SOUTHERN CROSS ELECTRICAL ENGINEERING LTD — Investor Presentation 2011

Mar 9, 2011

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Southern Cross Electrical Engineering
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www.scee.com.au

• Established in 1978 as a privately owned Electrical and Instrumentation Contractor (E&I)

• Listed on the ASX November 2007

• Founder Frank Tomasi, currently a major shareholder with 49.3% of shares on offer

• Safety record, almost 7 years LTI free

• Multiple safety awards, clients, state and national (NECA)

• Long track record of involvement in major resource projects:

• 174 Gold Plant Globally

• Iron Ore (RIO, BHP, FMG)

• LNG (Pluto, WEL/FWW)

• 3 Acquisitions :

• Oceanic Industries (Now SCEE East Coast) – February 2010

• KJ Johnson (Infrastructure) – August 2009

• Hindle Offshore Services (Offshore O&M) – July 2009

Southern Cross Electrical Engineering

www.scee.com.au

ancial Overview
($ millions)	Dec 10	Dec 09	Change
Sales Revenue	47.3	39.2	8.1
Gross Profit	2.3	13.7	(11.4)
Overheads	(7.6)	(6.3)	(1.3)
EBITDA	(5.3)	7.4	(12.7)
Business combination expenses	(0.1)	(0.8)	0.7
D&A	(0.8)	(1.6)	0.8
Net interest	(0.4)	0.1	(0.5)
Tax	1.8	(1.8)	3.6
NPAT	(4.8)	3.3	(8.1)

• June 11 half expected to be profitable.

• Subject to completing Pluto final negotiations successfully and some

near term contract awards, FY11 should record a full year profit.

• Forward order book in February 2011 $47m.

Southern Cross Electrical Engineering

www.scee.com.au

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Mt Keith
Southern Cross Electrical Engineering www.scee.com.au
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Southern Cross Electrical Engineering

www.scee.com.au

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Southern Cross Electrical Engineering

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www.scee.com.au

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Southern Cross Electrical Engineering

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www.scee.com.au

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KJ Johnson
Southern Cross Electrical Engineering www.scee.com.au
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www.scee.com.au

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Southern Cross Electrical Engineering
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• Good progress being on close-out of Pluto.

• Award of Concentrator E&I Package for MCC on Sino Iron.

• Forward order book currently sitting at $55m, including $20m for FY12.

• Approx $270m of tenders in the evaluation phase.

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Southern Cross Electrical Engineering

www.scee.com.au

FY07	FY08	FY09	FY10	FY11
Actual	Actual	Actual	Actual	Forecast (Range)
$81m	$84.2m	$100.3m *	$97.4m ** ***	$100-$110m

Acquisitions

• ** July 2009 August 2009

*** March 2010

Southern Cross Electrical Engineering

www.scee.com.au

$100m $200m+	$100m $200m+	$100m $200m+	$100m $200m+	$100m $200m+
FY11	FY12	FY13	FY14	FY15

• Targeting aggressive organic growth (30% + compound growth)

• Grow the top line revenue figure

• Grow the bottom line EBITDA/NPAT in absolute and in % terms

• International (DR/Peru/PNG/Mongolia) expected to be up in 10-15%

• overall revenue range

• 85-90% Revenue expected in Australia (WA, Queensland & NT)

Southern Cross Electrical Engineering

www.scee.com.au

Southern Cross Electrical Engineering is well positioned to achieve its growth target from future global Minerals and Metals projects from its long term relationships, reputation for delivery, quality and safety.

CAPEX Estimate* ($bn)

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... and future projects

• Rio Tinto (333mtpa) $14.8bn • BHPB (RGP6) $1.9bn ...with current • Fortescue $8.4bn projects ... • Sino Iron $3.5bn • Rio Tinto • Hancock Prospecting $7.2bn • Sino Iron Project (MCC) • Tropicana $0.74bn Strong relationships and • Barrick Gold (PVDC) • Xstrata (Africa and Peru) $6.47bn previous contracts ... • Newmont (Africa and Peru) $2.5bn

• Rio Tinto

• BHPB • Sino Iron • Fortescue Total CAPEX Estimate* ($bn) • Barrick *Note: not all project CAPEX is at FID

• • Newmont E&I CAPEX Estimate* @3.5% ($bn)

$45.4bn

$1.6bn

Southern Cross Electrical Engineering

www.scee.com.au

Southern Cross Electrical Engineering is well positioned to achieve its Oil and Gas market growth target from future projects through the sound project delivery at Pluto and from its CSG contracts

CAPEX Estimate* ($bn) Source Client Data

				... and future projects	... and future projects
				• Gorgon	$43bn
				• QCLNG	~$15bn
				• GLNG	~$16bn
				• PNGLNG	~$15bn
		...with current		• Wheatstone onshore	~$12.6bn
		projects ...		• Browse (onshore)	~$7bn
Strong relationships		• Woodside		• Pluto 2/3	~$20bn
and previous		• QGC		• Macedon	~$1.5bn
contracts ...		• BP Australia		• Ichthys	~$3bn
• Woodside		• Caltex		• APLNG	~$35bn
• QGC
• Origin Energy
• Arrow Energy
• Santos	*Note:	not all project CAPEX is
• Epic Energy	at FID		Total CAPEX Estimate* ($bn)		~$168bn
• BP Australia
• Offshore drilling	companies		E&I CAPEX Potential* @2% ($bn)		~$3.3bn

Southern Cross Electrical Engineering

www.scee.com.au

• Board Changes

• Retention/Expansion of Capacity (people strategy)

• Double our apprentice intake FY09-FY11, will further increase FY12

• onwards

• Increase indigenous employees across the company

• Greater focus on Integrated suit of project management systems, especially for schedule of rates contracts

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Southern Cross Electrical Engineering

www.scee.com.au

• Founder of SCEE

• Major Shareholder (49.3%)

• Chairman from 1978 to 9[th] March 2011

• Frank has advised his intentions to step down from the role of Chairman to becoming a Non-Executive Director, effective 9[th] March 2011

Frank Tomasi

• Over 30 years Engineering and Construction experience

• • FIE Australia

• FAIDC

Previous Directorships:

• Clough Ltd (2006-2010)

• Murray & Roberts (2008-2010)

Current Directorships:

John Cooper

• Flinders Resources

• John has accepted the appointment as Independent Chairman, effective 9[th] March 2011

Southern Cross Electrical Engineering

www.scee.com.au

• Internally:

• Identifying the right people for the right role

• Development of people within the organisation

• Mentoring

• HR Recruitment Team:

• Keep in contact with past employees

• Source new employees

• Attraction/Retention Strategy

• Networking opportunities

International Recruitment:

•

• Partnerships with external organisations

• Trades i.e. Philippines/Peru

• Supervisors and Management i.e. UK, Ireland and US

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Southern Cross Electrical Engineering

www.scee.com.au

• Career Development:

• Career Pathways have been developed

• Provide career guidance and opportunity for progression

• Allows for recruitment at lowest possible level

• Mentoring staff by:

• sharing knowledge and information

• creating opportunities

• guiding the individual through the work environment

• leading by example

• constructive feedback

• Opportunity for “older” employees to give feedback

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Southern Cross Electrical Engineering

www.scee.com.au

• SCEE has employed 79 Apprentices since 1979

• In the last 10 years, the company has graduated 43 apprentices of which 38 have been retained as tradespeople, supervisors and project managers

• Dedicated Training Centre to train, assess and enhance apprenticeship training

• Leadership and mentoring program

• 2011 apprentice intake has commenced

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Southern Cross Electrical Engineering

www.scee.com.au

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• 2010 Implemented Indigenous Traineeships; 11 Employed.

• 5 Traineeships completed by the end of November 2010 and 6 continued into 2011.

• Introduced Cultural Awareness training for all SCEE Staff.

• Developed close relationships with the Aboriginal Development Corporation, Wirrpanda Foundation and Kooya Enterprises.

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• Strategy to facilitate sustainable Indigenous Employment.

• Intent is to provide meaningful and long term employment opportunities through structured career pathways such as warehousing, business administration and electrical apprenticeships.

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Indigenous Employment is the Right Thing to Do and Gives SCEE a Strategic Benefit: Win - Win

Southern Cross Electrical Engineering

www.scee.com.au

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• 0 LTI’s recorded for last 6-7 years

• 2007 national NECA award winner for excellence in safety

• 2009 national NECA award winner for excellence in safety

• 2010 state NECA award winner for the Pluto LNG Project

• Numerous client sponsored safety awards at projects such as Pluto LNG project

Southern Cross Electrical Engineering

www.scee.com.au

• FY11 has been difficult for SCEE but many valuable lessons have been learnt;

• Current order book improving;

• H2 expected to be profitable and FY11 should record a full year profit;

• Prospects for FY12 and beyond over a 3-5 year period are exceptional;

• SCEE is preparing for aggressive but sustained growth over this period and beyond.

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Southern Cross Electrical Engineering

www.scee.com.au

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.

Southern Cross Electrical Engineering

www.scee.com.au