Slide 1: Investor Presentation – Downer Full Year Results
Downer Full Year Results | 29 August 2017 INVESTOR PRESENTATION
Slide 2: Introduction
INTRODUCTION Downer’s financial results for the 12 months to 30 June 2017 incorporate the financial statements of Spotless Group Holdings Limited (Spotless) as Downer’s interest in Spotless exceeded 50% on 27 June 2017. The table below shows where Spotless is either included or excluded from Downer’
Slide 3: Overview
OVERVIEW Total revenue1 $7,812 million, up 5.7% Net debt3 $620.2 million (including $787.5 million from Spotless) Earnings Before Interest and Tax (EBIT) Liquidity of $2.0 billion $277.8 million, up 0.3% Net Profit After Tax (NPAT) $181.5 million, Gearing4 (including Spotless) 14.7%, up 0.5% 17.7% i
Slide 4: Transport
TRANSPORT Total revenue1 $m EBIT $m EBIT margin ROFE2 5.8% 5.6% 2,500 2,153.4 140 124.6 6.0% 25% 22.2% 1,849.5 120 103.7 5.0% 19.3% 2,000 20% 100 4.0% 1,500 80 15% 3.0% 1,000 60 10% 40 2.0% 500 1.0% 5% 20 0 0 0.0% 0% FY17 FY16 FY17 FY16 FY17 FY16 FY17 FY16 OPPORTUNITIES New projects include Newcas
Slide 5: Utilities
UTILITIES Total revenue1 $m EBIT $m EBIT margin ROFE2 1,517.3 100 6% 5.5% 5.6% 25% 22.7% 1,600 84.1 1,400 1,274.3 18.6% 80 71.4 5% 20% 1,200 4% 1,000 60 15% 800 3% 600 40 10% 2% 400 20 5% 1% 200 0 0 0% 0% FY17 FY16 FY17 FY16 FY17 FY16 FY17 FY16 Strong contribution from nbnTM contracts with increas
Slide 6: Rail
RAIL Total revenue1 $m EBIT $m EBIT margin ROFE2 1000 35.0 4% 3.6% 8% 7.3% 850.2 30.3 826.2 7% 30.0 800 3% 6% 25.0 600 5% 20.0 1.7% 3.4% 14.4 2% 4% 400 15.0 3% 10.0 1% 2% 200 5.0 1% 0 0.0 0% 0% FY17 FY16 FY17 FY16 FY17 FY16 FY17 FY16 Continuing strong performance on maintenance contracts (Waratah
Slide 7: Engineering, Construction & Maintenance
ENGINEERING, CONSTRUCTION & MAINTENANCE Total revenue1 $m EBIT $m EBIT margin ROFE2 2500 60.0 52.3 3% 25% 22.9% 22.9% 2.6% 2.6% 2,004.3 48.2 2000 1,887.1 50.0 20% 40.0 2% 1500 15% 30.0 1000 10% 20.0 1% 500 10.0 5% 0 0.0 0% 0% FY17 FY16 FY17 FY16 FY17 FY16 FY17 FY16 Strong performance at Gorgon and
Slide 8: Mining
MINING Total revenue1 $m EBIT $m EBIT margin ROFE2 130.0 19.0% 2,000 140 10% 20% 1,595.2 8.1% 120 8% 13.2% 1,500 1,300.2 100 6.4% 15% 83.4 80 6% 1,000 10% 60 4% 500 40 5% 2% 20 0 0 0% 0% FY17 FY16 FY17 FY16 FY17 FY16 FY17 FY16 Conclusion of Christmas Creek contract Two year extension to Meandu M
Slide 9: Spotless
SPOTLESS Total revenue $m Underlying EBIT $m Underlying EBIT margin 3,500 250 221.8 8% 7.0% 3,006.3 3,176.1 3,000 200 161.5 6% 5.4% 2,500 2,000 150 4% 1,500 100 1,000 2% 50 500 0 0 0% FY17 FY16 FY17 FY16 FY17 FY16 Underlying NPAT of $84.1 million, within guidance range of $80 million to $90 millio
Slide 10: Combined Group
| COMBINED GROUP Downer Relationships creating success hon f ‘Commercial Maintenance Construction (Underground & Leisure Education & Government Surfacing Engineering (Open Cut Network Management Bitumen & Public Transport Operations & Base Log atadlest) Water ‘Operations Maintenance Blasting ‘& Town
Slide 11: Group Financials
GROUP FINANCIALS Downer | Relationships creating success
Slide 12: Financial Performance
FINANCIAL PERFORMANCE $m FY17 FY16 Change (%) Total revenue1 7,812.3 7,393.9 5.7 EBITDA 498.0 535.6 (7.0) EBITA2 285.2 283.3 0.7 EBIT 277.8 276.9 0.3 Net interest expense (26.8) (33.0) 18.8 Tax expense (69.5) (63.3) (9.8) Net profit after tax 181.5 180.6 0.5 NPATA2 186.6 185.1 0.8 EBIT margin 3.6% 3
Slide 13: Summary of Earnings
SUMMARY OF EARNINGS $m Total Transport Utilities Rail EC&M Mining Corp Statutory EBIT 277.8 124.6 84.1 30.3 52.3 83.4 (96.9) Benefit of Spotless1 (4.6) (4.6) New Intercity Fleet bid costs 10.0 10.0 NZ Schools PPP bid costs 3.0 3.0 Settlement of contractual claims 5.0 5.0 Contract closure (6.5) (6.5)
Slide 14: Operating Cash Flow
OPERATING CASH FLOW $m FY17 FY16 EBIT 277.8 276.9 Add: depreciation & amortisation 220.2 258.7 EBITDA 498.0 535.6 Operating cash flow 441.6 447.8 Add: Net interest paid1 23.0 26.5 Tax paid 49.0 35.9 Waratah Train Project net cash (inflow) 2 - (13.4) Adjusted operating cash flow 513.6 496.8 EBITDA co
Slide 15: Cash Flow
CASH FLOW $m FY17 FY16 Total operating 441.6 447.8 Net capital expenditure (180.4) (165.3) Spotless acquisition 1 (636.1) - Other acquisitions (143.2) - IT Transformation and Other (36.1) (40.2) Total investing (995.8) (205.5) Issue of shares (net of costs) 2 989.9 - Net (repayment) / proceeds of bo
Slide 16: Debt Maturity Profile – Downer Only
DEBT MATURITY PROFILE – DOWNER ONLY (by limit as at 30 June 2017) Downer Debt Maturity Profile - By Limit (at 30 June 2017) 900 Syndicated bank facility - 800 acquisition of shares in SPO Syndicated bank facility - 700 general corporate purposes 600 A$MTN A$m Equivalent 500 USPP 400 Bilateral bank f
Slide 17: Debt Maturity Profile – Spotless Only
DEBT MATURITY PROFILE – SPOTLESS ONLY (by limit as at 30 June 2017) Spotless Debt Maturity Profile - By Limit (at 30 DEBT COVENANTS June 2017)Net Leverage Interest Cover 3.5x 700 2.7x 2.9x 8.8x 600 95 8.4x 2.4x 7.3x 500 A$m Equivalent 400 300 30 200 3.0x 100 100 0 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19
Slide 18: Balance Sheet and Capital Management
BALANCE SHEET AND CAPITAL MANAGEMENT Adjustments on Combined Spotless $m Downer Spotless3 Group Jun 16 transaction / Jun 17 consolidation Total assets 4,487.8 1,912.0 1,055.6 7,455.4 4,200.3 Total shareholders’ equity 2,158.3 420.8 1,007.4 3,586.5 2,088.5 Net (debt1) / cash (111.9) (787.5) 279.24 (6
Slide 19: Progress Since Control of Spotless
PROGRESS SINCE CONTROL OF SPOTLESS In place Board transition Key FY18 STI metrics aligned including introduction of an earnings gate and cash targets Formation of Joint Bidding Group targeting specific integrated service opportunities Synergies Downer will seek to target synergy benefits of
Slide 20: Downer
Downer Relationships creating success
Slide 21: Work-in-Hand $22.5 Billion – Not Including $10.8 Billion Spotless PPPs
WORK-IN-HAND $22.5 BILLION - NOT INCLUDING $10.8 BILLION SPOTLESS PPPs 12,000 10,000 8,000 6,000 4,000 2,000 0 Transport Utilities EC&M Mining Rail Spotless PPPs Jun-16 Jun-17 21
Slide 22: Outlook
OUTLOOK With the acquisition of Spotless, the Downer Group is now well positioned for expected growth in the transport infrastructure, health, education, corrections, defence, utilities and other government service markets across Australia and New Zealand. The Group’s strong competitive position in
Slide 23: Downer
Downer Relationships creating success
Slide 24: Debt and Bonding Facilities
DEBT AND BONDING FACILITIES Debt facilities $m DOW SPO Group Debt facilities by type % Syndicated bank facility : Total limit 1,576.31 1,078.5 2,654.8 - general corporate purposes 3 43 Drawn (611.3) (853.5) (1,464.8) - SPO acquisition 19 Available 965.0 1 225.0 1,190.0 A$MTN 15 Cash 778.6 2 66.0 844
Slide 25: Segment Reporting
SEGMENT REPORTING FY17 Transport Utilities Rail EC&M Mining Unallocated Total $m Segment revenue 2,091.1 1,517.3 467.1 1,974.2 1,250.8 (13.1)1 7,287.4 Share of sales from JVs and Associates2 62.3 - 383.1 30.1 49.4 - 524.9 Total revenue2 2,153.4 1,517.3 850.2 2,004.3 1,300.2 (13.1)1 7,812.3 EBIT 124.
Slide 26: Reconciliation of Underlying to Statutory Result
RECONCILIATION OF UNDERLYING TO STATUTORY RESULT Net FY17 interest Tax EBIT NPAT $m (expense) / expense income Underlying result 273.2 (28.5) (63.3) 181.4 Spotless transaction costs1 (15.2) - - (15.2) Gains and other income related to Spotless investment2 19.8 1.7 (6.2) 15.3 4.6 1.7 (6.2) 0.1 Statut
Slide 27: Work-in-Hand: $22.5 Billion
WORK-IN-HAND: $22.5 BILLION WIH By Service Line By Contract Type - June 2017 1% 2% 28% 35% 23% 54% 16% 19% 9% 12% Transport Schedule of Rates Utilities Recurring EC&M Lump Sum / Fixed Price Alliance / Target Cost Mining Cost Plus Rail 27
Slide 28: Investor Presentation
Downer Full Year Results | 29 August 2017 INVESTOR PRESENTATION