EXPANSION INTO CANADIAN OIL & GAS MARKET

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Lucas Cross
8 years ago
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EXPANSION INTO CANADIAN OIL & GAS MARKET Acquisition of Stewart Weir a Canadian engineering and environmental consultancy specialising in pipeline infrastructure and energy related projects

2 EXPANSION INTO CANADIAN OIL & GAS MARKET Acquisition of Stewart Weir a Canadian engineering and environmental consultancy specialising in pipeline infrastructure and energy related projects Strategically important given Canadian market strength and industry growth prospects in Alberta Creates critical mass to compete for larger projects and complements existing Canada business Brings key clients from the oil and gas, industrial and utilities sectors Offers future expansion possibilities and strong crossselling opportunities Aligned values, systems and culture with Opus

Alberta Creates critical mass to compete for larger projects and complements existing Canada business Brings key clients from the oil and gas,

3 TRANSACTION SUMMARY TRANSACTION 100% acquisition of Stewart Weir & Co (SW) CA$50m upfront consideration; up to CA$12m on meeting non-financial targets over two years; up to CA$28m on meeting earnings targets over three years Upfront cash consideration is 4.8x historical EBITDA Funding sourced from available cash and existing debt facilities SW Geomatics, engineering and environmental consulting firm FY2013 revenue, CA$91m; Normalised EBITDA, CA$11m Key clients from the oil and gas, industrial and utilities sectors Over 550 employees spread over 5 offices in Alberta and 1 office in BC STRATEGIC AND FINANCIAL FIT Greater revenue and earnings diversity for Opus Enhances Opus operations in Canada and provides platform for growth Alignment of culture and values Immediately accretive to EPS

8x historical EBITDA Funding sourced from available cash and existing debt facilities SW Geomatics, engineering and environmental consulting firm FY2013 revenue, CA$91m; Normalised EBITDA, CA$11m

ESTABLISHED BUSINESS Employee-owned geomatics, engineering and environmental consulting firm Established in 1912 Reputation for quality work, ontime delivery, and having the necessary resources to

4 ESTABLISHED BUSINESS Employee-owned geomatics, engineering and environmental consulting firm Established in 1912 Reputation for quality work, ontime delivery, and having the necessary resources to complete large project assignments Clients operating in the following areas: pipeline, oil and gas, power infrastructure, municipal infrastructure and transportation 5 offices in Alberta, and 1 in BC Over 550 employees across all Stewart Weir s legal entities

assignments Clients operating in the following areas: pipeline, oil and gas, power infrastructure, municipal

5 (million barrels per day) $ Billions WELL-POSITIONED IN A GROWTH MARKET Positive growth outlook Canada s forecast growth of 2.2% p.a. from is expected to outperform other G7 countries Strong Alberta resource base underpinning Canadian growth Robust long-term demand outlook for oil and gas Urgent need to address current constraints in pipeline infrastructure Proposed development of several LNG terminals in Canada s West Coast requires support infrastructure Oil sands investment to 2014 (2) Forecast global oil demand (1) $30 $25 $20 $15 $10 $ $- Sources: (1) EIA; (2) Canadian Association of Petroleum Producers

6 DEAL STRUCTURE Summary CA$50m CA$12m CA$28m Upfront cash consideration Maximum consideration on meeting non-financial targets over two years Maximum consideration on meeting earnings targets over three years Upfront cash consideration translates to 4.8x SW s historical EBITDA Aggregate of upfront cash consideration and non-financial target payouts at 5.9x historical EBITDA Total enterprise value is between an EBITDA range of 4.8x 7.0x Note: (1) Based on Opus FY2012 financial statements

translates to 4.8x SW s historical EBITDA Aggregate of upfront cash consideration and non-financial target payouts at 5.

7 ACQUISITION IS ATTRACTIVE FROM THE STRATEGIC PERSPECTIVE Enhances Opus operations in Canada Creates a critical mass to compete for larger projects Establishes presence in Alberta, the top growth region in Canada Offers future expansion possibilities to adjacent provinces Provides a strong platform for growth Distinct geographic presences and client bases offer cross-selling opportunities Expertise in the resources sector could be assimilated in other parts of the business Strong alignment of culture and values Premium on the values of integrity and honesty, combined with a reputation for timely delivery of quality work Boosts talent pool for staff development and succession planning across the North American business

offer cross-selling opportunities Expertise in the resources sector could be assimilated in other parts of the business Strong alignment of culture and values Premium on the values

8 SEAMLESS SUITE OF SERVICES, EXPANDED SECTOR COVERAGE Asset Development Asset Management Sectors covered Stewart Weir Geomatics Mapping and imaging Design Project management Materials testing Environmental planning Opus - Canada Asset management Opus - Canada Design Planning Project management Environmental planning Stewart Weir Information management Environmental management Master planning Resilience planning Electrical Data management Operations consulting Environmental management Stewart Weir Industrial Infrastructure Local government Oil and gas Power Transportation Opus - Canada Infrastructure Local government Transportation Water and wastewater

Weir Information management Environmental management Master planning Resilience planning Electrical Data management Operations consulting Environmental management

9 SW REVENUES ON AN UPTREND SW s P&L 1 for the year ending 31 Jan 2013 Amounts in CA$m Revenue 91 EBITDA 11 EBIT 9 NPAT 7 Margins EBITDA /Revenue 12% EBIT / Revenue 10% NPAT / Revenue 8% Note: (1) Normalised earnings

10 STRONG CASE FROM THE FINANCE STANDPOINT 14% return on upfront cash consideration based on Stewart Weir s historic FY2013 NPAT Results in greater revenue and earnings diversity for Opus Identified synergistic benefits from day one include: Cross-selling between distinct client bases Subcontracted SW projects within the Opus Group Immediately accretive to Opus EPS Funding for the deal sourced from available cash and existing credit lines Minimal impact on Opus leverage position Opus Opus + SW Leverage ratio x Liquidity cover 1 4.6x 2.7x Note: (1) Based on Opus FY2012 financial statements

Subcontracted SW projects within the Opus Group Immediately accretive to Opus EPS Funding for the deal sourced from available cash and existing

11 ENHANCES OPUS REVENUE DIVERSITY Opus + SW 2 Opus 1 Note: (1) Based on Opus FY2012 financial statements; (2) Based on SW s FY2013 financial statements

12 End of presentation

For personal use only

For personal use only Acquisition of THG Expanding into Queensland April 2015 Disclaimer This Document should not be considered as an offer or invitation to subscribe for or purchase any securities in OTOC Limited ( OTOC or