Slide 1: Interim Results Presentation for the six months ended 31 December 2022
21 February 2023 Interim Results Presentation for the six months Puhinui Station ended 31 December 2022 Auckland, New Zealand
Slide 2: Agenda
A 1 OVERVIEW Sean Flanagan (Group CEO) G OUTLOOK 2 E Sean Flanagan (Group CEO) N 3 FINANCE Adrian Macartney (Group CFO) D KEY MESSAGES 4 A Sean Flanagan (Group CEO)
Slide 3: Overview
1 OVERVIEW Eastland Port Wharf 7Upgrade Gisborne/Tairāwhiti, New Zealand
Slide 4: Strategy - Turnaround and Positioning for Growth
STRATEGY - TURNAROUND AND POSITIONING FOR GROWTH 2017 The perfect storm An international engineering led 2018 ESG Restructuring contractor focused on framework infrastructure, resources and contract mining in selected markets 2019 People and systems Execution of • Two businesses – Moolmans and strat
Slide 5: Where we are on our journey | Balance sheet is in the best shape
WHERE WE ARE ON OUR JOURNEY | BALANCE SHEET IS IN THE BEST SHAPE IT HAS BEEN IN 8 YEARS Turned around a loss-making, over-geared business that was under-invested in equipment, systems and people 5th consecutive reporting period that Aveng delivers profitable earnings The deleveraged balance sheet cr
Slide 6: Where we are on our journey | Improving operational performance (McConnell Dowell)
WHERE WE ARE ON OUR JOURNEY | IMPROVING OPERATIONAL PERFORMANCE McConnell Dowell • Australia and New Zealand (84% of revenue) achieved an operating margin in line with our aspirations • 92% of contracts profitable • Batangas LNG terminal project in Philippines adversely affected performance: - Award
Slide 7: Where we are on our journey | Improving operational performance (Moolmans)
WHERE WE ARE ON OUR JOURNEY | IMPROVING OPERATIONAL PERFORMANCE Moolmans • 4 out of 5 contracts achieved an operating margin in line with our aspirations, negatively impacted by significant losses incurred on the terminated Tshipi contract • A new 5-year contract at Tshipi é Ntle was signed in Janua
Slide 8: ESG in practice
ESG IN PRACTICE Group safety performance Women in mining Recycling waste Working with local community • No fatalities • 12 female trainees from Moolmans local • Ovingham Level Crossing Removal project in • Our team on the Ngā Hau Māngere worked • Lost Time Injury Frequency Rate – 0,10 communities we
Slide 9: Outlook
2 OUTLOOK Trucks loaded to be transported to Tshipi Northern Cape, South Africa
Slide 10: Looking forward, we are:
LOOKING FORWARD, WE ARE: An international engineering led contractor with two businesses focused on infrastructure, resources and contract mining in s elected markets • Offers engineering and infrastructure • Offers specialised services to the mining solutions in the transport, water and industry sp
Slide 11: McConnell Dowell: Work in hand and opportunity pipeline
MCCONNELL DOWELL Opportunity Pipeline STRONG WORK IN HAND WITH FOCUS ON IMPROVING OPERATIONAL PERFORMANCE AND RETURNS AUD3,9bn • 92% of active projects profitable Work in hand • Work in Hand of AUD3,9 billion* provides a strong revenue platform over the next 18 months • Planned revenue for FY23 secu
Slide 12: McConnell Dowell | Continued
MCCONNELL DOWELL | CONTINUED DISCIPLINED PROJECT EXECUTION IS FUNDAMENTAL TO THE GOAL OF BEING A FIT-FOR-PURPOSE ORGANISATION CAPABLE OF SUSTAINABLE PROFITABLE LONG-TERM GROWTH • General cost pressures an industry wide risk - Managed at both tender and project delivery stages via multiple strategies
Slide 13: Moolmans: Work in hand and opportunity pipeline
MOOLMANS INVESTMENT IN NEW EQUIPMENT COUPLED WITH RECENT Opportunity Pipeline CONTRACT AWARDS REPOSITIONS MOOLMANS FOR GROWTH • Focus on operational performance through investment in our people and systems • Continued investment in new equipment in line with our strategy of selecting and entering in
Slide 14: Trident Steel
TRIDENT STEEL • Disposal process – envisaged implementation date during the 2023 financial year - Majority of conditions precedent met - Shareholder and competition approvals received - New investment in BEE SPV including a R207 million loan from Aveng to facilitate a future BEE transaction and to b
Slide 15: Finance
3 FINANCE Tshipi Northern Cape, South Africa
Slide 16: At a glance
AT A GLANCE HY 2023 HY 2022 % Rm Rm variance Revenue 15 035 12 958 15 Operating earnings 181 R215 (16) Earnings for the period 48 53 (9) Headline earnings 77 17 >100 External legacy debt 353 478* 26 Net cash (excl. IFR16) 2 052 2 136* (4) Work in hand R53,3bn R30,8bn* 73 Gamsberg, South Africa * At
Slide 17: Revenue and gross margin
REVENUE AND GROSS MARGIN McConnell Dowell – AUDm 5.7% 6.7% 6.5% • Revenue growth of 16% (in AUD) driven by the Australian business unit 1500 0.00% benefiting from increased government spend 1000 500 712 842 979 • Gross margin flat as a consequence of BLNG 0 -50.00% HY 2021 HY 2022 HY 2023 Revenue Gr
Slide 18: Operating earnings
OPERATING EARNINGS McConnell Dowell – AUDm 3.5%, excl. BLNG 1.8% • Earnings up 15% - Australia and New Zealand performed in line with margin 16 1.5% 1.5% incl. BLNG1.9% 1.8% 15 1.7% 1.6% aspirations 14 1.5% 1.4% 13 1.3% 1.2% 12 13 13 1.1% 1.0% • Operating earnings margin of 1,5% - flat as a conseque
Slide 19: Segmental results
SEGMENTAL RESULTS REVENUE OPERATING EARNINGS/(LOSS) EBITDA HY 2023 HY 2022 Change HY 2023 HY 2022 Change HY 2023 HY 2022 Change Rm Rm Rm Rm Rm Rm Rm Rm Rm McConnell Dowell 11 356 9 272 2 084 175 144 31 300 277 23 Moolmans 1 424 1 919 (495) 20 99 (79) 238 354 (116) Other - (3) 3 (80) (81) 1 (78) (80)
Slide 20: Comprehensive earnings
COMPREHENSIVE EARNINGS HY 2023 HY 2022 Change Rm Rm Rm Revenue 15 035 12 958 2 077 Gross earnings 1 003 979 24 Gross margin 6,7% 7,6% (12%) Operating earnings 181 215 (34) Non-recurring items 4 (29) 33 Earnings before financing 185 186 (1) transactions and taxation Net finance expense (123) (125) 2
Slide 21: Financial position
FINANCIAL POSITION Dec 2022* Jun 2022 Change Rm Rm Rm ASSETS 13 590 12 475 1 115 Property, plant and equipment 2 488 2 479 9 Right-of-use assets 606 606 - Investments 211 268 (57) Working capital 6 491 5 491 1 000 Cash and bank balances 2 797 2 617 180 Tshipi Northern Cape, South Africa * Current ye
Slide 22: Financial position
FINANCIAL POSITION Dec 2022* Jun 2022 Change Rm Rm Rm LIABILITIES AND EQUITY 13 590 12 475 1 115 LIABILITIES External borrowings and liabilities 745 481 (264) Credit and term facilities 353 478 (124) Trade Finance Facility 390 - 390 Asset-backed financing arrangements 2 3 (2) Lease liabilities 1 033
Slide 23: Working capital
WORKING CAPITAL Dec 2022* Jun 2022 Change Rm Rm Rm Commentary Inventory 1 449 1 033 416 Increased inventory levels at Trident Steel Trade and other receivables 895 856 39 Contract assets 4 159 3 626 533 Trade and other payables (5 051) (4 164) (887) Increased in line with McConnell Dowell’s work in
Slide 24: Contract assets and liabilities
CONTRACT ASSETS AND LIABILITIES Dec 2022 Jun 2022 Change Rm Rm Rm Uncertified revenue and variations 2 024 1 225 799 Contract contingencies (129) (81) (48) Contract and retention receivables 2 269 2 485 (216) Provision for contract receivables (5) (3) (2) CONTRACT ASSETS 4 159 3 626 533 Progress bil
Slide 25: Operating free cashflow
OPERATING FREE CASHFLOW HY 2023 HY 2022 Change Rm Rm Rm Commentary McConnell Dowell 433 667 (234) Increase in working capital as a result of higher work in hand Moolmans (60) 104 (164) Capital expenditure in the form of major component replacement Other (119) (46) (73) TOTAL CORE 254 725 (471) Aveng
Slide 26: Liquidity
LIQUIDITY Dec 2022* Jun 2022 Change Rm Rm Rm Commentary Net cash (including overdrafts) 2 797 2 617 180 South African operations 94 249 (155) McConnell Dowell 2 703 2 368 335 Early receipts from several clients in Australia in December of c.AUD25 million Borrowings (745) (481) (264) Credit and term
Slide 27: Movement in net cash
MOVEMENT IN NET CASH 3 500 595 390 3 000 58 2 797 2 617 (246) 56 (123) (8) (122) 2 500 (126) (294) 2 000 1 500 1 000 500 0 Cash Cash balance balance 30 Jun Cash Cashfrom from Working Working capital Net capital Net finance finance charges Taxation Taxation Net Netcapital capital Proceeds Proceeds on
Slide 28: Key messages
MN VENG Providing a better life
Slide 29: Key messages
KEY MESSAGES REPORTED 5TH CONSECUTIVE PROFITABLE PERIOD focus on improving margin performance SALE OF TRIDENT STEEL IS SIGNIFICANTLY ADVANCED legacy debt to be extinguished and surplus cash used to prioritise returns MCCONNELL DOWELL IMPROVED WORK IN HAND TO AUD3,9 BILLION strong revenue base for pr
Slide 30: Thank you, questions
MN VENG Providing a better life THANK YOU QUESTIONS
Slide 31: Appendix | Statement of comprehensive earnings
APPENDIX | STATEMENT OF COMPREHENSIVE EARNINGS HY 2023 HY 2022 Change HY 2023 HY 2022 Change Rm Rm Rm AUDm AUDm AUDm Revenue 15 035 12 958 2 077 1 289,0 1 139,6 149,4 Cost of sales (14 032) (11 979) (2 053) (1 203,0) (1 053,5) (149,5) Gross earnings 1 003 979 24 86,0 86,1 (0,1) Other earnings 19 38
Slide 32: Appendix | Statement of financial position
APPENDIX | STATEMENT OF FINANCIAL POSITION Dec 2022 Jun 2022 Dec 2022 Jun 2022 Rm Rm AUDm AUDm ASSETS 13 590 12 475 1 177,9 1 107,1 Goodwill 100 100 8,7 8,9 Property, plant and equipment 2 291 2 479 198,6 220,0 Right-of-use assets 284 606 24,6 53,8 Lease receivables 78 82 6,8 7,3 Investments 148 148
Slide 33: Appendix | Statement of financial position
APPENDIX | STATEMENT OF FINANCIAL POSITION Dec 2022 Jun 2022 Dec 2022 Jun 2022 Rm Rm AUDm AUDm EQUITY AND LIABILITIES 13 590 12 475 1 177,9 1 107,1 Liabilities 9 733 8 755 843,6 776,9 External borrowings and liabilities 355 481 30,8 42,7 Deferred taxation 117 121 10,1 10,7 Lease liabilities 593 1 03