GR ENGINEERING SERVICES LIMITED — Investor Presentation 2023

Feb 23, 2023

Providing global mineral ASX:ASX:GNGABC processing solutions

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Investor Presentation 24 February 2023

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HY23 Results Summary

Earnings

Revenue

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$600m
$400m
$200m HY23 HY22
331.9 302.3
$0m
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EBITDA

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$40m
$20m
HY23 HY22
20.6 24.3
$0m
$30m
$20m
HY23 HY22
$10m
18.1 21.5
$0m
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PBT

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Balance Sheet & Cash Flow

Cash

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$120m
$90m
HY23 HY22
$60m
83.4 93.6
$30m
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Net Assets

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$80m
$60m
$40m HY23 HY22
$20m 59.0 56.5
$0m
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Total Dividends (Fully Franked)

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20cps
15cps
10cps
HY23 HY22
5cps
9.0 9.0
0cps
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HY23 Results

• GR Engineering reported HY23 revenue of $331.9 million and EBITDA of $20.6 million.

• Project execution levels remained high during HY23, with several key project completions occurring in the period including the Thunderbox 6 Mtpa Expansion Project, Abra Base Metals Project and the Norseman Gold Project.

• The EBITDA results were impacted by:

• The business not achieving its forecast profitability targets on its Tasmanian projects. These Tasmanian projects are now substantially complete; and

• Upstream PS’s Northern Endeavour FPSO project being completed on 30 September 2022. Upstream PS recognised one-off restructuring costs associated with the completion of this project.

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• GR Engineering has focused on building its pipeline of ongoing project work and is working on a high volume of studies across a wide range of commodities.

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Balance sheet

• Strong balance sheet maintained at 31 December 2022.

• Cash: $83.4 million (HY22: $93.6 million).

• Significant headroom on bank guarantee and bonding facilities.

• Interim dividend declared: 9.0 cents per share (fully franked) (HY22: 9.0 cents per share (fully franked).

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Mineral Processing

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

Company	Project	Type	($’m)
Kimberley Mineral Sands JV	Thunderbird Mineral Sands Project	EPC	179.5
OZ Minerals Limited	West Musgrave Project	EPCM, EPC	Contract to be finalised
Golden Spur Resources Pty Ltd	Bellevue Gold Project	EPC	87.8
IGO Ltd	Cosmos Nickel Operations	EPC	76.0
Aurenne Alt Resources Pty Ltd	Mt Ida Gold Project	EPC	73.0

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

• At 31 December 2022, GR Engineering was engaged on 32 studies in Australia, the Americas and abroad.

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Oil, Gas, Energy & Water - 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 HY23, revenue contributions were primarily from:

• Wellsite and plant maintenance work for Santos in the Surat and Cooper Basins;

• 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 (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.

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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 HY23, Mipac continued to deliver solutions for key repeat clients such as First Quantum Minerals, OZ Minerals Limited, Glencore Technology, Anglo American group, Ok Tedi Mining Limited and other large conglomerates.

• Mipac is forecasting a record revenue result for FY23 based on its year to date results and strong pipeline of work. The business continues to operate at a high utilisation.

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ESG

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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 continues to build its contracted and near term prospective pipeline of work across a diverse commodity base.

• GR Engineering maintains its revenue guidance forecast of $500 million to $530 million. The EBITDA margin % is expected to return to historical levels in the second half of FY23.

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Selected Clients

GR Engineering

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Upstream Production Solutions Mipac

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Corporate Profile

Capital Structure

Capital Structure
Shares on issue	m	161.6
Share price_(GNG.ASX)(21 Feb 2023)_	$	2.24
Market Capitalisation	$m	362.0
Cash (31 Dec 2022)	$m	83.4
Debt_(31 Dec 2022) (excluding lease liabilities and_	$m	0
premium financing) Enterprise Value	$m	278.6

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
12 month period
24.0%
56.0%
20.0%
Directors & Founders Institutions Other
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Register Analysis

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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

GR Engineering

71 Daly Street Ascot WA 6104

• PO Box 258 Belmont WA 6984

• +61 8 6272 6000

Upstream PS

• Level 11, 99 St Georges Terrace Perth WA 6000  +61 8 6109 4000

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, 345 Queen Street Brisbane QLD 4000  +61 7 3239 5800

29 Dawson Street East Arm NT 0822

• +61 8 7979 2340

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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 half year ended 31 December 2022. 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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