GR ENGINEERING SERVICES LIMITED — AGM Information 2018

Nov 21, 2018

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ASX RELEASE

22 November 2018

For immediate release to the market

Annual General Meeting presentation – outlook statement

GR Engineering Services Limited (ASX:GNG) ( GR Engineering ) will today hold its 2018 Annual General Meeting.

The presentation materials to be delivered at the meeting follow this announcement and include an outlook statement at slide 7 addressing GR Engineering’s revenue forecasts for FY19.

GR Engineering confirms details of the outlook statement that revenue for the half year ending 31 December 2018 is likely to be in the range of $80 million - $85 million, with forecast total revenue for FY19 in the range of $220 million - $240 million.

Please refer to the Annual General Meeting presentation for further details.

Ends

For further information please contact:

Geoff Jones Joe Totaro Managing Director CFO & Company Secretary  +61 8 6272 6000  +61 8 6272 6000  geoff.jones@gres.com.au  joe.totaro@gres.com.au

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GR ENGINEERING SERVICES LIMITED ABN 12 121 542 738 Tel: +61 8 6272 6000 Fax: +61 8 6272 6001 Email: gres@gres.com.au Website: www.gres.com.au PO Box 258, Belmont WA 6984 71 Daly Street, Ascot WA 6104

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2018 Annual General Meeting Presentation 22 November 2018

FY18 Results Summary

Earnings

Revenue

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$300m
$200m
FY18
FY17
$100m 283.6 238.7
$0m
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EBITDA[1]

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$30m
$20m
FY18
$10m 24.1 FY17
16.9
$0m
PBT
$30m
$20m
$10m FY18 FY17
16.2 16.3
$0m
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PBT

Balance Sheet & Returns

Net Cash (ex. available facilities)

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$40m
$20m FY17
FY18 34.2
21.3
$0m
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Total Equity

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$60m
$30m FY18 FY17
52.4 48.9
$0m
Total Dividend
12cps
FY18
6cps
11.0 FY17
5.0
0cps
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Total Dividend

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1. FY18: Underlying EBITDA adopted. Excludes one-off bad debt expenses of $7.0 million primarily associated with the settlements agreed in relation to EPC contracts for the Hemerdon Tungsten & Tin Project and Davyhurst Refurbishment Project.

2

FY18 Results Summary

Ke Features y

• Mineral processing revenue growth achieved from strong levels of contracting activity, primarily from EPC projects

• Commissioned two new 2.5Mtpa gold processing plants

• Positive project delivery outcomes achieved

• Preferred tenderer status for Thunderbird Mineral Sands Project and Karlawinda Gold Project – early works commenced

• Positive contributions from Upstream PS through operations and maintenance service delivery

• Completed Perth office consolidation

• Settlement of Hemerdon Tungsten & Tin project and Davyhurst Refurbishment project matters

• Group FY18 TRIFR: 8.62

Se ment Revenue g

Mineral Processing

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$250m
$125m FY18 FY17
202.4 169.8
$0m
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Oil & Gas

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$100m
$50m FY18 FY17
81.2 68.9
$0m
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Se ment PBT g

Mineral Processing

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$16m
$8m FY18 FY17
15.7
10.8
$0m
Oil & Gas
$6m
FY17
$3m FY18 5.5
1.3
$0m
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Oil & Gas

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3

FY18 Operational Performance

Mineral Processin g

Design and Construction

• Successful operational outcomes achieved on key projects completed in FY18:

• Mt Morgans: 2.5Mtpa gold processing plant - $107 million

• Dalgaranga: 2.5Mtpa gold processing plant - $66.5 million

• Sunrise Dam REP: gold processing plant brownfields upgrade - $31.3 million

• Several positive demonstrations of GR Engineering’s standing as a proven EPC contractor in its market

Studies and Consulting

• Completed 47 studies and engaged on a further 30 studies at completion of FY18

• Commodity and geographic exposure in study activity remains diverse

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4

FY18 Operational Performance

Oil & Gas

• Solid contribution to group revenue and earnings from Upstream Production Solutions

• Matured further into project roles commencing in FY16 / FY17

• Presence in Perth basin reduced with change of control in assets and O&M in-sourcing. Upstream PS remains active at the Waitsia, Xyris and Dongara processing facilities

• Scope growth and term extensions on existing well management contracts in Bowen and Surat basins

• Contracted operations and maintenance services continued in Timor Sea on the Northern Endeavour FPSO and Blacktip / Yelcherr facilities

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5

Balance Sheet

Ke Features y

• Strong balance sheet maintained

• Cash: $21.8 million

• Interest bearing debt: $0.5 million

• Overdraft facilities of $15 million (undrawn)

• Significant bonding headroom

• $130 million total project bonding facilities

• Bank guarantee facility: $70 million

• Insurance bond facility: $60 million

• GR Engineering well placed to meet future bonding requirements under all growth assumptions, including where order book increases in value and project quantum

Available li uidit q y

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$50m
15.0
15.0
$25m
34.9
21.8
$0m
FY18 FY17
Cash Overdraft
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Bondin Facilities g

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$80m
70.0
60.0
$60m
$40m
$20m
$0m
Bank Guarantees Insurance Bonds
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6

Outlook

• Active EPC contracts at Carosue Dam in Western Australia ($17.9 million) and Fosterville in Victoria ($23.9 million) that commenced in 1H19

• 1H19 revenue is likely to be in the range of $80 million - $85 million (1H18 $177 million)

• Thunderbird Mineral Sands Project EPC contract signed in November 2018. The scale of revenue contributions from Thunderbird will be dependent on the timing of GR Engineering receiving a notice to proceed

• Based on management forecasts of Thunderbird EPC activity levels in -

• 2H19, GR Engineering has forecast total FY19 revenue of $220 million $240 million

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7

Appendix: Corporate Summary

Capital Structure
Shares on issue	m 153.5
Share price_(GNG.ASX)(21 Nov 18)_	$ 1.25
Market capitalisation	$m 191.9
Cash (30 June 2018)	$m 21.8
Debt_(30 June 2018)_ Enterprise Value	$m 0.5 $m 170.6
Directors & Management
Phillip Lockyer	Non-Executive Chairman
Geoff Jones	Managing Director
Tony Patrizi	Executive Director
Barry Patterson	Non-Executive Director
Peter Hood	Non-Executive Director
Joe Totaro	CFO & Company Secretary

Share Price Performance

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$2.00 2.0m
$1.50 1.5m
$1.00 1.0m
$0.50 0.5m
$0.00 0.0m
Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18
Volume GNG.ASX
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Register Analysis

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14.1%
38.2%
22.3%
25.4%
Directors & Senior Management Institutions
Other Founding Shareholders Balance
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8

Appendix: About GR Engineering

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GR Engineering

• Process engineering design and construction contractor servicing the mining and minerals processing industry

• Specialising in EPC / EPCM contracting to provide project delivery with secure cost, time, plant performance and contract completion warranties and guarantees

• Australian offices in Perth and Brisbane. Offshore presence in Africa, United Kingdom, PNG, Indonesia and the Americas

• Expertise in gold, base metals, uranium and industrial mineral commodities

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Upstream Production Solutions

• Oil and gas services business providing operations, maintenance, well management and engineering services to Australian oil and gas industry

• Strong presence on and offshore Perth Basin, Timor Sea and Queensland

Selected Clients

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Selected Clients

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9

Contact

Australian Office Details

Geoff Jones

Managing Director

• +61 8 6272 6000

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71 Daly Street Ascot WA 6104

Level 3, 42 McDougall Street Milton QLD 4064

• geoff.jones@gres.com.au

• PO Box 258  +61 7 3838 8000 Belmont WA 6984

Joe Totaro

• +61 8 6272 6000

CFO & Company Secretary

• +61 8 6272 6000

• joe.totaro@gres.com.au

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Level 11, 607 Bourke Street Melbourne VIC 3000

• +61 3 8623 9800

17 Graystone Street Tingalpa QLD 6173

• +61 7 3239 5800

Level 5, 1101 Hay Street West Perth WA 6005

• +61 8 6109 4000

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Disclaimer

RELIANCE ON THIRD PARTY INFORMATION

This presentation may contain Information that has been derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the information. No responsibility, warranty or liability is accepted by GR Engineering Services Limited ( Company ), its officers, employees, agents or contractors for any errors, misstatements in or omissions from this presentation.

PRESENTATION IS A SUMMARY ONLY

This presentation is information in a summary form only and does not purport to be complete. It should be read in conjunction with the audited financial report for the financial year ended 30 June 2018. Any information or opinions expressed in this presentation are subject to change without notice and the Company is not under any obligation to update or keep current the information contained within this presentation.

NO OFFER OF SECURITIES

Nothing in this presentation should be construed as either an offer to sell or a solicitation of an offer to buy or sell Company securities in any jurisdiction.

FORWARD LOOKING STATEMENTS

This presentation may include forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, these statements are not guarantees or predictions of future performance, and involve both known and unknown risks, uncertainties and other factors, many of which are beyond the Company’s control. As a result, actual results or developments may differ materially from those expressed in the statements contained in this presentation. Investors are cautioned that statements contained in this presentation are not guarantees or projections of future performance and actual results or developments may differ materially from those projected in forward-looking statements.

DISCLOSURE OF NON- IFRS FINANCIAL INFORMATION

Throughout this presentation, there are occasions where financial information is presented not in accordance with accounting standards. There are a number of reasons why the Company has chosen to do this including to maintain a consistency of disclosure across reporting periods

ROUNDING

Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided.

NOT INVESTMENT ADVICE

This presentation is not intended and should not be considered to be the giving of investment advice by the Company or any of its shareholders, Directors, officers, agents, employees or advisers. The information provided in this presentation has been prepared without taking into account the recipient’s investment objectives, financial circumstances or particular needs. Each party to whom this presentation is made available must make its own independent assessment of the Company after making such investigations and taking such advice as may be deemed necessary.

NO LIABILITY

To the maximum extent permitted by law, neither the Company nor its related bodies corporate, Directors, employees or agents, nor any other person, accepts any liability, including without limitation any liability arising from fault or negligence, for any direct, indirect or consequential loss arising from the use of this presentation or its contents or otherwise arising in connection with it.

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