Macmahon Holdings Limited · ASX:MAH
Macmahon — Euroz Securities Limited Presentation 2006
33 slides from Macmahon's conference presentation, Mar 8, 2006
Slide 1: Euroz Securities Limited Presentation
0 Presentation Outline January 2006 Euroz Securities Limited Presentation Wednesday 8 March 2006 Footnote: IFRS (TOB) Euroz Securities Limited Presentation 8 March 2006 0
Slide 2: Industry and Strategy
1 Industry and Strategy Euroz Securities Limited Presentation 8 March 2006 1
Slide 3: Who we are
2 Who we are CONSTRUCTION MINING SERVICES CIVIL OPEN CUT UNDERGROUND ALLPLANT MVM Rail Euroz Securities Limited Presentation 8 March 2006 2
Slide 4: Industry Outlook
3 Industry Outlook Engineering Construction - Australia (2003/04 $'billion) 25 5 year average 20 Value of Work ($' billion) 15 10 5 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Roads Bridges Railways Harbours Water Heavy Industry Other Sources: BIS Shrapnel: Engineeri
Slide 5: Industry Outlook: Value of Contract Mining in Australia
4 Industry Outlook Value of Contract Mining in Australia ($'million) 7,000 5 year average 6,000 5,000 Value of Work ($'million) 4,000 3,000 2,000 1,000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Coal Iron Ore Bauxite Copper Gold Ag/Pb/Zi Other Ores (Ni) * Sourc
Slide 6: Competitor Profile
5 Competitor Profile Euroz Securities Limited Presentation 8 March 2006 5
Slide 7: Strategy
6 Strategy Macmahon Strategy – Increase Total Shareholder Returns Two key Pillars: - Grow the Business - Increase EBIT Margins (Profitability) Growth Opportunities • Construction - Large government infrastructure projects - Mining expansion projects (iron ore and coal) • Mining - Iron ore, coal and
Slide 8: Strategy: Targets
7 Strategy Targets Targets Actual Dec 05 EBIT Margin 5% 2006 5.1% 6% 2007 PAT Growth +20% pa +107% Debt/Equity <50% short term 16.9% <30% long term ROE +15% 15.8% TRIFR Continual Improvement 18.2% improvement Euroz Securities Limited Presentation 8 March 2006 7
Slide 9: Financials
8 Financials Euroz Securities Limited Presentation 8 March 2006 8
Slide 10: Financials Summary
9 Financials Summary 31 Dec 05 31 Dec 04 Change Revenue Group $370 $243 +52% Joint Venture $36 $38 -5% Total Revenue $406 $281 45% EBIT $20.5 $11.2 +83% EBIT Margin 5.1% 4.0% +28% PBT $16.9 $8.3 +103% PAT $11.7 $5.7 +107% EPS 2.6 cents 1.4 cents +82% Dividends per share 0.5 cent Nil Note: 2004 tax a
Slide 11: Total Revenue
10 Total Revenue Half year Total revenue up 45% on December 2004 half 13% increase on June 2005 half confirms continued growth All divisions delivering growth Systems in place to manage growth Total Revenue Euroz Securities Limited Presentation 8 March 2006 10
Slide 12: EBIT and EBIT Margin
11 EBIT and EBIT Margin EBIT up 83% on December half and 27% up on June 05 half Importantly EBIT margins increased to 5.1% - above 2006 FY target of 5% EBIT margin highest in company history Increased EBIT margins from improved tender results Euroz Securities Limited Presentation 8 March 2006 11
Slide 13: Profit After Tax
12 Profit After Tax Record half year profit of $11.7 million Profit up 107% on December 2004 half and up 15% on June 2005 half Tax now applied at 30% (AIFRS) although tax paid in 2006 FY will be approximately 15% Accumulated tax losses used up by July 2007 PAT Note: PAT for FY03 & FY04 has been norm
Slide 14: EPS & Dividend
13 EPS & Dividend EPS of 2.6 cents on expanded share base following capital raising (516 million shares at December 2005) Interim fully franked dividend of 0.5 cent on back of record result and positive outlook DRP activated @ 2.5% discount ** ** EPS & Dividend *Not AIFRS restated Euroz Securities L
Slide 15: Operating Cash Flow
14 Operating Cash Flow Euroz Securities Limited Presentation 8 March 2006 14
Slide 16: Balance Sheet
15 Balance Sheet Euroz Securities Limited Presentation 8 March 2006 15
Slide 17: Market Cap
16 Market Cap Market cap now +$360 million up from $174 million in June 2005 Share price continues to show improvement up from 46 cents at June 05 and 27 cents June 04 Positive share price performance following capital raising in late 2005 Market Cap Euroz Securities Limited Presentation 8 March 200
Slide 18: Share Price: Cents per Share
17 Share Price Cents per Share Euroz Securities Limited Presentation 8 March 2006 17
Slide 19: Operations
18 Operations Euroz Securities Limited Presentation 8 March 2006 18
Slide 20: Order Book
19 Order Book $705 million of new contracts and contract extensions in 6 months to December 2005 December 2005 order book at a record $1.2 billion Focusing on securing longer term contracts for blue chip clients Further contract extensions and new work expected in next 6 months Order Book Euroz Secu
Slide 21: Style of Contract & Run-Off
20 Style of Contract & Run-Off Majority of contracts (89%) fully protected for cost increases Fixed price contracts appropriately priced $392 million of contracts already secured for June 2006 half Combined with expected contract extension and completed work already have $836 million of work locked
Slide 22: Orders by Commodity
21 Orders by Commodity Euroz Securities Limited Presentation 8 March 2006 21
Slide 23: Our Major Clients
22 Our Major Clients Euroz Securities Limited Presentation 8 March 2006 22
Slide 24: Construction Division
23 Construction Division Euroz Securities Limited Presentation 8 March 2006 23
Slide 25: Construction Division Outlook
24 Construction Division Outlook Construction revenue continues to grow Significant increase in EBIT to $8.0million with improved EBIT margin of 4.3% All construction contracts profitable Contracts reflect current industry costs High levels of tendering activity in QLD and WA (Government infrastruct
Slide 26: Mining Division
25 Mining Division Euroz Securities Limited Presentation 8 March 2006 25
Slide 27: Mining Division Outlook
26 Mining Division Outlook Existing mines continue to increase production (Eaglefield and Olympic Dam) 4 year $250 million BHP Billiton Orebody 18 iron ore contract commences March 06 Preferred tenderer for BHP Billiton Jimblebar iron ore mine Contract renegotiations and new work will deliver improv
Slide 28: Services Division (Allplant)
27 Services Division (Allplant) Euroz Securities Limited Presentation 8 March 2006 27
Slide 29: Services Division (Allplant) Outlook
28 Services Division (Allplant) Outlook Equipment hire fleet expanded to 132 items Nebo workshop complex in Queensland coal fields now operational Planning underway for new workshop complex in Perth Further growth forecast in 2007 Euroz Securities Limited Presentation 8 March 2006 28
Slide 30: People
29 People Workforce now at 2550 Need to increase workforce over next 12 months for new work Longer term contracts for blue chip clients attractive for employees Shortages of engineers and mechanical tradesmen. Overseas recruitment a short term solution Focusing on retention strategies for existing w
Slide 31: Outlook
30 Outlook Euroz Securities Limited Presentation 8 March 2006 30
Slide 32: Outlook
31 Outlook Positive Market Conditions - Government infrastructure - Resources activity (iron ore, coal, copper) Contractor services in short supply - opportunity Expect 2006 revenue of $850 million with EBIT margins above 5% Existing and new contracts expected to lift revenue above $1 billion in 200
Slide 33: Discussion
32 Discussion Euroz Securities Limited Presentation 8 March 2006 32
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