#1Presented by: Vince De Santis (Chairman) and Kevin Pallas (Managing Director & CEO) Level 22, 535 Bourke Street Melbourne Victoria 3000 Engenco FEBRUARY 2019 INVESTOR PRESENTATION [email protected] +61 (0)3 8620 8900 www.engenco.com.au#2REVENUE* ($'000) CAGR 9% Growth $88,030 $78,227 $79,109 $66,893 $62,426 H1 FY17 H2 FY17 H1 FY18 H2 FY18 H1 FY19 Engenco COMPANY HIGHLIGHTS EBITDA* ($'000) NPBT* ($'000) CAGR 12.4% Growth CAGR 18.8% Growth $7,646 $6,779 $9,721 $5,368 $8,875 $4,945 $7,229 $7,599 $3,409 $5,556 H1 FY17 H2 FY17 H1 FY18 H2 FY18 H1 FY19 H1 FY17 H2 FY17 H1 FY18 H2 FY18 H1 FY19 Track record of growth together with reinvestment to drive additional opportunities * from continuing operations INVESTOR PRESENTATION FEBRUARY 2019 2#3COMPANY HIGHLIGHTS Revenue from continuing operations Dec 2018 $'000 Dec 2017* $'000 88,030 78,227 EBITDA from continuing operations 8,875 9,721 EBIT from continuing operations 6,964 7,897 Profit/(loss) after tax from continuing operations 6,510 7,540 Net operating cash flow 4,618 5,008 Net assets* 76,450 73,218 Net cash/ (debt)* 8,633 8,318 Net assets and Net cash / (debt) comparatives are as at 30 June 2018. Engenco $6,510,000 Total profit for the Period W $4,618,000 Net operating cash flow 2.08c Basic earnings per share INVESTOR PRESENTATION 3 FEBRUARY 2019#4CONSOLIDATED STATEMENT OF FINANCIAL POSITION Engenco TOTAL ASSETS ↑ 4.9% FY18 $96,852 H1FY19 $101,588 NET ASSETS ↑ 4.4% FY18 $73,218 H1FY19 $76,450 INVESTOR PRESENTATION FEBRUARY 2019#5CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS 20,000 H1FY19 MAJOR CASH FLOW MOVEMENTS (000.$) 18,000 8,875 16,000 14,000 12,000 (3,657) (600) (1,994) 825 10,000 8,318 8,000 8,633 (3,134) 6,000 4,000 2,000 0 Opening Working Cash EBITDA Capital Financing & Tax CAPEX Asset Sale Dividend Closing Cash Engenco INVESTOR PRESENTATION 5 FEBRUARY 2019#6SUSTAINABLY CONTINUING TO GROW Engenco ($'000) 1,200 1,000 800 600 400 200 H1FY19 CAPEX BY BUSINESS UNIT 0 Engenco Corporate Gemco Rail Drivetrain Convair CERT Total Momentum Sustainment Growth INVESTOR PRESENTATION 6 FEBRUARY 2019#7BUSINESS UNIT OVERVIEW Convair $7,947 CERT Training $5,383 Other $3,974 Momentum Rail $14,708 H1FY19 REVENUE $'000 Engenco Engenco Drivetrain $24,978 Rail and Road Power and Propulsion GEMCORAIL ODrivetrain Gemco Rail $31,040 Momentum RAIL **CERT TRAINING -CONVAIR INVESTOR PRESENTATION FEBRUARY 2019 7#8Engenco Drivetra POWER AND PROPULSION DRIVETRAIN Mining, Transport, Energy and Defence focus. • Investment in strategic inventory to expand product range. • Defence sector project activity and product support for land and marine assets are ongoing. Continued development of initiatives aimed at increasing the specialist products offering. National branch network, increased volume of workshop activity. REVENUE* $'000 H1 FY17 H2 FY17 H1 FY18 H2 FY18 H1 FY19 $17,295 $20,133 $28,094 $24,821 $24,978 EBITDA* $'000 H1 FY17 $2,625 H2 FY17 $2,411 H1 FY18 $4,405 H2 FY18 H1 FY19 $3,572 $3,305 *Comparatives have been re-assessed with all Intercompany trading eliminated. INVESTOR PRESENTATION FEBRUARY 2019 8#9Engenco GEMCO RAIL AND ROAD GEMCO RAIL • • Record revenue for the period and profitability remained at healthy levels in a highly competitive market. The new facility in the Hunter Valley contributed strongly to the results along with increased volumes at Forrestfield in Western Australia and Dynon in Victoria. Ongoing investments in workforce and facilities to meet increasing outsourced maintenance opportunities. The Product Sales business continued expansion based on strategic partnerships with premium quality, globally recognised OEM partners. PQGY wagons fully utilised throughout the period. REVENUE $'000 H1 FY17 $25,868 H2 FY17 $25,403 H1 FY18 $27,468 H2 FY18 $26,728 H1 FY19 $31,040 EBITDA $'000 H1 FY17 $5,298 H2 FY17 $6,078 H1 FY18 $4,937 H2 FY18 $4,525 H1 FY19 $5,238 INVESTOR PRESENTATION 9 FEBRUARY 2019#10Momentum RAIL Engenco RAIL AND ROAD MOMENTUM RAIL • • Key partner in major rail upgrade project in South Australia between Adelaide and Tarcoola. Project effectively concluded in H1. The Western Australian market remained subdued. Eastern States somewhat impacted by decreased volumes caused by drought. REVENUE $'000 H1 FY17 $4,355 H2 FY17 $6,101 H1 FY18 $7,034 H2 FY18 $11,942 H1 FY19 $14,708 EBITDA $'000 H1 FY17 $766 H2 FY17 $1,041 H1 FY18 $1,391 H2 FY18 $1,609 H1 FY19 $2,064 INVESTOR PRESENTATION 10 FEBRUARY 2019#11***CERT TRAINING Engenco 3096 3096 RAIL AND ROAD CERT TRAINING • Focus on courseware development and technology delivery. Reacting to market demand, subdued activity in Victoria and opening a new training centre in Western Australia. The CERT Training team continue to provide students with a high- quality outcome as efficiently as possible. REVENUE $'000 H1 FY17 $4,637 H2 FY17 $4,697 H1 FY18 $5,800 H2 FY18 $6,440 H1 FY19 $5,383 EBITDA $'000 H1 FY17 $635 H2 FY17 $891 H1 FY18 $1,678 H2 FY18 $1,912 H1 FY19 $750 INVESTOR PRESENTATION 11 FEBRUARY 2019#12RAIL AND ROAD CONVAIR The dry bulk road tanker design and manufacturing business, delivered an improved revenue result. Fleet servicing, spares and repairs business remains steady. The Australian construction industry is experiencing a robust period, and this has helped boost demand for new tankers significantly, leading to a healthy order book for Convair. REVENUE $'000 H1 FY17 $6,984 THE NEW CONVAIR H2 FY17 $6,523 H1 FY18 $7,634 H2 FY18 $7,959 $7,947 CONVAIR Engenco H1 FY19 EBITDA $'000 H1 FY17 $515 H2 FY17 $645 H1 FY18 $702 COMANT CONVAIR H2 FY18 $735 H1 FY19 $757 CONVAIR INVESTOR PRESENTATION 12 FEBRUARY 2019#13GROUP STRATEGY GRANULAR OPERATIONAL PERFORMANCE ANALYSIS DRIVE EFFICIENCIES AND CUSTOMER SERVICE Engenco DEVELOP GROW DEVELOP PERSONNEL EXPAND * EXPAND PRODUCT OFFERINGS INCREASE PENETRATION OF MAJOR CUSTOMER BASE SUSTAIN INVESTOR PRESENTATION 13 FEBRUARY 2019#14Engenco LOOKING AHEAD • · Generally positive industry environment across mining, transport, and infrastructure construction. Further expansion of product portfolio with new, innovative products. Investment in new projects and facilities to meet anticipated demand. Strong balance sheet and available funding provide platform for further growth opportunities. These factors are expected to contribute to profitability positively in future periods. INVESTOR PRESENTATION 14 FEBRUARY 2019#15DISCLAIMER This Presentation has been prepared by Engenco Limited (ABN 99 120 432 144) (Engenco) for general background information purposes only and is current as at the date of this Presentation. It is information in a summary form and does not purport to be complete. It should be read in conjunction with Engenco's other periodic and continuous disclosure announcements to the ASX available at www.asx.com.au. This Presentation is not a Prospectus or a Product Disclosure Statement under the Corporations Act and has not been lodged with the Australian Securities and Investments Commission. This Presentation may contain forward-looking statements concerning projected earnings, revenue, growth, outlook or other matters (Projections). Any such Projections are based on assumptions which may differ materially from the actual circumstances which may arise. Engenco undertakes no obligation to update any Projections for events or circumstances that occur subsequent to the date of this Presentation or to keep current any of the information provided. Past performance is no guarantee of future performance. Any estimates or Projections as to events that may occur in the future are based upon the best judgement of Engenco and there is no guarantee that any of these estimates or Projections will be achieved. Actual results will vary from the Projections and such variations may be material. Engenco has no obligation to tell recipients if it becomes aware of any inaccuracy in or omission from the information in this Presentation. This Presentation is not intended to be an offer, invitation, solicitation or recommendation with respect to Engenco securities and does not purport to cover all relevant information about any potential investment in Engenco. Accordingly, potential investors are advised to seek appropriate independent advice, if necessary, to determine the suitability of any potential investment in Engenco. Neither the provision of this Presentation nor any information contained in this Presentation or subsequently communicated to any person in connection with this Presentation is, or should be taken as, constituting the giving of investment advice to any person. This Presentation does not contain legal, tax, accounting, investment or financial product advice and should not be used as the basis for making investment or other financial decisions in relation to Engenco securities. You should conduct your own investigations, enquiries and analysis and place no reliance on this Presentation in evaluating any potential investment in Engenco. Investors should be aware that certain financial measures included in this presentation are 'non-IFRS financial information' under ASIC Regulatory Guide 230: 'Disclosing non-IFRS financial information', published by ASIC. Non-IFRS financial information may not be comparable to similarly titled measures presented by other entities, and should not be construed as an alternative to other financial measures determined in accordance with Australian Accounting Standards of IFRS. Although Engenco believes these non-IFRS measures provide useful information to investors in measuring the financial performance of the business, investors are cautioned not to place undue reliance on any non-IFRS financial information included in this presentation. This Presentation has been prepared for publication in Australia and may not be released or distributed in the United States or to US persons. This presentation does not constitute an offer of securities for sale in the United States or to US persons (as defined in Regulation S under the US Securities Act of 1933) absent registration under the US Securities Act or an exemption from registration. This Presentation, including opinions set out in it, is based on information compiled or prepared by Engenco from sources believed to be reliable, although no attempt has been made to verify such information. No representation or warranty, express or implied, is made as to the accuracy, currency, reliability, legality or completeness of the information in the Presentation. To the maximum extent permitted by law, none of Engenco, its directors, employees, advisors or agents, nor any other person, accepts any liability, including without limitation any liability arising out of fault or negligence, for any loss arising from the use of the information contained in this Presentation. In particular, no representation or warranty, express or implied, is given as to the accuracy, completeness, likelihood of achievement or reasonableness of any forecasts, Projections or prospects referred to in this Presentation. This does not apply to the extent that liability by law cannot be excluded. All dollar values are in Australian dollars (A$) unless otherwise stated. Engenco INVESTOR PRESENTATION FEBRUARY 2019 15