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COFFEY INTERNATIONAL LIMITED
Half Year Results Presentation
15 February 2012
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November 2010 John Mulcahy becomes Chairman
December 2010 Board instigates management review and cost reduction program
$18 million annual cost base improvement by FY2012
March 2011 John Douglas commences as Managing Director
Business / strategy review initiated
June 2011 1st stage review completed
Financial update to market
August 2011 Reported FY2011 results
October 2011 Capital Raising
February 2012 Reported H1 FY2012 results
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Improved Result Reflects Impact of Completed Strategic Initiatives
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Improved Profitability
¹ Underlying EBITDA — EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) before impairment and restructuring costs
² Underlying EBITDA from continuing operations excludes discontinued businesses of LA Environments and Rail
H1 H2 H1
6 months FY11 FY11 FY12
($m) ($m) ($m)
Fee revenue 222.6 201.1 212.5
Underlying EBITDA¹ 15.6 16.7 23.0
Underlying EBITDA² from continuing operations 15.9 15.0 20.4
Restructuring costs (5.3) (3.8) 0.0
Impairment 0.0 (62.9) 0.0
EBITDA 10.3 (50.0) 23.0
EBIT 5.1 (55.1) 18.6
NPAT (4.7) (65.0) 4.6
EPS (Basic – cents per share) (3.6) (49.2) 2.8
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$44.9m
$55.4m
$47.9m
$32.3m
$23.0m
$45.0m
FY08 FY09 FY10 FY11 FY12
Underlying EBITDA¹
Actual Guidance
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Improved Margins
¹ Underlying EBITDA — EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) before impairment and restructuring costs
² Underlying EBITDA Margin represents underlying EBITDA over Fee Revenue
11.9% 10.8%
10.1%
7.6%
10.8%
FY08 FY09 FY10 FY11 H1 FY12
Underlying EBITDA Margin²
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Significant De-Risking
Net Debt/
EBITDA
= 1.72
Net Debt/
EBITDA
= 3.75
$45m
$77.5m
$32.3m
$121.2m
$23m
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Improved Net Asset Position
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Dec June Dec
2010 2011 2011
($m) ($m) ($m)
Cash & equivalents 35.6 29.6 37.1
Current assets (excl. cash) 170.5 157.2 159.9
Non-current assets (excl. cash) 254.5 191.0 189.2
Total assets 460.6 377.8 386.2
Current borrowings 1.2 46.8 5.6
Other current liabilities 113.7 91.8 94.8
Non-current Borrowings 138.6 104.0 109.0
Other Non-current liabilities 19.9 12.8 12.5
Net assets 187.2 122.4 164.3
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Debt Paid Down
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Components of Change in Net Debt
Net Operating Cash Inflow $10.8m
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Improved Gearing
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6 months
Dec June Dec
2010
($m)
2011
($m)
2011
($m)
Total Cash
35.6 29.6 37.1 (including non-current cash deposits)
AUD$ denominated debt 99.8 116.5 79.2
Non AUD$ denominated debt 40.0 34.3 35.4
Total Debt 139.8 150.8 114.6
Net Debt 104.3 121.2 77.5
Total facilities (excl bank guarantees) 185.0 179.0 142.0
Cash and debt available 80.7 57.8 64.5
Equity 187.2 122.4 164.3
Net Debt to (Equity + Net Debt) 36% 50% 32%
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Improved Financing Facilities
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Headroom
$64.5m
30 June 2011
31 December 2011
Post December 2011
Headroom
$79.5m
$77.5m
Net Debt
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Positive Net Profit After Tax
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H1 H2 H1
6 months FY11 FY11 FY12
($m) ($m) ($m)
EBITDA 10.3 (50.0) 23.0
Depreciation and Amortisation (5.2) (5.1) (4.4)
Interest (7.3) (8.2) (9.4)
Taxation and Minority Interests (2.5) (1.8) (4.6)
NPAT (4.7) (65.1) 4.6
• No interim dividend declared
• The Board will review the potential for a dividend with the FY2012 full year results
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P & L by Segment
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¹Underlying EBITDA before one-off impairment and restructuring costs
Footnote: Certain comparative data has been represented to align with the current period
FY09 FY10 FY11 FY12
H1 H2 YTD H1 H2 YTD H1 H2 YTD H1
($m) ($m) ($m) ($m) ($m) ($m) ($m) ($m) ($m) ($m)
Fee Revenue 261.2 249.3 510.5 241.0 234.7 475.7 222.6 201.1 423.6 212.5
Geosciences 138.1 118.1 256.2 126.7 111.9 238.5 117.9 117.0 234.9 132.4
International Development 71.6 80.3 151.9 71.2 82.0 153.2 67.5 54.8 122.3 54.2
Project Management 37.3 37.9 75.2 32.9 28.4 61.3 26.5 20.4 46.9 19.3
Other 14.2 13.0 27.2 10.3 12.4 22.7 10.7 8.9 19.6 6.6
Underlying EBITDA¹ 34.9 20.5 55.4 30.5 17.5 47.9 15.6 16.7 32.3 23.0
Geosciences 20.9 9.2 30.1 19.8 9.7 29.5 8.2 14.5 22.7 16.3
International Development 9.9 9.3 19.2 10.0 10.4 20.5 10.4 5.0 15.4 8.0
Project Management 5.5 4.7 10.1 4.1 0.4 4.5 0.7 (0.6) 0.1 0.0
Other 2.3 1.1 3.5 0.1 0.4 0.5 (0.2) 1.3 1.0 2.4
Corporate (3.8) (3.8) (7.6) (3.6) (3.5) (7.1) (3.5) (3.5) (7.0) (3.7)
EBITDA Margin % of Fee
Revenue 13% 8% 11% 13% 7% 10% 7% 8% 8% 11%
Geosciences 15% 8% 12% 16% 9% 12% 7% 12% 10% 12%
International Development 14% 12% 13% 14% 13% 13% 15% 9% 13% 15%
Project Management 15% 12% 13% 12% 2% 7% 3% (3%) 0% 0%
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Safety Performance Remains On Track
*LTIFR = Lost Time Injury Frequency Rate.
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1.56
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11
Coffey LTIFR* (12 Month Rolling Average) January 2011 to December 2011
2.36
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Ongoing Board Renewal
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September 2009 John Mulcahy appointed Non-executive Director
October 2010 Susan Oliver appointed Non-executive Director
November 2010 John Mulcahy appointed Chairman
March 2011 John Douglas commenced as Managing Director
February 2012
Guy Cowan and Leeanne Bond appointed Non-executive Directors
Charles Jamieson AM and Stephen Williams retire as Non-executive Directors
Urs Meyerhans appointed Finance Director
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Leeanne Bond Guy Cowan
New Non-executive Directors
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Age 60
Committees:
• Chair - Risk Committee
• Member - Audit Committee
Age 46
Committees:
• Member - Remuneration Committee
Mr Cowan spent 23 years working for energy
group Shell, most recently as Chief Financial
Officer of Shell Petroleum Inc, and CFO and
a Director of Shell Oil Company in the USA.
He was CFO of Fonterra Co-operative Group
Limited from Feb 2005 - Feb 2009.
Mr Cowan is a Non-executive Director of
Ludowici Ltd, UGL Limited, Queensland
Sugar Limited and Gold Oil PLC (UK), and
Chairman of the Advisory Board of Beak and Johnston Limited.
From 1996 to 2006 Ms Bond held a number of
roles with Worley Parsons in Queensland
including General Manager Hydrocarbons and
Development Manager (Queensland).
Ms Bond is a Non-executive Director of Liquefied
Natural Gas Ltd and Australian Water Recycling
Centre of Excellence Ltd, and a Board member of
the Queensland Bulk Water Supply Authority
(Seqwater).
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Falling Staff Turnover
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Annualised Staff Turnover
February 2011 to January 2012
Sta
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Bottom-Up Strategy Process Underway
• Markets remain positive particularly in Geosciences
• Further operational improvement is available
• Development for key technical and managerial staff is a priority
• Opportunities exist for organic growth within the existing geographic footprint
• Acquisition opportunities are being monitored but are not a short term focus
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Initial Portfolio Review Complete
• LA Environments divested – June 2011
• Commercial Advisory closed – July 2011
• Middle East Projects closed – September 2011
• Rail sold for $9.0 million – February 2012
The future of Specialist Training Australia (STA) is under review in light of current
exchange rates: provides less than 10% of International Development’s revenue and has
low margins
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Ongoing Portfolio Review
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EBITDA Breakdown H1 FY12
(for continuing Businesses)
Fee Revenue H1 FY12
(for continuing Businesses)
Focused on 3 Key Businesses
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• Geosciences ~ 1,800 employees
• International Development ~1,600 employees
• Project Management ~190 employees
Total: $206.0m Total: $24.3m
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Geosciences – A Well Integrated Offering
A very strong Australian brand in a discipline where Australia itself, is strong
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Geosciences – Fee Revenue Continues to Improve
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Geosciences Fee Revenue – Moving Annual Total
December 2009 to December 2011
De
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9
Jan
-10
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0
Ma
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0
Ap
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0
Ma
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0
Jun
-10
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g-1
0
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0
De
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-11
Fe
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1
Ma
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1
Ap
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Ma
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Se
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Oc
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No
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De
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$A
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-F
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Geosciences Fee Revenue - Moving Annual Total
Series1
$m
Fe
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eve
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Geosciences – Improving Pricing & Efficiencies
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Geosciences – 12 Month Moving Annual Total
Fee Revenue to Wage Ratio (Pre Bonuses)
December 2010 to December 2011
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H1 FY12 Breakdown by Sector H1 FY12 Breakdown by Geography
Geosciences – Exposed to Good Geographies & Buoyant Sectors
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Fee Revenue
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International Development – Wide-ranging Geographic
Exposure and Deep Capability
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
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Total: $67.5m Total: $54.2m
H1 FY11
International Development – Stable Revenues through
Geographic Diversification
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Clients include:
H1 FY12 H2 FY11
Total: $54.8m
Fee Revenue
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Australia &New Zealand83%
Europe &Middle East10%
Africa 7%
H2 FY11 H1 FY11
Australia &New Zealand83%
Europe &Middle East10%
Africa 7%
Project Management – Refocused on ANZ and Africa with
Upside Exposure to the Property Cycle
Australia &New Zealand86%
Europe &Middle East3%
Africa 11%
Total: $19.3m Total: $20.4m Total: $26.5m
H1 FY12
Fee Revenue
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Coffey Outlook
• Coffey is well positioned with a solid cash flow and a strengthened balance sheet
• Geosciences’ core markets in infrastructure, oil & gas, and mining continue to have a
positive outlook
• In International Development increased spend in Australia and the UK is offsetting a
weaker US outlook
• Projects continue to contribute with future upside exposure to the property cycle
• We are reconfirming FY2012 EBITDA guidance of $45 million
• We expect reduced interest and tax costs in the H2 FY2012 with improved NPAT
• The Board will review the potential for a dividend with the FY2012 full year results
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Financial
Performance Improved profits – EBITDA of $23m
Improved margins – EBITDA margin of 10.8%
Positive operating cash flow – $10.8m
Significant de-risking – Net debt: EBITDA of 1.75
Improved net asset position – Net assets of $164.3m
Debt paid down – Net debt at $77.5m
Improved gearing – reduced to 32%
Positive NPAT – $4.6m
Business
Performance Safety is a key priority and performance remains on track
Ongoing Board renewal
Overhead salary expenses controlled
Falling staff turnover
Strategy process underway
Initial portfolio review completed
Geosciences
- Fee revenue continues to improve
- Improving pricing and efficiencies
- Exposed to good geographies and buoyant sectors
International Development
- Stable revenues through geographic diversification
Projects
- Subdued property cycle
Outlook Reconfirming FY2012 EBITDA guidance of $45m
Review potential for a dividend with FY2012 full year results
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Disclaimer
The material in this presentation is a summary of the results of Coffey International Limited (Coffey) for the 6 months ended 31 December 2011 and an update on Coffey’s activities and is current at the date of preparation, 15 February 2012. Further details are provided in the Company’s half year accounts and results announcement released on 15 February 2012.
No representation, express or implied, is made as to the fairness, accuracy, completeness or correctness of information contained in this presentation, including the accuracy, likelihood of achievement or reasonableness of any forecasts, prospects, returns or statements in relation to future matters contained in the presentation (“forward-looking statements”). Such forward-looking statements are by their nature subject to significant uncertainties and contingencies and are based on a number of estimates and assumptions that are subject to change (and in many cases are outside the control of Coffey and its Directors) which may cause the actual results or performance of Coffey to be materially different from any future results or performance expressed or implied by such forward-looking statements.
This presentation provides information in summary form only and is not intended to be complete. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor.
Due care and consideration should be undertaken when considering and analysing Coffey’s financial performance. All references to dollars are to Australian Dollars unless otherwise stated.
To the maximum extent permitted by law, neither Coffey nor its related corporations, Directors, employees or agents, nor any other person, accepts any liability, including, without limitation, any liability arising from fault or negligence, for any loss arising from the use of this presentation or its contents or otherwise arising in connection with it.
This presentation should be read in conjunction with other publicly available material. Further information including historical results and a description of the activities of Coffey is available on our website, coffey.com
Photos owned by Coffey or Coffey employees and permission is provided.
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