Cimic : 2016 Annual Report CIMIC Group Limited 2016 Annual Report CIMIC Group Limited(PDF File 4.5 MB)

2016‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌

Annual Report‌‌‌‌‌‌‌‌‌

CIMIC Group Limited‌‌‌‌‌‌‌‌‌‌

ABN 57 004 482 982

I'm pleased to report that we achieved our objectives in 2016, delivering strong, sustainable returns for our shareholders.

Executive Chairman

With a strong operational and management team in place, we achieved a great deal in 2016: reporting net profit after tax at the top end of our guidance, increasing shareholder returns, and delivering exemplary building, infrastructure and resources projects for our clients.

In 2016, our projects were delivered through dedicated businesses focused on our core areas:

• Construction (CPB Contractors incorporating Leighton Asia);

• Mining and mineral processing (Thiess and Sedgman);

  building on

  a solid foundation to deliver

  strong and sustainable shareholder returns

  • Public Private Partnerships or PPPs (Pacific Partnerships); and

  • Engineering (EIC Activities).

We are currently incorporating diversified services company UGL into our stable, following a successful takeover offer in late 2016. UGL's areas of expertise will continue to

be the delivery of critical assets and essential services to our clients.

By focusing the skills, experience and expertise of our Operating Companies into activity driven businesses that work together we have gained a competitive edge.

Around the world, we have a first- rate team of 50,500 people who are focused on delivering our 434 active projects, to the benefit of our shareholders and clients.

I am immensely proud of all that our people have achieved in recent years, including the many changes involved in our transformation to an activity- focused operating model.

With these achievements in place, and a strong leadership team established, I was pleased to hand over my responsibilities as Chief Executive Officer and Managing Director to Adolfo Valderas in October 2016. Adolfo has played

an integral part in CIMIC Group's achievements during the past three years, first as Chief Operating Officer and then as Deputy Chief Executive Officer. The Board and I have every confidence in Adolfo's ability to lead CIMIC Group.

I am honoured to continue as Executive Chairman and I look forward to continuing to guide CIMIC Group in this capacity.

be recognised as one of the GradConnection Top100 Most Popular Graduate Employers for 2016 and to be rated by the Australian Association of Graduate Employers as a Top 75 Graduate Employer for 2017.

Our strong performance in 2016, as outlined by Adolfo on the following page, has enabled the Board to declare a 100% franked final dividend of 62 cents per share to be paid on

4 July 2017. On a full year basis, total 2016 dividends were 110 cents per share ($357 million in total), a 14.6% increase compared with 2015.

Basic earnings per share was 176.6 cents, up 14.9% (relative to an 11.5% increase in net profit after tax), boosted by the benefits of the share buy-back.

Our focus on shareholder returns continued in 2016 and there was a 43.8% increase in CIMIC's share price during the year. Combining the share price appreciation and dividends in respect of the 2016 Financial Year, CIMIC delivered a total shareholder return of 48%.

On 28 December 2016, we concluded an on-market share buy-back, improving shareholder returns

and demonstrating our disciplined approach to capital management.

On 12 December 2016, we announced the commencement of a further on- market share buy-back of up to 10% of our fully paid ordinary shares over 12 months commencing from

29 December 2016.

For CIMIC, sustainability is the integration of environmental, social and governance factors into our decision-making to maximise long term shareholder value, and contribute to safe and healthy employees, communities and ecosystems.

In 2016, our commitment to acting sustainably was reinforced through the launch of our Sustainability Policy. This Policy sets out minimum requirements for sustainability across the Group. Amongst other things, the Policy commits the Group to abiding by the principles of the UN Global Compact and we acknowledge

our role in contributing to the UN Sustainable Development Goals. The Sustainability Policy is available on our website at www.cimic.com.au.

Public and private clients in CIMIC's markets are continuing to invest, providing exciting opportunities for CIMIC to contribute our civil, mining, mechanical and electrical capabilities, and our PPP, project and operational experience.

Our financial strength is also an advantage as we pursue new opportunities and look to expand.

In closing, I would like to thank all of our shareholders for your continued support.

I look forward to updating you further on our Company's performance at the Annual General Meeting on 13 April 2017.

Sincerely,

Executive Chairman