GR ENGINEERING SERVICES LIMITED — Investor Presentation 2014

Feb 24, 2014

==> picture [780 x 84] intentionally omitted <==

HY14 Financial Results Investor Presentation

February 2014

==> picture [780 x 84] intentionally omitted <==

----- Start of picture text -----

Disclaimer
----- End of picture text -----

This document has been prepared by GR Engineering Services Limited ACN 121 542 738 ( GR Engineering ) to provide an overview and update of GR Engineering’s activities and HY14 financial performance.

Any statements, opinions, projections or other material contained in this document do not constitute any commitments, representations or warranties by GR Engineering and associated entities or its directors, agents and employees. Except as required by law, and only to the extent so required, directors, agents and employees of GR Engineering shall in no way be liable to any person or body for any loss, claim, demand, damages, costs or expenses of whatsoever nature arising in any way out of, or in connection with, the information contained in the document.

This document includes certain statements, opinions, projections and other material, which reflect various assumptions. The assumptions may or may not prove to be correct. Recipients of the document must make their own independent investigations, consideration and evaluation of the opportunity to participate in any investment. By accepting this document the recipient agrees that if it proceeds further with its investigations, consideration or evaluation of the opportunity to participate in any investment it shall make and rely solely upon its own investigations and inquiries and will not in any way rely upon the document.

==> picture [131 x 26] intentionally omitted <==

2

==> picture [780 x 84] intentionally omitted <==

----- Start of picture text -----

About GR Engineering
----- End of picture text -----

• Australian based 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

• Employs approximately 170 professional and support staff plus direct construction workforce and subcontractors

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

• Primary expertise in gold, base metals and industrial mineral commodities

• GR Engineering operates in a niche market – limited EPC competitors, high barriers to entry

==> picture [104 x 297] intentionally omitted <==

Selected Clients

==> picture [104 x 297] intentionally omitted <==

==> picture [104 x 297] intentionally omitted <==

==> picture [131 x 26] intentionally omitted <==

3

==> picture [780 x 84] intentionally omitted <==

----- Start of picture text -----

HY14 Results Summary
----- End of picture text -----

Revenue	Revenue $49.7 million (HY13 $56.6 million)
	EBIT $7.3 million (HY13 $1.6 million)
	PBT $8.0 million (HY13 $2.3 million)
Earnings	NPAT $7.3 million1(HY13 $1.3 million)
	EPS 4.9 cents (HY13 0.8 cent)
	Cash flow from operations $16.4 million (HY13 -$0.4 million)
	Strong cash generation and profitability supports 3cps interim dividend (40% franked) (HY13 2cps
Dividend	fully franked)
	GR Engineering establishing a consistent track record for delivering fully franked dividends
Balance Sheet	Cash $45.7 million2 Debt $0.7 million Net cash $45.0 million2

==> picture [131 x 26] intentionally omitted <==

1. HY14 tax rate reflects the receipt of a research and development tax rebate received in December 2013.

4

2. Including cash held to secure contingent liabilities under the Company’s bonding facilities less borrowings.

==> picture [780 x 84] intentionally omitted <==

----- Start of picture text -----

HY14 Results Summary
----- End of picture text -----

 Continued success in delivery of projects on time and on budget

 Strong safety and quality outcomes achieved on all projects

• Andy Well gold project, Whyalla brownfields upgrade and Syama brownfields upgrade primary contributors to earnings

Operational

 Hemerdon tungsten and tin project engineering design and procurement commenced prior to construction commencing on-site in February 2014

 Award of preferred contractor status for $55 million Keysbrook mineral sands project

 Operational efficiencies established to respond to lower levels of market activity

 Continuing to undertake discrete packages of design and optimisation works

 Study activity continues to be subdued, in line with market conditions

HSE

 Continued strong safety performance – 1,339 LTI free days as at 24 February 2014

 Safety is a key element of GR Engineering’s operating ethos - our people are our greatest asset

 Entry into upstream oil and gas services sector marked by agreement to acquire Production Solutions, a specialist operations and maintenance / well management services provider Corporate

 Acquisition funded from cash reserves as a conservative entry into diversified markets

==> picture [131 x 26] intentionally omitted <==

5

==> picture [780 x 84] intentionally omitted <==

----- Start of picture text -----

HY14 Results Analysis
----- End of picture text -----

Revenue

EBIT

==> picture [308 x 138] intentionally omitted <==

----- Start of picture text -----

$114.7m
$120m
2H $58.1m
$80m
$40m
HY $56.6m
HY $49.7m
$0m
FY13 HY14
----- End of picture text -----

==> picture [308 x 141] intentionally omitted <==

----- Start of picture text -----

$10.0m
$10m
$8m
$6m 2H $8.4m
$4m
HY $7.3m
$2m
HY $1.6m
$0m
FY13 HY14
----- End of picture text -----

PBT

NPAT

==> picture [308 x 139] intentionally omitted <==

----- Start of picture text -----

$11.5m
$12m
$9m
2H $9.2m
$6m
HY $8.0m
$3m
HY $2.3m
$0m
FY13 HY14
----- End of picture text -----

==> picture [308 x 137] intentionally omitted <==

----- Start of picture text -----

$7.5m
$8m
$6m
2H $6.2m
$4m
HY $7.3m
$2m
HY $1.3m
$0m
FY13 HY14
----- End of picture text -----

==> picture [131 x 26] intentionally omitted <==

6

==> picture [780 x 84] intentionally omitted <==

----- Start of picture text -----

Upstream Production Solutions
----- End of picture text -----

• In December 2013, GR Engineering agreed to acquire Production Solutions, a leading independent provider of specialist operations & maintenance and well management services to the oil and gas sector across Australia and South East Asia

==> picture [264 x 80] intentionally omitted <==

• Asset acquisition by Upstream Production Solutions ( UPS ), a wholly owned subsidiary of GR Engineering for $5.75 million

• UPS will operate as an independent business unit of GR Engineering, retaining its existing management team, key personnel, operations, systems and procedures (i.e. financial integration)

• Operations and maintenance activities provide GR Engineering with exposure to long term, recurring revenue streams

• Well management business offers strong growth potential through coal seam gas (CSG) / LNG exposure

• GR Engineering expects that Production Solutions will generate revenue of approximately $36 million and EBITDA of around $2.4 million in CY2014 which, to the extent not already earned or accrued by the vendors in the period to completion, will report to UPS following completion (anticipated to occur by 31 March 2014)

==> picture [131 x 26] intentionally omitted <==

7

==> picture [780 x 84] intentionally omitted <==

----- Start of picture text -----

Strategy & Outlook
----- End of picture text -----

• Diversified commodity exposure has de-risked GR Engineering’s project pipeline

• GR Engineering to continue maintaining a strong client focus:

• delivery of projects on time and on budget

• industry leading safety and quality outcomes

• GR Engineering is confident that its operational approach will deliver:

• win-win outcomes for the Company and its clients

• steady, consistent and sustainable growth

• strong shareholder returns

• Entering 2H14 with a solid order book, primarily comprising the £75 million Hemerdon Tungsten & Tin Project

• 2H14 financial performance will be influenced by timing of contract awards

• Upside potential from award and commencement of $55 million Keysbrook Minerals Sands EPC Project

• Expectation of improved revenue in 2H14 with financial outcomes consistent with those achieved in HY14

==> picture [131 x 26] intentionally omitted <==

8

==> picture [780 x 84] intentionally omitted <==

----- Start of picture text -----

Appendix A: Corporate Summary
----- End of picture text -----

Capital Structure
Shares on issue1	m	150.0
Share price_(GNG.ASX) (24/02/14)_	$	0.72
Market capitalisation	$m	108.0
Cash_(31 Dec 2013)2 _	$m	45.0
Debt_(31 Dec 2013)_	$m	0.7
Enterprise Value	$m	63.7

==> picture [352 x 172] intentionally omitted <==

----- Start of picture text -----

Share Price Performance
$1.20 5m
$1.00 4m
$0.80
3m
$0.60
2m
$0.40
1m
$0.20
$0.00 0m
Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14
Volume GNG.ASX
----- End of picture text -----

Directors & Management Joe Ricciardo Executive Chairman Geoff Jones Managing Director Tony Patrizi Executive Director Barry Patterson Non-Executive Director Terry Strapp Non-Executive Director Peter Hood Non-Executive Director Joe Totaro CFO & Company Secretary

Shareholder Breakdown

29.4% 54.5% 16.1% Directors & Senior Management Institutions Other

1. The Company also has 1,875,000 Performance Rights and 3,269,337 Share Appreciation Rights on issue vesting on various dates with various vesting criteria.

2. Including cash held to secure contingent liabilities under the Company’s bonding facilities less borrowings

==> picture [131 x 26] intentionally omitted <==

9

==> picture [780 x 84] intentionally omitted <==

----- Start of picture text -----

Appendix B: Project Photos
----- End of picture text -----

==> picture [557 x 373] intentionally omitted <==

----- Start of picture text -----

Brownfields Expansion – South Australia
----- End of picture text -----

==> picture [131 x 26] intentionally omitted <==

10

==> picture [780 x 84] intentionally omitted <==

----- Start of picture text -----

Appendix B: Project Photos
----- End of picture text -----

==> picture [557 x 355] intentionally omitted <==

----- Start of picture text -----

Syama Brownfields Expansion – Mali
----- End of picture text -----

==> picture [131 x 26] intentionally omitted <==

11

==> picture [780 x 84] intentionally omitted <==

----- Start of picture text -----

Appendix B: Project Photos
----- End of picture text -----

Andy Well Gold Processing Plant – Western Australia

==> picture [131 x 26] intentionally omitted <==

12

==> picture [780 x 84] intentionally omitted <==

----- Start of picture text -----

Contact
----- End of picture text -----

Geoff Jones

Managing Director

Australian Office Details

179 Great Eastern Highway Belmont WA 6104

175 Melbourne Street South Brisbane QLD 4101

• +61 8 6272 6000

• geoff.jones@gres.com.au

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

• +61 8 6272 6000

Joe Totaro

CFO & Company Secretary

• +61 8 6272 6000

• joe.totaro@gres.com.au

==> picture [131 x 26] intentionally omitted <==

13