For personal use only 5 October 2011 Company Announcements Office - - PDF document

Coffey International Limited ABN 16 003 835 112 Level 3, Tower 1, 495 Victoria Avenue Chatswood NSW 2067 Australia T (+61) (2) 8404 4300 F (+61) (2) 9419 5689 www.coffey.com

5 October 2011 Company Announcements Office Australian Securities Exchange - ASX Limited Exchange Centre Level 4, 20 Bridge Street Sydney NSW 2000 Via e-lodgements: Sequence #581 Dear Sir / Madam Investor Presentation Please find attached an investor presentation in connection with the capital raising announced today. Yours faithfully Jennifer Waldegrave Company Secretary

For personal use only

COFFEY INTERNATIONAL LIMITED

e.com

COFFEY INTERNATIONAL LIMITED FY2011 Results Presentation

10 August FY2011

James Ball - www.dlscap

Capital Raising October 2011

Photo by

For personal use only

Important Notice

This presentation ("Presentation") has been prepared by Coffey International Limited, ABN 16 003 835 112 ("Coffey"). This presentation has been prepared in relation to an accelerated non-renounceable entitlement offer ("Entitlement Offer") and placement (“Placement”) of new ordinary shares in Coffey ("New Shares"), to be made under section 708AA and section 708A of the Corporations Act 2001 (Cth) ("Corporations Act") as modified by ASIC Class Order [08/35]. The Entitlement Offer will be made to:

• eligible institutional shareholders of Coffey ("Institutional Entitlement Offer"); and
• eligible institutional shareholders of Coffey ( Institutional Entitlement Offer ); and
• eligible retail shareholders of Coffey ("Retail Entitlement Offer").

In this Presentation the Placement together with the Entitlement Offer is referred to as the “Capital Raising”. The Placement will be conducted contemporaneously with the Institutional Entitlement Offer and together are referred to as the “Institutional Offer”. Summary information The information contained in this Presentation is of a general nature and no representation or warranty, express or implied, is provided in relation to the accuracy or completeness f f f f C ff

• f the information. None of the underwriter, nor any of their respective advisers, nor the advisers to Coffey or any other person including clients named in this document, have

authorised, permitted or caused the issue, submission, dispatch or provision of this Presentation and, except to the extent referred to in this Presentation, none of them makes or purports to make any statement in this Presentation and there is no statement in this Presentation which is based on any statement by any of them. The historical information in this Presentation is, or is based upon, information that has been released to the market. It should be read in conjunction with Coffey’s other periodic and continuous disclosure announcements including the Coffey preliminary unaudited results for the year ended 30 June 2011 lodged with the Australian Securities Exchange (“ASX”) on 10 August 2011 and other announcements to ASX available at www.asx.com.au. Unless otherwise indicated, all references to Coffey’s FY2011 results (and earlier results) in this Presentation are references to Coffey’s audited results for the relevant financial year. ) y y Not an offer This Presentation is not a prospectus, disclosure document, product disclosure statement or other offering document under Australian law or under any other law. It is for information purposes only and is not an invitation nor offer of securities for subscription, purchase or sale in any jurisdiction. Any decision to purchase New Shares must be made

• n the basis of the information to be contained in a separate offer document to be prepared and issued to eligible investors. The retail offer booklet for the Retail Entitlement Offer

will be available following its lodgement with ASX. Any eligible retail shareholder who wishes to participate in the Retail Entitlement Offer should consider the retail offer booklet in deciding to apply under that offer. Anyone who wishes to apply for New Shares under the Retail Entitlement Offer will need to apply in accordance with the instructions contained i th t il ff b kl t d th titl t d li ti f Thi P t ti d t tit t fi i l d t d i d d t d ill t f t f in the retail offer booklet and the entitlement and application form. This Presentation does not constitute financial product advice and does not and will not form any part of any contract for the acquisition of New Shares. This Presentation does not purport to contain all the information that a prospective investor may require in evaluating a possible investment in Coffey nor does it contain all the information which would be required in a prospectus prepared in accordance with the requirements of the Corporations Act. U.S. restrictions This Presentation does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in the United States of America (“United States”). This Presentation may not be distributed or released in the United States The New Shares have not been and will not be registered under the U S Securities Act of 1933 (“U S Securities Act”) or not be distributed or released in the United States. The New Shares have not been, and will not be, registered under the U.S. Securities Act of 1933 (“U.S. Securities Act ) or the securities laws of any state or other jurisdiction of the United States and may not be offered or sold, directly or indirectly, in the United States absent registration except in a transaction exempt from, or not subject to, the registration requirements of the U.S. Securities Act and any other applicable securities laws. Underwriter The underwriter, its affiliates, directors, officers, employees, agents or associates may, from time to time, hold interests in the securities of, or earn brokerage, fees or other benefits from Coffey.

i

For personal use only

Important Notice

Not investment advice This Presentation has been prepared without taking account of any person's investment objectives, financial situation or particular needs and prospective investors should conduct their own independent investigation and assessment of the Capital Raising and the information contained in, or referred to in, this Presentation. An investment in Coffey is subject to investment risk including possible loss of income and principal invested. Please see the “Key Risks” section of this Presentation for further details details. Financial amounts All dollar values are in Australian dollars (A$) and financial data is presented as at the date stated. The Pro forma financial information and past information provided in this Presentation is for illustrative purposes only and is not represented as being indicative of Coffey's views on its future financial condition and/or performance. Investors should note that past performance, including past trading or share price performance, of Coffey cannot be relied upon as an indicator of (and provides no guidance as to) future Coffey performance including future trading or share price performance. Future performance Future performance This Presentation contains certain "forward-looking statements". Forward-looking statements can generally be identified by the use of forward-looking words such as "anticipate", "believe", "expect", "project", "forecast", "estimate", "likely", "intend", "should", “will”, "could", "may", "target", "plan" and other similar expressions within the meaning of securities laws of applicable jurisdictions, and include statements regarding outcome and effects of the equity raising. Indications of, and guidance or outlook on future earnings, distributions or financial position or performance are also forward-looking statements. The forward-looking statements contained in this Presentation involve known and unknown risks and uncertainties and other factors, many of which are beyond the control of Coffey, and may involve significant elements of subjective judgement and assumptions (including those assumptions set out on page 33 of this Presentation) as to future events which may or may not be correct. Refer to the “Key Risks” section of this Presentation f f t i i k f t th t ff t C ff d “K O tl k A ti ” h id i thi i f ti for a summary of certain risk factors that may affect Coffey and “Key Outlook Assumptions” when considering this information. There can be no assurance that actual outcomes will not differ materially from these forward-looking statements. Disclaimer No party other than Coffey has authorised or caused the issue, lodgement, submission, dispatch or provision of this Presentation, or takes any responsibility for, or makes or purports to make any statements, representations or undertakings in this Presentation. No person is authorised to give any information or make any representation in connection with the Capital Raising which is not contained in this Presentation. Any information or representation not contained in this Presentation may not be relied upon as having been th i d b C ff i ti ith th C it l R i i T th i t t itt d b l C ff th d it d it ti ffili t ffi l authorised by Coffey in connection with the Capital Raising. To the maximum extent permitted by law, Coffey, the underwriter and its respective affiliates, officers, employees, agents and advisers disclaim all liability for any expenses, losses, damages or costs incurred by you as a result of your participation in the Capital Raising and the information in this Presentation being inaccurate or due to information being omitted from this Presentation, whether by way of negligence or otherwise, make no representation or warranty, express or implied, as to the currency, accuracy, reliability or completeness of the information in this Presentation and, with regards the underwriter, its affiliates, officers employees, agents and advisers, take no responsibility for any part of this Presentation. The underwriter makes no recommendation as to whether you or your related parties should participate in the Capital Raising nor does it make any representations or warranties to you concerning this Capital Raising or any such information, and you represent, warrant and agree that you have not relied on any statements made by the underwriter or any of its affiliates in relation to the New Shares or the Capital Raising generally. The information in this Presentation remains subject to change without notice. Coffey reserves the right to withdraw or vary the timetable for the Capital Raising without notice. Photos Coffey is predominately a services business. While photos in this presentation may represent land, improvements, plant or equipment in relations to which Coffey may provide services or relating to services provided by Coffey, Coffey does not represent that it owns or has rights to use the land, improvements, plant or equipment in those photos, or that people in them are engaged in the provision of services on behalf of Coffey. Not for distribution in the United States of America

ii

For personal use only

Summary

Strategic Review

Significant progress in implementing Strategic Review outcomes announced in June 2011

FY2011 Results

Reported FY2011 EBITDA loss of $39.7 million, impacted by impairment and restructuring costs

• f $72 million

FY2011 Results

Underlying FY2011 EBITDA of $32.3 million, ahead of June market guidance ($29 million-$32 million)

Strengthening Balance Sheet

Continued focus on working capital management to improve balance sheet A i $40 illi C it l R i i t d i d t th th b l h t

Balance Sheet

Announcing $40 million Capital Raising to reduce gearing and strengthen the balance sheet Fully underwritten 1 for 1.75 accelerated non-renounceable Entitlement Offer and $10.9 million Institutional Placement at $0.38 per Share

FY2012 Guidance Confirmed

FY2012 EBITDA guidance of $45 million confirmed

1

Investors should refer to the Key Risks relating to an investment in Coffey (Page 14) and Key Outlook Assumptions (Appendix B) when considering the information in this Presentation

For personal use only

Outline Outline

Page

• 1. Business Overview

3

• 2. Capital Raising Information

9

• 3. Key Risks

14

• 4. Appendices

A Coffey’s Key Businesses 24

• A. Coffey s Key Businesses

24

• B. Key Outlook Assumptions

33

• C. Foreign Jurisdictions

35 g

2

For personal use only

• 1. Business Overview

3

For personal use only

Overview of Coffey

• Professional services business established in 1959 and listed in 1990
• Over 3,500 employees globally
• Strong reputation in its key businesses - Geosciences, International Development and Project Management

g p y p j g Geosciences International Project Management Other Geosciences Development Project Management

~1,700 employees ~1,600 employees ~220 employees

Other

4

For personal use only

Strategic Review – Initial Observations Still Valid

• Business fundamentals are strong:

Managing Director’s Initial Observations on Coffey

• Business fundamentals are strong:

– Good people – Many longstanding customers who value what Coffey does – Strong reputation in key businesses Positive outlook in core markets of mining infrastructure and oil & gas – Positive outlook in core markets of mining, infrastructure and oil & gas

• The Company had lost strategic focus due to:

– A number of acquisitions that provided a poor return on capital A complex and expensive organisational structure that confused managerial responsibility and reduced – A complex and expensive organisational structure that confused managerial responsibility and reduced accountability – Too many small, isolated, business units that were not contributing either financially or strategically to the broader group – Underperformance at the business unit level due to insufficient operating discipline Underperformance at the business unit level due to insufficient operating discipline

• From a financial perspective these factors led to a sharp decline in earnings performance during FY2011
• With stability and direction the Company will regain its momentum

5

For personal use only

Strategic Review – Significant Progress g g g

• Emphasise profitability and margin restoration
• Successful restructure:

Progress to Date Disciplined Profit Growth Focus

• Emphasise profitability and margin restoration
• Continue to improve staff morale and engagement

– Reward success Energise staff

• Successful restructure:

– Increased clarity in reporting lines and accountability as a result – Increased authority for service line management – New performance-based rewards scheme – Energise staff

• Improve decision making

– A new bottom up strategy process Considered central decisions around growth New performance based rewards scheme – Increasing organisational stability, confidence and morale

• Non-core businesses addressed:

– Considered, central decisions around growth

• Launch comprehensive strategy for growth

Non core businesses addressed: – Commercial Advisory brand discontinued and parts

• f the business folded into other service lines

– LA Environments divested – Middle East Projects business significantly j g y downsized – Assessing options for Rail business

• Capital Raising launched

p g

6

For personal use only

FY2011 Results Summary

($m) 12 months to 30 June 2011

 Reported FY2011 EBITDA loss of $39.7 million

($m) 12 months to 30 June 2011 Fee revenue 423.6 Underlying EBITDA¹ 32.3

impacted by impairment and restructuring costs of $72 million  Underlying FY2011 EBITDA of $32.3 million, ahead

Underlying EBITDA 32.3 Restructuring costs (9.1) Impairment (62.9)

• f June market guidance ($29 million-$32 million)

 Cost reduction program implemented with full benefits ($18 million) expected in FY2012 (of which

EBITDA (39.7) NPAT (69.7)

$6.3 million already achieved in FY2011)

EPS (basic – cents per share) (57.0)

Note: includes business classified as both continuing and discontinuing in the financial statements of the group ¹EBITDA before impairment and restructure costs

7

For personal use only

Coffey Outlook Coffey Outlook

• Cost reduction program implemented with full benefits ($18 million) expected in FY2012 (of which $6.3 million

already achieved in FY2011) already achieved in FY2011)

• Infrastructure, Mining & Resources and Oil & Gas sectors are expected to be the key drivers of growth in the short to

medium term and outlook is positive in these core markets

• Focus on discipline and margins to drive profitability
• Increasing staff morale and confidence for FY2012
• Underwritten Capital Raising to reduce gearing and strengthen the balance sheet
• Underwritten Capital Raising to reduce gearing and strengthen the balance sheet
• Confirm FY2012 EBITDA guidance of $45 million

Investors should refer to the Key Risks relating to an investment in Coffey (Page 14) and Key Outlook Assumptions (Appendix B) when considering the information in this Presentation

8

For personal use only

• 2. Capital Raising Information

9

For personal use only

Capital Raising

Balance Sheet Strengthening to Support the Refocused Business

• Strategic Review outcome to prioritise debt reduction and strengthen balance sheet

Previously announced measures to assist debt reduction

• Previously announced measures to assist debt reduction
• Improve working capital management
• Sale of non-core assets

$40 illi it l i i ill d i d t th b l h t

• $40 million capital raising will reduce gearing and strengthen balance sheet
• Management can finalise implementation of Strategic Review initiatives
• More focus on improving profitability of key businesses
• Flexibility for business going forward – increased covenant headroom
• Reduced funding costs
• Improved balance sheet strength and the finalisation of the Strategic Review outcomes will position Coffey well for

the future

10

For personal use only

Capital Raising Details

• Capital Raising comprises:
• 1 for 1.75 accelerated non-renounceable Entitlement Offer to raise approximately

$29 1 million

Capital Raising Size

$29.1 million

• $6.1 million Institutional Entitlement Offer
• $23.0 million Retail Entitlement Offer
• Placement to raise approximately $10.9 million

F ll d itt b UBS AG A t li B h

and Structure

• Fully underwritten by UBS AG, Australia Branch
• Institutional Entitlements not taken up will be sold via an institutional bookbuild
• Eligible Retail Shareholders may apply for additional Shares in excess of their Entitlement up to

a maximum of twice their Entitlement (subject to scaleback in the Board’s absolute discretion) Members of Coffey’s Employee Share Plans with registered addresses in Australia and New

• Members of Coffey’s Employee Share Plans with registered addresses in Australia and New

Zealand will be entitled to participate in the Retail Entitlement Offer through their trustee.

P

N t d ill b d t i ti d bt t th i C ff ’ b l h t

Purpose

• Net proceeds will be used to repay existing debt, strengthening Coffey’s balance sheet
• $0.38 per New Share

Price

p – 17.4% discount to Coffey’s closing price on Tuesday 4 October 2011 – 11.8% discount to the theoretical ex-rights price (TERP)¹

11

¹The theoretical ex-rights price is the price at which Coffey ordinary shares should trade immediately after the ex-date for the Entitlement Offer assuming 100% take-up of the Entitlement Offer, and excludes the impact of the Placement. The theoretical ex-rights price is a theoretical calculation only and the actual price at which Coffey ordinary Shares trade immediately after the ex-date for the Entitlement Offer will depend on many factors and may not be equal to the theoretical ex-rights price.

For personal use only

Impact of Capital Raising

$

Pro forma Balance Sheet (30 June 2011)

A$m 30 June 20111 Debt Reclassification2 Effect of the Capital Raising3 30 June 2011 Pro forma post

The table below presents the impact of the proposed $40 million Capital Raising as if it had occurred on 30 June 2011.

(August 2011) Capital Raising3 Capital Raising Cash and cash equivalents 29.6

• 29.6

Total assets 377.8

• 377.8

Gross debt (borrowings) – current 46.8 (40.5)

• 6.3

Gross debt (borrowings) – non current 104.0 40.5 (37.0) 107.5 Total liabilities 255.4

• (37.0)

218.4 Shareholders equity 122.4

• 37.0

159.4 Net debt (cash) 121 1

• (37 0)

84 1 Net debt (cash) 121.1 (37.0) 84.1

Gearing4 Net debt (30 June FY2011) / FY2012 EBITDA guidance ($45m)

49.7% 34.5% 2.7x 1.9x 1 Extracted from the audited results for the year ended 30 June 2011 30-Jun-11 Pro-forma post raising 30-Jun-11 Pro-forma post raising

12

1 Extracted from the audited results for the year ended 30 June 2011 2 Adjustment for reclassification of $40.5m of current debt to non-current debt following amendment of bank facility terms in August 2011 3 Assumes gross proceeds from the Capital Raising of approximately $40 million less transaction costs of $3 million with net proceeds entirely

• ffset against debt

4 Gearing = Net debt / (Net debt plus Shareholders equity)

For personal use only

Timetable

Event 2011

Trading halt, Institutional Entitlement Offer and Placement (“Institutional Offer”) Wednesday, 5 October g , ( ) conducted y, Result of Institutional Offer announced to the market, trading halt lifted Thursday, 6 October Record date for eligibility in Entitlement Offer (7pm, AEST) Monday, 10 October Retail Entitlement Offer opens / Retail Entitlement Offer Booklet despatched Friday, 14 October Settlement of Institutional Offer Tuesday, 18 October Issue of Institutional Offer Shares N l ASX t di f I tit ti l Off Sh Wednesday, 19 October Normal ASX trading of Institutional Offer Shares commence Retail Entitlement Offer closes Monday, 31 October Announcement of Retail Entitlement Offer results Wednesday, 2 November Settlement of Retail Entitlement Offer Monday, 7 November Issue of Retail Entitlement Offer Shares Tuesday, 8 November Normal ASX trading of Retail Entitlement Offer Shares commence and despatch of holding statements Wednesday, 9 November holding statements

The above timetable is indicative only and subject to change. All times are references to Australian Eastern Standard Time. Coffey reserves the right to vary these dates or to withdraw the Capital Raising at any time.

13

For personal use only

• 3. Key Risks

14

For personal use only

Key Risks

Introduction An investment in Coffey will be exposed to a number of risks. Risks include key risks relating to Coffey's business that senior management and the Directors focus on when managing the business of Coffey (in particular those risks described at 3.1 below) and have the potential, if they

• ccurred, to result in very significant consequences for Coffey and an investment in it, and also other risks that the

Directors regard as potentially material. These risks are described below. There are also risks that are common to all investments in shares and which are not specific to an investment in Coffey; for example, the general volatility of share prices including as a result of general economic conditions (including monetary and fiscal policy settings as well as exchange and interest rates) in Australia and overseas and other events

• utside the usual course of Coffey's business such as acts of terrorism or war.

Investors should note that the occurrence or consequences of some of the risks described in this section of the Investors should note that the occurrence or consequences of some of the risks described in this section of the presentation are partially or completely outside the control of Coffey, its Directors and senior management. Further, investors should note that this description focuses on the risks referred to above and does not purport to list every risk that Coffey may have now or in the future. It is important to note that there can be no guarantee that Coffey will achieve its stated objectives or that any forward looking statements, including guidance, contained in this presentation will be realised or otherwise eventuate. Investors should satisfy themselves that they have a sufficient understanding of these matters, including the risks described below, and have regard to their own investment objectives, financial circumstances and taxation position. If you do not understand any part of this presentation, it is recommended that you seek professional guidance from your stockbroker solicitor accountant or other independent and qualified professional adviser stockbroker, solicitor, accountant or other independent and qualified professional adviser.

15

For personal use only

Key Risks (cont’d)

3.1(a) Decreased demand for Coffey services Coffey's core businesses are Geosciences, International Development and Project Management. Uncertain, deteriorating or adverse economic or market conditions, including as a result of a fall in commodity prices, may decrease the demand for Coffey's services or increase competition pressure resulting in a reduction in work available, decrease the demand for Coffey s services or increase competition pressure resulting in a reduction in work available,

• r an inability to increase employee utilisation rates (or a fall in those rates), or work being offered on less favourable
• terms. This would adversely affect Coffey’s future performance, including through lower fees or margins or asset

impairments and financing challenges. (i) Geosciences The Geosciences business is heavily exposed to Infrastructure (34%), Mining & Resources (32%), and Oil & Gas (24%). Market conditions in the infrastructure and resources sector in which Coffey operates have been affected by reduced economic growth and significant financial market and fiscal disruption since 2008. Although these sectors g g p g are currently experiencing positive growth, there remains a significant degree of economic uncertainty fuelled by factors like potential credit defaults and high debt levels in Europe and the United States. In particular, if economic growth or market conditions in Australia, China, India, Europe or the United States deteriorate, this will have a direct impact on Coffey’s Geosciences business through reduced investment or delays in major projects, or increased competition among infrastructure and mining consultants for the reduced pool of available projects. Further, while Coffey's Geosciences business operates from a number of long-standing offices, it has relatively recently established or restaffed offices in locations including Dubai, Canada and Brazil which have less experience or tenure in their respective markets. A reduction in demand for Geosciences services and its market share or a failure to attract new business in each of its markets could have an adverse impact on Coffey's p y employee utilisation, revenues, margins and its ability to meet its earnings guidance.

16

For personal use only

Key Risks (cont’d)

(ii) International Development The International Development business primarily services aid donors in Australia (AusAID), the United States (USAID) and the United Kingdom (DFID). Government spend on foreign aid and contract terms in these j i di ti bj t t t i t h t i th i i ti d f t id d jurisdictions are subject to uncertainty or change as governments review their existing and future aid programs and the terms on which they contract with service providers. In particular, aid budgets in the USA are under pressure as the country attempts to reduce its deficit. A decrease in foreign aid spend by these governments as a result of changes in government policies or focus, or a deterioration of trading terms or increased competition (notwithstanding relatively high barriers of entry) is likely to reduce revenues and profitability of Coffey's International Development business. (iii) Project Management The Project Management business largely services the Commercial Property and Government sector in Australia The Project Management business largely services the Commercial Property and Government sector in Australia and New Zealand. Where economic uncertainty in these markets results in one or more of Coffey's major projects being delayed, postponed or cancelled, this would have a direct impact on Coffey’s business. Reduced or delayed market activity generally in construction and property will also reduce the number of new projects which Coffey may bid for and lead to an increase in competition between market participants giving rise to pressure on prices and margins.

17

For personal use only

Key Risks (cont’d)

3.1(b) Human Resources Risk In order to maintain its credentials as a specialist service provider in the fields in which it operates, to deliver projects, compete effectively and to grow its revenues in accordance with its budgets, Coffey must retain and attract new, quality l d hi i t t ff i employees and achieve an appropriate staff mix. Increased economic activity in mining, oil and gas and infrastructure sectors and a general shortage of skilled employees has resulted in increased employee turnover across these market sectors. If Coffey is unable to both retain and attract quality employees, it may be exposed to reduced revenue growth and profitability and be unable to deliver

• n key projects The loss of key employees may adversely impact Coffey’s relationships with clients and its ability to
• n key projects. The loss of key employees may adversely impact Coffey s relationships with clients and its ability to

win and secure new work, and may potentially reduce Coffey's attractiveness as an employer. If demand for specialist employees in these markets outstrips supply, Coffey risks exposure to increased salary pressures and costs of recruitment and training of new employees or increased costs through the need to engage subcontractors or external consultants to complete projects. If any additional costs cannot be recovered through, for p p j y g , example, an increase in charge out rates for Geosciences professional employees, there is potential for this to impact the profitability of Coffey's projects. Further, close attention by management to the day to day operations of the business is critical to Coffey's performance. A failure to do this, or an inability to recruit reliable, accountable managers, would be likely to result in reduced revenues, increased costs, or a combination of both. 3.2(a) Commercial Risk In the normal course of business, Coffey may be involved in disputes arising from contract claims. These disputes may not always be resolved through negotiation with the parties directly and may lead to litigation. If economic or market conditions deteriorate, there is an increased risk that Coffey's clients will default on contract terms resulting in the potential for litigation and reduced revenues. In Coffey's International Development and Project Management businesses, revenues are derived in a number of cases from substantial contracts. Delays, terminations or other unforeseen events arising in relation to these contracts may l d t i d t l f f th b i

18

lead to increased costs or loss of revenues for those businesses.

For personal use only

Key Risks (cont’d)

3.2(b) Weather and Other Delays Coffey's ability to undertake some of its operations, particularly within its Geosciences Information business, may be hampered due to a variety of reasons outside the control of Coffey including natural disasters, inclement weather p y y g conditions, regulatory intervention, delays in necessary approvals and difficult site access. While delays to projects could negatively impact revenue levels or growth, there is also the risk, particularly in the Geosciences Information business, that sustained periods of rain may hamper Coffey’s ability to maintain expected activity levels and reduce gross profit. 3.2(c) Insurance Risk While Coffey maintains insurance which it considers appropriate, either through professional indemnity or public liability insurance, it is not insured against all foreseeable risks and if an event were to occur that was not covered by insurance

• r exceeded the insurable limits, including a claim against Coffey for professional negligence, it may have a material

impact on Coffey by adversely affecting its reputation, increasing future insurance premiums and, to the extent the claim is not insured or indemnity is refused by the insurer, may cause material financial loss. 3.2(d) Health, Safety and Security While Coffey maintains a focus on health and safety, Coffey employees work across many countries, primarily within the International Development and Geoscience businesses, and do undertake work in environments where risk of personal injury is present. If an incident were to occur that resulted in injury or death of a Coffey employee, Coffey may ff f C ff f suffer reputational damage impacting its ability to win work and retain employees. In addition, if Coffey fails to comply with the necessary occupational health and safety legislative requirements across the jurisdictions in which it operates, it could result in fines, penalties and compensation for damages.

19

For personal use only

Key Risks (cont’d)

3.2(e) Breach of Covenants Factors such as increases in interest rates, increased funding requirements and weak operational performance could lead to Coffey breaching its debt covenants. In certain circumstances, Coffey's debt finance provider may require that th d bt b id i di t l U d h i th i t th t C ff ill b bl t the debt be repaid immediately. Under such a scenario, there is no guarantee that Coffey will be able to secure alternative financing on commercially acceptable terms, or at all. 3.2(f) Financing In the past Coffey has relied on, and continues to rely on, debt finance to grow. Further access to debt under existing arrangements is limited and this may adversely impact Coffey's ability to fund working capital requirements, undertake future projects, develop new business initiatives or respond to competitive pressures. Further, if any of the major risks identified are realised, the Capital Raising may be insufficient for Coffey’s future financing needs and it may be necessary to undertake further financial initiatives to reduce debt. There is a risk that additional financial initiatives may not be available to Coffey when required. 3.2(g) Contingent Liabilities (g) g In the ordinary course of Coffey's business, Coffey is required to provide guarantees, insurance, performance bonds, payment bonds, or letters of credit to clients as security in relation to the completion of projects and the satisfaction of equity commitments. As a consequence of the nature of the projects and contracts to which Coffey is a party, there is a risk that these guarantees, bonds and letters of credit may be called upon, and that Coffey would be required by the banks and insurance companies involved to fund payments under guarantees, bonds and letters of credit. This may, in turn, have an adverse effect on Coffey's current debt obligations and future financial performance and position.

20

For personal use only

Key Risks (cont’d)

3.2(h) Legislative and Regulatory Change Coffey operates in multiple jurisdictions across which there are often changes in regulations. Changes to legislation, regulation and policy including but not limited to taxation, health and safety, corporate governance and accounting t d d ll lt i i d t f C ff d i t f t i Th l lt i i d f standards, may all result in increased costs for Coffey and impact future earnings. They can also result in periods of uncertainty which may give rise to delays or cancellations of proposed projects. Non compliance with laws and regulations, particularly in the jurisdictions in which the International Development business operates, may result in a withdrawal of necessary licenses making it difficult or impossible for Coffey to continue to undertake projects in those jurisdictions continue to undertake projects in those jurisdictions. Whilst it is clear that the introduction of new mining and carbon taxes in Australia will affect investment patterns, it is not clear whether the new taxes will have an adverse impact on Coffey's revenues. The new taxes may result in reduced investment in projects by some of Coffey’s clients or may generate new investment areas and projects from which Coffey may benefit. y y 3.2(i) Exchange Rate Risk Coffey provides services to clients in a number of countries other than Australia and earns revenues in currencies other th A t li d ll (“AUD”) Ch i th l f th AUD l ti t th i ill i t th t l ti than Australian dollars (“AUD”). Changes in the value of the AUD relative to other currencies will impact the translation

• f non-AUD denominated earnings and may impact on the competitiveness of Coffey in providing services where its

costs are AUD denominated. Changes in exchange rates will also impact the AUD value of assets and liabilities denominated in foreign currency recorded on Coffey’s balance sheet.

21

For personal use only

Key Risks (cont’d)

3.2(j) Damage to Reputation Coffey’s reputation as a supplier of high quality professional services could be adversely impacted by events such as: a y p pp g q y p y p y serious accident; a transgression against probity; services delivered outside quality or price expectations or timeframes;

• r a dispute, litigation or adverse media coverage arising from alleged professional negligence. The consequence of

damage to Coffey’s reputation could result in reduced revenues and margins through loss of client trust in the Coffey brand. Coffey sometimes acts as a sub-contractor on International Development projects and as a member of alliance projects as part of its Geosciences businesses. If there is a deterioration in the relationship with a joint venture partner or a member of an alliance, or the joint venture partners or alliance members do not act in the best interest of the project or perform to the standard required of the project client, the project may experience early termination, disputes and/or litigation which may have an adverse impact on Coffey's reputation and its ability to generate revenues. g y p y p y g

22

For personal use only

• 4. Appendices

23

For personal use only

Appendix A

Coffey ‘s Key Businesses Coffey s Key Businesses

24

For personal use only

Safety Performance Improving Safety Performance Improving

Safety is an indicator of improving discipline within the business

LTIFR* (month rolling average) July FY2010 to June FY2011

5.00

Coffey LTIFR* (month rolling average) July 2010 to June 2011

3 00 3.50 4.00 4.50 1.50 2.00 2.50 3.00 0.00 0.50 1.00 l-10 g-10 p-10 t-10 v-10 c-10 n-11 b-11 r-11 r-11 y-11 n-11 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

25

*LTIFR = Lost Time Injury Frequency Rate.

For personal use only

Coffey’s Key Businesses Contribution Coffey s Key Businesses Contribution

FY2011 Segment Performance ¹

Projects 3% Other 6% International Development 21%

• Geotechnics
• Environments
• Information
• Mining

Geosciences 70%

1 1 Based on underlying EBITDA, before impairment and restructure costs, and before corporate costs.

26

For personal use only

Geosciences – Core Capabilities

Core Capabilities Clients include

• One of the leaders in:
• Roads & Traffic Authority NSW

Well Integrated Service Offering

• One of the leaders in:

– geotechnical design – geotechnical interpretation and analysis – construction advice – geophysics

• Roads & Traffic Authority NSW

Government

• Leighton Contractors
• Inpex

g p y – groundwater management

• Environmental and social impact assessments
• Site remediation
• Environmental social health and safety waste
• Esso
• Mobil
• Caltex
• Environmental, social, health and safety, waste

management and energy monitoring consulting services

• Exxon
• Specialist geotechnical materials testing and

anal sis

• Roads & Traffic Authority NSW

Abi analysis

• Includes soil, rock, concrete, aggregates, and

surface integrity testing for road construction projects

• Abigroup
• Thiess
• Mining services including: early stage resource
• Fortescue Metals Group
• Mining services including: early stage resource

definition, operational support and optimisation services, independent reports and a range of technical audits and studies

• Fortescue Metals Group
• Vale SA
• HWE Mining

27

For personal use only

Geosciences – Geographic Presence g p

Very strong Australian brand in a discipline where Australia, itself, is strong

Australia New Zealand Canada Brazil United Kingdom Middle East Africa

                  

28

For personal use only

Geosciences – Business & Outlook Geosciences Business & Outlook

Major Project Investment in Australia

Commercial Government 1%

Fee Revenue Breakdown FY2011

Infrastructure 34% Oil & Gas 24% Property 7% Other 2% 1% 100 120 140

Infrastructure Oil & Gas Mining & Resources $bn

40 60 80 100 Mining & Resources 32%

by Sector

20 40 2008A 2009A 2010A 2011A 2012E 2013E 2014E

Outlook Outlook

Chart Source: ANZ Economics & Global Markets Research – Australian Major Project Update: Q2 2011 (14 September 2011)*

Americas 12% Europe & Middle East 2% Africa 3%

• Exposed to key growth sectors – Infrastructure,

Mining & Resources, and Oil & Gas,

• Continue to see client demand increasing
• Project investment pipeline remains buoyant
• Exposed to key growth sectors – Infrastructure,

Mining & Resources, and Oil & Gas,

• Continue to see client demand increasing
• Project investment pipeline remains buoyant

APAC 83%

by Geography

j p p y j p p y

29

by Geography * Updated by ANZ on 19 September 2011

For personal use only

International Development – Geographic Presence & Core International Development Geographic Presence & Core Capabilities

• Plans coordinates and executes programs and

Plans, coordinates and executes programs and projects in the developing world

• Operates out of three hubs: Australia, USA and UK
• Approximately 1,600 employees
• Four decades of experience in the market
• Clients comprise government and international

bodies Key areas of activity include: − promoting economic growth − developing governance and public sector skills and processes implementing security and justice frameworks Major Offices Regions services supplied to − implementing security and justice frameworks Major Offices Regions services supplied to

30

For personal use only

International Development – Business & Outlook International Development Business & Outlook

Key Observations Fee Revenue Breakdown FY2011

APAC 26% Europe & Middle East 19%

• Strong global brand in international development

contracting

• Scale business with diversification across key donor

groups and regions

Americas

– lowers localised policy risk – providing stable and consistent earnings (longer term contracts, typically 1-3 years)

• High barriers to market entry

Americas 55%

• High barriers to market entry

Outlook Outlook Outlook

• Australian Government spending more on international

development

• UK market very favourable given DFID’s increased

Outlook

• Australian Government spending more on international

development

• UK market very favourable given DFID’s increased

Clients include

expenditure

• USA may reduce expenditure, however Coffey has

recently won two new contracts expenditure

• USA may reduce expenditure, however Coffey has

recently won two new contracts

31

For personal use only

Project Management – Business & Outlook Project Management Business & Outlook

Fee Revenue Breakdown 2011 Key Observations

• Experienced management team operating rescaled

and refocused business

• Competitive market but delivering positive profits

and cash flow after absorbing significant corporate

• verheads

Government 47% Infrastructure 5%

• verheads

Clients include:

• Australian Government

Department of Defence

47%

• Australian Government – Department of Defence
• Australian Government – Department of Education,

Employment and Workplace Relations

• Christchurch International Airport

Commercial Property 48%

by Sector

Outlook

• Low point in non-residential property cycle with

Outlook

• Low point in non-residential property cycle with
• Stockland

Europe & Middle East 10% Africa 7%

p p p y y potential upside on increase in property development activity

• Continue to assess value proposition and strategic

contribution p p p y y potential upside on increase in property development activity

• Continue to assess value proposition and strategic

contribution

32

by Geography

Australia & New Zealand 83%

For personal use only

Appendix B pp

Key Outlook Assumptions

33

For personal use only

Key Outlook Assumptions

G l ti General assumptions

• The FY2012 EBITDA guidance is based on bottom up analyses from service line managers, taking into account assessed

levels of activity and demand in the geographic locations and sectors in which Coffey operates. Overall expectations of activity and demand have been compared to third party analysis and benchmarked against Coffey's historical performance. p

• Forecast foreign exchange rate assumptions are based on a weighted average of current rates and existing open hedge

positions (held until maturity).

• Overhead expenses have been indexed by CPI rates applicable to the jurisdictions in which Coffey operates.
• The full year cost reduction program benefit of $18 million is realised.
• No significant adverse change in macro economic or general business conditions has been forecast.

Geosciences

• Weather patterns are assumed to be consistent with long term historical averages, with an absence of extreme or

prolonged unseasonal weather conditions.

• Utilisation rates are assumed to improve between 2% to 5% over FY2011 utilisation rates achieved.
• Available hours within the consulting businesses are assumed to increase between 5% and 8% compared to FY2011.
• Charge out rates are forecast to improve by an average of 10% in FY2012 compared to FY2011.
• The achievement of the budget is not dependent on the outcome of one single assumption (ie utilisation or available

hours or charge out rate) but the managed combination thereof hours or charge out rate) but the managed combination thereof.

• Wage growth is assumed to be consistent with recent increases experienced by Coffey in FY2011 (approximately 5 to

8%). International Development

• No net material contraction in the foreign aid budgets of Australian UK and USA are assumed with FY2012 revenues

No net material contraction in the foreign aid budgets of Australian, UK and USA are assumed, with FY2012 revenues currently 78% contracted. No material political or sovereign events restricting generation of these revenues have been assumed. Project Management

• Modest recovery in the commercial property and government infrastructure sector in Australia in FY2012 (assessed

currently to be at a low point).

• No contribution from the government stimulus program (a key driver to FY2010 and FY2011 earnings).

34

For personal use only

Appendix C

Foreign Jurisdictions Foreign Jurisdictions

35

For personal use only

Foreign Jurisdictions

Introduction This document and any accompanying documents do not constitute an offer or invitation in any jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer or invitation. The distribution of this document and any accompanying documents in jurisdictions

• utside Australia and New Zealand may be restricted by law and anyone who receives this presentation and accompanying documents should

seek advice on and observe such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities

• laws. No action has been taken to register or qualify the New Shares or the Offer or otherwise permit a public offering of New Shares in any

jurisdiction outside Australia or New Zealand. European Economic Area - Belgium, Germany and Netherlands The information in this document has been prepared on the basis that all offers of New Shares will be made pursuant to an exemption under the Directive 2003/71/EC ("Prospectus Directive"), as implemented in Member States of the European Economic Area (each, a "Relevant Member State"), from the requirement to produce a prospectus for offers of securities. An offer to the public of New Shares has not been made, and may not be made, in a Relevant Member State except pursuant to one of the following exemptions under the Prospectus Directive as implemented in that Relevant Member State: – to legal entities that are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities; – to any legal entity that has two or more of (i) an average of at least 250 employees during its last fiscal year; (ii) a total balance sheet of to any legal entity that has two or more of (i) an average of at least 250 employees during its last fiscal year; (ii) a total balance sheet of more than €43,000,000 (as shown on its last annual unconsolidated or consolidated financial statements) and (iii) an annual net turnover

• f more than €50,000,000 (as shown on its last annual unconsolidated or consolidated financial statements);

– to fewer than 100 natural or legal persons (other than qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive) subject to obtaining the prior consent of the Company or any underwriter for any such offer; or i th i t f lli ithi A ti l 3(2) f th P t Di ti id d th t h ff f N Sh h ll lt i – in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of New Shares shall result in a requirement for the publication by the Company of a prospectus pursuant to Article 3 of the Prospectus Directive.

36

For personal use only

Foreign Jurisdictions

Hong Kong WARNING: This document has not been, and will not be, registered as a prospectus under the Companies Ordinance (Cap. 32) of Hong Kong (the "Companies Ordinance"), nor has it been authorised by the Securities and Futures Commission in Hong Kong pursuant to the Securities and Futures Ordinance (Cap 571) of the Laws of Hong Kong (the "SFO") No action has been taken in Hong Kong to authorise or register this and Futures Ordinance (Cap. 571) of the Laws of Hong Kong (the SFO ). No action has been taken in Hong Kong to authorise or register this document or to permit the distribution of this document or any documents issued in connection with it. Accordingly, the New Shares have not been and will not be offered or sold in Hong Kong by means of any document, other than (i) to "professional investors" (as defined in the SFO)

• r (ii) in other circumstances that do not result in this document being a "prospectus" (as defined in the Companies Ordinance) or that do not

constitute an offer to the public within the meaning of that ordinance. No advertisement invitation or document relating to the New Shares has been or will be issued or has been or will be in the possession of any No advertisement, invitation or document relating to the New Shares has been or will be issued, or has been or will be in the possession of any person for the purpose of issue, in Hong Kong or elsewhere that is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to New Shares that are or are intended to be disposed of only to persons outside Hong Kong or only to professional investors (as defined in the SFO and any rules made under that ordinance). No person allotted New Shares may sell, or offer to sell, such shares in circumstances that amount to an offer to the public in Hong Kong within six months following the date of issue of such shares. The contents of this document have not been reviewed by any Hong Kong regulatory authority. You are advised to exercise caution in relation to the offer. If you are in doubt about any contents of this document, you should obtain independent professional advice. Singapore This document and any other materials relating to the New Shares have not been, and will not be, lodged or registered as a prospectus in Singapore with the Monetary Authority of Singapore. Accordingly, this document and any other document or materials in connection with the

• ffer or sale, or invitation for subscription or purchase, of New Shares, may not be issued, circulated or distributed, nor may the New Shares be
• ffered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore except

pursuant to and in accordance with exemptions in Subdivision (4) Division 1, Part XIII of the Securities and Futures Act, Chapter 289 of Singapore (the "SFA") or as otherwise pursuant to and in accordance with the conditions of any other applicable provisions of the SFA Singapore (the SFA ), or as otherwise pursuant to, and in accordance with the conditions of any other applicable provisions of the SFA. This document has been given to you on the basis that you are (i) an existing holder of the Company’s shares, (ii) an "institutional investor" (as defined in the SFA) or (iii) a "relevant person" (as defined under section 275(2) of the SFA). In the event that you are not an investor falling within any of the categories set out above, please return this document immediately. You may not forward or circulate this document to any

• ther person in Singapore.

Any offer is not made to you with a view to the New Shares being subsequently offered for sale to any other party. There are on-sale restrictions in Singapore that may be applicable to investors who acquire New Shares. As such, investors are advised to acquaint themselves with the SFA provisions relating to resale restrictions in Singapore and comply accordingly.

37

For personal use only

Foreign Jurisdictions

Switzerland The New Shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange ("SIX") or on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff.

• f the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland Neither this document nor any
• f the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any
• ther offering or marketing material relating to the New Shares may be publicly distributed or otherwise made publicly available in Switzerland.

Neither this document nor any other offering or marketing material relating to the New Shares have been or will be filed with or approved by any Swiss regulatory authority. In particular, this document will not be filed with, and the offer of New Shares will not be supervised by, the Swiss Financial Market Supervisory Authority (FINMA). This document is personal to the recipient only and not for general circulation in Switzerland. New Zealand This document has not been registered, filed with or approved by any New Zealand regulatory authority under or in accordance with the S iti A t 1978 (N Z l d) Securities Act 1978 (New Zealand). The New Shares in the Entitlement Offer are not being offered or sold to the public in New Zealand other than to existing shareholders of the Company with registered addresses in New Zealand to whom the offer of New Shares is being made in reliance on the Securities Act (Overseas Companies) Exemption Notice 2002 (New Zealand). Other than in the Entitlement Offer, New Shares have not and will not be offered, sold or delivered directly, or indirectly, in New Zealand other , , y, y, than to:

• persons whose principal business is the investment of money or who, in the course of and for the purposes of their business, habitually

invest money; or

• persons who are each required to (i) pay a minimum subscription price of at least NZ$500,000 for the securities before allotment or (ii)

have previously paid a minimum subscription price of at least NZ$500 000 for securities of the Company ("initial securities") in a single have previously paid a minimum subscription price of at least NZ$500,000 for securities of the Company ( initial securities ) in a single transaction before the allotment of such initial securities and such allotment was not more than 18 months prior to the date of this document. After the allotment of the New Shares, any resale of the New Shares in New Zealand (other than those allotted under the Entitlement Offer) must: i comply in all respects with the Securities Act 1978; and

38

i. comply in all respects with the Securities Act 1978; and

• ii. without limitation, not occur earlier than six months after the New Shares are allotted unless sold to those persons stipulated above.

For personal use only

Foreign Jurisdictions

United Kingdom Neither the information in this document nor any other document relating to the offer has been delivered for approval to the Financial Services Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services and Markets Act 2000, as amended ("FSMA")) has been published or is intended to be published in respect of the New Shares. This document is issued on a confidential basis to "qualified investors" (within the meaning of section 86(7) of FSMA) in the United Kingdom and the New Shares may not be offered or basis to qualified investors (within the meaning of section 86(7) of FSMA) in the United Kingdom, and the New Shares may not be offered or sold in the United Kingdom by means of this document, any accompanying letter or any other document, except in circumstances which do not require the publication of a prospectus pursuant to section 86(1) FSMA. This document should not be distributed, published or reproduced, in whole or in part, nor may its contents be disclosed by recipients to any other person in the United Kingdom. Any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) received in connection with the issue

• r sale of the New Shares has only been communicated or caused to be communicated and will only be communicated or caused to be
• r sale of the New Shares has only been communicated or caused to be communicated and will only be communicated or caused to be

communicated in the United Kingdom in circumstances in which section 21(1) of FSMA does not apply to the Company. In the United Kingdom, this document is being distributed only to, and is directed at, persons (i) who have professional experience in matters relating to investments falling within Article 19(5) (investment professionals) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 ("FPO"), (ii) who fall within the categories of persons referred to in Article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc.) of the FPO or (iii) to whom it may otherwise be lawfully communicated (together "relevant persons"). The unincorporated associations, etc.) of the FPO or (iii) to whom it may otherwise be lawfully communicated (together relevant persons ). The investments to which this document relates are available only to, and any invitation, offer or agreement to purchase will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents. United States of America This document may not be released or distributed in the United States of America. This document does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States. Any securities described in this document have not been, and will not be, registered under the US Securities Act of 1933 and may not be offered or sold in the United States of America except in transactions exempt from, or not subject to, registration under the US Securities Act and applicable US state securities laws. Other Jurisdictions New Shares may not be offered or sold in any other jurisdiction, except to persons to whom such offer, sale or distribution is permitted under applicable law.

39

For personal use only