For personal use only COFFEY INTERNATIONAL LIMITED COFFEY INTERNATIONAL LIMITED Photo by James Ball ‐ www.dlscape.com FY2011 Results Presentation 10 August FY2011 2011 Annual General Meeting 24 November 2011 1
2 John Mulcahy, Chairman Welcome For personal use only
Our Board For personal use only John Mulcahy Stuart Black Charles Jamieson AM Chairman Chair – Audit Committee Non-executive Director Stephen Williams John Douglas Susan Oliver Chair – Risk Committee Managing Director Chair – Remuneration Committee 3
Proceedings For personal use only • Chairman’s Address • Managing Director’s Address • General Questions • Business of the Meeting - Formal Resolutions • Close 4
5 Chairman’s Address John Mulcahy For personal use only
Strategic and Operational Improvements Executed For personal use only Board instigates management review and cost reduction program December 2010 $18 million annual cost base improvement by FY2012 John Douglas commences as Managing Director March 2011 Business / strategy review initiated 1 st stage review completed June 2011 Financial update to market August 2011 Reported FY2011 results October 2011 Capital Raising 6
FY2011 Financial Results Overview For personal use only 12 months to 30 June FY2010 FY2011 Change ($m) ($m) Fee revenue 475.7 423.6 (11)% Underlying EBITDA¹ 47.9 32.3 (34%) Restructuring costs (3.9) (9.1) - Impairment - (62.9) - EBITDA 44.0 (39.7) - NPAT 13.8 (69.7) - EPS (basic – cents per share) 11.9 (57.0) - Note: includes business classified as both continuing and discontinuing in the financial statements of the group ¹ EBITDA before impairment and restructure costs 7
Capital Raising For personal use only Balance Sheet Strengthening to Support the Refocused Business • Strategic Review outcome to prioritise debt reduction and strengthen balance sheet • $40 million capital raising to reduce gearing and strengthen balance sheet - Management can finalise implementation of Strategic Review initiatives - More focus on improving profitability of key businesses - Greater certainty for shareholders, employees and clients - Flexibility for business going forward – increased covenant headroom - Reduced funding costs • Improved balance sheet strength and the finalisation of the Strategic Review outcomes will position Coffey well for the future 8
Safety and Diversity For personal use only • Safety – Primary corporate value – Improvement in safety performance in FY2011 – Committed to continued improvement • Diversity – Committed to an inclusive workplace that embraces and promotes diversity – Board approved policies to foster diversity 9
Board Renewal For personal use only September 2009 John Mulcahy appointed Director October 2010 Susan Oliver appointed Director November 2010 John Mulcahy appointed Chairman March 2011 John Douglas commenced as Managing Director June 2011 Deferred until strategic review outcomes implemented & capital raising completed Pre July 2012 Appoint at least one new Non-executive Director to fill casual vacancy 10
Executive Remuneration For personal use only • Aim: to align Board and management remuneration to shareholder returns. • Link to company performance: – No short-term incentives earned or paid in FY2011 – All long-term incentive performance shares granted in November 2008 forfeited – John Douglas voluntarily forfeited contractual performance payment – Non-executive Director fees to remain unchanged from October 2008 • Strategic review of executive incentives by independent remuneration consultant, Guerdon Associates • Revised performance-based incentive scheme implemented for FY2012 11
Resolutions - Long-term Incentive Scheme For personal use only • Grant of Shares to John Douglas – Part of 2012 remuneration package – Subject to achievement of performance hurdles prior to any vesting – Aligns John’s remuneration and key objectives with other senior managers • Coffey Rewards Share Plan – No legal requirement to approve employee share plan – Not the intention to issue significant number of shares under the plan – Large pool of forfeited shares available in the plan – Plan deed allows for shares to be acquired on market 12
Conclusion For personal use only • Disappointing financial performance • Strategic review outcomes implemented • Significant improvement in profitability in FY2012 13
14 Managing Director’s Address John Douglas For personal use only
Key Points For personal use only • Safety • Financial Results FY2011 • Progress of Strategic Review • Outlook and Guidance FY2012 15
16 16 Safety - A Key Priority For personal use only
Safety - Performance Improving For personal use only Safety is an indicator of improving discipline within the business *LTIFR = Lost Time Injury Frequency Rate. 18
FY2011 Results Summary For personal use only Note: includes business classified as both continuing and discontinuing in the financial statements of the group ¹EBITDA before impairment and restructure costs 18
FY2011 Results - Significant Impairment and For personal use only Restructuring Costs 19 19
Strategic Review – Key Businesses Identified For personal use only June 2011 Outcome Progress to Date 1. Key businesses identified • Refocused on Geosciences, International Development and Project Management 2. Non-core businesses resolved 3. Management restructure 4. Debt Reduced 20 20
Strategic Review - Key Business Contribution For personal use only FY2011 Segment Performance ¹ Other 6% Projects 3% International Development 21 % • Geotechnics Geosciences • Environments 70% • Information • Mining 1 Based on underlying EBITDA, before impairment and restructure costs, and before corporate costs. 21 21
Geosciences – a Well Integrated Offering For personal use only A very strong Australian brand in a discipline where Australia itself, is strong 22 22
Geosciences – 4,000 Active Projects, 2,000 Active Clients For personal use only 23 23
Coffey Geotechnics - North West Rail Link, New South Wales For personal use only 24
Coffey Environments - Wafi-Golpu Copper Gold Project, For personal use only Papua New Guinea 25
Coffey Information - Hunter Expressway Alliance, New South For personal use only Wales 26
Coffey Mining - Economic Assessment, Manganese Los For personal use only Pumas Project , Chile 27
Geosciences – Exposure to Strong Sectors For personal use only Fee Revenue Breakdown FY2011 Major Project Investment in Australia Infrastructure Other Commercial Government Oil & Gas 2% Property 1% Mining & Resources 7% $bn 140 120 100 Oil & Gas Infrastructure 24% 34% 80 60 40 by Sector Mining & 20 Resources 32% 0 2008A 2009A 2010A 2011A 2012E 2013E 2014E AFRICA Chart Source: ANZ Economics & Global Markets Research EUROPE 3% 2% – Australian Major Project Update: Q2 2011 (14 September 2011)* AMERICA 12% Outlook • Exposed to key growth sectors – Infrastructure, Mining & Resources, and Oil & Gas • Continue to see client demand increasing ANZ by Geography 83 %% • Project investment pipeline remains buoyant 28 28 * Updated by ANZ on 19 September 2011
29 29 Geosciences – Improving Fee Revenue Trend For personal use only
International Development – Wide-ranging Geographic For personal use only Exposure and Deep Capability Plans, coordinates and executes programs and projects in the developing world Operates out of three hubs: Australia, USA and UK Approximately 1,600 employees Four decades of experience in the market Clients comprise government and international bodies Key areas of activity include: – promoting economic growth – developing governance and public sector skills and processes – implementing security and justice frameworks 30
AusAID – Sub-National Strategy Project, Papua New For personal use only Guinea 31
USAID - Assistance for Afghanistan’s Anti-Corruption For personal use only Authority Project 32
UK’s Department for International Development (DFID) - For personal use only Strengthening Transparency, Accountability and Responsiveness in Ghana 33
International Development – Quality Clients and Significant For personal use only Barriers to Entry Fee Revenue Breakdown FY2011 Key Observations • Strong global brand in international development contracting ANZ EUROPE 26% 19% • Scale business with diversification across key donor groups and regions – lowers localised policy risk – providing stable and consistent earnings (longer term contracts, typically 1-3 years) AMERICA 55% • High barriers to market entry Outlook Clients include • Australian Government spending more on international development • UK market very favourable given DFID’s increased expenditure • USA reduced expenditure foreshowed, however Coffey is still winning new contracts 34 34
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