VERBREC LIMITED — Annual Report 2016

Sep 6, 2016

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2016 FULL YEAR RESULTS INVESTOR BRIEFING

7 SEPTEMBER 2016

PERFORMANCE SUMMARY FY16

AGAINST PREVIOUS CORRESPONDING PERIOD

Revenue Statutory NPAT $108.2m ($38.1m) FY15: $133.8m FY15: $8.3m

• includes non-cash goodwill impairments of $28.1m and onerous lease provision of $4.2m

EBITDAI^

($4.2m) FY15: $12.1m

Cash balance

$6.6m FY15: $21.9m*

• includes project procurement pre-payments and prior to acquisitions and dividend payments

• Revenue and EBITDAI in line with guidance

• Net cash and no outstanding borrowings

Total Recordable Injury Frequency Rate

• Restructure costs delivering an 18% reduction in overheads fully accounted for in FY16 results

• Strong growth prospects in key target markets including infrastructure

• Workforce of 450 people (FY15: 550)

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2.28 per million hours worked as at 30 June 2016

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FINANCIAL SUMMARY FY16

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123.1 [129.5] 127.9 133.8 10.7 10.6 14.1
108.2 11.3 12.1
8.3
5.4 6.7
FY16 FY16
FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY12 FY13 FY14 FY15
Includes impairment to
(4.2) goodwill of $28.1m and
onerous lease provisions
of $2.9m (post tax)
Revenue ($m) EBITDAI ($m) NPAT ($m) (38.1)
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REVENUE

EBITDAI^

NPAT

• Maintained key capability and positions in hydrocarbons and minerals & metals sectors

• Approximately 90% of revenue derived from brownfield (sustaining) works

• Revenue growth and prospects increasing in infrastructure, particularly water

• Strong project performance across the portfolio

• More than $8m in cost savings achieved in FY16 leading to improved margins in FY17

• Includes:

• $28.1m impairment to goodwill

• $4.2m onerous lease provision

• No significant project issues or bad debts

• Strong earnings-to-cash conversion through highly effective working capital management

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OUR BUSINESS

We deliver multi-discipline professional engineering, consulting and maintenance services to optimise the value and performance of our customers’ assets.

Our business model applies across our core markets of Hydrocarbons, Minerals and Metals and Infrastructure. The model allows us to address a diverse range of our customers' needs and continue to develop our own growth opportunities.

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MINERALS &
HYDROCARBONS INFRASTRUCTURE
METALS
• Offshore topsides • Materials handling & • Power generation Consulting
• Onshore processing minerals processing • Water and wastewater High value solutions
facilities • Iron ore treatment / production tailored to customer needs
• Compressor stations • Coal • Onshore pipelines
• Coal seam gas, natural • Precious metals (gold) • Defence
gas, LNG • Base metals (copper) • Environmental/approvals
• Petrochemical • Rare earths • Specialist consultancy
• Uranium Delivery
Delivery of
• Phosphates
engineering projects
Maintenance
Site based implementation,
maintenance, completions,
testing and shutdowns
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REPRESENTATIVE CUSTOMERS

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• Strengthened relationships with water utilities and anticipating further growth in FY17

• New contract wins in mid-stream oil and gas pipelines sector for services from concept design to EPC delivery. Solid investment in asset optimisation and new infrastructure continuing in this sector

• Competency Training continues to expand into new operational training services and new markets including PNG, Malaysia, Korea and Singapore

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ADAPTING TO GROWTH SECTORS

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Revenue by sector FY13 30% 57% 13%
FY14 57% 36% 7%
FY15 65% 29% 6%
FY16 48% 39% 13%
Hydrocarbons Minerals & Metals Infrastructure
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• Continued investment and growth in infrastructure opportunities

• Strong project performance with hydrocarbons and minerals & metals customers

• Capitalise on recent award of Master Service Agreements with SEQ Water (Queensland), SA Water (South Australia) and Water Corp (Western Australia)

• Growing capabilities in maintenance services, including geographically from Western Australia and into Adelaide and the Hunter Valley

• Commenced projects in opportunities outside of traditional commodities, including grain handling, copper and timber

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INVESTMENT IN TECHNOLOGY AND INNOVATION

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LOGICAMMS’ AUTOMATED INFRASTRUCTURE DESIGN ENGINE (AIDE)

Our team of GIS experts and software engineers have developed cutting edge technology to lower design costs for linear infrastructure projects

• Ability to run many concept designs in parallel

• Collaboration platform enabling stakeholder engagement

• Single point of truth for project data

• Information available in the field via handheld tablet

• • Construction 4D/5D capable.

1 day >40% turnaround on reduction in design changes design time

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INVESTMENT IN TECHNOLOGY AND INNOVATION

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LOGICAMMS’ UAV SURVEY AND MONITORING CAPABILITY

• Significantly reduced costs for monitoring, survey and data acquisition costs utilising our UAV capability.

• UAV outputs integrate seamlessly with Concept/Detailed Design inputs, AIDE (GIS) and Asset Management tools.

>30%

First in Australia

Overall survey to gain operational approval for night flights, beyond savings over visual line of sight flight and traditional methods increased altitude approval above the 123m limit

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OUTLOOK FY17

Following the restructuring of the business in FY16, LogiCamms is well positioned to deliver services at market competitive prices and maintain solid margins for shareholders. Based on recent project wins, work in hand and the visible pipeline of opportunities, LogiCamms is confident of revenue growth in FY17, with EBITDA margins expected to be in the order of 6%.

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APPENDICES

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LOGICAMMS AT A GLANCE

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PORT MORESBY
MACKAY
BRISBANE
PERTH
WHYALLA MUSWELLBROOK
NEW PLYMOUTH
ADELAIDE
MELBOURNE
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LogiCamms is a professional engineering and consulting services company with offices across Australia and New Zealand.

Key industries:

• Hydrocarbons

• Minerals & metals

• Infrastructure

Our purpose is to enhance the value and performance of assets.

450 people

8 offices

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FINANCIAL SUMMARY FY16

A$m	FY16 Statutory Results to 30 June 2016 $108.2m $34.7m 32.1% ($4.2m) (3.9%) ($8.2m) ($38.1m) (35.2%) ($8.3m) (55.5c) 0c	FY15 Comparison
		Statutory Results to 30 June 2015 Change
Revenue		$133.8m (19%)
Gross Proft Gross Proft %		$51.4m (32%) 38.4%
EBITDA* EBITDA Margin %		$12.1m (135%) 9%
EBIT*		$9.9m (183%)
NPAT* NPAT Margin (%)		$8.3m (559%) 6.2%
Operating Cash Flow		$18.6m (145%)
EPS (Basic) (cents per share)		12.0c (562%)
DPS (cents per share) FF = Fully franked		7.0c FF

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• Excluding impairment and onerous lease provision

BALANCE SHEET (JUNE 2016) – KEY ITEMS

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Comparison to
Balance Sheet Item 30 June 2016 30 June 2015 Comments
Cash $6.6m $21.9m Continue to operate from positive cash reserves. June 2015
position included pre-payments for project procurement and
prior to acquisition costs and dividend payments.
Trade and Other $20.8m $23.0m Strong cash collection cycle, highly effective and efficient
Receivables (current) working capital and project management.
Current Trade and $10.3m $12.6m
other Payables
AUD$’M 25.0
21.9
20.0 1.7
0.8 0.3
1.7
15.0 1.8 0.5
2.8
10.0 0.3 0.3
2.4
0.6 6.6
0.9 0.3 0.0
5.0 2.1
_
Cash EBITDA FY15 Taxes PPE (incl. Petromod ITL Project FY15 Insurance Repayments Purchase Share of Insurance Restructure Other Cash
30/06/2015 adj for Incentives (Aus & NZ) systems acquisition Earn Out accruals final (annual (IT licensing of EST profits claim net cash 30/06/2016
non-cash dev) dividend prepaid) & equip) shares for equity flows
items accounted
investee
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DISCLAIMER AND NOTES

• The purpose of this presentation is to provide general information about LogiCamms Limited (Company). It is not recommended that any person makes any investment decision in relation to the Company based solely on this presentation. This presentation does not contain all information which would be material to the making of a decision in relation to the Company. Any investor should make its own independent assessment and determination as to the Company’s prospects prior to making any investment decision, and should not rely on the information in this presentation for that purpose.

• This presentation does not involve or imply a recommendation or a statement of opinion in respect of whether to buy, sell or hold securities in the Company.

• This presentation contains certain statements which may constitute “forward-looking statements”. Such statements are only predictions and are subject to inherent risks and uncertainties which could cause actual values, results, performance or achievements to differ materially from those expressed, implied or projected in any forward-looking statements. No representation or warranty, express or implied, is made by the Company that the matters stated in this presentation will be achieved or prove to be correct.

• Except for statutory liability which cannot be excluded, the Company, its officers, employees and advisers expressly disclaim any responsibility for the accuracy or completeness of the material contained in this presentation and exclude all liability whatsoever (including in negligence) for any loss or damage which may be suffered by any person as a consequence of any information in this presentation or any error or omission therefrom. The Company accepts no responsibility to update any person regarding any inaccuracy, omission or change in information in this presentation or any other information made available to a person nor any obligation to furnish the person with any further information.

End notes

^ The directors believe the presentation of certain non-IFRS financial measures is useful for the users of this document as they reflect the underlying financial performance of the Group. The non-IFRS financial profit measures are used by the Managing Director to review operations of the Group and include but are not limited to:

• EBITDAI – Earnings before interest, tax, depreciation, goodwill impairment and losses on onerous leases.

The above non-IFRS financial measure has not been subject to review or audit. This non-IFRS financial measure reconciles to the profit before and after income tax as reported in the Consolidated Statement of Profit or Loss on page 28 of the Annual Financial Report as follows.

In millions of AUD	30 June 2016 30 June 2015
Net proft / (loss) before tax Net fnance income Depreciation Onerous lease charge Goodwill impairment charge EBITDAI	(40.6) 10.2 (0.1) 0.3 4.0 2.1 4.2 1.3 28.1 –
	(4.2) 13.3

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FURTHER INFORMATION

INVESTOR RELATIONS

OUR VALUES

Paul Bowker

Director, Corporate Development Tel. +61 7 3058 7000

REGISTERED OFFICE

200 Mary Street Brisbane Queensland 4000 Tel. +61 7 3058 7000

WEB

Teamwork Commitment to people Can do approach Integrity Delivering quality results

www.logicamms.com.au

MEDIA ENQUIRIES

Alasdair Jeffrey Rowland Tel. +61 7 3229 4499

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