Macmahon Holdings Limited · ASX:MAH
Macmahon — Investor Presentation (September 2006)
37 slides from Macmahon's investor presentation, Sep 26, 2006
Slide 1: Investor Presentation
INVESTOR PRESENTATION Tuesday 26 September 2006
Slide 2: Outline of Presentation
Outline of Presentation 1 Macmahon – Strategy and Industry Financial Performance Operational Overview - Order Book - Construction - Mining - Services - People Shareholding Outlook
Slide 3: Industry and Strategy
Industry and Strategy fa [2°
Slide 4: About Macmahon
About Macmahon 3 • Started business in 1963 • Civil Construction and Mining Contractor • 2,700 full time employees • Operations throughout Australia and overseas • Forecast 2007 Revenue $1 to $1.1 billion • High level of repeat business with both Government and Resource Sector customers
Slide 5: What we do
What we do Q 4 MAGMAHON | @) MAGMAHON MINING | CONSTRUCTION Roadworks Railways (MVM) Ports Dams Pipelines Mine Infrastructure Maintenance | OPENCUT | UNDERGROUND | Mine Design Mine Development Mine Management Mine Production Load and Haul Drill and Blast Crushing | ALLPLANT Equipment Hire Equipment
Slide 6: Industry Outlook - Construction
Industry Outlook - Construction 5 Forecast market +$ 22 billion per annum through to 2008 Next Federal Election likely to increase spending post 2008 Macmahon contestable market is $7.5 to $10 billion – current share 5% Engineering Construction Engineering – Australia Construction - Australia
Slide 7: Industry Outlook – Contract Mining
Industry Outlook – Contract Mining 6 Forecast market $5.5 billion per annum through to 2010 Macmahon share, including ARD / CRE 10 % Value of Contract Mining in Australia (2003/04 V a lu e o f C $’million) o n tra c t M in in g i n A u s t r a li a ( $ 'm i l li o n ) 6 ,0 0 0 5 ,0 0 0 4 ,0 0 0
Slide 8: Strategy
Strategy race ouon Objective C Grow the Business “ Secure Market Position “ Increase Shareholder Returns Construction Services Govt Infastructure > Road > Rail > Ports > Dams Mining > Iron Ore > Coal > Base Metals Maintenance New Business > MVM > ARD/ CRE Projects aligned with our expertise Australi
Slide 9: What differentiates Macmahon
What differentiates Macmahon 8 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 fa E CONSTRUCTION MINING PLANT HIRE BUILDING CIVIL OPEN CUT UNDERGROUND = cc — _ N cc — —
Slide 11: Financials
Financials Q [20 MAGMAHON
Slide 12: Total Revenue
Total Revenue 11 Total Revenue increased 36% to record level Revenue has doubled in the last two years
Slide 13: EBIT and EBIT Margin
EBIT and EBIT Margin 12 EBIT Margin of 5.4% exceeded Target of 5% 5.4% EBIT Margin is the highest in the history of the Company
Slide 14: Profit After Tax
Profit After Tax 13 Profit from normal operations up 72% to record $27.4 million APT (Alice Springs to Darwin Railway) investment written down to zero
Slide 15: Cash Flow
Cash Flow 14 Strong Cash Flow from operations of $78 million Year end cash balance at $87 million
Slide 16: Balance Sheet
Balance Sheet 15 Return on equity 16% Interest cover improved to 5.8 x
Slide 17: Annual CAPEX
Annual CAPEX 16 2006 capital expenditure focused on increasing capacity in Mining and Allplant Open Cut truck fleet size increased to provide operational efficiencies
Slide 18: Earnings Per Share / Dividend Per Share
Earnings Per Share / Dividend Per Share 17 Full year, fully franked dividend increased to 2 cents Payout ratio 36%, up from 24% in 2005
Slide 19: Operations
Operations 18
Slide 20: Order Book
Order Book 19 30 June Order Book at record $1.2 billion 70% Mining and 30% Construction $1.1 billion of new contracts and extensions in 2006
Slide 21: Order Book Run Off and Contract Style
Order Book Run Off and Contract Style 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
Slide 22: Major Customers
Major Customers Q 21 MACGMAHON 4 bl bhpbilliton Peabody i / Government of Ga, Western TWh Australia we 9 Y , AS Northern Territory Government — NEWMONT The Gold Company (ny Quesnsians AY Government
Slide 23: New Contracts / Extensions - Since June 2006
New Contracts / Extensions - Since 30 June 2006 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 Island (WA)
Slide 24: Construction
Construction 23 2006 Financials - Revenue $370 million - EBIT $14.7 million 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 Waterfron
Slide 25: Darwin Waterfront
Darwin Waterfront @) | 24 MAGMAHON
Slide 26: Ross River Dam
gE MAGMAHON = © fal © 2 ra i) ip) O a
Slide 27: Mining
Mining 26 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
Slide 28: Eaglefield Coal Mine
Eaglefield Coal Mine fa [27
Slide 29: Orebody 18
Orebody 18 fa [28
Slide 30: ARD / CRE
[= MAGMAHON ARD / CRE
Slide 31: Services (Allplant)
Services (Allplant) 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 increase
Slide 32: Nebo Workshop
Nebo Workshop fa [21
Slide 33: People
People 32 Workforce at 2700 People Need to increase workforce over next 12 months for new work Longer term contracts for blue chip customers attractive for employees Focusing on retention strategies for existing workforce Shortages of engineers and mechanical tradesmen. Solution via gradua
Slide 34: Shareholding
Shareholding 33 Shares on issue = 519 million, 6,900 Shareholders Staff Options = 22 million Top 20 Shareholders own 65% Average monthly turnover 18 million shares
Slide 35: Outlook
Outlook 34
Slide 36: Outlook
Outlook 35 Positive Market Conditions Outlook - 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: Questions
QUESTIONS == |MACMAHON
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