Emeco Group UBS Investor Conference Keith Gordon, Managing Director - PowerPoint PPT Presentation

Emeco Group UBS Investor Conference Keith Gordon, Managing Director & Chief Executive Officer

Presentation Overview  Strategy  Operating Update Picture: Emeco’s on -site maintenance facilities in Western Australia

Strategy

Strategic Framework Strategy developed to drive business performance and growth  Ongoing optimisation of  Grow without sacrificing invested capital and quality of earnings earnings  Leverage capabilities for  Continue to evolve the growth business model Consistent Value Creation for Shareholders  Disciplined investment above WACC returns  Optimise capital structure 4

Executing the Strategy Current focus on Optimising the Core  Incremental investment in  Embed “Customer Centric” model in core markets with quality growing mining markets historical returns  Align Australia Sales and Parts with  Expand maintenance services Rental (mining) offering  Increase weighting of large  Leverage core competencies mining equipment to expand products/services & geographies Consistent Value Creation for Shareholders  Disciplined investment to achieve above WACC returns  Ongoing optimisation of capital structure  Building capability to deliver consistent returns 5

Incremental Investment Investment of incremental capital in core businesses to deliver returns above the cost of capital Returns from Core Businesses over 4 years  Australia will remain around 75% of 21.5% earnings in short to medium term 25.0%  Customer diversification and growing FY07 15.8% coal volumes in Indonesia will drive 20.0% FY08 FY09 sustained and improving returns 9.5% FY10 FY09  Canada to benefit from mining fleet 15.0% FY07 reorientation and broader FY10 FY08 FY07 commodity exposure 10.0% FY08  CY09 trough earnings more than a commodity downcycle… FY09 5.0%  Corporate Costs and Goodwill impact FY10 on Group ROC diluted through 0.0% incremental investment Australia Rental 1 North America Indonesia 4 year Divisional ROFE 2 1 Australia Rental excludes Victoria rental 2 Excludes Group Corporate costs and Goodwill 6

Focus on Customer Needs Customer requirements vary but Emeco’s solution is used at all stages of mine life Mine Mine Core Emeco’s Overburden Mining cycle Construction Development Production (Production) leverage: 6% 19% 42% 33% Customers Flexibility Equipment Mechanical Capital Avoid Residual Needs: Availability Availability Management Risk Ramp-up: Full Mine Production: Ramp-down: Supplement Service ramp owned fleet Avoid Access up in material during Materials BCM scope external Short movement scheduled Manage Movement variation maintenance mine maintenance Capital residual & tyre supply Non-core life allocation risk Avoid equipment investment required Long OEM Flexibility to Non-core lead times change fleet equipment push miners mix quickly required to rent Ramp up Full mine production Ramp down Percentage leverage to mining cycle indicative of FY11 plan and comprises 95% of group rental revenue 7

Operating Update

Rental Fleet Utilisation Strong market activity and fleet optimization translating into robust fleet utilization Average Equipment Utilisation by WDV 100 %  Customer activity levels driven by strong 95 % commodity outlook 87% Avg 90 % 83% Avg 85 %  All core markets are contributing to 78% Avg 78% Avg 80 % strong utilization 70% Avg 75 %  68% Avg Market demand for large and small 70 % mining equipment 65 % 60 %  +4% increase in fleet weighting toward - Utilisation by A$ value 55 % large mining equipment 50 % 45 %  Non-core asset disposal well progressed 40 % with $15M of $60M target achieved in Q1 Dec-07 Dec-08 Dec-09 Mar-08 Jun-08 Sep-08 Mar-09 Jun-09 Sep-09 Mar-10 Jun-10 Sep-10 9 Note: Utilisation defined as % of fleet rented to customers (measured by written down value)

Business Unit Performance Strong demand for equipment in Eastern Australia QLD 100 % 90 %  Recent wet weather had little impact on 80 % equipment utilisation (no major fleets in transit) 70 % Queensland 60 %  Investment in 5 x 240 tonne trucks purchased 50 % and deployed in 1Q11 to Rio Tinto Coal 40 % 30 %  Further growth opportunities present within the WDV 20 % region $144M 10 % – % Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 NSW 100 %  Thermal coal activity remained robust 90 % 80 % New South Wales  Utilization consistently high across the cycle 70 %  60 % Close proximity of mines within the Hunter Valley 50 % limits redeployment downtime 40 % 30 %  Two major fleet redeployments occurring in 2Q11 WDV 20 % $91M 10 % – % Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 10 Note: Graphs reflect average equipment utilisation which is defined as % of fleet rented to customers (measured by written down value)

Business Unit Performance Strong sector activity in WA translating into sustained utilisation WA 100 %  90 % New projects commissioned in FY10 now well 80 % established Western Australia 70 % 60 %  Gold production expected to increase as new 50 % projects come on-line 40 % 30 %  Iron Ore production at record levels WDV 20 % $128M 10 % – % Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Victorian business disposed on 1 st October as a going concern   $12.5M proceeds realised Victoria  Remaining civil fleet of ~$25M(excluded from transaction) will be disposed of over FY11 11 Note: Graphs reflect average equipment utilisation which is defined as % of fleet rented to customers (measured by written down value)

Business Unit Performance Revised strategy and strong market fundamentals providing growth opportunities offshore Canada 100 %  Reconfigured mining fleet highly utilized with 90 % 80 % strong activity in oil sands region 70 %  Seasonal “freeze” and “thaw” periods will 60 % Canada 50 % impact utilisation 40 %  30 % Sharper ‘return to work’ expected due to WDV 20 % increasing exposure to production cycle $104M 10 %  – % Stronger AUD may impact translation of CAD Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 earnings PTI 100 %  Robust thermal coal activity underpinning 90 % steady improvements in fleet utilisation 80 % 70 %  New management team transition complete Indonesia 60 % 50 %  Growth opportunities exist in deploying larger 40 % mining equipment with top tier customers 30 % WDV 20 %  Stronger AUD may impact translation of USD $75M 10 % earnings – % Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 12 Note: Graphs reflect average equipment utilisation which is defined as % of fleet rented to customers (measured by written down value)

Equipment Progressing fleet evolution June-10 September-10 Fleet mix proportions by net book value:  Continue to increase weighting of large mining equipment  Acquisition of $29M large mining fleet in 1Q11, including 5x 240 tonne trucks  Further downsizing of small civil equipment targeted in FY11 Notes: Civil defined as <70 tn artic trucks and related small ancillary equipment; Small mining defined as <150 tn trucks and related mining equipment; 13 Large mining defined as 190+ tn trucks and related mining equipment.

Market Outlook Outlook in core markets remains positive Dynamic Outlook  Continuing strong fundamentals for bulk commodities in Asia Pacific region  Canadian oil sands stable with positive outlook Market  Lead times on new OEM mining equipment continue to increase Dynamics  Market value of mining equipment remains strong  Civil equipment experiencing improved liquidity  Evaluate profitable opportunities for further investment in large mining equipment  Evaluate maintenance services offering in NSW and Canada Emeco  Consolidate presence in Canadian oil sands production cycle Focus  Liberate underperforming capital (targeting $60M release in FY11)  Optimise capital structure and execute refinance  Currency may impact translated earnings  Labour continues to be challenging Challenges  Access to equipment may dampen growth opportunities, however continue to leverage procurement capabilities 14

Appendix

Geographies FY10 Rental WDV by FY10 Revenue Split FY10 Commodity Exposure Geographic Region (AUD $M) 5% 3% 10% 37.5 3% 6% 26% 74.1 135.3 11% 8% 4% 89.5 11% 59% 128.0 10% 19% 8% 107.6 16% Queensland Australian Rental Thermal Coal Coking Coal Western Australia Canada Gold Zinc Canada Indonesia Oil Sands Iron Ore New South Wales Sales Civil Other Indonesia Parts Victoria USA (discontinued) Europe (discontinued) 16 Note: Revenue percentages based on FY10 revenue and include discontinued operations.