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Half Year 2013 Financial Results - AGC/AusGroup · Half Year 2013 Financial Results ... A process to assist in ... Chevron-operated Gorgon project on Barrow Island (November 2012)

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  • 1

    Half Year 2013 Financial Results 14 February 2013

    Mr Laurie Barlow CEO & Managing Director

    Mr Anthony Hardwick Chief Financial Officer

  • 2

    Company Snapshot

    AusGroup are currently ranked number 5 in the contractors

    category in the WA book of lists. (WA Business News Book of Lists 2013)

  • 3

    Our Operating Locations

  • 4

    Our Clients

    AusGroup service a number of the worlds leading blue chip companies across the oil and gas, LNG, infrastructure and resources sectors. We work closely with our clients to plan, build, deliver, maintain and upgrade a range of diverse and challenging projects in the resources and energy industries.

  • 5

    0.73

    0.33

    FY12 H1 FY13

    Injury Frequency Rates (LTIFR & TRIFR)

    TRIFR LTIFR

    5.80 5.98

    Safety First H1 FY2013

    Perfect Day philosophy moves away

    from traditional mindset, focusing on a

    perfect day, one day at a time

    E-colors - A process to assist in

    identifying different personality styles,

    which enables us to better understand

    ourselves and those around us

    Live data monitoring of lead

    indicators, focusing and measuring

    quality of actions

    On-line on-boarding HSE module

    Dampier Incremental

  • 6

    Highlights H1 FY2013

    Financial H1FY13

    (Compared to H1FY12)

    Operational Strategic

    Revenue

    12% to AU$306.8M

    NPAT

    10% to AU$9.1M

    Basic EPS

    6% to 1.9 CPS

    Net cash flow from operating

    activities

    14% to AU$12.1M

    Order book of AU$308M (as at 14 February 2013)

    Strong performance Major Projects

    Group safety performance TRIFR & LTIFR 5.98 & 0.33

    respectively

    Personnel numbers at 2,667

    Ongoing roll-out of Oracle E-Business Suite

    Establishment of common Project Delivery systems -

    Primavera

    Regional expansion to Queensland

    Establishment of project management and business

    management training

    schemes

    Sole ASX listing

  • 7

    Financial Summary

    AU$ millions unless otherwise mentioned H1FY13 H1FY12 % Change

    Revenue 306.8 274.4 12%

    Earnings before Interest, Tax, Depreciation & Amortisation (EBITDA) 21.8 21.9 1%

    Earnings before Interest and Tax (EBIT) 14.4 14.4 No change

    Profit after Tax 9.1 8.3 10%

    Basic Earning per Share - Weighted Average Shares (AU$ cents) 1.9 1.8 6%

    EBITDA Margin (%) 7.1% 8.0% 11%

    EBIT Margin (%) 4.7% 5.2% 10%

    Net Margin (%) 3.0% 3.0% No change

    Interest Cover (Times) 13.6 7.8 75%

    31-Dec-12 30-Jun-12 % Change

    NTA per Share - Period End Shares (AU$ cents) 34.9 34.1 2%

    NTA per Share - Period End Shares (SGD cents) 45.2 44.1 3%

    Current Ratio (Times) 1.6 1.5 7%

    Quick Ratio (Times) 1.1 1.1 No change

    Net Debt to Equity ratio (%) 3.1% 3.7% 16%

  • 8

    Historical Financial Performance

    20.5

    16.6

    17.2

    21.9

    21.8

    H1FY09

    H1FY10

    H1FY11

    H1FY12

    H1FY13

    EBITDA (AU$M)

    9.3

    6.3

    5.8

    8.0

    7.1

    H1FY09

    H1FY10

    H1FY11

    H1FY12

    H1FY13

    EBITDA Margin (%)

    10.8

    5.1

    5.1

    8.3

    9.1

    H1FY09

    H1FY10

    H1FY11

    H1FY12

    H1FY13

    Net Profit After Tax (AU$M)

    2.7

    1.3

    1.3

    1.8

    1.9

    H1FY09

    H1FY10

    H1FY11

    H1FY12

    H1FY13

    Earnings per Share (Aus cents)

    260.5

    159.7

    298.8

    274.4

    306.8

    H1FY09

    H1FY10

    H1FY11

    H1FY12

    H1FY13

    Revenue (AU$M)

  • 9

    Revenue Contribution

    Contribution by division Contribution by sector Contribution by geography

    AU$478M AU$367M AU$602M

    60% 53%

    40% 32%

    48%

    30%

    19%

    17%

    18%

    22%

    10%

    28%

    43% 50%

    30%

    FY09 FY10 FY11 FY12 H1FY13

    Integrated Services

    Fabrication & Manufacturing

    Major Projects

    AU$632M AU$478M AU$367M AU$602M AU$632M

    94% 89%

    93% 95% 93%

    6% 11%

    7% 5% 7%

    FY09 FY10 FY11 FY12 H1FY13

    I Australia Asia

    36%

    56% 55% 55%

    32%

    64%

    44% 45% 45%

    68%

    FY09 FY10 FY11 FY12 H1FY13

    Oil & Gas Mineral Resources

    AU$478M AU$367M AU$602M AU$632M AU$307M AU$307M AU$307M

  • 10

    Recruiting and training the best people

    Strategy in place to find the best people

    domestically and globally

    Structured recruitment process in place to ensure

    all due diligence is completed on new personnel

    Recruitment team aligned to the business

    structure

    Average of 240 personnel recruited per month for

    2011/2012 highest rate at 434 in 1 month

    Priority placed on retaining AGC people from

    project to project

    We make the de-mobilising on projects as

    important as on-boarding

    Brockman

    Our People

  • 11

    Our People

    People Performance

    Training pathways to optimise the potential of our

    people with experienced in-house support

    Experienced people capital and industrial relations

    teams supporting all personnel

    Award-winning Aboriginal & Torres Strait Islander

    programme, supporting both AGC personnel and

    local communities

    Confidential employee assistance programme

    Professionally developed performance review

    process

    83%

    10% 7%

    Geographic Breakdown

    Australia

    Singapore

    Thailand

    1,704

    2,471

    2,135

    2,778 2,667

    FY09 FY10 FY11 FY12 H1 FY13

    Employee Numbers

    83%

  • 12

    Business Highlights

    Oil & Gas, Mining & Industry

    Chevron-operated Gorgon project on Barrow Island (November 2012)

    Continued integration of Subsea

    Pressure Controls, Singapore

    Secured further work on Chevron

    Gorgon pipe spools

    Over AU$17M of scaffolding and

    associated services projects awarded

    to MAS

    AU$13M Fugro TSM subsea spools

    contract on Woodsides Greater

    Western Flank project

    Ongoing works with Apache Energy

    Limited

    Strong focus on LNG sector for 2014

    and beyond

    Jimblebar Project construction

    officially commenced September

    2012

    AGC awarded Sub-contractor of the

    month for exceptional performance

    on Binningup desalination plant

  • 13

    Outlook

    Tenders and tracking - 12 36 months forward looking

    Oil & Gas

    Gorgon (LNG)

    Wheatstone (LNG)

    Ichthys (LNG)

    APLNG

    GLNG

    QCLNG

    Mineral Resources

    Roy Hill (iron ore)

    QAL (allumina)

    Western Turner (iron ore)

    Syncline Stage 2 (iron ore)

    Tan Burrup (ammonium

    nitrate)

    Pipe spools, AGC Kwinana Workshop

    Pipe spools, AGC Kwinana Workshop

    58%

    41%

    1%

    Over AU$4.5 Billion worth of tenders submitted

    Oil & Gas

    Mining & Resources

    Infrastructure

  • 14

    Market Conditions

    11 mega projects worth $201b,

    or 76% of total $268b

    Jimblebar

    Sino Iron

    Gladstone LNG

    Queensland Curtis LNG

    Australia Pacific LNG

    Wheatstone LNG

    Ichthys LNG

    Gorgon LNG

    Number and Value of Committed Stage Projects

    LNG, Oil, Gas $195b 73%

    Iron Ore $26b 10%

    Infrastructure $25b 9%

    Other $22b 8%

    Total $268b 100%

    Source: Bureau of Resources and Energy Economics, Resource and Energy Major Projects Publication, October 2012

  • 15

    Market Conditions

    Record mining capital expenditure in 2011-12 of

    $82.1b, up 68% on 2010-11

    Forecasted growth of 45% in 2012-13 to $119b

    Australian Mining Capital

    Expenditure

    Number of Resource & Energy Projects by

    Stage

    27%

    44%

    23%

    6%

    PubliclyAnnounced(>$91b)

    FeasabilityStage ($292b)

    CommittedStage ($268b)

    Completed($12b)

    Committed Stage Projects by Region

    19%

    25%

    46%

    5%

    2% 2% 0% 1%

    NSW (18.4%)

    QLD (25.3%)

    WA (46%)

    NT (4.6%)

    SA (2.3%)

    VIC (2.3%)

    TAS (0%)

    Other* (1.1%)

    Source: Bureau of Resources and Energy Economics, Resource and Energy Major Projects Publication, October 2012

  • 16

    Market Conditions

    Committed Stage Projects By Location

    Source: Bureau of Resources and Energy Economics, Resource and Energy Major Projects Publication, October 2012

  • 17

    The Road Ahead

    Western Australia, Northern Territory and Queensland

    are growth regions

    Increased investment in LNG and unconventional

    gas

    Barriers for entry into construction remain high

    Projects are becoming larger and more complex

    Desire for integrated service provider

    Iron Ore price on the rise

    Significant trends and

    competitive conditions

    Halyard Wing Deck Loadout

    Karara Early Works

  • 18

    The Road Ahead - Summary

    Outlook longer term Growth

    Initiatives:

    Increased maintenance opportunities as projects

    are completed

    Very early stages of large scale projects (3 to 4 years

    of strong market remain)

    Promising outlook for iron ore and coal project

    pipeline

    LNG construction opportunities remain

    buoyant

    Karara Early Works

  • 19

    Summary

    Buoyant market conditions,

    providing a strong project pipeline

    from 2014 onwards

    Healthy financial position and

    robust order book

    Company structure has been

    realigned to increase cross-selling

    opportunities

    Company well positioned to take

    advantage of opportunities as we

    position ourselves for growth Brockman

  • 20

    Appendix Additional Information 14 February 2013

  • 21

    Who We Are

    Grant Pestell

    Independent Non-Executive Director

    Dr Chew Kia Ngee

    Independent Non-Executive Director and

    Chairman

    Damien OReilly

    Independent Non-Executive Director

    Laurie McGregor Barlow

    Chief Executive Officer and Managing Director

    Stuart Maxwell Kenny

    Non-Independent Non-Executive Director

    Barry Alfred Carson

    Non-Independent Non-Executive Director

    Kok Pak Chow

    Independent Non-Executive Director

    Kelvin Lee Kiam Hwee

    Independent Non-Executive Director

  • 22

    Project Snapshot

    Binningup Desalination Plant Project Client: Southern Seawater Alliance

    Location Kwinana, WA

    Contract Value AU$26.5 million

    Contract Period Sept 2012 - Current

    Scope of Work De-bottlenecking project

    involving construction and installation of

    all structural, mechanical, piping, electrical

    and instrumentation works associated with

    the upgrade to the PP2 facility. AGC will

    also supply pipe spooling and fabricated

    plate requirements for this project.

    CSBP AN3 PP2 Expansion Project Principal: CSBP / PCM: AECOM

    Location Jimblebar, WA

    Contract Value AU$48.8 million

    Contract Period June 2012-Current

    Scope of Work The new 35 Mtpa ore

    handling facility at Jimblebar will involve

    the construction of a primary crusher to

    Run of Mine (ROM) ore from the

    surrounding Jimblebar Ore bodies and a

    3.4km overland conveyor (OLC) system

    to transfer primary crushed ore to the

    coarse ore stockpile.

    Location Binningup, WA

    Contract Value AU$30 million

    Contract Period March 2011-Current

    Scope of Work Structural, mechanical

    and piping installation of the main

    facility as well as fabrication of the

    secondary steelwork. As well as

    painting, fireproofing and protective

    coatings and the expansion to a 100GL

    per year capacity.

    Jimblebar SMP Project Client: BHP

    Location North-west coast of WA

    Contract Value AU$12 million

    Contract Period Jul 2011-Current

    Scope of Work Fabrication, supply,

    testing, inspection, storage and

    delivery of adjustable pipe support

    structures weighing in excess of 900

    metric tonnes.

    Gorgon Adjustable Pipe Supports Fabrication Client: Chevron Australia

  • 23

    Project Snapshot

    Location Cloudbreak, WA

    Contract Value AU$260 million

    Contract Period Nov 2011-Current

    Scope of Work The scope includes the

    addition of; a front end circuit of wet

    scrubbing and screening; new desands

    module and tails thickening; tailings

    transfer and modifications to the

    existing desands modules for the

    Cloudbreak Enhancement Project at

    Fortescue's Cloudbreak mine site.

    Cloudbreak Engineering Procurement & Construction Client: Fortescue Metals Group

    Location Karara, WA

    Contract Value AU$230 million

    Contract Period March 2011-Current

    Scope of Work Structural, mechanical

    and piping installation works at the

    companys iron ore process plant. The

    contract involves all mechanical

    disciplines, scaffolding,

    rigging and procurement for the main

    Process Plant.

    Karara Main Works Contract Client: Karara Mining / Operator: Gindalbie Metals

    Dampier Incremental Expansion Project Client: Rio Tinto

    Location: Parker Point, Dampier, WA

    Contract Value: AU$33 million

    Contract Period Sept 2011 Aug 2012

    Scope of Work: The contract consists of

    the construction of two new surge bins,

    installation of two new belt feeders, two

    new conveyor sections, two new transfer

    stations and various other modifications to

    existing conveyors.

    Location: Tom Price, WA

    Contract Value: AU$22 million

    Contact Period Sept 2011 June 2012

    Scope of Work: The design, supply,

    manufacture, delivery, installation,

    construction, testing and commissioning

    of a low grade iron ore pilot plant (LGPP)

    at the Brockman 4 Mine. AGCs scope is

    inclusive of structural, mechanical,

    piping, electrical and instrumentation.

    Brockman 4 Low Grade Pilot Plant Project Client: Hamersley Iron Pty Ltd

  • 24

    Project Snapshot

    Location North West Shelf, WA

    Contract Value AU$14 million per

    annum

    Contract Period Jan 2010-Current

    Scope of Work General and

    campaign services, and minor capital

    works at Apaches Varanus Island

    facilities and offshore assets. The

    scope involves all mechanical

    disciplines, sheet-metal fabrication,

    insulation, scaffolding, rigging and

    electrical and instrumentation.

    Apache Integrated Services Contract Client: Apache Energy Limited

    Location Pinjarra, Kwinana & Wagerup, WA

    Contract Value AU$12 million per annum

    Contract Period 2007-Current

    Scope of Work Multidiscipline

    maintenance shutdown support services to

    Alcoas Alumina Refineries in WA.

    Additional to the planned and unplanned

    shutdowns on the calcination circuits, AGC

    was also awarded capital work upgrades

    and refurbishment projects which included

    fabrication and onsite installation at the

    Pinjarra and Wagerup refineries.

    Alcoa Calciner Maintenance Contract Client: Alcoa Alumina Australia

    Location Karratha, WA

    Contract Value AU$600 million

    Contract Period Apr 2010-Current

    Scope of Work Painting and insulation

    works for the Pluto LNG onshore plant.

    The scope of work includes the supply

    and installation of all insulation,

    cladding and ancillary materials;

    fabrication and application of cladding

    products; and painting and fireproofing

    coatings of the storage tanks and

    associated utilities, pipelines and jetty

    facilities.

    Pluto LNG Scaffolding, Painting & Insulation Client: FWW / Operator: Woodside

    Location North-west coast of WA

    Contract Value AU$75 million

    Contract Period Jul 2011-Current

    Scope of Work The manufacture of pipe

    spools for the Gorgon Project, The

    scope of work covers receiving material,

    fabrication, storage, coating and testing

    of 19,000 pipe spools of various

    diameters, weighing approximately 7,500

    tonnes.

    Gorgon Pipe Spools Fabrication Client: Chevron Australia

  • 25

    Disclaimer

    The information in this presentation:

    Is not an offer or recommendation to purchase or subscribe for securities

    in AusGroup Limited or to retain any securities currently held

    Does not take into account the potential and current individual investment

    objectives or the financial situation of investors

    Was prepared with due care and attention and is current at the date of the

    presentation

    Actual results may materially vary from any forecasts (where applicable)

    in the presentation.