SOUTHERN CROSS ELECTRICAL ENGINEERING LTD — AGM Information 2008

Nov 25, 2008

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SOUTHERN CROSS ELECTRICAL ENGINEERING LIMITED

3 September 2008

ASX Limited Level 8 Exchange Plaza 2 The Esplanade Perth WA 6000

Annual General Meeting Presentations of the Chairman and Managing Director

In accordance with Listing Rule 3.13, please find attached the presentations to be delivered to the Annual General Meeting of Shareholders by the Chairman and Managing Director of Southern Cross Electrical Engineering Limited

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Mr Stephen Fewster Company Secretary Southern Cross Electrical Engineering Limited +61 (8) 9410 1833 www.scee.com.au

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A.B.N. 92 009 307 046 EC001681 41 MACEDONIA STREET, NAVAL BASE, WESTERN AUSTRALIA 6165 TELEPHONE: 61 8 9410 1833 FAX No: 61 8 9410 2504 EMAIL: scee@scee.com.au

Southern Cross Electrical Engineering Limited

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CHAIRMAN’S SPEECH FOR AGM

Welcome ladies and gentlemen to the inaugural Annual General Meeting of Southern Cross Electrical Engineering Ltd (“SCEE”) since it became a public company.

SCEE has a proud history which commenced 30 years ago when the business was founded. The Company has been built on a simple philosophy of getting the job done on time and at the highest standard possible without compromising safety. We believe we are Australia’s best electrical contractor. This is a claim that is supported by the numerous times SCEE has won the prestigious National Electrical Contractors Association (“NECA”) award for excellence and also the national award for safety.

Over the last 12 months your company has delivered on the many promises it made in its prospectus. At a time where a number of similar businesses downgraded their earnings for 2008, SCEE went against the trend and increased its earnings forecast and exceeded its prospectus forecast. The earnings result provided the Company with an opportunity to increase its dividend by 20% to 6 cents per share.

At an operational level we had a number of highlights, some of these included:

• There were zero lost time injuries during the year.

• SCEE won the national NECA excellence award for safety at the Hope Downs Stage 1 project.

• SCEE won the national NECA excellence award for quality also at the Hope Downs Stage 1 project.

• SCEE achieved a record number of manhours for a project undertaken by the Company at Cerro Corona. This record is particularly satisfying because the project is situated approximately 4,000 metres above sea level.

• SCEE recorded its highest profit in the history of the company.

These highlights could only be achieved by having a world class team and I believe that is what SCEE has. At SCEE we pride ourselves that we have a loyal team with many of them having been with the company well in excess of 10 years. This is an endorsement of the Company’s culture and is a major reason why SCEE has not been impacted by the recent shortages of skilled people.

Another great strength SCEE has is its balance sheet. The Company today has over $20 million cash in the bank and no debt. Strong operating cash flows more than cover relatively minor amounts of required capital expenditure so that SCEE is in a position where it is not directly exposed to the current turmoil facing the credit markets.

Over the past couple of months there have been some projects that have been deferred until the capital markets stabilise. Whilst SCEE remains conscious of the current environment, the Company is not commodity dependent and has a number of earnings drivers. Two key initiatives are the number of international projects undertaken by the Company and its push into the oil and gas area.

SCEE has long been involved in international projects and typically the Company has undertaken one substantial project a year. This is due to the fact that the site supervision required to manage these projects has in recent times been fully utilised in the Pilbara. If demand for SCEE’s services softens from its current client base, it may be possible to deploy these teams on international projects.

Over the last 12 months the management team has been working hard to break into the oil and gas sector and SCEE has now qualified as an approved tenderer and is currently preparing tenders for electrical construction work within the oil and gas industry.

Southern Cross Electrical Engineering Limited

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One of the key undertakings by the Company at the time of listing was to complete two key Senior Management appointments to complement the existing management team. As a Board we are very pleased to have appointed Mr Stephen Pearce as Managing Director and Chief Executive Officer and Mr Stephen Fewster as Chief Financial Officer and Company Secretary.

Further discussion on the Company’s prospects will be addressed in the presentation by Mr Pearce.

In conclusion I would like to thank my fellow directors, staff, customers and SCEE’s shareholders for their support over the last 12 months.

I will now hand over to Mr Stephen Pearce for the Managing Directors presentation prior to proceeding with the formal part of the meeting.

Southern Cross Electrical Engineering Limited

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MANAGING DIRECTOR’S SPEECH FOR AGM

Thank you Frank and Good morning to you all

Thank you for your attendance and it is a pleasure for me to be here this morning.

This morning I will recap on some of the operational and financial highlights from the 2008 financial year before making some comments on the outlook for the 2009 FY and beyond.

2008 was an important year for Southern Cross both from an operational and corporate perspective. November 2007 saw the successful listing of the company on the ASX and saw the company recognised on several fronts.

Of particular note is the State and National award from NECA for both the Industrial Award in the case of the Dampier Port Upgrade project and the Safety Award for the Ravensthorpe project. The company puts a lot of focus and effort into managing the OH&S area across the group so we are particular proud of achieving a zero Lost Time Injuries outcome for the financial year.

This outcome is the result of a lot effort by everyone across the Company in conjunction with teams from the Company’s on whose projects we work.

In addition we made some significant steps in terms of re- entering the Oil and Gas market which I will touch on later and of course, a number of key executive appointments.

The list of completed projects for FY 2008 is impressive and reflects the dedication and hard work from the whole team at Southern Cross. The hard work has continued through the first half of 2009 in what are often difficult and remote locations.

Turning to the financial results for the year. It was a tremendous outcome to report results that the Earnings Before Interest and Tax (“EBIT”) and Net Profit After Tax (“NPAT”) were above those contained in the Prospectus forecast despite slightly lower revenue. This translated to earnings per share (“EPS”) of 12.8 cents per share which in turn enabled the Board to declare a full year dividend of 6 cents some 20% above that contained in the Prospectus.

Cash flow for the year was spot on that contained in the prospectus with strong underlying cash flows from operations.

The combination of operational results and strong underlying cash flows means that we are in a very strong position from a balance sheet perspective. So that apart from some minor finance leases the company has no debt and in excess of $20 million cash on hand. This position remains current even after paying the final dividend and the final tax payments for the year just ended.

I would like to now turn to some comments on the outlook for the 2009 FY and beyond to 2010.

The current economic environment is posing challenges for all of us both at a company and in many cases a personal level. To make comments in these circumstances that look forward 12 to 24 months with any confidence is extremely challenging.

Southern Cross Electrical Engineering Limited

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But there are several things I can say;

1. As noted earlier Southern Cross is in a very strong financial position with in excess of $20 m in the bank and virtually no debt. This means that the Company faces no refinance risks at a time where credit can be hard to come by.

2. Southern Cross has also been working hard to ensure that the Company can use a number of levers to help see it through these uncertain times.

WA based mining projects have been a big part of the Southern Cross work flow over recent years but importantly Southern Cross is not commodity dependant. As you saw earlier we have completed work across numerous commodity groups including, iron ore, gold, nickel etc.

While there has been some slow down or deferral of projects by some companies in some sectors we are still working flat out on a number of projects that are clearly proceeding.

In terms of International projects this has been a key part of the Southern Cross story for some 20 years and we have a strong established brand/presence in both Africa and South America in particular. Southern Cross has typically taken on one medium to large project per year so as to not overstretch the critical areas of project and site management. This has particularly been the case in recent years as the company has had so much work on in its home state of WA.

If we were to see any extended weakness in the Western Australian market Southern Cross has the capability to undertake multiple international projects and is currently tendering on a large International project that would commence in the 2010 financial year.

In terms of the Oil and Gas sector, Southern Cross has re-entered this sector where there are a large number of projects progressing with the electrical tendering process now underway.

Medium term demand for energy across the Asia Pacific region is expected to underwrite these projects beyond current market conditions. This is another earnings lever that Southern Cross can pull.

Southern Cross has also traditionally operated in the power line/infrastructure sector with several projects in this space currently underway and a number of others currently being tendered. We are also monitoring a number of counter cyclical opportunities regarding infrastructure in the 12 months ahead.

Turning to 2009 specifically.

We are on track to achieve revenue in excess of last year’s which will be a new record for Southern Cross. It is difficult to say by exactly how much as we are only some 4 and a half months into the financial year. We have a number of active tenders outstanding and are seeing a regular flow of tenders for small to medium jobs for the balance of 2009. The majority of the clients that Southern Cross undertakes work for are tier 1 mining companies which also helps to minimise any credit risk associated with the work undertaken by the Company.

Margins on existing projects are broadly in line with management expectations and there are no surprises in relation to corporate overheads. As predicted we have a full year of listing costs etc and the complete executive team for the full year.

Southern Cross Electrical Engineering Limited

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The business is generating strong cash flows which, coupled with our strong balance sheet and cash position puts the Company in a strong position to manage through any difficult times but possibly to then take advantage of any growth opportunities as they arise.

Since I have joined Southern Cross we have commenced a long term planning process to help determine what the Company will look like in the next 3 to 5 years. This process still has a month or two to run and we will look to provide some guidance to Shareholders towards the end of March.

In relation to 2010 and beyond, I can say that we are already working on a number of large tenders that commence in the 2010 year. The process for these tenders still has a couple of months to run so any announcements in the event that we are successful would not be until approximately the end of the March quarter next year.

In conclusion, 2008 was a very successful year for Southern Cross with results exceeding prospectus forecast on most fronts.

• We saw continued recognition of the Company’s performance with regard to quality and safety performance, something that Southern Cross is very proud of.

• Southern Cross recognises the challenges that the current uncertain economic times provide but believe we are well placed to face those challenges and have a number of levers to help navigate a successful path and an experienced management team in place.

• Strong cash flows and a strong balance sheet assist greatly and may provide opportunities going forward.

• The company has re-entered the Oil and Gas sector and is confident of it’s ability to provide the same quality of service it provides to it’s many mining and other customers.

Thank you.

I am happy to take any questions in relation to the presentation.

I will now hand back to the Chairman for the formal AGM proceedings.

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Southern Cross Electrical Engineering Limited AGM Presentation Managing Director Stephen Pearce

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Operational Highlights

Financial Results

Outlook

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FY08 Operational Highlights

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• Successful listing on ASX.

• OH&S excellence award from NECA for the Ravensthorpe Nickel Project.

• Awarded best industrial electrical contractor for Dampier Port Upgrade Phase B.

• 0 lost time injuries.

• Accreditation of the oil and gas team commenced.

• Executive team appointments complete.

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Completed Projects

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Project
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Client
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Hope Downs I Stage 1 Hamersley HMS Ravensthorpe Nickel Project BHP Billiton Dampier Port Upgrade Phase B Hamersley Iron Newman Ammonium Nitrate Facility Civmec Lake Johnston Overhead Power Line Norilsk Nickel Newman Hub Early Infrastructure Works BHP Billiton Robe River Iron Western Creek Overhead Power Line Upgrade Associates Robe River Iron 33kv Village Over Head Power Line Associates Hope Downs Borefields PIHA

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Operational Highlights Financial Results

Outlook

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SCEE Financial Snapshot

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	$ millions	Proforma*	Prospectus	Variance
	Revenue	84.1	96.8	(12.7)
	EBITDA	21.0	18.5	2.5
	EBIT	19.9	17.5	2.4
	NPAT	14.3	12.2	2.1
	ROCE (%)	42.5	38.8	3.7
	EPS (cents per share)	12.8	10.9	1.9
	Full year dividend (cents per share)	6.0	5.0	1.0

* Proforma earnings have been adjusted for IPO costs of $3.7m pre-tax

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SCEE delivered on its prospectus earnings
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Cash Flow

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$ millions Net cash from operations* Net cash used in investing Free cash flow IPO costs Net cash from financing Net increase in cash Opening cash Closing cash Borrowings Net cash	FY08 Prospectus 13.5 11.9 (1.9) (0.3)
	11.6 11.6 (3.7) (3.7) 8.6 8.6
	16.5 16.5 9.2 9.2
	25.7 25.7 (1.3) (1.3)
	24.4 24.4

• Proforma cash flows adjusted for IPO costs of $3.7m

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Balance Sheet

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$ millions Total Current Assets Total Non-Current Assets Total Assets Total Current Liabilities Total Non-Current Liabilities Total Liabilities Net Assets Total Equity	FY08 FY07 40.2 21.6 7.9 6.2
	48.1 27.8 13.7 13.9 0.7 1.1
	14.4 15.0 33.7 12.8
	33.7 12.8

Net Cash = $24.4m

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Strong cash flows and balance sheet to grow the business
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Operational Highlights Financial Results

Outlook

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Earnings Drivers

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SCEE has many levers to grow its business
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FY09 Update

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• Based on current order book, on track to exceed FY08 revenue

• Tendering for more FY09 work

• Existing project margins in line with management expectations

• No surprises in corporate costs

• Business is generating positive cash flows

• Net cash > $20m

• Virtually no debt

• Long term business plan being prepared

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Conclusion

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• Exceeded prospectus forecast

• Continued industry recognition with awards for quality and safety excellence

• Experienced management team in place

• SCEE is not commodity dependent and has many growth levers

• Strong cash flows and balance sheet

• Has re-entered the oil & gas sector

• Executive appointments complete

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Important Notice

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This presentation has been prepared by Southern Cross Electrical Engineering Limited (“the Company”) and provides background information about the Company’s activities. The information is current at the date of this presentation. The information is a summary and does not purport to be complete. This presentation is not (and nothing in it should be construed as) an offer, invitation, solicitation or recommendation with respect to the subscription for, purchase or sale of any security in any jurisdiction, and neither this document nor anything in it shall form the basis of any contract or commitment. The presentation is not intended to be relied upon as advice to investors and does not take into account the objectives, financial situation or needs of any particular investor which need to be considered, with or without professional advice, when deciding whether or not an investment is appropriate.

The Company has prepared this presentation based on information available to it, including information derived from publicly available sources that have not been independently verified. No representation or warranty, express or implied, is made as to fairness, accuracy, completeness, correctness or reliability of the information, opinions and conclusions expressed in this presentation.

Any statements or assumptions in this presentation as to future matters may prove to be incorrect and the differences may be material. This presentation should not be relied upon as a recommendation of or forecast by the Company. To the maximum extent permitted by law, none of the Company, its directors, employees or agents, or any other person accepts any liability, including without limitation, any liability arising from fault or negligence on the part of any of them or any other person, for any loss arising from the use of this presentation or its content or otherwise arising in connection with it.

The financial information disclosed in this presentation has been prepared on a statutory and pro-forma basis consistent with the financial information prepared in the Company’s prospectus. Due care and attention should be undertaken when considering and analysing the financial performance of the Company. All references to dollars are to Australian currency unless otherwise stated. The distribution of this presentation in jurisdictions outside Australia may be restricted by law and you should observe any such restrictions.

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