Macmahon Holdings Limited · ASX:MAH
Macmahon — FY2014 Earnings Presentation
28 slides from Macmahon's earnings presentation, Aug 20, 2014
Slide 1: 2014 Full Year Results
2014 Full Year For personal use only Results 20 August 2014
Slide 2: Disclaimer and Important Notice
Disclaimer and Important Notice For personal use only This presentation contains forward looking statements that are subject to risk factors associated with the business. While Macmahon considers the assumptions on which these statements are based to be reasonable, whether circumstances actually occ
Slide 3: Delivering on the promise
Delivering on the promise For personal use only Completed or sold all remaining construction projects Returned the company to profitability Reduced debt Improved mining safety performance Cut costs and improved productivity Bolstered business development capability Grown te
Slide 4: Group Highlights
Group Highlights For personal use only Consolidated profit after tax of $30.4 million highlighting Mining Revenue ongoing performance of mining operations Strong cash flow from mining operations with lower capital expenditure and increased focus on asset utilisation Balance sheet healthy with
Slide 5: Current Operations
5 For personal use only Current Operations
Slide 6: Operational Update – Surface Mining
Operational Update – Surface Mining For personal use only Performance at Christmas Creek improved steadily over the year. Key achievements included: • Improved production • Implementation of real-time monitoring and analysis • Significant improvement in safety since February 2014 Increased mater
Slide 7: Operational Update – Underground Mining
Operational Update – Underground Mining For personal use only Operations at Olympic Dam performed well: • Company awarded a 4 year, raise-drilling contract • World’s largest raise drill, the Herrenknecht RBRVF 900, designed in conjunction with Macmahon, commissioned and performing well Works at
Slide 8: Operational Update – International
Operational Update – International For personal use only Productivity across Nigerian operations improved steadily over the year South East Asia operations performed well operationally – contract extensions currently being negotiated for Kanthan and Rawang projects Mongolia Production contin
Slide 9: People
People For personal use only Group employee numbers Employee numbers reduced in line with sale of construction and completed contracts Strong focus on leadership and development across the organisation 3,536 4,791 3,495 3,021 2,467 Several senior appointments made across Business Development,
Slide 10: Safety
Safety For personal use only Improved mining safety performance in 2014 KEY MILESTONES Top-down safety approach ensuring company-wide accountability Kanthan, Malaysia operating 9 Safety improvement plan delivering strong results years LTI free 3 month TRIFR falling since December 2013 Sh
Slide 11: Financials
For personal use only Financials
Slide 12: Income Statement
Income Statement For personal use only $ millions 2014 2013 Change Total revenue from continuing operations 1,017.4 1,173.4 (13%) Earnings before interest and tax (EBIT) from continuing operations 67.3 84.5 (20%) Interest (18.8) (18.3) 3% Profit before tax from continuing operations 48.5 66.3 (27%)
Slide 13: Profit Waterfall
Profit Waterfall For personal use only Note: Numbers may not add due to rounding 13
Slide 14: Continuing Operations
Continuing Operations For personal use only $ millions 2014 2013 Change Segment revenue 1,017.4 1,173.4 (13%) Profit before tax 48.5 66.3 (27%) Profit before tax margin % 4.8 5.7 - Order book 2,572 3,167 (19%) Capex 99 197 (50%) Revenue of $1.0 billion (down 13% on pcp) predominantly driven by the
Slide 15: Discontinued Operations
Discontinued Operations For personal use only $ millions 2014 2013 Segment revenue 26.9 581.7 Profit / (loss) before tax (0.0) (126.0) Profit / (loss) after tax 1.5 (73.1) Order book - 63.0 Revenue of $26.9 million relates to the Trangie Nevertire Irrigation Scheme project (completed) and the Hong
Slide 16: Cash Flow
Cash Flow For personal use only $ millions 2014 2013 Strong cash flow from continuing mining EBITDA 172.9 67.5 operations of $125.2 million Net interest paid (15.9) (18.8) Operating cash flow decreased due to the wind Income taxes paid (8.7) (9.6) down of the discontinued construction business W
Slide 17: Balance Sheet and Gearing
Balance Sheet and Gearing For personal use only $ millions 2014 2013 Change Gearing 23.1% Current assets 354.6 435.3 (19%) Non-current assets 469.2 509.2 (8%) 15.4% 12.9% Total assets 823.7 944.5 (13%) Net assets 432.2 401.2 8% Net debt 55.9 61.7 (9%) Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Gearing 12.9%
Slide 18: Strategy and Outlook
For personal use only Strategy and Outlook
Slide 19: Strategy – defend and extend
Strategy – defend and extend Key markets For personal use only Aspiration We will focus on retaining, To be a leading provider of improving and growing our services to the resources domestic business in Australia sector while extending into the Achieve sustainable growth emerging markets of Africa,
Slide 20: Strategic priorities
Strategic priorities For personal use only 1 Operational Our focus on business improvement will provide our clients with excellence strategic solutions to lower their input costs in the medium to long term 2 Global diversification We are actively pursuing international opportunities in Africa, Centr
Slide 21: Four pillars of success
Four pillars of success For personal use only Improved Safety Business Business People Performance Development Improvement Simplified safety Centralised BD Governance and New hires polices and function reporting Increased focus on procedures New international Operational training and
Slide 22: Business Improvement Program
Business Improvement Program For personal use only BI Framework Key focus areas Key activities to date Operations • Development of BI governance and Best practice Strong examples foundation reporting framework Plant & • Continuation of strategic sourcing Equipment • Upgraded procurement system Procu
Slide 23: Order Book
Order Book For personal use only Mining order book and run-off ($ million) Order book by division Mining order book of $2.6 billion consisting mainly of long-term contracts with blue-chip clients More than $700 million of FY15 revenue secured 1 1. “Revenue secured” means revenue estimated to com
Slide 24: Business Outlook
Business Outlook For personal use only An environment of “survival of the leanest” is Tender Pipeline ~$2.3bn currently prevailing Industry has shifted its focus from expansion to cost reduction Margin pressure likely to increase Macmahon well positioned to meet current challenges Opportunity
Slide 25: Summary
For personal use only Summary
Slide 26: Summary
Summary For personal use only We’re delivering on our promise Consolidated profit after tax of $30.4 million Strong cash flow from mining operations combined with aggressive asset management program Balance sheet healthy with gearing at 12.9% Solid order book of $2.6 billion backed by qual
Slide 27: Major Projects and Key Clients
Major Projects and Key Clients For personal use only Project Value Started Christmas Creek (WA) $1.8 billion 2012 Tropicana Project (WA) $900 million 2012 Eaglefield / Lenton (QLD) $550 million 2003 Olympic Dam (SA) $687 million 2004 Tavan Tolgoi (Mongolia) US$250 million 2012 Calabar Quarry (Nigeri
Slide 28: Revenue and Order Book Diversity
Revenue and Order Book Diversity Revenue by client Revenue by commodity Revenue by location For personal use only Order book by client Order book by commodity Order book by location 28