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CONSOLIDATED RESULTS

CONSOLIDATED RESULTS. f or the year ended 28 FEBRUARY 2014. Story line. Lowlights. Loss making contracts in Civils. Trading environment. Highlights. Geotechnical sale. Developments established. Pipelines maintained growth. Financial position. Gearing. Order book. Going concern.

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CONSOLIDATED RESULTS

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  1. CONSOLIDATED RESULTS for the year ended 28 FEBRUARY 2014

  2. Story line Lowlights Loss makingcontracts in Civils Tradingenvironment Highlights Geotechnicalsale Developmentsestablished Pipelinesmaintained growth Financial position Gearing Order book Going concern

  3. agenda • Salient features • Financial overview • Operational overview • Strategy • Prospects and order book • Conclusion

  4. Salientfeatures

  5. Salient features (Continued operations) • Non-recurring items in financial year 2014 • Sale of Geotechnical business • Impairment of goodwill Revenue R1,593bn R1,538bn Order book R2,6bn R2,2bn Gearing 27,0% 32,3% ▲ 3,6% ▲ 18,6% ▼ 16,4% Net cash R20,9 million R33,6 million Health & Safety LTIFR 0,86 LTIFR 0,59 HEPS (11,3) cents 20,5 cents ▼ ▲ ▼ 155,1% Reduced to 0,43at April 2014 A year of many highs and lows

  6. Salient features continued • Sale of Geotechnical business • Approval at GM - 18 November 2013 • Disposal valued at R592 million including fair valueof contingent consideration of R65 million • Cash received to date R497 million • Outstanding Issues • Registration of off-shore properties • Rationalisation of legacy legal structures • Sale proceeds utilised as follows: R’mil • Settle HYB 210 • Dividend of 38 cents/share 150 • Working capital investment 70 • Geotech borrowings settled 45

  7. Financial review

  8. Financial results in context • Lowlights • Finalisation of loss making contracts • N4 impacted by Marikana unrest, bridge design error and consequential late completion • Kriel Civils and Boxhole contracts impacted by changes in construction methodology, subject to claims (not traded) • Hwelereng road contract for RAL subject to numerous delays and consequential late completion • Labour unrest impacted productivity on most sites • Civil’s conservative view on estimated final completion margin on Kusile contracts • Highlights • Increase in revenue and profitability maintained in Pipelines • Established Developments business • Gearing down to 27% • Order book increase to R2,6 billion • B-BBEE certified as Level 3 at 78,96 from level 4 Major drainageat N4 On the back of weak markets with margins remaining under pressure

  9. Summary Statement of comprehensive income

  10. Statement of comprehensive income

  11. Statement of comprehensive income

  12. Statement of comprehensive income

  13. Statement of financial position 45 daysin tradereceivable 2014 Currentratio 1,65 NTAV/share168,6 cents NAV/share203,5 cents

  14. Statement of financial position 64 daysin tradepayables

  15. Cash flow

  16. Operational review

  17. The year general • General market • General tough contracting conditions - tight marginsand fierce competition • Risk transfer to contractor • Focus on contract completion • Finalising commercial compensation claims • Still awaiting budgeted public sector expenditure • Tender activity increased but seems to be budgetary • Infrequent and delayed awards • Reaction • Rebuilding order book - focus on skills • Cautious approach to Africa • Right-sizing • Action • Look to consolidate construction operations in year ahead • Office established in Zimbabwe

  18. Pipelines

  19. Pipelinescontinued • Focused on contract completion and commercial compensation (BG3 and Mopani) • Infrequent and delayed awards impacting 2014/15 • Start-up of major contracts - Northern and Western Aqueduct • Competition from new entrants (perceived low barrierof entry) • Impact of level 3 B-BBEE rating • Cross-border focus - Namibia, Zambia and Zimbabwe • Time and cost • Sanitation project for eThekwini progressing well • Plant expansion of R10 million on back of awarded work BG3100ton crane pipe lift Focus on project delivery Office established in Zimbabwe

  20. Civils

  21. Civilscontinued • Loss making contracts (N4, Kriel and RAL) • Generally tough contracting conditions • Focus on contract completion and commercial compensation • Rebuilding order book at acceptable margins and risk • Still awaiting budgeted public sector expenditure • Delayed awards • Fierce competition at tight margins • Contracts at Kusile • Crushing nearing completion (no claims) • General services piping 62% complete (no claims) • Bulk earthworks - original contract nearing completion with minor claims • Underground facilities 51% complete with substantial scope changes and claims submitted • Plant optimisation nearing completion N4 Temporary staging to portal structure Look to continue consolidating construction operations in year ahead Reinvigorated business

  22. CIVILSloss making contracts • N4 Bakwena • Contract award 4 May 2011 • Value at award R370 million • Duration originally 30 months • What happened • Tendered at time of economic crisis at break even • Anticipated/historical productivity never achieved resultingin R62 million loss on allowable • Steel and fuel strikes in 2012/13 • Marikana killings in March 2013 • Platinum strike 2014 • Consequential effects: • Plant utilisation achieved 60% and R60 million loss • Late completion of project forecasted to be August 2014 with impact on P&G • What now • Agreed programme with client - completion August 2014 • Reduced resources to activity levels • Negotiating contractual entitlements and claims • Design errors - variation agreed with costs Placingselected fillat N4

  23. CIVILSloss making contracts • Kriel Civils and Boxhole • What happened • Tendered at time of low work on hand at break even • Scope changed materially - subject to claim • Client imposed restrictions on methodology and access • Availability of client supplied materials • Consequential effects: • Productivity and utilisation never achieved, R32 million losson labour and plant • Late completion of project • Civils in May 2014 • Boxhole in July 2014 • What now • Civil contract complete - snags being finalised • Agreed Boxhole programme with client - completion July 2014 • Reduced resources to activity levels • Continued with commercial claims process • Civils • Contract award 11 April 2012 • Value at award R109 million • Duration 12 months • Boxhole • Contract award 11 April 2012 • Value at award R35 million • Duration 8 months Earthworksat Kriel

  24. CIVILSloss making contracts | continued • RAL road contract - Hwelereng • Contract award 10 March 2011 • Value at award R80 million • Duration 18 months • What happened • Tendered at time of economic crisis at break even • Re-work impacting completion • Availability of crushed materials • Never achieved tendered production rates • Consequential effects: • Productivity and utilisation never achieved,R27 million loss on labour and plant • Late completion of project with associated costs • What now • Contract complete - handover finalised • Awarded associated works contract of R30 million,mainly subcontractors Road upgradeat Hwelerengfor RAL

  25. CIVILSturnaround started November 2012 • Actions and timeline • Loss making contracts • Productivity • Utilisation • Tender and estimating • Commercial • Civils Recovery Strategy 2014.ppt Building bridgesat Diepsloot

  26. Developments

  27. Developmentscontinued • Established division during the year • Orchards R30 million sales in 2014 • Project potential to be realised exceeds R240 million • Broke ground at Diepsloot East, north of Johannesburg • Project potential to be realised exceeds R2 billion,with commercial element • Uitvlugt is an integrated residential development inThree Rivers East with land transferred to Esor • Project potential excluding top structures to be realised exceeds R600 million • Soshanguveis a residential development in Tshwane with Esor acquiring development rights • Project potential to be realised exceeds R150 million • Division may expand into top structure development • Potential in social and gap housing expected to increase over the next few years • Demand for affordable housing exceeds supply, but maybe impacted by rising interest rates and unemployment Orchards Completed houses Strategically important division due to secondary work potential for group

  28. strategy

  29. strategy • Strategic themes • Consolidate and rationalise • Streamline support functions • Build on strong brand • Leadership • Commercial astuteness • Cash flow • Positive about SADC Strategic alignment to improve combined strength Keep it simple

  30. Prospects and Order book

  31. Looking ahead • Prospects • SANRAL - budget of R10 billion pa • Transnet - various rail and port projects in the pipeline • Eskom - ongoing work at Kusile and Medupi power stations with potential for Coal 3 • Major water projects planned for SA, Lesotho and Zambia • Schools - R5 billion worth of tenders submitted and still to be awarded • Order book • Order book increased by 18,6% to R2,6 billion • One-year and total order book both at satisfactory levels against FY2014 revenue • Work on hand heavily weighted in favour of Governmentand Parastatal work

  32. Order book

  33. Order book Legacy loss making contracts in woh • Impact of loss making contracts on 2015 order book • Civils order book - R1,2 billion • Included FY15 order book is R25,4 million re legacy loss making contracts • Order book includes R203,8 million work secured prior to FY14 • New work secured represents 81% of order book

  34. Capex

  35. capex

  36. Conclusion

  37. In summary • Tough year across industry • Maintained growth in Pipelines • Established Developments Actions taken • Gearing improved • Controlled growth mainly in RSA with prospects in select African countries • Rebuilding Civils • Implemented and tracking progress • Complete loss making contracts • Improve commercial acumen

  38. Forward-looking statements • This presentation contains forward-looking statements that, unless otherwise indicated, reflect the company’s expectations as at 28 February 2014. Actual results may differ materially from the company’s expectations if known and unknown risks or uncertainties affect its business or if estimates or assumptions prove inaccurate. The company cannot guarantee that any forward-looking statement will materialise and, accordingly, readers are cautioned not to place undue reliance on these forward-looking statements. The company disclaims any intention and assumes no obligation to update or revise any forward-looking statement even if new information becomes available as a result of future events or for any other reason save as required by statute or regulation. disclaimer

  39. Contact us • Esor Limited30 Activia Road, Activia Park, Germiston 1401PO Box 6478, Dunswart, 1508, South Africa • Bernie Krone | CEO + 27 83 259 5984 +27 11 776 8700 +27 11 822 1158 Bernie.krone@esor.co.za • Wessel van Zyl | CFO + 27 82 498 3518 +27 11 776 8700 +27 11 822 1158 Wessel.vanzyl@esor.co.za

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