opus international consultants limited kevin thompson
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Opus International Consultants LimitedKevin Thompson
Managing Director
Briefing : February 2009
Agenda
1) 2008 Operational Highlights
2) Financial Performance 2008
3) Operations Outlook 2009
4) Strategic Direction
5) Company Overview
1) 2008 Operational Highlights
2008 Operational Highlights
• Acquisition of the Joynes Pike Group doubling our UK staff numbers to 360 and adding 9 offices
• Acquisition of Project Engineering Ltd in Canada• Secured 55% of New Zealand Transport Agency’s
fees for the management of state highway networks• Partner in the Auckland Motorway Alliance• Won key Auckland City Council contracts for road
asset management services, pavement structures and drainage design
• Transmission Gully new ‘preferred’ route reduces projected costs by $200m in Wellington
2008 Operational Highlights
• Renewed three major highway network asset management contracts in NZ
• Roading design for Tillegra Dam in NSW• Appointed to Perth city’s contracts panel• Award winning architectural design for Wilson Special
Needs School in Auckland• Australian Northern Territory Strategic Indigenous
Housing and Infrastructure Programme• Environment Centre for Wales• Appointed as preferred consultant to Logan City
Council, QLD
2008 Operational Highlights
• Developed Asset Management Framework for Ontario• Appointed sole structural engineering consultant for
conversion of 1,500 Boots stores in the UK• Sustainability award winning Oxley Woods housing
project in the UK• Won survey work for UK “Decent Homes” housing
programme
2) Financial Performance 2008
• 2008 Results
Financial Performance 2008
Financial HighlightsFinancial Highlights• Revenue up 25.4% to $372m• EBITDA up 28.4% to $30.5m• NPAT up 23.4% to $17.5m• Profit exceeds forecast by 10.5%• ROE 24.7% exceeds 22.8% forecast• Staff numbers increase 327 to 2,563
Financial Results
Full Year Variance Prospectus Variance
2008
Actual($000)
2007Actual($000)
$($000)
%2008PFI
($000)
$($000)
%
Total Revenue 371,540 296,332 75,208 25.4% 314,792 56,748 18.0%
Net Revenue 277,973 213,365 64,608 30.3% 251,411 26,562 10.6%
EBITDA 30,530 23,770 6,760 28.4% 27,901 2,629 9.4%
EBIT 24,068 18,882 5,186 27.5% 21,773 2,295 10.5%
Interest 276 1,100 (824) -74.9% 1,447 (1,171) -80.9%
Operating Profit 24,344 19,982 4,362 21.8% 23,220 1,124 4.8%
Taxation (6,848) (5,808) (1,040) 17.9% (7,380) 532 -7.2%
Net Profit After Tax 17,496 14,174 3,322 23.4% 15,840 1,656 10.5%
Half Year Comparators
2008 2007 2008-2 / 2008-1 2008-2 / 2007-2
2nd Half
($000)
1st Half ($000)
2nd Half
($000)
1st Half ($000)
$ ($000)
%$ ($000)
%
Total Revenue 193,714 177,826 157,003 139,329 15,888 9% 36,711 23%
Net Revenue 150,806 127,167 117,421 95,944 23,639 19% 33,385 28%
EBITDA 14,516 16,014 12,694 11,076 (1,498) -9% 1,822 14%
EBIT 11,160 12,908 10,141 8,741 (1,748) -14% 1,019 10%
Interest (23) 299 626 474 (322) -108% (649) -104%
Operating Profit 11,137 13,207 10,767 9,215 (2,070) -16% 370 3%
Taxation (2,789) (4,059) (3,216) (2,592) 1,270 -31% 427 -13%
Net Profit After Tax 8,348 9,148 7,551 6,623 (800) -9% 797 11%
12 months to 31 December (NZ$m) 2008 2007 Prospectus Forecast
Receipts from Customers 371.9 287.5 310.7
Payments to Suppliers and Employees (340.0) (266.1) (283.9)
Net Interest (0.1) 1.2 1.4
Tax Paid (7.0) (5.6) (7.9)
Net Cash From Operations 24.7 16.9 20.3
Net Purchase of PP&E (5.9) (4.1) (7.5)
Purchase of Investments (15.4) (9.0) -
Other Investing Cash Flows 0.9 1.8 -
Net Cash from Investing (20.3) (11.2) (7.5)
Net Cash from Financing Activity (13.5) 1.7 (10.7)
Net Increase in Cash Held (9.2) 7.4 2.1
Cash at the End of the Year 13.7 23.0 21.5
Strong Operating Cash Flow
31 December 2008 (NZ$m) 2008 2007 Prospectus Forecast
Bank & Start Term Deposits 60.5 53.4 50.3
Other Current Assets 75.5 60.8 68.7
Property Plant and Equipment 14.6 11.0 14.6
Intangible Assets 33.9 23.7 24.5
Other Non-Current Assets 11.2 7.9 8.4
Total Assets 195.7 156.8 166.5
Bank Overdraft 46.9 30.3 28.3
Other Current Liabilities 72.0 55.6 58.1
Non-Current Liabilities 5.8 7.2 10.1
Total Equity 71.0 63.7 69.5
Total Equity and Liabilities 195.7 156.8 166.5
Balance Sheet Strength
Key Ratios
2008
Actual2007
Actual2008PFI
EPS (diluted) $0.12 $0.10 $0.11
DPS $0.07 $0.06 $0.07
Revenue Growth 25.38% 17.39% 18.03%
EBIT Growth 27.47% 4.87% 10.54%
EBITDA Margin 8.22% 8.02% 8.86%
EBITDA/Net revenue 10.98% 11.14% 11.10%
EBIT Margin 8.66% 8.85% 8.66%
Effective Tax Rate 28.13% 29.07% 31.78%
ROE 24.70% 22.30% 22.79%
ROA 8.94% 9.04% 9.51%
ROCE 22.79% 19.99% 19.90%
Net Interest Bearing Debt (10,067) (19,455) (15,592)
Net IBD to Equity (0.14) (0.31) (0.22)
Net Interest Cover 87.20 17.17 15.05
Trends
Company - Total Revenue
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
2004 2005 2006 2007 2008
Total Revenue Linear (Total Revenue)
Company - EBITDA
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
2004 2005 2006 2007 2008
EBITDA Linear (EBITDA )
Company - NPAT
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
2004 2005 2006 2007 2008
NPAT Linear (NPAT)
Company - FTEs
-
500
1,000
1,500
2,000
2,500
3,000
2004 2005 2006 2007 2008
Company Total Linear (Company Total)
3) Operations Outlook 2009
Operations Outlook 2009
Global Economy – Implications for A&E ServicesGlobal Economy – Implications for A&E Services
Public Sector• Every major economy is targeting increased infrastructure
investment as an economic stimulus
• Resultant increase in Architecture and Engineering services demand will build over 2009
Private Sector• Absence of finance and risk appetite have severely depressed
activity with widespread shelving or cancellation of projects
• Liquidity of sector increases bad debt risk
• Recovery of activity levels will be influenced by backlogged demand and capital availability
Operations Outlook 2009
Impact on Opus MarketsImpact on Opus Markets
NZ • Opus revenues dominated by Public Sector Clients
• Well placed to benefit from increased infrastructure spend
• Every reason to be optimistic
Australia • Mix of Public/Private Sector Clients
• Some Developer exposure
• Reasonably well placed
Canada • Clients predominantly Public Sector Clients
• Well positioned
United Kingdom • Mix of Public/Private Sector Clients
• Exposure to the House Building Sector
• Has impacted significantly on results
• Challenges to refocus activity into other sectors
Operations Outlook 2009
• Tactical Response• Reducing operating costs
Indirect cost constraints Adjusting resource levels Conservative approach to growth
• Preserving cash Improving project management Focussed debt collection Reduced Capex Reduced recruitment Tightened liquidity management
• Building revenues Tracking and capturing increased infrastructure spend Diversifying UK business activity Increasing international collaboration
• Defending margins Focus on maintaining existing business Identify opportunities to improve margins Mitigate unprofitable projects
Operations Outlook 2009
Country ResultsCountry Results
Country
FTE Total Revenue Result
Outlook2007
($000)
2008
($000)
2007
($000)
2008
($000)
2007
($000)
2008
($000)
New Zealand 1,637 1,731 232,073 257,647 19,536 29,613 Improving
Australia 299 358 22,067 53,555 (281) (382) Steady / improving
Canada 62 66 8,889 11,730 (22) 1,188 Improving
UK 199 359 33,055 48,165 773 (5,420) At risk / negative
4) Strategic Direction
• Conservative liquidity management• Acquisition Strategy:
• 2009 Prudent to preserve cash, maintain/increase NTA, deal with
issues in UK Continue exploring potential acquisitions, maintain NTA by
mainly using new equity in any deal completed Focus is still Canada
• 2010 and beyond Prepared and alert to opportunities to advance
• Short term strategy – grow profits before extending scope• 2011 strategy for global footprint is unchanged, but likely to
be deferred
Strategic Direction
360 FTEs
1777 FTEs
360 FTEs
66 FTEs
Strategic Direction
500 FTEs
1850 FTEs
700 FTEs500 FTEs
Strategic Direction
5) Company Overview
• Company Description• Locations• Rationale for International Market Presence• Broad Range of Services Provided• Developing Capability across the Globe
Overview: Company Description
• Infrastructure professional services organisation
• Specialise in Buildings Water Roads
• Creation of new assets, and management of existing assets
• Also work with other infrastructure Port / Airport Industry Energy Land Development Environmental Rail
21 Offices360 FTEs
36 Offices11 Labs
1777 FTEs
17 Offices360 FTEs
7 Offices66 FTEs
Overview: Locations
2,563 Employees Across 81 offices and 11 laboratories
Overview: Rationale for International Market Presence
• Global presence Spreads opportunity & economic risk Broadens skill base Provides opportunities for staff
• Opus asset management capability provides competitive advantage Chosen markets need and want asset management
• Also able to provide asset development services in these markets
• Growth achieved through acquisitions plus organic growth
• Chosen markets have similar Infrastructure Legal systems Culture Language
Overview: Broad Range of Services Provided
• Architecture• Asset Valuation• Bridge Design• Building Services Engineering• Civil Engineering• Infrastructure Economic Evaluation• Environmental Planning• Estimating & Cost Management• Fire Engineering• Geotechnical Engineering• GIS Services• Graphic Design• Heritage Conservation Services• Infrastructure Asset Management• Land Surveying• Landscape Architecture• Maritime Engineering (Marine Services)• Materials Testing• Mechanical & Electrical Engineering
• Pavement Engineering• Pipe Network Reticulation• Project Management• Project Procurement & Construction Management• Property Acquisition, Disposal and Management• Risk Management• Seismic Engineering• Structural Engineering• Traffic Engineering• Traffic Modelling• Transportation Asset Management• Transportation Infrastructure Design• Transportation Planning and Engineering• Travel Demand Management Plans• Utilities Operator Training• Wastewater Treatment• Water Asset Management• Water Resource Management• Water Treatment
Majority of Opus employees are technical professionals with skills in the following areas:
Overview: Broad Range of Services Provided
New train stations on the Epping to Chatswood Railway line, NSW
Overview: Broad Range of Services Provided
Stage 2 development at White Water World, QLD
Overview: Broad Range of Services Provided
Master plan for the development of a new ferry terminal, Nova Scotia
Overview: Broad Range of Services Provided
Safety review of Cobequid Pass,Trans-Canada Highway, Nova Scotia
Overview: Broad Range of Services Provided
Westfield Retail Development at White City
Overview: Broad Range of Services Provided
The Environment Centre for Wales
Overview: Broad Range of Services Provided
Oxley Woods project, Milton Keynes
Overview: Broad Range of Services Provided
The Wilson Special Needs School, Auckland
Overview: Broad Range of Services Provided
Newmarket Station, Auckland
Overview: Broad Range of Services Provided
Mt Grand Raw Water Reservoir, Dunedin
Overview: Broad Range of Services Provided
Hillsborough roundabout overbridge, Auckland
Overview: Broad Range of Services Provided
Air-conditioning system design at Gen-i Data Centre, Auckland
Strong FTE Growth
Year End FTEs by Country 2002 2003 2004 2005 2006 2007 2008
New Zealand 1,121 1,201 1,350 1,459 1,594 1,677 1,777
Australia 30 38 46 68 82 299 360
Canada - - 24 29 59 62 66
UK 32 34 135 154 179 199 360
1,183 1,273 1,555 1,710 1,914 2,237 2,563
Annual Increase 7.6% 22.2% 10.0% 12.0% 16.9% 14.6%