Business Planning Conference

KEY TAKEAWAYS

Introduction

ACKNOWLEGEMENT OF COUNTRY

Australia

We acknowledge the Traditional Owners of country throughout Australia and recognise their continuing connection to land, waters and culture. We pay our respects to their Elders past, present and emerging.

MIHI WHAKATAU

New Zealand

Tēnā koutou, tēnā koutou, tēnā koutou katoa

Nga mihi nui ki a koutou katoa

Ki te atua-tēnā koe

Ki a papatuanuku – tēnā koe

Ki te manawhenua [Ngati Tamaoho] iwi – tēnā koe

Ki a Abergeldie – tēnā koe

Ki te hunga mate

Ki te hunga ora

Tēnā koutou katoa

Introduction

On 19 and 20 June our business leaders came together for our annual Business Planning Conference at the Q-Station at North Head (Carranggel). Carranggel, the traditional land of the Gayamaygal people, is a place of great significance where traditional and spiritual healing has long taken place for Aboriginal communities. In this tradition, it serves as a meaningful location for us to reflect on our business performance and plan for the future.

To honour the traditional owners of the land, Brendan Kerin from the Metropolitan Local Aboriginal Land Council led a Smoking Ceremony and Welcome to Country, emphasising the importance of strengthening our connection to country and the need to manage and protect our environment for future generations.

Over the two days, we discussed our FY30 strategy, reviewed our FY24 performance against key objectives, discussed the plan for FY25 and took a deep dive into several areas of the business that we are looking to further develop.

FY30 Strategy

As part of our planning for FY25, we have taken the opportunity to develop a 5-year strategic plan, extending to 2030. This strategic plan will ensure our annual business plans act as stepping-stones towards achieving our long-term objectives.

Over the next 5 years we aim to double the current turnover from around $650M to $1.2B turnover per annum by FY30. To achieve this, we will implement the following five core strategic objectives:

Grow the core Infrastructure, Utilities and Services divisions from $450M per annum turnover to $650M turnover.

Grow the New Zealand business to sustainably turnover $60M per annum through our Asset Upgrade Renewal Program and Healthy Waters Framework contracts.

Explore a new sector within existing geographies where Abergeldie can leverage existing skills and capabilities to generate $150M turnover by FY30.

Grow the core QLD Water business by an additional $100M per annum turnover to $150M turnover.

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Diversify Infrastructure and Rail capabilities into Queensland generating $100M per annum by FY30.

Celebrating FY24

FY24, Another Incredible Year

FY24 has been another incredible year for Abergeldie. We have continued to deliver the complex infrastructure needed to build better communities, with turnover forecasted to reach $670M (against a budget of $570M).

In FY24, we won $200M in new work outside of long-term framework contracts, including the following significant projects the Vaucluse Diamond Day Project, The D4C Bundle 19 Reticulation Package, the Wallendbeen Bridge for TfNSW, The Bribie Island Inlet Works for Unitywater, and the Hunts Creek Bridge and Stage 1 and 2 T-way works at Constitution Hill for City of Parramatta. We also won several significant framework contracts including the South East Water contract through the ABK Joint Venture, the 10-year Asset Upgrade and Renewal Program with Watercare, the 12-year Yarra Valley Water Delivery Reliability contract and the 2-year extension on the Barwon Water renewals contract.

This past year we have invested in and broadened our functional capability with the establishment of an Environment and Sustainability function to support our growth. The team has grown to support projects across Australia and New Zealand and are taking the appropriate steps to ensure we are prepared to meet our IFRS Stage 1 and 2 reporting obligations in FY25.

FY24, Another Incredible Year

We also established an enterprise architecture team to manage our information technology and ensure we have the capability to migrate to IFS Cloud and implement digital systems that will improve productivity and efficiency (e.g. Hammertech, Flexi Purchase and Procore) to make it easier for our delivery teams to deliver projects.

We also developed and rolled out several training programs in The Abergeldie Way, including the Supervisor Leadership Program, Commercial Management, Contract Management and Project Management training as well as several Lunch and Learn sessions throughout the year.

As part of our evolution to be a $1.2B turn over company we revamped the Abergeldie website to better portray our size, capability, capacity and evolution of our systems and processes to take on ever more complex and larger Infrastructure projects.

This past year, we onboarded over 250 people and dropped our turnover rate to less than 16%. We have also bolstered the capacity and capability of the people and culture team, implemented and launched the independent Whistleblower hotline, published our first Gender Pay Gap statement, continued to build our family culture and have continued our corporate social responsibility activities with over $500,000 in charitable donations.

FY24, Another Incredible Year

Our people and projects continued to be recognised with significant awards this year. The SHOO Early Works received the Steve Maxwell Platelaying (Minor) Award from PWI NSW. Elissa Miller won the Women in Civil Award, Daniel Remaili won Engineer of the Year (Contracts over $2M) and Paul Galea won Engineer of the Year (Contracts under $2M) at the CCF NSW People Awards and Sonny Butler won Trainee of the Year (Male) at the CCF VIC People and Training Awards. The Minnippi Parklands Shared Path Project won a CCF QLD Earth Award in the $2M to $5M category. Melissa Pollock was recognised as the Australian WHS Leader of the Year for companies less than 1,000 employees, and we were the runner up for the IFS Connect Hero award.

Congratulations to everyone on a fantastic year - your commitment and dedication is very much recognised and appreciated.

It is also important to note that this growth has come with its challenges. Over the past twelve months, some areas of the business have not performed as well as we would like, we have experienced profit erosion across several projects and our safety performance requires improvement.

Conference Video

Thanks to you

Click here or scan the QR code and enter the password Abergeldie2024 to watch

Celebrating 30 years of Building Better Communities

FY25 marks an important milestone for Abergeldie as we will celebrate our 30th anniversary. We are looking forward to celebrating this important milestone. As we head into FY25, it is important to share our key goals. In FY25 we aim to turnover $675M and improve our profitability. We have over 66% of the work in hand already contracted to achieve this target and plan to consolidate and invest in areas that will set us up with the foundation to grow the Abergeldie family to sustainably deliver $1.2B turnover by FY30.

KEY GOALS FOR FY25 ARE AS FOLLOWS:

Integration of safety tactical plan into a renewed safety strategy.

Successfully establish our newer framework contracts – ABK JV, AURP and YVW.

Continue to develop our Employee Value Proposition by incorporating feedback from the Employee Engagement Survey to further improve attraction and retention.

Focus on project delivery to increase gross profit, particularly in Abergeldie Pipeline Renewals and the SFP JV.

Continue to build our Precontracts capability and capacity to achieve $535M in tenders won.

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Develop our enterprise architecture to drive mobility, productivity, efficiency and reporting.

Implement our matrix organisational structure to improve functional support to delivery teams and ensure a consistent functional approach in a growing business.

Conference Focus Areas

As a business, we are committed to learning from our past experiences, continually improving, and fostering the growth of our team and organisation. The conference provided an opportunity for our leaders to reflect on our FY24 performance, discuss our plans for FY25, our strategic plan for FY30 and share innovative ideas to help us achieve our goals and objectives.

Our leaders have identified 7 key focus areas for FY25 which will help us achieve our objectives for the year and will help to set the foundation to achieve our FY30 growth objectives:

1 DESIGN AND CONSTRUCT (D&C) APPROACH

We have seen the market shifting to D&C projects. For some time, we have faced challenges in successfully delivering D&C projects, particularly with profitability. To address this, we recognise the need for an integrated approach to developing our policies, processes and capability to effectively manage these projects. A working group has been established to work on our approach to D&C projects so we can capitalise on these opportunities whilst managing risk and achieving our profit expectations.

2 MATRIX STRUCTURE

We have traditionally operated a functional, role-based structure that provided a clear chain of command and accountability within each functional area. However, as we have grown significantly in recent years, we have developed in-house capability in Environment and Sustainability, Safety, Commercial Management, HR, Engineering Management, Project Support and other functional areas. This expansion has significantly improved our in-house capability to deliver larger, more complex projects in alignment with our strategic goals.

To further develop these functional areas and their deployment across the business and into projects, we will be implementing a matrix organisational structure. A matrix organisational structure combines elements of functional and project organisations, creating multiple reporting obligations: one through the functional line and another through the project teams. This structure offers flexibility, enables shared resources and fosters collaboration within the company, all while maintaining The Abergeldie Way of working together and supporting each other.

We will adopt a consistent approach across functional areas and will develop service level agreements that help to define roles, responsibilities, reporting lines and expectations for our functional teams to support project delivery teams. We feel this approach will support our continued growth and enhance our capacity to manage and deliver large and complex projects successfully in a consistent and repeatable fashion.

ON-BOARDING AND ORIENTATION

To support the growth of the business, set a positive tone and lay the foundation for long-term success and retention we are committed to improving the on-boarding experience for new employees. This will involve digitisation of paper-based processes and forms to make the pre-employment process seamless and improving the induction process to ensure essential information about the company, our culture, values and systems and processes is effectively communicated and foster a sense of belonging and alignment with the organisational goals.

Conference Focus Areas

EMPLOYEE ENGAGEMENT

In FY25, improving employee engagement will be a key focus area. We consider initiatives like a self-service kiosk to help our team to drive efficiency, making P&C resources and information easy to access. We will continue our investment in and development of in-house training programs to develop our staff and plan and publish an online training calendar so people can book in. A review of our performance review forms is planned, with digitisation in mind for the future. We also aim to develop a knowledge network where staff can collaborate, share insights and access valuable resources, fostering a culture of continuous learning and innovation across the business. These initiatives are designed to empower our team, strengthen engagement, and drive success as we grow the business.

IMPROVING

ONTIME PAYMENT FOR SUBCONTRACTORS AND SUPPLIERS

At Abergeldie, our commitment has always been to pay our suppliers and subcontractors promptly. Regrettably, this has not consistently been the case. To address this issue, it is crucial that we undertake a unified effort across the business to ensure our teams are trained and adept at setting up and managing projects efficiently through IFS and aligning our processes within IFS to ensure that they align with subcontractor payment terms and legislative requirements. We will continue to bolster the accounts payable team to support invoice processing that comes with a growing business. Only by achieving this can we reliably meet our commitment to timely payments for our suppliers.

EFFECTIVE SYSTEMS

In FY24 we made strategic investment in our IT function to establish an enterprise architecture plan to support our growing business and drive productivity and efficiency within the business. We will continue our work to introduce best of breed systems, including Hammertech and Procore. These two are currently in pilot phase across some projects and we will look to introduce these systems across the business in FY25.

IMPROVING OUR APPROACH TO THE PRECONTRACTS PROCESS

We aim to enhance the Precontracts process with a structured approach to opportunity identification, pre-positioning and Request for Tender (RFT) management. Clearly defined responsibilities between precontracts and the business unit will be articulated for each stage of the process. Business units will take the lead in identifying potential opportunities, positioning and campaign planing with the precontracts team providing a governance and coaching role to ensure that this is undertaken effectively.

Focus Areas

Focus Areas by Business Unit

▪ The team will be focused on improving the way we manage projects in IFS to ensure timely payment of suppliers and sub-contractors.

▪ Safety will remain a key priority to ensure our workers, clients and the broader community are not at risk.

▪ We will work closely with the Precontracts team to win more work to ensure we achieve our growth objectives.

▪ We will continue to pilot new systems like Procore and Hammertech to streamline operations and enhance efficiency across projects.

▪ We will look to optimise the on-boarding process for new employees.

▪ We will look to bolster our commercial capability to ensure we are profitable on projects.

▪ To ensure we win more work we will work to improve our pre-positioning and campaign planning.

▪ We will seek to improve our commercial legal review and delivery strategy at the tendering phase.

▪ We will work on improving our screening of new hires to decrease turnover.

▪ We will aim to provide opportunities for professsional development of our team.

▪ We will look to optimise our processing of accounts.

Focus Areas by Business Unit

▪ In FY24, despite significant effort, we failed to secure some significant water tenders in QLD. To align with our growth targets, we recognise the need to shift market perceptions with a campaign that demonstrates we are competent, capable and experienced in delivering large infrastructure projects in QLD.

▪ Position and win work through the recently awarded AURP Framework contract with watercare.

▪ Continue to successfully deliver the Central Interceptor Project.

▪ In FY25, we would like to improve brand awareness and perception in the local market, positioning Abergeldie as a leading contractor with broad capability.

▪ We aim to ensure that our delivery of local water projects is both efficient and effective, achieving the best project outcomes for our clients.

QUEENSLAND

NEW ZEALAND

Focus Areas by Business Unit

▪ In FY25 we will be focused on ensuring that the Mardi and Castle Hill projects are successfully delivered.

▪ We will look to secure replacement projects for Mardi and Castle Hill and an extension on the ARRP.

▪ We will look to continue to build and develop depth in our water business .

▪ We will be focused on integrating the water renewals and rehabilitation team into a combined Abergeldie Pipeline Renewals business, training and supporting our people through the transition to ensure we have a united team proving an integrated offering to our clients.

▪ The team will look to improve the integration with Precontracts to win more work.

▪ We will focus on enhancing our Risk Adjusted Maximum Price strategy within ABK and YVW, aiming to optimise investment decisions and mitigate risks effectively.

▪ We will seek to expand capability in Sydney, with the addition of spiral lining to broaden our service offering.

▪ We aim to build our water renewals self performance delivery capability to be less reliant on contractors.

NSW WATER ABERGELDIE PIPELINE RENEWALS

Focus Areas by Business Unit

▪ We will continue to invest in and develop the team, systems and processes in the joint venture (comprised of Abergeldie, BMD and KBR).

▪ We aim to win work to deliver major infrastructure upgrades for South East Water under their Integrated Planning and Delivery model.

▪ We aim to develop and implement an integrated approach to the delivery of rehabilitation services for our clients.

▪ We are committed to improving delivery performance to ensure that commercial returns are being achieved.

▪ We aim to strengthen our value proposition for water infrastructure delivery to preposition for the release of the new framework contract.

▪ We will implement an integrated approach to the delivery of services into the JVs.

▪ To enhance skills and knowledge, we will proactively seek opportunities to rotate staff between the WRDT and Abergeldie.

▪ We will adjust our commercial model to align effectively with changing conditions and meet our objectives.

▪ We will actively seek opportunities and platforms to strengthen communication and knowledge sharing networks between Abergeldie and employees working in the WRDT.

ABK JV

SFP JV

WEST REGION DELIVERY TEAM

Thank you

On behalf of the leadership team, myself Mick and Robin, thank you for your contribution over the past twelve months. It’s been another fantastic year, and I am looking forward to working with you again this year as we continue to grow the business and celebrate 30 years of Abergeldie.

Mark Bruzzone Chief Executive Officer