SOUTHERN CROSS ELECTRICAL ENGINEERING LTD — Investor Presentation 2011

Nov 9, 2011

Euroz Investor Seminar

10 November 2011

Simon High CEO

Chris Douglass CFO

Presentation overview

• Financial Summary of 2010/11

• Non Financial Achievements 2010/11

• Current Operational Review

• Strategy and Outlook

• Summary

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FY11 financial overview – profit & loss

	6 months to	6 months to			• • • • • •
($m)	Dec 2010	Jun 2011	Change	FY11
Sales Revenue	47.3	54.5		101.8
Gross profit	2.3	13.9		16.2
EBITDA	(5.4)	6.1		0.6
Statutory NPAT	(4.8)	3.1		(1.7)
Statutory NPAT Margin	(10.1)%	5.7%		(1.6)%
Return on Equity	(12.9)%	4.6%		(2.3)%
Operating Cash Flow	(4.4)	4.6		0.2

H2 FY 11 Highlights Satisfactory resolution of Pluto Award of Cadia/Sino/Pueblo Viejo/Mining Area C contracts KJ Johnson returned to “normal” run rate in H2 SCEE East Coast strong performance through the year Capital raising strengthened balance sheet Increased order book at the end of FY11

2

H1 FY11 issues

• Extremely low work‐in‐hand

• BD efforts not focussed sufficiently on “short term” prospects

• High overheads

• Uncertainty regarding financial performance of Pluto

• Extremely competitive contracting environment – many bidders and low margins

• Gorgon bid and carrying costs

• Shift from lump sum to schedule of rates contracts

3

Non Financial Achievements

• 7[th] consecutive LTI free year

• Full review of bidding processes, norms, capacity and competency

• Greater focus on monthly project management reporting and peer reviews

• Commenced upgrading of project management systems (SCEEtrak)

• Board changes

• Recruitment of new project management talent (PMs, CMs, Commercial, Safety and Quality)

• Greater focus on risk management

• Integration of acquisitions to maximise benefits to group and subsidiaries

• New training centre opened

• Increased apprentice intake West Coast and East Coast

• Established international recruitment pipeline

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Creating a solid
foundation for growth
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Five lines of business

Minerals and Processing ‐ Australia Oil & Gas – Australia

Infrastructure – Australia

Minerals and Processing ‐ International Operational Support and Maintenance

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FY11 revenue
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5

Minerals and Processing ‐ Australia Iron ore to underpin business over the next 5 years on the West Coast and entry into coal projects on the East Coast

Major upcoming opportunities

• Secured long term framework agreements:

• RTIO 333mtpa

  • RTIO MSA

• Sino Iron

Sino Iron Rio Tinto expansion projects BHP RGP6 Roy Hill

Current major projects

• Cadia East, Mt Keith and Sino Iron:

• work continuing through FY12

• strong relationship built with Sino Iron

• Mt Keith complete

• Strong pipeline of projects

6

Rio Tinto framework agreement

SCEE enters into a preferred contractor agreement with Rio Tinto

• Provides SCEE with preferred contractor status for the next five years at Cape Lambert and potential minesites for Electrical & Instrumentation works

• Further highlights the strength of relationship with Rio Tinto built upon since 2005

• First package of work expected to commence in FY12

• Long term nature of the contract provides greater certainty in planning

7

Sino Iron

SCEE awarded seventh E&I contract for Sino Iron project

• Seventh Sino Iron contract awarded to SCEE for Electrical and Instrumentation work

• Combination of lump sum and reimbursable contracts

• Framework agreement now providing additional orders

SCEE Headcount at Sino Iron project:

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250
200
150
100
50
0
March May July Sept Oct Nov F/cast
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8

Oil & Gas ‐ Australia

Established credibility ‐ in strong contention for CSG projects

• Pluto project achieved a successful completion and satisfactory commercial result – market credibility established

• Oceanic Industries acquisition now fully integrated as SCEE East Coast ‐ positions SCEE for upcoming CSG projects

Current projects

Major upcoming opportunities East Coast West Coast QGCLNG Wheatstone GLNG Macedon APLNG Ichthys Browse Pluto 2/3 Gorgon

• Origin contract

• QGC LNG early works

• APLNG early works

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Infrastructure ‐ Australia

Strong bounce‐back

• Substantial growth expected in FY12 off the back of increased mining investment

• KJJ acquisition fully integrated and performing well

Major upcoming opportunities

Rio Tinto BHP Sino Iron FMG East Coast

Current major projects

• Sino Iron

• BHP Area C

• Rio Tinto Tom Price Feeder

10

Minerals and Processing ‐ International

Focus to be Peru

Major upcoming opportunities

• Expect activity in Peru to increase

• Undertake at least one major project each year

• Pueblo Viejo project tracking in line with expectations

Minas Congas Cerro Verde Constancia Torromocho

• Close Denver office and provide support for international ops from Perth

Current major projects

• Pueblo Viejo gold project (Dominican Republic)

• Yanacocha power line (Peru)

• Antapaccaya power line (Peru)

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Operational Support and Maintenance

Building recurring revenues

Major upcoming opportunities

• Queensland weather events impacted H2

• Growing a recurrent revenue base to provide a consistent baseline of revenues

• Expansion of line of business driven by acquisition of Oceanic Industries and Hindle Group

• Long term objective for line of business is to grow it to cover group overhead

Expansions of: RTIO agreement BP framework agreement Caltex framework agreement Sino Iron (MCC)

Current major clients

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SCEEtrak Development Project

• Business intelligence software development

• Develop processes, technologies and tools to change data into information, information into knowledge and knowledge into plans to guide the company

• Executed as an internal project with dedicated Project Manager and full time project team

• Significant investment with capital budget set over next two years

• Implementation takes a modular approach addressing most critical needs first

• First modules rolled out now, with significant number in development

Systems Map

TENDERS

PROJECTS

OPS SUPPORT

FINANCE

Estimating Scheduling Procurement Payroll (WINEst) (Primavera) (Levesys) Scheduling Document Control Accounts Materials Management (Primavera) (DocTracer) (Levesys) Document Control Reporting General Ledger Material Control (DocTracer) (SQLator) (Levesys) HR Management Reporting (SQLator) Timekeeping Reporting (SQLator) (STEMS) Asset Management Reporting (SQLator) (STEMS) OHSE Management OHSE Management (STEMS) (STEMS) HR Management (STEMS) KEY Asset Management Existing legacy system (STEMS) (to be retained) Completions Management (SQL database) SCEEtrak Module completed/in progress Quality Management (Excel) Planned SCEEtrak Module (existing system) Production Reporting (Excel)

Existing legacy system (to be retained) SCEEtrak Module completed/in progress Planned SCEEtrak Module (existing system)

Strategic objectives

The three year objectives are to organically grow with a core focus on Australia and an international focus on opportunities with major international clients in Peru, building the Operational Support and Maintenance line of business, so as to :

• Grow revenues to over $200m pa

• Restore EBITDA margins to 15 – 20%

• Contain overhead costs to between 8 – 10% of revenues

15

Orders – lead indicator of revenues

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120
Orders
100 won
current
$75m FY12
80
FY11 $75m Mining Australia
revenue
Mining International
60
Operational Support
Infrastructure
40
$27m Oil & Gas
20
0
June 2010 June 2011 October 2011
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N.B Does not include Rio 333mtpa preferred status O.B

16

Employee numbers over the past 12 months

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1000
900
FY 2011 FY 2012
800
700
600
500 Australian Employees
Overseas Employees
400
Total Employees
300
200
100
0
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17 November 2011

Delivery of strategy – on track

Strong domestic fundamentals are platform to deliver strategic goals

• Focus on organic growth in domestic market:

• iron ore miners looking to accelerate investment plans

• LNG and CSG projects ramping up

• lead indicators showing positive signals for E&I operators

• SCEE well positioned for additional contracts

• Strengthened capital position

• Significant Board appointments of non‐executive directors Dr John Hamilton and Mr Peter Forbes

• Employee recruitment initiatives

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Summary

Growing orders, revenue and margins into FY12 and beyond

• Positioned well with a strong order book

• momentum building with seventh Sino contract

• Rio Tinto preferred contractor status

• Significant new project awards

• Successful completion of Pluto contract positions the business for further oil and gas contracts

• Internal capability strengthened

• Seventh consecutive LTI‐free year

• Industry lead indicators showing positive signs

• Well positioned for further growth and to capitalise on improving market fundamentals

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Disclaimer

Some of the information contained in this presentation contains “forward‐looking statements” which may not directly or exclusively relate to historical facts. These forward‐ looking statements reflect Southern Cross Electrical Engineering Limited’s current intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors, many of which are outside the control of Southern Cross Electrical Engineering Limited.

Important factors that could cause actual results to differ materially from the expectations expressed or implied in the forward‐looking statements include known and unknown risks. Because actual results could differ materially from Southern Cross Electrical Engineering Limited’s current intentions, plans, expectations, assumptions and beliefs about the future, you are urged to view all forward‐looking statements contained herein with caution.

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