GR ENGINEERING SERVICES LIMITED — Investor Presentation 2023

Nov 21, 2023

Providing global mineral ASX:ASX:GNGABC processing solutions

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Annual General Meeting Presentation 22 November 2023

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FY23 Results

• GR Engineering reported FY23 revenue of $551.4 million and EBITDA of $44.4 million.

• FY23 revenue was higher than the revenue guidance of $500 million to $530 million provided at the Annual General Meeting on 23 November 2022.

• The EBITDA margin percentage improved in the second half of FY23 and the FY23 margin percentage of 8.0% was consistent with historical levels.

• During FY23, GR Engineering successfully delivered multiple major projects, including the Thunderbox 6 Mtpa Expansion Project, the Abra Base Metals Project, the Mt Ida Gold Project, the Norseman Gold Project and the Renison Tin Projects.

• Subsequent to year end, GR Engineering achieved practical completion on the Thunderbird Mineral Sands Project, Bellevue Gold Project and Cosmos Nickel Concentrator Facility Upgrade Project.

• The Group Total Reportable Injury Frequency Rate for FY23 was 11.42. GR Engineering recorded one LTI during the year.

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• The Board has resolved to declare a final fully franked dividend of 10 cents per share, resulting in total FY23 fully franked dividends of 19 cents per share (FY22 fully franked dividends: 19 cents per share).

• During FY23, the shareholder base increased from 2,779 shareholders to 3,536 shareholders.

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FY23 Results Summary

Earnings

Revenue

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$800m
$600m
$400m FY22
FY23
651.7
$200m 551.4
$0m
$60m
$40m
FY23 FY22
$20m 44.4 55.8
$0m
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EBITDA

PBT

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$60m
$40m
FY22
FY23
$20m 50.3
39.7
$0m
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Balance Sheet & Cash Flow

Cash

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$120m
$90m
$60m FY22
FY23
102.0
$30m 86.0
$0m
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Net Assets

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$80m
$60m
$40m FY23 FY22
$20m 59.7 62.2
$0m
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Total Dividends (Fully Franked)

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20cps
15cps
FY23 FY22
10cps
19.0 19.0
5cps
0cps
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Balance sheet

• Strong balance sheet maintained at 30 June 2023.

• At 30 June 2023, GR Engineering held a cash balance of $86.0 million (30 June 2022: $102.0 million) with negligible external bank debt.

• During FY23, the business paid out $30.7 million in fully franked dividends to GR Engineering shareholders.

• GR Engineering has significant headroom on its combined bank guarantee and bonding facilities.

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Mineral Processing

• GR Engineering’s design and construction order book of current work includes:

Company	Project	Type	($’m)
BHP Group Limited	West Musgrave Project	EPC / EPCM	312
Evolution Mining Limited	Mungari Future Growth Project	EPC	155
K92 Mining Ltd	Kainantu Gold Mine – 1.2Mpta Process Plant*	EPC	USD81
Hastings Technology Metals Limited	Yangibana Rare Earths Project – Beneficiation Plant**	EPC	210

*Letter of intent executed and in advanced contract negotiations. Early works have commenced.

**Contract executed, pending full notice to proceed. Early works have commenced.

• In addition to the above ongoing projects, GR Engineering maintains a solid pipeline of near term work opportunities across a broad range of commodities.

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Energy – GR Production Services (GRPS)

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• GR Engineering’s wholly owned subsidiary, GR Production Services (GRPS) (formerly known as Upstream Production Solutions or UPS), generates longer term operations and maintenance (O&M) services revenue alongside project based design and construction work.

• GRPS’s contracted pipeline includes the following key projects:

Company	Project	Start date	Contract term (excluding options)	Estimated $’m per annum
QPM Energy Pty Ltd	Moranbah Gas Plant – O&M	2023	5 years	30
Santos Ltd	Surat Basin – maintenance	2021	3 years	10
Santos Ltd	Cooper Basin – maintenance	2023	3 years	10
Eni Australia	Blacktip Gas Field – O&M	2022	2 years	10
INPEX Operations Australia	Icthys LNG Project – O&M	2023	3 years	9

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Process Controls Systems - Mipac

• Mipac is a leading global provider of controls systems, operational technology and engineering services primarily in the mineral processing, energy and water industries.

• During FY23, Mipac continued to deliver solutions for key repeat clients such as First Quantum Minerals Limited, BHP Group Limited, Glencore Technology, Anglo American and other large conglomerates.

• Mipac achieved another record revenue and earnings result for FY23 and continues to operate at a high utilisation based on its strong contracted and near term pipeline of work.

• Since the acquisition of Mipac in May 2021, Mipac’s headcount has increased from 80 to 125 employees.

• In addition to its underlying business, Mipac has internally developed proprietary digital solutions which are licensed to clients based on a software as a service model (SaaS). Mipac’s digital products include:

• TCard™- this a simple-to-use operations management solution designed to help plan, schedule and manage tasks easily and efficiently, facilitate two-way communication and provide clear visibility of the status of tasks.

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• MPA – this is a suite of integrated applications that provide operational insight and intervention for complex processes. This purpose-built software will detect, escalate, track, control and manage production events, enabling teams to solve operational challenges in real-time.

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Environmental Social Governance

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• At GR Engineering we:

• Support our communities, including:

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• Promote and encourage diversity in our workforce and operations. We recognise that a diverse workforce is a contributor to the business achieving its strategic objectives.

• GR Engineering regularly partners with its clients on social ventures, particularly in relation to initiatives involving the regional communities in which our clients operate.

• Favour local suppliers and supply chain ethics that are supported by our standards. The risk of modern slavery in our supply chain and operations is low.

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• Maintain a proactive assessment towards potential environmental impacts. We work closely with our clients and adhere to their environmental management plans.

• Support university engineering students with scholarships and maintain an active graduate recruitment program.

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Outlook

• GR Engineering’s contracted and near term pipeline across the group is strong and is continuing to grow. GR Engineering is also currently working on a high volume of studies across a broad range of commodities and geographies.

• Based on the contracted and near term pipeline and the high levels of study work, GR Engineering’s visibility for project work remains high for FY24 and FY25.

• The consolidated entity expects revenue for FY24 to be in the range of $500 million to $530 million, with revenue weighted towards the second half.

• GR Engineering’s strong balance sheet means that it is well capitalised to deliver its pipeline of work.

• GR Engineering will continue to assess potential growth opportunities that provide scale, diversity and technical expertise to the business.

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Corporate Profile

Capital Structure

Capital Structure
Shares on issue	m	165.0
Share price_(GNG.ASX)(20 Nov 2023)_	$	2.27
Market Capitalisation	$m	374.4
Cash_(30 Jun 2023)_	$m	86.0
Debt_(30 Jun 2023) (excluding lease liabilities)_	$m	0
Enterprise Value	$m	288.4

Directors & Management

Phillip Lockyer Non-Executive Chairman Tony Patrizi Managing Director Peter Hood Non-Executive Director Joe Totaro Non-Executive Director Omesh Motiwalla Chief Financial Officer

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Share Price History

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3.00 800,000
700,000
2.50
600,000
2.00
500,000
1.50 400,000
300,000
1.00
200,000
0.50
100,000
0.00 0
Share Price Volume
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Register Analysis

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27.0%
56.0%
17.0%
Directors & Founders Institutions Other
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Contact Details

Tony Patrizi

Managing Director

 +61 8 6272 6000

• tony.patrizi@gres.com.au

Omesh Motiwalla

CFO & Company Secretary

 +61 8 6272 6000

• omesh.motiwalla@gres.com.au

Key locations

GR Engineering

71 Daly Street Ascot WA 6104

• PO Box 258 Belmont WA 6984

• +61 8 6272 6000

Level 11, 99 St Georges Terrace Perth WA 6000  +61 8 6272 6000

GR Production Solutions

Level 24, 324 Queen Street Brisbane QLD 4000  +61 7 3239 5800

Mipac

Level 4, East Tower 410 Ann Street Brisbane QLD 4000  +61 7 3212 5600

Hanlon Engineering

2502 N Huachuca Dr, Tucson Arizona USA 85745  +1 520 326 0062

Building 3, Level 3, Kings Row Office Park 42 McDougall Street Milton QLD 4064  +61 7 3838 8000

Level 10, 99 St Georges Terrace Perth WA 6000  +61 8 6109 4000

Level 10, 99 St Georges Terrace Perth WA 6000  +61 7 3212 5600

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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 financial report for the year ended 30 June 2023. 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.

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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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