Gresham Mining & Infrastructure Services Quarterly

We are pleased to present Edition 28 of the Gresham Mining & Infrastructure Services Quarterly (GMISQ), a snapshot of the performance, news and trends across the resources and infrastructure services sectors.

The final quarter of 2020 saw a continued broad based share price recovery across the sector. The Gresham Mining & Infrastructure Services Index (GMISI) increased by 20% over the period, outpacing the 14% improvement in the All Ordinaries Index. Of the 50 GMISI constituents, 41 recorded share price increases, including 6 companies that gained more than 50%.

Earnings multiples ticked up during the quarter, with the sector’s median PE ratio of 14.2x above its long term average, but still well below the broader market multiple.

The observed strengthening of share prices and multiples reflects the industry’s improved earnings outlook, with analysts currently forecasting median annual EBITDA growth of 13% through to FY22. This is consistent with a range of new contract awards and renewals in recent months in both mining and infrastructure, and across construction and operations.

Corporate activity has ramped up, led by the continued evolution of the contracting mining landscape with CIMIC’s sale of 50% of Thiess to Elliott and Maca’s purchase of Downer’s Mining West business. Other notable transactions included the IPOs of GenusPlus and Duratec in November.

In this edition’s Quarterly Focus we also recap the equity market rollercoaster ride throughout 2020. After a promising start, valuations across the sector dropped significantly over February and March amidst uncertainty regarding the potential impact of COVID-19. Since that time, the GMISI has rebounded strongly, driven by a combination of the strong domestic response to the pandemic, improving commodity prices and government stimulus, including fast-tracked infrastructure projects.

Editorial Team

Chris Branston Tom Waddell David Burton Harry Pickworth [email protected] [email protected] [email protected] [email protected]

Edition 28 Gresham Advisory Partners Ltd is a leading Australian mergers and acquisitions and capital advisory 1 February 2021 business and one of Australia’s largest and highest ranking independent corporate advisors. Share Price Movements

GMISI Constituents1 Leaders & Laggards (Share Price)1

Ranks Market Cap (A$m) Share Leaders Laggards Company price 179% Dec Sep 31 Dec 20 30 Sep 20 Δ%

1 2 Seven Group Holdings Ltd. (ASX:SVW) 7,924 6,081 30%

2 3 CIMIC Group Ltd. (ASX:CIM) 7,586 5,872 31% 80% 73% 3 5 Mineral Resources Ltd. (ASX:MIN) 7,063 4,698 50% 70% 57% 4 1 Orica Ltd. (ASX:ORI) 6,149 6,263 -2%

5 4 Worley Ltd. (ASX:WOR) 5,999 4,970 20%

6 6 ALS Ltd. (ASX:ALQ) 4,636 4,443 4% (10%) 7 7 Downer EDI Ltd. (ASX:DOW) 3,738 3,086 21% (12%) (19%) (24%) (27%) 8 8 Monadelphous Group Ltd. (ASX:MND) 1,275 960 33%

9 9 NRW Holdings Ltd. (ASX:NWH) 1,255 866 44% Veris

Veem

Verbrec Primero

10 11 Perenti Global Ltd. (ASX:PRN) 965 804 20% AJLucas

11 10 Service Stream Ltd. (ASX:SSM) 740 838 -12% Mastermyne

MMAOffshore

Group

Boom Logistics ServiceStream 12 14 Imdex Ltd. (ASX:IMD) 684 531 29%

13 15 Emeco Holdings Ltd. (ASX:EHL) 620 457 36%

14 12 Alliance Aviation Services Ltd. (ASX:AQZ) 616 563 9% ResourceDevelopment

15 13 Macmahon Holdings Ltd. (ASX:MAH) 571 550 4% 16 17 MACA Ltd. (ASX:MLD) 366 221 49% Performance Relative to S&P 200 Indices1 17 16 RPMGlobal Holdings Ltd. (ASX:RUL) 293 257 14%

18 18 Civmec Ltd. (ASX:CVL) 199 189 5% 25% 26% 19 22 Fleetwood Ltd. (ASX:FWD) 197 165 20% 22% 20% 20 23 Mader Group Ltd. (ASX:MAD) 196 161 22% 18% 15% 14% 21 20 Engenco Ltd. (ASX:EGN) 191 166 15% 12% 13% 11% 12% 22 24 EnviroSuite Ltd. (ASX:EVS) 190 159 19% 6% 5% 23 25 GR Engineering Services Ltd. (ASX:GNG) 189 158 20%

24 21 Lycopodium Ltd. (ASX:LYL) 186 166 12%

25 27 SRG Global Ltd. (ASX:SRG) 185 129 43% (1%) 26 30 BSA Ltd. (ASX:BSA) 158 126 26% (7%)

27 29 Southern Cross Electrical Engineering Ltd. (ASX:SXE) 141 126 12% IT

28 26 Cardno Ltd. (ASX:CDD) 136 130 17%

GMISI

Energy

Utilities

A-REIT Materials

29 19 Resource Development Group Ltd. (ASX:RDG) 129 177 -27% Industrials

Resources

Cons. Disc.

HealthCare

AllOrdinaries Cons. Staples

30 31 Intega Group Ltd. (ASX:ITG) 122 118 4% S&P/ASX200 TelcoServices

31 28 DUG Technology Ltd. (ASX:DUG) 120 127 -5% Financial-x-A-REIT 32 32 Mitchell Services Ltd. (ASX:MSV) 112 102 10%

33 42 MMA Offshore Ltd. (ASX:MRM) 108 54 -19% 34 38 Veem Ltd. (ASX:VEE) 107 62 73% Performance Over Time 35 34 Austin Engineering Ltd. (ASX:ANG) 99 87 13%

36 41 Primero Group Ltd. (ASX:PGX) 96 57 70%

37 35 Acrow Formwork & Construction Services Ltd. (ASX:ACF)83 78 6% Gresham Mining & Infrastructure Services Index (GMISI) 95 38 36 Decmil Group Ltd. (ASX:DCG) 81 72 13% S&P/ASX 200 39 43 Boom Logistics Ltd. (ASX:BOL) 77 49 57% S&P/ASX 200 Resources 85 40 33 Mastermyne Group Ltd. (ASX:MYE) 72 91 -24%

41 39 Swick Mining Services Ltd. (ASX:SWK) 61 58 5% 75 42 37 Saunders International Ltd. (ASX:SND) 61 62 -2% 43 40 Laserbond Ltd. (ASX:LBL) 60 57 4% 65 44 47 Verbrec Ltd. (ASX:LCM) 54 30 80%

45 44 XRF Scientific Ltd. (ASX:XRF) 41 44 -8% 55

46 46 Boart Longyear Ltd. (ASX:BLY) 39 34 12%

47 55 Veris Ltd. (ASX:VRS) 33 12 179% 45

48 45 AJ Lucas Group Ltd. (ASX:AJL) 32 36 -10% 35 49 51 Dynamic Drill & Blast Holdings Ltd. (ASX:DDB) 31 20 51%

50 49 Valmec Ltd. (ASX:VMX) 30 21 41% 25 Dec17 Jun18 Dec18 Jun19 Dec19 Jun20 Dec20

Notes: (1) Performance measured over the period 30-Sep-20 to 31-Dec-20 (inclusive). Source: FactSet, IRESS. 2

2 Valuation Multiples

The sector’s forward PE multiple increased in line with share prices in the final quarter and is currently sitting above the 10 year median. However, the industry continues to trade at a significant discount to the broader market.

1 Year Forward Price Earnings Ratio Over Time

23x 21x 19x 17x 15x 13x 11x 9x GMISI 10-year Median: 10.4x 7x 5x GMISI All Ordinaries 3x

Price Earnings Ratio (FY21F)

Median as at 30 June 2020: 10.5x 35x

30x

25x

20x Median: 14.2x 15x

10x

5x

-

ORI

LYL LBL

IMD CIM MIN

EHL

BOL RUL VEE ALQ BSA SXE ACF

AQZ

SND PRN MLD

PGX

SSM SRG

DUG DCG MAD MAH

SWK MND SVW GNG FWD

NWH

WOR DOW

Dividend Yield (FY21F)

6.0% Median as at 30 June 2020: 3.6%

5.0%

4.0%

3.0% Median: 2.7%

2.0%

1.0%

-

ORI

LYL LBL

MIN CIM IMD

EHL

ACF SXE BSA ALQ VEE RUL EVS BOL

AQZ

PRN MLD SND PGX

SSM ANG SRG

MAD MAH DUG DCG

GNG MND FWD SWK SVW

NWH MRM

WOR DOW

Large Cap (>$1bn) Mid Cap (between $200m and $1bn) Small Cap (<$200m)

Notes: (1) Only companies with consensus earnings forecasts are included in charts; (2) Share prices are as at 31-Dec-20; (3) Earnings multiples are not calendarised; (4) Companies exhibiting negative multiples have been excluded from the above analysis. Source: FactSet. 3

3 Valuation Multiples (cont.)

Median sector enterprise value multiples are currently c.11x EBIT and c.6x EBITDA, with a very wide range driven by factors such as relative growth outlook, profitability and type of service offering. Additionally, only 5 constituents currently trade at a discount to NTA, compared to 10 at 30 June 2020.

EV/EBIT (FY21F)

30.0x Median as at 30 June 2020: 7.9x

25.0x

20.0x

15.0x Median: 10.7x

10.0x

5.0x

-

ORI

LBL LYL

IMD CIM MIN

BLY

EHL

RUL BOL VEE ALQ ACF BSA SXE

AQZ

MLD SND PRN PGX

SSM SRG

DUG DCG MAD MAH

FWD

SWK SVW MND GNG

NWH MRM

WOR DOW

EV/EBITDA (FY21F)

16.0x Median as at 30 June 2020: 5.1x

14.0x

12.0x

10.0x

8.0x Median: 5.9x 6.0x

4.0x

2.0x

-

ORI

LBL LYL

IMD MIN CIM

BLY

EHL

RUL VEE ALQ ACF BOL BSA SXE

AQZ

SND PGX PRN MLD

SSM SRG ANG

DUG DCG MAD

SVW MND GNG FWD SWK

MRM NWH

WOR DOW

PRICE/NTA

700% Median as at 30 June 2020: 175%

600%

500% Companies trading at a 400% discount to NTA

300% Median: 213%

200%

100%

-

ITG

AJL

ORI

LBL LYL

IMD MIN

EHL CVL

BSA EVS RUL VEE XRF SXE ACF BOL

VRS AQZ

LCM SND PRN MLD

PGX

CDD

SSM MSV EGN SRG MYE ANG VMX

DUG MAD RDG DCG MAH

SVW GNG MND FWD SWK

NWH MRM

Large Cap (>$1bn) Mid Cap (between $200m and $1bn) Small Cap (<$200m)

Notes: (1) Only companies with consensus earnings forecasts are included in charts; (2) Share prices are as at 31-Dec-20; (3) Earnings multiples are not calendarised; (4) Companies exhibiting negative multiples have been excluded from the above analysis. (5) Where a transaction has occurred after the balance date net debt has been adjusted accordingly. Source: FactSet. 4

4 Forecast Growth

Consensus earnings estimates improved for the majority of the covered GMISI constituents in the second half of 2020, reflecting the resilience of the mining and construction industries, strong commodity prices and government stimulus announcements.

Forecast Revenue Growth (FY20-22F CAGR)

30% Median as at 30 June 2020: 6%

20%

Median: 8% 10%

-

(10%)

ORI

LBL LYL

MIN IMD CIM

BLY

EHL

ACF RUL

EVS VEE SXE ALQ BSA

AQZ

PRN MLD SND

SRG SSM

MAD DCG DUG MAH

GNG FWD SVW MND SWK

NWH MRM

DOW WOR

Forecast EBITDA Growth (FY20-22F CAGR)

60% Median as at 30 June 2020: 9%

40%

20% Median: 13%

-

(20%)

ORI

LBL LYL

MIN IMD

BLY

EHL

VEE BOL SXE RUL ACF BSA ALQ

AQZ

SND MLD PRN

PGX

SRG ANG SSM

DUG MAD MAH

GNG SWK MND FWD SVW

NWH MRM

DOW WOR Forecast EBIT Growth (FY20-22F CAGR)

50% Median as at 30 June 2020: 17%

40%

30% Median: 17% 20%

10%

-

(10%)

ORI

LBL LYL

MIN IMD CIM

BLY

EHL

RUL VEE SXE ACF BOL BSA ALQ

AQZ

MLD SND PRN

PGX

SRG ANG SSM

MAD MAH

MND GNG FWD SVW

NWH

DOW WOR

Large Cap (>$1bn) Mid Cap (between $200m and $1bn) Small Cap (<$200m)

Notes: (1) Only companies with consensus earnings forecasts are included in charts. Source: FactSet. 5

5 Forecast Profitability & Gearing

Median FY21 EBIT and EBITDA margin estimates have changed slightly whilst median gearing (net debt / enterprise value) has dropped from 18% to 12%, reflecting increased equity values over the 6 month period.

EBIT Margin (FY21F)

20% Median as at 30 June 2020: 7%

15%

10% Median: 7%

5%

-

ITG

ORI

LYL

CIM MIN IMD

EHL CVL

ALQ RUL EVS BSA SXE

AQZ

PRN MLD

CDD

SSM EGN SRG MSV

MAH MAD RDG DUG

FWD

SVW MND GNG

NWH MRM

WOR DOW

EBITDA Margin (FY21F)

30% Median as at 30 June 2020: 13% 25%

20% Median: 14%

15%

10%

5%

-

ORI

LBL LYL

IMD MIN CIM

BLY

EHL

ACF RUL

ALQ VEE SXE BSA

AQZ

PRN MLD SND

SSM SRG

DUG MAH MAD

GNG SVW SWK FWD MND

MRM NWH

WOR DOW

Net Debt / Enterprise Value

50% Median as at 30 June 2020: 18%

25% Median: 12%

-

(25%)

(50%)

ITG

AJL

LBL ORI LYL

CIM IMD MIN

BLY

EHL CVL

VEE ACF BOL ALQ XRF EVS RUL BSA SXE

VRS AQZ

PRN DDB MLD PGX LCM SND

CDD VMX MSV SRG EGN ANG SSM MYE

DUG MAD MAH DCG RDG

MND FWD

SVW SWK GNG

MRM NWH

WOR DOW

Large Cap (>$1bn) Mid Cap (between $200m and $1bn) Small Cap (<$200m)

Notes: (1) Only companies with consensus earnings forecasts are included in charts; (2) Share prices are as at 31-Dec-20; (3) Earnings multiples are not calendarised; (4) Where a transaction has occurred after the balance date net debt has been adjusted accordingly. Source: FactSet. 6

6 Contract Awards

Both infrastructure and mining contract awards increased in the second half of 2020. The largest mining contract wins went to CIMIC’s now 50% owned Thiess business whilst Downer secured the highest value infrastructure contracts.

Major Contract Awards

Date Value Commodity/ Company Client Project/Facility Location Services Announced (A$m) Sector Asset management 21-Dec-20 CIMIC Anglo American Bowen Basin QLD 216 Coal services Various network related Telecommunicat 21-Dec-20 CIMIC Telstra Network sites Aus 570 services ions Power TransGrid Maragle Switchyard NSW Design and construction generation Power TransGrid Wallgrove Substation NSW Installation of Tesla battery generation Power 4-Dec-20 CIMIC TransGrid Solar farm NSW Design and construction 112 generation Lilydale and South Power Powerlink NSW Design and construction Gladstone substations generation Power United Energy Substations VIC Design and construction generation Department of Defence 17-Nov-20 CIMIC Australian Government (Australia-Singapore QLD Development 800 Defence Military Training Initiative) Sonoma and Byerwen 23-Oct-20 CIMIC Qcoal QLD Operation and maintenance 166 Coal processing plants

14-Oct-20 CIMIC BHP Mitsubishi Alliance Caval Ridge QLD Mining services 110 Coal

NSW Land and Housing Asset maintenance Social 28-Sep-20 CIMIC Residential properties NSW 124 Corporation services infrastructure Iron Bridge Magnetite FMG and Formosa Steel WA Earthworks Iron ore Project 11-Aug-20 CIMIC 128 Water QLD Government Paradise Dam QLD Essential works infrastructure Multidisciplinary mining 22-Jul-20 CIMIC Glencore Mount Owen NSW 340 Coal services Queensland Curtis Island Maintenance and shutdown GLNG Operations QLD Oil and gas facility services Bass Strait offshore Operations and Esso Australia VIC Oil and gas platforms maintenance services

22-Jul-20 CIMIC BP Kwinana refinery WA Labour services 180 Oil and gas

Viva Energy Geelong refinery VIC Maintenance services Oil and gas

Brownfields oil & gas Unknown QLD Operational services Oil and gas projects Operations and 10-Jul-20 CIMIC Jellinbah Group Lake Vermont Coal Mine QLD 2,500 Coal maintenance services Power station in North Pre-FEED services for Power 21-Sep-20 Worley Drax UK Unknown Yorkshire, UK carbon capture units generation

BP Downstream projects Global EPC services Oil and gas 7-Aug-20 Worley Unknown Cheniere Energy Corpus Christi LNG facility US Multidisciplinary services Oil and gas

European battery material Design and construction Battery 3-Jul-20 Worley BASF Finland Unknown investment project services materials Auckland’s City Rail Link 20-Oct-20 Downer NZ Government NZ Various rail services 767 Rail project Unified field operations Telecommunicat 31-Aug-20 Downer Australian Government NBN Co Aus 320 services ions Various existing upstream 29-Jul-20 Downer Santos Aus Multi-discipline services 342 Oil and gas sites

7-Jul-20 Downer SA Government SA roads SA Road maintenance 420 Roads

Notes: (1) Contracts sorted by company (descending market cap order) followed by date (most recent to least recent). Source: Company announcements. 7

7 Contract Awards

Major Contract Awards

Date Value Commodity/ Company Client Project/Facility Location Services Announced (A$m) Sector Various existing upstream Santos Aus Multi-discipline services Oil and gas sites

DLNG JV parties Darwin LNG facility NT Maintenance services Oil and gas

Outages and Power Delta Electricity Vales Point power station NSW supplementary labour generation LYB Operations & Power 29-Jul-20 Downer Loy Yang B Power Station VIC Stator installation 342 Maintenance generation Stanwell and Tarong power Inspections and rewinds of Power Stanwell Corporation QLD stations generator rotors generation Delivery of sustaining BHP WA Iron Ore sites WA Industrials capital projects Electrical maintenance and Wesfarmers WCEF WA Industrials shutdowns Construction and Rio Tinto Various sites in the Pilbara WA Iron ore maintenance services Construction and 23-Nov-20 Monadelphous Rio Tinto Gove operations NT 60 Iron ore maintenance services Construction and BHP WA Nickel operations WA Nickel maintenance services Construction and Newman Hub WA Iron ore maintenance services Construction and 14-Sep-20 Monadelphous BHP Jimblebar WA 120 Iron ore maintenance services

Olympic Dam SA Construction services Copper

14-Sep-20 Monadelphous BHP Saraji Mine QLD Dragline shutdown services 120 Coal

Supply and installation Jimblebar WA Iron ore services

Nelson Point WA Refurbishment services Iron ore 17-Aug-20 Monadelphous BHP 100 Port Availability Multidisciplinary brownfield WA Iron ore Improvement Project modification works Communications Escondida copper mine Chile Copper infrastructure services Power General Electric Murra Warra Stage II Wind 3-Aug-20 Monadelphous VIC Wind farm construction 80 generation International Inc Farm (wind) Development and 15-Sep-20 Perenti MMG Dugald River mine QLS 140 Zinc, lead, silver production services Development and 10-Sep-20 Perenti Roxgold Yaramoko mine Burkina Faso 200 Gold production services Odysseus mine (Cosmos Development and 8-Sep-20 Perenti Western Areas WA 200 Nickel nickel operation) production services Alliance Aviation Copper, gold, 22-Oct-20 BHP BHP Olympic Dam SA Aviation charter services 100 Services silver, uranium Main Roads Western 14-Dec-20 MACA WA Government WA Road maintenance 74 Roads Australia

2-Nov-20 MACA Red 5 Limited King of the Hills gold project WA EPC services 129 Gold

19-Oct-20 MACA Fenix Resources Iron Ridge WA Open pit mining services 185 Iron ore

27-Aug-20 MACA Capricorn Metals Karlawinda Gold Project WA Open pit mining services 410 Gold

2-Jul-20 MACA Atlas Iron Pty Ltd Corunna Downs WA Open pit mining services 230 Iron ore

Iron Bridge Magnetite Structural, mechanical, 14-Dec-20 Civmec FMG and Formosa Steel WA 140 Iron ore Project piping and electrical works

Notes: (1) Contracts sorted by company (descending market cap order) followed by date (most recent to least recent). Source: Company announcements. 8

8 Contract Awards

Major Contract Awards

Date Value Commodity/ Company Client Project/Facility Location Services Announced (A$m) Sector

BHP Mitsubishi Alliance Hay Point loading port QLD Fabrication services Coal

Various onshore and 12-Oct-20 Civmec Woodside Energy Aus Multidiciplinary services 175 Oil and gas offshore projects Iron Bridge Magnetite Provision of plant FMG and Formosa Steel WA Iron ore Project infrastructure

17-Dec-20 Fleetwood Rio Tinto Ti Tree Rail Camp WA Refurbishment services 30 Iron ore

Victorian Government's Manufacture and supply of 7-Sep-20 Fleetwood VIC Government Prison Infill Expansion VIC 42 Prisons prison cells Program

2-Oct-20 GR Engineering Wiluna Mining Wiluna Gold Operations WA EPC services 26 Gold

Davyhurst Gold Processing 15-Jul-20 GR Engineering Ora Banda Mining Limited WA EPC services 11 Gold Plant

30-Jun-20 GR Engineering Saracen Thunderbox WA EPC services 29 Gold

Queens Wharf Residential Residential Multiplex QLD Specialist façade works Tower infrastructure 24-Nov-20 SRG Global 100 Elizabeth Quay West Residential D&C Corporation WA Specialist façade works Development infrastructure

NSW Government New England Highway NSW Bridge construction Roads

WA Government (Water Design and construction Water 17-Nov-20 SRG Global Karratha water tank WA 55 Corporation) (water tank) infrastructure Water Sunwater Paradise Dam QLD Dam remedial works infrastructure

1-Oct-20 SRG Global South32 Worsley Alumina WA Refactory services 100 Bauxite

Commercial John Holland Sydney Football Stadium NSW Post-tensioning services infrastructure Commercial 10-Sep-20 SRG Global AAIG Capital Square WA Specialist façade works 65 infrastructure 150 Lonsdale St, Commercial Lendlease VIC Specialist façade works Melbourne infrastructure 140 Lonsdale St, Commercial Charter Hall VIC Specialist façade works Melbourne infrastructure 23-Jul-20 SRG Global 40 Richard Crookes (Charter Commercial 6 Hassall St, Sydney NSW Specialist façade works Hall) infrastructure Access and insulation 21-Jul-20 SRG Global Yara Pilbara Yara Pilbara's facilities WA 25 Industrials services

15-Jul-20 SRG Global John Holland Victorian Heart Hospital VIC Specialist façade works 25 Hospitals

Inspection and 7-Jul-20 SRG Global NZ Government Auckland Harbour Bridge NZ 24 Roads maintenance services Unified field operations Telecommunicat 16-Dec-20 BSA Australian Government NBN Co Aus 85 services ions Southwest Bunbury Outer Ring Road Investigation, design and 13-Oct-20 Connex WA Government WA 852 Roads project construction consortium Plant electrical and 23-Nov-20 SCEE Rio Tinto Gudai-Darri iron ore mine WA 65 Iron ore instrumentation works Commercial Built Pty Ltd Paramatta Square project NSW infrastructure RuData SYD053 data Commercial J. Hutchinson Pty Ltd NSW Electrical and centre communications infrastructure 19-Aug-20 SCEE 30 infrastructure design and Residential Geocon Pty Ltd Nightfall Apartments ACT installation infrastructure Aspen and Establishment Residential Geocon Pty Ltd ACT Apartments infrastructure

Notes: (1) Contracts sorted by company (descending market cap order) followed by date (most recent to least recent). Source: Company announcements. 9

9 Contract Awards

Major Contract Awards

Date Value Commodity/ Company Client Project/Facility Location Services Announced (A$m) Sector Resources Design and construction of 24-Jun-20 Development FMG Cloudbreak mine site WA 26 iron ore overpass Group Provision of 2 support 26-Aug-20 MMA Offshore Woodside Energy North West Shelf WA 16 Oil and gas vessels

FMG Eliwana WA EPC services Iron ore

2-Oct-20 Primero Rio Tinto Various sites in the Pilbara WA EPC services 55 Iron ore

Hazer Group Hydrogen/Graphene plant WA EPC services Hydrogen

Acrow Formwork Surat Basin Oil and Gas Industrial scaffold 17-Aug-20 Origin QLD 13 Oil and gas and Construction facility equipment and services Design and construction 13-Nov-20 Decmil Rio Tinto Mesa J iron ore mine WA 30 Iron ore services Design and construction 23-Oct-20 Decmil Rio Tinto Mesa A iron ore mine WA 9 Iron ore services Iron Bridge Magnetite 16-Sep-20 Decmil FMG and Formosa Steel WA Infrastructure works Unknown Iron ore Project

14-Jul-20 Decmil WA Government Albany Ring Road WA Road construction 175 Roads

BHP Olympic Dam SA Drilling services Copper

14-Aug-20 Swick MATSA Copper operations in Spain Spain Drilling services Unknown Copper

St Barbara Gwalia Mine WA Mineral technology services Gold

Northern Star Jundee Gold operations WA Drilling services Gold 30-Jul-20 Swick Unknown Perilya Limited Broken Hill NSW Drilling services Gold

Larrakeyah Defence Saunders Laing O'Rourke Australia Multidisciplinary 15-Sep-20 Precinct Redevelopment NT 26 Defence International Contracting construction services Program Northern Goldfields Surveying and associated 26-Nov-20 Veris APA Group WA 1 Oil and gas Interconnect pipeline services Iron Bridge Magnetite Provision of networking 21-Oct-20 Veris FMG and Formosa Steel WA 2 Iron ore Project equipment

8-Dec-20 Valmec Origin Spring Gully gas facility QLD Maintenance services 100 Oil and gas

WA Government (Water Installation of water pipeline Water 12-Oct-20 Valmec WA water pipelines WA 20 Corporation) infrastructure infrastructure

Notes: (1) Contracts sorted by company (descending market cap order) followed by date (most recent to least recent). Source: Company announcements. 10

10 Corporate Activity

M&A increased in the second half of 2020 with the majority of the transactions occurring in the December quarter. Notable transactions include CIMIC’s sale of 50% of Thiess to Elliott Advisors in late 2020 and Downer’s divestment of several mining services businesses as it shifts focus to its core urban services offerings. Mergers & Acquisitions

Date Value Status Target Business Target HQ Seller Acquirer Forum Interest Cons. Announced (A$m)

Swick Mining Swick Perth, 22-Dec-20 Pending Services surface RC drilling business Mining K-Drill Pty Ltd 6 Public 100% Cash WA drilling business Services

Open cut mining Perth, 15-Dec-20 Pending Mining West Downer MACA Limited 175 Public 100% Cash contractor WA

Laundry Spotless Laundry and 2-Dec-20 Pending management Sydney, NSW Downer Adamantem Capital 155 Public 70% Cash Linen Services services

Cash Primero Group Engineering and (50%) & 24-Nov-20 Pending Perth, WA na NRW Holdings Ltd 85 Public 100% Limited contracting company Scrip (50%)

Downer Blasting Contract drill and Brisbane, 18-Nov-20 Pending Downer Enaex SA 62 Public 100% Cash Services blast services QLD

Cash Electrical Southern Cross Trivantage Group Pty Perth, Paul (90%) & 18-Nov-20 Pending engineering Electrical 46 Private 100% Ltd WA Chisholm Scrip contracting Engineering (10%)

Mining equipment Perth, Ian 2-Nov-20 Complete GET Trakka Pty Ltd CQMS Razer na Private 100% na technology WA Hamilton

Inventory Quebec, RPMGlobal Holdings 28-Oct-20 Complete IMAFS Inc optimisation SaaS na 2 Public 100% Cash Canada Limited company

Mining services Brisbane, Elliott Advisors (UK) 19-Oct-20 Complete Thiess Pty Ltd CIMIC 2,150 Public 50% Cash provider QLD Limited

Thiess Pty Ltd RTL Mining and Yallourn, 7-Oct-20 Complete Plant hire services Downer (CIMIC subsidiary at 20 Public 44% Cash Earthworks Pty Ltd VIC the time)

Geelong, Straight Bat Private 18-Aug-20 Complete HPS Tech Pty Ltd Consulting services na na Private 50% na VIC Equity

Royal Dutch Shell Sirius Well Plc and Consortium Coal seam gas Moreton Bay, 31-Jul-20 Complete Manufacturing China (including AJ Lucas na Private 100% na drilling contractor QLD Services Australia National Group Limited) Petroleum Corporation Cash AusSpec Automated Imdex (35%) & 7-Jul-20 Complete Otago, NZ Imdex Limited 9 Private 100% International Limited mineralogy services Limited Scrip (65%)

Source: Company announcements. 11

11 Corporate Activity (cont.)

Capital raising activity also continued during the quarter, with examples of both primary and secondary equity raisings.

Capital Raisings (Equity and Debt)

Amount (Discount) / Date Status Company Type Raised Premium to Purpose (A$m) Last Price (%)

Entitlement Offer to support acquisition of Institutional entitlement offer ($339 the remaining shares in Spotless, million) and accelerated pro-rata, non- strengthen the Group's balance sheet 19-Aug-20 Complete Downer 400 12% renounceable entitlement offer ($68 and provide flexibility for continued million) investment in Downer's core Urban Services businesses

Emeco Holdings Underwritten accelerated pro-rata, non- 24-Aug-20 Complete 149 18% Reduce Secured Notes outstanding Limited renounceable entitlement offer

Institutional Placement and Institutional To partially fund the acquisition of Mining Entitlement Offer ($59.6 million) and 15-Dec-20 Complete Maca Limited 75.2 8% West, a business unit within the Mining accelerated non renounceable pro rata Division of Downer entitlement offer ($15.6 million)

Fully underwritten accelerated non- 2-Dec-20 Complete MMA Offshore Limited renounceable pro-rata entitlement offer 80 53% Recapitalisation and institutional placement

21-Sep-20 Complete Perenti Global Limited Unsecured Notes 650 n/a Refinancing existing debt

5-Aug-20 Complete ALS Limited USPP senior notes 281 n/a Refinancing existing short term debt

IPOs

Listing date Company Sector Offer size Description 8 GenusPlus Group constructs power and telecommunications transmission and distribution infrastructure for Government 6-Nov-20 GenusPlus Group Engineering & Construction $32.8m and private utilities, mining companies and telecommunications companies

Duratec is a specialist contractor providing steel and concrete 2-Nov-20 Duratec Engineering & Construction $53.0m protection, remediation and refurbishment services to a range of industries including mining and infrastructure.

Active Share Buybacks

Date Announced Company Type Size Purpose

5-Nov-20 BSA Limited On-market 10% Capital management

14-Dec-20 CIMIC Group Limited On-market 10% Ongoing capital management

Acquire shares where the Board deems the share price to 29-Oct-20 Intega Group Limited On-market 10% be below intrinsic value

Special Dividends

Dividend Date Announced Company Record Date Purpose (A$cents / share)

Part of its ongoing capital management strategy following 27-Feb-20 Mitchell Services 30-Jun-20 1.1 strong operational performance to date

Partial return of capital from the sale of the caravan 26-Aug-20 Fleetwood 2-Sep-20 7.0 manufacturing business

Source: Company announcements. 12

12 Executive Movements

Executive & Director Appointments

Date Announced Company Name Role Date Effective

Chairman (previously Non- 14-Aug-20 AJ Lucas Group Andrew Purcell 31-Aug-20 Executive Director) Non-Executive Director 29-Jul-20 Decmil Group Peter Thomas 31-Dec-20 (previously CFO)

29-Jul-20 Decmil Group Andrew Barclay Chairman 31-Dec-20

Managing Director (previously 12-Oct-20 EnviroSuite Peter White Non-Executive Director and 12-Oct-2020 CEO)

27-Nov-20 Fleetwood Andrew Wackett Interim Chief Executive Officer 27-Nov-20

1-Jul-20 Imdex Paul House Chief Executive Officer 1-Jul-20

Southern Cross Electrical 17-Dec-20 Paul Chisholm Non-Executive Director 16-Dec-2020 Engineering

Executive & Director Resignations / Retirements

Date Announced Company Name Role Date Effective

Chairman and Non-Executive 14-Aug-20 AJ Lucas Group Phillip Arnall 31-Aug-20 Director

29-Jul-20 Decmil Group David Saxelby Chairman 31-Dec-20

29-Jul-20 Decmil Group Bill Healy Non-Executive Director 31-Dec-20

CFO (appointed as Non- 29-Jul-20 Decmil Group Peter Thomas 31-Dec-20 Executive Director)

12-Oct-20 EnviroSuite Zhigang Zhang Non-Executive Director 27-Nov-20

30-Jun-20 EnviroSuite Adam Gallagher Non-Executive Director 31-Aug-20

6-Nov-20 Fleetwood Brad Denison Managing Director 27-Nov-20

1-Jul-20 Imdex Bernie Ridgeway Managing Director 1-Jul-20

Source: Company announcements. 13

13 Quarterly Focus: 2020 Year in Review

The last year saw significant volatility across the equity market, and the GMISI was no exception. After a dramatic and unprecedented fall during March, the index climbed over most of the following months, closing down 8% for the year. The sector’s improvement proved to be correlated to strengthening iron ore prices and was also supported by significant government stimulus announcements. 2020 Year in Review

COVID-19 developments Government action and monetary policy Geopolitical events

WHO release report confirming 'novel RBA cut the cash rate 25bp to 0.50% UK leave the EU 1 coronavirus' pathogen 5 3 WTI crude oil price goes negative for the first time First Australian case reported $17.6B stimulus package announced 2 7 11 in history RBA cut the cash rate 25bp to 0.25% as part of a China imposes 80% tariff on Australian barley First Australian death reported 4 8 broader COVID-19 recovery package 12 imports JobKeeper implemented, ASX and ASIC WHO declares COVID-19 a global pandemic China bans Australian barley imports 6 9 introduce emergency capital raising measures 16 $1.5B infrastructure stimulus package Global cases surpass 1 million 13 US presidential election 10 announced 19 China institutes unofficial trade sanctions on Global cases surpass 10 million 15 JobKeeper extended to 24-Sep-20 14 20 Australian coal, timber and lobster China imposes 200% tariff on Australian wine Global deaths surpass 1 million 18 RBA cut the cash rate 15bp to 0.10% 17 22 imports

21 Global cases surpass 50 million

2020 Winners (Share Price) 2020 Losers (Share Price)

Market Cap Share Price Market Cap Share Price Company Commentary Company Commentary (A$m) Performance (A$m) Performance Acquired Ant Hill and Sunday Hill Resources Earnings guidance impacted due to manganese projects from Mineral Development 129 +183% Emeco Holdings 620 -44% reduced utilisation as a result of the Resources for 75% of the RDG’s Group Pandemic issued capital UK moratorium on fracking Achieved its best full year result. Mineral continues to impact UK shale Mining services revenue up 50%. AJ Lucas Group 39 -61% Resources 7,063 +127% business. Highly exposed to oil Significant exposure to iron ore and Limited price over the year lithium. Profitability impacted through Babylon Pump & Contract win at Nickel West and 30 +106% Decmil Group 81 -67% various problem contracts. Power contract renewal at BHP Iron Ore Undertook recapitalisation

Returned to profitable position Highly exposed to oil price volatility. Saunders 61 +81% following a weak 2019 and goes MMA Offshore 86 -73% Significant uncertainty with respect International into 2021 with a $110m order book. to COVID-19 Signed 3yr agreement with Damen US based operations significantly Veem 107 +67% Shipyards for the supply of VEEM Boart Longyear 39 -73% impacted by COVID-19 Gyros

Source: John Hopkins University, Australian Federal Government, Australian State Government, various news outlets, Company announcements. 14

14 Gresham’s Credentials

Landmark Mergers & Acquisitions

2020 2018 2016 2015 2014 2014

Advised Advised First Advised the Lead Wesfarmers on State Super on Advised Bank of Advised Iluka on the Lonsdale Independent the sale of its its acquisition of Queensland on demerger of Consortium on financial adviser underwriting and the land titles the acquisition of Deterra Royalties the acquisition of to the Board of insurance and registry $2.5bn loan Limited a 50-year lease BHP Billiton on broking functions of Land portfolio from of Port of the demerger of businesses Use Victoria Investec Melbourne South32

Mining and Infrastructure Services

2020 2019 2019 2018 2017 2017

Advisor to Lendlease on its Adviser to Lend Adviser to Adviser to Advisor to SCEE Adviser to QIC on $950m Lease on the sale Barminco on its Quadrant on the in relation to the the acquisition of placement and of its Engineering acquisition by sale of CQMS acquisition of Pacific Energy $200m share business Ausdrill Razor Heyday5 purchase plan

Takeover Response

2019 2017 2017 2016 2014 2013

Advised DUET Advised Asciano on Group in relation Advisor to UGL in its takeover by a Advised David Advised Little Advised Ruralco to its $13bn relation to its consortium led by Jones in relation World on its takeover takeover by a takeover by Canada Pension to acquisition by Beverages on its by Nutrien consortium CIMIC Plan Investment Woolworths acquisition by comprising CKP, Board Lion CKI and PAH

Awards & Accolades

Excellence in 2011 M&A Deal 2009 Most Secondary Market Equity Raising of 2007 Best M&A Best M&A Deal Corporate of the Year Innovative Deal the Year Deal in Australia Advisory - 2012 SABMiller’s Babcock & Wesfarmers’ Wesfarmers’ Wesfarmers’ Boutique / acquisition of Brown $2.6bn equity acquisition of acquisition of Independent Foster’s Group Infrastructure’s raising Coles Coles recapitalisation

15 Contact Details

Chris Branston Charlie Graham Matt Keenan Executive Director, Perth Managing Director, Sydney Managing Director, Melbourne E: [email protected] E: [email protected] E: [email protected] T: +61 8 9213 0290 T: +61 2 9224 0247 T: +61 3 9664 0353

Michael Smith Neville Spry Mark Stevens Executive Director, Perth Managing Director, Sydney Managing Director, Melbourne E: [email protected] E: [email protected] E: [email protected] T: +61 8 9213 0286 T: +61 2 9224 0237 T: +61 3 9664 0381

Gresham Advisory Partners Limited ABN 88 093 611 413

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