GR ENGINEERING SERVICES LIMITED — Investor Presentation 2024

Feb 21, 2024

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Providing global mineral ASX:ASX:GNGABC processing solutions

Investor Presentation 22 February 2024

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HY24 Results

• GR Engineering reported HY24 revenue of $187.3 million and EBITDA of $22.6 million.

• During HY24, GR Engineering successfully delivered multiple major projects, including the Thunderbird Mineral Sands Project, Bellevue Gold Project and Cosmos Nickel Concentrator Facility Upgrade.

• The solid operational performance and the completion of multiple major projects resulted in a stronger EBITDA performance compared to the prior corresponding period.

• The Group Total Reportable Injury Frequency Rate for HY24 was 2.62. GR Engineering recorded one LTI during the half year period.

• The Board has resolved to declare an interim fully franked dividend of 9.0 cents per share, (HY23 fully franked dividends: 9.0 cents per share).

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• During the last six months, GR Engineering’s shareholder base has increased from 3,346 shareholders to 3,773 shareholders.

GR Engineering Services (ASX:GNG)

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HY24 Results Summary

Earnings

Revenue

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$400m
$200m HY23
HY24 331.9
187.3
$0m
$30m
$20m
HY24 HY23
$10m
22.6 20.6
$0m
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EBITDA

PBT

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$30m
$20m
HY24
$10m HY23
20.7
18.1
$0m
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Balance Sheet & Cash Flow

Cash

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$90m
$60m
HY23
$30m HY24 83.4
58.4
$0m
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Net Assets

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$80m
$40m HY24 HY23
59.0
58.3
$0m
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Dividends (Fully Franked)*

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10cps
5cps HY24 HY23
9.0 9.0
0cps
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• Represents interim dividend

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Balance sheet

• Strong balance sheet maintained at 31 December 2023.

• At 31 December 2023, GR Engineering held a cash balance of $58.4 million with negligible external bank debt.

• During HY24, the business paid out $16.5 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
Evolution Mining Limited	Mungari Future Growth Project	EPC	155
K92 Mining Ltd	Kainantu Gold Mine – 1.2 Mtpa Process Plant	EPC	USD81
Hastings Technology Metals Limited	Yangibana Rare Earths Project – Beneficiation Plant*	EPC	210

*Contract executed, pending full notice to proceed. Early works continued up to a capped amount

• 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), generates longer term operations and maintenance (O&M) services revenue alongside project based design and construction work.

• GRPS’s contracted pipeline includes, but is not limited, to 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 HY24, 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 continues to operate at a high utilisation based on its strong contracted and near term pipeline of work.

• On 1 February 2024, Mipac entered into an agreement to acquire Paradigm Engineers (Paradigm), a provider of control systems and electrical engineering automation and technology services based in Western Australia.

• This strategic transaction enhances Mipac’s control system and design capabilities and expands its existing footprint in Western Australia. Paradigm has significant expertise working across a range of commodities, including iron ore, gold and battery minerals.

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• The purchase price is $9.0 million, with 50% payable in cash and 50% payable in GR Engineering scrip, subject to voluntary escrow. It is anticipated that completion will occur on or around 29 February 2024.

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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.

• Regularly partner 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 ongoing study work, GR Engineering’s visibility for project work remains high for FY24 and FY25.

• As previously advised at the Annual General Meeting in November 2023, the consolidated entity expects revenue for FY24 to be in the range of $500 million to $530 million.

• 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 strategic 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 Feb 2024)_	$	2.29
Market Capitalisation	$m	377.9
Cash (31 Dec 2023)	$m	58.4
Debt_(31 Dec 2023) (excluding lease liabilities)_	$m	0
Enterprise Value	$m	319.5

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
3.00
1,400,000
2.50
1,200,000
2.00 1,000,000
800,000
1.50
600,000
1.00
400,000
0.50
200,000
0.00 0
Share Price Volume
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Register Analysis

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30.0%
55.0%
15.0%
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 half year ended 31 December 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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