the changing face of construction CEDA, Brisbane, 23 March 2004 Wal King AM CEO Leighton Holdings
presentation outline - Australia s economic performance since 1990 - Performance of Australia s construction industry since 1990 - The Leighton story
the changing face of australia - Australia has been an economic success story since the early 1980 s - Now in our 13th year of continuous economic growth - Economic league tables demonstrate our success
world competitiveness league table 1 USA 2 Singapore 3 Finland 4 Netherlands 5 Switzerland 6 Luxembourg 7 Ireland 8 Germany 9 Sweden 10 Iceland 11 Canada 12 Denmark 13 Australia 14 Hong Kong 15 UK Source: International Institute for Management Development
GDP per capita rankings world bank 1990 2002 1 Switzerland Norway 2 United States United States 3 Norway Ireland 4 Iceland Denmark 5 Denmark Iceland 6 Canada Canada 7 Japan Austria 8 Austria Switzerland 9 Germany Australia 10 Belgium Netherlands 11 France Belgium 12 Netherlands Germany 13 Italy France 14 Sweden Finland 15 Finland United Kingdom 16 Australia Japan
real GDP Year-ended percentage change 8 6 Australia USA 4 2 0 Euro area -2 1993 1995 1997 Sources: ABS, CEIC, Thomas Financial 1999 2001 2003
days lost through industrial disputes 900 800 700 600 500 400 300 200 100 Days lost per 1000 employees 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 Source: DB Global Markets Research; ABS
australian household net wealth Multiple of annual personal disposable income 7 6 5 Total (including super, shares, bank deposits etc) 4 3 2 Housing 89 91 93 Sources: ABS, Economics@ANZ 95 97 99 01 03
December 1995=100 225 US and australian house prices 200 175 Australia 150 125 US 100 96 97 98 99 00 Sources: Datastream, ABS, US Office of Federal Housing Enterprise Oversight 01 02 03
$bn 1500 australian super funds under management 1000 500 1983 1990 1995 Sources: APRA, BCA, Axiss Australia 2002 2005 (e) 2010 (e)
australia s changing industries (1800 to 2030) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1800 1840 1880 1920 1960 2000 2030 Source: www.ibisworld.com Agriculture Mining Manufacturing Utilities Construction Wholesale trade Retail trade Accom, cafes & rest Transport & storage Communication Finance & insurance Prop & business Govt admin Education Health & community Cult & recreation Personal & other Dwellings et al
australian geo-cultural groups Coastal Rural 7% 17% Coastal 19% Capital 32% Rural 61% Capital 64% 1901 2001 Source: The Big Shift, 2001
annual percent change 10 construction as growth driver forecast 8 6 4 2 0-2 -4 gross domestic product gross national product -6-8 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 YE June Source: BIS Shrapnel, ABS Data construction contribution to GDP
australian construction market A$bn 38 34 30 26 22 18 14 10 6 Non-Residential Building Engineering Construction Forecasts 2 91 92 93 Source: BIS Shrapnel 94 95 96 97 98 99 00 01 02 03 04 05 06
25% public infrastructure investment 1960-2001 20% % GDP Total 15% Private 10% 5% Total Public 59/60 63/64 67/68 71/72 75/76 79/80 83/84 87/88 91/92 95/96 99/00 00/01 Source: Australian National Accounts, National Income and Expenditure
major project timing Awarded to Leighton Group Yet to be awarded F3 to Orbital Link M4 East Brisbane Tunnel Gateway Bridge Pakenham Bypass Albury Bypass Mitcham- Frankston Freeway Lane Cove Tunnel Perth- Mandurah Rail WestLink M7 Regional Fast Rail Parramatta Rail Spencer St $300m $550m $1.0bn $550m $1.54bn $240m $335m $1.8bn $880m 03/04 04/05 05/06 06/07 07/08 $1.0bn $800m $1.0bn $1.5bn 08/09 09/10
composition of australian toll road construction Value of Work Done - 2001/02 Prices $M 1,200 Forecasts 1,000 800 Eastern Distributor Mitcham-Frankston Tollway 600 Westlink M7 400 M4 Citylink F3 to M2 Lane Cove Link 200 Tunnel M4 Sydney M2 East Harbour Cross City M5 Tunnel Tunnel 0 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 Year Ended June Source: ABS & BIS Shrapnel
advanced minerals and energy projects Capital Expenditure on Mine, Platform of Processing Facility Source: ABARE
structured for growth HOCHTIEF (50.1%) Other (49.9%) 100% owned 100% owned 70% owned 100% owned 100% owned 100% owned Thiess Roger Trundle Leighton Contractors Bob Merkenhof John Holland* Bill Wild Leighton Asia (Northern) Will Hamilton Leighton Asia (Southern) David Savage Leighton Properties Vyril Vella PT Thiess Indonesia Thiess Services HVE Silcar BOS Australia Leighton Lucon Services Infratek Networks - Infocus DMM - Visionstream Gridcomm - LSE Technology - Quantum Broad * Includes Transfield
the leighton story 1990/91 2002/03 Total Revenue $1.7 billion $5.6 billion WIH $1.4 billion $9.6 billion NPAT $21 million $140 million Market cap $199.9 million $2714.8 million Share price $1.08 $10
group strategy Thiess Leighton Contractors John Holland Leighton Asia (Northern) Leighton Asia (Southern) Leighton Properties Mining & Resources Engineering & Infrastructure Building & Property Operations & Maintenance Markets/ Products Geography Brands Delivery Systems Australia Asia/Pacific Hard Dollar Design & Construction Project Management Alliancing Negotiated Development
competitors revenue A$m 6000 at 31 Dec 2002 at 30 June 2003 5000 4000 3000 2000 1000 Leighton Downer EDI Multiplex Bilfinger Berger Australia* Bovis Lend Lease (Asia-Pacific) Clough HWE Transfield Services United Group Barclay Mowlem Baulderstone Hornibrook Abigroup Walter McConnell Dowell McMahon 0 * Bilfinger Berger Australia reflects combined Baulderstone Hornibrook and Abigroup
competitors profit after tax A$m 150 100 50 0 at 30 June 2002 at 31 Dec 2002 at 30 June 2003 Leighton Downer EDI Multiplex* Transfield Services Bovis Lend Lease (Asia-Pacific) United Group Bilfinger Berger Australia** Barclay Mowlem Baulderstone Hornibrook McMahon Abigroup McConnell Dowell Clough HWE Walter -50 * NPBT $67m NPAT based on forecast tax-rate ** Bilfinger Berger Australia reflects combined Baulderstone Hornibrook and Abigroup
competitors work in hand A$m 10000 8000 6000 4000 2000 0 Leighton Multiplex Downer EDI Bilfinger Berger Australia* Transfield Services United Group at 31 Dec 2002 Baulderstone Hornibrook Abigroup HWE Barclay Mowlem Walter * Bilfinger Berger Australia reflects combined Baulderstone Hornibrook and Abigroup at 30 June 2003 Clough Bovis Lend Lease (Asia-Pacific) McMahon McConnell Dowell
WestLink M7, NSW Leighton Contractors
Parramatta Rail Link, NSW Thiess
Spencer Street Station, Vic Leighton Contractors
700 Collins Street, Vic Leighton Contractors
Mt Owen Coal Mine, NSW Thiess
Burton Coal Mine, Qld Thiess
Comalco Alumina Refinery Project, Qld John Holland
conclusion - Australia is now in its 13 th year of sustained economic growth - Construction sector has been a driver of growth over this period - Many opportunities in the future - transport infrastructure - mining and resources - public private partnerships - Leighton is well positioned for these opportunities
the changing face of construction CEDA, Brisbane, 23 March 2004 Wal King AM CEO Leighton Holdings