McConnell Dowell 2018 Annual Review

McConnell Dowell Annual Review 2018 7 CEO Report A Year of Achievements The 2018 financial year was a defining one for the McConnell Dowell Group (the Group) and represented a substantial turnaround in both financial and operational performance. We finished the year strongly and met expectations in terms of profitability and cash performance. In addition, the Group reached an unprecedented level of work in preferred and/or sole source position totalling over $1.3 billion which provides a greater level of confidence and visibility of near-to- medium term earnings. We reaffirmed the Group’s strategic plan and successfully delivered several important milestones along our transformational journey. The organisational focus shifted to operational integrity and performance and most importantly, customer satisfaction to drive long term relationships. Customer Focus & Working Together The year saw a strong improvement in project performance and further demonstrated the most important element of our business; valuable, long term customer relationships. As always, we adopt a collaborative approach to all customer and stakeholder relationships and an unwavering commitment to consistently deliver on what is promised. We worked hard to solidify our reputation as a nation leading specialist contractor and customer-focused organisation. There were several standout projects for the Group during the year, these include; Northern Gas Pipeline delivered for Jemena in Australia. We devised an innovative installation solution together with outstanding project delivery performance for one of the largest gas transmission pipeline projects in Australia, using 34,000 lengths of pipe. Another notable project for the year was Urbanest Student Accommodation. Completed in January 2018, this 22-storey building was delivered for Urbanest on a fast-tracked schedule making this the shortest construction period for a building this size in Adelaide. Paramount to the success of these projects was fully grasping the needs of our customers and stakeholders, and working with all of them to ensure we deliver and fulfil our promises. Transformation Program Core to the recent transformation of the McConnell Dowell Group is our Vision 2025; to be a leader in the delivery of infrastructure, building and resource solutions. Our revised and reinvigorated company Purpose and Values have set the strong foundations required to create long term workplace cultural improvement and sustained profitability. The revised Values are fostering a common culture of working together, accountability, rigour and efficiency and have fully ignited a passion for future success. A key focus for the year has been the investment to improve our operating systems and processes. We launched The McConnell Dowell Way to enhance and streamline our internal management systems to drive greater consistency, efficiency and predictability across all our business operations. We have simplified and created a more effective Group Operating Framework. This not only supports our scalable growth but also ensures it remains fit for purpose and value adding in improving our overall performance. Financial Highlights We delivered on our commitment to significantly improve our financial performance and return the Group to profitability. We reported a 2018 full year EBITDA of $26.4 million at an underlying level which reflected a strong performance from the active project portfolio. Off the back of the improved performance and profitability, the Group further strengthened the balance sheet with the completion of the recapitalisation process which reduced debt and improved liquidity. The main features of the result for the 12 months ended 30 June 2018 were; • Total revenue was $1.2B up 28% from the previous year; • Underlying EBITDA was $26.4 million representing a solid return to profitability; • Finalised several balance sheet management initiatives which included completing the re-capitalisation;