Macmahon Holdings Limited · ASX:MAH
Macmahon — Investor Conference Presentation Perth 2019
28 slides from Macmahon's conference presentation, Dec 2, 2019
Slide 1: Investor Conference Presentation Perth 2019
Investor Conference Presentation Perth 2019
Slide 2: Our Business
Our Business Civil / Mining Surface Underground Rehabilitation Services Mining Mining Plant & Maintenance Performance Enhancement MACMAHON - Investor Conference Presentation December 19 2
Slide 3: Our Equipment
Our Equipment Dump Trucks Drill Rigs 277 74 Excavators and Loaders 110 MACMAHON - Investor Conference Presentation December 19 3
Slide 4: Map of Operations
Map of Operations MACMAHON - Investor Conference Presentation December 19 4
Slide 5: Macmahon has evolved significantly
Macmahon has evolved significantly Revenue EBIT Business Unit Order Book Pipeline Pre AMNT Transaction Surface • Underground • Other FY16 312m 14 1.5bn Australia • International Surface • Underground • Other Results FY17 360m (-2) 1.3bn1 6.4bn1 Australia • International Post AMNT Transaction Sur
Slide 6: Key Projects
Key Projects Project / Clients Location Commodity / Type Comments • Commenced March 2012 Tropicana • WA Gold Alliance life-of-mine contract Australia Open-pit • Long Island extension to continue to 2023 • Potential to extend scope • Commenced February 2016 Telfer WA Copper-gold • Life-of-mine co
Slide 7: Key Projects
Key Projects Project / Division Location Commodity / Type Comments • Commenced August 2017 • Alliance life-of-mine contract Batu Hijau Sumbawa Copper-gold • Equipment depreciated on straight line basis over 5 years to August 2022 Indonesia Open-pit • If contract ends before August 2022, AMNT oblig
Slide 8: People and Safety
People and Safety Group Employee Numbers1 Injury Frequency Rates 450 3.98 3913 4119 4072 2630 1809 0.36 FY17 1H18 FY18 1H19 FY19 FY17 1H18 FY18 1H19 FY19 TRIFR (Total Recordable Injury Frequency Rate) Macmahon Employees GBF Group LTIFR (Lost Time Injury Frequency Rate) • New leadership program was i
Slide 9: Financial Performance
Financial Performance MACMAHON - Investor Conference Presentation December 19 9
Slide 10: Delivering strong growth in line with guidance
Delivering strong growth in line with guidance Revenue ($m) Guidance 1,400 1,200–1,300 1,200 1,103 1,000 Guidance 950–1,050 800 710 Guidance 600 620–680 400 360 200 FY17 FY18 FY19 FY20 Underlying EBIT ($m) Guidance 100 80–90 75 80 Guidance 70–80 60 42 Guidance 40 40–50 20 -2 -20 FY17 FY18 FY19 FY20
Slide 11: FY19 Revenue Diversification
FY19 Revenue Diversification Commodity Clients 13% AMNT 16% Gold Qcoal 11% 3% 34% Copper / Gold 39% AngloGold / IGO 5% Copper 3% Newcrest Coking Coal Dacian 12% Other Agincourt Other 11% 34% 19% Country 1% Activity 7% 7% Australia 38% Surface Indonesia Underground Other 61% Civil 86% MACMAHON - Inve
Slide 12: Robust Balance Sheet
Robust Balance Sheet $ Millions FY18 FY19 Cash 109.6 113.2 • Strong operating cash flow of $126m for FY19 underpinning robust financial position PPE 380.1 399.6 • Balance sheet supported reinstatement of sustainable Equity 409.8 447.6 dividends after 7 years Net Debt / (Cash) (3.3) 52.7 • Balance sh
Slide 13: Capital Allocation Policy & Dividends
Capital Allocation Policy & Dividends New policy adopted to balance growth and cash returns to shareholders Objectives 1. Maintain financial strength 2. Invest in growth 3. Return cash to shareholders 1. Maintain strong balance sheet 2. Ensure appropriate liquidity and gearing with regard to revenue
Slide 14: Strategy and Outlook
Strategy and Outlook MACMAHON - Investor Conference Presentation December 19 14
Slide 15: Strategy
Strategy Our strong order book with excellent revenue visibility underpins a focus on execution of work in hand and pursuit of new opportunities A premium provider of contract mining services across the mining value chain, delivering consistent returns and stable employment Safety Execution and Tech
Slide 16: Work in Hand
Work in Hand Work in Hand ($m)1 3 year Work in Hand by Commodity 1200 3% 1200 1103 1000 950 6% 800 750 Gold Copper / Gold 600 37% 54% Coking Coal 400 Other 200 FY19 FY20 FY21 FY22 3 year Work in Hand by Country • Order book of ~$4.7 billion, including GBF Group 1% • Existing order book underpins FY2
Slide 17: Tender Pipeline
Tender Pipeline Near Term Medium Term Long Term Exclusive / Preferred Tender Pre Tender Bubbles represent = $200m New Client Current Client contract value • 20+ tender opportunities worth $7bn+, split between Australia and Indonesia, and gold, base metals, lithium and coal • $4.5bn+ exclusive or pre
Slide 18: FY20 Priorities and Outlook
FY20 Priorities and Outlook FY20 priorities: Revenue Guidance • Lock in additional contract expansions / new work $1.2–$1.3bn • Mining technology $1.1bn • Build on safety culture • Growth in underground business – integrate GBF • Disciplined capital management FY20 guidance1: • Revenue of $1.2 - $1.
Slide 19: Thank You
Thank You Contact Chris Chong Investor Relations and Corporate Development cchong@macmahon.com.au Mick Finnegan CEO & MD mfinnegan@macmahon.com.au Giles Everist CFO geverist@macmahon.com.au www.macmahon.com.au MACMAHON - Investor Conference Presentation December 19 19
Slide 20: Appendix
Appendix MACMAHON - Investor Conference Presentation December 19 20
Slide 21: Corporate Overview
Corporate Overview Capital Structure Share Price ($) – 3 years Share Price $0.24 0.30 Fully paid ordinary shares (m) 2,155 Market Capitalisation $517.2m 0.25 Cash as at 30 June 2019 $113.2m Debt as at 30 June 2019 $165.8m 0.20 Enterprise Value $569.8m 0.15 Directors and Senior Management 0.10 Eva Sk
Slide 22: Digital Transformation
Digital Transformation Optimising performance and equipment health through deployment of next generation operational technology • Increasing visibility of business performance – Phase 1 of our new digital core (ERP) completed • Investing in People and transforming work - HR processes to become autom
Slide 23: Batu Hijau
Batu Hijau AMNT SUMBAWA • AMNT is an Indonesian mining company that acquired 82.2% of Batu Hijau mine from Newmont and Sumitomo in November 2016 • Supportive shareholder and two board representatives Batu Hijau Elang Nangka • Open pit, copper-gold porphyry located on Sumbawa, Indonesia Rinti • Secon
Slide 24: Profit and Loss
Profit and Loss $ Millions FY18 1H19 2H19 FY19 Change Revenue 710.3 542.1 560.9 1,103.0 p 55% EBITDA1 119.2 89.1 92.3 181.4 p 52% EBITDA margin 16.8% 16.4% 16.5% 16.4% EBIT 1 41.5 39.9 35.2 75.1 p 81% EBIT margin 5.8% 7.4% 6.3% 6.8% Net finance costs (2.4) (4.8) (5.9) (10.7) PBT1 39.1 35.1 29.3 64.5
Slide 25: Balance Sheet
Balance Sheet $ Millions FY18 1H19 FY19 Cash 109.6 77.4 113.2 Receivables 152.3 183.0 181.5 Inventories 42.0 45.8 45.8 Property, plant and equipment 380.1 408.2 399.6 Intangible assets and goodwill 5.8 9.6 10.2 Other assets 33.5 67.1 74.6 Total assets 723.3 791.2 824.9 Payables 175.0 175.0 168.6 Bor
Slide 26: Cash Flow
Cash Flow $ Millions FY18 FY19 EBITDA 119.2 181.4 Movement in receivables (93.8) (41.5) Movement in inventory (9.9) (3.8) Movement in payables and provisions 88.0 0.1 Other (1.6) (10.3) Interest and tax (paid) / received 3.9 (25.8) Class Action Settlement - (7.6) Net operating cash flow 105.8 92.5 C
Slide 27: Reconciliation of Non-IFRS Financial Information
Reconciliation of Non-IFRS Financial Information $ Millions FY18 Restated1 FY19 Profit for the year (as reported) 33.2 46.1 Add back: Loss from discontinued operations (net of tax) - 0.0 Less: Profit from discontinued operations (net of tax) (1.9) - Net profit after tax from continuing operations (a
Slide 28: Important Notice and Disclaimer
Important Notice and Disclaimer Disclaimer as to forward looking statements The forward looking statements in this Non-IFRS Financial Information presentation reflect views held only as at the date This presentation uses non-IFRS financial This presentation contains forward looking of this presentat
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