Investor Investor Presentation Presentation MARCH 2010 MARCH - - PowerPoint PPT Presentation

MARCH 2010 MARCH 2010 MARCH 2010 MARCH 2010

Investor Investor Presentation Presentation

Jules Pemberton Chief Operating Officer Mark Wallace Chief Financial Officer

2

Share Register Share Register

FPO Shares: 251 million Share Price History: Market Cap: $388 million 12 Month High: $2.16 P/E Ratio: 9.77* 12 Month Low: $0.32 Sector P/E ratio: 12.99* Last (19/03/10): $1.545

* Source Commsec

3

Key Clients Key Clients – – Civil & Mining Civil & Mining

Customer Mix (Mining) Customer Mix (Civil)

OM Holdings 34% FMG 26% Rio Tinto 36% Other 4%

Rio Tinto 21% Citic Pacific 53% BHP 23% Other 3%

4

Business Overview 1 Business Overview 1st

st Half FY2010

Half FY2010

CIVIL: Business Mix

Bulk Earthworks 54% Port Infrastructure 4% Rail 33% Roads 9% NT 12% WA 83% International 5%

Managanese 35% Iron Ore 65%

Business Mix (Mining) Business Mix (Civil) Revenue Contribution Geographical Spread

Bulk Earthworks 54% Port Infrastructure 4% Rail 33% Roads 9%

Civil 62% Mining 32% Action 4% Promac 2%

5

Safety Safety



At Feb 2010 NRW employs a workforce of 1600 personnel comprising direct staff and sub contractors.



Safety performance is an important fundamental factor in retaining key clients and the awarding of new contracts.



NRW has world class safety systems and procedures. Performance

500000 1000000 1500000 2000000 2500000 3000000 FY 2005 FY 2006 FY 2007 FY 2008 FY2009 YTD 2010 5 10 15 20 25 30 35 40 Man hours TRIFR (Total Recordable Injury Frequency Rate) LTIFR (Lost Time Injury Frequency Rate)

6

Human Resources Human Resources



Ongoing extensive Safety Training programmes attended by all staff



Indigenous Cultural Awareness workshops attended by all staff.



Accredited Cert.2 in Metaliferous Mining attended by 700 staff to date.



Diploma of Management for all Supervisors and site managers – attended by 150 staff



Power Up programme providing indigenous groups extensive training to enter the mining sector



Commitment to Dept. of Employment for intake

• f 100 indigenous employees each year.

Jeff McGlinn – Chief Executive Officer Julian Pemberton – Chief Operating Officer Willie Rooney – MD Civil & Mining Mark Wallace – Chief Financial Officer Mal Stewart – GM Civil Operations Simon Ridley – GM Mining Operations Bob McNair – GM HSE & Training Keith Bounsell – GM Action Mining Services Keith Bassett – GM Human Resources

Training & Development Initiatives Employee Retention and Mix Key Management

Dec 09 Dec 08 Total Staff 830 585 Indigenous Staff 11% 10% Project Staff 90% 90% Retention Rates 90% 90% Sub Contractors 800 600

7

Operation Overview Operation Overview

8

Civil Division Civil Division – – Key Projects Key Projects



Rail duplication - 54km of the southern section from Cowra siding to Yandi mine



Contract includes: Rail formations, drill and blast, track and signals and a 300 man camp



JV with Laing O’Rourke & John Holland



Chichester Deviation contract awarded by variation in Jan 2010 for $120m RGP5 (South) - BHPBIO Cape Preston – CP Mining



Port infrastructure and mine site earthworks.



6 million cubic meters of drill and blast rock



Contract includes: 3.7km breakwater construction, plant site and bulk earthworks



JV with VDM Group



Peak workforce in excess of 400

9

Civil Division Civil Division – – Key Projects Key Projects



Contract includes: All preliminary construction works including site drains, roads, retention ponds and all-weather airstrip



40,000 cubic metres of concrete for concentrator base



400-500 NRW personnel on site



Project value: $120 million Karara Concrete Works – Gindalbie Metals Christmas Creek Rail - FMG



Recommencement of Cloudbreak to Christmas Creek Mine Rail Spur Contract. Port Haven - BHPBIO



Camp earthworks, drainage and minor concrete works for a new camp adjacent to the Port Hedland airport



Area H – Variation awarded November 2009

10

Mining Services Mining Services – – Key Projects Key Projects



Drill and blast, excavation, haulage and waste dump management services



In-pit works including pre-development pit establishment, waste pre-stripping, waste cutback and remnant ore mining Hope Downs Mining – Rio Tinto



Drill & Blast, excavation of mine overburden, load and haul



Significant mine expansion proposed Christmas Creek - FMG

11

Mining Services Mining Services – – Key Projects Key Projects



Drill and blast, excavation, haulage waste dump management services and crusher feed



3 + 2 year contract term Bootu Creek – OM Holdings



Renegotiated contract extension through to December 2010 plus one year option



NRW onsite since July 2007 Simandou Project – Rio Tinto

12

Promac / Action Mining Promac / Action Mining



Product sales only business in FY2010



Lighting towers and Gensets demand strong in mining sector



Quotations increasing on service and water trucks as activity in resource sector picks up.

Promac Action Mining Services



Slow to recover but ahead of expectations to Dec 09



Repairs and Maintenance business now increasing output



Contracts secured for quarantine cleaning works associated with Gorgon Project.

13

Revenue and Order Book Outlook Revenue and Order Book Outlook

14

Revenue Outlook Revenue Outlook

15

Revenue & EBIT Margin Revenue & EBIT Margin

Consistent industry leading margins Consistent industry leading margins 186.2 76.7 277.6 471.2 509.6 12% 11% 12% 8% 13% 2005 2006 2007 2008 2009 Revenue ($m) Margin (%)

16

Order Book: Civil & Mining Order Book: Civil & Mining

Strongest order book in NRW Strongest order book in NRW’ ’s history s history

100 200 300 400 500 600 700 800 900 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Feb 2010

$m's

17

Order Book Run Off Order Book Run Off

FY 10 revenue secured and building FY11 and beyond FY 10 revenue secured and building FY11 and beyond

100 200 300 400 500 600 700 FY09 FY10 FY11 FY12 + $m's Completed Secured

18

Tender Break Tender Break-

• up

up

Tender Pipeline ($bn's)

$1.4 $3.3

Civil Mining

Tender Pipeline Mining 45% 55%

Coal Iron Ore

Tender Pipeline Civil 92% 5% 3%

Bulk Earthworks Rail Road

19

Capital Expense Capital Expense



NRW has invested in equipment during the 1HY10 in order to capitalize on the upward demand for commodities.



Strategic purchases made at reduced

• cost. New assets immediately deployed
• n Bootu Creek and Western Turner

Syncline projects.



Total expenditure to 31 Dec 2009 is $33.79m



Future capex driven by new project awards.

4.4 8.0 6.2 7.4 26.4 19.7 51.0 36.4 10 20 30 40 50 60 70 FY 07 FY 08 FY09 1H 10 $m Maintenance Growth

20

Strategy & Outlook Strategy & Outlook

Mining Civil

• Continued involvement in WA iron ore expansion

projects.

• East Coast expansion into coal.
• International expansion building on current African

presence.

• Focus on long term revenue contracts
• Opportunities in oil & gas infrastructure projects.
• Road, rail and bridge construction with increased capital

expense in resource sector.

• Develop opportunities in government and utilities sector

including WA and QLD Roads. Prequalification's in place.

The expected NPAT range for FY10 is $33 - $38m with legacy of contracts awarded during GFC running off during the current financial year. As world wide demand for commodities continues to improve the outlook is very positive for the Group and the mining services sector.

Action & Promac

• International sales opportunities for Promac’s Lighting

plants and Gensets

• Develop the fabrication arm of Action Mining

21

Strategy & Outlook Strategy & Outlook

New Business Divisions

• Internal establishment of a concrete division undertaking

significant project works at Gindalbie

• Establishment of Drill & Blast division to service internal

mining and civil projects. Future opportunity to offer drill and blast services externally



Grow revenue at a compounding rate of 20% per annum.



Target double digit EBIT margins.



Grow earnings per share.



Grow order book to $2bn.



Continue to provide, involve and integrate indigenous groups through training, employment and JV initiatives.



Maintain conservative net Debt/Equity levels in order to sustain a strong balance sheet.



Reinstate dividend policy to 40 – 60% payout of net profit.

22

Appendices Appendices

23

Appendix: Balance Sheet Appendix: Balance Sheet

44.7% 22.0% 29.3% Net debt / (Net debt + equity) 8.4x 7.2x 6.2x EBIT / net interest Debt / Balance Sheet Metrics 117.2 142.3 156.8 Shareholders equity 117.2 142.3 156.8 Net assets 311.7 311.8 347.3 Total Assets 185.0 165.3 187.1 Other Assets 123.4 125.9 145.8 PPE 3.3 20.6 14.5 Cash 2008 2009 1HY10 $m unless stated

24

Appendix: Profit & Loss Appendix: Profit & Loss

4.0 cents 1.0 cents 3.0 cents DPS 5.7 cents 8.0 cents 6.1 cents EPS $13.7 $19.8 $15.3 Net profit after tax $22.7 $32.9 $25.8 EBIT $30.2 $43.1 $38.0 EBITDA $253.5 $269.6 $275.6 Total Revenue

1HY 08 1HY 09 1HY 10 $ millions

NRW has a strong track record of growing revenue and delivering profits through safe working practices, efficiency, production and service. The growth trend of NPAT was interrupted by GFC, however the outlook is positive. NRW’s strong balance sheet and earnings protected the company from having to raise equity and dilute earnings during the GFC.