Downe r Group 2014 F ull Ye a r Re sults 5 Aug ust 2014
F ina nc ia l ove rvie w ) $216.0 millio n, up 5.9% 1 • Ne t Pro fit Afte r T a x (NPAT nings E ar • E a rning s Be fo re Inte re st a nd T a x (E BIT ) $341.1 millio n, do wn 4.9% 1 • Re turn o n F unds E mplo ye d (ROF E ) 16.8%, do wn fro m 17.7% 1 Re ve nue o ta l re ve nue 2 $7.7 b illio n, do wn 15.3% • T • Ope ra ting c a sh flo w $583.4 millio n, up 30.2% Cash F low • Wo rk-in-ha nd 3 $17.6 b illio n, do wn 7.4% fro m June 2013 Wor k-in-hand • Ne t de b t 4 $32.7 millio n, do wn 86.5% Balanc e She e t • Ge a ring 5 1.6% (9.2% inc luding o ff-b a la nc e she e t de b t) • F ina l divide nd de c la re d: 12.0 c ps, 100% fra nke d, no DRP Capital manage me nt • On-ma rke t sha re b uy-b a c k • L T IF R o f 1.08, up fro m 0.70 a t June 2013 Ze r o Har m • T RIF R o f 4.83, do wn fro m 5.42 a t June 2013 1 (i) Ba se d o n sta tuto ry numb e rs; (ii) F o llo wing the a d o p tio n o f AASB11 Jo int Arra ng e me nts in the c urre nt ye a r, p rio r ye a r c o mp a ra tive s ha ve b e e n re -sta te d . 2 T o ta l re ve nue is a no n-sta tuto ry d isc lo sure a nd inc lud e s re ve nue fro m jo int ve nture s a nd o the r a llia nc e s a nd o the r inc o me . No te : the Co mp a ny c o nsid e rs T o ta l Re ve nue to b e a n a p p ro p ria te me a sure d ue to a n ind ustry tre nd to wa rd jo int ve nture mo d e ls to me e t the ne e d s o f e ng ine e ring , p ro c ure me nt a nd c o nstruc tio n (EPC) c usto me rs with re g a rd to la rg e sc a le inte g ra te d p ro je c ts. 3 Wo rk-in-ha nd numb e rs a re una ud ite d . 4 Ad juste d fo r the ma rk-to -ma rke t o f d e riva tive s a nd d e fe rre d fina nc e c ha rg e s. 5 Ge a ring = Ne t d e b t / ne t d e b t + e q uity. Ge a ring inc lud ing o ff-b a la nc e she e t d e b t b a se d o n p re se nt va lue o f p la nt a nd e q uip me nt o p e ra ting le a se s 2 d isc o unte d a t 10% p a : $166.8m (June 2013: $231.8m).
Group re ve nue : F Y13 to F Y14 Mining (569) Infr astr uc tur e (501) Rail (333) ($m) All numb e rs o n this slid e a re ro und e d to the ne a re st who le numb e r. Divisio na l re ve nue mo ve me nts d o no t a d d up p re c ise ly to to ta l Gro up re ve nue d ue to the e xc lusio n o f inte r-se g me nt sa le s a nd una llo c a te d ite ms. 3
Infra struc ture • Sub d ue d c o nd itio ns fo r re so urc e s-re la te d e ve nue 1,2 $m T otal r E BIT $m e ng ine e ring a nd c o nstruc tio n; multip le initia tive s in p la c e to d rive e ffic ie nc ie s a c ro ss the b usine ss 5,242.6 230.3 4,742.0 191.1 • Sig nific a nt c o ntra c t wins d uring the ye a r: ― Whe a tsto ne E &I ($400 millio n) ― Sydne y We st Zo ne Ste wa rdship Ma inte na nc e Co ntra c t (Do wne r sha re $350 millio n) F Y14 F Y13 F Y14 F Y13 ― Ma ule s Cre e k Co a l Ha ndling a nd Pro c e ssing Pla nt ($100 millio n) E BIT mar gin 3 ROF E ― Ya ndi E &I ($80 millio n) 4.0% 4.4% 21.0% 25.8% ― T AN Burrup AN Pla nt ($70 millio n) ― In NZ, a numb e r o f ro a d infra struc ture pro je c ts a nd se le c te d a s a le a d c o ntra c to r o n sta g e o ne o f Ce ntra l Pla ins Irrig a tio n sc he me (NZ$140m) • So lid Ne w Ze a la nd re sult, d rive n b y ro b ust a c tivity F Y14 F Y14 F Y13 F Y13 a c ro ss a ll o p e ra tio na l a re a s, c o ntinue d b usine ss imp ro ve me nt a nd a stro ng e r Ne w Ze a la nd d o lla r 1 T o ta l re ve nue inc lud e s jo int ve nture s a nd o the r inc o me . 2 F o llo wing the a d o p tio n o f AASB11 Jo int Arra ng e me nts in the c urre nt ye a r, p rio r ye a r c o mp a ra tive s ha ve b e e n re -sta te d . 4 3 ROF E = EBI T d ivid e d b y a ve ra g e fund s e mp lo ye d (AF E). AF E = Ave ra g e Op e ning a nd Clo sing Ne t De b t + Eq uity.
Mining • Re ve nue d o wn a s a re sult o f c o ntra c ts finishing in F Y13 a nd vo lume re d uc tio ns e ve nue 1 $m T otal r E BIT $m • Stro ng E BI T ma rg in g e ne ra te d fro m p ro d uc tivity 1,982.9 2,551.9 171.4 174.2 imp ro ve me nts, c ha ng e s to e q uip me nt fina nc ing • Sig nific a nt c o ntra c t wins d uring the ye a r: ― 4.5 ye a r c o ntra c t with Ro y Hill Iro n Ore ($500 millio n) F Y14 F Y13 F Y13 ― F Y14 F ive -ye a r c o ntra c t e xte nsio n a t Co mmo do re (Millme rra n po we r Pa rtne rs) ($200-250 millio n) E BIT mar gin ROF E 2 % ― One -ye a r c o ntra c t e xte nsio n a t Bo g g a b ri 20.9% 8.6% 6.8% 20.3% (Ide mitsu) • E a rly te rmina tio n b y BHP Billito n Mitsub ishi Allia nc e (BMA) a t Go o nye lla Rive rsid e mine will re d uc e wo rk-in-ha nd b y ~$360 millio n o ve r F Y15 a nd F Y16 F Y14 F Y14 F Y13 F Y13 1 T o ta l re ve nue inc lud e s jo int ve nture s a nd o the r inc o me . 2 ROF E = EBI T d ivid e d b y a ve ra g e fund s e mp lo ye d (AF E). AF E = Ave ra g e Op e ning a nd Clo sing Ne t De b t + Eq uity. 5
Ra il • Co mp le te d Wa ra ta h Ro lling Sto c k Ma nufa c ture T otal r e ve nue 1 $m E BIT $m c o ntra c t in Ma y 2014 1,002.8 1,335.7 22.1 59.0 • Sub sta ntia l re struc turing c o ntinue d , inc lud ing site c o nso lid a tio n a nd sta ff re d und a nc ie s ― $16.9 millio n in re struc turing c o sts • Wa ra ta h T hro ug h L ife Sup p o rt (T L S) c o ntra c t no w fully o p e ra ting a nd p e rfo rming we ll F Y14 F Y13 F Y14 F Y13 • K e o lis Do wne r JV p e rfo rming we ll – Go ld Co a st L ig ht Ra il b e g a n o p e ra tio ns in July 2014 E BIT mar gin ROF E 2 4.4% 12.5% • I nve stme nt in ne w ma c hine s a nd p ro c e sse s to 2.2% 4.7% sup p o rt mo re e ffic ie nt o p e ra tio ns • Ong o ing tra nsfo rma tio n fro m ma nufa c turing to 365-d a y, 24/ 7 se rvic e b usine ss • Pro visio n re le a se o n Wa ra ta h T ra in Pro je c t ($17.0 F Y14 F Y13 F Y14 F Y13 millio n) o ffse t b y re struc turing c o sts 1 T o ta l re ve nue inc lud e s jo int ve nture s a nd o the r inc o me . T o ta l re ve nue inc lud e s re ve nue re la te d to the und e rlying b usine ss F Y14 $845.1m (F Y13: $910.7m) a nd the Wa ra ta h RSM c o ntra c t F Y14 $157.7m (F Y13: $425.0m). 2 ROF E = EBI T d ivid e d b y a ve ra g e fund s e mp lo ye d (AF E). AF E = Ave ra g e Op e ning a nd Clo sing Ne t De b t + Eq uity. 6
On ma rke t sha re buy- ba c k Ong o ing pro g ra m tha t will o pe ra te fro m 20 Aug ust, 2014 • T o ta l numb e r o f sha re s purc ha se d will de pe nd o n sha re pric e • le ve ls a nd c a pita l re q uire me nts Pro g ra m will b e ma na g e d in c o njunc tio n with c a pita l • re q uire me nts fo r g ro wth Stro ng b a la nc e she e t a nd o pe ra ting c a sh flo ws pla c e Do wne r • in a g o o d po sitio n to ta ke a dva nta g e o f g ro wth o ppo rtunitie s, inc luding M&A – a ny pro spe c t sub je c t to ro b ust risk a sse ssme nt F o c us o n o ppo rtunitie s tha t a re stra te g ic , the rig ht pric e a nd • g ro w o ur c a pa b ility 7
Group F ina nc ia ls 8
F ina nc ia l pe rforma nc e Y13 3 $m F Y14 F Cha ng e (% ) o ta l re ve nue 1 T 7,734.5 9,132.4 (15.3) E BI T DA 607.5 653.6 (7.0) E BI T 341.1 358.8 (4.9) Ne t inte re st e xpe nse (43.1) (67.1) 35.9 T a x e xpe nse (82.1) (87.7) 6.4 ta x Ne t pr ofit a fte r 216.0 204.0 5.9 E BI T ma rg in 4.4% 3.9% E ffe c tive ta x ra te 27.5% 30.1% 2 ROFE 16.8% 17.7% Divide nd de c la re d (c e nts pe r sha re ) 23.0 21.0 9.5 1 T o ta l re ve nue inc lud e s jo int ve nture s a nd o the r inc o me . 2 ROF E = EBI T d ivid e d b y a ve ra g e fund s e mp lo ye d (AF E); AF E = Ave ra g e Op e ning a nd Clo sing Ne t De b t + Eq uity. 3 (i) Ba se d o n sta tuto ry numb e rs; (ii) F o llo wing the a d o p tio n o f AASB11 Jo int Arra ng e me nts in the c urre nt ye a r, p rio r ye a r 9 c o mp a ra tive s ha ve b e e n re -sta te d .
Summa ry of e a rning s otal $m T Infrastruc ture Mining Rail Corporate Statutory E BIT 341.1 191.1 171.4 22.1 (43.5) Ad d b a c k unfa vo ura b le ite m: • Re struc turing c o sts 29.0 11.4 16.9 0.7 L e ss fa vo ura b le ite ms: • Co nting e nc y re le a se s (24.5) (7.5) (17.0) • Se ttle me nt o f c o ntra c t c la ims (6.4) (6.4) Adjuste d E BIT (approx) 339.2 202.5 163.9 22.0 (49.2) 10
Ope ra ting c a sh flow Y13 1 Ope r a ting c a sh flow ($m) F Y14 F E BI T 341.1 358.8 Add: De pre c ia tio n & Amo rtisa tio n 266.4 294.8 DA E BIT 607.5 653.6 Ope r a ting c a sh flow 583.4 448.1 Add: Ne t inte re st pa id 2 43.3 60.6 T a x pa id 41.7 14.3 ra in Pro je c t ne t c a sh (inflo w)/ o utflo w 3 Wa ra ta h T (93.0) 63.3 Sing a po re T unne l se ttle me nt - 39.3 a ting c a sh flow Adjuste d Ope r 575.4 625.6 sion E BIT DA c onve r 94.7% 95.7% 1 (i) Ba se d o n sta tuto ry numb e rs; (ii) F o llo wing the a d o p tio n o f AASB11 Jo int Arra ng e me nts in the c urre nt ye a r, p rio r ye a r c o mp a ra tive s ha ve b e e n re -sta te d . 2 I nte re st a nd o the r c o sts o f fina nc e p a id minus inte re st re c e ive d . 3 Una ud ite d . 11
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