1. Aveng Half year results to December 2002
Part A :
Strategy & objectives : Carl Grim
Part B :
Financial performance : Dennis Gammie
Part C :
Operational overview and prospects : Carl Grim

2. Corporate governance Board: Chairman of board :
5 independent non-executives
3 non-executives
5 executives
Chairman of board :
Independent non-executive
Audit & risk committee:
2 independent non-executives
1 non-executive
Remuneration committee:
4 independent non-executives

3. Corporate governance (cont.)
Nomination committee
4 independent non-executives
Corporate social investment committee
2 independent non-executives
1 executive
Note
# Simple Code of Business Conduct formally committed to at all levels
# Substantially meet King II recommendations

4. Vision : Globally competitive
“To be a globally competitive
construction-related group focused
principally on the developing world”

5. Mission : Consistent long-term value
“To deliver consistent long-term value for all stakeholders by:-
(i) engaging disciplined people
respected for their
Integrity (Values)
quality of work and
entrepreneurial spirit
(ii)
securing local and hard currency
generating opportunities that most
profitably leverage our ‘best in class’ (Capabilities)
construction capabilities”

6. Values Integrity Quality of work “walking the talk”
“holding the catch”
“engaging disciplined
people respected for their…
Entrepreneurial spirit
“making it happen”

7. Capabilities “Best in class”
Locally
steel processing and trading
building and construction across all engineering disciplines
cement, aggregates and concrete
Developing world
selected mining services for demanding clients
specialized energy-related projects and pipelines
complex infrastructure [marine] projects

8. Strategy
Vision
Mission
Values
Capabilities
Strategy

9. Strategy : Balancing risk
“The group’s strategy is to deliver
consistent long-term value
by seeking an optimal
balance of risk
across
Aveng
corporate
office
responsibility
group businesses,
market segments and
potential opportunities/projects”
Operating
division
responsibility
Business
unit
responsibility

10. Strategy : Aveng risk framework
Downside
risk
(loss potential)
Walk-away
segment
Speculative
segment
Base-load
segment
Targeted
segment
Upside
risk
(profit potential)

11. Strategy : Balancing risk (1)
Higher risk gives lower consistency and probably higher growth
VALUE?
Lower risk gives greater consistency but probably lower growth
VALUE?
“Higher value from filling the targeted segment and spreading other opportunities along the risk line”

12. Strategy : Balancing risk (2)
Lower
value
Higher
value
“Higher value by lowering the slope of the risk line to incorporate more “targeted” and less “speculative” opportunities”

13. Strategy : Aveng corporate office
Lower risk; lower growth
South African construction-related businesses occupying a leading position in their sectors and having stable and significant cash-generating capabilities
Higher risk; higher growth
Hard currency generating construction opportunities in the developing world that most profitably leverage our “best in class” capabilities.
Balancing
risk
“Balancing risk across group businesses”

14. Strategy : Operating divisions
High capital-intensity,
high margin,
annuity cash flows
Cash positive,
low margin work
Balancing
risk
Infrastructure work –
generally public money
International commodity- price-driven work – generally privately financed
Different engineering disciplines, products and services
South Africa vs Africa
vs Middle East vs Australia vs S.E. Asia
“Balancing risk across market segments”

15. Strategy : Operating divisions
“Firstly to analyse the relative macro risk dynamics associated with each business unit using the Turnbull risk analysis methodology
and
secondly to optimally manage these risks by balancing the divisions exposure to opportunities on projects having different
- cash flows
- levels and technical complexity
- funding sources
- risk responsibility and
- growth characteristics”

16. Strategy : Business units
Balance
Chase
hard
“Balancing risk across potential opportunities/projects”

17. Strategy : Business units
“To categorise potential opportunities or projects into one of the four segments of the Aveng risk framework by:
(i) completing the standard risk analysis template
(ii) debating these risks at the appropriate executive committee
and then to respond by:
chasing ‘targeted’ and
balancing ‘base-load’ and ‘speculative’ opportunities/projects”

18. Objectives Vision Mission Strategy Objectives capabilities values
return on
equity
20%
headline
eps
growth
hard
currency
revenues
50%
debt to
ratio
35%

19. Objectives : Balancing risk
Maximising upside risk
Return on average equity: 20%*
Headline eps growth: 20%*
Hard currency revenue: 50%
Net debt to equity ratio: 35%
Minimising downside risk
*Approximately CPIX + 10%

20. Objectives scorecard : ROE%
Target 20%
18.4%
Return on average equity : 20%

21. Objectives scorecard : HEPS growth%
Target 20%
1998
1999
2000
2001
Dec-01
2002
Dec-02
Growth in diluted HEPS : 20%

22. Objectives scorecard : Hard currency%
Target 50%
1998
1999
2000
2001
Dec-01
2002
Dec-02
Hard currency revenue : 50%

23. Objectives scorecard : Debt to equity%
Target 35%
1998
1999
2000
2001
Dec-01
2002
Dec-02
Net debt to equity ratio : 35%

24. Financial performance
Part B
Financial performance
Dennis Gammie

25. Financial presentation : Basis of preparation
The AFS have been prepared in accordance with SA GAAP
Accounting policies are consistent with those of the
prior reporting year, except for the implementation of
the following statements effective 1 July 2002
Financial Instruments :
recognition and measurement
(AC 133)
No material effect on results

26. Equity based compensation
On issue of an option the cost is expensed, reduced by any amounts to be paid by employees to acquire the option
The liability is fairly valued at balance sheet date
Any changes in the value of the liability is recognised in net profit during the period in which it occurs

27. Financial performance
December
2002
2001 %
change
Revenue
6 969
5 930
+ 18
Operating income
271
243
+ 12
Net finance costs
119
101
Tax 46 40
+ 15
Earnings
307
126
+ 144
Headline earnings
190
154
+ 23

28. Number of shares Millions 2002 2001 % change In issue 396,1 Weighted
389,5
371,3
+ 5
Diluted weighted
385,2
+ 1

29. Share performance (per share)
Cents
2002
2001 %
change
Headline earnings
48,7
41,6
+ 17
Earnings
78,9
33,9
+ 133
Diluted headline
40,1
+ 21
Diluted earnings
32,7
+ 141
NAV
641
586
+ 9

30. Balance sheet Rm 2002 2001 % Change Capital employed 4 610 4 022 + 15
Gross assets
8 276
6 628
+ 25
Net debt
1 160
1 153
+ 1

31. Borrowings Rm 2002 2001 Interest bearing debt 1 870 1 514 Cash 710 361
Net debt
1 160
1 153
Floating
48%
32%
Fixed
52%
68%

32. Capital expenditure Rm 2002 2001 Replacement 169 100 Expansion 129 66
Total additions
298
166
Depreciation
(196)
(175)
Disposals
(26)
(20)
Net increase 76
(29)

33. Capital expenditure June 2001 June 2002 Dec 2001 Dec 2002 703 536 364
(billion)
703
536
364
292
298
175
196
166
June 2001
June 2002
Dec 2001
Dec 2002
Capex
Depreciation

34. Working capital December 2002 2001 June Stock days 43 40 41
Debtors days 75 67 84
Creditors days
108 87
115

35. Margins and tax rate % Dec 2002 2001 June Operating income 3,9 4,1 4,9
Effective tax rate
30,1
28,2
26,6
Return on revenue
2,7
2,6
3,2

36. Cash movements December 2002 2001 Opening net borrowings (1 190)
(1 195)
Operating income
467
418
Net finance costs
(119)
(102)
Working capital movement 43
(420)
Tax
(37)
(27)
Capex
(298)
(166)
Divs
(105)
(74)
Capital and investments 79
413
(1 160)
(1 153)

37. Divisional operating income
Steel
&
Allied
(47%)
Steel
&
Allied
(33%)
Construction
(67%)
Construction
(53%)
R243m R271m
Dec Dec 2002

38. Geographical revenue December 2001 December 2002 Australia & SE Asia
(18%)
Australia
&
SE Asia
(15%)
South Africa
& CMA
(53%)
South Africa
& CMA
(59%)
Africa &
Middle East
(26%)
Africa &
Middle East
(29%)
December December 2002

39. Segmental analysis Ebit to revenue: Assets to revenue: % December 2002
2001
Ebit to revenue:
Construction
2,9
3,7
Steel & Allied
6,2
5,7
Assets to revenue:
Republic of South Africa 96 88
Africa & Middle East
107
124
Australia & South East Asia
111 82

40. Ratios Annualised December 2002 2001 Return on equity 14,9 14,2
Return on capital employed
16,5
17,9
Interest cover
3,0
Asset turnover
2,9

41. Operational overview & prospects
Part C
Operational overview & prospects
Carl Grim

42. Aveng : Three operating divisions
Construction : order book driven
Steel & Allied : trading and processing
Cement : manufacturing

43. Operating divisions Construction Steel & Allied Cement : AVENG
Carl Grim
FD Dennis Gammie
Corporate
office
100%
100%
46%
Grinaker-LTA
Frank Crowley
Dep Howard Jones
Trident Steel
Ernie Behr
Dep Ben Fourie
Alpha
Karl Meissner-Roloff
Operating
groups
Civil & Process
Engineering
S A Cement
Operations
63%
Trident
Service
Centres
Mechanical &
Electrical
Engineering
McConnell
Dowell Corporation
David Robinson
Business
units
Roads &
Earthworks
Trident
Sterling
Tube
62.5%
Tanga Cement –
Quarrying &
Concrete
Civil
Engineering
Opencast
Mining
Trident
Midrand
Steel
Building
Mechanical
Engineering
Property
Development
30%
25%
Tshipi
Steel
Ash Resources
Electrical
Engineering
33%
Infrastructure
& Mining
Services
Slagment
Pipelines
Operating
divisions
Construction
Steel & Allied
Cement :

44. McConnell Dowell Corporation
Aveng : Construction division
Grinaker-LTA
Frank Crowley
Dep Howard Jones
Operating
group
63%
Civil & Process
Engineering
McConnell Dowell Corporation
David Robinson
Business
units
Mechanical &
Electrical Engineering
Civil
Engineering
Roads & Earthworks
Opencast Mining
Mechanical
Engineering
Building
Electrical
Engineering
Property Development
Pipelines

45. Construction market segment revenue : 2002
Process Engineering
& Pipelines
(15%)
Building
(17%)
Civil Engineering
(21%)
Mining & Earthworks
(26%)
Mechanical & Electrical
Engineering
(21%)
R9,6 billion

46. Construction operating income: six months to DecemberRm
Dec 2000
Dec 2001
Dec 2002

47. McConnell Dowell Corporation : operating income six months to December
Australian
Dollars
Dec 2000
Dec 2001
Dec 2002

48. Construction order book : December 2002 (two years only)
(billion)
R8.2b
Dec June Dec June Dec 2002

49. Construction order book : December 2002 (two years only)
% of
Revenue
94%
82%
Target
Zone
Dec June Dec June Dec 2002

50. Order book, risk & profit
The greater the perceived project risk, the higher the profit % mark up necessary to offset that risk
The larger the order book, and the less important it is to win work, the higher the profit % mark up
Order book
Risk
The larger the order book, the easier it becomes to walk away from overly risky projects

51. Strategy : Construction
Product-Service
Carefully
defined
market
segments
Carefully
defined
‘best in class’
capabilities
positioning
Resultant
project profile and
geographical
spread

52. Construction : Strategy scorecard
To integrate Grinaker-LTA
To improve McConnell Dowell Corporation profitability/positioning
To build a globally competitive construction group  

53. Grinaker-LTA Infrastructure
Aveng : Steel & Allied divisions
AVENG
Carl Grim
FD Dennis Gammie
Corporate
office
Trident Steel
Ernie Behr
Dep Ben Fourie
Operating
group
Trident
Service
Centres
Business
units
Trident
Sterling
Tube
Trident
Midrand
Steel
30%
Tshipi
Steel
Grinaker-LTA Infrastructure
& Mining Services

54. Steel & Allied market segment revenue : 2002
Export
(15%)
Construction
&
Mining
(56%)
Manufacturing
(20%)
Motor
(9%)

55. Steel & Allied : Operating income for six months to DecemberRm
Dec Dec Dec 2002

56. Steel & Allied : Motor strategy
Flat sheet – de-coiler
Coil
Rectangular angled blanks – “cut to length” line
Shaped blanks and tool cuts – press feed line
Formed blanks – stamping plant
Vehicle body – assembly line
Aveng
interest

57. Suppliers to Trident Steel%
Iscor 58
Highveld Steel 33
Scaw Metals 5
Davesteel (Cape Gate) 2
Imports
100

58. Steel & Allied : Key strengths
concrete reinforcing and steel mesh
blanks to motor industry
specialised steels
railway sleepers
No.1 in
No 2/3 in
- steel pipe
- mine stope and roof support products
Over tons of steel p.a
Strong links to the rapidly growing motor export market

59. Steel and Allied : Strategy scorecard
To acquire group company minority interests
To rationalise business units
To broaden range of specialised steels
To move to next level of beneficiation (shaped blanks and tool cuts) for motor industry
To rationalise coastal branches    

60. Aveng : Cement division
Alpha
Karl Meissner-Roloff
Operating
group
S A Cement
Operations
Business
units
Quarrying & Concrete
62.5%
Tanga Cement
25%
Ash Resources
33%
Slagment

61. Cement: Daily tons sold
2002 tons up 5% on 2001

62. Cement : Approximate market share
Cimpor
11/12%
Alpha
31/32%
PPC
39/40%
Lafarge
17/18%

63. Cement : Market segments year to December 2002 (change from 2001)
Concrete
products
16,8%
(+0,3)
Merchants
& blenders
54,3%
(- 0,4)
Construction, mining
& other
16,4%
(- 1,1)
Readymix
Concrete
12,6%
(+ 1,3)

64. Cement : Geographic segments year to December 2002 (change from 2001)
Export
5.5%
(+ 1,0)
Botswana, Swaziland,
Namibia
10,9%
(- 0,8)
Gauteng
30,4%
(+ 0,4)
Control of
Southern areas
17%
(+ 0,2)
Southern KZN
8,6%
(+ 0,2)
Northern areas
17,3%
(- 1,1)
Western Cape
10,3%
(+ 0,3)

65. Cement : Key strengths
Large market share in a stable market with world #1 & #2 present
No threat from importing [$65/ton in Durban, $95/ton in Johannesburg]
Cement capacity up to 5 m t pa by December 2003 [running at 60% of capacity]
Excellent efficiency when benchmarked against Holcim stable of kilns
Buoyant market conditions [5% growth last year]

66. Cement : Strategy scorecard
Sale non-core interest in Omnia
Sale non-core interest in NPC
Capex based efficiency projects
(R340 m over 3 years)
Resolve jointly held operations    

67. Can Aveng deliver “consistent long-term value”?
Solid and well positioned underlying businesses
large local market shares
platinum and motor expansion
depth of management
Clear vision and robust strategy that balances :-
cash generating and growth businesses
rand and hard-currency revenues
base-load and higher margin work
Good track record with conservative accounting
Buoyant South African prospects

68. Prospects : Local Buoyant South African prospects :-
Construction : R105 billion over 3 years on infrastructure [+/- 50%
on construction spend]
Steel : SEIFSA “Business Conditions Index” at its highest
level for 8 years
Cement : Tonnage in 6 month period to December 2002 up
9,9% on prior period

69. Construction building expenditure as % of GDP
% change – quarter on quarter
Source: SARB September 2002

70. Prospects : International
Uncertain international prospects
prospect of war in the Middle East
oil, gold and commodity prices
general uncertainty – banking and insurance
rand/dollar exchange rate fluctuation

71. Prospects
“Trading conditions within South Africa have been buoyant. However, in the face of the current international political and economic difficulties and the uncertainty of the rand/dollar exchange rate, it is unlikely that the group will manage to maintain the same growth in earnings for the next six months”

72. Challenges Black economic empowerment ownership employment equity
procurement
corporate social investment
Replicate first half financial performance
Working capital management/debt reduction
Managing HIV/Aids
Skills development/people capacity

73. Targeting consistent long-term value