Macmahon Holdings Limited · ASX:MAH
Macmahon — Investor Presentation (October 2007)
19 slides from Macmahon's investor presentation, Oct 31, 2007
Slide 1: Investor Presentation – Information Briefing – Refinancing
Ross Carroll – Chief Financial Officer Theresa Mlikota – General Manager Corporate Finance & Investor Relations Matthew Phillips – Group Treasurer Investor– Presentation Information Briefing – Refinancing New Finance Package - 31 October 2007 1
Slide 2: Disclaimer
Disclaimer This presentation contains forward looking statements that are subject to risk factors associated with the mining and construction businesses. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a variety of variables and changes i
Slide 3: Briefing Outline
Briefing Outline The need to refinance The opportunity New facilities Benefits Reporting impacts 3
Slide 4: The Need to Refinance
The Need to Refinance The Company is experiencing a period of significant growth Strong focus on growing East Coast construction business and expanding existing contract mining opportunities in coal, iron ore, copper and uranium Future expansion into overseas markets Revenue projections indi
Slide 5: The Opportunity
The Opportunity Existing Facilities Insufficient facilities to fund growth Inflexible facilities - Limitations on acquisitions and disposals - Limitations of shareholder returns - Financial Indebtedness limits High margins – reflecting historic credit Company’s operations have been signifi
Slide 6: New Facilities
New Facilities 6
Slide 7: New Facilities
New Facilities Revolving Credit and Guarantee Facility 3 year term $150 million committed facility includes revolving cash advance and guarantee tranches Provided by ANZ, HSBC and CAT Finance Master Operating Lease Facility Up to 7 year leasing (2 year drawdown period) $230 million domesti
Slide 8: Benefits
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Slide 9: Benefits – Revolving Credit and Guarantee Facilities
Benefits Revolving Credit and Guarantee Facilities Lower costs Increase in limits of $30 million More flexible: Financial covenants (reduced from 6 to 3) Less onerous undertakings (removing limits on financial indebtedness) No limits on return to shareholders Allows for continued growt
Slide 10: Benefits – Operating Lease
Benefits Operating Lease Reduced reliance on equity raisings to fund capital requirements – EPS accretive and NPV positive Improves ‘free cash flow’ Off Balance Sheet funding – reduces gearing Increasing corporate flexibility to pursue acquisitions or increase dividends to shareholders Com
Slide 11: Benefits – Operating Lease (continued)
Benefits Operating Lease (continued) Flexibility: Tailored lease payment profile (including principal holidays) Restructure options in the event of under / over usage Early termination in the event of mining contract cancellation (after an initial 12 month lease period) Purchase option F
Slide 12: Financial Impacts – Operating Lease
Financial Impacts – Operating Lease 12
Slide 13: Equipment Funding Options
Equipment Funding Options Debt / Finance Lease Debt / Equity Operating Lease Gearing ▲ Gearing exceeds ▲Gearing may exceed ▼ “Off balance sheet” covenant limits covenant limits reduces gearing EPS ▲Accretive ▼ Dilutive ▲ Accretive - no equity calls - no equity calls Shareholder NPV ▲ No equity calls
Slide 14: Reporting Impacts
Reporting Impacts EXS500
Slide 15: Profit Reporting
Profit Reporting Note: Illustration only Example: $100 million capital expenditure increase Base 100% Debt 100% Operating Lease Adj Total Adj Total Sales 1,000.00 115.00 1,115.00 115.00 1,115.00 Other expenses -890.00 -88.50 -978.50 -88.50 -978.50 Depreciation -50.00 -10.00 -60.00 - -50.00 Operating
Slide 16: Cash Flow Reporting
Cash Flow Reporting Note: Illustration only Example: $100 million capital expenditure increase 100% 100% Debt Operating Lease Interest (8.00) - Lease Payment - (18.25) Capex (100.00) - Loan drawdown/ (repayment) (10.00) - Interest and principal vs. Operating lease payment Cash flows are ‘smoothed’ u
Slide 17: Balance Sheet Reporting
Balance Sheet Reporting Note: Illustration only Example: $100 million capital expenditure increase OLD NEW 30 June 2007 100% Debt Operating Lease (Adj) $m (Adj) $m Assets 560 100 660 - 560 Net Debt 54 100 154 - 54 Equity 211 - 211 - 211 Gearing (ND/E) 26% 73% - 26% Gearing ND/(ND+E) 20% 42% - 20% Hi
Slide 18: Questions
CATERPILLAR QMACMAHON CATERPILLAR
Slide 19: Investor Presentation – Refinancing
Investor Presentation – Refinancing 19
Macmahon Holdings — Investor Presentation (October 2007) on 6ix