GR ENGINEERING SERVICES LIMITED — Investor Presentation 2023

Aug 22, 2023

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Providing global mineral ASX:ASX:GNGABC processing solutions

Investor Presentation 23 August 2023

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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
10cps FY22
19.0
5cps 19.0
0cps
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GR Engineering Services (ASX:GNG)

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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% is 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 and the Norseman Gold Project.

• The Group Total Reportable Injury Frequency Rate for FY23 was 11.42.

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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).

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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	EPCM, EPC	312.0
Kimberley Mineral Sands JV	Thunderbird Mineral Sands Project	EPC	179.5
Golden Spur Resources Pty Ltd	Bellevue Gold Project	EPC	87.8
IGO Ltd	Cosmos Nickel Operations	EPC	76.0

• In addition to the above ongoing projects, GR Engineering maintains a solid pipeline of near term work opportunities including, but not limited to, the Kainantu Gold Mine – 1.2 Mtpa Process Plant and the Yangibana Rare Earths Project – Beneficiation Plant.

• At 30 June 2023, GR Engineering was engaged on 30 studies across a broad range of commodities for projects in Australia, the Americas and abroad.

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Energy - Upstream PS

• GR Engineering’s wholly owned subsidiary, Upstream PS, generates longer term operations and maintenance services revenue alongside project based design and construction work.

• During FY23, revenue contributions were primarily from:

• Wellsite and plant maintenance work for Santos in eastern Australia. Upstream PS has recently significantly expanded its service offering to Santos in the Cooper Basin;

• Timor Sea operations and maintenance services, including services provided to Eni’s Blacktip gas field production facilities (onshore and offshore);

• Working with the Australian Government to maintain the Northern Endeavour FPSO in a non-producing state. This project was successfully completed on 30 September 2022.

• Operations and maintenance services to an industry leading green hydrogen production facility (ENEOS); and

• Supporting onshore clients with respect to carbon sequestration services.

• On 26 June 2023, Upstream PS was awarded a five year contract with QPM, with an option for a further 5 years, to provide regulated operations and maintenance services for the Moranbah Gas Plant and associated assets (together the ‘MGP’). The contract is conditional on transition of ownership of the MGP from Arrow Energy to QPM.

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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.

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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 strong pipeline and the high levels of study work, GR Engineering’s medium to long term visibility for project work remains high.

• GR Engineering intends to provide FY24 revenue guidance at its 2023 Annual General Meeting.

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

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Current Clients

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GR Engineering Upstream Production Solutions Mipac

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Corporate Profile

Capital Structure

Capital Structure
Shares on issue	m	161.6
Share price_(GNG.ASX)(18 Aug 2023)_	$	2.24
Market Capitalisation	$m	362.0
Cash_(30 Jun 2023)_	$m	86.0
Debt_(30 Jun 2023) (excluding lease liabilities)_	$m	0
Enterprise Value	$m	276.0

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 2,500,000
2.50
2,000,000
2.00
1,500,000
1.50
1,000,000
1.00
500,000
0.50
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

Upstream PS

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 forwardlooking 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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