Macmahon Holdings Limited · ASX:MAH
Macmahon — 1H FY23 Earnings Presentation
28 slides from Macmahon's earnings presentation, Feb 21, 2023
Slide 1: Half Year Results FY23
Half Year Results FY23
Slide 2: 1H23 Financial Highlights
1H23 Financial Highlights Revenue Underlying EBITDA1 Underlying EBIT(A)1 FY23 Secured Revenue5 $987.2m p 21.9% $149.3m p 7.6% $53.7m p 14.5% $1.8bn 15.1% margin 5.4% margin Underlying NPAT(A)1 Underlying operating cash flow2 Dividend FY23 Revenue Guidance6 $29.8m q 6.0% $105.5m p 9.2% 0.30cps $1.85b
Slide 3: 1H23 Key Highlights / FY23 Outlook
1H23 Key Highlights / FY23 Outlook Significant contracts secured and executing in challenging industry conditions Financials Surface Mining Underground Mining Mining Support Outlook Services • Driving growth in revenue • New contracts: • Underground revenue at 23% • Fimiston contract awarded ✓ Order
Slide 4: People & Resourcing
People & Resourcing Workforce growth, improved safety and continued investment in people Safety and Wellbeing Injury Frequency Rates and Workforce • TRIFR decreased from 4.8 (FY22) to 3.99 (1H FY23) 8,032 • Delivering WHS legislation training to all leaders 7,848 7,059 7,069 • Executing on our FY23
Slide 5: Greenbushes Lithium Project
Greenbushes Lithium Project Contract win enhances commodity diversification Our newest Surface Mining Contract • Macmahon has secured a 7-year contract with option to extend for up to 2 years, About Talison Lithium commencing 1 July 2023 • Scope consists of Load & Haul and Crusher Feed services • Gr
Slide 6: Batu Hijau Phase 8 Agreement
Batu Hijau Phase 8 Agreement Contract win consolidates on strong relationship and capital management focus Batu Hijau – Phase 8 Cut Back • PT AMNT is expanding the Batu Hijau mine by undertaking a further cutback of the pit, About AMNT known as Phase 8 • Batu Hijau is owned by AMNT, an Indonesian mi
Slide 7: Key Projects
Key Projects Diversified client portfolio CLIENT END (UNLESS EST. MINE COST CLIENT PROJECT COMMODITY SINCE EXTENDED) END DATE1 CURVE1 Tropicana, WA Gold 2012 Life of mine 2031 Telfer, WA Gold 2016 Life of mine 2026 Byerwen, QLD Met Coal 2017 Nov 2023 2069 Batu Hijau, Indonesia Copper / Gold 2017 Lif
Slide 8: Sustainability
Sustainability Evolving commitment and enhancing contribution Baseline Developing FY22 GHG emissions Land rehabilitated Tyre Recycling Environment Environmental ESG Framework and 169 hectares in Program (tonnes per CO2-e) Footprint Roadmap Scope 1: 15,125 Australia 1,267 tonnes Project Scope 2: 1,24
Slide 9: 1H23 Results
= = MACMAHON 1H23 Results
Slide 10: Financial Performance
Financial Performance Revenue ($m) Underlying EBIT(A) ($m) 1200 70 987 Reported 57.5 EBIT(A) 1000 60 55.2 excl. FX 888 Revenue incl. 810 BH Phase 71 47.3 48.5 50 43.4 46.1 800 694 698 43.6 687 653 40 600 30 400 20 Revenue 200 excl. BH 10 Reported 687 694 653 698 730 788 837 Phase 71 44.1 47.5 46.5 4
Slide 11: On track to deliver earnings guidance
On track to deliver earnings guidance Updated Guidance 1,850 – 1,950 Revenue ($m) EBIT(A) ($m) Guidance unchanged 1800 1,698 120 105 – 125 1600 101 100 95 1,380 1,351 92 1400 1200 1,103 80 75 987 1000 60 54 800 710 42 600 40 400 Guidance Guidance Guidance Guidance Guidance Guidance Guidance Guidance
Slide 12: Profit and Loss
Profit and Loss $ Millions 1H22 1H23 Change • Revenue increased by 21.9% due to commencement of new work and ramp up of Revenue 809.7 987.2 p 21.9% existing projects (King of the Hills and Warrawoona) and Batu Hijau contract cost recoveries Underlying EBITDA1 138.7 149.3 p 7.6% EBITDA margin 17.1% 1
Slide 13: Revenue Diversification
Revenue Diversification Commodity Anglogold Ashanti Calidus 8.8% 3.0% 7.9% Newcrest Gold 24% Red 5 17.5% 6.2% Gold Copper/Gold Silver Lake 53% 6.4% Met Coal St Barbara Copper Other PT AMNT 9.3% Gold PT Agincourt 18.9% 19% 3.9% Anglo America 3% Coal 10.3% 4.4% Met Qcoal 3.4% Qmetco Other Region Activ
Slide 14: Cash Flow – Net Debt Waterfall
Cash Flow – Net Debt Waterfall Underlying Operating Cash Flow $105.5m Operating Cash Flow • Underlying operating cash flow of $105.5m with 2H23 cash flows expected to be higher (43.8) • 70.6% EBITDA cash conversion impacted 149.3 by timing of receipts of certain receivables and increases in working
Slide 15: Balance Sheet
Balance Sheet Solid financial position $ Millions FY22 1H23 • Maintained financial discipline during high growth phase: Cash 198 196 ‒ Net Debt / EBITDA of 0.83x is below thresh hold of 1.0x Receivables 322 334 ‒ Net Debt reduction expected at 30 June 23 Inventories 90 90 Property, plant and equipme
Slide 16: Strategy and Outlook
Strategy and Outlook
Slide 17: Strategic Focus
Strategic Focus Building a sustainable diversified scalable business Improve Invest Expand Diversify Value Margins & execution Relevance & competitive advantage Growth in current markets Build scalability Grow shareholder value • Systems and processes • Advanced contractor • Additional services with
Slide 18: Diversify and Expand
Diversify and Expand Business has evolved and is progressing towards long term targets 3% 7% 23% FY18 1H23 Target1 9% 68% 90% EBIT(A) ROACE EBIT(A) ROACE EBIT(A) ROACE Margin Margin Margin p 8% p 15% 5.8% 15.4% 5.4% 13.3% As we grow the lower capital intensity projects we expect the overall business
Slide 19: Order Book $5.6bn & Tender Pipeline $10bn
Order Book $5.6bn & Tender Pipeline $10bn Order book provides a high level of secured revenue Order Book Run Off ($m) Tender Pipeline • $1.8bn1 of FY23 revenue secured 14% • Order book at $5.6bn2 of work in hand which 1H23 includes Greenbushes 1H23 987 • $10bn tender pipeline reflects strong market
Slide 20: Priorities and Outlook
Priorities and Outlook 2H23 PRIORITIES FY23 GUIDANCE1 • Optimise operations and continue to deliver for clients safely • Deliver earnings and margin growth from recent growth capital investments Revenue EBIT(A) • Accelerate ROACE growth by continuing to diversify into lower capital intensity opportu
Slide 21: Thank You
Thank You CONTACT Mick Finnegan CEO & MD mfinnegan@macmahon.com.au Ursula Lummis CFO ulummis@macmahon.com.au Donald James CCO djames1@macmahon.com.au www.macmahon.com.au 21 31 December 2022 Half Year Results
Slide 22: Appendix
= = MACMAHON Appendix
Slide 23: Corporate Overview
Corporate Overview Capital Structure Share Price - Last 3 Years Share Price1 (ASX:MAH) $0.170 0.25 Fully paid ordinary shares (m) 2,155 Market Capitalisation1 $366.4m 0.20 Cash (31 Dec 22) $196.0m 0.15 Net Debt (31 Dec 22) $246.6m Enterprise Value $613.0m 0.10 Net Tangible Assets per share (31 Dec 2
Slide 24: Corporate Overview - Directors
Corporate Overview - Directors MICHAEL FINNEGAN DENISE McCOMISH BRUCE MUNRO Managing Director Independent, Non-Executive Director Independent, Non-Executive Director and Chief Executive Officer EVA SKIRA ALEX RAMLIE ARIEF SIDARTO HAMISH TYRWHITT Independent Non-Executive Chair Non-Independent, Non-E
Slide 25: Map of Operations
Map of Operations NORTHERN TERRITORY WESTERN AUSTRALIA weormecona SOUTH AUSTRALIA t Nicolsons: 1 UNDERGROUND Santa ‘Olympic Bam 2. MINING SUPPORT SERVICES Fimiston kone QUEENSLAND rom. (2 SURFACE Donan south 3. MINING SUPPORT SERVICES Foxteigh ‘Peak Downs Sarai VICTORIA MALAYSIA INDONESIA “1. MINING
Slide 26: Cash Flow
Cash Flow $ Millions 1H22 1H23 Underlying EBITDA 138.7 149.3 Movement in receivables (56.8) (43.1) Movement in inventory (15.8) 0.2 Movement in payables and provisions 30.5 (4.2) Cash payments for SaaS customisation costs (2.9) (2.5) 1 Other (1.9) 3.3 Net Interest and tax (paid) / received (19.3) (2
Slide 27: Reconciliation of Non-IFRS Financial Information
Reconciliation of Non-IFRS Financial Information $ Millions 1H22 1H23 Profit for the year (as reported) 3.3 23.3 Add back: • Share Based Payment expense (0.4) 0.5 • M&A costs and earn-out related to previous acquisitions 22.3 - • Customer contracts amortisation (A) 3.6 3.5 • SaaS customization costs
Slide 28: Important Notice and Disclaimer
Important Notice and Disclaimer Disclaimer as to forward looking statements The forward looking statements in this presentation reflect views seeking independent legal, financial and taxation advice in relation to held only as at the date of this presentation. the contents of this presentation. This