MADER GROUP LIMITED — Annual Report 2020

Aug 26, 2020

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2020 Full Year Results

REVENUE

CHANGE (FROM FY2019)

• Successfully listed on the ASX in October 2019

• Purely organic revenue growth of 20% made up of:

• Revenue growth in all Australian regions

ADJUSTED EBITDA[1]

• Higher than forecast growth in USA and NSW

• Decline in revenue in Africa and Asia

ADJUSTED EBIT[1]

• Reduction in net debt to $18.5 million at 30 June 2020, down 57.3% from $29.1 million at 31 December 2019

• Underlying earnings of $33.1m, representing a 30% increase from $25.4m EBITDA in FY2019

ADJUSTED NPAT[1]

FY2020 DIVIDEND

• Continued scaling of ancillary services to complement our core service capabilities. Ancillary services achieved year on year revenue growth of 41% in WA

• Mader selected as a finalist for the Australian HR Awards 2020, Employer of Choice (>1000 Employees) category. Winner to be announced in Q2 FY2021

• Strong balance sheet positions Mader Group well for continued growth in FY2021 and beyond

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• Strong macro trends position Mader for continued growth on a global scale:

• Mader is well placed to deal with the challenges of COVID-19

• Positive outlook for maintenance sector with continued strong demand for services

• Mining provinces globally show increased production and maintenance spend

• High market share in strong commodity markets

• Regional outlook for FY2021:

• Ongoing growth in USA, QLD and NSW supported by strong recruitment environments

• Continued development of ancillary strategy to capitalise on growth potential in mature regions

• Steady growth in WA with strong demand expected in WA's Pilbara and Goldfields regions and a dedicated focus to increase the delivery of people to WA’s Midwest Region

• Tightening labour market in WA offset by a scalable Trade Upgrade Apprenticeship Program with third intake commencing Q2 FY2021

• Strategy to return limited service to customers in Africa and Asia

• Canadian expansion delayed to assess COVID-19 impacts and capitalise on opportunities with growth potential in USA’s Eastern States

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• Western Australia revenue of $181m, up 24% from FY2019

FY2020

Summary

• Continued scaling of ancillary and complementary services achieved year on year revenue growth of 41% in WA

• FY2021 • Preferred maintenance supplier for Roy Hill, and contract extensions with Rio Tinto, BHP Iron Ore, BHP Olympic Dam,

• Outlook Nickel West and Fortescue Metals Group

• Supplier for John Holland on Fortescue Metals Group’s Eliwana Integrated Railway Project

Region

Revenue up

Pilbara

Revenue up

• Partnered with BHP Iron Ore to maintain their train load out fleet and maintenance workshop at Eastern Ridge

• Strong demand for services expected, particularly from gold and iron ore regions

• Dedicated focus on increased delivery of people to Western Australia’s Midwest and Kimberley Regions

Goldfields

Revenue up

• Tightening labour market offset by scalable Trade Upgrade Apprenticeship Program with next intake commencing Q2 FY2021

• Operations remain affected by workforce availability limitations and some extra costs due to COVID-19

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FY2020 Summary Region Revenue up by 31% FY2021 From FY2019 Outlook QLD Revenue up by 14% From FY2019 NSW Revenue up by

• Eastern Region revenue of $45m, up 31% from FY2019

  • QLD revenue up 14%

  • NSW revenue up 107%

• Market sentiment in QLD is softer due to coal price movements. In response:

• • QLD continues to diversify its market share to reduce its risk profile

• QLD has adopted a strategy to capitalise on a favourable recruitment environment

• NSW operations have been less affected and remain focused on margin improvement and growth in the Hunter Valley and Central West regions

• Continued diversification into North QLD and Central West NSW

• Continued scaling benefits to occur through FY2021

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Revenue growth of

• FY2020 • Fully organic start up returned higher than forecast revenue and profit of $A14m

• Summary

• USA operations profitable with scale benefits continuing month on month

• FY2020 average quarterly revenue growth of 60%.

• FY2021 • Strong growth prospects with new contracts commencing in Outlook Texas, Florida and Nevada in Q1 FY2021 • Operating in strong commodity markets of gold, copper and zinc. No revenue derived from coal in 2H20

• Fleet increase from 16 to 41 vehicles, which have been actively delivering service to customers to 30 mine sites:

• Nevada • Tennessee

• • Arizona • Texas • Wyoming • Florida (Q1 FY2021)

• • Strong recruitment environment

• Canadian expansion delayed to assess COVID-19 impacts and capitalise on opportunities with growth potential in USA’s Eastern States

32% 28% 26% 14%

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Region Revenue up by

SA

Revenue down by

NT

Revenue up by

FY2020

Summary

FY2021 Outlook

• Central Region revenue of SA and NT comprised $21m, up 4% from FY2019

• Steady growth in the NT and a slight decline in revenue in SA

• Numbers reduced in SA due to workforce rationalisation at Olympic Dam

• Commenced new workscope at a large open pit operation in NT and increased support for major underground operations

• Positive response to newly resourced, dedicated regional management teams

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

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• FY2020 • Revenue declined by 52% in FY2020 as a result of a pause in Summary our International operations (non-USA) due to principal COVID19 impacts

• Mader withdrew its expatriate workforce from Africa and Asia, largely re-mobilising them in Australia

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Revenue
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decline of
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• New workscopes delivered in Chile, Philippines and Papua New Guinea during the financial year

• Services delivered in Mongolia, Laos and Central/West Africa including Mauritania, Senegal, Cote d’Ivoire, Democratic Republic of the Congo and Zambia

• FY2021 • Currently implementing plans to step back into Africa and Outlook Mongolia markets pending effective management strategies to keep our people safe

• Mader has recommenced operations in Laos and secured new workscope in Papua New Guinea (Q1 FY2021)

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• Steady margin driven by decrease in International (Africa, Asia, South America) revenues offset by scaling in the USA

• • Revenue and EBITDA slightly below expectations at the time of preparing the FY20 prospectus forecast

• Adjusted NPAT impacted by COVID-19 and reduced relative contribution from International (ex-USA)

Adjusted Net Profit After Tax[1] 15,189 18,058

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• Simple balance sheet

• Principal asset is receivables

• ~ 2.4x monthly revenue

• Property, plant and equipment primarily service vehicles with a fleet of over 500 vehicles including 41 vehicles in USA in FY2020

Reduction in net debt to $18.5 million at 30 June 2020, down 57.3% from $29.1 million at 31 December 2019

Net debt is $18.5m (< 0.6x FY20 EBITDA)

• Facilities available: $41.6m

• • Debt drawn: $24.9 m

• • Net debt target ~ 50% of receivables • 53% as at 31 Dec 2019 • 34% as at 30 June 2020

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• Operating cash flow of $20.4 million was a $10.4 million improvement on FY2019

• Operating cash flow before interest and tax (OCFBIT) of $28.3 million represents a $14.2 million increase on FY2019

• Capex decreased by $3.0 million compared to FY2019. Capex was above IPO Prospectus forecast of $9.7 million due to higher than forecast growth in USA. The USA fleet increased to 41 vehicles, all in active service

• The Company ended the year with:

• Cash of $6.5 million, an increase of $3.0 million as compared to FY2019

• Net Debt of $18.5 million at 30 June 2020, a decrease of $2.7 million as compared to FY2019. Net debt comprised total debt of $24.9 million less cash of $6.5 million

• Dividend instalments:

• 1.5 cents per share - $3.0m (paid in March 2020)

• 1.5 cents per share - $3.0m (confirmed to be paid in September 2020)

• Payout ratio of 33.3%

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Safety & People

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Injury frequency rates
7
6
5
4
3
2
1
0
Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20
TRIFR LTIFR
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Our goal is zero harm and we will continue to work with our employees and clients to achieve this.

• Total recordable injury frequency rate 6.3

• Lost time injury frequency rate 1.75

• Continuous improvement to HSE systems and process:

• Implemented new app based technology to enhance our monitoring, reporting and training

• Strengthening our field leadership process and increasing time spent in the field.

• Continued development of robust processes to support our employees and clients locally and internationally

• Monthly ‘Mader Day’ events held to raise safety awareness and build teamwork and safety driven culture

• Over 2.7 Million hours worked in FY2020

Mader Group Limited 2020 Full Year Results | August www.madergroup.com.au

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Appendices

• A range of positive underlying trends for Mader:

• Increasing forecast mining maintenance expenditure

• Ongoing production growth in key commodities

• An industry trend for equipment to be used longer before replacement

• Aging of mining equipment purchased during a period of peak capital investment in CY2011 and CY2012

Iron Ore Production

Gold Production

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450 950
400 940
350 930
920
300
910
250
900
200
890
150
880
100
870
50 860
0 850
2018–19 2019–20 2020–21 f 2021–22 f 2018–19 2019–20 2020–21 f 2021–22 f
Metallurgical Coal Production Thermal Coal Production
188 280
186
275
184
270
182
265
180
260
178
176 255
2018–19 2019–20 2020–21 f 2021–22 f 2018–19 2019–20 2020–21 f 2021–22 f
Production (mt) Production (mt)
Production (mt) Production (mt)
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Source data: “Australian Government: Department of Industry, Innovation and Science” for Production charts

Our 15 Year Journey

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1,334 employees
Mader enters TAS
1,133 employees
Mader lists on the
Australian Stock Exchange
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
2005 2009 2011 2012 2015 2017 2018 2019 2020
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Mader Group Limited Full Year Results | August www.madergroup.com.au

Expanding Global Platform

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EAST ASIA
Mongolia
SOUTH EAST ASIA
Laos
Philippines
NORTHERN TERRITORY
Tanami
McArthur River
QUEENSLAND
USA Brisbane
Nevada Bowen Basin
Wyoming Surat Basin
Arizona Far North Queensland
Tennessee
Florida
AUSTRALIAN
Texas
CAPITAL TERRITORY
AFRICA
Mauritania WESTERN AUSTRALIA NEW SOUTH WALES
Senegal Kimberley Hunter Valley
Mali Pilbara Gunnedah Basin
Goldfields Southern NSW
DRC Mid West Central & Far West
SOUTH AMERICA
Zambia South West VICTORIA
Chile
South Africa Perth SOUTH AUSTRALIA
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Growth opportunities and addressable market

MTPA means Million Metric Tonnes Per Annum (FY2018 Run of Mine Production)

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▪ 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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CANADA	MTPA	MTPA
Canadian Copper (excl. Gold)	88
Canadian Gold (incl. Copper & Gold)	155
Canadian Oil Sands		71
TOTAL	314
NORTH AMERICA	MTPA
USA Coal Wyoming	314
USA Gold Nevada (incl. Copper & Gold)	188
USA Other Coal	604
USA Copper (excl. Copper & Gold in Nevada)	378
TOTAL	1,484

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

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

Workforce

Clients

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

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~2,300 1,334
35
17,660
~2,500 3,900
+200 <2%
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Mader Group Limited Full Year Results | August www.madergroup.com.au

Top Tier Client Base

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Mader Group Limited Full Year Results | August 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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‘Home for Dinner’ Volunteer Program Ronald McDonald House Charities Perth, WA, Australia

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Roxby Council Community Awards Roxby, SA, Australia

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Townsite Eagles Football Club Sponsorship Tom Price, WA, Australia

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Mader Group Limited Full Year Results | August www.madergroup.com.au

Notes to financials

Currency: A$’000 FY2019 FY2020	Currency: A$’000 FY2019 FY2020	Currency: A$’000 FY2019 FY2020
Statutory net profit after tax	14,900	17,504
Public company costs1	(228)	-
One-off offer costs2	908	856
Impact of accounting standard AASB 16	(267)	(65)
Impact of income tax3	(124)	(237)
Adjusted net profit after tax	15,189	18,058
Adjusted net profit margin	6.6%	6.6%

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:

2. 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;

3. For FY2019, no Public Company costs were incurred. Therefore, as a normalisation adjustment to make FY2019 comparable with FY2020, $0.23 million ($0.16 million tax effected) has been included as an adjustment;

4. For FY2020, the net profit already includes Public Company Costs, therefore no adjustment is required.

5. One-off Offer costs incurred by Mader Group of $0.86 million ($0.60 million tax effected).

6. 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%.

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Mader Group Limited Full Year Results | August www.madergroup.com.au

Our Vision

To be the outsourced provider of choice

• 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

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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 Full Year Results | August www.madergroup.com.au

Mader Group Limited