PRELIMINARY FINAL REPORT August 2008

Transcription

1 PRELIMINARY FINAL REPORT August I Preliminary Final Results I I

2 DISCLAIMER This document is not a prospectus and does not constitute an offer of securities. The offer of shares will only be made in, or accompanied by, a copy of the prospectus which will be sent to eligible shareholders. Eligible retail shareholders wishing to acquire New Shares should consider the prospectus and will need to complete the Acceptance and Entitlement Form that will be in, or will accompany the prospectus. This document does not constitute a Redemption Notice (as defined in the terms of issue of Leighton Notes). Not for release or distribution in the United States The Entitlements and New Shares have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (Securities Act), or any U.S. state or other securities laws. The Entitlements and the New Shares may not be offered, sold or otherwise transferred except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any other applicable securities laws. 2 I Preliminary Final Results I I

3 PRESENTATION OUTLINE Results highlights Operational update Financial statements and Entitlement offer Outlook and strategy 3 I Preliminary Final Results I I

4 RESULTS HIGHLIGHTS 4 I Preliminary Final Results I I

5 FINANCIAL HIGHLIGHTS Jun 08 $m Jun 07 $m % change Total revenue 14,542 11,891 22% New contracts, extensions & variations 22,901 16,665 37% Value of work in hand 30,303 21,085 44% Profit before tax % Profit after tax % Dividends per ord share % 5 I Preliminary Final Results I I

6 WORK IN HAND AT RECORD HIGH A$m 35,000 30,000 At 31 December At 30 June 25,000 20,000 15,000 10,000 5, /0 00/1 01/2 02/3 03/4 04/5 05/6 06/7 07/8 08/9 6 I Preliminary Final Results I I

7 LAUNCH OF EQUITY RAISING Offer structure Accelerated Pro rata Entitlement Offer (AREO) Offer size Use of proceeds HOCHTIEF participation Approximately $700 million To invest in plant and equipment which will primarily be used to grow the Group's contract mining activities in Australia, Indonesia and India; and To redeem the Leighton Notes, which have a total face value of $200 million and are resettable on 1 December 2008 HOCHTIEF has committed to take up its full entitlement (represents c.55% of offer size) This document is not a prospectus and does not constitute an offer of securities. The offer of shares will only be made in, or accompanied by, a copy of the prospectus which will be sent to eligible shareholders. Eligible retail shareholders wishing to acquire New Shares should consider the prospectus and will need to complete the Entitlement and Acceptance Form that will be in, or will accompany the prospectus. This document does not constitute a Redemption Notice (as defined in the terms of issue of Leighton Notes). Not for release or distribution in the United States The Entitlements and New Shares have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (Securities Act), or any U.S. state or other securities laws. The Entitlements and the New Shares may not be offered, sold or otherwise transferred except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any other applicable securities laws. 7 I Preliminary Final Results I I

8 OPERATIONAL UPDATE 8 I Preliminary Final Results I I

9 EASTLINK, VIC THIESS JOHN HOLLAND 9 I Preliminary Final Results I I

10 SOUTH MIDDLEBACK RANGES IRON ORE MINE, SA LEIGHTON CONTRACTORS 10 I Preliminary Final Results I I

11 400 GEORGE ST, QLD LEIGHTON PROPERTIES/THIESS 11 I Preliminary Final Results I I

12 CITY OF DREAMS, MACAU LEIGHTON ASIA 12 I Preliminary Final Results I I

13 SANGATTA COAL MINE, INDONESIA THIESS 13 I Preliminary Final Results I I

14 TRUMP TOWER, DUBAI HABTOOR LEIGHTON GROUP 14 I Preliminary Final Results I I

15 A RANGE OF CHALLENGES TO NAVIGATE Credit crunch Skills shortages Emission Trading Scheme Cost escalation 15 I Preliminary Final Results I I

16 COST ESCALATION IS BEING MANAGED Purchasing, i.e. fixed prices from suppliers Tendering with escalation and contingency Contractually, i.e. alliances and provisional sum 16 I Preliminary Final Results I I

17 FINANCIAL STATEMENTS 17 I Preliminary Final Results I I

18 REVENUE UP 22% TO $14.5 BILLION A$m 15,000 12,000 9,000 Group JV's 6,000 3, I Preliminary Final Results I I

19 PROFIT BEFORE AND AFTER TAX UP STRONGLY June 2007 June 2008 A$m 1,000 A$m 1, EBIT Finance Costs Tax NPAT 0 EBIT Finance Costs Tax NPAT 19 I Preliminary Final Results I I

20 PROFIT BEFORE AND AFTER TAX UP STRONGLY June 2007 June 2008 A$m 1,000 A$m 1, EBIT Finance Costs Tax NPAT 0 EBIT Finance Costs Tax NPAT 20 I Preliminary Final Results I I

21 BALANCE SHEET ASSETS UP BY 37% A$m 7,000 6,000 5,000 4,000 3,000 2,000 1, ,745 6,464 'June 2007' 'June 2008' Other Property, plant & equip Investments (other) Investments (equity) Inventories Trade & receivables Cash & equivalents 21 I Preliminary Final Results I I

22 BORROWINGS INCREASED LIABILITIES A$m 6,000 5,000 4,000 3,000 2,000 1, ,391 4,979 'June 2007' 'June 2008' Leighton Notes Limited recourse debt Interest bearings liab s Provisions Current tax liabilities Trade & payables 22 I Preliminary Final Results I I

23 OPERATING CASH FLOW OF $1.2 BILLION A$m 2,500 2,000 1,500 1, Opening cash Operating cash Finance & Tax PP&E Investment Proceeds from sale Controlled entities Borrowings Other investments Dividends Closing cash 23 I Preliminary Final Results I I

24 DEPRECIATION SIMILAR TO LAST YEAR A$m Other Plant and equipment components 200 Plant and equipment I Preliminary Final Results I I

25 STRONGER CONTRIBUTION FROM ASIA Revenue Profit Before Tax A$m 15,000 A$m 1,000 12, , , , Australia Asia Australia Asia 25 I Preliminary Final Results I I

26 ADJUSTED SPLIT REFLECTS PERFORMANCE Revenue Profit Before Tax A$m 15,000 A$m 1,000 12, , , , Australia Asia Australia Asia 26 I Preliminary Final Results I I

27 ACTIVE CAPITAL PLANNING New $600 million working capital facilities Available operating lease facilities of approx $600 million Bonding increased to over $3.6 billion Pro rata entitlement offer of $700 million 27 I Preliminary Final Results I I

28 SUMMARY OF THE ENTITLEMENT OFFER Structure Accelerated Pro rata Entitlement Offer consisting of an Institutional and Retail Entitlement Offer Entitlements cannot be traded on ASX nor otherwise transferred Offer size Approximately $700 million Entitlement ratio 1 New Share for every 14 Existing Shares Offer price $35.35 per New Share, which represents: a 14.8% discount to the closing price 1 on 13 August 2008, before Leighton announced the Entitlement Offer a 14.0% discount to the theoretical ex entitlement price 2 of $41.10 Record date Tuesday, 19 August 2008 (7.00pm AEST) 3 HOCHTIEF participation Dividend entitlement Joint Lead Managers and Underwriters HOCHTIEF, which holds c.55% of the Leighton shares, has committed to take up its full entitlement under the Entitlement Offer The New Shares will not be entitled to the 85 cents per share final dividend payable by Leighton with respect to the financial year ended 30 June 2008 ABN AMRO Equity Capital Markets Australia Limited Macquarie Capital Advisers Limited Notes: 1. Closing price of Leighton Shares on ASX before announcement of the Entitlement Offer adjusted downwards for Leighton s 85 cents per share final dividend for FY2008 as New Shares will not be entitled to receive this final dividend 2. The theoretical ex-entitlement price is the theoretical price at which Leighton Shares should trade immediately after the ex-date for the Entitlement Offer and is adjusted downwards for Leighton s 85 cents per share final dividend for FY2008 as New Shares will not be entitled to receive this dividend. The theoretical ex-entitlement price is a theoretical calculation only and the actual price at which Leighton Shares trade immediately after the ex-date for the Entitlement Offer will depend on many factors and may not equal the theoretical ex-entitlement price 3. Notwithstanding the Record Date, Leighton has been granted a waiver by ASX so that in determining shareholder entitlements it may ignore any changes in shareholdings that occur after the trading halt announcement made on Thursday, 14 August 2008 (other than registrations of transactions that were effected through ITS on a normal T+3 settlement basis prior to the commencement of the trading halt on Thursday, 14 August 2008) Not for distribution or release into the United States or to US persons 28 I Preliminary Final Results I I

29 RATIONALE FOR THE ENTITLEMENT OFFER Funding for future growth Solid financial position Benefits for shareholders Invest in plant and equipment which will primarily be used to grow Leighton's contract mining activities in Australia, Indonesia and India Leighton is currently the world's largest contract miner and is keen to take advantage of the opportunities arising from strong global demand for iron ore, coal and other minerals Leighton s balance sheet remains a source of competitive advantage Entitlement Offer strengthens capital base to exploit a significant number of opportunities in contract mining Net proceeds also used to redeem $200 million Leighton Notes (resettable on 1 December 2008) Allows each Eligible Shareholder to participate on a pro rata basis Opportunity for Eligible Shareholders to increase investment in Leighton at a 14.0% discount to the theoretical ex entitlement price 1 and at no brokerage cost Non participating Shareholders may potentially receive value for their Entitlements 2 Notes: 1. The theoretical ex-entitlement price is the theoretical price at which Leighton Shares should trade immediately after the ex-date for the Entitlement Offer and is adjusted downwards for Leighton s 85 cents per share final dividend for FY2008 as New Shares will not be entitled to receive this dividend. The theoretical ex-entitlement price is a theoretical calculation only and the actual price at which Leighton Shares trade immediately after the ex-date for the Entitlement Offer will depend on many factors and may not equal the theoretical ex-entitlement price 2. Shares equal to the number of renounced or ineligible Entitlements will be placed into an institutional or retail bookbuild as applicable. Any premium achieved in a bookbuild above the Offer Price will be remitted to relevant shareholders on a pro-rata basis Not for distribution or release into the United States or to US persons 29 I Preliminary Final Results I I

30 INVESTMENT HIGHLIGHTS Past performance and results are not indicative of future performance and results, and should not be relied upon in making an investment decision Track record of strong financial performance History of creating shareholder value Leading market position in Australia with strong outlook Revenue growth of 25% p.a. since FY04 to $14.5 billion in FY08 Operating profit after tax increased five fold from FY04 to $608 million in FY08 Total assets more than doubled over 5 years to nearly $6.5 billion as at 30 June 2008 Total shareholder return of 44% p.a. from FY04 FY08 versus 16% for the S&P/ASX 100 Accumulation Index Consistent increases in dividends since FY04 with average growth of 34% p.a. Return on equity of 41% in FY08 Long serving and experienced management team A leading provider of construction, contract mining and operation and maintenance services to the Australian infrastructure, resources and property markets Positioned to benefit from continued investment in infrastructure Largest contract miner globally, leveraged to strong demand for iron ore and coal Notes: 1. Measured as compound annual growth rate Not for distribution or release into the United States or to US persons 30 I Preliminary Final Results I I

31 INVESTMENT HIGHLIGHTS (CONT) Exposure to emerging markets Record levels of work in hand Over 30 years of operating experience in emerging markets in Asia and the Gulf Recently expanded presence in the Gulf through 45% investment in Gulfbased Al Habtoor Engineering Potential for further geographic expansion across the Gulf and North Africa $30.3 billion at YE08, an increase of 133% since YE04 Work in hand represents more than two years worth of FY08 revenues Mix of work in hand across major markets Attractive terms with support from HOCHTIEF Allows shareholders to increase investment at $35.35 per New Share 14.0% discount to the theoretical ex entitlement price 1 HOCHTIEF, which holds c.55% of the Leighton shares, has committed to take up its full Entitlement and sub underwrite up to $75 million of any shortfall Notes: 1. The theoretical ex-entitlement price is the theoretical price at which Leighton Shares should trade immediately after the ex-date for the Entitlement Offer and is adjusted downwards for Leighton s 85 cents per share final dividend for FY2008 as New Shares will not be entitled to receive this dividend. The theoretical ex-entitlement price is a theoretical calculation only and the actual price at which Leighton Shares trade immediately after the ex-date for the Entitlement Offer will depend on many factors and may not equal the theoretical ex-entitlement price Not for distribution or release into the United States or to US persons 31 I Preliminary Final Results I I

32 SUMMARY OF KEY DATES Institutional Offer opens and start trading halt Thu 14 August 2008 (10.00am) Institutional Offer closes(domestic institutions) Fri 15 August 2008 (6.00pm) Institutional Offer closes(international institutions) Sat 16 August 2008 (6.00am) Institutional Bookbuild opens Mon 18 August 2008 (10.00am) Institutional Bookbuild closes Tue 19 August 2008 (noon) Record Date Tue 19 August 2008 (7.00pm) Leighton shares resume trading Wed 20 August 2008 Retail Offer opens Wed 20 August 2008 (10.00am) Institutional settlement Thu 28 August 2008 Institutional trading date Fri 29 August 2008 Retail Offer closes Thu 11 September 2008 (5.00pm) Retail Bookbuild Wed 17 Thu 18 September 2008 Retail settlement Tue 23 September 2008 Retail trading date Wed 24 September 2008 Notes: 1. All dates and times are subject to change and stated as AEST Not for distribution or release into the United States or to US persons 32 I Preliminary Final Results I I

33 OUTLOOK AND STRATEGY 33 I Preliminary Final Results I I

34 STRATEGY BASED ON DIVERSITY Thiess John Holland Leighton Contractors Australia Asia/Pacific Gulf region Leighton Asia Leighton International Leighton Properties Geography Hard Dollar Design & Construction Project Management Alliancing Resources Infrastructure Property Construction Mining Markets/ Services Brands Delivery Systems Negotiated Development Privatised Projects/PPP Services 34 I Preliminary Final Results I I

35 STRATEGY A WORK IN PROGRESS DEVELOPMENT CONSTRUCTION CONTRACTING MINING SERVICES FUNDS MANAGEMENT Original positioning Commercial property developer Major infrastructure developer Leading contractor in Australia and selected markets in Asia Strong Miner in Australia and Indonesia Strong in selected segments in Australia Limited participation Recent initiatives Undertake acquisitions to enter particular markets Residential Acquired 40% Devine Acquired 15% Macmahon Evaluating Defence Acquisition? Other Acquisitions Services Diversification?? Property / Infrastructure Take our skills to new geographies India Indonesia Gulf India India Gulf? 35 I Preliminary Final Results I I

36 1) EXPAND IN ASIA AND THE GULF WHICH ARE GROWING FASTER THAN OTHER MARKETS MONGOLIA NORTH AFRICA KUWAIT QATAR UAE 10.7% MIDDLE EAST INDIA 8.0% SRI LANKA CHINA 9.6% THAILAND MALAYSIA MACAU TAIWAN HONG KONG 5% LAOS VIETNAM INDONESIA 6.2% SINGAPORE PHILIPPINES PACIFIC VERSUS EURO AREA 2.3% USA 2.6% AUSTRALIA 3.3% NEW ZEALAND # Based on 2008 GDP forecasts from The Economist * UAE 2008 GDP forecast based on IMF 36 I Preliminary Final Results I I

37 AL BUSTAN, ABU DHABI LEIGHTON INTERNATIONAL 37 I Preliminary Final Results I I

38 2) EXPAND CONTRACT MINING INTERNATIONALLY Commodity spot prices US$/tonne Coking Coal Iron Ore Crude Oil Thermal Coal Jul 05 Oct 05 Jan 06 Apr 06 Jul 06 Oct 06 Jan 07 Apr 07 Jul 07 Oct 07 Jan 08 Apr I Preliminary Final Results I I

39 AUSTRALIAN PRODUCTION TO CONTINUE TO RAMP UP OVER FUTURE YEARS Coal annual production Iron Ore annual production mt mt Forecast Forecast Source: BIS Shrapnel, March I Preliminary Final Results I I

40 3) BECOME A LEADING INFRASTRUCTURE/ RESOURCES DEVELOPER IN THE REGION Total work yet to be done across Australia $bn Non resources Resources Source: ABS, excludes residential construction 40 I Preliminary Final Results I I

41 MORE AND LARGER MAJOR PROJECTS ARE IN PIPELINE OVER THE NEXT FIVE YEARS Australian major projects construction value* A$bn 35 Resources May 07 Forecast Transport Water Social Infr. Resources May 08 Forecast Social Infrastructure Water Transport * Major projects over the next five years with 75% Go probability Source: LHL internal analysis 41 I Preliminary Final Results I I

42 CONSTRUCTION ACTIVITY EXPECTED TO STAY AT A HIGH LEVEL IN NEAR TERM Construction value of work done $bn Forecast Non Residential Building Other Engineering Construction Mining and Heavy Industry Transport CFC* BIS* * Including public sector Source: BIS Shrapnel Dec 07 forecast in Jun 06 dollars. CFC forecasts as at June I Preliminary Final Results I I

43 4) MOVE INTO RESIDENTIAL PROPERTY DEVELOPMENT Building construction value of work done $bn Forecast Residential Commercial Source: BIS Shrapnel June 06 dollars 43 I Preliminary Final Results I I

44 5) GROW OUR SERVICES BUSINESSES Australian revenues A$m 12,000 10,000 Services 8,000 6,000 Construction and Mining 4,000 2, I Preliminary Final Results I I

45 6) BUILDING OUR DEFENCE BUSINESS Strategic rationale Attractive industry with large budget, insulated from construction cycles, limited to 2 or 3 players Core contracting skills can be applied to the defence business Current position ASC sale in FY09 stated by Federal Government but not foreshadowed in recent budget Majority Australian ownership may be an issue Competition limited for sale to real bidders Will re assess attractiveness when bid comes to market 45 I Preliminary Final Results I I

46 7) CONTINUE AN ACQUISITIONS PROGRAM GENERALLY Rationale Recent transactions 1. Strengthen traditional core markets HWE, Macmahon, Marshalls 2. Grow in adjacent or closely related businesses Devine, Ansett Aviation Services, Silk 3. Extend along the value chain Sedgman 4. Grow in overseas geographies Al Habtoor 46 I Preliminary Final Results I I

47 SUMMARY Outlook remains very positive Work in hand to be maintained around existing levels Momentum driven by extended Australia construction and resources related upswing Strong competitive position and further strengthened balance sheet supports outlook On track for solid profit increase 47 I Preliminary Final Results I I

48 PRELIMINARY FINAL REPORT August I Preliminary Final Results I I