Annual General Meeting 14 November 2013
Disclaimer and additional information This presentation has been prepared by and concerns Calibre Group Limited (Calibre), and consists of these slides and any accompanying commentary. By reviewing / attending this presentation, you acknowledge the following statements / information in this disclaimer. FORWARD LOOKING STATEMENTS This presentation contains forward looking statements that are subject to risk factors associated with the engineering services, mining, rail, construction, industrial technology, consulting, and asset management business. All statements other than the statements of historical facts included in this presentation, including, without limitation, those regarding Calibre s financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to Calibre s products and services and forecasts) are forward looking statements. In addition to the categories of risk set out here, such forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Calibre, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. While Calibre considers the assumptions on which these statements are based to be reasonable, whether circumstances actually occur in accordance with these statements may be affected by a variety of factors. These include, but are not limited to, levels of actual demand, currency fluctuations, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory developments, economic and financial market conditions in various countries and regions, political risk, project delay or advancement, approvals and cost estimates. These could cause trends or results to differ from the forward looking statements in this presentation. NOT FINANCIAL PRODUCT ADVICE This presentation is for information purposes only and is not financial product or investment advice, nor a recommendation to acquire Calibre shares. It has been prepared without taking into account the objectives, financial situation or needs of individuals. Before making an investment decision, prospective investors should consider the appropriateness of the information having regard to their own objectives, financial situation and needs and seek legal and taxation advice appropriate to their jurisdiction. PAST PERFORMANCE Past performance information given in this presentation is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance. Nothing in this presentation should be interpreted to mean that future earnings per share of Calibre will necessarily match or exceed its historical published earnings per share. All references to dollars, cents, or $ in this presentation are to Australian currency, unless otherwise stated. References to Prospectus refer to the Company s 12 July 2012 Prospectus. References to Calibre, the Company, the Group or the Calibre Group may be references to Calibre Group Limited ACN 100 255 623, or its subsidiaries. This presentation contains references to Calibre s unweighted pipeline; this includes prospective projects that extend beyond FY2016 for the Group, including G&S Engineering. Unweighted pipeline figures excludes recurring revenue and projects in the Company s Order book and are determined from an analysis and an estimate of the size and timing of potential projects, and furthermore ignore any assessment of the probability of the project proceeding or of Calibre being awarded the project. Recurring Revenue consists of ongoing revenue from Calibre consulting and maintenance services.
Ray Horsburgh AM Chairman Calibre has continued to deliver excellence in client outcomes, significantly progressed its revenue diversification strategy and repositioned the business to benefit from any market upturn, despite experiencing the impact of very challenging market conditions during the past 6 months. 3
Today s Agenda Welcome Chairman s Address Finance and Operational Review Business of the Meeting Close of Meeting
Board of Directors Ray Horsburgh AM Independent Chairman & Interim Managing Director Peter Housden Independent Non- Executive Director Geoff Tomlinson Independent Non- Executive Director Ray Munro Non- Executive Director Brian MacDonald Non- Executive Director Alex Williams Non- Executive Director
Safety 10.95m 1 hours LTI free 7.3m Strong safety performance: 10.95m 1 hours Lost Time Injury Free ZERO LTIFR 0.0 LTIFR (Lost Time Injury Frequency Rate) Maintaining strong safety standards 2 with changing safety profile. Calibre Group (excl. G&S Engineering) G&S Engineering FY2010 FY2011 FY2012 FY2013 1. As at 30 June 2013. 2. Against industry benchmarks (Safe Work Australia regulator). 3. Includes G&S Engineering, since acquisition. Group TRIFR 0.6 1.8 0.9 3.2 3
FY2013 Overview Financial performance ahead of revised April 2013 earnings guidance: Below Prospectus forecasts due to significant market down-turn in H2FY2013 Attractive payout policy maintained - Total FY2013 dividend 7.6 cps, fully franked Cost reduction program repositions cost base to maintain competiveness in FY2014 FY2014 Revenue visibility of $625m as at 30 June 2013 (88% of FY2013 revenue) Significantly more diversified business and revenue profile: Ongoing Asset Management and operational support, 41% of FY2013 revenue G&S Engineering acquisition provided solid contribution in line with expectations Sound balance sheet position with capacity to support growth initiatives Major shareholders supportive of ongoing strategy Search for new Group Managing Director progressing.
Peter Reichler Interim Group Chief Operating Officer & Chief Financial Officer FY2013 Financial review FY2013 Operations review Strategy & Outlook
Overview A diversified global provider of engineering, consulting, project delivery, construction and asset management services. Integrated service offering across minerals & energy, rail & transportation, and infrastructure asset lifecycles Long term program manager to blue-chip resource sector clients Expanding client base, geographic presence and service offering Comprehensive capability covering the entire lifecycle - from asset creation to asset management ~ 3,000 personnel across three member companies: Calibre Global, G&S Engineering, Brown Consulting Multi-billion dollar, multi-year, project portfolio, executed and in progress Extensive Australian and emerging international presence; ASX Listed (ASX:CGH) since 2 August 2012. Minerals & Energy Rail & Transport Infrastructure
Calibre Group Integrated services across the asset lifecycle A diversified global provider of engineering, project delivery and asset management services. Calibre Global An engineering, project delivery and asset management service provider to the minerals & energy, rail & transport sectors. G&S Engineering A maintenance, construction engineering and asset management service provider to the minerals and energy sector. Brown Consulting A specialist urban development, civil, structural and environmental engineering consultancy to the public and private infrastructure sectors. 10
Integrated and expanded service capability across the Asset Lifecycle ASSET CREATION ASSET MANAGEMENT MINERALS & ENERGY RAIL & TRANSPORT Assess Deliver Support Optimise INFRASTRUCTURE Asset evaluation and consulting Resource and reserve estimation Geological evaluation and advice Mine planning and engineering Geotechnical engineering Concept and feasibility studies Simulation Urban development planning Water and environment planning and design Engineering and design Project management and project services Construction management and supervision Operational readiness Commissioning and handover Structural, mechanical and electrical construction services for: Major mobile plant Fixed plant Materials handling facilities Sustaining capital works Mining engineering and planning Safety management training Environmental management Mine closure and rehabilitation Operations maintenance teams Maintenance, refurbishment and upgrades of: Fixed plant Major mobile plant Materials handling facilities Major shutdowns Process optimisation Automation and controls Industrial communications Train and network simulation and modelling Rail signalling and communications Railway operations management Remote operations enablement Simulations of, and training in, equipment operation 11
Building a global presence from our Australian base 12
FY2013 Highlights Diversification and growth in capabilities Diversification strategy continued in 2013 Operations, maintenance and Asset Management G&S Engineering acquisition (Oct 2012) And into FY2014 Expand end market foot print: civil and urban infrastructure services and Coal Seam Gas E-Tec acquisition by Brown Consulting (July 2013) JV with Canadian based, True North Automation (Oct 2013) Extracting Group integration benefits is a focus Expanding access to core markets. Exposure to different revenue types and delivery models. Integrated client services approach to enable cross-selling and joint project opportunities. Leveraging cost synergies. 13
FY2013 Highlights New Project Awards 1 Sustain phase projects Yandicoogina Sustaining Project (Rio Tinto) (~$150m) Major construction projects Hay Point terminal onshore upgrade project (BMA) ($140m) Caval Ridge Installation of coal stackers and reclaimers (BMA) ($46m) Assess (create) phase projects Mine and rail studies Charmichael Coal mine & rail (Adani Mining) Hunter Valley, Rail upgrade network (ARTC) Multiple earlier stage studies 1 Not including ongoing multi-year projects, small studies or recurring revenue streams from Calibre s consulting and maintenance businesses. 14
FY2014 update New Project Awards to date 1 New Awards in FY2014 - Assess phase projects Koodaideri Mine and Rail DES (RTIO) (~$30m) Ore Car Repair Shop, Mooka, (BHPB) ($30m) Roy Hill 330km rail design (Samsung) ($23m) Thompson MRT Rail line (supervisory), Singapore Land Transport Authority ($14m) 1 Not including ongoing multi-year projects, small studies or recurring revenue streams from Calibre s consulting and maintenance businesses. 15
FY2013 Financial Review
Financial Review $m FY2013 FY2012 Var (pcp) April 2013 Revised Guidance Revenue $711.3 $560.9 26.8% $680m - $695m EBITDA (underlying) $59.8 $75.2-20.5% $50m - $55m EBITDA (reported) $52.6 $75.2-30.0% Underlying EBITDA Margin (%) 8.4% 13.4% NPAT $22.2 $33.8-34.3% NPATA 1 $36.3 $46.7-22.3% $30m - $35m Basic Earnings per share (NPATA) (cents) 12.2 15.9-23.3% Operating cash flow $42.3 $73.7-42.6% Dividend per share (cents) 7.6 n/a n/a $711.3m Revenue, 26.8% growth in FY2013 includes G&S Engineering contribution ($166m) since acquisition. $59.8m EBITDA (underlying), excludes one-off restructure cost ($7.2m) for overhead cost reduction program undertaken in Q4FY2013. 1. Net profit after tax after adding back the tax effected customer relationship goodwill amortisation expense of $14.1m in FY13 ($12.9m in FY2012). 17
Increasingly diversified revenue streams (FY2013) Increased Asset Management revenue contribution 1 Revenue by business sector 1 Expanding range of reimbursement models 1 36% 19% 18% 18% 19% 2 Revenue by client 1 Other Clients include: Samsung C&T Xstrata Hancock Prospecting ARTC Adani Anglo Aurizon ACT Gov. Stockland Peabody Singapore LTA Stanwell 1. Percentage contribution to Calibre Group FY2013 revenue of $711m. 2. Schedule of Rates. 18
A more diversified business model 10% 41% ~53% Increased Asset Management exposure includes: Yandi Sustaining Project Industrial Technology services Site maintenance services Increasing range of client service delivery models. Growing construction revenue in FY2014: Hay Point (in progress) Caval Ridge (in progress) 19
Strong cash flow Summary Cash Flows ($m) FY2013 FY2012 Net operating cash flow of $42.3m reflected softer market conditions partly offset by strong working capital management. Net proceeds from IPO capital raising ($69.6m) applied to acquisitions and debt reduction as planned. Net cash managed through the downturn sufficient to pay a total dividend of 7.6 cents per share (fully franked) in FY2013 in line with dividend policy. EBITDA 52.6 75.2 Net working capital movements 21.7 13.9 Income Tax paid (25.8) (11.8) Interest paid (6.2) (3.6) Net Operating Cash Flow 42.3 73.7 Payment for Acquisitions (64.2) (57.5) Capital Expenditure (11.9) (5.4) Net proceeds / (payments) (20.5) 26.3 Net Proceeds from issue of shares 69.6 1.0 Payment of dividend (17.8) - Other 1.5 1.0 Net Cash Generation (1.0) 39.1 Opening Cash Balance 51.2 12.1 Closing Cash Balance 50.2 51.2 20
Sound Balance Sheet $50.2m cash balance at 30 June 2013. $23m Net bank debt excluding deferred consideration. $43.2m Net debt including deferred consideration. Banking facilities in line with operating requirements. $113m funding capacity, including $50m cash, provides flexibility and capacity. Low gearing: Net bank debt at 0.4x FY2013 underlying EBITDA. Majority of Deferred Consideration Payments have been finalised since 30 June. $m FY2013 FY2012 Cash and cash equivalents 50.2 51.2 Trade and other receivables 108.4 82.9 Other current assets 14.3 21.3 Total Current Assets 172.9 155.4 Property, plant and equipment 35.2 9.7 Goodwill and intangibles 208.4 164.5 Other non-current assets 13.1 6.8 Total non-current assets 256.7 181.0 TOTAL ASSETS 429.6 336.4 Trade and other payables 91.0 74.7 Bank borrowings 30.0 56.0 Deferred acquisition consideration 19.7 28.2 Other current liabilities 13.6 19.8 Total current liabilities 155.3 178.7 Bank borrowings 43.2 - Deferred acquisition consideration 0.5 16.8 Other non-current liabilities 18.6 17.2 Total non-current liabilities 62.3 34.0 TOTAL LIABILITIES 217.6 212.8 NET ASSETS 212.0 123.6 21
Cost base repositioned $25m annualised savings Strong response to market conditions to support earnings and competitive positioning for FY2014. Productivity and cost management program achieving positive results: Ongoing focus on maximising utilisation. Focus on overhead costs and reduction in non-billable time impacts. Cost reductions implemented to reduce FY2014 overheads in Q4FY2013 in response to market conditions. Annual overhead savings of $25m for FY2014 (compared to FY2013 actual overhead costs). 22
FY2013 Operations Review
Operations Review FY2013 Revenue $393.8m FY2012: $251.4m 56.6% Minerals & Energy 3.5% Rail & Transport 55% contribution to FY2013 revenue Key end markets: iron ore, coal, heavy haul bulk materials Revenue $261.7m FY2012: $271.1m 3.5% 37% contribution to FY2013 revenue Key end markets: heavy haul, passenger and metro, freight, railway management Revenue $55.8m FY2012: $55.9m on par Infrastructure 8% contribution to FY2013 revenue Key end markets: residential/urban development, commercial & industrial structures 24
Operations Review Minerals & Energy Increased revenue included $166m contribution from G&S Engineering (9 months) : Expanding Industrial Technology reach; North America providing new growth potential (JV with True North) Project delays a significant impact on FY2013 revenue; decisions on further expansion pending. Rail & Transport Key ongoing Deliver phase rail projects include the Rail Capacity Enhancement projects (Rio Tinto); and Port Hedland Inner Harbour and Jimblebar projects (BHP Billiton). Assess phase work with majors and new clients continued. Growth in east coast rail activity and new services areas (freight and passenger rail sectors a focus). Singapore passenger rail project progressing Other international opportunities delayed in FY2013. Infrastructure Continuing softness in the urban development and structural engineering market. Exploring growth opportunities in Asia through Singapore base. Recent acquisition of E-Tec Consultants 1 provides national foot-print and new growth opportunities in civil and urban infrastructure services. 25
Minerals & Energy G&S realising strategic benefits Continuing to unlock strategic value from G&S Engineering acquisition. Revenue diversification through increased access to downstream Asset Management activities: G&S Revenue and earnings in line with acquisition forecasts. Key staff retained. Expanding access to core markets. Exposure to different revenue types and delivery models. Focus on extracting Group integration benefits in FY2014. Integrated client services model adopted to enable crossselling and joint project opportunities. Enhancing G&S Engineering penetration of WA markets. Assisting G&S Engineering to access larger Tier 1 projects; Hay Point expansion project awarded in April 2013 ($140m) (BMA). 26
FY2014 Strategy & Outlook
Strategy on track Growing the existing businesses and diversifying the revenue base across our market sectors and potential new end markets Asset Creation Asset Management GROW Services delivered to current clients DIVERSIFY Asset Management services Client base Geographic footprint Services breadth and depth End markets Expanding markets Integrated Services Capability Asset Creation Asset Management Minerals & Energy Iron Ore Coal Base Metals Coal seam gas Rail & Transport Heavy haul bulk materials Passenger and metro Freight Rail Services Infrastructure Residential / urban development Commercial and industrial structures Water and wastewater Environment 28
FY2014 Outlook - Strategic Focus Asset Creation Asset Management GROW Services delivered to current clients Client base Services breadth and depth DIVERSIFY Asset Management services Geographic footprint End markets Grow share of client activity in our core markets: Expand asset management services into iron ore market. Build National Construction and Maintenance business. Grow passenger rail presence, including geographically. Expand Industrial Technology service offering. Expand Infrastructure business. 29
FY2014 Outlook Market conditions remain challenging Reduction in cost base has repositioned Calibre to maintain competiveness Revenue visibility into FY2014 of $625m as at 30 June 2013 (88% of FY2013 revenue) comprising FY2014 Order Book and Recurring Revenue 1. Subject to no further unforeseen deterioration in our markets, we anticipate revenue levels broadly in line with FY2013 Significantly more diversified business and revenue profile Significant increase in exposure to Asset Management & operational support Capturing strategic benefits associated with integration of expanded service offering Leveraging strong long term relationships Address client value creation needs Sound balance sheet and cash position provides stability and flexibility Capacity to pursue appropriate corporate growth opportunities to enhance service offering (including JVs) Long term, supportive, strategic investors Attractive dividend payout policy maintained 1. Refer Disclaimer and additional information for Forward Looking Statements on slide 2. 30
Business of the Meeting
Agenda Item 1 2013 Financial Report In accordance with the Notice of Meeting the first item of business is: To receive and consider the financial report of the company and the reports of the directors and auditors for the year ended 30 June 2013. Questions to Auditors? 32
Agenda Item 2 Elect Mr Ray Munro as Director of the Company (Resolution 2) In accordance with the Notice of Meeting the resolution to be put before the members is: (a) That Mr Ray Munro retires in accordance with rule 8.1(d) of the Company s Constitution, and being eligible, is elected as a director of the company. Proxies and Online Voting received as at 12.30pm (WST), 12 November 2013: In Favour Against Open Abstention 236,079,668 306,885 12,500 2,700 33
Agenda Item 3 Adopt remuneration report (Resolution 3) In accordance with the Notice of Meeting the resolution to be put before the members is: That the remuneration report for the year ended 2013, be adopted. Proxies and Online Voting received as at 12.30pm (WST), 12 November 2013 : In Favour Against Open Abstention 199,594,080 801,125 83,829 38,074 Notes: -The vote on this resolution is advisory only and does not bind the directors or the Company -Voting restrictions apply to this resolution. Key Management Personnel and their closely related parties may not vote. Refer to Notice of Meeting. 34
Thank you Questions