MONADELPHOUS GROUP LIMITED — Annual Report 2011

Feb 21, 2011

22 February 2011

Business Highlights Rob Velletri

Financial Performance Zoran Bebic Divisional Update Rob Velletri Rob Velletri

Divisional Update Strategy and Outlook

Business Highlights

• Sales revenue up 13% to $700m

• EBITDA up 15% to $74m, enhanced margin of 10.6%

• NPAT up 12% to $45.5m, EPS up 10.6% to 52.3c, DPS up 14%

• Healthy cash conversion, $61.5m cash flow from operations

• Strong demand and scope growth in EC activity, up 11%

• $450m of new contracts and contract extensions

• Workforce numbers up 24% to 5,742

• Flat overall safety performance, improved LTIFR

• Successful establishment of Infrastructure business

• Significant Infrastructure sales revenue growth, up 212%

• Continued focus on people and safety

• Record sales revenue of $467 million, up 11%

• Strengthening of the energy and resources markets

• Awarded more than $200 million in new construction contracts

• Sales revenue up 6% to $188 million

• Retained all existing customers and contracts

• Established new workshop facility in Mackay

• $80 million in new contracts and extensions

• Sales revenue up 212% to $72m driven by KT Pipeline Services and water projects

• Integration of KT Pipeline Services on track

• Secured $170 million in new contracts

• JV with AnaeCo secures WMRC Stage II project

Key Contract Wins

06

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Continued Market Diversification
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Highlights:

• Employee numbers increase 24% (pcp) in line with work volumes

• Skilled labour shortages continue to build

• Continued focus on attraction and retention strategies

Employee Numbers

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7,000
6,000 5,742
5,424
4,782
5,000 4,632
4,211
4,041
4,000 3,808 3,848
3,000
2,000
1,000
0
FY07 HY08 FY08 HY09 FY09 HY10 FY10 HY11
Engineering Construction Maintenance & Industrial Services
Infrastructure Other
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Highlights:

• TCIFR up marginally to 6.7 incidents

• Improvement in LTIFR

• Continued investment in safety leadership training, HSE processes and systems

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Financial Performance

			Dec 10	Dec 09	Change
Sales Revenue	$m		700.1	619.5	+ 13.0%
EBITDA	$m		74.0	64.2	+ 15.4%
Operating Cash Flow	$m		61.5	56.6	+ 8.7%
NPAT	$m		45.5	40.5	+ 12.3%
NPAT Margin*	%		6.5	6.5	0 pp
EPS	Cps		52.3	47.3	+ 10.6%
DPS (Fully Franked)	Cps		40.0	35.0	+ 14.3%
Return on Equity (Average)*	%		56.5	63.4	+ 6.9 pp
Capital Expenditure (Cash + HP)	$m		17.6	13.4	+ 31.3%
Net Cash Position	$m		129.1	132.1	- 2.2%

* pp = Percentage Points

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NPAT Contribution ($m)

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49
47
1.9 (1.8) 0.2 (0.5)
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45.5
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HY10 NPAT Sales Growth Margin Growth D&A Interest (Net) Tax HY11 NPAT
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Cash flow conversion (%) = cash flow (un-geared pre-tax) / EBITDA

Divisional Update

		Dec 10	Dec 09	Change
Engineering Construction	$m	466.8	421.7	+ 10.7%
Maintenance and Industrial Services	$m	188.1	176.9	+ 6.3%
Infrastructure	$m	72.0	23.1*	+ 211.7%
Internal Eliminations	$m	-26.8	-2.2
TOTAL	$m	700.1	619.5	+ 13.0%

* Comparative includes Skystar sales revenue and reclassification of revenues previously reported within Engineering Construction

Highlights:

• Record sales revenue of $467 million

• Strengthening of the energy and resources market

• Awarded more than $200 million in new construction contracts

• Enhanced heavy-lift capability

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Major Projects Done/Underway:

Major Contracts Won:

• BHPB, RGP5 - Yandi Hub, WA

• BHPB, Worsley Alumina’s E&G Expansion Project, WA

• Boyne Smelter, Alumina Delivery System, Gladstone, QLD

• Rio Tinto, Brockman 4, Brockman, WA

• MCC, Ball Mill CITIC Pacific Mining’s Sino Iron Project, WA

• BHPB, RGP5 – Finucane Island Iron Ore port facilities, WA

• BHPB, RGP5 – Nelson Point, WA

• BHPB, RGP5 – Yandi Train Load Out, WA

• MCC, AG Mill CITIC Pacific Mining’s Sino Iron Project, WA

• Newcrest Mining, Cadia East Project, NSW

• Woodside, Pluto LNG Project, Dampier, WA

Highlights:

• Sales revenue up 6% to $188 million

• Retained all existing customers and contracts

• Secured 3yr Oil Search contract extension and associated gas works for LNG project

• Established new workshop facilities in Mackay

• $80 million in new contracts and extensions

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Major Contracts Underway:

• BHPB, NiW Maintenance Projects and Shutdowns, WA

• BHPB Worsley Alumina Minor Capital Collie, WA

• BHPB Olympic Dam Services Roxby Downs, SA

• Chevron, Gorgon Facilities Management Barrow Island, WA

• Chevron WA Oil, General Maintenance Services, Barrow Island, WA

• Oil Search, Maintenance and construction, PNG*

• Rio Tinto Alcan, Boyne Trade Services Gladstone, QLD

• Rio Tinto Pilbara Iron Structural Integrity Project, WA

• Rio Tinto Pilbara Iron Coastal Maintenance Dampier, WA

• Rio Tinto Pilbara Iron West Pilbara Maintenance, WA

• Rio Tinton Alcan, Yarwun Operation Gladstone, QLD

• ConocoPhillips, LNG Maintenance Services, Darwin, NT

* Secured 3 yr main contract extension

Highlights:

• Sales revenue up 212%

• Successful acquisition and integration of KT

• Secured $170 million in new contracts

• JV with AnaeCo secures WMRC Stage II Project

• Significant investment in specialised pipeline equipment

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Major Contracts Underway:

New Contracts:

• Chevron Australia, Water Treatment Facility, Barrow Island, WA

• Cowra Shire Council, Sewage Augmentation, Cowra, NSW

• Nambucca Shire Council, Sewage Treatment Plant Works, NSW

• Unity Water, Sewage Treatment Plant, Burpengary, QLD

• Chevron Australia, Pipes, Cables and Tubes, Barrow Island, WA

• Sino Iron, Intake and Outfall Pipelines, Cape Preston, WA

• WMRC, Stage II, Perth, WA (JV with AnaeCo)

• Water Corporation, Picton Water Treatment Facility, Bunbury, WA

Strategy and Outlook

• Maintained strong position in core markets

• Continued market expansion initiatives in energy and infrastructure

• LNG construction capability development

• Enhanced heavy-lift capability

• New Mackay workshop facility established

• Established Infrastructure division 1 July 2010

• KT integration on track

• JV with AnaeCo secures WMRC Stage II

• Organisational review under way

• Safety leadership training commenced

• Continuous improvement to people processes, systems and architecture

• Initiated programs to enhance attraction and retention strategy:

• Launched new recruitment website

• Employee benefits program

• Overseas recruitment campaign

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	FY10	Current
Resources
Energy
Infrastructure
Declining Activity
Stable Activity
Expanding Activity

• Forward workload remains robust entering H2 of FY 2011

• Burgeoning pipeline of opportunities across all markets

• Continued expansion of Infrastructure division

• Skilled labour shortages continue to build – focus on attraction and retention

• No significant impact to H2 earnings from Queensland natural disasters

• H2 revenue and earnings expected to be similar to those of H1

22 February 2011

www.monadelphous.com.au

Information for Investors/Analysts: Brett Lane – Group Communications Manager Telephone: (61 8) 9315 7385 Email: blane@monadel.com.au

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.