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Bradken is a leading global supplier of differentiated consumable and capital products to international markets. It supplies products and consumables through five market focused divisions: Mining Products, Engineered Products, Rail, Industrial, and Power & Cement.

Bradken develops and supplies products for the mining, freight rail, steel making, smelting, transport, cement, oil & gas, power generation and sugar industries. It can manufacture fully machined cast iron and steel products from 1 kg to over 25 tonnes.

BKN employs over 5,000 people globally and operates 30 manufacturing and service facilities across Australia, New Zealand, the United States of America, Canada, China and the United Kingdom. BKN is characterised by its focus on modern technology and production systems. Its varied plant capabilities, characteristics and cost structures allow optimised supply.

Recent News Highlights

As at 31/12/2012 : see details at www.bradken.com.au   (new window? Shift+Click)

10/12/2012    Response to ASX Query

24/10/2012    Grant of Restricted Share Rights

23/10/2012    2012 AGM & Presentation

24/09/2012    2012 Annual Report to Shareholders

18/09/2012    Bradken Affirms its Position re Notification from the Federal Court of Australia Alleging Patent Infringement by its new Ground Engaging Tools ('GET'); Roll-out Not Impeded

07/08/2012    FY12 Full Year Results & Presentation

07/06/2012    Response to ASX Price Query

20/04/2012    Earnings Guidance - Downgrade

07/02/2012    1H12 result: NPAT +13%; EPS -4%; Div +5%; debt doubled

30/11/2011     Completion of US$200 Million Private Placement

On 20 April 2012, Bradken downgraded its guidance for FY12. It now expects full year EBITDA of $210-220m which is 10% (midpoint) growth over the adjusted FY11 result. NPAT, pre amortisation costs of intangibles resulting from the Norcast acquisition, is expected to be $95-102m representing 13% (midpoint) growth over the adjusted FY11 result. [This was a significant drop from the aggressive earlier guidance - see below.]

The new guidance is largely due to two factors in the Rail Division - a one-off cost increase of $16m and a $35m reduction in sales - caused by:

• Two contracts executed in the period, which required new designs for production during 2012 resulting in a delayed start to manufacture, lower efficiencies and increased rework and warranty costs. • The inclusion of new parts suppliers, which caused delays and rework costs. • Flow-on effects from these production issues, which triggered liquidated damages for projects downstream.

The affected projects will be largely completed by June 30, 2012 and costs are expected to return to normal levels in the 2013 financial year.

All other Bradken businesses continue to perform strongly and generally in line with previous guidance. The businesses remain capacity constrained in some areas, with ramp-ups ongoing and order books at record levels.

• Within the Mining Products Division the Mineral Processing, Fixed Plant and Crawler Systems businesses continue to meet forecast. The release of the new GET product range to date is proving very successful but is likely to be lagging plan by 3 months due to bottlenecks in tooling and production in the period to June 30. For the first time orders have been taken for GET products in Africa, North America, Indonesia and South America and inventory has now been shipped to those regions. • The Industrial Division suffered from lower demand during January and February but has returned to forecast levels for the remainder of the year. • The Engineered Products Division continues to meet forecast. The Industrial Products and Energy businesses continue to enjoy strong demand and are beginning to reap the benefits of the plant upgrades at Amite and Tacoma.

Bradken is well positioned to benefit from the expected growth in the end market for these businesses in 2013 and is supported by an existing order book that is at record levels.

Gearing at the end of June is forecast to be lower than the half year result with net debt close to 2.0 times EBITDA.

At the half year results on 7 February, MD Brian Hodges had said, “Excluding one-off adjustments for the Norcast acquisition, we confirm the current guidance of EBITDA growth of 25% - 30% with NPAT growth in the range of 35% - 40% over FY11 adjusted results.” Mr Hodges said, “FY13 should see a continuation of the second half of FY12 demand with expanded capacity available from the new China foundry and with ground engaging tools product global sales continuing to grow strongly as new products are progressively released to the market.”

We were surprised at the strength of the February FY12 guidance, and disappointed at the severity of the April cutback. However, despite weakness in the wider global economy, we continue to expect sound growth for Bradken through FY13.

Half-yearly Performance & Estimates - BKN

Year-end June	FY11A	1H12A	FY12A	1H13A	FY13A	FY14E	FY15E
Sales, $m	1,148	683.2	1,451	684.9	1,313	1,260	1,312
EBITDA, $m	188.8	78.4	223.3	83.2	193.5	215.0	228.1
EBIT, $m	144.7	78.4	172.1	83.2	135.3	156.5	170.0
Report NPAT, $m	75.2	43.7	100.6	46.8	67.0
Adj. NPAT, $m					67.0	92.6	103.2
Reported EPS, ¢	52.00	26.00	60.00	27.00	39.00
Adjusted EPS, ¢					39.00	54.70	60.35
EPS %FY/Growth		43%	15%	69%	-35%	40%	10%
Dividend, ¢	39.5	19.5	41.0	20.0	38.0	36.00	38.00
Franking, %	100%	100%	100%	100%	100%	100%	100%
EBITDA Margin	16%	0	15%	12.1%	15%	17.1%	17.4%
NPAT Margin	7%	0	7%	6.8%	5%	7.3%	7.9%
ROE, %	12%	0	14%	6	9%
EBIT/Interest	3.9	0.0	5.2	5.27	4.33
Net Debt / Equity	0.35	0	0.62	0.63	0.56
CashFlow/Sh, ¢	22.8	6.6	73.0	41.9	128.7	88.5	89.4
Y/E Shares, m	161.9	166.7	168.7	169.3	169.3

Notes

Data sourced from IRESS Market Technology Limited. EPS Growth compared with the pcp is shown in most columns, except 1H11A and 1H12A which show the first half % of full year EPS. In a handful of cases, unadjusted share splits may give strange changes in ratios.

Half-year Performance & Estimates - BKN

Year-end June	1H11A	FY11A	1H12A	FY12A	1H13A	FY13E	FY14E
Sales, $m	532.5	1,148	683.2	1,451	684.9	1,429	1,498
EBITDA, $m	72.4	188.8	78.4	223.3	83.2	233.6	259.9
EBIT, $m	72.4	144.7	78.4	172.1	83.2	177.6	200.7
Report NPAT, $m	39.3	75.2	43.7	100.6	46.8
Adj. NPAT, $m					46.8	110.6	124.1
Reported EPS, ¢	28.00	52.00	26.00	60.00	27.00
Adjusted EPS, ¢					27.00	64.60	72.40
EPS %FY/Growth	54%		43%	15%	4%	8%	12%
Dividend, ¢	18.5	39.5	19.5	41.0	20.0	42.00	46.00
Franking, %	100%	100%	100%	100%	100%	100%	100%
EBITDA Margin	17%	16%	0	15%	12.1%	16.3%	17.3%
NPAT Margin	8%	7%	0	7%	6.8%	7.7%	8.3%
ROE, %	16%	12%	0	14%	6%
EBIT/Interest	4.5	3.9	0.0	5.2	5.27
Net Debt / Equity	0.52	0.35	0	0.62	0.63
CashFlow/Sh, ¢	26.1	22.8	6.6	73.0	41.9	93.2	101.7
Y/E Shares, m	139.7	161.9	166.7	168.7	169.3

Notes

EPS Growth compared with the pcp is shown in most columns, except 1H10A and 1H11A which show the first half % of full year EPS.

Half-yearly Performance & Estimates - BKN

Year-end June	FY10A	1H11A	FY11A	1H12A	FY12A	FY13E	FY14E
Sales, $m	1,4	532.5	1,148	683.2	1,451	1,545	1,643
EBITDA, $m	176.3	72.4	188.8	78.4	223.3	259.7	289.0
EBIT, $m	136.1	72.4	144.7	78.4	172.1	207.0	232.6
Report NPAT, $m	77.3	39.3	75.2	43.7	100.6
Adj. NPAT, $m					100.6	124.9	143.2
Reported EPS, ¢	59.00	28.00	52.00	26.00	60.00
Adjusted EPS, ¢					60.00	73.90	82.75
EPS %FY/Growth		54%	-12%	43%	15%	23%	12%
Dividend, ¢	34.0	18.5	39.5	19.5	41.0	45.50	50.40
Franking, %	100%	100%	100%	100%	100%	100%	100%
EBITDA Margin	17%	17%	16%	11.3%	15%	16.8%	17.6%
NPAT Margin	8%	8%	7%	6.3%	7%	8.1%	8.7%
ROE, %	16%	16%	12%		14%
EBIT/Interest	4.5	4.5	3.9	0.00	5.15
Net Debt / Equity	0.52	0.52	0.35	0	0.62
CashFlow/Sh, ¢	113.3	26.1	22.8	6.6	73.0	95.2	105.0
Y/E Shares, m	138.8	139.7	161.9	166.7	168.7

Notes

Data sourced from IRESS Market Technology Limited. EPS Growth compared with the pcp is shown in most columns, except 1H11A and 1H12A which show the first half % of full year EPS. In a handful of cases, unadjusted share splits may give strange changes in ratios.

Company Overview

Bradken is a leading supplier of differentiated consumable and capital products to the resources, energy and freight rail industries. The Company employs almost 5,900 people in 34 manufacturing facilities and more than 30 sales and service centres across Australia, New Zealand, USA, Canada, United Kingdom, Indonesia, South Africa, South America and China.

Bradken, which has been in business for over 90 years and became a publicly listed company in August 2004, has four market-focused divisions.

Mining Products supplies ground engaging tools, wear plate and block products, crawler systems, mill liners, crusher liners and associated refurbishment and maintenance services. These products are primarily consumable wear parts for mobile and fixed plant used extensively throughout the mining industry. Mill liners and crusher liners are consumable products, which are regularly replaced by operators of mills and crushers in the mining and quarrying industries.

Rail designs, manufactures and supplies rail freight rolling stock, cast and general spares, and provides rolling stock maintenance and refurbishment services. Its product and service offering, as in all Bradken’s divisions, is customised to meet specific customer requirements.

Industrial manufactures and supplies iron and steel cast products, mainly consumables, directly to end users for use in their process plants or manufacturing processes. The products can vary from products manufactured to the client’s specification, customised products and products based on Bradken’s proprietary designs.

Engineered Products is a leading North American based supplier of large (greater than 4,500kg), highly engineered steel castings to the high growth global energy, mining and rail markets. Headquartered in Atchison, Kansas, AmeriCast employs approximately 2,500 people across eight steel foundries and four machine shops in North America.

Other operations include Cast Metal Services (CMS), which manufactures and distributes consumable steelmaking and foundry industries, the metal recycling business, which support the Company’s foundry business and the corporate activities of the Bradken Group.