ABN 70 108 112 303 For personal use only · (ENR) gave Cardno the following rankings: > #10 in the...

Cardno Limited ABN 70 108 112 303

Level 11

515 St Paul’s Terrace

Fortitude Valley QLD 4006

Australia

Locked Bag 4006

Fortitude Valley QLD 4006

Australia

Phone: 61 7 3369 9822

Fax: 61 7 3369 9722

www.cardno.com.au

Our Ref CL-12 NOD Contact Michael Pearson

21 August 2013 Australian Securities Exchange Companies Announcements Office Dear Sir/Madam, AMENDED 2013 FULL YEAR RESULTS PRESENTATION

Please find attached a copy of our revised 2013 Full Year Results presentation, the original of which was provided to the market yesterday. It is noted that amendments have been made to the following two slides:-

> Slide 5 – correction to date > Slide 16 – correction to chart index colour > Slide 29 – correction to the description of the Ameristar project

Yours faithfully Michael P Pearson Company Secretary for Cardno Limited

For

per

sona

l use

onl

y

Cardno Limited2013 Full-Year Results PresentationAugust 2013

Presenters:Andrew Buckley, Managing DirectorGraham Yerbury, CFOF

or p

erso

nal u

se o

nly

1 / 2013 Full-Year Results Presentation

Disclaimer

This presentation contains certain statements and projections provided by or on behalf of Cardno Limited with respect to the anticipated future undertakings. Any forward-looking statements reflect various assumptions by or on behalf of Cardno. Accordingly, these statements are subject to significant business, economic and competitive uncertainties and contingencies associated with the business of Cardno which may be beyond the control of Cardno which could cause actual results or trends to differ materially, including but not limited to competition, industry downturns, inability to enforce contractual and other arrangements, legislative and regulatory changes, sovereign and political risks, ability to meet funding requirements, dependence on key personnel and other market and economic factors. Accordingly, there can be no assurance that any such statements and projections will be realised. Cardno makes no representations as to the accuracy or completeness of any such statement of projections or that any projections will be achieved and there can be no assurance that any projections are attainable or will be realised.

Additionally, Cardno makes no representation or warranty, express or implied, in relation to, and no responsibility or liability (whether for negligence, under statute or otherwise) is or will be accepted by Cardno or by any of their respective officers,directors, shareholders, partners, employees, or advisers (Relevant Parties) as to or in relation to the accuracy or completeness of the information, statements, opinions or matters (express or implied) arising out of, contained in or derivedfrom this presentation or any omission from this presentation or of any other written or oral information or opinions provided now or in the future to any interested party or its advisers. In furnishing this presentation, Cardno undertakes no obligation to provide any additional or updated information whether as a result of new information, future events or results or otherwise.

Except to the extent prohibited by law, the Relevant Parties disclaim all liability that may otherwise arise due to any of this information being inaccurate or incomplete. By obtaining this document, the recipient releases the Relevant Parties from liability to the recipient for any loss or damage which any of them may suffer or incur arising directly or indirectly out of or in connection with any use of or reliance on any of this information, whether such liability arises in contract, tort (includingnegligence) or otherwise.

This document does not constitute, and should not be construed as, either an offer to sell or a solicitation of an offer to buy orsell securities. It does not include all available information and should not be used in isolation as a basis to invest in Cardno. F

or p

erso

nal u

se o

nly


Cardno Overviewand Highlights

Financial Review

Strategy and Acquisitions

Projects

Outlook

Appendix

For

per

sona

l use

onl

y


CardnoOverviewand Highlights

For

per

sona

l use

onl

y


1 Cardno Overview

> Cardno (ASX:CDD) is a professional infrastructure and environmental services company, with specialist expertise in the development and improvement of physical and social infrastructure for communities around the world. Cardno’s team includes leading professionals who plan, design, manage and deliver sustainable projects and community programs.

> Cardno is an ASX200 company and has 143.7million shares on issue and has a market capitalisation around $850 million.

> Cardno was founded in 1945 in Brisbane, Australia, and now employs around 8,000 staff in over 290 offices working on projects in 85 countries.

> Since listing Cardno has delivered nine consecutive years of record NPAT.

For

per

sona

l use

onl

y


1 Five Year Snapshot

Record NPAT Delivery of $77.6 million but EPS down due to equity issuance and compressed margins

*CAGR = five year compound annual growth rate

For

per

sona

l use

onl

y


1 Cardno 2013 FY Highlights - Financials

> Record profit of $77.6m up by 4.7% on FY2012, despite variable conditions

> Record EBITDA of $135.3m up 5.1% on 2012

> Earnings per share of 55.1 cents

> Full-year dividend at 36 cents, final 18 cents dividend 100% franked

> Strong operating cash flow of $95.7m

> Strong balance sheet– net debt / equity of 23.9%– cash on hand of $90.5m

> Profit impacted by restructuring costs and increased merger acquisition costs

> Robust forward project pipeline (Work In Hand) $710m as at June 2013, up from $671m last yearF

or p

erso

nal u

se o

nly


1 Cardno 2013 FY Highlights - Growth

> Organic revenue growth for the year is around 1%

> Organic revenue growth in the December 2012 Half Year was 7.6%

> Second half revenue and profit were impacted by:

Tapering of the environmental consulting work associated with the Gulf of Mexico oil spillExtended winter weather and storms in North America Longer than average wet season in AustraliaThe initial impacts of the US Federal Government sequester on the award of government contractsWinding back of mining projects, especially in AustraliaLack of confidence in Australia reducing new project start-ups

For

per

sona

l use

onl

y


1 Cardno 2013 FY Highlights – M&A

Diversification via acquisitions has continued in FY13:> Mining and energy sector in the USA

(Cardno MM&A)

> Environmental sector in the USA(Cardno EM-Assist & Cardno ChemRisk)

> Water and environmental sector in New Zealand(Cardno BTO)

> Surveying practice in Australia(Cardno Hard & Forester)

> Infrastructure engineering in South America(Cardno Caminosca)

> Construction materials testing in Western Australia(Cardno Geotech)

For

per

sona

l use

onl

y


1 Safety performance continues to improve

Cardno LTIFR* at the end of June 2013:> 0.69 per million man-hours

(0.14 per two hundred thousand person-hours - US equivalent)

* Lost Time Injury Frequency Rate

In FY2013, Cardno achieved an improvement in our Lost Time Injury Frequency Rate and Total Recordable Injury Frequency Rate. The Zero Harm program responds to the changing needs of the business and clients, and provides managers and staff with resources to fulfill their roles and responsibilities with regard to safety.For

per

sona

l use

onl

y


1 Awards

Cardno won ‘Best Provider as rated by the ASX Top 100’ and ‘Best Provider to the primary industry sector’ awards at the 2013 BRW Client Choice Awards.

2013 Engineering News-Record’s (ENR) gave Cardno the following rankings:> #10 in the Top 100 Pure

Designers in the US, within the ENR Top 500 Design Firms

> #35 in the Top 150 Global Design Firms, within the ENR Top 225 International Design Firms

Cardno is the fastest growing engineering and environmental consulting firm in North America for the third consecutive year.

For

per

sona

l use

onl

y


1 Outlook

> Cardno’s global market conditions continue to be variable Australia and New Zealand remain difficult but we are active on several ongoing oil and gas projects and there are signs residential construction and infrastructure projects are picking upIn the United States economic activity is improving and the environmental sector is still strong. However, the Gulf of Mexico oil spill work continues to slow

> Project pipeline (WIH) of $710 m at 30 June 2013 in line with our expectations (circa 10 months of fee revenue)

> Over 50% of Cardno’s revenue is in US$, so the weakening of the AU$ will be a positive for earnings

> Growth via both organic expansion and acquisitions to continue, strengthening Cardno’s core competencies

> Cardno has strong cash flow with a healthy balance sheet to support further growthF

or p

erso

nal u

se o

nly


FinancialReview

For

per

sona

l use

onl

y


2 2013 Financial Highlights

Cardno Limited FY2013($m)

FY2012($m)

Change

Revenue from operations 1,195.4 965.8 23.8%

Fee revenue 886.0 709.4 24.9%

EBITDA 135.3 128.7 5.1%

EBITDA margin 15.3% 18.1%

Net profit after tax 77.6 74.2 4.7%

Basic earnings per share (cents) 55.09 61.73 -10.8%

Net operating cash flow 95.7 72.6 31.8%

Dividends per share (cents) 36 36 -

Total assets 1,134.2 958.7 18.3%

Total liabilities 501.7 409.9 22.4%For

per

sona

l use

onl

y


2 Cash and Earnings – Key Results

Cardno continues to demonstrate strong cash conversion capability with operating cash flow of $95.7 million in the 2013 FY.

EBITDA at record levels. EBITDA margin declined due to difficult market conditions, and increased M & A and restructuring costs.

For

per

sona

l use

onl

y


2 Debt and Liquidity

> Financial capacity to support future growth

> Cardno increased its existing term loan facilities in FY13

* represents bank guarantees drawn under a guarantee sub facility as part of a combined working capital facility

Key Metrics FY2013 FY2012

Gross Debt to Equity 38.2% 36.2%Net Debt to Equity 23.9% 16.6%Facility Utilisation 70% 75%Average Cost of Debt 2.23% 2.20%Average Maturity (yrs) 2.4 3.3Interest Cover (times) 20.7 21.0Debt/EBITDA Ratio 1.8 1.6

Liquidity Summary $m FY2013 FY2012

Term Loan and Working Capital Facilities 353.1 272.1Less:Term Loan Utilised (234.4) (194.0)Working Capital Utilised* (12.1) (9.0)Available Facilities 106.6 69.1Plus: Cash 90.6 107.9

Total Liquidity 197.2 177.0For

per

sona

l use

onl

y


2 Diversified revenue streams – Geographic and Segment

For

per

sona

l use

onl

y


2 Diversified revenue streams - Market and Client Type

For

per

sona

l use

onl

y


2 Operating Segment Performance- Americas (including Software)

Americas FY2013 FY2012

Fee revenue ($m) 447.7 317.7

Recoverable expenses ($m) 160.1 136.1

Total Revenue ($m) 607.8 453.8

EBIT($m) 59.2 49.2

Fee revenue margin 13.2% 15.5%

COMMENTARY> Strong revenue growth due to contribution

from acquisitions > Organic growth down in second half due

to reduction in oil spill work> Margins down, due to drop in oil spill

margins and full-year impact of lower Cardno ATC margins

> Environmental sector remains healthy and broader economic conditions improving

OUTLOOK> Cautiously optimistic about the outlook for

the Americas Region > Business and consumer confidence

is improving > Housing, commercial and industrial

development up> State and municipal markets are

expanding with federal to remain flat> South America continues to provide

growth opportunitiesFor

per

sona

l use

onl

y


2COMMENTARY> Figures include Cardno BEC and

Middle East> Organic growth lower in the

second half> Acquisitions performing well> Margins down due to weak market

conditions and inability to fully pass on increased labour costs

OUTLOOK> Outlook for the ANZ Region

remains challenging> Confidence is gradually returning

to the housing sector and some significant infrastructure projects are expected in NSW, Victoria and Queensland

> CMT expected to perform well

Operating Segment Performance- Australia & New Zealand

Australia & New Zealand FY2013 FY2012

Fee revenue ($m) 361.4 324.0



EBIT($m) 55.1 55.9


For

per

sona

l use

onl

y


2COMMENTARY> Fee revenue up over 6%> EBIT up slightly, but margins

slightly down> Market conditions difficult due

to government spending restraint> Project pipeline remains strong

OUTLOOK> Global economic conditions have

constrained development assistance budgets

> Recent project wins will underpin our performance in FY 2014

Operating Segment Performance- Emerging Markets

Emerging Markets FY2013 FY2012

Fee revenue ($m) 79.0 74.2



EBIT($m) 5.5 5.4


For

per

sona

l use

onl

y


Strategy and Acquisitions

For

per

sona

l use

onl

y


3 Cardno Strategy

“One Cardno, One Vision”Cardno uses a 5 year Strategic Planning cycle

2010-2015 plan theme is: “One Cardno, One Vision”

Focus of the plan is to:> Grow Cardno significantly through to 2015> Increase benefits from ongoing integration> Foster cross selling> Optimise overhead costs> Aim for audacious growth targets> Broadly increase our profile

For

per

sona

l use

onl

y


3 Core Businesses

> Global professional services business with around 8,000 people in 290 offices spanning projects in over 85 countries.

> 85% of staff are professionals and technical staff.

> Primary disciplines of planning, surveying, engineering and management services, environmental sciences, construction materials testing and social infrastructure delivery – involved in all areas of a projects life cycle

> Focus on developing/improving physical and social infrastructure for private and public sectors.

> Environmental consulting markets continue to deliver strong performance.

For

per

sona

l use

onl

y


3 Cardno Growth Strategy

> Combine organic growth and M & A to become a world leader in our industry

> Build recurring revenue streams and organic growth through cross selling

> Focus on strengthening core disciplines through strategic acquisitions and organic growth

> Sustain historically high retention of principals

> Foster/encourage employee shareholding to incentivise performance and align interests of employees and shareholders

> Maintain risk-averse balance between major and smaller projects

> Continue diversification strategy – both geographical and market sectors

For

per

sona

l use

onl

y


3


Expanding Globally- Recent acquisitions highlighted

For

per

sona

l use

onl

y


3 Seven new merger partners in FY2013

> Cardno MM&A: is a diverse 180-person engineering and consulting firm based in Virginia, USA. As part of Cardno’s Engineering and Environmental Services Division, MM&A provides the company with expertise in mining engineering, mine reserve evaluation, oil and gas exploration, feasibility studies and due diligence services for mining and resource projects. Cardno MM&A’s clients include US government departments and several high-profile mining companies.

> Cardno EM-Assist: is a 140-person company based in California, USA, that operates within Cardno’s Government Services Division. The firm specialises in environmental management and compliance services, encompassing air quality, hazardous materials, hazardous waste and environmental restoration. In addition, it markets a portfolio of customised software products which augment its core service offerings.

> Cardno BTO: is a 21-person water and wastewater process engineering specialist firm that delivers exceptional service to public and private clients throughout Australia and New Zealand. It provides innovative solutions developed through strong relationships of mutual trust and respect with clients, as well as a commitment to quality and sustainability.

> Cardno Hard & Forester: is a 53-person leading surveying firm based in Sydney, Australia. It has a strong client base including major civil contractors, councils, the state road authority, the rail authority and resource companies. It offers a complete range of professional surveying services, specialising in strategic planning, feasibility assessment, detailed design, construction and asset management.

For

per

sona

l use

onl

y


3 Seven new merger partners in FY2013

> Cardno ChemRisk: is a 95-person environmental risk consulting firm based in San Francisco, USA. As part of Cardno’s Natural Resource Management & Health Sciences Division, Cardno ChemRisk works with clients around the globe to improve the health and safety of their products, operations, workers, the public and the environment. Cardno ChemRisk’s staff have backgrounds in areas such as toxicology, industrial hygiene, epidemiology, ecotoxicology, environmental sciences and risk assessment.

> Cardno Caminosca: is a 450-person engineering consulting company based in Ecuador. As part of Cardno’s Latin American Division, the firm provides specialist engineering consulting services in the hydropower, mining, oil and gas, roads, water supply and sewerage, urban development, airports and stormwater sectors. Cardno Caminosca is involved in major hydropower projects and the development of oil and gas production in the Amazon region of South America.

> Cardno Geotech: is a 190-person construction materials testing firm located in Western Australia. It services clients in major mining, LNG, iron ore and government infrastructure projects. It has contracts supporting works for large companies such as BHP Billiton, Rio Tinto and Fortescue Metals Group.

For

per

sona

l use

onl

y


Projects

For

per

sona

l use

onl

y


Projects- Americas4

The Sopladora project is the third of four projects in the Paute River basin in Ecuador implemented to create a complex hydropower system. Cardno’s Latin American team is providing hydropower expertise and various services through the lifecycle of the project, including studies for the optimisation of the design flow, validation of the feasibility studies, final designs for construction, and construction supervision.

Sopladora Hydropower Project

Cardno’s Engineering & Environmental Services Division is providing construction materials testing and special inspections for the $500 million casino-resort Ameristar in Lake Charles, Los Angeles. The 30,000 square-foot, state-of-the-art casino will feature a 700-room luxury hotel and an 18-hole golf course and tennis club. Project fees were $525,000.

Ameristar

For

per

sona

l use

onl

y


4

Cardno developed plans and specifications for 3,700 acres of reclaimed habitat to protect rare species in the Salton Sea, California. Services included preparing all environmental impact analyses and permit applications. The team developed and implemented stakeholder outreach programs and an adaptive management approach for long-term operations. Project fees were $4M.

Salton Sea –Species Conservation Habitat Project

Cardno is providing multidisciplinary services for this 694-acre master planned community in Phoenix, Arizona. The team designed a master drainage plan and miles of arterial and roadways. The community has been designed to provide a broad range of residential zoning districts. Project fees were $1.6M.

The Meadows

Projects- Americas

For

per

sona

l use

onl

y


4

Cardno was commissioned by INPEX to provide nearshore marine environmental monitoring services for the large-scale Ichthys Gas Field Development Project in the Northern Territory, Australia. To support the infrastructure at Blaydin Point, dredging works are being carried out to seat and protect the Gas Export Pipeline and provide a safe access channel for shipping. Cardno’s scope includes 12 work packages relating to the assessment of potential environmental effects as result of dredging and spoil disposal activities.

Ichthys LNG Plant Nearshore Environmental Monitoring

Cardno has been awarded a prestigious Illuminating Engineering Society of Australia and New Zealand Award of Commendation for the lighting design of National Australia Bank’s Client Floor in Sydney’s CBD. Featuring natural light and views of the harbour and city, the fit-out placed high consideration on the environment with best practice and energy efficient light solutions used wherever possible.

Lighting Design for NAB Building

Projects- Australia & New Zealand

For

per

sona

l use

onl

y


Indicative Projects – Australia & New Zealand

Nambour Sewage Treatment Plant (STP) Augmentation

Wiggins Island Balloon Loop

Cardno is carrying out the civil and structural detailed design for the Nambour Sewage Treatment Plant Augmentation in Queensland, Australia. The plant services residential, commercial and industrial users in a number of towns. The new plant will cater for increased growth up to 45,000 EP and provide ongoing water quality improvements.

Cardno Bowler delivered construction materials testing on the Wiggins Island Balloon Loop for Abigroup. The Wiggins Island Rail Project is the staged development of existing lines to service the new Wiggins Island Coal Export Terminal (WICET) at the Port of Gladstone in Queensland, Australia. The project will create a vital link between WICET and mines in Central Queensland.

4 Projects- Australia & New Zealand

For

per

sona

l use

onl

y


Rio Tinto awarded Cardno BEC the project to complete the detailed design for the replacement of more than 40 obsolete LV switchboards and associated control systems at the Paraburdoo, Tom Price and Channar sites in Western Australia. Cardno BEC completed the first phase of this project with design works for the Channar site. Subsequently, the Tom Price site was put on hold and remaining Paraburdoo site was completed at the end of July, 2013. Cardno BEC has since been awarded the construction contract for the Channar site.

Electrical Infrastructure replacement for various mine sites

Cardno BEC was awarded the EPCM contract to provide the electrical design and construction management for the new Agbaou Gold Plant in West Africa. Cardno BEC is responsible for the electrical design of the processing plant, SAG mill and controls, main power sub-station, site infrastructure power systems, and process control and SCADA. Cardno BEC is also designing and managing the construction of the 15-kilometre, 90-kilowatt power line and substations to connect to the national grid.

Agbaou Gold Plant

4 Projects- Cardno BEC

For

per

sona

l use

onl

y


This five-year project aims to strengthen China’s economic, trade and investment reform, in line with China’s sustainable development path. Cardno’s role involves designing and implementing activities in support of ongoing trade-related dialogues between China and the EU. Cardno’s approach for what is currently the EU’s largest trade-related technical assistance project in the world, consists of a three-tier strategy. It will address policy, legislative and regulatory reform at the local level; implement pilot projects at the provincial level; and oversee a nationwide integrated communications and dissemination strategy, including e-Learning.

EU-China Trade Project II

The Pacific Leadership Program (PLP) is a six-year AU$35.5 million AusAID-funded program. PLP recognises the pivotal role leadership plays at all levels in a nation's path to development, and aims to strengthen existing and emerging leaders and leadership practice.As the managing contractor of PLP, Cardno provides key program personnel, human resources and financial management, management and logistical support, stewardship of allocated resources and management of sub-contracts.

Program Secretariat Support for the Pacific Leadership Program (PLP)

4 Projects- Emerging Markets

For

per

sona

l use

onl

y


Outlook

For

per

sona

l use

onl

y


5 Outlook

> Cardno’s global market conditions continue to be variable Australia and New Zealand remain difficult but we are active on several ongoing oil and gas projects and there are signs residential construction and infrastructure projects are picking upIn the United States economic activity is improving and the environmental sector is still strong. However, the Gulf of Mexico oil spill work continues to slow

> Project pipeline (WIH) of $710 m at 30 June 2013 in line with our expectations (circa 10 months of fee revenue)

> Over 50% of Cardno’s revenue is in US$, so the weakening of the AU$ will be a positive for earnings

> Growth via both organic expansion and acquisitions to continue, strengthening Cardno’s core competencies

> Cardno has strong cash flow with a healthy balance sheet to support further growthF

or p

erso

nal u

se o

nly


Appendix- Supporting Material

For

per

sona

l use

onl

y


6

*CAGR = compound annual growth rate since listing in 2004

10 Year Performance – Growth in Key Metrics

Cardno continued to demonstrate growth in key financial metrics reflecting the results of a continuance of the mergers and acquisitions strategy and lower than trend organic growth.F

or p

erso

nal u

se o

nly


6 10 Year Performance – Growth in Key Metrics

Earnings per share declined over 2012 reflecting margin compression and the impact of equity issuances. Operating cash flow was significantly stronger due to concerted working capital management efforts. Dividend payout of 36c/share is unchanged.

*CAGR = compound annual growth rate since listing in 2004

For

per

sona

l use

onl

y


6 Operating Segment Performance- Australia & New Zealand

For

per

sona

l use

onl

y


6 Operating Segment Performance- Americas (including Software)

For

per

sona

l use

onl

y


6 Successful Merger & Acquisition Strategy

Business Unit & Division Structure – competitive advantage to attract merger partnersGrowth and Diversification Objective> Complementary businesses with new geographical and/or skills coverage

and good cultural fit> Minimal overlap with existing businesses> Focus on retention of staff> Effective acquisition process with robust due diligence> Focus on adding value through cross selling and organic growth

Continuous Integration of New Partners> Brand Integration> Accounting and job cost integration> Focus on knowledge sharing and cross sell> Successful track record> Potential cost synergies> Operating systemsFor

per

sona

l use

onl

y


6 Merger History 1945 - 2013

For

per

sona

l use

onl

y


6 Organisational Structure to drive accountability


For

per

sona

l use

onl

y


For

per

sona

l use

onl

y

ABN 70 108 112 303 For personal use only · (ENR) gave Cardno the following rankings: > #10 in the...

Documents

Transcript of ABN 70 108 112 303 For personal use only · (ENR) gave Cardno the following rankings: > #10 in the...