrics » Cash generation = Return on capital employed » EPS « Balance sheet strength « Growing sales inflows, as measured by order book position = Team management - Recruitment - Training - Retention LTIFR — best ever result Downer EDI Limited 2004 Full Year Financial Re
Slide 5: 2004 — Financial Highlights
2004 — Financial Highlights Sales NPAT $81.6m (NPAT pre GW amortisation, $100.2m) EBITA Normalised operating cash flows Net working capital ratio to sales much improved Gearing remains at historic lows & below target range EPS (basic) 29.6 cps DPS 15.6 cps NPAT pre GWA / Shareholder equity pre GWA D
Slide 6: 2004 Scorecard
2004 Scorecard Objective Outcome Focus on key markets and expanding service offering Sales from services up $650m Increase non-mining revenues as a % of total revenue Increase EBITA/AFE >12% Order book > $5b Now 68% - up from 62% Record 14.1% Order book at $6.4b AFE flat, although sales up +18%, Dec
Slide 7: 2004 - Clearing the Decks
2004 - Clearing the Decks Mining performance sv CPG acquisition va Resources division v Free float improved e Board movements Clean capital structure “ Management team “ QLD mines producing to plan Outlook strengthened post moratorium Sales process underway 75%, up from 51% in 2003 Independent appoi
Slide 8: Targeted Diversification
Targeted Diversification Lowering earnings risk, positioning for long term growth Order Book $6.4b at Jun 04 Targeted diversification: 3000 A diversified portfolio targeting growth sectors: transportation; energy; communication 2000 1000 (A$ millions) This explains the shifting order book profile “C
Slide 9: Financial Performance
FINANCIAL PERFORMANCE Geoff Bruce Downer Downer EDI Limited 2004 Full Year Financial Results EDi g
Slide 10: Reported Earnings up 22%
Reported Earnings up 22% {A$ Millions) 2004 2003 Change Revenue** 3,173 2,680 18% Turnover 3417 2,868 19% EBITA 157 140 12% Net Interest 28 29 -1% Profit Before Tax 109 95 15% Net Profit After Tax 82 67 22% Goodwill Amortisation 19 16 19% Net Profit (pre goodwill amortisation) 101 83 21% EPS (basic)
Slide 11: Margin Stable & Outperforming Peer Group
Margin Stable & Outperforming Peer Group Consistent 1 outperformance owing to: pS ml Targeted 5% diversification Prudent capital management 3% Growth in services as % of total 1% 2001 2002 2003 2004 « PeerGroup Average «0g DOW welje@e DOW excl discontinued = Focus on maintaining margin combined with
Slide 12: Core Business Growing Strongly
Core Business Growing Strongly Reconciling EBITA growth (A$ millions) FY03 CPG adj All other Mktg Hi one-off FY04 FY04 for FX & O/H adjustments * act base * H1 bad debt provisioning, miscellaneous mining items Downer Downer EDI Limited 2004 Full Year Financial Results EDi g
Slide 13: Interest Cover Strengthening
interest Cover Strengthening 2002 2003 2004 2004 2005 Interest Cover (X) Forecast* Actual Target As at 30 June EBIT / Net Interest EBITA / Net Interest 3.3 43 >45 48 >5.0 3.7 49 >5.0 6.5 >65.7 * As at 2003 full year presentation Downer EDI: Downer EDI Limited 2004 Full Year Financial Results
Slide 14: Consecutive Year of Earnings Growth
7 Consecutive Year of Earnings Growth Profitability NPAT pre GWA (A$ millions) 1998 1999 2000 2001 2002 2003 2004 fH NPAT HM NPAT pre-Goodwill Amortisation Downer Downer EDI Limited 2004 Full Year Financial Results EDi g
Slide 15: Dividends Per Share
Dividends Per Share Up 34% with special dividend =s les) Full translation EPS to DPS growth = nN H2FY04 = FYO3 A disciplined response to emerging growth opportunities cents per share oO 2001 2002 2003 2004 EMI Interim HE) Final [Special Downer EDI Limited 2004 Full Year Financial Results
Slide 16: Strong Underlying Operating Cash Flows
Strong Underlying Operating Cash Flows (A$ Millions) 2004 2003 Operating cash flow 181.5 225.0 Less 4GT: — one off recovery (60.0) Adjusting for Tax 20.0 (20.0) Normalised operating cash Normalised Op Cash Flow 201.5 145.0 flow A 28% Used to fund PpE Net PPE (124.7) (10.7) modernisation: Acquisition
Slide 17: Working Capital:Sales Ratio Improved
Working Capital:Sales Ratio Improved Ratio near 5 yr low owing to: Strong sales Better a 7) management of cS working capital ° @ 2 NWC down 15% on 2002 levels yet supporting 31% growth in sales 2000 2004 2002 2003 2004 MO «Operating Revenue (LHS) = gy Net Working Capital (LHS) vee NWC/Revenue (RHS)
Slide 18: Gearing Maintained at Historical Lows
Gearing Maintained at Historical Lows Trend 100% improvement maintained Credit worthiness a 75% key requirement for govt agencies (PPP) 50% Gearing & balance Sheet size- a competitive Sirength 2000 2001 2002 2003 2004 wim Target Maximum = Target Minimum "*aii™™ Actual Downer EDI Limited 2004 Full Ye
Slide 19: Improving Returns
improving Returns On Equity & Funds Empioyed 168% 14% 12% 2000 2001 2002 2003 2004 tani ROE Jo ROFE Downer EDI Limited 2004 Full Year Financial Results
Slide 20: And Growth Has Been Broadly Based
And Growth Has Been Broadly Based Engineering 213 362 568 | 1,080 | 1,170 |106% | 1,200 | 3% Mining & Resources 624 | 1,036 | 1,104 | 1,040 | 1,083 | -2% | 1.150 | 6% Infrastructure 426 425 577 630 684 | 19% | 800 | 17% Rail 240 362 319 | 370 410 | 29% | 400 | -2% Continuing Businesses | 1,503 | 2,1
Slide 21: Outlook & Summary
OUTLOOK & SUMMARY Stephen Gillies Downer EDI Limited 2004 Full Year Financial Results
Slide 22: Order Book: Strong Platform for Growth
Order Book: Strong Platform for Growth Order Book - Jun & Aug 04 90% of FYO5 sales in hand Order book up from $6.4b to $6.8b since end June FYO6 FYO?7 FYO8 FYO9+ A$ millions Net order inflow rather than order book size or changes are a better indication of revenue A$ billions AS millions Jut Aug Sep
Slide 23: A World of Opportunities
A World of Opportunities » Australia / NZ - Public infrastructure upgrade spending #., eg PPP NSW ~ Replicate Downer EDI business model in full across Australia & NZ ~ Compete for increased track maintenance spend « South East Asia - Starting to look very attractive - Further privatisation of govern
Slide 24: A Targeted Diversified Portfolio of Opportunities: Transportation
A Targeted Diversified Portfolio Of Opportunities TRANSPORTATION SECTOR Rail - Sectorisation (NSW); interstate track modernisation - Replacement of aging freight & passenger fleets - External assistance with operations and maintenance - PPPs Road - Public infrastructure spend - Regional road network
Slide 25: A Targeted Diversified Portfolio of Opportunities: Energy
A Targeted Diversified Portfolio Of Opportunities ENERGY SECTOR Power ~ Aging reticulation, eg QLD & NSW ~ Maintenance linked to capex, eg Transpower $1.5b reticulation build, upgrade - Fundamentals signal positive 3-5 yr outlook - Growth outside Australia facilitated by selective Australian clients
Slide 26: Goals & Strategies — FY05
Goals & Strategies — FY05 Goal To consolidate our footprint in the Asia-Pacific region as a pre-eminent provider of outsourced engineering services Strategies « Growth beyond core, ie value chain migration ~ Ticketing system Vic, $300m+ - Singapore Water Treatment, $150m+ - PPP NSW, $2b+ « — Improve
Slide 27: Guidance & Assumptions — FY05
Guidance & Assumptions — FY05 Guidance # Sales revenue > 10% # NPAT growth in line with sales *” EPS Assumptions No requirement for new share capital * EBITA/AFE (>14%) # Non-mining revenues as % total revenue 4 Order Book (around $7b) Hold margins relative to peer group (3 yr average) Interest cove
Slide 28: Summary
Summary « 7'h consecutive year of earnings growth, NPAT CAGR 21% » Strong cash flows funded expanded PPE for 2005 sales * — Downer EDI on track for 8" year of earnings growth Downer EDI Limited 2004 Full Year Financial Results EDi
Slide 29: 2004 Project Awards
2004 Project Awards CPG Corp Guangzhou Airport EDI Rail Cairns Tilt Train CPG Corp Batavia Perkasa Development Works NZ Britomart Railway Station Downer EDI Limited 2004 Full Year Financial Results EDi g
Slide 30: 2004 Project Awards
2004 Project Awards Roche Mining indigenous Award Roche Mining Safety Award Downer EDI Limited 2004 Full Year Financial Results EDi 5
Slide 31: Investing For The Future
Investing For The Future Roche Mining Softioad Technology Truck Transportation — Road Asphait Piant Transportation - Rail Tamping Machine Downer Downer EDI Limited 2004 Full Year Financial Results EDi g
Slide 32: Questions & Answers
QUESTIONS & ANSWERS Downer EDI Limited 2004 Full Year Financial Results
Slide 33: Five Year Record
Five Year Record For year ended 30 June 2004 2003 2002 2001 2000 goes #000 $7000 goo $000 Turnover 3,417,491 2,867,858 2,585,636 1,718,128 1,354,854 Revenue 3,193,308 2,697,023 2,442,449 1,632,824 1,274,753 Eamings before interest tax and amortisation of Intangibles (EBITA) 187,303 140,445 128,734 1
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