Group Overview and Leadership Reviews
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04 MURRAY & ROBERTS | Annual integrated report 2020 OUR NEW STRATEGIC FUTURE Implementation of the Group’s strategy has consolidated our longer-term growth potential, strengthening the Group’s investment case. A MULTINATIONAL …FOCUSED ON THE …DIVERSIFIED TO …DIFFERENTIATED BY …SET FOR GROWTH SPECIALISED NATURAL RESOURCES COUNTER MARKET ENGINEERED IN HIGH-POTENTIAL ENGINEERING AND SECTOR… CYCLICALITY… EXCELLENCE… MARKET SECTORS. CONSTRUCTION GROUP… Our broadened strategic High uncertainty in the Diversification across The Group’s culture of With the capacity to scope includes the near-term outlook for market sectors, regions Engineered Excellence, fund growth and market sectors and global economic growth and service offerings that which embeds shared navigate business regions with the best and commodity price encompass the full learning and continual cycles, and a significant, opportunities for growth, recovery, but medium- engineering and improvement in every high-quality order book diversification and term structural shifts and construction project life aspect of our business, and project pipeline, we differentiation for each of long-term demand cycle, allows us to supports the are confident in our our platforms, as fundamentals in our optimise our earnings competitiveness of our expectation of long-term specialist, rather than market sectors remain potential and spread our business platforms in profitable growth. generalist contractors. favourable. risk through the cycle. highly contested markets. CONSOLIDATING OUR STRATEGIC GAINS In the last five years, despite the pressures of a trying external environment and the work needed to resolve a long tail of complex legacy issues, we achieved significant milestones. The Group entered this year, with a more diversified international presence and stronger positions in our chosen market sectors. We were also able to establish, by acquisition, strategic positions in new high-growth areas. Despite the set-back to our operations caused by the COVID-19 pandemic, our growth ambitions remain compelling. SETTING THE FOUNDATION GATHERING MOMENTUM Sale of Infrastructure Resumed dividend & Building platform payments R314 million AUGUST APRIL NEW 2014 2017 STRATEGIC FUTURE (FY2015+) SEPTEMBER JANUARY MARCH 2014 TO 2016 2017 Acquisitions: JSE subsector change Aquamarine Enercore and new financial director Booth Welsh Merit appointed CH-IV 05 GROUP OVERVIEW LEADERSHIP REVIEW REVIEW BUSINESS PLATFORM REPORTS AND REMUNERATION RISK GOVERNANCE, GATHERING MOMENTUM Increased investment Acquisitions: Terra Nova Technologies SUMMARISED FINANCIAL RESULTS SHAREHOLDERS’ INFORMATION in Bombela (50%) Clough USA Boipelo Mining Contractors DECEMBER FEBRUARY TO MAY 2017 2019 APRIL SEPTEMBER 2018 2019 ATON offer to ATON offer fails shareholders Acquisitions: OptiPower Projects 06 MURRAY & ROBERTS | Annual integrated report 2020 SET FOR SUSTAINABLE GROWTH We enable fixed capital investment that allows people to live better lives. We are both a service provider to society and an integral part of the socioeconomic ecosystem. Our Purpose connects our capabilities to the investment our clients make in the infrastructure required for long-term economic and social development of industries, countries and communities. We design, construct and maintain the mining operations that provide the resources on which all real economic activity is based; the plant that turns gas, water and sun into electricity, and takes it to industries and individuals; and the complex transport infrastructure like roads, tunnels and water works that serve growing urban populations. Our Values guide us individually and collectively in everything we do, in every country we work, and our culture of Engineered Excellence defines, governs and informs our management approaches throughout the organisation. This reinforces the competitiveness of our operations, and our reputation as a well-governed, values-driven and ethical multinational organisation, which is how we define the leadership aspiration in our Vision. Murray & Roberts Holdings Limited A group of world-class companies and brands aligned to the same Purpose, Values and Vision STOP. THINK. ACT. 24/7: SAFETY FIRST IN EVERYTHING WE DO BUSINESS PLATFORMS ENERGY, RESOURCES POWER, INDUSTRIAL MINING & INFRASTRUCTURE & WATER PURPOSE VISION VALUES Enabling fixed capital To be a leading • Integrity investments that support multinational engineering • Respect the advancement of and construction group • Care human development that applies our project • Accountability life cycle capabilities to • Commitment optimise fixed capital investment PROJECT LIFE CYCLE Design and Process engineering, Service and engineering/ procurement and Construction operations technical consulting construction ENGINEERED EXCELLENCE The Group’s ability to create and sustain value, rests on achieving sustainable growth. This requires that we differentiate our services PG 34 Chairman’s statement through a high degree of specialism and excellence in project delivery. 07 BUSINESS MODEL RESILIENCE Long-term demand drivers of global population growth, rapid Because the Group is exposed to the cyclicality of commodity urbanisation and economic growth, inform the Group’s focus on demand, its business model is designed to diversify its earnings selected global natural resources market sectors. The relevance potential through the cycle. The combination of portfolio, of natural resources – of commodities, utilities, energy and geographic and capability diversification across our business infrastructure – to a post-COVID-19 world is clear. The Group’s platforms, provides a blend of revenue and earnings potential diversified exposure to these activities positions it to benefit from across our market sectors. This buffers the Group against economic stimulus centred on infrastructure development and over-exposure to the risk dynamics in any one market sector, GROUP OVERVIEW opportunities emerging from the shift to lower-carbon and each of which respond differently to commodity demand and renewable energy sources. supply cycles. The Group’s geographic footprint is focused on establishing a permanent presence in high-growth regions for our clients. We also support clients in other geographies where we do not have a permanent presence, occasionally in joint venture with local partners. LEADERSHIP REVIEW REVIEW BUSINESS PLATFORM REPORTS AND REMUNERATION RISK GOVERNANCE, VANCOUVER CALGARY AYRSHIRE ROUYN-NORANDA ULAANBAATAR NORTH BAY SUDBURY SANTEE KITWE PORT MORESBY ACCRA HOUSTON PERTH SALT LAKE CITY MAPUTO CAPE TOWN KALGOORLIE JOHANNESBURG ADELAIDE CORPORATE OFFICE ENERGY, RESOURCES & INFRASTRUCTURE MINING POWER, INDUSTRIAL & WATER SYDNEY BRISBANE The Group’s capabilities across the project life cycle enable us to provide specialised and competitive end-to-end service offerings to clients in our market sectors, while diversifying our revenue and margin mix. SUMMARISED FINANCIAL RESULTS SHAREHOLDERS’ INFORMATION MINING ENERGY, RESOURCES & INFRASTRUCTURE POWER, INDUSTRIAL & WATER ■ Detailed engineering ■ Detailed engineering ■ Detailed engineering ■ Procurement ■ Procurement ■ Procurement ■ Construction ■ Construction ■ Construction ■ Commissioning and maintenance ■ Commissioning and maintenance ■ Commissioning and ■ Operations maintenance Market focus Market focus Market focus Global: Underground and open pit Global: Energy Sub-Saharan Africa: Power, mining services and material Australasia: Energy, resources (metals and industrial and water markets logistics, in global metals and minerals) and infrastructure markets minerals markets The Group favours lower-risk, developed markets and higher-margin market segments, in which the regional capabilities and competitive PG 45 advantages of our platforms can be fully leveraged to achieve growth. Business platform review 08 MURRAY & ROBERTS | Annual integrated report 2020 A STRATEGY FOR VALUE CREATION CORPORATE VALUE DRIVERS ACTIONS KEY CONSIDERATIONS FY21 FY22 FY23 RISK DRIVERS LINK TO MATERIAL ISSUES STRATEGY Strategic focus ■ Deliver clear medium-term business plans STRATEGIC RISKS Business model resilience ■ across our platforms. ■ Vulnerability to macroeconomic factors. Leverage market positions to drive order book growth. EXECUTION ■ Further diversify earnings potential through organic ■ Group liquidity. AND DELIVERY ■ Continue to expand internationally. and acquisitive means. ■ Capitalising on the recovery of energy markets. ■ Manage liquidity and allocate capital effectively. ■ Close-out Middle East projects and office. PROJECT RISK Employer of choice ■ Uncertified revenues. ■ Ensure leadership quality and depth through constant and proactive Mergers and ■ Position platforms in developed markets and u development. acquisitions higher-margin segments of the project life cycle. ■ Maintain competitive employee value proposition to retain and attract critical skills and to ensure flexible capacity. ■ Identify and conclude selected acquisitions in high-potential markets across platforms to Trusted partner support growth. ■ Be respected as a values-led, ethical and responsible multinational. OPERATIONAL Performance ■ Improve business platform accountability for STRATEGIC RISKS Contractor of choice ■ the standards, systems, practices and ■ Vulnerability to macroeconomic factors. Deepen Group culture of Engineered Excellence through continuous PERFORMANCE management reporting of Engineered Excellence. learning. ■ Group liquidity. ■ Invest in digital solutions to improve safety, productivity and