MONADELPHOUS GROUP LIMITED — Annual Report 2012

Aug 20, 2012

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2012 Full Year Results

21 August 2012

Safety and Wellbeing | Integrity | Achievement | Teamwork | Loyalty

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

www.monadelphous.com.au

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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 24 for reconciliation.

www.monadelphous.com.au

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Contract Activity
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www.monadelphous.com.au

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Contracts Secured
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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

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

12 month moving average

www.monadelphous.com.au

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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 1062 -027pp	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 1062 -027pp
. . 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 24 for reconciliation.

www.monadelphous.com.au

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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 borrowins) $m	June 12 June 11 Change 203.6 172.5 +18.0% 152.9 129.5 +18.1%	June 12 June 11 Change 203.6 172.5 +18.0% 152.9 129.5 +18.1%
		June 12 June 11 Change 203.6 172.5 +18.0% 152.9 129.5 +18.1%
	g Capital Expenditure (Cash and Hire Purchase) $m Capital Expenditure Commitments $m Bank Guarantee & Performance Bond Facilities	74.2 54.5 +36.0% 19.6 11.0 +79.1%
	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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Historical Performance
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Sales Revenue ($M) EBITDA^ ($M) Net Profit After Tax^ ($M)
+31.4% +28.2% +32.5%
Earnings Per Share^ (Cents) Dividends Per Share (Cents) Net Cash Position ($M)
+30.8% +31.6% +18.1%
^Underlying basis. Refer to slide 24 for reconciliation.
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Cash Flow Performance
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Operating Cash Flow ($M)

Cash Flow Conversion (%)

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Cash flow conversion (%) = cash flow (ungeared, pre-tax)/EBITDA^

~~^Underlying basis. Refer to slide 24 for reconciliation.~~

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NPAT Contribution Analysis
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NPAT Contribution ($M)

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Underlying
$126
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Divisional Sales Revenue Summary
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		FY12 FY11 Change Engineering Construction $m 1,058.0 929.8 +13.8%
		Maintenance & Industrial Services $m 634.5 401.3 +58.1% Infrastructure $m 219.8 157.8 +39.3% Internal Eliminations $m -14.8 -45.0
		Total $m 1,897.5 1,443.9 +31.4%

www.monadelphous.com.au

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BHP Billiton Port Hedland
Inner Harbour Project
Western Australia
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Engineering Construction
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Highlights

• Secured ~ $1.3b in new contracts

• First marine contract - WICET

• Two Rio Tinto Iron Ore

• Framework Agreements

• Significant investment in crane fleet

Major Project Involvement

• Woodside, Pluto LNG Project, Dampier, WA

• BHPB, Worsley Alumina Project, Collie, WA

• Newcrest, Cadia East Project, Orange, NSW

Revenue Contribution

Revenue

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Major Projects Secured

• BHPB PHIH, Finucane Island and Nelson Pt, WA

• WICET, MMM, Gladstone, Queensland (2 contracts)

• Rio Tinto, Hope Downs 4, Pilbara region, WA

• BHPB, Macedon Gas Project, Onslow, WA

• Rio Tinto, Kestrel Mine, Queensland (3 contracts)

• Chevron, Wheatstone Project, Onslow, WA

www.monadelphous.com.au

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Maintenance and
Industrial Services
ConocoPhillips
Australia’s Darwin
LNG Plant
Northern Territory
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Maintenance and Industrial Services
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Highlights

• Record sales, growth of 58%

• Strengthened presence in coal

• Secured Woodside Pluto

• LNG contract

• Consolidation within division

Contract Extensions

• BHPB, Worsley Alumina, Collie, WA (3yr extension)

Revenue Contribution

Revenue

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New Contracts

• BMA, Bowen Basin, Queensland (3yr contract)

• Woodside, Pluto LNG, WA (3yr contract)

• ConocoPhillips Australia, Darwin LNG Plant, NT (2yr extension)

• Chevron-Australia, LNG Facilities, Barrow and Thevenard Islands, WA (1yr extension)

www.monadelphous.com.au

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Infrastructure
Water Corporation’s
Picton Waste Water
Treatment Facility
Western Australia
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Infrastructure
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Highlights

• Strong sales growth of 39%

• Secured $330m in new contracts

• Expansion into power through PearlStreet acquisition

Major Project Involvement

• Chevron Australia-operated Gorgon

• Project, Pipelines, Cables and Tubes, WA

• Water Corporation, Wastewater Treatment Facility, Picton, WA

• WMRC, DiCOM Waste Processing Facility, Shenton Park, WA

Revenue Contribution

Revenue

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Major Projects Secured

• Rio Tinto Coastal Waters Project, Potable Water Supply, Pilbara Region, WA

• Hamersley Iron, Transmission Pipelines and Facilities, West Angelas, WA

• Toowoomba Regional Council, Wastewater Infrastructure Project, Queensland

• Clough Sea Trucks JV, DomGas Pipeline, ~~Barrow Island, WA~~

www.monadelphous.com.au

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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

www.monadelphous.com.au

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Australian Market Conditions
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Resources Energy
(Mining Capex A$b) (Oil and Gas Capex A$b)
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Forecast CAPEX
by Market 2012-2016
$561.1b
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Infrastructure (Public Sector Capex A$b)

Source: BIS Schrapnel Mining Investment by Commodity New Fixed Capital Expenditure by Commodity Fixed Current Prices (Updated March 2012) and Australia Value of Work Done Constant 2008/2009 Prices (Updated August 2011)

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Project Pipeline
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Project Pipeline	Project Pipeline
Proposed CAPEX on the98advanced 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 2015 $16b
		Santos/Petronas/Total/Kogas 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 Rio 333 (ports and rail) 2013 $3b
	CAPEX of advanced projects by State	Rio Tinto 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

www.monadelphous.com.au

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Outlook
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� Positioned for growth

• High volume of secured work and high levels of projects in execution phase provide strong revenue visibility for FY13 and beyond

• Further growth in sales revenue expected in FY13

• Strong pipeline of opportunities

• Pipeline of engineering construction opportunities expected to continue

• Maintenance opportunities growing as projects reach completion and startup

• Supply constraints

• Industry-wide supply and infrastructure constraints expected to continue

• Focus on managing execution risks and improving productivity

• Labour availability expected to further tighten

� Foundation for sustainable growth

• Robust levels of capital expenditure to support core business and expansion

• Market leadership position and infrastructure diversification strategy will support sustainable growth

www.monadelphous.com.au

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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 this document, 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

www.monadelphous.com.au

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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 Information
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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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2012 Full Year Results

21 August 2012

Safety and Wellbeing | Integrity | Achievement | Teamwork | Loyalty