MONADELPHOUS GROUP LIMITED — AGM Information 2012

Nov 19, 2012

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Title Annual General Meeting 2012 XX November 2012 20 November 2012

Safety and Wellbeing | Integrity | Achievement | Teamwork | Loyalty

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Agenda
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1. Chairman’s Address

2. Managing Director’s Address

3. Items of Business

4. Other Business

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Board of Directors and Chief Financial Officer
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John Rubino Chairman

Rob Velletri Zoran Bebic Managing Director CFO and Company Secretary

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Peter Dempsey (Lead) Non-Executive Director

Chris Michelmore Non-Executive Director

Irwin Tollman Non-Executive Director

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1. Chairman’s Address
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John Rubino (Chairman)

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Company Profile
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Monadelphous Group Limited (ASX:MND) is a S&P/ASX 100 company that provides construction, maintenance and industrial services to the resources, energy and infrastructure sectors throughout Australasia

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Market People Revenue Earnings per Dividends per
capitalisation 6,105 ~$1,897m share share
~$1.9b 155.2c 125c
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(as at 30 June 2012)

Engineering Construction Division

Maintenance and Industrial Services Division

Infrastructure Division

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Long Growth History
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Growth Strategy

• Organic growth approach

• Increasingly larger contracts with blue chip customers

• Long term customer relationships - safe and reliable delivery

• Geographical expansion - WA, Queensland, SA, NT, NSW, China, PNG

• Oil and gas expansion

• Electrical/instrumentation services expansion

• Dragline services expansion

• Transmission pipelines

• Infrastructure expansion - water, power, aviation services

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Share Price Performance
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Monadelphous 12‐month	Share Price
Performance (Rebased)
(Source: Miraqle)
					Monadelphous
					+18%
				S&P/ASX 100 Industrials
					-2%
					S&P/ASX 100
					-11%
Top Five Shareholders		Substantial Shareholder (Beneficial)		Capital
HSBC Nominees Australia	12.0%	Mondrian Investment Partners	6.2%	Shares on Issue	90.7m
JP Morgan Australia	9.8%			Market Capitalisation	~$1.9b
National Nominees Australia	5.4%			(as at 30	June 2012)
Velham Nominees Pty Ltd	2.5%
Thorney Holdings	2.3%

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Shareholder Return
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Total Shareholder Return (TSR) is the total return to shareholders (including income from dividends and interest). TSR has been calculated to 30 June 2012.

For comparison purposes, peers are ASX-listed companies operating in Monadelphous sectors, including Transfield, UGL, Clough, Downer and Leighton (not in this order).

~~(Source: Thomson Reuters)~~

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2. Managing Director’s Address
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Rob Velletri (Managing Director)

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Group Highlights
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• Sales revenue up 31% to $1,897m

• NPAT up 44% to $137m, underlying NPAT^ up 32% to $126m

• Underlying EPS^ up 31% to 142c, DPS up 32% to 125c

• Included in the S&P/ASX 100 index

• Divested stake in Norfolk

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Operating
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• Strong demand across all markets

• Significant growth from the Maintenance and Industrial Services and Infrastructure divisions

• Awarded ~$2b of new contracts and contract extensions

• Consolidated the Company’s position in the energy market

• Awarded first marine construction contract

• Expansion into power through PearlStreet acquisition

^Underlying basis. Refer to slide 27 for reconciliation.

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Financial Performance
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		FY12	FY11	Change
Sales Revenue	$m	1,897.5	1,443.9	+31.4%
EBITDA^	$m	196.5	153.3	+28.2%
EBITDA Margin^	%	10.35	10.62	-0.27pp
NPAT^	$m	126.0	95.1	+32.5%
NPAT Margin^	%	6.64	6.58	+0.06pp
EPS^	cps	142.4	108.8	+30.8%
Operating Cash Flow	$m	138.6	125.2	+10.7%
DPS (Fully Franked)	cps	125.0	95.0	+31.6%
Return on Equity^	%	53.77	49.20	+4.57pp

^Underlying basis. Refer to slide 27 for reconciliation.

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Financial Position and Funding
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	Cash at Bank $m Net Cash Position (Cash less interest bearing loans and $m	June 12 June 11 Change 203.6 172.5 +18.0% 152.9 129.5 +18.1%
	borrowings) Capital Expenditure (Cash and Hire Purchase) $m Capital Expenditure Commitments $m	74.2 54.5 +36.0% 19.6 11.0 +79.1%
	Bank Guarantee & Performance Bond Facilities Utilised $m Available $m Total Facility $m	331.4 129.2 +156.5% 89.8 65.8 +36.5% 421.2 195.0 +116.0%

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Divisional Highlights
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• Secured ~$1.3 billion in new contracts

• First marine contract – WICET

• Two Rio Tinto Iron Ore Framework Agreements

• Significant investment in crane fleet

• Record sales, growth of 58%

• Strengthened presence in coal

• Secured Woodside Pluto LNG maintenance contract

• Consolidation within division

• Strong sales growth of 39%

• Secured $330m in new contracts

• Expansion into power through PearlStreet acquisition

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FY2012 Contract Activity
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FY2012 Contracts Secured
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Engineering Construction – BHP Billiton Inner Harbour Project,
Port Hedland
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Maintenance and Industrial Services – Facilities Management
Services, Chevron-operated Gorgon Project, Barrow Island
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Infrastructure – Water Corporation’s Picton Water Treatment
Plant, Bunbury
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FY2013: $775m in new contracts awarded
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Engineering Construction

Maintenance and Industrial Services

$295m

$480m

• Rio Tinto, Coastal and Inland Shutdown Maintenance (2 contracts,

• BHP Billiton, Jimblebar Mine, Newman, WA

• Rio Tinto, Marandoo Mine Phase 2, Tom Price, WA

• 3-year extensions), Pilbara, WA

• Chevron, Facilities Management Services (1-year extension), Barrow Island, WA

• BMA, Caval Ridge, Moranbah, Queensland

• Woodside, Karratha Gas Plant Maintenance (3-year contract), Pilbara, WA

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People Performance
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Highlights

• End of year employee numbers at record levels

• Restructure of human resources function to support expanding operations

• Continued implementation of attraction, development and retention initiatives

• New long-term employee incentive program for 235 employees

Employee Numbers

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Safety Scorecard
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Injury Frequency Rate (per million hours worked)

The Safe Way is the Only Way

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• TCIFR improved 31.6% to 6.0

• LTI improved 18.8% to 0.13

• Achieved 12-months LTI free for first time in January

• Continued implementation of Safety Leadership Program

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12 month moving average
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Strategic Progress
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 Maintained leading position in core markets

 Increased presence in coal and energy

 Secured first marine construction contract

 Expanded pipeline business

 Moved into power

 Consolidated M&IS division

 Implemented Safety Leadership Program  Restructured human resources function  Launched new long-term equity program  Formalised diversity initiatives

 Enhanced heavy lift capability

 Strengthened group assurance function

• Reviewed tender risk assessment process

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Market Expansion
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Sales Revenue
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Australian Market Conditions
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Energy (Oil and Gas Capex A$b)

Resources (Mining Capex A$b)

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Infrastructure (Public Sector Capex A$b)

Maintenance (Resources and Energy A$b)

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~~- Source: BIS Schrapnel~~ ~~Mining Investment by Commodity Total New Fixed Capital Expenditure Constant 2009/10 Prices (updated November 2012).~~ Australia –Total Public Sector - Value of Work Done Constant 2009/10 Prices (updated October 2012).

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Project Pipeline
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Proposed CAPEX on the 98 advanced Australian resources and energy projects is > $260b

p Australian resources and energy projects is >$260b	SIGNFICANT PROSPECTS EXPECTED COMPLETION CAPEX Wheatstone LNG Chevron/Apache/KUFPEC/Shell 2016 $28b Australia Pacific LNG Origin/ConocoPhillips/Sinopec 2016 $14b
	Gladstone LNG Santos/Petronas/Total/Kogas 2015 $16b Ichthys Gas Field (including Darwin LNG Plant)Inpex/Total 2017 $33b Queensland Curtis LNG BG Group 2014 $20b Rio 333 (mines) Rio Tinto 2014 $6b
CAPEX of advanced projects by State	Rio 333 (ports and rail) Rio Tinto 2013 $3b Jimblebar BHP Billiton 2014 $3b Inner Harbour and Optimisation BHP Billiton 2014 $4b BMA Coal Expansion BHP Billiton 2014 $6b

Source: BREE’s list of major minerals and energy projects, April 2012

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Outlook
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 Strong pipeline of opportunities

• High levels of resources and energy projects and secured work provides strong construction revenue visibility for FY13 and beyond

• Maintenance opportunities growing as projects reach completion and startup

 Record levels of activity

• Large volume of contracts ramping up and accelerating concurrently

• Focus on meeting the operational and abnormal working capital demands of this intensive period

• Expected revenue for FY13 H1 up around 40% on pcp and FY13 up around 25% on pcp

• Delivery focus

• Customers tightening of expenditure putting pressure on margins

• Focus on productivity and cost effective delivery of current workload

• Continued skilled labour challenges

 Foundation for long term growth

• Market leadership position, infrastructure and overseas diversification strategy will support long term growth

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Non-IFRS Financial Information
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Monadelphous Group Limited results are reported under International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. The Company discloses certain nonIFRS 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.

Underlying EBITDA is a non-IFRS earnings measure which does not have any standardised meaning prescribed by IFRS and therefore may not be comparable to EBITDA presented by other companies. Underlying EBITDA represents earnings before interest, income taxes, depreciation, amortisation and gain from sale of Norfolk Group Limited shares. This measure is important to management as an additional way to evaluate the Company’s performance. The gain from sale of Norfolk Group Limited shares in FY12 has been excluded for comparative purposes to FY11. Underlying NPAT represents NPAT excluding the after tax gain from sale of Norfolk Group Limited shares in FY12 for comparative purposes to FY11.

The word “underlying” used within the Chairman’s Report, refers to the statutory result for the year ended 30 June 2012 excluding the one-off gain from the sale of Norfolk Group Limited shares. This measure is important to management as an additional way to evaluate the Company’s performance. Underlying measures are unaudited.

^Reconciliation Underlying EBITDA Profit before income tax Gain from sale of Norfolk Group Limited shares	2012 2011 $’000 $’000 187,259 131,576 ‐16,262 0
Interest expense Interest revenue Depreciation expense Amortisation expense Underlying EBITDA Underlying NPAT Net profit after tax	3,447 2,672 ‐6,717 ‐5,356 26,541 23,341 2,195 1,074
	196,463 153,307 137,335 95,067
After tax gain from sale of Norfolk Group Limited shares Underlying NPAT	‐11,383 0
	125,952 95,067

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Disclaimer and Important Notice
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Information, including forecast financial information, in this presentation, should not be considered as a recommendation in relation to holding, purchasing or selling shares, securities or other instruments in Monadelphous Group Limited or any other company. Due care and attention has been used in the preparation of forecast information, however, actual results may vary from forecast and any variation may be materially positive or negative.

Forecasts, by their very nature, are subject to uncertainty and contingencies may occur which are outside the control of Monadelphous Group Limited. Before making or varying any decision in relation to holding, purchasing or selling shares, securities or other instruments in Monadelphous Group Limited, investors should consider the appropriateness of that investment in light of their individual investment objectives and financial situation and should seek their own independent professional advice.

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Contact
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www.monadelphous.com.au

Information for Investors/Analysts: Rachael Cutler, Investor Relations Manager Telephone: +61 (08) 9315 7429 Email: rcutler@monadel.com.au

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Title Annual General Meeting 2012 XX November 2012 20 November 2012