MADER GROUP LIMITED — AGM Information 2019

Nov 28, 2019

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FY2019 CEO AGM Presentation

CEO’s Address

Patrick Conway

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Mader Group Limited AGM | November

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Jim Walker

Non-Executive Chairman

Over 45 years’ experience in the resources sector. Former MD of WesTrac, Director of Seven Group Holdings, and National Hire Group. Former Non-Exec Chairman of Macmahon Holdings. Currently Chairman of Austin Engineering, Australian Potash, State Training Board, Wesley College, WA Motor Museum, and Deputy Chairman of RAC WA.

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Luke Mader Founder and Executive Director Founder of Mader Group. Trade qualified with 20 years’ experience in the mining services industry. Cultivated a 1000+ workforce after realising an underserviced ‘niche’ whilst working in marketing for a Caterpillar dealer network.

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Craig Burton Non-Executive Director A venture capital investor in emerging companies, projects and businesses. A track record of providing financial backing and strategic advice to successful business teams and start-up entrepreneurs.

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Patrick Conway Justin Nuich Executive Director and Non-Executive Chief Executive Officer Director Bachelor of Commerce, CPA Over 20 years’ experience in the and a Graduate Diploma in mining and oil & gas industries. Corporate Governance. MBA and a Graduate Diploma of Background in Public Practice Maintenance Management. Has accounting and business held senior roles with FMG and advisory including 4 years’ BHP and is currently the General experience on a West African Manager of Assets with Mineral gold development project. Resources.

Mader Group Limited AGM | November www.madergroup.com.au

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REVENUE
$228.6 M
YOY REVENUE GROWTH
46.4%
EBITDA
$25.5 M
EBIT
$21.6 M
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250
200
150
100
50
0
2017 2018 2019
WA QLD/NSW SA/NT International USA
Revenue A$ m
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ADJUSTED NET PROFIT AFTER TAX
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Mader Group Limited AGM | November www.madergroup.com.au

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2015 2016 2017 2018 2019 2020F 2021F 2022F 2023F 2024F
Source data: “BIS Oxford Economics” for Maintenance spend
$13.10
$12.50
$12.10
$10.00
$9.70
$8.70
$7.90
$7.30 $7.40
$7.00
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Source data: “Department of Industry, Innovation and Science” for Production charts

Mader Group Limited AGM | November

• Financial • Group net profit* in line with Guidance prospectus forecast.

• Revenue up 6% from Q4 2019

• Revenue up 23% from Q1 2019

• Purely organic growth

REVENUE UP

From Q1 2019

REVENUE UP 6% From Q4 2019

Outlook

• Dividend intended for March 2020 – 1.5c per share

• Mader are positioned and established in key mining provinces across the globe showing increased production and maintenance spend

• Focusing on scaling into markets that have been recently penetrated

• Continued roll out of ancillary and complementary services in mature regions of high brand awareness

* Based on unaudited management accounts

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Mader Group Limited AGM | November www.madergroup.com.au

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50
45
40
35
30
25
20
15
10
5
-
Q3 2019 Q4 2019 Q1 2020
Revenue A$ 'm
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Region Revenue up 6% Pilbara Revenue up 9% Goldfields Revenue up

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Mader Group Limited AGM | November www.madergroup.com.au

Region Revenue up by

Financial

Guidance

• Eastern Region Q1 FY2020 revenue up 21% from Q4 FY2019

• QLD revenue up 19%

• NSW revenue up 27%

• Revenue and profit* up on forecast

• Growth purely organic

QLD Revenue up by

Outlook

• Demand in Bowen Basin, Surat Basin and Hunter Valley regions to remain strong for core services

• Continued roll out of ancillary services in Bowen and Surat Basin regions

• Focus on continued penetration into Hunter region and Mt Isa hard rock

NSW Revenue up by

• Management focus on margin improvement in areas of high brand awareness

• Continued scaling benefits to occur through Q2 FY2020 to Q4 FY2020

* Based on unaudited management accounts

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Mader Group Limited AGM | November www.madergroup.com.au

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Financial Guidance

Outlook

• Steady revenue

• Recent division spin off (Q2 FY2020) to resource management team with a dedicated regional focus in Q2 FY2020

• Currently 8% of group monthly turnover; focus to increase revenue in the SA and NT regions

• Field teams operational in SA and NT with a focus on reactive services

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Mader Group Limited AGM | November www.madergroup.com.au

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Revenue and profit softened in Q1 FY2020; expect
further softening in Q2 FY2020 due to reduced 7
6
Revenue softening in Mongolia for Q3 FY2020
5
Re-allocation of internal employees to Australian
contracts has occurred, skilled employees retained
4
New contracts expected to come on line: South America
Asia
Q2 FY2020 West Africa Africa
3
Q3 and Q4 FY2020 Central Africa & SE Asia
Renewed management focus on central African 2
copper belt Northern Zambia/Southern DRC
Medium term expansion focus on PNG with work 1
commenced in country
Revenue A$ 'm
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Mader Group Limited AGM | November www.madergroup.com.au

Revenue growth of

Mader Group Limited AGM | November www.madergroup.com.au

Appendices

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927 employees
Mader enters USA
567 employees
Mader enters NSW and
SA
251 employees
Mader enters QLD
Mader opens first Mader International
Mader established workshop launched 100 employees
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Mader Group Limited AGM | November www.madergroup.com.au

Expanding Global Platform

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EAST ASIA
Mongolia
Northern Territory
Tanami
USA
Nevada
Queensland
Wyoming
Brisbane
Arizona
Bowen Basin
Tennessee
Surat Basin
New Mexico
Far North Queensland
New South Wales
AFRICA Hunter Valley
Mauritania Gunnedah Basin
Senegal Western Australia Southern NSW
Mali Pilbara Australian Capital Territory
Goldfields Central & Far West
DRC Mid West
SOUTH AMERICA Zambia South West
Chile Perth South Australia
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Competitive Position

Mader believes it differs from its competitors on its combination of value, flexibility, quality and capacity.

Longstanding relationships with top tier mining customers are built on quality of service and a focus by the Mader Group on its people, culture and reputation.

LABOUR HOUSES SMALL OPERATORS MARKET POSITION	LABOUR HOUSES SMALL OPERATORS MARKET POSITION	LABOUR HOUSES SMALL OPERATORS MARKET POSITION	LABOUR HOUSES SMALL OPERATORS MARKET POSITION		ORIGINAL EQUIPMENT MANUFACTURERS
VALUE	▪Lower cost	▪Lower cost		▪Cheaper than OEMs	▪Higher cost
FLEXIBILITY	▪Limited in-house employees ▪Response lag	▪No in-house employees ▪Response lag		▪In-house employees ▪Fast response	▪In-house employees ▪Restricted to brand
QUALITY	▪Limited leadership ▪Limited internal training	▪No leadership ▪No internal training		▪Skilled leadership team ▪Maintenance labour specialists ▪Highly skilled employees ▪Internal training	▪Equipment specialists ▪Highly skilled employees ▪Internal training
CAPACITY	▪Low capacity ▪Small internal talent pool	▪Low capacity – must recruit to meet demand		▪High capacity - on demand ▪Large talent pool ▪Site support for different equipment brands	▪Site support for single manufacturer only ▪Restriction to brand and geographical boundaries

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Mader Group Limited AGM | November www.madergroup.com.au

System & Scheduling

Mader Group coordinators strategically pair skilled staff with corresponding projects that match their skillset and availability. This sophisticated scheduling system has been developed and continuously refined since the company’s inception.

Mutual Flexibility Clients Workforce

Tailor request volume based Tailor roster and work location on work level and requirement around desired lifestyle

P10 Mader Group Limited AGM | November www.madergroup.com.au

Growth opportunities and addressable market

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MTPA means Million Metric Tonnes Per Annum (FY2018 Run of Mine Production) ▪ Current markets
▪ Recently entered markets
▪ Potential markets
CENTRAL ASIA MTPA
CANADA MTPA Mongolia 123
Canadian Copper (excl. Gold) 88
Canadian Gold 155 SOUTH EAST ASIA MTPA
(incl. Copper & Gold)
Philippines 112
Canadian Oil Sands 71
TOTAL 314
AUSTRALIA MTPA
East Coast Coal 575
NORTH AMERICA MTPA
USA Coal Wyoming 314
USA Gold Nevada 188
(incl. Copper & Gold)
USA Other Coal 604 CHILE MTPA AUSTRALIA MTPA
USA Copper (excl. Copper & 378 Chile Copper (excl. Gold) 711 AFRICA MTPA Pilbara Iron Ore 1,104
Gold in Nevada)
Chile Gold (incl. Copper & Gold) 426 Zambia 132 Goldfields 162
TOTAL 1,484
TOTAL 1,137 DRC Copper 40 TOTAL 1,266
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Top Tier Client Base

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Mader Group Limited AGM | November www.madergroup.com.au

Corporate Social Responsibility

Mader Group aim to empower communities, improve social dynamics and lessen inequality by sponsoring initiatives that support socio-economic development in remote areas and disadvantaged communities. We help fund a growing number of initiatives across the globe, with programs extending throughout Australia and into Asia, Africa and the US. In addition to providing financial aid our people also volunteer time to support local charities.

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Ronald McDonald House

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Solwezi Primary School Construction Project

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Townsite Eagles Football Club

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Mader Group Limited AGM | November www.madergroup.com.au

Profit & Loss

Historical Forecast	Historical Forecast	Historical Forecast	Historical Forecast	Historical Forecast
Currency: A$’000 FY17 FY18 FY19 FY20
Revenue	99,252	156,208	228,645	279,176
… % growth	35.2%	57.4%	46.4%	22.1%
EBITDA	10,174	18,603	25,454	33,836
… EBITDA margin	10.3%	11.9%	11.1%	12.1%
EBIT	8,440	15,551	21,628	28,097
… EBIT margin	8.5%	10.0%	9.5%	10.1%
Net Profit Before Tax	8,181	15,023	20,419	26,287
… profit before tax margin	8.2%	9.6%	8.9%	9.4%
Net Profit After Tax	6,206	11,353	14,900	18,853
… profit after tax margin	6.3%	7.3%	6.5%	6.8%
Adjustments	(384)	(379)	289	457
Adjusted Net Profit After Tax1	5,822	10,974	15,189	19,310
… adjusted profit after tax margin	5.9%	7.0%	6.6%	6.9%

Notes:

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1. Includes adjustments for Offer Costs expensed, Public Company costs and the impact of AASB 16

Balance Sheet

Currency: A$’000	Jun 18	Jun 19
Cash and cash equivalents	8,246	3,049
Receivables	39,366	54,495
Tax Assets	1,701	1,896
Other assets	2,854	1,820
Property, plant and equipment	12,736	26,247
Total assets	64,903	87,507
Payables	18,388	24,809
Borrowings	14,794	24,228
Provisions	696	1,140
Tax liabilities	243	3,161
Total liabilities	34,123	53,338
Total equity	30,780	34,169

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Mader Group Limited AGM | November www.madergroup.com.au

Cash Flow

Historical Forecast	Historical Forecast	Historical Forecast	Historical Forecast	Historical Forecast
Currency: A$’000 FY17 FY18 FY19 FY20
Earnings before interest and tax	8,440	15,551	21,628	28,097
Interest received (paid)	(347)	(489)	(1,475)	(1,139)
Income tax paid	(2,649)	(4,159)	(2,800)	(7,432)
Depreciation	1,734	3,052	3,826	5,196
Movement in payables	2,412	10,862	3,703	772
Movement in receivables	(4,746)	(14,268)	(15,128)	(11,603)
Other non-cash movements	(1,019)	(1,543)	204	24
Net cash provided from operating activities	3,825	9,006	9,958	13,915
Payment for plant and equipment	(3,673)	(8,659)	(15,911)	(9,783)
Proceeds from (payments for) shares in unlisted companies	(10)	(539)	484	-
Dividends paid	-	(3,000)	(9,161)	(6,280)
Proceeds from (repayment of) borrowings	4,014	6,590	9,435	2,302
Net cash flows during the period	4,156	3,398	(5,195)	154
Cash and cash equivalents at the end	4,792	8,246	3,049	3,353

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Notes to financials

Historical Forecast	Historical Forecast	Historical Forecast	Historical Forecast	Historical Forecast
Currency: A$’000 FY17 FY18 FY19 FY20
Statutory net profit after tax	6,206	11,353	14,900	18,853
Public company costs1	(523)	(523)	(228)	-
One-off offer costs2	-	-	908	671
Impact of accounting standard AASB 16	(26)	(19)	(267)	(18)
Impact of income tax3	165	163	(124)	(196)
Adjusted net profit after tax	5,822	10,974	15,189	19,310
Adjusted net profit margin	5.9%	7.0%	6.6%	6.9%

Mader Group Limited results are reported under International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. The Company discloses certain non-IFRS measures that are not prepared in accordance with IFRS and therefore are considered non-IFRS financial measures. The non-IFRS measures should only be considered in addition to and not as a substitute for, other measures of financial performance prepared in accordance with IFRS.

1. Public company costs include:

• The directors’ estimate of incremental annual costs that the Mader Group will incur as a public listed company. These incremental costs include share registry fees, Executive Director, Non Executive Director remuneration, Directors’ and Officers’ insurance premiums, additional audit and legal fees, listing fees, investor relations costs as well as annual general meeting and annual report costs. The annual estimate of these costs is $0.52 million (tax effected $0.36 million);

• For FY2018, no Public Company costs were incurred. Therefore, as a normalisation adjustment to make FY2018 comparable with FY2019, $0.52 million ($0.36 million tax effected) has been included as an adjustment;

• For FY2019, the net profit already includes $0.29 million ($0.21 million tax effected) Public Company Costs. Therefore, additional $0.23 million ($0.16 million tax effected) is included as an adjustment to FY2019 net profit.

2. One-off Offer costs incurred by Mader Group of $0.91 million ($0.64 million tax effected).

1. Income tax effect - An adjustment has been made to reflect the tax impact of the adjustments based on the Australian statutory corporate tax rate of 30%.

2. The Directors have considered the impact of AASB 9 and AASB 15 and do not expect these standards to have an impact on the financial position or results of the Group.

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Our Vision

T o b e t h e o u t s o u r c e d p r o v i d e r o f c h o i c e

• To maintain our superior customer service, people and culture

• To be the first choice place of employment for quality tradespeople in equipment maintenance

• ▪ To replicate and grow our business model

Disclaimer

This presentation has been prepared by Mader Group Limited (ACN 159 340 397) “ Mader ”, “ Mader Group ” and the “ Company ”). The information contained in this presentation is for information purposes only.

The information contained in this presentation is not investment or financial product advice and is not intended to be used as the basis for making an investment decision. Please note that, in providing this presentation, Mader has not considered the objectives, financial position or needs of any particular recipient. Mader strongly suggests that investors consult a financial advisor prior to making an investment decision.

This presentation is strictly confidential and is intended for the exclusive use of the institution to which it is presented. It may not be reproduced, disseminated, quoted or referred to, in whole or in part, without the express consent of Mader.

No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation. To the maximum extent permitted by law, none of Mader, their respective related bodies corporates, shareholders, directors, officers, employees, agents or advisors, nor any other person accepts any liability, including, without limitation, any liability for any loss arising from the use of information contained in this presentation.

This presentation may include “forward looking statements”. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of Mader and their respective officers, employees, agents or associates that may cause actual results to differ materially from those expressed or implied in such statement. Actual results, performance or achievements may vary materially from any projections and forward looking statements and the assumptions on which those statements are based. Mader assumes no obligation to update such information.

This presentation is not, and does not constitute, an offer to sell or the solicitation, invitation or recommendation to purchase any securities and neither this presentation nor anything contained in it forms the basis of any contract or commitment. Any offer or sale of securities will be made pursuant to definitive documentation, which describes the terms of the offer (Offer Document). An Offer Document for any offer of securities in Mader will be made available when the securities are offered. Prospective investors should consider the Offer Document in deciding whether to acquire securities under the offer. Prospective investors who want to acquire under the offer will need to complete an application form that is in or accompanies the Offer Document.

This presentation does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in the United States. The securities of Mader have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (Securities Act) or the securities laws of any state or other jurisdiction of the United States, and may not be offered or sold in the United States except in compliance with the registration requirements of the Securities Act and any other applicable securities laws or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any other applicable securities laws.

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Mader Group Limited AGM | November www.madergroup.com.au

Mader Group Limited