Downer Group Explained

Downer EDI Limited
Type:Public
Foundation:1933
Founder:Arnold Fielder Downer
Location City:Sydney
Location Country:Australia
Key People:Peter Tompkins, CEO and Managing Director
Industry:Civil engineering
Services:Integrated services
Operating Income:$12.6 billion (June 2023)[1]
Num Employees:31,000 (March 2024)[2]
Divisions:Transport and Infrastructure
Energy and Industrial
Spotless
New Zealand
Subsid:Downer Rail
Keolis Downer (49%)
Spotless Group Holdings (88%)
DM Roads
Hawkins
EPICURE
QCC Resources
Mineral Technologies
VEC
Homepage:www.downergroup.com

Downer Group is an integrated services company active in Australia and New Zealand.

Listed on the Australian Securities Exchange and New Zealand Stock Exchange as Downer EDI (DOW), Downer is an ASX 200 company.

Downer Group employs approximately 33,000 people across more than 300 sites, primarily in Australia and New Zealand, but also in the Asia-Pacific region, South America and southern Africa.

History

Downer's foundations were laid in the 19th century, when Walkers Limited and Clyde Engineering were founded in Australia, and the Public Works Department and Electrical Telegraph Department were founded in New Zealand. They merged in the 20th century to form parts of the Downer Group. The 20th century also saw the purchase of companies that now make up Downer's core divisions: railway manufacturer Evans Deakin & Company (EDI) and mining contractor Roche Brothers.[3]

In 1933, the Downer Group was founded in New Zealand by Arnold Fielder Downer, as Downer & Co, focusing on providing engineering and construction services to the public and private infrastructure sectors in New Zealand, including the New Zealand Public Works Department. In 1954, Downer & Co merged with William Cable Holdings and, in 1964, with A & G Price, to form Cable Price Downer.[3]

In 1994, Downer merged with Hong Kong-based Paul YITC. In 1996, the company purchased Works Corporation, the state-owned enterprise civil construction arm of the New Zealand Ministry of Works & Development. In 1997, mining contractor Roche Brothers was acquired.[4] In 1998, Downer purchased major roads contractor Technic Group, and was first listed on the Australian Securities Exchange.[3]

In 2000, road-sealing business Bitumix was acquired from BP.[5] In 2001, Downer merged with Evans Deakin Industries to form Downer EDI.[3] [6] Between 2003 and 2008, Downer also acquired Stork, QCC, Snowden, Emoleum and Excell Corporation. In October 2014, the construction assets of Tenix were acquired.[7]

In March 2017, Downer acquired Hawkins, one of New Zealand's largest builders, and in June 2017, took majority ownership of Spotless Group Holdings through a hostile takeover.[8] [9] It took full ownership of Spotless for $1.27 billion in October 2020.[10] [11] The Spotless acquisition was the largest in Downer's history.[12] [13]

Major projects

Projects undertaken by the company have included:

Operations

Downer reports its financial results under five service lines: Transport; Utilities; Facilities; Engineering, Construction and Maintenance (EC&M); and Mining.

Rail/Bus

Downer Rail was formed in March 2001 as EDI Rail following the purchase of Evans Deakin Industries by Downer Group. Evans Deakin operated the former Clyde Engineering plants at Kelso and Somerton and Walkers Limited, Maryborough plant. It reopened the former Cardiff Locomotive Workshops to build CityRail M sets. In July 2007 it was renamed Downer Rail.[26]

In 2008 Locomotive Demand Power was established as a subsidiary to lease locomotives. In November 2009 Downer Rail became a tram operator through its 49% shareholding in Keolis Downer that operates the Yarra Trams franchise in Melbourne.[27] In July 2014, Keolis Downer commenced operating the light rail line on the Gold Coast.[28]

In March 2015, Keolis Downer purchased bus operator Australian Transit Enterprises which operates the Hornibrook Bus Lines, LinkSA, Path Transit and SouthLink operations with 930 buses.[29] In July 2017, Keolis Downer commenced operating bus and ferry services in Newcastle under the Newcastle Transport brand.[30] [31]

Transport

Transport comprises Downer's road services, infrastructure projects, and rail & transit systems businesses. It conducts transport infrastructure services that include earthworks, civil construction, asset management, maintenance, surfacing and stabilisation, supply of bituminous products and logistics, open space and facilities management and rail track signalling and electrification works.[32] In June 2023, Downer Group sold the transport projects business to Gamuda Berhad who rebranded it DT Infrastructure.[33] [34] [35]

Utilities

The Utilities service line provides services to customers across the power and gas, water, communications and renewables sectors. Downer designs, builds, operates and maintains steel lattice transmission towers, electricity and gas networks, wastewater treatment plants, water assets, wind farms, solar farms and telecommunication networks such as the NBN.[36]

Facilities

The Facilities services line operates in Australia and New Zealand delivering facilities services to customers across a range of industry sectors including: defence, education, health government and hospitality. Facilities businesses include Spotless, AE Smith, Alliance, Ensign, EPICURE, Mustard, Nuvo, Taylors and Envar.[37]

Asset Services

Downer's Asset Services line includes its Oil and Gas, Power Generation and Industrial businesses and it works with customers in the public and private sectors delivering services including design, engineering, construction and maintenance of critical assets. In the oil and gas sector, Downer's capabilities cover the full range of services including maintenance, shutdown, turnaround and outage delivery, sustaining capital program delivery, project and commissioning services.[38]

Downer also has a Defence business which offers professional and managed services, asset sustainment and estate upkeep services to the Australian and New Zealand defence forces.[39]

Mining

On 1 February 2021 Downer completed the sale of its Open Cut Mining West business to MACA Limited.[40] The remainder of the Downer Mining business was divested in December 2021 upon sale of its Open Cut Mining East division to Buma Australia Pty Ltd. [41]

Use of pseudoscience

In 2019 Downer admitted to using dowsing, in an attempt to find water pipes while contracting to the Wellington City Council. Dowsing is considered a pseudoscience and there is no scientific evidence that it is any more effective than random chance. Downer told New Zealand Skeptic's chair Craig Shearer that Downer has no concern about the public perception that ratepayer money is being spent on a technique considered pseudoscience. Downer's general manager of business excellence and reputation Brooke Dahlberg said "the method is safe, and it has no plan to ban staff from using it – the choice to use it was up to individual employees."[42]

In December 2019, at the New Zealand Skeptics annual conference, the Downer Group was co-awarded the Bent Spoon by NZ Skeptics for "showing the most egregious gullibility in 2019" for the contractor's use of water divining to find underground pipes.[43]

Sponsorships

Downer Group was the naming rights sponsor of the NRL Auckland Nines in 2016 and 2017.[44] [45] It also sponsored the 2016 Anzac Test at the Newcastle International Sports Centre and the 2018 World Club Challenge.[46] [47] Downer will be the major sponsor of the Rugby League World Cup 9s.[48]

In 2017, Downer signed on to be the major sponsor of the Sunshine Coast Lightning netball team.[49]

In 2021 Downer joined mental health organisation Beyond Blue as its Major Partner.[50]

External links

Notes and References

  1. https://www.downergroup.com/Content/cms/media/4__FY23_Investor_Presentation_FINAL_cosec.pdf Downer Investor Presentation
  2. https://www.marketscreener.com/quote/stock/DOWNER-EDI-LIMITED-6491850/company/ Downer EDI Limited
  3. https://www.downergroup.com/company-history History
  4. http://www.rocheholdings.com.au/About-Us.aspx A Family History
  5. http://www.comcom.govt.nz/the-commission/media-centre/media-releases/1998/workscivilclearedto Works Civil cleared to acquire Bitumix
  6. http://www.asx.com.au/prices/company-name-and-asx-code-changes-2001.htm Company name and ASX code changes 2001
  7. http://www.smh.com.au/business/downer-edi-buys-salteri-familys-tenix-business-for-300m-20141019-118l2b.html Downer EDI buys Salteri family's Tenix business for $300m
  8. https://thewest.com.au/business/markets/downer-set-to-launch-13b-bid-for-spotless-ng-b88420954z Downer launches $1.27b bid for Spotless
  9. http://www.sbs.com.au/news/article/2017/06/27/downer-edi-seeks-seats-spotless-board Downer EDI seeks seats on Spotless board
  10. Web site: ASX Announcements. 2021-03-29. Downer Corporate Site.
  11. Web site: Pash. Chris. 2017-03-21. Downer EDI moves into cleaning with a $1.27 billion bid for Spotless. https://web.archive.org/web/20170321024012/https://www.businessinsider.com.au/downer-edi-moves-into-cleaning-with-a-1-27-billion-bid-for-spotless-2017-3. dead. 21 March 2017. 2021-03-29. Business Insider Australia.
  12. Web site: Wells. Peter. 2017-03-21. Spotless Group spikes after A$1.2bn bid from Downer EDI. 2021-03-29. Financial Times.
  13. Web site: 2017-12-21. Downer-Spotless: Inside the capital markets story of the year. 2021-03-29. Australian Financial Review.
  14. " Longest Tunnel in British Commonwealth" Railway Gazette 18 November 1955 page 584
  15. Web site: City Rail Link Become Reality. 7 April 2015. 4 December 2016. NBR.
  16. Web site: Subscribe to the Australian | Newspaper home delivery, website, iPad, iPhone & Android apps.
  17. Web site: Downer wins Gorgon contract. 2 September 2014. The Sydney Morning Herald.
  18. Web site: Downer EDI wins $400m Wheatstone contract. 1 November 2013. Australian Financial Review.
  19. Web site: Ausenco Downer JV awarded EPC contract for Carrapateena Copper Gold Mine Project. Ausenco.
  20. Web site: Gruyere gold project partners sign $400m contract. 19 December 2017. The West Australian.
  21. Web site: Downer wins $250m contract extension at Meandu Mine. Sophia. Rostron. blog.plantminer.com.au.
  22. Web site: Downer consortium wins HCMT contract. Oliver. Probert. 12 September 2016.
  23. Web site: Sydney Growth Trains. Transport for NSW. 23 June 2017. Transport for NSW.
  24. Web site: Millenium maintenance contract extension. Downer Corporate Site.
  25. Web site: Newcastle Light Rail. Revitalising Newcastle. 12 January 2019. 28 February 2019. https://web.archive.org/web/20190228050241/https://revitalisingnewcastle.nsw.gov.au/what-we-are-doing/newcastle-light-rail/. dead.
  26. https://web.archive.org/web/20070901080726/http://www.downeredirail.com.au/Default.aspx?aCateId=1626 Downer EDI launches new company names and branding approach
  27. http://www.railwaygazette.com/news/single-view/view/melbourne-tram-and-train-operators-selected.html Melbourne tram and train operators selected
  28. http://www.railwaygazette.com/news/single-view/view/goldlinq-selected-to-build-gold-coast-light-rail.html GoldlinQ selected to build Gold Coast light rail
  29. http://www.busnews.com.au/industry-news/1503/operator-ate-sold/ Operator ATE Sold
  30. https://www.newcastleherald.com.au/story/4349836/keolis-downer-awarded-contract-to-run-newcastle-public-transport-gallery/?cs=305 Keolis Downer awarded contract to run light rail, buses and ferries says Baird government
  31. http://keolisdowner.com.au/?p=8988 Keolis Downer awarded Newcastle Transport Contract
  32. Web site: Roads. Downer Corporate Site.
  33. https://www.afr.com/street-talk/ey-tows-malaysia-s-gamuda-into-downer-s-transport-projects-arm-20230223-p5cn1e EY tows Malaysia’s Gamuda into Downer projects arm
  34. https://www.downergroup.com/downer-completes-sale-of-australian-transport Downer completes sale of Australian Transport Projects business
  35. https://dtinfrastructure.com.au/who-we-are/ History of DT Infrastructure
  36. Web site: Communications. Downer Corporate Site.
  37. Web site: Facilities Management. Downer Group . live . https://web.archive.org/web/20231009231111/https://www.downergroup.com/facilities-management . Oct 9, 2023 .
  38. Web site: Annual Report 2020 . live . https://web.archive.org/web/20240312044655/https://www.downergroup.com/Content/cms/ResultsCentre/DOW0056_Annual_Report_2020_COMBINED_AW_LR_5_.pdf . Mar 12, 2024 . Downer Group.
  39. Web site: Defence. Downer Group . live . https://web.archive.org/web/20230924164401/https://www.downergroup.com/defence . Sep 24, 2023 .
  40. Web site: Market announcements - DOW . ASX. live . https://archive.today/20240313224128/https://www.asx.com.au/markets/trade-our-cash-market/announcements.dow . 13 March 2024 .
  41. Web site: Downer completes sale of open cut mining east . 17 December 2021 . Downer . ASX . live . https://web.archive.org/web/20221224001057/https://www.asx.com.au/asxpdf/20211217/pdf/4548f505d2bv95.pdf . Dec 24, 2022 .
  42. https://www.newsroom.co.nz/2019/03/06/471504/wellington-ratepayers-foot-bill-for-pseudo-science Wellington ratepayers foot bill for pseudo science
  43. Web site: Wellington City Council wins Skeptics award after contractor divines for water. December 2019.
  44. http://www.nrl.com/downer-becomes-2016-nines-naming-rights-sponsor/tabid/10874/newsid/91384/default.aspx Downer becomes 2016 Nines naming rights sponsor
  45. http://nrlaucklandnines.co.nz/downer-secures-nrl-auckland-nines-2017-2018/ Downer secures NRL Auckland Nines naming rights sponsorship for 2017 and 2018
  46. http://www.nrl.com/downer-to-sponsor-test-match/tabid/10874/newsid/94791/default.aspx Downer to sponsor Test Match
  47. https://www.melbournestorm.com.au/news/2018/02/05/downer-partners-with-world-club-challenge/ Downer partners with World Club Challenge
  48. https://www.downergroup.com/major-sponsorship-announcement Major sponsorship announcement
  49. Web site: Major partnership with Sunshine Coast Lightning. Downer Corporate Site.
  50. Web site: Downer joins Beyond Blue as Major Partner. Downer.