MONADELPHOUS GROUP LIMITED — Annual Report 2021

Aug 23, 2021

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MONADELPHOUS PROFILE

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2021 GROUP PERFORMANCE AND HIGHLIGHTS

REVENUE[1] $ 1 953 , NET PROFIT AFTER TAX $ 47.1 EARNINGS PER SHARE 49.7 FULL YEAR DIVIDEND 45.0 CASH $ 175.7 CONTRACTS SECURED $ 950

REVENUE BY DIVISION ($M)

REVENUE BY END CUSTOMER

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Iron ore 53%
Oil and gas 18% 979.0 Engineering
615.9 Construction
Copper 7%
Coal 7% Maintenance
& Industrial
Other minerals 6%
976.9 1049.8 Services
Lithium 5%
Infrastructure 4%
FY21 FY20
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• Revenue up 18.3% on pcp

• Demand for services increased as industry recovered from COVID-19

• Customers capitalising on strong commodity prices, especially in iron ore

• Unprecedented skilled resources shortage

• Secured $950 million of new contracts and contract extensions

• Substantial improvement in safety performance

• 1 Includes Monadelphous’ share of joint venture revenue

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2021 DIVISIONAL HIGHLIGHTS ENGINEERING CONSTRUCTION

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REVENUE BY END CUSTOMER
Iron ore 73%
Lithium 10%
Infrastructure 8%
Copper 6%
Oil and gas 2%
Coal 1%
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REVENUE ($M)

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979.0
615.9
FY21 FY20
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• Revenue of $979.0 million[1] , up 59%

• Significant progress on large portfolio of major construction contracts

• Secured approximately $480 million of new contracts

• Awarded five-year $150 million crane services contract with Fortescue Metals Group

• Secured several contracts under BHP’s Olympic Dam Asset Projects Framework Agreement and WAIO Panel Agreement

• Good progress on Mondium’s Western Turner Syncline Phase 2 Project for Rio Tinto

• Zenviron continues to perform strongly

• Established SinoStruct fabrication facility in Tianjin, China

1 Includes Monadelphous’ share of joint venture revenue

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2021 DIVISIONAL HIGHLIGHTS MAINTENANCE & INDUSTRIAL SERVICES

REVENUE ($M)

REVENUE BY END CUSTOMER

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Oil and gas 34%
Iron ore 33%
Coal 13%
Other minerals 11% 976.9 1049.8
Copper 8%
Infrastructure 1%
FY21 FY20
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• Revenue of $976.9 million, down 7%

• Strong demand for maintenance services in iron ore

• Lower level of demand in oil and gas, but steadily improving

• Secured $470 million in new contracts and extensions

• Significant number of sustaining capital projects awarded under BHP and Rio Tinto iron ore panel agreements

• Completed significant turnarounds for Woodside and INPEX

• Buildtek performed strongly, securing approximately $100 million of new contracts in resources and oil and gas

• Continued to grow rail portfolio across Australia

• Invested in specialist plant and equipment to support growth of industrial services, civil and specialist oil and gas fabric maintenance capability

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CONTRACTS SECURED

REVENUE BY END CUSTOMER

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Iron ore	48%
Copper	27%
Other minerals	8%
Infrastructure	7%
Oil and gas	7%
Coal	3%

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Refer to slide 14 for contract details

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SAFETY PERFORMANCE

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6.00
4.00
TRIFR
2.00 2.26
LTIFR
0.27
-
2018 2019 2020 2021
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• 39% improvement in TRIFR performance

• Initiatives implemented to reinforce controls around line-offire fatal risks

• Updated supervisor safety leadership program

• Continued focus on employee mental health and wellbeing

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PEOPLE

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• Substantial ramp up in numbers, total workforce up 37%

• High levels of industry activity

• COVID-19 restrictions significantly impacted skilled labour supply

• Enhanced employee development initiatives and reviewed benefit and reward programs

• Formalised commitment to workplace flexibility

• Progressed strategic attraction initiatives, including updated employer branding programme

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SOCIAL VALUE

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• Achieved Indigenous ‘Employment Parity’ goal for second year running

• Commenced 3-year Indigenous Employment Pathways Program in partnership with Rio Tinto

• Developed fourth Reconciliation Action Plan

• Maintained female participation in excess of 20% target for graduate and vacation programs

• Retained over 90% key female talent

• Commenced second Gender Diversity and Inclusion Plan

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FINANCIAL SNAPSHOT

Period ended 30 June		FY21	FY20	CHANGE
Revenue1	$M	1,953.1	1,650.8	18.3%
Engineering Construction1 $M 979.0 615.9 58.9%
Maintenance & Industrial Services $M 976.9 1,049.8 (6.9%)
Internal Eliminations $M (2.8) (14.9)
EBITDA2	$M	108.7	92.1	18.0%
EBITDA margin	%	5.6	5.6	(0.0pp)
NPAT	$M	47.1	36.5	29.0%
EPS	cps	49.7	38.7	28.4%
DPS (fully franked)	cps	45.0	35.0	28.6%
Cash	$M	175.7	208.3	(15.6%)

1 Includes Monadelphous’ share of joint venture revenue – refer to reconciliation on slide 17

2 Refer to reconciliation on slide 17

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INDUSTRY OUTLOOK – AUSTRALIA

RESOURCES CAPEX A$B

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35
30
25
20
15
10
5
0
2016 2017 2018 2019 2020 2021f 2022f 2023f 2024f 2025f
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Source: BIS Oxford Economics, ABS (June 2021)

ELECTRICITY INFRASTRUCTURE CAPEX A$B

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16
14
12
10
8
6
4
2
-
2016 2017 2018 2019 2020 2021f 2022f 2023f 2024f 2025f
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Source: BIS Oxford Economics, ABS (June 2021)
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ENERGY (O&G) CAPEX A$B

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60
50
40
Copper
30
Gold
Otherminerals 20
Coal
Iron ore 10
0
2016 2017 2018 2019 2020 2021f 2022f 2023f 2024f 2025f
Source: BIS Oxford Economics, ABS (June 2021)
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TOTAL MAINTENANCE A$B

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14
12
10
8
6
4
2
-
2016 2017 2018 2019 2020 2021f 2022f 2023f 2024f 2025f
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Source: BIS Oxford Economics, ABS (June 2021)

Gold Copper Iron ore Other minerals Coal Oil and gas

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OUTLOOK

• Buoyant resources, energy and infrastructure sectors to provide solid pipeline of opportunities

• Forecast for Australian iron ore remains positive

• Maintenance activity expected to grow steadily

• Positive outlook for developments in lithium, gold, copper and nickel

• Market conditions in oil and gas improving

• Transition to clean energy will drive renewable energy developments including hydrogen

• FY22 revenue likely to be lower due to timing of new major projects

• Stronger construction activity forecast in FY23

• Skilled labour shortages to remain a major challenge

• Strategic targeting of new work and working collaboratively with customers will be key

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APPENDICES APPENDIX

CONTRACTS SECURED

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*Announced subsequent to 30 June 2021

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ENGINEERING CONSTRUCTION MAJOR PROJECTS FY 2021

• BHP; SMPE&I works associated with inflow infrastructure at South Flank Project, Pilbara, WA

• BHP; SMPE&I works associated with outflow infrastructure at South Flank Project, Pilbara, WA

• Rio Tinto; SMPE&I works associated with West Angelas Deposits C & D Project, Pilbara, WA

• MARBL Lithium Joint Venture; SMP works for lithium hydroxide plant, Kemerton, WA

• BHP; WAIO Asset Projects Panel, various SMPE&I integrated packages, Pilbara, WA

• BHP; multidisciplinary construction services at Olympic Dam, SA

• Fortescue Metals Group; crane services, Pilbara, WA

• thyssenkrupp; site assembly of stackers and reclaimer, South Flank Project, Pilbara, WA

• Australia Pacific LNG; supply, fabrication and assembly of wellhead separator skids, Chinchilla, Qld

• Rio Tinto; design and construction of Western Turner Syncline Phase 2 mine, Pilbara, WA

• Talison Lithium; design and construction of new tailings retreatment processing plant, Greenbushes, WA

• General Electric International; balance of plant civil and electrical works for Murra Warra Stage II Wind Farm, Horsham, Vic

• CWP Asset Management; design and construction of civil and electrical balance of plant, transport and erection of Crudine Ridge Wind Farm, Mudgee, NSW

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MAINTENANCE & INDUSTRIAL SERVICES MAJOR SERVICE CONTRACTS FY 2021

• BHP Iron Ore; general maintenance, shutdowns and sustaining capital works, Pilbara, WA

• Rio Tinto; fixed plant maintenance services, marine services and sustaining capital works, Pilbara, WA

• Woodside; onshore and offshore maintenance and brownfields services for Woodside-operated gas production facilities in north west WA, maintenance and turnarounds at Karratha Gas Plant and Pluto LNG, WA

• Shell; provision of services in WA and Queensland

• INPEX Operations Australia; offshore maintenance services, Browse Basin, WA

• BHP Mitsubishi Alliance; maintenance and shutdown works, Bowen Basin, Qld

• Oil Search; engineering, procurement and construction services at oil and gas production and support facilities, Papua New Guinea

• BHP; maintenance and shutdowns at Olympic Dam, Roxby Downs, SA

• Incitec Pivot; turnarounds, general mechanical and maintenance services, Qld

• Newcrest Mining; maintenance works, Lihir Island, PNG

• Minera Escondida; construction and assembly of communications tower at Escondida copper mine, upgrade to conveyer system at Coloso Port, Antofagasta region, Chile

• Codelco; maintenance of underground water infrastructure at Chuquicamata underground copper mine, Antofagasta region, Chile

• GNL Quintero; removal and replacement of LNG discharge arms, Valparaiso, Chile

• Codelco; maintenance services at El Teniente copper mine, Rancagua, Chile

• South32; shutdown and mechanical services, Worsley, WA

• Rio Tinto; rail network maintenance, Pilbara, WA

• BHP Nickel West; maintenance and shutdowns, Goldfields, WA

• Rio Tinto; maintenance services at Yarwun Alumina Refinery, Gladstone, Qld

• Queensland Alumina Limited; maintenance and projects, Gladstone, Qld

• Rio Tinto; shutdown services, Gove, NT

• Anglogold; maintenance services, Goldfields, WA

• BHP; shutdown maintenance and minor projects, Mt Arthur Coal, Hunter Valley, NSW

• Synergy; Collie Basin Coal Plant Infrastructure operation and maintenance, Collie, WA

• AGL Macquarie; Bayswater Fly Ash Plant Upgrade, Muswellbrook, NSW

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NOTES TO FINANCIALS

Non-IFRS Financial	Reconciliation of total revenue from contracts with
Information	customers including joint ventures to statutory revenue	FY21	FY20
	from contracts with customers	$M	$M
Monadelphous Group
Limited results are reported	Total revenue from contracts with customers including joint ventures	1,953.1	1,650.8
under International Financial Reporting Standards (IFRS)	Share of revenue from joint ventures1	(199.4)	(163.4)
as issued by the	Statutory revenue from contracts with customers	1,753.7	1,487.4
International Accounting
Standards Board. The
Company discloses certain non-IFRS measures that are	Reconciliation of profit before income tax to EBITDA
not prepared in accordance	Profit before income tax	70.4	55.1
with IFRS and therefore are considered non-IFRS	Interest expense on loans and hire purchase finance charges	1.5	1.7
financial measures. The non-	Interest expense on other lease liabilities	1.6	1.9
IFRS measures should only be considered in addition to	Interest revenue	(0.4)	(1.2)
and not as a substitute for,	Depreciation of owned and hire purchase assets	23.5	22.6
other measures of financial performance prepared in	Depreciation of right of use assets	8.9	8.0
accordance with IFRS.	Amortisation expense	0.5	0.7
	Share of interest, depreciation, amortisation and tax from joint ventures2	2.7	3.3
	EBITDA	108.7	92.1

1 Represents Monadelphous’ proportionate share of the revenue of joint ventures accounted for using the equity method

2 Represents Monadelphous’ proportionate share of interest, depreciation, amortisation and tax of joint ventures accounted for using the equity method

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DISCLAIMER & IMPORTANT NOTICE

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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