FY2012 DISCLAIMER AND IMPORTANT NOTICE 2 Information, including - - PowerPoint PPT Presentation

INVESTOR PRESENTATION

FY2012

FULL YEAR RESULTS

DISCLAIMER AND IMPORTANT NOTICE

Information, including forecast financial information in this presentation should not be considered as a recommendation in relation to holding, purchasing or selling shares, securities of other instruments in NRW Holdings Limited or any

• ther company. Due care and attention has been used in the preparation of

forecast information. However, actual results may vary from forecast and any variation may be materially positive or negative. Forecasts, by their very nature, are subject to uncertainty and contingencies may occur which are outside the control of NRW Holdings Limited. Before making or varying any decision in relation to holding, purchasing or selling shares in NRW Holdings Limited, investors should consider the appropriateness of that investment in light of their individual investment

• bjectives and financial situation and should seek their own independent

professional advice. All currency is denominated in Australian dollars.

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YEAR IN REVIEW

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FINANCIAL HIGHLIGHTS

• Revenue of $1.358 billion:

82% increase on FY11

• EBIT of $154.0 million:

138% increase on FY11

• EBIT Margin increased from 8.6% to 11.3%
• NPAT of $97.1 million

136% increase on FY11

• NPAT Margin increased from 5.5% to 7.1%
• Conservative Net debt / Equity position of 18%
• Cash balance $138 million

95% increase on FY11

• Final dividend of 10 cents fully franked, totalling 18 cents for full financial year.

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YEAR IN REVIEW

STRATEGIC AND OPERATIONAL HIGHLIGHTS

• Awarded first oil and gas contract at Wheatstone Project
• 60% of civil contracts negotiated with key clients
• Work completed under 2 year Special Services Agreement signed with BMA

(Queensland)

• In-house concrete delivery accounted for 20% of Civil revenue
• Order book of $2.0 billion (excludes Framework and ECI projects)
• Awarded 3 year extension to services contract at Simandou
• Significant increase in scale and capability across all divisions:

Civil Division increased revenue by 91% Mining Division increased revenue by 69% Drill & Blast increased revenue by 307% AMS increased revenue by 65%

SAFETY AND TRAINING

Safety The recently introduced company wide Safety Program, ‘A safe day, every day’ has increased engagement and awareness across all levels of the business.

• Lost Time Injury Frequency Rate (LTIFR)

currently at 0.64 (62.7% improvement from 1.8 in FY2011).

• A corresponding decrease in Total Recordable

Case Frequency Rate achieved, currently at 5.22, (53% improvement from a TRIFR of 10.94 in FY2011).

Training An increase in employee HSE training along with the sustained focus through ‘A safe day, every day’ will continue to drive continuous improvement. NRW has enhanced its training portfolio and is geared to delivering more HSE training to all employees in 2013 and beyond.

PERFORMANCE

5 10 15 20 25 30 35 40 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 Man hours LTIFR (Lost Time Injury Frequency Rate) TRIFR (Total Recordable Injury Frequency Rate)

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OUR PEOPLE

• As of 30 June 2012 NRW

employed a workforce in excess

• f 4,592*.
• Continued focus on attraction and

retention of talent, including project based and corporate personnel.

• NRW’s Indigenous workforce

participation remains strong with an Indigenous workforce of 8.2%.

500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000

June 30 2007 June 30 2008 June 30 2009 June 30 2010 June 30 2011 June 30 2012

NRW EMPLOYEES

2007–2012

*Employees includes direct employees, subcontractors and apprentices

KEY FINANCIALS

CONTINUED REVENUE GROWTH SHAREHOLDER EQUITY GROWTH REDUCED NET DEBT / EQUITY CONTINUED EBITDA GROWTH

200 400 600 800 1,000 1,200 1,400 FY07 FY08 FY09 FY10 FY11 FY12 $m's 1st Half 2nd Half 50 100 150 200 FY07 FY08 FY09 FY10 FY11 FY12 $m's 1st Half 2nd Half 0% 10% 20% 30% 40% 50% 60% 70% 80% FY07 FY08 FY09 FY10 FY11 FY12 50 100 150 200 250 300 350 FY07 FY08 FY09 FY10 FY11 FY12 $m's

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CIVIL OVERVIEW

• Revenue increase by 91% on FY2011
• Current workforce of 2,196 employees
• Ongoing geographic diversification, particularly QLD (BMA

and Dugald River)

• 60% of civil contracts negotiated based on reputation with

key clients

• Awarded first major Oil & Gas project on the Wheatstone

Project

• Successful expansion of concrete capability to 20% of Civil

revenue

• First Government infrastructure project progressing well -

Great Eastern Highway Upgrade (Alliance with Leighton/GHD)

• Continued safety performance improvement: TRIFR of 4.0
• Successful recruitment of highly skilled workforce in

difficult labour market conditions complemented by industry leading retention of 90% amongst civil staff

• Indigenous employment of 10%
• Total Civil Fleet (Heavy Equipment): 657 items

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CIVIL – PROJECTS AWARDED IN FY12

Major contracts and contract extensions awarded during the period included:

• Main Line Rail Duplication – Fortescue
• Herb Elliott Port (Anderson Point) – Fortescue
• Dugald River Early Works – Minmetals

Resources Ltd (MMG)

• Special Services Agreement for 2 years – BMA
• Wheatstone Access Roads – Bechtel
• Cape Lambert Car Dumper Bulk Earthworks –

Rio Tinto Iron Ore

• Western Turner Syncline Civil / Concrete Works

– Rio Tinto Iron Ore

• Boolgeeda Aerodrome - Rio Tinto Iron Ore
• Port Hedland Inner Harbour Project – BHP

Billiton Iron Ore

• Solomon Spur – Fortescue

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MINING OVERVIEW

• Revenue increase by 69% on FY2011
• Current workforce of 1,643 employees
• Commenced extensive pre-mining development works

and Tailings Dam construction at Solomon Hub for Fortescue

• Ongoing operations at Christmas Creek and Western

Turner Syncline.

• Performance at Middlemount below expectations due

to unseasonal weather conditions in second half.

• Indigenous Joint Ventures continuing to expand with

Indigenous employment remaining a key focus. Indigenous employees currently represent 28% of Western Turner Syncline workforce.

• Continued improvement in safety performance: TRIFR

now at 6.13, down from 10.47 at the end of FY11

• Total Mining Fleet (Heavy Equipment): 383 items

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MINING – PROJECTS AWARDED IN FY12

Contracts awarded and extensions during the period include:

• Solomon pre-mining development works –

Fortescue

• Solomon Tailings Dam - Fortescue
• Extensions at Christmas Creek – Fortescue
• 3 year extension Simandou contract – Simfer SA

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ACTION DRILL & BLAST OVERVIEW

• Action Drill & Blast has experienced exceptional

growth with a 307% increase in revenue to $113.1 million from $27.8 million in FY11.

• Operates in 3 primary units, Mining, Civil and Coal in

WA, SA, NT and QLD.

• Expansion in the Queensland coal market with a

new blasting contract at Millennium for Peabody and a second drill being utilised at Gregory Crinum.

• Maintained an exceptional safety performance with

TRIFR of 1.59, an improvement from last financial year (FY11: 5.68 )

• Current workforce of 350 employees, up from 190 at

the end of FY11, and a fleet of 36 drills.

• Currently has 11 contracts in Western Australia and

4 in Queensland.

• The largest operation is at Solomon Hub Project

where there are over 100 employees and 8 drills.

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ACTION DRILL & BLAST FY12 PROJECTS

External projects undertaken and awarded during the period included:

• Greenbushes – Talison Lithium
• Christmas Creek (Drill Only) – Downer
• South Middleback Ranges – HWE
• Karara DSO – Karara Mining
• Fortescue Rail - Summit North & South &

Cloudbreak – Brierty

• CLASCO – Macmahon
• West Angelas Power Station – Cimeco
• Gregory Crinum – BMA
• Millennium Shot Crew - Peabody Energy

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ACTION MINING SERVICES OVERVIEW

• Action Mining Services provides repairs, refurbishment

to all brands of earthmoving and mining equipment. A comprehensive mechanical repair and rebuild facility, sand blasting, painting, boiler making repair and fabrication services are offered.

• Revenue growth in the 2012 financial year was

excellent with revenue of $46.6 million, up 65% from the previous financial year (FY2011:$28.2m).

• A separate fabrication and assembly shop is also on

the premises where service and water tanker fabrication is undertaken. These products are fully mine site compliant and marketed to resources, hire and mining services companies.

• Increased demand allowed increased production of

Support Vehicles to match demand and alongside improvements to efficiency, enabled improved delivery lead times.

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ACTION MINING SERVICES

HIGHLIGHTS

• Support vehicle sales outperformed, with units sold exceeding forecast budget by 64%.
• The 200th Water Tank was invoiced in May with the 100th Service Module due to come off

the production line in August 2013.

• Staff increased by 17% to 145 employees
• Development of apprentices continues to be a focus with the first two years completed at

AMS before they rotate through various NRW sites to gain practical site experience.

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PROJECT LOCATIONS

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FINANCIAL RESULTS

FY2012

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OPERATING PERFORMANCE

FINANCIAL PERFORMANCE ($m’s) 1HY12 2HY12 FULL YEAR FY12 FY11 Change SALES REVENUE Civil 323.9 407.8 731.7 382.6 91% Mining 246.5 295.7 542.2 321.7 69% Action Drill & Blast 50.9 62.2 113.1 27.8 307% Action Mining Services 21.0 25.6 46.6 28.1 66% Other * (31.8) (43.0) (74.8) (15.0)

• TOTAL SALES REVENUE

610.5 748.3 1,358.8 745.2 82% EBITDA 89.4 106.2 195.9 95.5 105% EBIT 70.4 83.6 154.0 64.6 138% NPAT 45.3 51.8 97.1 41.2 136% EPS (basic) cents 16.2 18.6 34.8 16.1 116% DPS cents 8.0 10.0 18.0 9.0 100%

* other includes unallocated income and consolidation eliminations for Action Drill & Blast ($68.4)m, Action Mining Services ($6.4)m.

• Significant revenue growth across all Divisions of the Company resulting in 82% increase over FY11 and

accompanied by increase in margin in all divisional operations (see slide 19)

• Increased earnings per share to 34.8 cents from 16.1 cents and dividends per share from 9.0 cents to

18.0 cents.

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DIVISIONAL PERFORMANCE

DIVISIONAL PERFORMANCE ($m’s) NRW CIVIL CONTRACTING NRW MINING SERVICES ACTION DRILL & BLAST ACTION MINING SERVICES FY2012 Revenue 731.7 542.2 113.1 46.6 Segment Profit 81.6 64.0 18.7 4.6 Return on revenue 11% 12% 17% 10% FY2011 Revenue 382.6 321.7 27.8 28.2 Segment Profit* 39.7 32.0 2.9 2.2 Return on revenue 10% 10% 10% 8% Revenue Growth 91% 69% 307% 65% Profit Growth 106% 100% 545% 114%

• Civil revenue grew 91% and margins increased from 10% to 11% despite adverse weather during the

third quarter.

• Mining revenue grew 69% and margins increased from 10% to 12% despite adverse weather

conditions mainly impacting the Middlemount operation during the second half.

• Action Drill and Blast experienced exceptional growth with revenue increasing 307%. Margins

improved due to increased contribution of external contracts.

• Action Mining Services revenue and margins grew as a result of increased demand for both

mechanical services and product sales of water trucks and service truck modules.

* Refers to profit before tax , consolidation entries and corporate overhead allocation.

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BALANCE SHEET

FINANCIAL POSITION ($m’s) FY12 FY11 FY10 FY09 FY08 Working Capital

15.0 36.9 30.1 26.4 56.4

Non-Current Assets

391.1 293.0 178.8 156.7 165.5

Non-Current Liabilities

(16.2) (10.2) (0.4) (0.6) (12.3) 389.9 319.6 208.5 182.5 209.6

Funded by: Cash / (overdraft)

138.0 70.6 21.4 20.6 (11.3)

Debt

(198.7) (123.5) (60.8) (60.8) (81.0)

Net Funding

(60.8) (52.9) (39.4) (40.2) (92.3)

Shareholders Equity

329.2 266.7 169.1 142.2 117.2

Return on Equity

30% 15% 21% 27% 32%

Net debt / equity

18% 20% 23% 28% 79%

• NRW has maintained a conservative net debt to equity position of 18%.
• Increased cash reserves to $138 million due to continued focus on efficient cash management.
• Debt consists of insurance premium funding $0.01m, Hire Purchase $198.7m.
• Reduced investment in working capital.
• High return on equity of 30%

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CASH & RETURN ON CAPITAL EMPLOYED

• Operating cash flow of $173.2 million strengthened in line with growth in EBITDA and efficient

management of cash.

• The Group achieved a 41% return on average capital employed despite the increase in net

fixed assets.

• The increase in EBITDA (see slide 18), combined with increase in operating cash, high

utilisation of net fixed assets and high returns of average capital employed has resulted in Group cash reserves of $138 million at 30 June 2012.

• Efficient capital allocation has provided a solid foundation for future investment opportunities.
• 20.0

40.0 60.0 80.0 100.0 120.0 140.0 160.0 180.0 200.0 FY07 FY08 FY09 FY10 FY11 FY12 Operating Cash Flow

$m’s

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

• 50

100 150 200 250 300 350 400 450 FY08 FY09 FY10 FY11 FY12 % $m's Net Fixed Assets Return on Avge Capital Employed

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CAPITAL EXPENSE & FUNDING

CAPITAL EXPENDITURE ($m’s) FY12 FY11 NRW Civil Division 16.6 6.9 NRW Mining Division 105.5 120.4 Action Drill & Blast 15.1 7.5 Action Mining Services 0.6 0.6 Other 6.6 14.8 TOTAL ADDITIONS $144.4 $150.2

• Significant investment of capital in the Mining Division for Middlemount Coal and Fortescue

projects.

• Action Drill & Blast capex relates to purchase of 11 rigs
• “Other” includes investment of information systems and leasehold improvements to allow for

centralisation of staff in new Perth headquarters.

• Commitments to further capital expenditure post 30 June 2012 total $68.35m comprising $20

million for Action Drill & Blast, and $48.35 million for Mining

• Value of items subject to Operating Leases commencing in FY12 was $32m being for BMA civil

fleets and some drill and blast assets (excluded from table above)

• Structured Debt Facility (ANZ lead arranger) provides NRW the capability and flexibility to fund

asset purchases into the future, with ability to scale up as required with the participation of

• ther lenders on standard terms and conditions.

FACILITY ($m’s) Limit Available Bonding 208 73.6 Asset Funding 495 260.7 Working Capital 50 49.9 TOTAL $753.0 $384.2

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ORDER BOOK & REVENUE RUN OFF

• Order book as at 30 June 2012 is $2.0 billion comprising; Mining Services $1.1bn, Civil Contracting

$0.7bn, Drill & Blast $0.20bn

• Secured revenue for FY13 is $1.3bn comprising: $500 million for Mining; $640 million for Civil and

$160 million for Action Drill & Blast

• ECI projects and BMA Special Service Agreement projects are excluded from the order book.
• Order book excludes future expected revenue from projects included in the Rio Tinto Iron Ore

Framework Agreement with NRW as preferred contractor.

$2.0bn $0.7bn $0.3bn FY13 FY14 FY15 & beyond

Total order book at start: Mining Services Civil Contracting Drill & Blast $1.1bn $0.7bn $0.2bn $0.60bn $0.06bn $0.04bn $0.3bn

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$2.31bn $2.35bn $1.86bn $3.01bn $3.04bn

Civil WA Civil Qld Drill & Blast Mining WA Mining Qld

$13.4b

Strong tender activity and good visibility with $13.4 billion in the future tender pipeline across Australia. Current active tenders/framework projects approximately $4.6 billion comprised of: Civil: $0.92 billion Mining: $2.8 billion Drill & Blast: $0.88 billion

TENDER PIPELINE & ACTIVE TENDERS

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FY13 OUTLOOK

• NRW is confident of strong growth with an order book of $2 billion including secured

revenue for FY13 of $1.3 billion. The Company is targeting growth in both revenue and earnings of at least 15-20% in FY13.

• We expect to secure further work in Queensland and have a number of tenders

currently pending decision in the region, including new clients across the LNG

• sector. This is in line with our ongoing strategic plan to diversify by geography,

commodity and client.

• The Civil Division also expects to increase the scale and capability of its concrete

business to represent up to 30% of our Civil Division’s revenue in FY13.

• Selected JV’s on large infrastructure projects will also be a priority for future growth,

domestically and internationally.

• Mining growth is anticipated from existing and new clients in iron ore and coal. We

also continue to assess opportunities in other commodities both in domestic and emerging markets.

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FY13 OUTLOOK

• Action Drill & Blast will continue its strong growth profile through its existing client base

in WA and Queensland, as well as capitalising on new contract opportunities throughout Australia.

• Action Mining Services’ performance will be influenced by investment in the resource

sector for sales of products and outlook remains positive with increased sales to the East Coast through agency agreements as well as its traditional WA market expected to drive revenue.

• The Group’s balance sheet, funding facilities and cash position provide a strong

foundation for future organic growth or suitable acquisitions.

• Despite continued uncertainly in global markets and delays in formal approval of some

resource projects, we remain confident there is ample opportunity in the medium term for the business to continue to grow, as reflected by the strength of our current order book, tender pipeline and diversification strategy.

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