McConnell Dowell 2020 Annual Review

4 McConnell Dowell Group Message from our CEO ‘The 2020 financial year saw our business deliver operational profit for a sixth consecutive 6-month period’ Key Highlights • Underlying operational profit of $10 million • Work in hand up 60% to $1.84 billion • Strong liquidity position with $140 million cash in bank and minimal debt • Non cash impairment <$19 million > recognised to settle legacy issues and build liquidity resilience • Revenues impacted by COVID-19 however strong, proactive and coordinated response helped mitigate profit impacts • Preferred positions on prospects worth over $1.4 billion • Solid pipeline of tenders • Strong foundation for significant revenue growth in FY21. The 2020 financial year was one of continued success with our business delivering an operational profit for the third consecutive year and effectively dealing with the complexities and challenges imposed by the COVID-19 pandemic. We have built a solid platform for growth and are confident about our future. Operational Performance Disciplined and consistent project delivery has been crucial to our results, with approximately 80% of projects meeting or exceeding financial and delivery expectations defined at time of project award. Coupled with proactive cost management, this mitigated some of the impacts of the COVID-19 induced revenue decline in the final quarter. A strong focus on business development and tendering resulted in new contract awards amounting to AUD1.65 billion. These new awards increased the Group’s work in hand by 60% to AUD1.84 billion with more than 90% of the portfolio made up of Government projects across all selected markets. The diverse nature of our business, across both geographies and disciplines, has also helped mitigate the impact of COVID-19, but there were instances of COVID-19 related delays in the award of some contracts late in the year. We expect these to come back to the market in the first half of financial year 2021, which augers well for future performance. Our proactive approach to the management and mitigation of COVID-19 impacts ensured liquidity resilience through this period. This included the settlement of some legacy commercial issues at a discount to our book position to release cash, resulting in a <AUD19 million> non-cash impairment. As a result, the balance sheet has been significantly de-risked and the operating group ended FY20 in a strong liquidity position, with cash reserves of approximately $140 million, minimal debt and undrawn credit lines available.