12 November 2014 Company Announcement Office Australian Stock Exchange Level 4, Stock Exchange Centre 20 Bridge Street SYDNEY NSW 2000 By ASX Online CHAIRMAN’S ADDRESS, MANAGING DIRECTOR’S ADDRESS AND PRESENTATION Attached are the Chairman’s address, the Managing Director’s address and a presentation to be delivered at Decmil Group Limited’s (ASX: DCG) Annual General Meeting scheduled to commence at 10.00am WST this morning. Yours faithfully, Alison Thompson Company Secretary B MS Doc No: DGL-STA-TP-0011 | Rev 0 | 12/06/2014 Page 1 of 1 Chairman’s Address DECMIL GROUP LIMITED 2014 ANNUAL GENERAL MEETING 12 NOVEMBER 2014 BILL HEALY Good Morning Ladies and Gentlemen. Welcome to the 2014 Decmil Annual General Meeting. My name is Bill Healy and I am Chairman of the Board of Directors of Decmil Group Limited. On behalf of my colleagues, I would like to welcome you to our head office to reflect on the year that was and acknowledge the outstanding achievements of our team. As it is now 10am and a quorum is present, I declare this meeting open. I propose to take the Notice of Meeting as read. I would like to take this opportunity to introduce my fellow directors. Scott Criddle, Managing Director and Chief Executive Officer Scott was appointed Chief Executive Officer in July 2009 and Managing Director of Decmil Group Limited in April 2010. He has been a Director of the Company since April 2010. He was previously the Managing Director of Decmil Australia from 2002, where he was responsible for the long-term growth and strategic direction of the company, playing a key role in building relationships with stakeholders and clients. Scott joined Decmil Australia in 1993 as a construction labourer to gain experience and learn about the company from the ground up. He held a variety of roles within Decmil Australia including Construction Manager, Estimator, Business Development Manager and Area Manager. Denis Criddle, Non-Executive Director Denis was the founder of Decmil Australia, Decmil Group Limited’s major business division. He was appointed to the Company’s Board as a Non-Executive Director in August 2007 and served as DGL’s Non-Executive Chairman from September 2009 to December 2011. Denis is a civil engineer with more than 30 years’ experience in construction and maintenance services for the oil and gas and resources sectors in central Queensland and north-west Western Australia. Denis has been a Director of the Company since August 2007. Giles Everist, Non-Executive Director Giles joined the Company in December 2009. He served as Non-Executive Chairman of Decmil from December 2011 to June 2014. In July 2014 he became Chairman of the Audit and Risk Committee. Page 1 of 3 He has more than 25 years’ experience in the finance, resources and engineering services industry, holding senior executive roles with Coopers and Lybrand, Rio Tinto, Fluor Australia and more recently Monadelphous Group where he was Chief Financial Officer from 2003 to 2009. Lee Verios, Non-Executive Director Lee has more than 40 years’ experience as a commercial and property lawyer. Until he retired in July 2010, he was a partner in the international law firm of Norton Rose Fulbright, where he headed its Commercial Property division in Perth. Lee is also an experienced Company Director, currently serving as a Non-Executive director of Finbar Ltd and the Wyllie Group Pty Ltd. He joined our board in April 2010. Trevor Davies, Non-Executive Director Trevor was appointed to the Board as a Brisbane-based Non-Executive Director in April 2013. He is a civil engineer who has had an extensive career within the construction and mining industries. Until his retirement in 2009, Trevor was the Chief Executive Officer of Queensland- based civil and mining services contractor Golding Contractors where he oversaw a period of significant growth. Trevor’s industry experience and knowledge of the Queensland market is already proving invaluable to the Group as we expand our footprint in that market. I would also like to introduce you to our Executive Team, some of whom are here with us today. ▪ Jon Holmes – Executive General Manager Construction and Engineering. ▪ Pamela Rosenthall – General Manager of Homeground Villages. ▪ Craig Amos – our Chief Financial Officer. ▪ Alison Thompson – our Company Secretary. At today’s meeting we have four resolutions to consider. However, before we commence the formal part of the meeting, I am going to give a brief overview of the Company’s financial performance and key activities over the past year, and will then invite our CEO and Managing Director, Scott Criddle, to update shareholders on the business highlights, operations, strategy and the outlook for the Group. After Scott’s presentation, there will be an opportunity for you to ask questions. And of course upon the conclusion of formal proceedings, you are most welcome to stay on for light refreshments, and discuss any matters regarding the Company with the directors and senior executives present today. We finished the year in a strong position with revenue, EBITDA and NPAT up, with healthy earnings per share and stable cash on hand with no core senior debt. Looking to the highlights of FY14 our results have been underpinned by key contracts with the Department of Immigration and Border Protection, Atlas Iron, Shell, Roy Hill, QGC, Rio Tinto and Chevron. Page 2 of 3 We have won work in new competencies such as civil roads and bridges; and new sectors including Government. Our flagship accommodation village, Homeground Gladstone, has achieved steady occupancy, averaging 79% during FY14. Our focus continues to be on diversification of construction and engineering revenue; however we are mindful that margins will be returning to long term average levels. We continue to look at opportunities with the Government, civil, upstream coal seam gas and infrastructure ownership. As I am sure you are aware, Decmil offers a diversified range of services to the mining, oil & gas, infrastructure and government sectors in Australia and overseas. We are rightly proud of the track record we have established over the past 35 years of delivering integrated solutions to our blue-chip clients. Our existing capabilities continue to grow with a focus on Civil Construction, Building Construction, Village Ownership, Speciality Engineering Services and Infrastructure Ownership. Our growth and diversification strategy is not simply aimed at maintaining these strong capabilities but to build on them organically with additional infrastructure services, further government infrastructure works, BOO and operating efficiency opportunities, oil & gas, mine infrastructure maintenance, PPP and long term contracted revenue opportunities. During the past 12 months the climate in Decmil’s traditional industry has changed with some businesses in difficulty or downgrading their profit. Despite the challenging environment, we are focussed and determined to adapt as we continue diversifying our business seeking work from a much wider geographic, customer and industry base. The Company delivered another record year of revenue, being $617.7 million and profit of $49.7 million. This represents our seventh consecutive year of profits. This result was supported by a solid performance across both Construction and Engineering and Accommodation Services. Earnings per share was a record 29.50 cents and based on a 44% payout ratio. The Group maintained its net cash position with $59.3 million cash on hand and is currently debt free with all senior debt repaid during the period. Revenue, EBITDA, net profit after tax and earnings per share were all up on FY13 numbers. Going forward, the Group has sufficient headroom in bank guarantee and surety bond facilities to ensure we can continue to successfully tender for future key projects. In closing, I would like to take this opportunity on behalf of the Board to thank our loyal shareholders for their ongoing support and of course to our loyal staff for their hard work over the past 12 months. We have a young team who bring high levels of energy and creativity to their roles, combined with a strong focus on client service. Page 3 of 3 Managing Director’s Address DECMIL GROUP LIMITED 2014 ANNUAL GENERAL MEETING 12 NOVEMBER 2014 SCOTT CRIDDLE Thank you Bill. Good Morning Ladies and Gentlemen and thank you for joining us today for our 2014 Annual General Meeting. As you’ve heard from our Chairman, I am pleased to report that we have delivered another solid result this financial year. Revenue has increased by $88.9 million to $617.7 million, however at the same time we are seeing our margins reducing. There are two main factors at play here: ▪ Firstly, it is widely acknowledged that the resource sector boom conditions that we have experienced over recent years are now at an end. ▪ And secondly, we are successfully winning more government work in infrastructure and civil, and these projects inevitably have smaller margins. Operationally our Department of Immigration and Border Protection contracts are progressing well. We have successfully integrated Eastcoast Development Engineering and VDM into the broader Decmil business and we have expanded our capability including roads and bridges. We have also secured a number of non-process infrastructure contracts with Tier 1 resource clients, which is very pleasing. Looking forward, we have a high degree of revenue visibility within a diverse range of revenue streams. We are continuing to pursue Government, civil and upstream LNG opportunities with margins returning to long term sustainable levels. Looking at our journey over the past four years our geographical spread has increased from being 100% Western Australian to being represented in Western Australia, Queensland, Northern Territory and overseas. We continue to work in new areas with new clients diversifying from resources and oil & gas clients to Government and infrastructure. I would like to provide you with a quick overview of some of our current major projects. Page 1 of 2 Turning our attention now to our Accommodation Services business. Occupancy at Homeground Villages’ flagship property – Homeground Gladstone – remains consistent, offering a value for money solution for a wide range of clients. EBITDA was up 89% during the 13/14 financial year with an average occupancy of 79%. With a diversified client base future growth opportunities are to capture long term tenancy from the construction to operations and maintenance phases. Homeground’s current tenancy includes more than 30 organisations operating in Gladstone in coal, LNG, port, civil and shutdown maintenance work. The people we have are the strength of our business and during the 13/14 financial year we have had a real focus on improving leadership and career progression. Strategies have been implemented to support the Company’s performance, and traineeships have been offered. Keeping our people and our projects safe is central to everything we do at Decmil. Over the past year our safety performance improved with no serious injuries or incidents reported. We are looking at ways to further reduce the TRIFR result including greater subcontractor engagement, alignment and a focus on training. At the heart of Decmil’s philosophy is our strong, values-based culture that focusses less on what we do and more on how we do it. Our values – Safety, People, Leadership, Teamwork, Client Relationships and Community – frame our actions and our decision making throughout the organisation. I am proud of the steps we have taken to implement a meaningful corporate social responsibility program. Decmil in the Community gives back to those who need it most in the way of charity events, corporate friendships, charity partnerships, volunteering and donating. Our future growth strategy will see us continuing to grow and diversify by leveraging our existing core capability, capitalising on our strong credentials, mapping opportunities in less mature markets and expanding geographically. We see coal seam gas as a particular area of potential growth. Our experience with QGC along with complimentary CSG services such as maintenance will be targeted. Since acquiring VDM and its associated R4/B2 certification, which in a nutshell has opened the door for us to pursue roadworks contracts, we have had an initial success in civil works. We would like to enhance this via strategic alliances and joint ventures, and continue to leverage our national prequalification in roads and bridges. Moving forward, Government and infrastructure will be a key focus for our business. Social infrastructure, defence, PPP opportunities and build-own-operate asset opportunities all offer strong prospects for growth. Before I conclude I would like to thank Bill, our Chairman; Giles, our former Chairman, and our fellow directors for your support and advice over the past year. We are very fortunate at Decmil to have a stand-out team at every level of the business, and it is through teamwork that we are continuing to grow and develop the company. My thanks also go to everyone who works for the Company for their hard work and focus on delivering for our clients. Page 2 of 2 Annual General Meeting 12 November 2014 Welcome Board of Directors Executive Team