HOCHTIEF : Update on the Leighton Group’s strategic review more

GROUP HEADQUARTERS

To the Editors

Dear Editor,

Marcelino Fernández Verdes, CEO of HOCHTIEF and of Leighton, today outlined a strategic blueprint for the future of the Leighton business.
Please find attached a Media Release from Leighton Holdings. If you have any questions, please do not hesitate to ask.
Kind regards
Bernd Pütter

CORPORATE COMMUNICATIONS

Contact:

Dr. Bernd Pütter

Tel.: +49 201 824-2610 bernd.puetter@hochtief.de

06/12/2014

HOCHTIEF Aktiengesellschaft Sitz der Gesellschaft: Essen, Registergericht: Essen HRB 279, USt-IdNR. DE 1198 171 25, StNr. 5112/5710/0012, Vorsitzender des Aufsichtsrates: Thomas Eichelmann; Vorstand: Marcelino Fernández Verdes (Vorsitzender), Nikolaus Graf von Matuschka,

José Ignacio Legorburo Escobar, Peter Sassenfeldl

Media Release

12 June 2014 Update on the Leighton Group's strategic review

Leighton Holdings today outlined a strategic blueprint for the future of its business which involves:

 Strengthening the balance sheet;

 Streamlining the operating model; and

 Improving project delivery.

Executive Chairman and Chief Executive Officer Marcelino Fernández Verdes said: "We are in the process of undertaking an in-depth review which has led us to the strategic blueprint that we are announcing today.
"We are maintaining our focus on recovering existing receivables and on improving our approach to working capital management.
"In addition, we are analysing options for our Services, Property and John Holland businesses including the potential divestment or introduction of new partners to these businesses. As part of this process we have engaged external advisors and will be having discussions with potential investors.
"Cash receipts from receivables and divestments will be used to reduce our gearing and

strengthen our balance sheet so as to increase our competitiveness.

"We will streamline our operating model and group similar activities to establish dedicated businesses focused on:

 Construction;

 Mining;

 Public Private Partnerships (PPPs); and

 Engineering.

"The Services, Property and John Holland businesses will be subject to the outcome of the strategic review and a final decision is yet to be made.
"Streamlining our operating model will allow us to better leverage the existing expertise that resides across the Group's diverse operations and increase our transparency. By reorganising these activities we will create economies of scale, thereby lowering our cost base and helping to improve our competitive advantage and create value for the benefit of all stakeholders.
"We will combine our existing PPP capabilities to create a focused industry-leading business. This new business will form a key component of our growth as we see numerous construction and investment opportunities in the large and expanding PPP markets in Australia and overseas.
"Similarly, we intend to combine our existing Engineering skills, and further develop these capabilities to provide more innovative solutions for our clients. Promoting greater self-reliance on our own engineering skills will enhance our ability to mitigate and manage contract risk.

Page 1 of 2

Media Release 12 June 2014

"We are focused on improving project delivery by further developing the entrepreneurial approach of our project managers including a greater focus on cash and cost control. This will be supported by the standardisation of our business processes and systems.
"We are now developing our transition plan for our new operating structure and will be engaging with our key stakeholders. While this work is underway, and in the future, our Operating Companies remain focused on continuing to safely and efficiently provide services to our clients," Mr Fernández Verdes said.
ENDS

Issued by Leighton Holdings Limited ABN 57 004 482 982 www.leighton.com.au

Further information:

MS JANET PAYNE, Group Manager Investor Relations T+61 2 9925 6121
MS FIONA TYNDALL, Group Manager Media Relations T+61 2 9925 6188

LEIGHTON HOLDINGS LIMITED, founded in Australia in 1949, is the parent company of the Leighton Group, one of the world's leading international contractors. The Group is also the world's largest contract miner. Listed on the Australian Stock Exchange since 1962, Leighton Holdings has its head office in Sydney, Australia. Leighton Holdings owns and operates through a number of diverse and independent operating companies: Leighton Contractors; Thiess; John Holland; Leighton Asia, India and Offshore; and Leighton Properties. The Leighton Group also has a 45% investment in the Habtoor Leighton Group. These companies provide development, construction, contract mining, and operation and maintenance services to the infrastructure, resources and property markets. They operate in more than 20 countries throughout Australia, Asia, the Middle East and Southern Africa. The Leighton Group directly employed approximately
53,000 people, as at 31 March 2014.

Page 2 of 2

STRATEGIC REVIEW UPDATE 4'Leighton

Marcelino Fernandez Verdes

12 June 2014

Delivering for all stakeholders

1. Strengthening the balance sheet

2. Streamlining the operating model

3. Improving project delivery

LEIGHTON HOLDINGS

| DISCIPLINE | INTEGRITY | SAFETY | SUCCESS | 2

 Maintain focus on recovering existing receivables

 Improve approach to working capital management on new projects

 Analyse strategic options (potential divestments or introducing partners)

 Services / Property / John Holland

 Options subject to market conditions

Reduced gearing Increased competitiveness

Strengthened balance sheet

LEIGHTON HOLDINGS

| DISCIPLINE | INTEGRITY | SAFETY | SUCCESS | 3

 Group similar activities

 Construction

 Mining

 PPP's

 Engineering

 Review support functions and LHL structure

 Reduce overhead duplication

 Remove bureaucracy

 Explore potential for additional sustainable cost savings

 LHL

 OpCos

Streamlined model Reduced costs

Increased transparency

LEIGHTON HOLDINGS

| DISCIPLINE | INTEGRITY | SAFETY | SUCCESS | 4

Construction

Mining

PPPs Engineering

Construction

Asset Co

Mining

Asset Co

Australia International

Australia International

Subject to outcome of any divestments

LEIGHTON HOLDINGS

| DISCIPLINE | INTEGRITY | SAFETY | SUCCESS | 5

 Focus on risk management

 Streamlined reporting

 Consistent business processes

 Simplified, common IT systems

 Encourage further development of entrepreneurial approach

 Increased accountability and empowerment

 Focus on costs and cash

 Reduce management layers

Improved project delivery Cash profitability

LEIGHTON HOLDINGS

| DISCIPLINE | INTEGRITY | SAFETY | SUCCESS | 6

April 2014 May June July August September … March 2015

Mobilise

Design and confirm target operating model

Develop and implement the transition plan

Transform and streamline

 Confirmed blueprint for the Group

Target completion for any divestments

 Now developing and implementing the transition plan

 Staged approach to minimise disruption and mitigate transition risks

 Over the next year

 Commence transformation of Group systems

 Streamline Operating Companies to achieve best practice business processes and culture

LEIGHTON HOLDINGS

| DISCIPLINE | INTEGRITY | SAFETY | SUCCESS | 7

Delivering for all stakeholders

More detail on progress in due course......

LEIGHTON HOLDINGS

| DISCIPLINE | INTEGRITY | SAFETY | SUCCESS | 8

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