roadshow - syd melb 23 24 march 2010 final · 6 million cubic meters of drill and blast rock...
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MARCH 2010MARCH 2010
Investor Investor PresentationPresentation
Jules PembertonChief Operating Officer
Mark WallaceChief Financial Officer
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Share RegisterShare Register
FPO Shares: 251 million Share Price History:Market Cap: $388 million 12 Month High: $2.16P/E Ratio: 9.77* 12 Month Low: $0.32 Sector P/E ratio: 12.99* Last (19/03/10): $1.545
* Source Commsec
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Key Clients Key Clients –– Civil & MiningCivil & Mining
Customer Mix (Mining) Customer Mix (Civil)
OM Holdings34%
FMG26%
Rio Tinto36%
Other4% Rio Tinto
21%
Citic Pacific53%
BHP23%
Other3%
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Business Overview 1Business Overview 1stst Half FY2010Half FY2010
CIVIL: Business Mix
Bulk Earthworks54%
Port Infrastructure4%
Rail33%
Roads9%
NT12%
WA83%
International5%
Managanese35%
Iron Ore65%
Business Mix (Mining) Business Mix (Civil)
Revenue Contribution Geographical Spread
Bulk Earthworks54%
Port Infrastructure4%
Rail33%
Roads9%
Civil62%
Mining32%
Action4%
Promac2%
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SafetySafety
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
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500000
1000000
1500000
2000000
2500000
3000000
FY 2005 FY 2006 FY 2007 FY 2008 FY2009 YTD 2010
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5
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25
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35
40
Man hoursTRIFR (Total Recordable Injury Frequency Rate)LTIFR (Lost Time Injury Frequency Rate)
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Human ResourcesHuman 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 of 100 indigenous employees each year.
Jeff McGlinn – Chief Executive OfficerJulian Pemberton – Chief Operating OfficerWillie Rooney – MD Civil & MiningMark Wallace – Chief Financial OfficerMal Stewart – GM Civil OperationsSimon Ridley – GM Mining OperationsBob McNair – GM HSE & TrainingKeith Bounsell – GM Action Mining ServicesKeith Bassett – GM Human Resources
Training & Development Initiatives
Employee Retention and Mix
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Key Management
Dec 09 Dec 08Total Staff 830 585Indigenous Staff 11% 10%Project Staff 90% 90%Retention Rates 90% 90%Sub Contractors 800 600
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Civil Division Civil Division –– Key ProjectsKey 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
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Civil Division Civil Division –– Key ProjectsKey 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: $120 million
Karara Concrete Works – Gindalbie Metals
Christmas Creek Rail - FMG
Recommencement of Cloudbreak to Christmas Creek Mine Rail Spur Contract.
Port Haven - BHPBIO
Camp earthworks, drainage and minor concrete works for a new camp adjacent to the Port Hedland airport
Area H – Variation awarded November 2009For
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Mining Services Mining Services –– Key ProjectsKey Projects
Drill and blast, excavation, haulage and waste dump management services
In-pit works including pre-development pit establishment, waste pre-stripping, waste cutback and remnant ore mining
Hope Downs Mining – Rio Tinto
Drill & Blast, excavation of mine overburden, load and haul
Significant mine expansion proposed
Christmas Creek - FMG
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Mining Services Mining Services –– Key ProjectsKey Projects
Drill and blast, excavation, haulage waste dump management services and crusher feed
3 + 2 year contract term
Bootu Creek – OM Holdings
Renegotiated contract extension through to December 2010 plus one year option
NRW onsite since July 2007
Simandou Project – Rio Tinto
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Promac / Action MiningPromac / Action Mining
Product sales only business in FY2010
Lighting towers and Gensets demand strong in mining sector
Quotations increasing on service and water trucks as activity inresource sector picks up.
Promac
Action Mining Services
Slow to recover but ahead of expectations to Dec 09
Repairs and Maintenance business now increasing output
Contracts secured for quarantine cleaning works associated with Gorgon Project.
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Revenue & EBIT MarginRevenue & EBIT Margin
Consistent industry leading marginsConsistent industry leading margins
186.2
76.7
277.6
471.2
509.6
12%11%
12%
8%
13%
2005 2006 2007 2008 2009
Revenue ($m) Margin (%)
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Order Book: Civil & MiningOrder Book: Civil & Mining
Strongest order book in NRWStrongest order book in NRW’’s historys history
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700
800
900
Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Feb 2010
$m's
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Order Book Run OffOrder Book Run Off
FY 10 revenue secured and building FY11 and beyondFY 10 revenue secured and building FY11 and beyond
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FY09 FY10 FY11 FY12 +
$m's
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Tender BreakTender Break--upup
Tender Pipeline ($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
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Capital ExpenseCapital 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 on 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
26.419.7
51.0
36.4
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70
FY 07 FY 08 FY09 1H 10
$m
Maintenance Growth
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Strategy & OutlookStrategy & 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 MiningFor
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Strategy & OutlookStrategy & Outlook
New BusinessDivisions
• 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 andblast 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 $2bn.
Continue to provide, involve and integrate indigenous groups through training, employment and JV initiatives.
Maintain conservative net Debt/Equity levels in order to sustain a strong balance sheet.
Reinstate dividend policy to 40 – 60% payout of net profit.For
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Appendix: Balance SheetAppendix: Balance Sheet
44.7%22.0%29.3%Net debt / (Net debt + equity)
8.4x7.2x6.2xEBIT / net interest
Debt / Balance Sheet Metrics
117.2 142.3 156.8 Shareholders equity
117.2 142.3 156.8 Net assets
311.7 311.8 347.3 Total Assets
185.0 165.3 187.1Other Assets
123.4 125.9 145.8PPE
3.3 20.6 14.5Cash
200820091HY10$m unless stated
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Appendix: Profit & LossAppendix: Profit & Loss
4.0 cents1.0 cents3.0 centsDPS
5.7 cents8.0 cents6.1 centsEPS
$13.7$19.8$15.3Net profit after tax
$22.7$32.9$25.8EBIT
$30.2$43.1$38.0EBITDA
$253.5$269.6$275.6Total Revenue
1HY 081HY 091HY 10$ 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.
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