Annual Results 28 ruary 2015 Bridging y expectations Agenda 2015 2014 2 1
12 month overview Phase 1 of turnaround strategy successfully implemented Closed-out problem contracts Closed non-performing Power business All Business Units performed to management expectations with improved year-on-year financial performance Balance sheet remains strong Cash on hand just over R800 million Current order book R12,4bn 3 3 Financial Performance Results for the year-on-year Contract revenue R10,6 bn 15 Operating profit R335 m 50 Operating margin 3,2 Net profit after tax* R259 m 70 Earnings Per Share* 146,8 c 69 Cash generated from operations Cash on hand Market cap (R6.49 / share)** R301 m R815 m R1,2 bn * From continuing operations ** Business Day, 20 May 2015 4 4 2
Operational Overview Bridging y expectations 5 Key Operations Structures RPM Building Middle East Mechanical & Electrical Gauteng Roads & Earthworks Inland Al Tayer Stocks Mechanical (Industrial) KZN Pipelines Coastal Zener Steward Mechanical (Oil & Gas) Marine Mining Services Housing Construction Electrical & Instrumentation Geotechnical Africa (SADC) Africa (SADC) Power Distribution &Transmission 6 6 3
Key Operations Excluding Middle East Structures RPM Building M&E 5 000 4 000 3 000 2 000 1 000 0 Contribution to turnover (Rm) 2 533 2 961 4 407 667 Structures RPM Building M&E 250 200 150 100 50 0 Contribution to operating profit* (Rm) 79 221 5 35 Structures RPM Building M&E Outside South Africa: 28 Outside South Africa: 40 * Excludes head office 7 7 Operating Segments: 2014 As at 28 2014 (Restated to exclude Power) Exclude R 000s Structures RPM Building (incl. M. East) M&E (Excl. Power) Head Office Operations Middle East * Group as reported Contract revenue 2 637 106 2 428 473 3 709 590 937 518-9 712 687 (561 912) 9 150 775 Contribution 28,8 26,5 40,5 10,2-100 (6,1) 100 Operating profit/ (loss) 128 051 189 030 (139 789) 48 048 9 066 234 406 (10 935) 223 471 Contribution 57,3 84,6 (62,6) 21,5 4,1 100 (4,9) 100 Operating margin () 4,9 7,8 (3,8) 5,1 N/A 2,4 1,9 2,4 * Excluded from reported contract revenue and operating profit as Middle East is an equity accounted investee 8 8 4
Operating Segments: 2015 As at Exclude R 000s Structures RPM Building (incl. M. East) M&E (Excl. Power) Head Office Operations Middle East * Group as reported Contract revenue 2 532 950 2 960 507 5 385 301 666 836-11 545 594 (977 951) 10 567 643 Contribution 24,0 28,0 51,0 6,3 - - (9,3) 100 Operating profit/ (loss) 78 584 220 780 28 883 35 345 (4 105) 359 487 (24 106) 335 381 Contribution 23,4 65,8 8,6 10,5 (1,2) - (7,2) 100 Operating margin () 3,1 7,5 0,5 5,3 N/A 3,1 2,5 3,2 * Excluded from reported contract revenue and operating profit as Middle East is an equity accounted investee 9 9 Key Operations & Order Book Structures RPM Building Middle East Mechanical & Electrical Gauteng Roads & Earthworks Inland Al Tayer Stocks Mechanical (Industrial) KZN Pipelines Coastal Zener Steward Mechanical (Oil & Gas) Marine Mining Services Housing Construction Electrical & Instrumentation Geotechnical Africa (SADC) Africa (SADC) R2 000m R5 000m R2 200m R5 100m R600m R1 200m R4 000m R4 200m Order book: 28 2014: R11,6 bn Order book: : R12,7 bn Current order book: R12,4 bn 10 10 5
Group turnover by sector 4 10 Mining & Infrastructure Transport Infrastructure Projected 7 18 37 8 11 16 6 8 Bulk Earthworks & Industrial Industrial Plants, Oil & Gas Power Stations Water, Sanitation & Pipelines Building Non-residential Building Residential 33 7 5 8 3 19 34* Public sector work in SA: 30 Public sector work outside SA: 8 37* Public sector work in SA: 31 Public sector work outside SA: 14 * Includes Middle East 11 11 Structures turnover by sector Projected 10 15 Mining Infrastructure 13 12 28 25 Transport Infrastructure Bulk Earthworks & Geotech Water, Sanitation & Pipelines 16 26 Power Stations 15 7 Industrial Plants, Oil & Gas 25 8 15 Public sector work in SA: 55 Public sector work outside SA: 2 14 Public sector work in SA: 69 Public sector work outside SA: 2 12 12 6
Roads, Pipeline & Mining Services turnover by sector Projected 18 12 20 Mining & Infrastructure Transport Infrastructure Bulk Earthworks & Industrial 5 8 6 39 16 34 Water, Sanitation & Pipelines Power Stations 42 31 Public sector work in SA: 26 Public sector work outside SA: 21 36 Public sector work in SA: 13 Public sector work outside SA: 30 13 13 Building turnover by sector Non-residential Projected Office & Commercial 7 21 Shopping & Retail 13 Hospitals & Medical Education 11 12 Factories & Warehouses Power Stations 7 7 Tourism & Leisure 11 11 Other Residential 5 5 21 17 15 15 3 10 9 49 Public sector work in SA: 23 Public sector work outside SA: 3 54 Public sector work in SA: 39 Public sector work outside SA: 8 14 14 7
M&E turnover by sector Projected 77 18 5 Mining & Infrastructure Power Stations Industrial Plants, Oil & Gas 75 24 1 2 Public sector work in SA: 0 Public sector work outside SA: 0 0 Public sector work in SA: 0 Public sector work outside SA: 0 15 15 Financial Overview Bridging y expectations 8
Abridged Statement of Comprehensive Income 28 2014 Contract Revenue 10 567 643 15,5 9 150 775 Contract revenue up 15,5 y-o-y Similar 2H 2015 R5,3bn 17 17 Contribution to operating profit Structures RPM Building * M&E (Excl. Power) Rm 300 200 100 0-100 -200 141 2013 128 2014 79 2015 177 2013 189 2014 221 2015-55 2013-150 2014 5 2015-24 2013 48 2014 35 2015 * Excluding Middle East 18 18 9
Abridged Statement of Comprehensive Income 28 2014 Contract Revenue 10 567 643 15,5 9 150 775 EBITDA 496 730 33,5 372 068 EBITDA () 4,7 4,1 Depreciation & amortisation of intangibles (161 349) (148 596) Operating profit 335 381 50,1 223 472 Operating Margin () 3,2 2,4 EBITDA at R497m, up 33,5 mainly due to improved contribution from Building business unit Operating profit up 50,1 to R335,4m at a 3,2 margin 19 19 Abridged Statement of Comprehensive Income 28 2014 Contract Revenue 10 567 643 15,5 9 150 775 EBITDA 496 730 33,5 372 068 EBITDA () 4,7 4,1 Depreciation & amortisation of intangibles (161 349) (148 596) Operating profit 335 381 50,1 223 472 Operating Margin () 3,2 2,4 Net finance costs (120) (16 003) Profit before taxation 361 722 221 698 Taxation (102 678) (69 253) Profit for the year, continuing operations 259 044 69,9 152 445 Net margin () 2,5 1,7 Reduction in net finance costs due to lower interest-bearing debt Increase in investment income as a result of change in the mix of African currencies and USD Tax rate of 28,4 70 increase in profit for the year from continuing operations 20 20 10
Abridged Statement of Comprehensive Income 28 2014 Contract Revenue 10 567 643 15,5 9 150 775 EBITDA Power division closed and reflected 496 730 as 33,5 372 068 EBITDA () 4,7 discontinued operations (R55,9m) 2014: (R33,6m) 4,1 Depreciation & amortisation of intangibles (161 349) (148 596) Operating profit HEPS from continuing operations335 increase 381 50,1 223 472 Operating Margin () 3,2 2,4 of 72,4 y-o-y Net finance costs (120) (16 003) Profit before Reduced taxation forex gains as a result of 361 the 722 mix between221 698 Taxation African currencies and USD (102 678) (69 253) Profit for the year, continuing operations 259 044 69,9 152 445 Net margin () 2,5 1,7 Loss after tax for the year from discontinued operations (55 883) (33 620) Profit for the year Total operations 203 161 118 825 Earnings attributable to ordinary shareholders 256 695 151 925 Headline Earnings, continuing operations 250 505 72,7 145 035 Diluted weighted average shares in issue 188 080 746 188 080 746 EPS (cents), continuing operations 146,8 68,7 87,0 HEPS (cents), continuing operations 143,3 72,4 83,1 22 22 Abridged Statement of Financial Position 28 2014 ASSETS Non-current assets Property, plant and equipment 1 109 652 (3,3) 1 147 443 Capex spend R186m (2014: R195m) Including own infrastructure R52m 64 capex for expansion 23 23 11
Abridged Statement of Financial Position 28 2014 ASSETS Non-current assets Property, plant and equipment 1 109 652 (3,3) 1 147 443 Goodwill and intangible assets 1 256 449 1 266 556 Equity-accounted investees 232 254 207 312 Non-current assets held for sale 108 444 - Current assets Bank balances 815 235 (18,8) 1 003 410 Goodwill tested for impairment Non-current assets held for sale include 2 unutilised own properties Assets from discontinued operation Net cash on hand is R815m (2014: R1,0 bn) 24 24 Abridged Statement of Financial Position 28 2014 ASSETS Non-current assets Property, plant and equipment 1 109 652 (3,3) 1 147 443 Goodwill and intangible assets 1 256 449 1 266 556 Equity-accounted investees 232 254 207 312 Non-current assets held for sale 108 444 - Current assets Bank balances 815 235 (18,8) 1 003 410 Other current assets 2 866 395 2 555 325 Total assets 6 523 417 6 298 297 Other current assets Inventories & contracts in progress 900 136 54,3 583 219 Trade accounts receivable 1 488 638 0,5 1 481 076 Other receivables 477 621 (2,7) 491 030 2 866 395 12,2 2 555 325 Increase in work in progress Constant trade accounts receivable Cash conversion from work in progress to debtors 25 25 12
Abridged Statement of Financial Position 28 2014 ASSETS Non-current assets Property, plant and equipment 1 109 652 (3,3) 1 147 443 Goodwill and intangible assets 1 256 449 1 266 556 Equity-accounted investees 232 254 207 312 Non-current assets held for sale 108 444 - Current assets Bank balances 815 235 (18,8) 1 003 410 Other current assets 2 866 395 2 555 325 Total assets 6 523 417 6 298 297 EQUITY AND LIABILITIES Capital and reserves Ordinary shareholders' interest 2 396 926 9,2 2 194 573 Non-current liabilities Interest-bearing liabilities 243 883 348 951 Deferred tax 51 182 80 338 Interest bearing debt decreased by R244m Interest bearing D:E now 19 (2014: 31) Two remaining instalments of CompCom (R212m) 26 26 Abridged Statement of Financial Position 28 2014 ASSETS Non-current assets Property, plant and equipment 1 109 652 (3,3) 1 147 443 Goodwill and intangible assets 1 256 449 1 266 556 Equity-accounted investees 232 254 207 312 Non-current assets held for sale 108 444 - Current assets Bank balances 815 235 (18,8) 1 003 410 Other current assets 2 866 395 2 555 325 Total assets 6 523 417 6 298 297 EQUITY AND LIABILITIES Capital and reserves Ordinary shareholders' interest 2 396 926 9,2 2 194 573 Non-current liabilities Interest-bearing liabilities 243 883 348 951 Deferred tax 51 182 80 338 Current liabilities Other current liabilities* 2 179 103 1 923 718 * Including interest-bearing liabilities of 171 338 309 929 Other current liabilities Short term loans 187 838 (39,6) 310 979 Trade accounts payable 1 023 674 22,4 836 403 Accruals & other current liabilities 967 591 24,6 776 336 2 179 103 13,3 1 923 718 27 27 13
Abridged Statement of Financial Position 28 2014 ASSETS Non-current assets Property, plant and equipment 1 109 652 (3,3) 1 147 443 Goodwill and intangible assets 1 256 449 1 266 556 Equity-accounted investees 232 254 207 312 Non-current assets held for sale 108 444 - Current assets Bank balances 815 235 (18,8) 1 003 410 Other current assets 2 866 395 2 555 325 Total assets 6 523 417 6 298 297 Net decrease of R136m mainly as a result of a reduction in advance payments of R130m (2014: Increase R207m) EQUITY AND LIABILITIES Capital and reserves Ordinary shareholders' interest 2 396 926 9,2 2 194 573 Non-current liabilities Interest-bearing liabilities 243 883 348 951 Deferred tax 51 182 80 338 Current liabilities Other current liabilities* 2 179 103 1 923 718 Provisions and payments in advance 1 539 683 (8,1) 1 676 039 Taxation 26 932 49 704 Total equity and liabilities 6 523 417 6 298 297 * Including interest-bearing liabilities of 171 338 309 929 28 28 Abridged Cash Flow Statement (Rm) 301 1 003 Opening cash balance Cash generated from operations 28 2014 (Rm) 565 836-6 Working capital changes 35 0 Net investment income -16-133 Taxation paid -72 15 Dividends received 18-158 -219 Investing activities Financing activities -138-276 12 Exchange rate effects 51 815 Closing balance 1 003 The Board has decided not to pay a dividend 29 29 14
Summary of prospects & conclusion Bridging y expectations Bridging y expectations 30 Prospects 2015 and beyond Government and provincial infrastructure spend Hospitals and education residential units Marine Water and waste water treatment works Roads Private sector Commodities & Industrial Open pit contract mining Surface infrastructure on mines Office & commercial, shopping & retail Petrochemical Rest of Africa & Middle East Office blocks & commercial buildings in SADC region Public infrastructure including Marine Improved market conditions in Dubai 31 31 15
Conclusion Successfully achieved first phase of recovery plan Continue to build on sound financial and operational performance Strong focus to improve free cash position Expanding order book in key focus areas 32 Stefanutti Stocks City A multi-disciplinary construction group www.stefanuttistocks.com Q & A 33 16