Downer EDI (DOW) investor relations material

Strategic direction and portfolio transformation

• Focus on being the leading infrastructure services provider in Australia and New Zealand, with a purpose to enable communities to thrive and a culture centered on ownership, customer focus, and mutual support.

• Portfolio simplification has shifted the business to a capital-light, services-led model, exiting capital-intensive and volatile sectors, and divesting non-core assets.

• High-quality, balanced portfolio across sectors and geographies, with 51% of FY25 group revenue from Transport, 28% from Energy & Utilities, and 21% from Facilities.

• Strategic priorities include enhancing core businesses, investing for sustainable growth, delivery excellence, cost leadership, and robust risk management.

• Management ambition targets a 6% EBITA margin by FY30, with 4–5% revenue CAGR from FY26 and >4.5% EBITA margin across FY25–26.

Financial performance and capital management

• Statutory NPAT of $149m (+139% on FY23), EBITA of $474m (+60% on FY23), and EBITA margin of 4.4% in FY25, exceeding management targets.

• Annualised gross cost out of $213m, surpassing the $100m target, and free cash flow with 98% cash conversion.

• Leverage ratio improved to 0.9x net debt/EBITDA from 2.0x in June 2023, with a strong balance sheet and capacity for growth investment.

• Dividend payout ratio increased to 63% (from 53% in FY23), with a target range of 60–70% of underlying NPATA and full franking from FY26.

• Share buy-back of up to $230m (5% of issued capital) signals confidence in future performance.

Sector outlooks and growth drivers

• Energy & Utilities: Positioned for sustainable organic growth, with a $35bn addressable market and sector tailwinds from energy transition and population growth.

• Facilities: Stable, long-term contracts with government and Defence, $45bn addressable market, and margin enhancement through asset management and cost reduction.

• Transport: 51% of group revenue, with strong demand for road, rail, and transit services, and a $30bn addressable market.

• Macro tailwinds include energy transition, increased Defence spending, population growth, and local industry revitalisation.

• Key opportunities identified in transmission infrastructure, water network upgrades, social housing, Defence infrastructure, and rail rollingstock renewal.