A STOR A STOR STORY SO FAR STORY SO FAR Y SO FAR SO FAR Brian Bruce Brian Bruce Non-Negotiable Commitment to Sustainable Globalising Murray & Roberts Globalising Murray & Roberts Earnings Growth and Value Creation
Non-Negotiable Commitment to Sustainable Globalising Murray & Roberts Earnings Growth and Value Creation
SOUTH AFRICA AND MURRAY & ROBERTS SOUTH AFRICA AND MURRAY & ROBERTS Colonisation “Winds of Change” “Darkest Africa” Uhuru & Apartheid Berlin Wall Berlin Wall Tiananmen Square February 2000 Globalisation Democracy Democracy � South Africa - a Global Nation in Africa � Murray & Roberts - a Global Company in South Africa Murray & Roberts a Global Company in South Africa Non-Negotiable Commitment to Sustainable Globalising Murray & Roberts Earnings Growth and Value Creation
LEADERS WHO BUILT MURRAY & ROBERTS LEADERS WHO BUILT MURRAY & ROBERTS 1902 TO 1980 1902 TO 1980 Non-Negotiable Commitment to Sustainable Globalising Murray & Roberts Earnings Growth and Value Creation
STRATEGIES THAT ALMOST DESTROYED IT STRATEGIES THAT ALMOST DESTROYED IT 1980 TO 2000 1980 TO 2000 14,000 100 12,000 600 90 10,000 8,000 400 80 6,000 4,000 200 70 2,000 60 0 0 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 50 Turnover Attributable 40 8000 30 7000 7000 6000 20 5000 4000 3000 10 2000 1000 1000 0 0 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 1980 1985 1990 1995 2000 Shareholders Funds Market Capitalisation Contracting Materials Industrial Non-Negotiable Commitment to Sustainable Globalising Murray & Roberts Earnings Growth and Value Creation
Non-Negotiable Commitment to Sustainable Globalising Murray & Roberts Earnings Growth and Value Creation
REBUILDING MURRAY & ROBERTS REBUILDING MURRAY & ROBERTS 2000 TO 2006 2000 TO 2006 2200 2000 1800 1600 + 650% 1400 1200 = 45% pa = 45% pa 1000 800 600 400 200 0 2000 2001 2002 2003 2004 2005 June June June June June June Share Price Non-Negotiable Commitment to Sustainable Globalising Murray & Roberts Earnings Growth and Value Creation
QUANTUM PHYSICS AND CHAOS QUANTUM PHYSICS AND CHAOS QUANTUM PHYSICS AND CHAOS QUANTUM PHYSICS AND CHAOS THE LORENZ ATTRACTOR THE LORENZ ATTRACTOR Non-Negotiable Commitment to Sustainable Globalising Murray & Roberts Earnings Growth and Value Creation
STRANGE ATTRACTOR IN QUANTUM PHYSICS STRANGE ATTRACTOR IN QUANTUM PHYSICS RISK ENVIRONMENT RISK ENVIRONMENT We explored and defined the “Strange Attractor” for Murray & Roberts. This concept from Chaos Theory defines the nature of a repetitive pattern of systems behaviour. A genetic behavioural fingerprint A genetic behavioural fingerprint . If an identified behaviour is repetitively destructive, as it has been in Murray & Roberts in recent years, y y , then by identifying its characteristic we can genetically redesign our “Corporate DNA” for a different future. Non-Negotiable Commitment to Sustainable Globalising Murray & Roberts Earnings Growth and Value Creation
MURRAY & ROBERTS ATTRACTOR MURRAY & ROBERTS ATTRACTOR Succession Market Value Alloy Wheels Headleases Standard Dorts Elgin Net Asset Value Net Asset Value Carlton C lt Vulnerability Non-Negotiable Commitment to Sustainable Globalising Murray & Roberts Earnings Growth and Value Creation
ACOMODADOR OR GIVING UP POINT ACOMODADOR OR GIVING-UP POINT An event in our experience that is primarily responsible for us failing to progress, e.g. � a trauma; � a particularly bitter defeat; � a performance disappointment; � even a victory we did not quite understand. These can make cowards of us and prevent us from moving on. Paulo Coelho Paulo Coelho Non-Negotiable Commitment to Sustainable Globalising Murray & Roberts Earnings Growth and Value Creation
CHANGING LEADERSHIP GENETICS CHANGING LEADERSHIP GENETICS Succession ? ? Market Value Alloy Wheels Headleases Standard GLOBALISATION Dorts GAUTRAIN Elgin CLOUGH Net Asset Value Net Asset Value C Carlton lt Vulnerability Non-Negotiable Commitment to Sustainable Globalising Murray & Roberts Earnings Growth and Value Creation
BEST IN CLASS BENCHMARKING BEST-IN-CLASS BENCHMARKING A Central Theme across all sectors within Engineering & Construction. • Globalisation remains an illusive ideal; • Many major players are experiencing increased risk/reward challenges; M j l i i i d i k/ d h ll and • A rapidly changing investment and risk environment; and that • Superior financial performance is possible; S i fi i l f i ibl • A range of business models can deliver superior results; • Best-in-class companies typically exhibit both revenue and value growth. Non-Negotiable Commitment to Sustainable Globalising Murray & Roberts Earnings Growth and Value Creation
GLOBAL CONSOLIDATION MODEL GLOBAL CONSOLIDATION MODEL St Stage 2 2 St Stage 3 3 Stage 1 Stage 4 Scale Focus Opening Alliances CR3 CR3 1 1 HHI HHI 2 2 100% 100% 0,7 0,7 Defense Electr . Defense Electr . Source: VBG Database, A.T. Kearney Analysis 90% 90% Cigarette Cigarette Autom . Controls Autom . Controls 80% 80% 80% 80% Distillers Distillers Maximum Maximum Shoe Mfrs. Shoe Mfrs. Shipbuilding Shipbuilding 70% 70% Mil. & Comm. Aircraft Mfrs. Mil. & Comm. Aircraft Mfrs. 60% 60% Aero. Engines & Parts Aero. Engines & Parts Soft drinks Soft drinks Truck & Trailer Mfrs. Truck & Trailer Mfrs. Confectionary Confectionary 0,1 0,1 Games & Toys Games & Toys Games & Toys Games & Toys 50% 50% 50% 50% Rubber & Tire Mfrs. Rubber & Tire Mfrs. Divers. Food Divers. Food Æ 45% Æ 45% Automotive Mfrs. Automotive Mfrs. 40% 40% Apparel Store Chains Apparel Store Chains Steel Producer integrated Steel Producer integrated Brewers Brewers Logistic Logistic Divers. Chemicals Divers. Chemicals Railroad Railroad 30% 30% Restaurants & Fast Food Restaurants & Fast Food Drugs Drugs Telekom Telekom National Regional Food Stores, Department Store Chains National Regional Food Stores Engineering & Airlines Airlines Automotive Supplier Automotive Supplier Contracting g 20% 20% % % Diversified Diversified Minimum Minimum Retailer Retailer Construction Construction Banks Banks 10% 10% 0,01 0,01 Utilities (Electric Utilities (Electric Insurance Insurance Power & Gas) 0% 0% 0 0 -5 -5 0 0 5 5 10 10 15 15 20 20 Years Years - CR3: Market share of the three biggest in relation to the overall market size in the VBG-Database Footnote: - HH1: Hirschman-Herfindahl Index equal to the sum of the squared market share of all companies. Correlation of HH1 and CR3 is > 90% HH1 - Axis is logarithmic scale Non-Negotiable Commitment to Sustainable Globalising Murray & Roberts Earnings Growth and Value Creation
STRATEGIC CONVERSION STRATEGIC CONVERSION STRATEGIC CONVERSION STRATEGIC CONVERSION Clough Unitrans sold for R935m Strategic buy Non-core Natural Retailing Resources Resources Cementation Cementation and Clough operate within the strategic focus of the Group and are expected to deliver attributable earnings from the 2007 financial year in line with what could have been expected had the Group remained invested in Unitrans h t ld h b t d h d th G i d i t d i U it Non-Negotiable Commitment to Sustainable Globalising Murray & Roberts Earnings Growth and Value Creation
GLOBAL BUSINESS MODEL GLOBAL BUSINESS MODEL GLOBAL BUSINESS MODEL GLOBAL BUSINESS MODEL Mining & Minerals Mining & Minerals Non-Negotiable Commitment to Sustainable Globalising Murray & Roberts Earnings Growth and Value Creation
GLOBAL MINING & MINERALS GLOBAL MINING & MINERALS GLOBAL MINING & MINERALS GLOBAL MINING & MINERALS THE CEMENTATION CO AFRICA LIMITED Acquired 1 July 2004 � De-listed from the JSE Limited � Merged with Murray & Roberts RUC � Empowered 1 January 2005 with � 20% sold to AKA Capital CEMENTATION CANADA INC Murray & Roberts International � Deepest mine outside RSA Deepest mine outside RSA � � Murray & Roberts Cementation Cementation Canada RUC A RUC Australia t li Non-Negotiable Commitment to Sustainable Globalising Murray & Roberts Earnings Growth and Value Creation
GLOBAL BUSINESS MODEL GLOBAL BUSINESS MODEL GLOBAL BUSINESS MODEL GLOBAL BUSINESS MODEL Oil & Gas Oil & Gas Non-Negotiable Commitment to Sustainable Globalising Murray & Roberts Earnings Growth and Value Creation
GLOBAL OIL & GAS GLOBAL OIL & GAS GLOBAL OIL & GAS GLOBAL OIL & GAS CLOUGH LIMITED CLOUGH LIMITED Based in Perth West Australia � Similar development history to � M Murray & Roberts & R b t Petrosea in Jakarta Indonesia � Australia, Indonesia, Thailand, India, � Pakistan Saudi Arabia and Caribbean Pakistan, Saudi Arabia and Caribbean 29,3% stake & share partnership Nov 2004 � Pre-acquisition issue : BassGas Dispute � 46,1% + 3,0% & de facto control Nov 2005 46 1% + 3 0% & de facto control Nov 2005 � � Clough Oil & Gas Clough Murray & Roberts Petrosea Non-Negotiable Commitment to Sustainable Globalising Murray & Roberts Earnings Growth and Value Creation
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