4. Introduction to Leighton Holdings
The Leighton Group has evolved significantly from the construction
company of its origins over 50 years ago. Today it is a diversified
service provider to a range of private and public sector clients.
One of the world’s major project development and contracting
organisations. Also the world’s largest contract miner.
They operate in more than 20 countries from headquarters in
Australia, Hong Kong and Dubai.
Employ around 40,000 people.
Turnover of A$13.3 billion in 2009 (1999: A$3.3 billion)
5. Organisation Structure
Visionstream PT Thiess Lucon
LSE Technology Indonesia Infratek Networks
Vytel Asia Thiess Services Quantum Joint Ventures have
Broad HVE
Silcar also added new
BOS Australia
capabilities
6. 20 YR. Share Price Performance
LEI - Market Capitalisation
16,000
14,000 Strong
Market Capitalsiation A$ million
performer
12,000
Close
10,000
Outperformed the correlation to
8,000 ASX 200 Industrials economic
cycle
6,000 Index
4,000
Yield Stock
2,000
0
7. Key Financials
Leighton Holdings - Total Revenue
14,000
12,000
Also strong Balance
A$ millions
10,000
8,000
6,000
4,000 Sheet with
2,000
- conservative net
gearing of 26.2%#
Financial Years
Total Revenue
Financial strength* and
Leighton Net Profit After Tax capacity to bid for
700.0
600.0
major projects
A$ millions
500.0
400.0
300.0
200.0
100.0
0.0
Increasing market
share without margin
Financial Year erosion
NPAT
# Industry gearing target 30% to 40% * $3B in undrawn facilities
8. Mix of organic & acquisition growth
Leighton Asia
Leighton founded by Stanley
German Leighton Asia established
Leighton
Construction established office in the
Company Thiess re- offices in Philippines
Leighton Contractors becomes major Malaysia and
establishes in
established as principal shareholder. Vietnam.
Indonesia
operating subsidiary
1962 1975 Next
1949 1972 1983 1987 - 1989 1995 1996 page
1988
Acquires
Wal King Visionstream
Strategic move into Appointed CEO Leighton Asia from Telstra
Asia. HK Office establishes office in
Listed on the ASX established Thiess becomes part Thailand
of the Leighton
Group. Construction
and mining services
capability.
9. Acquisitions extend capabilities
Acquires
45% stake in Al
construction
Habtoor
division of
Engineering
Transfield
Acquires Henry
Walker Eltin FY2010: Earnings
Group Guidance of $19b
revenue, NPAT in
excess of $600
Previous
1906
2006 2003 2006 2007 2010 million
page
John Holland
acquisition
Leighton Asia
opens offices in
Guam and
Mongolia
10. A Journey of growth &
Diversification
Current Strategy
Tarong Energy Corporation
Value: $385 million
Type: Contract mining & Maintenance
Parties: Thiess
11. Resource View
Culture People
Each subsidiary is encouraged to maintain its individual Leighton is a service based organisation, its
culture. success is reliant upon the quality and service
Eight core values sit across the entire Group. its people delivers.
Systems Experience
A variety of delivery systems enables Leighton to Long serving leadership. Wal King has been
carry out every primary activity of the construction CEO for 22 years and joined 1968.
value chain.
Leighton has a promotion from within bias,
which has contributed to the depth of the
experience within the company.
Structure Competences
The decentralised nature of Leighton’s structure Leighton's ability to deliver large scale projects in
allows each operating company to pursue its own multiple industries.
market position and respond to aggressive
Leighton’s ability to deliver all primary activities
competition and changing market environments.
of the construction value chain through its
vertically integrated model.
12. Current Strategy
Markets Geography
Infrastructure Australia
Resources Asia/Pacific
Property Gulf Region
Geography
Delivery Systems
Activities Hard Dollar
Construction Brands Design & Construction
Contract Mining Project Management
Services Alliancing
Development Markets/ Negotiated Development
Delivery
Activities systems Privatised projects/ PPPs
Brands
Leighton Contractors
Thiess
John Holland
Leighton International
Leighton Asia
Leighton Properties
13. Why does Leighton’s have more than one brand?
Brand Recognition
enhanced by different
core capabilities and
track record
14. Markets and Activities
Markets
Infrastructure Diversified Strategy by
Service offering
Resources
Property
Diverse Capabilities
Civil Engineering Utilities Services
Major Infrastructure Development Facilities Operations & Maintenance
Building Structural mechanical process
Contract Mining Rail
Process Engineering Water
Telecommunication Services Tunnelling and Underground Mining
Facilities Management Telecommunication & power transmission
Mining Property development
Environmental Services Specialist services in development mgt
15. Geographic Diversification
Operate in high growth markets in the Asia
Pacific Region and Middle East
Mongolia
Korea
Kuwait Versus
Qatar Mongolia China 9.0% Euro area 0.3%
Kuwait India 6.4% Taiwan USA 1.3%
UAE Macau
5.2% Hong Kong 3.5%
Thailand
Vietnam
Philippines
Sri Lanka
Malaysia
Indonesia 6.3%
Near Pacific
Australia 2.0%
New Zealand
# Based on 2010 GDP forecasts from the IMF
16. GE Business Screen
Low Medium High
High
Business Strength
Protect position
Medium
Selectively manage
for earnings Build selectively
Low Divest
Market Attractiveness
Strong position for all SBU with the exception
of Leighton Properties.
17. Peer Review
Total Revenue - 30 June 2009
16,000 Bovis Lend Lease
14,000 Leighton
12,000
10,000
Binfinger Berger (Est)
$A millions
8,000
Downer EDI
6,000 UGL
Transfield
4,000
Laing O’Rourke
2,000 Monadelphous
-
Net Gearing Ratio High revenue and
Leighton 26.21% modest gearing.
Downer EDI 39.00%
Laing O’Rourke 24.57% $3 billion in unused debt
Bovis Lend Lease 2.90%
UGL 28.95%
capital facilities
Transfield 50.13%
Monadelphous 20.32%
18. A Journey of growth &
Diversification
Industry Analysis
Sydney Desalination Plant
Value: $980 million
Type: Design, Construct, Operate & Maintain
Parties: John Holland & Veolia Water
Consortium
23. A Journey of growth &
Diversification
Future Strategy
The Emerald Palace - Dubai
Value: $293 million
Type: Construction only
Parties: Leighton International & Al Habtoor
Engineering
24. Future Strategy & Issues
Industry consolidation amongst smaller players. Opportunity for
Leighton to acquire further niche capabilities.
CEO leadership transition.
Consortium structure will continue to flourish as a way of sharing
and managing project risks
Difficult regulatory regime in Australia for bidding for major
government infrastructure. High bidding costs at 100% risk to get to
prequalification stage. Eg Sydney Metro project cancellation.
Infrastructure Australia should codify bidding rules with the objective
of minimising bidding and pre-selection costs. Leighton’s will
continue to lobby this organisation to tighten up the tendering
process for major infrastructure works.
Engineering personnel shortages will resurface as the economy
rebounds.
Careful consideration of exposure to emerging markets.
