Scott Cummins 28 September 2017
STRATEGIC HIGHLIGHTS Transformational Growth Strategy Reset, Stabilise, Consolidate, Grow New operating model and turnaround in performance Pursuit of operational excellence adopted across the entire business and all operating regions Cultural shift to a consistent, reliable and high-performing project delivery business Simplified business structure and strengthened technical & operational capabilities Established strong foundation with effective management systems and programs Active Project Portfolio performing in line with expectations and plan Balance Sheet Clean & Strong. Significantly Reduced overall Business Risk Profile. 1. Balance Sheet Strengthened & Restored Financial Capacity & Flexibility Aveng have reset the McConnell Dowell Balance Sheet. Removed risk & uncertainty from the Balance Sheet Resolution of the long outstanding arbitration process in relation to the QCLNG Export Pipeline Project that was executed over a four-year period from 2010 Project impairments remove risk and uncertainty from the Balance Sheet. Non cash in nature but impacted the FY17 P&L 2. Capital Restructure Recapitalised the balance sheet by capital injection from Aveng 3. No External Debt Paid off all external debt in Australia (minor asset finance / leases remain) Full Support from all Stakeholders All our Banks and Bonding providers have approved the balance sheet restructure and have confirmed ongoing commitment to provide bonding required to support our business plan Following the reset of our organisational structure and operating model it was necessary to reset the balance sheet. This has been successfully completed and now positions the Group for future reliable & predictable project delivery and Corporate growth. Scott Cummins, Chief Executive Officer McConnell Dowell 2
FY17 PERFORMANCE SUMMARY Select highlights are included below: VALUE WE ARE DELIVERING McConnell Dowell has taken the final step in completing the Reset phase of its transformational strategy Reset, Stabilise, Consolidate & Grow and built a platform to optimise value and growth. Transformational program to ensuring the McConnell Dowell Group are a leading project delivery business. SAFETY PERFORMANCE SIGNIFICANT INDUSTRY RECOGNITION 33,969 Safety Observations Recorded 84% Projects Remained LTI Free Australian Construction Achievement Award Webb Dock Master Builders Modbury Hospital Redevelopment Civil Contractors New Zealand Waterview Tunnel FINANCIAL PERFORMANCE Revenue A$936 Million of construction work including: Cash Position A$120 Million Improved Cashflow Performance Webb Dock, Melbourne, Australia Waterview Tunnel, Auckland, New Zealand Modbury Hospital, Adelaide, Australia RAPID Solid Product Jetty, Malaysia Mangere BNR, Auckland, New Zealand O-Bahn City Access, Adelaide, Australia Order Book & Preferred Status A$1,500 Million Increased >50% from Dec 16 Murray Basin Rail Upgrade, Australia BP Tanguuh LNG Export Jetty, Indonesia Northern Gas Pipeline, Australia Dryandra Road Underpass, Australia Amrun Export Facility, Australia Western Program Alliance, Australia MAJOR PROJECTS AWARDED Midvale, Australia Christchurch Southern Motorway Stage 2, New Zealand U2 on Waymouth, Australia West Franklin Apartments, Australia 3
YEAR IN REVIEW RESET PHASE COMPLETED Year of considerable change across the organisation Foundations built to optimise value and growth Focused on becoming a consistent reliable project delivery business Strengthened Customer Relationships Reduced the fixed cost base to improve cost competitiveness Implemented a structured approach to winning a new business Strengthened project and business governance Enhanced technical and operational capabilities MAXIMISING VALUE Established a new leadership Set clear expectations for leaders and business units Stronger focus on Customer relationships Simplified the organisation New structure and operating model Lean and accountable Regionally focused business units and strategies Strong band and market position Customer orientated and outcome focused STRENGTHENED OPERATIONAL MANAGEMENT Embedded a clear transformational growth strategy Reset, Stabilise, Consolidate & Grow Maximise value by becoming a reliable and high performance business Increased transparency in all aspects of the business, winning through execution Improved Systems and Procedures back to basics drive, execution improvement program, centralised project start-up expertise, centralised HSEQ processes Strengthened new business and commercial management processes to safeguard brand, profitability and strategy Monthly project review process, peer reviews, internal audit 4
STRONGER BALANCE SHEET Transforming to a stabilised and cash flow positive business. Recapitalised the balance sheet to support Business Plan. Strengthening the balance sheet was a significant focus for the organisation in the 2017 financial year Results reflect the financial Reset of the business and places the Group in a strong position to support the further stages of the growth strategy Project impairment for QCLNG and other historical issues (Previously announced non-cash impairment) Banks and financiers support the project impairments and capital restructure that forms part of the FY17 Full Year Results The capital restructure provides the Group with a robust balance sheet to: Execute and fulfil all defined growth objectives in line with the transformational strategy Support future working capital and bonding requirements associated with the strong pipeline of projects Continue to invest in building and enhancing capability across the entire Group GREATER PREDICTABILITY & CERTAINTY OF FINANCIAL PEFORMANCE >100% secured revenue for FY18. More predictable performance and earnings. Efficient & scalable cost structure Strong operational focus to bid, execute and deliver strong earnings growth Strong & healthy Order Book 5
PROJECT IMPAIRMENTS Previously announced non-cash impairment on the QCLNG Export Pipeline Project and other historical commercial issues PROJECT IMPAIRMENTS FROM LEGACY & HISTORICAL ISSUES QCLNG Export Pipeline Project Reflects the long running arbitration process associated with the project that commenced in 2010 and was executed over a fouryear period. Project was completed in late 2013 The award event was fully anticipated and represents a long awaited important milestone in our strategic journey Other Historical Commercial Issues Enable the finalisation of commercial issues and disputes Clean up the balance sheet of historical issues so we can focus on the future No material adverse impacts expected in FY18 REDUCED BUSINESS RISK PROFILE Significantly reduced the level our dispute backlog in relation to all legacy and historical projects Significantly lower risk profile as legacy matters are closed CULTURAL SHIFT TO DISCIPLINE Disciplined commercial delivery approach to project commercial and legal disputes. Focused on timely and effective resolution. Embedded new rigorous project commercial framework and procedures in response to past practices and decision making processes 6
FY18 & BEYOND GROUP STRATEGY REMAINS INTACT AND FULLY SUPPORTED BY AVENG. MCCONNELL DOWELL ENTERS FY18 WITH A CLEAR STRATEGY, A NEW LEADERSHIP TEAM, A STRONGER BALANCE SHEET AND TREMENDOUS MOMENTUM. Turnaround strategy on track Positive momentum moving in to FY18 with 100% of Group Revenue Budget secured All Business Units are well placed to deliver strong operational results in line with plan Cultural shift to a consistent, reliable and high-performing project delivery business Disciplined focus on high growth opportunities. Strong growth in Order Book & Preferred Status. Significant upside. Positioned for strong earnings growth in FY18 Year of delivery 2016 2018 2021 2025 RESET STABILISE, DELIVER & POSITION FOR GROWTH CONSOLIDATED GROWTH EXTENDED GROWTH & SUSTAINED PROFITABILITY 7
GROUP DIVERSITY ACTIVELY EXECUTING MAJOR PROJECTS ACROSS ALL GLOBAL REGIONS, MARKET SECTORS AND SPECIALIST CAPABILITIES OF THE MCCONNELL DOWELL GROUP S VALUE OFFERING 8
ACTIVE PROJECT PORTFOLIO O Bahn City Access, Australia Murray Basin Rail Upgrade, Australia Amrun Export Facility, Australia Customer: Department of Planning, Transport & Infrastructure Design & Construct Contract 670m long tunnel completed Customer: V/Line Upgrading 1,055km of rail track Converting the track from broad gauge to standard gauge Completion scheduled for August 2018 Customer: Rio Tinto Significant Australian mining project 642m of jetty structure 306m of wharf with attached tug berth 9
ACTIVE PROJECT PORTFOLIO Dryandra Road, Australia Northern Gas Pipeline, Australia Western Program Alliance, Australia Customer: Brisbane Airport Corporation Significant structural element of new runway Concrete 4-lane underpass structure 700 precast piles including 1.5km of road Customer: Jemena Engineering, construction and commissioning 481km of pipeline Scheduled for completion late 2018 Customer: LXRA Major Alliance Project Significant Program of Work 5+ years First 2 sites to be complete by end 2018 10
ACTIVE PROJECT PORTFOLIO Christchurch Southern Motorway, New Zealand City Rail Link, New Zealand Russley Road Upgrade, New Zealand Customer: New Zealand Transport Agency 8km new of 4 lane motorway 7 bridges over new highway Scheduled Completion end 2019 Customer: City Rail Link Limited Largest Infrastructure project in New Zealand 3.45km twin tunnel underground rail link Customer: New Zealand Transport Agency An on-line roundabout and a 150 m subway Scheduled Completion end 2019 11
ACTIVE PROJECT PORTFOLIO Tangguh LNG Bulk Offloading Facility, Indonesia Petronas RAPID 12B Solid Product Jetty, Malaysia Tuas Road Bridges, Singapore Customer: PT Saipem Indonesia (PTSI) Bulk Offloading Facility, LNG and Condensate Loading Jetty Onshore brownfield site and receiving facility Customer: Petronas PRPC Utilities EPC Contract 8km new of 4 lane motorway 7 bridges over new highway Scheduled Completion end 2019 Customer: National Environment Agency (NEA) 2 Permanent viaducts including foundations, abutments and marine deck Scheduled for completion in June 2018 12
ACTIVE PROJECT PORTFOLIO Nakhon Ratchasima Pipeline Extension, Thailand Maris South Canal, Philippines Dubal Energy Optimisation Mechanical Works, Dubai Customer: PTT Public Company Limited EPC Contract 60 km of 42-inch diameter pipeline, 18 block valve stations 20 km of pipe installation by Direct Pipe processes Customer: SNAP (Aboitiz Power and Statkraft Norfund Power Investment group) 8.5 megawatt hydroelectric power plant Scheduled for completion late 2017 Customer: Emirates Global Aluminium (EGA) 4 pot rooms, 8 sections, 241 pots, 4 temporary crossovers, 4 central passageways 4 North end and 4 South end crossovers 13
ACTIVE PROJECT PORTFOLIO West Franklin Apartments, Australia Urbanest, Australia U2 on Waymouth, Australia Customer: Greaton 272 residential apartments two towers (north tower is 20 storeys and the south tower is 18 storeys) Scheduled for completion early 2019 Customer: Urbanest Australia Design & Construct Contract 689 bed accommodation Scheduled completion November 2017 Customer: U2 Design & Construct Contract 27 Levels with 257 apartments Scheduled completion for early 2019 14