Macmahon Holdings Limited · ASX:MAH
Macmahon — Investor Presentation (September 2006)
37 slides from Macmahon's investor presentation, Sep 26, 2006
Slide 1: HON
HON < $ j < 2
Slide 2: Outline of Presentation
Outline of Presentation dedi [a # Macmahon - Strategy and Industry = Financial Performance # Operational Overview - Order Book - Construction - Mining - Services - People # Shareholding = Qutiook
Slide 3: ieee
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Slide 4: About Macmahon
About Macmahon dedi fs” * Started business in 1963 * Civil Construction and Mining Contractor « 2,700 full ime employees * Operations throughout Australia and overseas * Forecast 2007 Revenue $1 to $1.1 billion * High level of repeat business with both Government and Resource Sector customers
Slide 5: What we do
Whatwedo | dedi MACMAKMON MINING CONSTRUCTION Roadworks Railways (MVM) Ports Dams Pipelines Mine Infrastructure Maintenance OPENCUT UNDERGROUN ALLPLANT Mine Design Mine Development Equipment Hire Mine Management Mine Production Equipment Maintenance Load and Haul Production Drilling Drill and Blast
Slide 6: Industry Outlook - Construction
Value of Work (5* billion} Q MACDMAHEIN Industry Outlook - Construction » Forecast market +$ 22 billion per annum through to 2008 a Next Federal Election likely to increase spending post 2008 « Macmahon contestable market is $7.5 to $10 billion — current share 5% Engineering Construction — Australia
Slide 7: Industry Outlook - Contract Mining
Value of Work {$"million) 6.000 5.000 4,000 3,000 2.000 4.000 Q MADMAHEIN Industry Outlook — Contract Mining Forecast market $5.5 billion per annum through to 2010 Macmahon share, including ARD / CRE 10 % Value of Contract Mining in Australia (2003/04 $’million) GRUBER : 8 7 ; Le _ 2002 2005 2006 20
Slide 8: Strategy
Strategy | £2. [7 Objective © Grow the Business & Secure Market Position S Increase Shareholder Returns Govt Infastracture Projects aligned Revenue Growth Construction » Road with our expertise » Rail » Ports Australia improved Margins Mini » Dams ning Mining Longer Term . > tron Ore Contracts incre
Slide 9: What differentiates Macmahon
What differentiates Vacmahon dedi fe « Focussed on core business of Mining and Construction * Self perform the work — people and equipment # In-house maintenance capability # Long term customer relationships -- repeat business # Non litigious * Approach to Safety
Slide 10: Competitor Profile
Competitor Profile edad con [o" CONSTRUCTION MINING PLANT FRE i Lien ane i HI So pictogel jC mall ) Lc IBIGHTON GROUP oo es hae Holiend, Leighton ase BILEIRIGER BERGER ) Cees Homibiook Abigroup) = ee Sena : a a _ _. ~ ROCHE =
Slide 11: Financials
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Slide 12: MACMAHEIN
11 MACMAHEIN 3) © = : = ® 0 a _ G 3 Oo G > oO % 3 4 : 2 O 3 | = y c ae Tk o 2 3s 3 2 oO : OU : sf 7 D =) oO * ca} set o £ o § oe @ os | 2 3 a = 6 E o oO — w § = m 3 o ¢ g 6 > a g 5 @ a fq © 5 & > fe) oO NI 3 re S 8 q S&S F a a * E i wt
Slide 13: EBIT and EBIT Margin
Q [re MAGMAHON bo EB! and EBIT Marcin # EBIT Margin of 5.4% exceeded Target of 5% # 5.4% EBIT Margin is the highest in the history of the Company 5.4% ae 2002 2003 2004 2005 2006 $ (millions) EBIT oommeefiinmme EBIT Margin
Slide 14: Profit After Tax
Profit After | ax Q [a3 MACMAHEIN « Profit from normal operations up 72% to record $27.4 million « APT (Alice Springs to Darwin Railway) investment written down to zero $27.4 2002 = 2003 2004 2005 2006 $ (millions) Pre 2005 normalised to 30% AIFRS) tax rate
Slide 15: Cash Flow
Cash Flow Q MACMAHEIN # Strong Cash Flow from operations of $78 million * Year end cash balance at $87 million Ly Lo : 2 y LL ee Le L a Ve z
Slide 16: Balance Sheet
Balance Sheet Q) MACMAHEIN # Return on equity 16% 2 Interest cover improved to 5.8 x Year End 30 June 2006 2005 increase LL a y Le Lo oo oo / Li a ne Bes Al. 8
Slide 17: Annual CAPEX
Annual CAPEX MACMAHEIN 2 2006 capital expenditure focused on increasing capacity in Mining and Alipiant « Open Cut truck fleet size increased to provide operational efficiencies $126 Annual Capex 2002 2003 2004 2005 2006 $ (millians) Q [se
Slide 18: Earnings Per Share / Dividend Per Share
Earnings Pet Share / Dividend Per Share | ded ion [ar « Full year, fully franked dividend increased to 2 cents « Payout ratio 36%, up from 24% in 2005 2003 2004 2005 2006* Basic Earnings per share [BE Dividends Declared * EPS excludes APT Adjustment Pre 2005 normalised to 30% (AIFRIS) tax rate
Slide 19: Operations
Operations MACMAHEIN are) oe i,
Slide 20: Order Book
MACMAHEIN Order Book lion 20 Construction # 30 June Order Book at record $1 = 70% Min = $1.1 bill d 30% ing an 2006 in f new contracts and extensions i ion o 2003 2004 2005 2006 2002 $ (millions)
Slide 21: Order Book Run Off and Contract Style
Order Book Run Off and Contract Style | edhe [20 # 30 June Order Book provides $619 million of secured work for 2007. This has increased to + $700 million with recent new work # Increase in Alliance style contracts Order Book Run Off Order Book Contract Style $1.2 billion Alliance 36% $619 Fixed Pri
Slide 22: Major Customers
Major Customers dedi [21 4 @ bhpbilliton ty _ ([farance xstrata : Government of y il, ALAN Western Australia a NEWMONT The trad Coenapany ueensland es Northern Territory Government i Government
Slide 23: New Contracts / Extensions - Since June 2006
New Contracts / Extensions - Since 30 June 2006 dedi [22° =» Newmont; Waihi (NZ) - Three and half year contract extension for mining, crushing and rehabilitation. » Kimberley Diamond Company; Ellendale Diamond Mine (WA) - Four year mining contract for the E4 and E9 pipes # BHP Billiton; Finucane Isl
Slide 24: Construction
Construction ae [23 @ 2006 Financials - Revenue $370 million - EBIT $14.7 million s 2006 Revenue Growth in WA and NT # Acquired 60% MVM Rail in February 2006 # Key projects include: - Millstream Link $120 million - Ross River Dam Upgrade (50%) $ 84 million - Alcan G3 Gove $125 million - Darwin Water
Slide 25: Darwin Waterfront
- a ae Hee a Darwin Waterfront , a oo Q MACMAHCIN ny
Slide 26: Ross River Dam
Ross River Dam_ | Q MACMAHEIN cin
Slide 27: Mining
Don FE # 2006 Financials -Revenue $466 million - EBIT § 33.9 million # 2006 Revenue Growth from iron ore, coal and copper # ARD/ CRE acquisition in August 2006 # Key projects include: - OB18 BHP Billiton $60 million pa - Jimblebar BHP Billiton $60 million pa - Eaglefield Peabody $85 million pa - Oly
Slide 28: Zz o = € yj aq
Zz o = € 2 yj aq
Slide 29: Zz o z ae = a ¢
Zz o z ae = a ¢
Slide 30: ARD/CRE
ARD/CRE [ened MACMAHEIN
Slide 31: Services (Allplant)
Services (Allplant) ele [30 « 2006 Financials -Revenue $60 million - EBIT § 10.1 million =» 2006 Revenue split ~ 53% Internal 47% External # Capacity of hire fleet increased in 2006 # Equipment maintenance capability increased with Nebo Workshop (QLD) and expanded Perth facility = 2007 focus on incr
Slide 32: Nebo Workshop
Lao Q a Nebo Workshop a Lo Q MAGMAHEIM vy - ee ae Ess a 0
Slide 33: People
Doon FE =» Workforce at 2700 be # Need to increase workforce over next 12 months for new work = Longer term contracts for blue chip big . customers attractive for employees + think safety »act safely - » Focusing on retention strategies for existing workforce s Shortages of engineers and mechanical
Slide 34: Shareholding
Shareholding oo on [33 = Shares on issue = 519 million, 6,900 Shareholders = Staff Options = 22 million = Top 20 Shareholders own 65% s Average monthly turnover 18 million shares 659% Total Shareholder Return 327% 168% 150% 45% (46%) ee 2002 2004 2005 2006 Cumulative return since 2001 (%) nnual retu
Slide 35: Outlook
Outlook fee. [a4 MACMAHEIN
Slide 36: Outlook
Outlook aceon [35 # Positive Market Conditions - Government infrastructure - Resources activity (iron ore, coal, copper) # Contractor services in short supply - opportunity # Awarded $200 million of new contracts in first 2 months of FY07 « Currently preferred tenderer for $500 million of new work «
Slide 37: CMAHON
CMAHON < 2
Macmahon Holdings — Investor Presentation (September 2006) on 6ix