Slide 1: 2015 Half Year Results
2015 Half Year Results 5 February 2015
Slide 2: Financial overview
Financial overview • Net Profit After Tax (NPAT) $94.7million, down 4.4%1 Earnings • Earnings Before Interest and Tax (EBIT) $141.7 million, down 11.5%1 • Return on Funds Employed (ROFE) 15.0%, down from 16.6%1 Revenue • Total revenue2 $3.6 billion, down 8.8% Cash Flow • Operating cash flow $257.9 m
Slide 3: Infrastructure
Infrastructure • Markets remain very challenging due to low Total revenue1 $m EBIT $m commodity prices and reduced capital investment • Highly competitive tendering environment with 2,338.9 2,312.5 72.8 87.4 fewer opportunities, pressure on bid margins • Consulting businesses (Snowden, QCC and Miner
Slide 4: Mining
Mining • Pressure on commodity prices continues to be a Total revenue1 $m EBIT $m major challenge for our customers 815.2 1,024.5 63.4 90.1 • Lower revenue due to early termination of Goonyella, contract completion at Daunia and reduced volumes • In December 2014 received two Letters of Award from A
Slide 5: Rail
Rail • Lower revenue due to completion of Waratah Total revenue1 $m EBIT $m Train Project Rolling Stock Manufacture (RSM) contract 424.4 589.1 17.5 4.6 • Restructuring costs considerably lower 143 (1H15: $2.4 million, 1H14:$10.5 million) 446 • WTP Through Life Support (TLS) contract performing stron
Slide 6: Acquisition of Tenix Holdings Australia
Acquisition of Tenix Holdings Australia • Acquired Tenix Holdings Australia on 31 October 2014 for $300 million on a cash and debt free basis. Re-branded DownerTenix. • Tenix is a leading provider of long-term Tenix revenue (FY14) by sector operations and maintenance services to owners of electricit
Slide 7: Divisional restructure
Divisional restructure • To ensure Downer continues to succeed, take advantage of future opportunities and best meet the needs of its customers, the Group will operate as five Divisions: ― Infrastructure Services (Australian road and rail Infrastructure, telecommunications, power and DownerTenix) ―
Slide 8: Group Financials
Group Financials MDowner .
Slide 9: Financial performance
Financial performance $m HY15 HY14 Change (%) Total revenue1 3,586.0 3,931.1 (8.8) EBITDA 263.7 297.5 (11.4) EBIT 141.7 160.1 (11.5) Net interest expense (13.8) (23.7) 41.9 Tax expense (33.2) (37.2) 10.8 Net profit after tax 94.7 99.1 (4.4) EBIT margin 4.0% 4.1% Effective tax rate 26.0% 27.3% ROFE2
Slide 10: Summary of earnings
Summary of earnings $m Total Infrastructure Mining Rail Corporate Statutory EBIT 141.7 72.8 63.4 17.5 (12.0) Add back unfavourable items: • Redundancy costs 11.6 4.8 3.7 2.4 0.7 • Acquisition cost – Tenix 5.2 - - - 5.2 • Amortisation of customer related 1.6 - - - 1.6 intangibles Less favourable item
Slide 11: Operating cash flow
Operating cash flow Operating cash flow ($m) HY15 HY14 EBIT 141.7 160.1 Add: Depreciation & Amortisation 122.0 137.4 EBITDA 263.7 297.5 Operating cash flow 257.9 280.3 Add: Net interest paid1 12.0 25.4 Tax paid 21.9 16.4 Waratah Train Project net cash inflow2 (18.9) (28.1) Adjusted Operating cash fl
Slide 12: Cash flow
Cash flow $m HY15 HY14 Total operating 257.9 280.3 Net capital expenditure (78.7) (156.4) Tenix acquisition (308.9) - Other (16.5) (7.4) Total investing (404.1) (163.8) Tenix bridge loan finance 300.0 - Share buy-back1 (11.7) - Net repayment of borrowings (140.3) (191.2) Dividends paid (57.5) (46.5)
Slide 13: Balance sheet and capital management
Balance sheet and capital management $m Dec 14 Jun 14 Total assets 4,041.5 3,868.4 Total shareholders’ equity 1,995.6 1,962.0 Net debt1 252.7 32.7 Gearing: net debt to net debt plus equity 11.2% 1.6% Gearing (including off balance sheet debt)2 17.4% 9.2% Adjusted net debt / adjusted EBITDAR3 2.0 1.8
Slide 14: Debt maturity profile
Debt maturity profile • Weighted average debt duration: 2.1 years (at December 2014) • Downer intends to refinance $300 million Acquisition bridge loan in the debt capital markets • Debt capital markets being targeted: A$MTN and USPP with tenors of 7-10 years • Expect to exercise option to extend ex
Slide 15: Financial reporting
Financial reporting • Downer will report its results for the 2015 financial year under the Divisions of Infrastructure, Mining and Rail • From the 2016 financial year, Downer will report its results along service lines, being: ― Transport Services ― Telecommunications Services ― Utilities Services ―
Slide 16: Outlook
Outlook MDowner ..
Slide 17: Work-in-hand: $18.0 billion
Work-in-hand: $18.0 billion Work-in-hand by division1 Work-in-hand by type1 Infrast AU $7.8 billion 43% Schedule of rates $6.4 billion 36% Rail $3.5 billion 19% Fixed price $5.6 billion 31% Infrast NZ $3.4 billion 19% Recurring/annuities3 $4.9 billion 27% Mining $3.3 billion2 19% Cost Plus $0.6 bill
Slide 18: Group outlook
Group outlook On current trading, Downer is on track to meet its target NPAT of around $210 million for the 2015 financial year. 18
Slide 19: Appendices
Appendices MDowner ..
Slide 20: Debt and bonding facilities
Debt and bonding facilities Debt facilities $m Debt facilities by type % Total facilities 1,243 Syndicated bank facility 32 Drawn1 631 Acquisition bridge loan 24 Available facilities 612 Bilateral bank facilities 17 Cash 378 Capital markets: A$MTN 12 Total liquidity 990 ECA finance 9 Finance leases
Slide 21: FY16 reporting structure
FY16 reporting structure Operational Lines Infrastructure Services NZ EC&M Mining Rail Corporate Group Major Transport Telco Utilities Transport Telco Utilities Projects Transport Services X X X Telco Services X X X Services Lines Utility Services X X X EC&M Services X X X Mining Services X X Rail S
Slide 22: Summary of Mining contracts
Summary of Mining contracts Business Description Major contracts Name / Customer Initial contract Duration value Open cut Mine engineering, scheduling and Christmas Creek - Fortescue $3.1b 2010-16 planning, load and haul operations, dozer push operations, Boggabri Stage I & II – Idemitsu $1.8b 2006-
Slide 23: Disclaimer
Disclaimer Reliance on third party information This Presentation may contain information that has been derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the information. No respo