SGH LIMITED — Annual Report 2012

Aug 27, 2012

28 August 2012

Company Announcements Office Australian Securities Exchange Limited Level 6, 20 Bridge Street SYDNEY NSW 2000

By Electronic Lodgement

Total pages: 8 (including cover letter)

Dear Sir / Madam

MEDIA RELEASE

Following is the Media Release for the financial year ended 30 June 2012.

Yours faithfully For and on behalf of Seven Group Holdings Limited

Warren Coatsworth Company Secretary

Seven Group Holdings Limited | ABN 46 142 003 469 38-42 Pirrama Road | Pyrmont NSW 2009 Australia | Postal Address: PO Box 777 | Pyrmont NSW 2009 Australia Telephone +61 2 8777 7777 | Facsimile +61 2 8777 7192

Seven Group Holdings Limited (SGH) announces financial results

Key Highlights

• Seven Group Holdings delivers record revenue, statutory net profit after tax, underlying EBIT and NPAT: total revenue up 41 per cent to $4,456.4 million, statutory net profit after tax up 121% to $176.7 million, underlying EBIT1 up 57 per cent to $553.1 million and underlying NPAT1 up 38 per cent to $343.2 million.
• Industrial services revenue1 up 41 per cent and underlying EBIT up 75 per cent as WesTrac Australia delivers an outstanding performance, and AllightSykes and Coates Hire provide strong growth.
• Substantial investment in future growth with completion of acquisitions of Bucyrus and National Hire minority interest, additional investment in Seven West Media and significant release of capital through the sale of vividwireless.
• Significant items include marking to market at 30 June our investment in Seven West Media, offset by the gain on sale of vividwireless.
• Final dividend up 2 cents to 20 cents per share, fully franked and payable in October, taking full year dividends to 38 cents per share.

28 August 2012 --- Seven Group Holdings Limited (SGH) today reported a statutory net profit after taxation (NPAT) of $176.7 million, up 121 per cent for the year to 30 June 2012. After adjustment for significant items, SGH reported underlying NPAT of $343.2 million, an increase of 38 per cent on the previous financial year.

SGH delivered underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $629.8 million, an increase of 50 per cent on the prior year, on total revenues of $4,456.4 million, up 41 per cent. Underlying earnings before interest and tax (EBIT) is $553.1 million for the financial year, up 57 per cent.

Commenting on the results, Seven Group Holdings CEO, Peter Gammell said: "We are very pleased to post this record underlying result, and are particularly pleased with the performance of our industrial services businesses in Australia, where WesTrac Australia, AllightSykes and Coates Hire enjoyed significant revenue growth and improved profitability.

"The current level of activity in the mining and resources sector position WesTrac Australia, AllightSykes and Coates Hire for a strong first half. WesTrac Australia will also benefit in the coming year from a full twelve months trading from the recent Bucyrus acquisition.

"We remain very cautious regarding trading conditions in China and the outlook for media markets over the next six months is soft. Looking forward, the 2013 statutory results will continue to be impacted by any mark to market movement on our investment in Seven West Media. Given the uncertainty in the markets at this time we are not providing guidance for 2013 but we would expect to provide a trading update at the AGM".

Results

Key Results	Results foryear ended30 June 2012	Results foryear ended30 June 2011	% Change
Reported profit before tax	$132.8 m	$32.4 m	310%
Reported profit after tax	$176.7 m	$79.9 m	121%
Statutory EPS	43 cents	12 cents	258%
Total revenueUnderlying EBITDAUnderlying EBITUnderlying profit before taxUnderlying profit after taxUnderlying EPS	$4,456.4 m$629.8 m$553.1 m$440.1 m$343.2 m98 cents	$3,162.8 m$420.8 m$353.0 m$298.0 m$248.3 m67 cents	41%50%57%48%38%46%
Final fully franked, dividendper ordinary share	20 cents	18 cents	11%

Dividend

A final dividend of 20 cents per share fully franked has been declared, up 2 cents per share, taking the total dividend on ordinary shares for the 2011-2012 financial year to 38 cents fully franked.

Significant Items

The significant items during the period include a gain of $129.8 million recognised on the sale of vividwireless to Optus and marking to market, the carrying value of Seven West Media ($483.5 million) offset by an impairment reversal of $66.6 million in respect of Consolidated Media Holdings. On an after-tax basis, significant items gave rise to a $166.5 million reduction in NPAT.

Industrial Services

SGH's industrial services businesses delivered total revenue of $4,399.7 million, segment EBITDA of $514.9 million is up 65 per cent. Segment EBIT of $463.0 million is up 75 per cent.

WesTrac

WesTrac posted a record result for the year, benefiting in particular from the company's leading position in the strongly performing mining and resource sector in Western Australia and New South Wales.

In Australia, WesTrac delivered total revenue and other income of $3,536.1 million, up 57 per cent on the prior year. Segment EBIT of $387.1 million is up 88 per cent on the prior year.

WesTrac Australia's growth is being driven primarily by expansion in coal and iron ore mining, with an 82 per cent increase in product sales to $2,240.0 million. The company also delivered $1,279.1 million in product support revenues, 26 per cent up on the prior year -- driven by a significant increase in the installed equipment base.

The very high activity levels also saw a strengthening in WesTrac Australia's EBIT margins compared to the corresponding prior year with an EBIT margin of 10.9 per cent, up from the 9.1 per cent achieved in the prior year.

On 1 June 2012, WesTrac successfully completed the acquisition from Caterpillar Inc of the Bucyrus distribution and support business in Western Australia, New South Wales and the Australian Capital Territory.

The transaction valued at USD 400 million further strengthens WesTrac's leadership in the supply and service of heavy equipment to the mining sector. This business has been successfully integrated into WesTrac's management structure and is trading as WesTrac Expanded Mining Products (EMP). Early financial results are in line with expectations with the transaction expected to be EPS accretive in the 2012-2013 financial year.

WesTrac China's performance was impacted by a slowdown in the construction market, resulting in a significantly lower level of excavator sales compared to the prior year. Sales of mining and power systems equipment performed well, and a 17 per cent increase in product support revenue to US$120.1 million was achieved. Segment EBIT of US$8.7 million is down 70 per cent from the prior year and was impacted by both the lower revenue and stock provision costs for the year.

AllightSykes

SGH moved to 100 per cent shareholding in National Hire Group through the compulsory acquisition of remaining minority shareholdings in January 2012.

As a result of this transaction, SGH owns 100 per cent of AllightSykes, which saw a 56 per cent increase in revenue to $210.3 million, largely as a result of increased lighting towers, generators and pumps sold to the mining and resources sector. AllightSykes delivered a 30 per cent increase in segment EBIT versus the 2010-2011 financial year.

Coates Hire

SGH owns 45 per cent of Coates Hire Group. SGH recognises Coates Hire as an equity accounted investment and its results are not consolidated into SGH's financial results.

SGH's share of Coates Hire NPAT is up 147 per cent on the previous financial year to $56.3 million. The main drivers of growth were increased equipment hire revenue to the mining and resources sectors and improved operational efficiency. The Coates Hire Group itself delivered a 22 per cent increase in revenue to $1,293.0 million and a 40 per cent increase in EBIT on the prior year to $317.9 million.

Media

SGH's media investments include a 33.2 per cent shareholding in Seven West Media, a 25.3 per cent shareholding in Consolidated Media Holdings which has significant shareholdings in Foxtel and Fox Sports Australia, and an 11.4 per cent shareholding in Prime Media Group.

These businesses delivered a $116.1 million segment EBIT contribution to SGH in the 2011-2012 year, an 8 per cent decline on the prior corresponding period reflecting a difficult overall advertising market and operating conditions.

Seven West Media

Seven West Media reported NPAT of $226.9 million and EBIT of $473.4 million on total revenues of $1,957.4 million.

Despite difficulties in the overall advertising market, Seven West Media delivered an overall EBIT margin of 24.2 per cent reflecting the strong performances of the company's key market-leading media businesses.

Earnings comparisons with the prior period are difficult due to the West Australian Newspapers Holdings acquisition of Seven Media Group from Seven Group Holdings and Kohlberg Kravis Roberts & Co to form Seven West Media in April 2011.

On a pro forma basis, with the prior year including twelve months of both West Australian Newspapers and Seven Media Group, Seven West Media EBIT of $473.4 million compares to $550.1 million in the prior year, on total revenues of $1,957.4 million compared to $1,960.6 million in the prior year.

Seven West Media's television business, the Seven Network, continues to lead the market in television advertising revenue share, building share in a tough advertising market. Recent industry figures put Seven's share of the television advertising revenue market at 40 per cent for January-June 2012 and 39 per cent across the 2011-2012 financial year.

The West Australian Newspaper continues to manage its newspaper business in a challenging environment holding cost growth to 1.8 per cent over the past twelve months. The West Australian has increased its total Monday to Saturday audited circulation by 0.2 per cent for the June 2012 quarter, maintaining its position as one of the strongest performing newspapers in the country.

Seven West Media's magazine publishing business, Pacific Magazines, delivered a positive performance in a challenging market. It is the only major publishing company to increase circulation, readership and advertising share across the past twelve months.

Seven West Media's online and new media presence through Yahoo!7, a joint venture with Yahoo! Inc continues its strong momentum. Revenue is up 27 per cent, EBITDA is up 20 per cent and EBIT is up 15 per cent on the 2011 financial year.

Over the past twelve months, Seven West Media has successfully completed the re-financing of all existing components of group debt into one facility with an average tenor of four years.

On 16 July 2012, Seven West Media announced an underwritten pro rata accelerated entitlement offer to raise $440 million. The offer received strong support from institutional investors contributing approximately $320 million including a $146 million investment by SGH. The equity raising was successfully completed in August and proceeds have been used to pay down debt, strengthening that company's balance sheet.

As noted, SGH marked down to market its carrying value of Seven West Media during the year by $483.5 million, reflecting that company's share price at 30 June 2012.

Consolidated Media Holdings

SGH's current shareholding in Consolidated Media Holdings (CMH) is 25.3 per cent. CMH owns 50 per cent of subscription television programming company, Fox Sports Australia, which owns 25 per cent of pay television company Foxtel and also owns and operates Fox Sports, Fox Sports News, Speed and Fuel TV.

CMH has reported a financial year NPAT of $85.8 million, down 15.6 per cent on the prior year. Underlying NPAT of $97.9 million, excluding transaction related and contractual costs, is up 2.4 per cent on the prior year. Foxtel's subscriber base grew by 1.8 per cent during the period to 1.7 million and Foxtel's average revenue per user (ARPU) increased by 3.1 per cent to $99 per user as at 30 June 2012.

During the year Foxtel completed the acquisition of Austar, creating a national subscription television service and taking total Foxtel subscribers to 2.3 million.

Investments

vividwireless

SGH announced the sale of vividwireless Group Limited (VGL) to Optus Mobile Pty Ltd (Optus) for a total consideration of $230 million on 20 February 2012. Under the terms of the sale, Optus paid $170 million in cash to SGH when the transaction closed on 19 June 2012, with the remaining deferred consideration of $60 million to be paid on the re-issue of spectrum licenses.

Other Investments

SGH continues to hold its investment in the Agricultural Bank of China, one of the four biggest national banks in China. The investment has a carrying value at 30 June 2012 of $237.9 million.

SGH's listed portfolio is an important pool of liquidity available to the group, invested in high yielding listed securities providing income and franking credits. The market value of this portfolio as at 30 June 2012 $432.9 million.

SGH Overview

SGH is a holding company with interests in Industrial Services, Media and Investments.

In industrial services, WesTrac Group is the sole authorised Caterpillar dealer in Western Australia and New South Wales/ACT and in North Eastern China territories. WesTrac Group is one of Caterpillar's top five dealers globally (by sales value). SGH also owns AllightSykes, a supplier of lighting towers, generators and pumps, and has a 45 per cent interest in Coates Hire, Australia's largest equipment hire business.

In media, SGH has a 33.2 per cent ordinary shareholding and holds convertible preference shares with a face value of $250 million in Seven West Media, Australia's largest multiple platform media company, including Seven Network, West Australian Newspapers, Pacific Magazines and Yahoo!7. SGH also has a 25.3 per cent investment in Consolidated Media Holdings (which has a 50 per cent interest in Fox Sports and a 25 per cent interest in Foxtel), and an 11 per cent investment in Prime Media Group.

Note:

Included in this presentation is data prepared by the management of SGH and other associated entities and investments. This data is included for information purposes only and has not been subject to the same level of review by the company as the statutory accounts and so is merely provided for indicative purposes. The company and its employees do not warrant the data and disclaim any liability flowing from the use of this data by any party.

1. SGH results are reported under International Financial Reporting Standards (IFRS). The underlying segment performance is presented in Note 2 to the financial statements and excludes significant items, including impairment, fair value movement of derivatives and net gain on sale of investments as detailed in slide 25 of the attached presentation. This press release also includes certain non-IFRS measures including underlying net profit after tax (excluding significant items) and total revenue and other income. These measures are used internally by management to assess the performance of our business, make decisions on the allocation of our resources and assess operational management. Non-IFRS measures have not been subject to audit or review.