Prospectus

Initial Public Offering of Shares
PROSPECTUS
Joint Lead Managers

Cover image:
Perth, WA
IMPORTANT NOTICES AND DISCLAIMER
The Offer
The Offer contained in this prospectus (Prospectus)
is an invitation by Ventia Services Group Limited
(ABN 53 603 253 541) (Ventia or the Company) to acquire fully
paid ordinary shares (Shares). The
Prospectus is issued by
the Company and Ventia SaleCo Limited (ACN 654 078 878)
(SaleCo) for the purposes of Chapter 6D of the Corporations
Act 2001 (Cth) (Corporations Act). See Section 7 for further
information on the Offer, including details of the securities that
will be issued and transferred under this Prospectus.
Lodgement and Listing
The Prospectus is dated 26 October 2021 and was lodged
with the Australian Securities and Investments Commission
(ASIC) on that date. The Company will apply to the Australian
Securities Exchange (ASX) for its admission to the Official
List and quotation of Shares on ASX. The Company will also
apply for listing with NZX as a foreign exempt issuer and for
quotation of the Shares on the NZX Main Board. None of ASIC,
the ASX, NZX or their respective officers take any responsibility
for the contents of the Prospectus or the merits of the
investment to which the Prospectus relates.
Expiry Date
This Prospectus expires on the date that is 13 months after the
Prospectus Date (Expiry Date) and no Shares will be issued on
the basis of this Prospectus after the Expiry Date.
Note to Applicants
The Offer contained in the Prospectus is not investment or
financial product advice and does not take into account the
investment objectives, financial position and particular needs
of individual investors.
It is important that you read the Prospectus carefully and in its
entirety before deciding to invest in Ventia.
In particular, you should consider the basis of preparation of
the Financial Information and the best estimate assumptions
underlying the Forecast Financial Information (see Section
4)
and the risk factors (see Section 5) that could affect the
business, operational and financial performance, and financial
condition of Ventia. You should carefully consider these risks
in light of your personal circumstances and seek professional
advice from your accountant, tax adviser, stockbroker, lawyer
or other professional adviser before deciding to invest.
Some
of the key risk factors that should be considered by
prospective investors are set out in Section 5 of the Prospectus.
There may be risk factors in addition to these that should be
considered in light of your personal circumstances.
Except as required by law, and only to the extent required,
no person named in the Prospectus, nor any other person,
guarantees the performance of Ventia, the repayment of
capital or the payment of a return on the Shares.
No person is authorised to give any information or make
any representation in connection with the Offer which is not
contained in the Prospectus. Any information or representation
not so contained may not be relied on as having been
authorised by Ventia, or any other person in connection with
the Offer. You should rely only on information contained in
the
Prospectus when deciding whether to invest in Ventia.
Barrenjoey Advisory Pty Limited, J.P. Morgan Securities
Australia Limited and Macquarie Capital (Australia) Limited
have acted as joint lead managers (Joint Lead Managers) to
the Offer, Bell Potter Securities Limited, Morgans Financial
Limited and Forsyth Barr Limited acted as Co-Lead Managers
to the Offer and Crestone Wealth Management Limited and
National Australia Bank Limited have acted as Co-Managers
to the Offer. None
of these parties, together with their related
bodies corporate, shareholders or affiliates, agents and
advisers (each a Limited Party) has authorised, permitted
or caused the issue or lodgement, submission, dispatch or
provision of this Prospectus and there is no statement in this
Prospectus which is based on any statement made by any of
them. To the maximum extent permitted by law, the Joint
Lead Managers, Co-Lead Managers and Co-Managers (Limited
Parties) expressly disclaim all liabilities (whether in fault,
negligence or otherwise and including, without limitation,
any liability arising out of direct, indirect, consequential
or contingent loss or damage) in respect of, make no
representations regarding, and take no responsibility for,
any part of the Offer or this Prospectus other than references
to their respective names and have not verified and make
no representation or warranty, express or implied, as to
the fairness, currency, accuracy, reliability, correctness or
completeness of this Prospectus or any of the information,
opinions and conclusions contained in it. The Joint Lead
Managers, Co-Lead Managers and Co-Managers and each of
their respective Limited Parties make no recommendations as
to whether you or your related parties should participate in
the Offer nor do they make any representations or warranties
to you concerning the Offer, and by making an Application you
represent, warrant and agree that you have not relied on any
statements made by a Limited Party in relation to the Offer
and you further expressly disclaim that you are in a fiduciary
relationship with any of them.
The Limited Parties are full service financial institutions
engaged in various activities, which may include trading,
financial advisory, investment management, investment
research, principal investment, hedging, market making,
brokerage and other financial and non-financial activities and
services including for which they have received or may receive
customary fees and expenses or other transaction consideration.
In the course of these activities, the Limited Parties and their
respective affiliates may at any time for their own account and
for the accounts of their clients make or hold investments in
equity securities or other financial products of Ventia or its
affiliates, and receive customary fees and expenses or other
transaction consideration in respect of such activities.
As set out in Section 7 of the Prospectus, it is expected that the
Shares will be quoted on the ASX and on the NZX Main Board,
initially on a conditional and deferred settlement basis. Ventia,
SaleCo, the Registry, the Joint Lead Managers, the Co-Lead
Managers and the Co-Managers each disclaim all liability,
whether in fault, negligence or otherwise, to persons who trade
Shares before receiving their holding statement, or allotment
confirmation notice, even if such person received confirmation
of their allocation from the Offer Information Line or confirmed
their firm allocation through a Broker.
Exposure Period
The Corporations Act 2001 (Cth) (Corporations Act)
prohibits Ventia from processing Applications in the seven-
day period after the date of lodgement of the Prospectus
(Exposure
Period).
The Exposure Period may be extended by ASIC by up to a
further seven days (i.e. up to a total of 14 days). The Exposure
Period enables the Prospectus to be examined by market
participants prior to the raising of funds. The examination may
result in the identification of deficiencies in the Prospectus.

1
Ventia Prospectus
Applications received during the Exposure Period will not
be processed until after the expiry of the Exposure Period.
No preference will be conferred on Applications received
during the Exposure Period.
No cooling-off rights
Cooling-off rights do not apply to an investment in Shares
issued under this Prospectus. This means that, in most
circumstances, you cannot withdraw your Application once
it
has been accepted.
Obtaining a copy of this Prospectus
During the Exposure Period, an electronic version of this
Prospectus without an Application Form will be available
at www.ventiaipo.com to persons who are Australian and
New
Zealand residents only. Application Forms will not be
made available until after the Exposure Period has expired.
During the Retail Offer Period, this Prospectus is available in
electronic form at www.ventiaipo.com. The Offer constituted
by this Prospectus in electronic form at www.ventiaipo.com is
available only to persons within Australia and New
Zealand.
The Prospectus is not available to persons in other jurisdictions
(including the United States) in which it may not be lawful to
make such an invitation or offer. If you access the electronic
version of this Prospectus, you should ensure that you
download and read the
Prospectus in its entirety.
You may before the Retail Offer Period closes, obtain a paper
copy of the Prospectus (free of charge) by telephoning the
Offer Information Line on 1300 140 281 (within Australia)
or 0800 453 521 (within New Zealand) or +61 3 9415 4015
(outside
Australia and New Zealand) from 8.30am to 5.30pm
(Sydney time), Monday to Friday during the Retail Offer Period.
Applications for Shares may only be made during the
Retail Offer Period on an Application Form attached to or
accompanying this Prospectus.
The Corporations Act prohibits any person from passing the
Application Form on to another person unless it is attached to
a paper copy of the Prospectus or the complete and unaltered
electronic version of the Prospectus.
Refer to Section 9 for further information.
Statements of past performance
This Prospectus includes information regarding the past
performance of Ventia. Investors should be aware that past
performance should not be relied upon as being indicative of
future performance.
Past performance is not necessarily a guide to future
performance and no representation or warranty is made
by any
person as to the likelihood of achievement or
reasonableness of any forward-looking statements, forecast
financial information in Section 4 or other forecast. Nothing
contained in this Prospectus nor any information made
available to you is, or shall be relied upon as, a promise,
representation, warranty or guarantee as to the past, present
or the future performance of the Company.
Financial Information presentation
Section 4 sets out the detail of the Financial Information
referred to in this Prospectus. The basis of preparation and
presentation of the Financial Information in this Prospectus
is
set out in Section 4.2.
All references to CY2018, CY2019, CY2020, CY2021F and CY2022F
appearing in this Prospectus are to the financial years ended
or ending 31 December 2018, 31 December 2019, 31 December
2020, 31 December 2021 and 31 December 2022, respectively,
unless otherwise indicated. All references to H1CY2020 and
H1CY2021 appearing in this Prospectus are to the financial
half years ended 30 June 2020 and 30 June 2021, respectively,
unless otherwise indicated.
The Financial Information has been prepared and presented in
accordance with the recognition and measurement principles of
Australian Accounting Standards (AAS) (including the Australian
Accounting Interpretations) issued by the Australian Accounting
Standards Board (AASB), which are consistent with International
Financial Reporting Standards (IFRS) and Interpretations
issued by the International Accounting Standards Board (IASB).
The Financial Information is presented in an abbreviated
form insofar as it does not include all disclosures, statements
and comparative information as required by AAS and other
mandatory professional reporting requirements applicable
to general purpose financial reports prepared in accordance
with the Corporations Act. The
Financial Information should be
read in conjunction with, and is qualified by reference to, the
information contained in Sections 4 and 5.
The Historical Financial Information is presented on both
a statutory and pro forma basis. Unless otherwise stated,
all pro forma data in this Prospectus gives effect to the pro
forma adjustments referred to in Section 4. Unless otherwise
specified all information in Sections 1-4 is presented on a pro
forma basis.
The Prospectus also includes Forecast Financial Information
based on the best estimate assumptions of the Board.
The
basis of preparation and presentation of the Forecast
Financial Information, to the extent applicable, is consistent
with the basis of preparation and presentation for the
Historical Financial Information. The Forecast Financial
Information presented in this Prospectus is presented on
both
a statutory and pro forma basis and is unaudited.
Investors should note that certain financial data included
in the
Prospectus is not recognised under the AAS and is
classified as ‘non-IFRS financial information’ under Regulatory
Guide 230 ‘Disclosing non-IFRS financial information’
published by ASIC. Ventia believes that this non-IFRS financial
information provides useful information to users in measuring
the financial performance and condition of Ventia.
The non-IFRS financial measures do not have standardised
meanings under the AAS and therefore may not be comparable
to similarly titled measures presented by other entities,
nor
should they be interpreted as an alternative to other
financial measures determined in accordance with the AAS.
Investors are cautioned therefore not to place undue reliance
on any non-IFRS financial information and ratios included in
this Prospectus.
All financial amounts contained in this Prospectus are
expressed in Australian dollars, unless otherwise stated.
Any
discrepancies between totals and sums of components
in tables contained in this Prospectus are due to rounding.
Investigating Accountant’s Report on Financial
Information and financial services guide
The provider of the Investigating Accountant’s Reports on
the Historical Financial Information and Forecast Financial
Information is required to provide Australian retail clients
with a financial services guide in relation to the review under
the Corporations Act. The Investigating Accountant’s Reports
and accompanying financial services guide are provided in
Section
8.

2
Ventia Prospectus
Forward-looking statements
This Prospectus contains certain forward-looking
statements and comments about future events, including
the Company’s expectations about the performance of
the Company’s business, growth strategy and the forecast
financial information in Section
8 of the Prospectus, as
well as expected trends in the industry sectors in which the
Company currently operates, and estimates and forecasts
of the Company’s potential total addressable market and
market share. Forward-looking statements can generally
be identified by the use of forward-looking words such as,
‘expect’, ‘anticipate’, ‘likely’, ‘intend’, ‘should’, ‘could’, ‘may’,
‘predict’, ‘plan’, ‘propose’, ‘will’, ‘believe’, ‘forecast’, ‘estimate’,
‘target’ and other similar expressions within the meaning of
securities laws of applicable jurisdictions. Indications of, and
guidance or outlook on, future earnings or financial position
or
performance are also forward-looking statements.
Any forward-looking statements provided in this Prospectus
are based on certain assumptions and contingencies which
are subject to change without notice, which are based on
interpretations of current market conditions and potential
opportunities. Forward-looking statements also involve
inherent risks and uncertainties, both general and specific,
and there is a risk that such predictions, forecasts, projections
and other forward-looking statements will not be achieved.
A number of important factors could cause the Company’s
actual results to differ materially from the plans, objectives,
expectations, estimates and intentions expressed in such
forward-looking statements, including those set forth in
Section 5 of this Prospectus, and many of these factors
are beyond the Company’s control. In particular, potential
investors are strongly cautioned not to place reliance on past
performance or forward-looking statements, particularly in
light of the current economic uncertainties and disruption
caused by the outbreak of COVID-19. A number of important
factors could cause the Company’s actual results to differ
materially from the plans, objectives, expectations, estimates
and intentions expressed in such forward-looking statements,
including (but not limited to) the risks and uncertainties
related to the ongoing impact of COVID-19, the Australian
and global economic environment, market conditions and
the impact of regulation. Forward-looking statements are
provided as a general guide only, and should not be relied
on as an indication or guarantee of future performance and
involve known and unknown risks, uncertainties and other
factors, many
of which are outside the control of the Company.
As such, undue reliance should not be placed on any forward-
looking statements.
Forward-looking statements should be read in conjunction
with the risk factors set out in Section 5 of this Prospectus, the
assumptions contained in the Financial Information set out
in
Section 4 and other information in the Prospectus.
No offering where offering would be illegal
The Prospectus does not constitute an offer or invitation
in any place in which, or to any person to whom, it would
not be lawful to make such an offer or invitation. No action
has been taken to register or qualify the Shares or the Offer,
or to
otherwise permit a public offering of Shares, in any
jurisdiction outside Australia and New
Zealand.
The distribution of the Prospectus outside Australia and
New
Zealand (including electronically) may be restricted by
law and persons who come into possession of the Prospectus
outside Australia and New
Zealand should seek advice and
observe any such restrictions. Any failure to comply with such
restrictions may constitute a violation of applicable securities
laws. For details of selling restrictions that apply to the Shares
in certain jurisdictions outside of Australia and New
Zealand,
please refer to Section 9.
This Prospectus may not be distributed to, or relied upon
by, persons in the United States, unless accompanied by
the US
Institutional Offering Memorandum as part of the
Institutional Offer. The Shares being offered pursuant to this
Prospectus have not been, and will not be, registered under the
US Securities Act or any securities laws of any state or other
jurisdiction in the United
States and may not be offered or sold
in the United States except in transactions exempt from, or not
subject to, the registration requirements of the US Securities
Act and any other applicable securities laws of any state or
other jurisdiction of the United States.
The Offer is not being extended to any investor outside of
Australia and New
Zealand, other than to certain Institutional
Investors as part of the Institutional Offer.
Please refer to Section 9 of the Prospectus for more detail
on selling restrictions that apply to the Offer and the sale of
Shares in jurisdictions outside of Australia and New
Zealand.
Privacy
By filling out the Application Form to apply for Shares, you
are providing personal information to Ventia through Ventia’s
service provider, Computershare Investor Services Pty Limited
ABN 48 078 279 277 (Registry), which is contracted to manage
Applications.
Ventia, and the Registry on its behalf, may collect, hold and use
that personal information in order to process your Application,
service your needs as a Securityholder, provide facilities
and services that you request and carry out appropriate
administration. Some of this personal information is collected
as required or authorised by certain laws including the Income
Tax Assessment Act 1997 (Cth) and the Corporations Act.
If you do not provide the information requested in the
Application Form, Ventia and the Registry may not be able to
process or accept your Application.
Your personal information may also be used from time to time
to inform you about other products and services offered by
Ventia and its group companies, which it considers may be of
interest to you.
Your personal information may also be provided to Ventia’s
members, agents and service providers on the basis that
they deal with such information in accordance with Ventia’s
privacy policy. The members, agents and service providers
of Ventia may be located outside Australia and New
Zealand
where your personal information may not receive the same
level of protection as that afforded under Australian and
New
Zealand law. The types of agents and service providers
that may be provided with your personal information and the
circumstances in which your personal information may be
shared are:
•
the Registry for ongoing administration of the register of
members;
• printers and other companies for the purpose of preparation
and distribution of statements and for handling mail;
•
mark
et research companies for the purpose of analysing
the Securityholder base and for product development and
planning; and
•

le
gal and accounting firms, auditors, contractors,
consultants and other advisers for the purpose of
administering, and advising on, the Shares and for
associated actions.
IMPORTANT NOTICES AND DISCLAIMER

3
Ventia Prospectus
If an Applicant becomes a Securityholder, the Corporations
Act requires Ventia to include information about the
Securityholder (including name, address and details of the
Shares held) in its public register of members. If you do not
provide all the information requested, your Application may
not be able to be processed.
The information contained in Ventia’s register of members
must remain there even if that person ceases to be a
Securityholder.
Information contained in Ventia’s register of members is
also used to facilitate dividend payments and corporate
communications (including Ventia’s financial results, annual
reports and other information that Ventia may wish to
communicate to its Securityholders) and compliance by Ventia
with legal and regulatory requirements. An Applicant has a
right to gain access to the information that Ventia and the
Registry hold about that person, subject to certain exemptions
under law. A fee may be charged for access. Access requests
must be made in writing or by telephone call to Ventia’s
registered office or the Registry’s office, details of which are
disclosed in the Corporate Directory on the inside back cover
of
the Prospectus.
Applicants can obtain a copy of Ventia’s Privacy Statement by
visiting Ventia’s website https://www.ventia.com/documents/
downloads/114/Ventia_Privacy_Statement.pdf.
Photographs and diagrams
Photographs used in this Prospectus which do not have
descriptions are for illustration only and should not be
interpreted to mean that any person shown endorses
this Prospectus or its contents or that the assets shown
in them are owned by Ventia. Diagrams used in this
Prospectus are illustrative only and may not be drawn to
scale. Unless
otherwise stated, all data contained in charts,
graphs and tables is based on information available at the
Prospectus Date.
Website
Ventia maintains a website at www.ventia.com.
Any references to documents included on Ventia’s website
are for convenience only, and information contained in or
otherwise accessible through this or a related website is not
a
part of this Prospectus.
Applications
Applications may be made only during the Retail Offer Period
(as applicable) on the appropriate Application Form attached
to, or accompanying, this Prospectus in its paper copy form or
in its electronic form which must be downloaded in its entirety
from www.ventiaipo.com.
By making an Application, you represent and warrant that
you were given access to this Prospectus, together with an
Application Form.
The Corporations Act prohibits any person from passing on
to another person the Application Form unless it is attached
to, or accompanied by, the complete and unaltered version of
this
Prospectus.
Glossary
Certain terms and abbreviations used in the Prospectus have
defined meanings which are explained in the Glossary in
Appendix
3. Unless otherwise stated or implied, reference to
times in this Prospectus are to the time in Sydney, Australia.
Questions
Instructions on how to apply for Shares are set out in
Section 7 of this Prospectus and on the back of the provided
Application Form.
If you have any questions about how to apply for Shares,
please call your Broker (in relation to the Broker Firm Offer).
Alternatively, call the Offer Information Line on 1300 140 281
(within Australia) or 0800 453 521 (within New Zealand) or
+61
3 9415 4015 (outside Australia and New Zealand) from
8.30am to 5.30pm (Sydney time), Monday to Friday.
Important notice to New Zealand investors
This Offer to New Zealand investors is a regulated offer made
under Australian and New Zealand law. In Australia, this is
Chapter 8 of the Corporations Act 2001 (Aust) and regulations
made under that Act. In New Zealand, this is subpart 6 of Part 9
of the Financial Markets Conduct Act 2013 and Part 9 of the
Financial Markets Conduct Regulations 2014.
This Offer and the content of the Offer document are principally
governed by Australian rather than New
Zealand law. In the
main, the Corporations Act 2001 (Aust) and the regulations
made under that Act set out how the Offer must be made.
There are differences in how financial products are regulated
under Australian law. For example, the disclosure of fees
for managed investment schemes is different under the
Australian
regime.
The rights, remedies and compensation arrangements available
to New
Zealand investors in Australian financial products
may differ from the rights, remedies, and compensation
arrangements for New
Zealand financial products.
Both the Australian and New Zealand financial markets
regulators have enforcement responsibilities in relation to
this Offer. If you need to make a complaint about this Offer,
please contact the Financial Markets Authority, New
Zealand
(http://www.fma.govt.nz). The Australian and New
Zealand
regulators will work together to settle your complaint.
The taxation treatment of Australian financial products is not
the same as for New Zealand financial products.
If you are uncertain about whether this investment is
appropriate for you, you should seek the advice of a financial
advice provider.
The Offer may involve a currency exchange risk. The currency
for the financial products is not New Zealand dollars. The value
of the financial products will go up or down according to
changes in the exchange rate between that currency and
New
Zealand dollars. These changes may be significant.
If you expect the financial products to pay any amounts in
a currency that is not New
Zealand dollars, you may incur
significant fees in having the funds credited to a bank account
in New
Zealand in New Zealand dollars.
If the financial products are able to be traded on a financial
product market and you wish to trade the financial products
through that market, you will have to make arrangements for
a participant in that market to sell the financial products on
your behalf. If the financial product market does not operate
in New
Zealand, the way in which the market operates, the
regulation of participants in that market, and the information
available to you about the financial products and trading
may differ from financial product markets that operate in
New Zealand.

4
Ventia Prospectus
A copy of this Prospectus, other documents relating to the
Offer and a copy of the Constitution have been, or will be,
lodged with the New Zealand Companies Office and are, or will
be, available at www.business.govt.nz/disclose (Offer number,
OFR13196). In addition to the Company applying to the ASX for
admission to the Official List and quotation of the Shares on
ASX, the Company will also apply for listing with the NZX as a
foreign exempt issuer and for quotation of the Shares on the
NZX Main Board.
Cautionary note regarding industry and
market data
This Prospectus, including the Industry Overview in
Section 2 and the Company Overview in Section 3,
contains statistics, data and other information (including
forecasts and projections) relating to: (i) markets, market
sizes, market shares, market and other industry data; and
(ii)
macroeconomic trends and other data, in each case
pertaining to the Company’s business and the markets in
which the Company operates (Market Data).
The Company engaged BIS Oxford Economics to prepare
an industry report (Industry Report) that covered market
drivers, the estimated addressable market size of Maintenance
Services, the outlook for each industry segment that Ventia
operates in and Ventia’s estimated market share. In order to
enable potential investors to assess the reasonableness of the
estimates of the total addressable market and the assumptions
underlying these estimates, a description of the way BIS Oxford
Economics calculated these estimates is set out in Appendix
1
to this Prospectus. Throughout the Industry Report, the
total estimated addressable market refers to the outsourced
component of the Maintenance Services market, which BIS
Oxford Economics defined with the assistance of Ventia, as
described in Appendix 1.
The Industry Report is dated 17 August 2021 and reflects the
information available to BIS Oxford Economics as of that date.
It has not been updated for information arising after that date,
including subsequent market and trading conditions and
government policy changes, including in relation to the current
lockdowns (and the extensions of lockdowns) in Australia
and New
Zealand as a result of COVID-19 outbreaks. As at the
Prospectus Date, the Company does not believe that these
developments will result in a material change to the expected
industry segment growth rates and market sizes as reflected in
the Industry Report for FY21 to FY25.
Investors should note that all references to FY18, FY19, FY20,
FY21F, FY22F, FY23F, FY24F and FY25F appearing in the Industry
Report are to the financial years ended or ending 30 June 2018,
30 June 2019, 30 June 2020, 30 June 2021, 30 June 2022, 30
June 2023, 30 June 2024 and 30 June 2025 respectively.
Because Ventia’s fiscal year ends on 31 December of each year,
in order to derive Ventia’s market share information for FY21 on
a consistent basis with the BIS estimates of addressable markets
in the Industry Report, Ventia has adjusted its revenue data
from its financial statements to a 30 June 2021 basis; Ventia has
subtracted its revenue from its financial statements for the six
months ended 30 June 2020 (which financial statements are
unaudited but have been subject to review) from its revenue
from its financial statements for the year ended 31 December
2020 (which financial statements have been audited), to derive
Ventia revenue for the six months ended 31 December 2020.
This has then been added to Ventia’s revenue from its financial
statements for the six months ended 30 June 2021 to derive
Ventia’s revenue for the 12 months ended 30 June 2021.
The Industry Report is based on BIS Oxford Economics
proprietary data which has been developed with reference to a
number of sources as summarised in Appendix 1. Some of the
analysis contained in the Industry Report, including market
share estimates, was supported by internal financial and
operational information supplied to BIS Oxford Economics
by or on behalf of the Company. While the Industry Report
provides that the views, opinions, forecasts and information
contained in the report are based on information reasonably
believed by BIS Oxford Economics in good faith to be reliable,
BIS Oxford Economics has not independently verified or
audited the information or material provided to it by or on
behalf of the Company. See Appendix 1 for further information.
In addition, the Company has not independently verified, and
cannot give any assurances as to the accuracy and completeness
of, the market and industry data contained in this Prospectus
that has been extracted or derived from the Industry Report.
Accordingly, the accuracy and completeness of such information
is not guaranteed. There is no assurance that any of the forecasts
or projections contained in the Industry Report which are
referred to in this Prospectus will be
achieved.
The Industry Report includes or is otherwise based on
information BIS Oxford Economics obtained from: (a) forecasts
from BIS Oxford Economics’ proprietary datasets; contract
data; industry reports; (b) publicly available information;
and other information publicly released by corporations
and government departments. BIS Oxford Economics has
not independently verified or audited this information or
any information provided by or on behalf of the Company.
Accordingly, the accuracy and completeness of such
information is not guaranteed. The information from the
Industry Report has been accurately reproduced and, as far as
the Company is aware, no facts have been omitted that would
render the information provided inaccurate or misleading.
Investors should note that market data and statistics are
inherently predictive and subject to uncertainty and not
necessarily reflective of actual market conditions. There is
no assurance that any of the forecasts contained in reports
and research of third parties which are referred to in this
Prospectus will be achieved. In addition, none of the Company,
the Directors or the Joint Lead Managers can assure you as to
the accuracy or the reliability of the underlying assumptions
used to estimate such industry data and third party market
data. Forecasts and estimates involve risks and uncertainties
and are subject to change based on various factors, including
the risk factors in Section 5.
Moreover, in any disclosure that contains projections as to
market size estimates, the Company has given due regard
to the latest available industry sources that are publicly
available, including those that assess the impact of the
COVID-19 pandemic lockdowns and restrictions on movement,
government stimulus and changing fiscal policy on market
volumes and pricing. It should be noted, however, that
such information is produced at a point in time, and may
not fully reflect the longer-term impact of COVID-19, the
recent lockdowns and restrictions on movement in Australia
and New
Zealand as a result of the recent outbreak of the
COVID-19 Delta variant, government stimulus packages or
recent changes in policy that were introduced or that may be
introduced in response to COVID-19. In light of the ongoing
uncertainty in respect of the impact of COVID-19, investors are
cautioned not to place undue reliance on industry estimates,
forecasts and projections.
IMPORTANT NOTICES AND DISCLAIMER

5
Ventia Prospectus
5
Ventia Prospectus
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Ventia Prospectus
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Ventia Prospectus
Edinburgh, SA
Contents
Important Information 6
At a Glance 8
Chairman’s Letter 10
1. Investment Overview 12
2. Industry Overview 31
3. Company Overview 53
4. Financial Information 90
5. Risk Factors 149
6. Key People, Interests and Benefits 164
7.

De
tails of the Offer
187
8. Investigating Accountant’s Report 210
9.
Additional Information 220
Appendix 1
248
Methodology for Addressable Market Size,
Estimated Market Share and Estimated
Market Position
Appendix 2 255
Signific
ant Accounting Policies
Appendix 3 267
Glossary
Corporate Directory 277

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IMPORTANT INFORMATION
Key Offer Dates
1. The Key Offer Statistics contain Forecast Financial Information, which is prepared on the basis of the general and specific assumptions set out in
Sections 4.9.1 and 4.9.2 and should be read in conjunction with the discussion of the Pro Forma Historical Financial Information and the Pro Forma
Forecast Financial Information in Sections 4.8 and 4.9, including the sensitivities set out in Section 4.10 and the risk factors set out in Section 5. The
above table contains non-IFRS financial measures, which are discussed in Section 4.2.8.
2. The Indicative Price Range is the indicative range for the Final Price. The Final Price may be set below, within or above the Indicative Price Range (refer to
Section 7.4.3 for further details). Shares may trade below the Final Price following Completion of the Offer.
3.
The issue of New Shares under the Offer will raise materially the same dollar amount, irrespective of where the Final Price is set relative to the Indicative
Price Range, because the number of New Shares to be issued will be increased or decreased to ensure materially constant issue proceeds are raised
by the Company. This means that the total number of Shares available in the Offer can vary, both because of possible variances in the number of New
Shares to be issued and also depending on whether or not the Over-allocation occurs.
Prospectus date26 October 2021
Broker Firm Offer, Priority Offer, Employee Offer and CIMIC Group Limited Shareholder
Offer open
3 November 2021
Broker Firm Offer, Priority Offer, Employee Offer and CIMIC Group Limited Shareholder
Offer close
10 November 2021
Commencement of trading on the ASX and on the NZX Main Board, on a conditional and
deferred settlement basis
19 November 2021
Settlement date22 November 2021
Expected Completion (Shares issued or transferred to successful Applicants)23 November 2021
Expected dispatch of holding statements and allotment confirmation notices24 November 2021
Expected commencement of trading of Shares on the ASX and on the NZX Main Board,
on a normal settlement basis
By 25 November 2021
Dates may change
The dates above are indicative only and may change without notice. The Company and SaleCo, in consultation with
the Joint Lead Managers, reserve the right to vary the times and dates of the Offer.
Unless otherwise indicated, all times are Sydney time. The Company and SaleCo, in consultation with the Joint
Lead Managers, reserve the right to vary any and all of the above dates and times without notice (including, subject
to ASX Listing Rules and the Corporations Act, to close the Offer early, to extend the Closing Date, to accept late
Applications or bids, either generally or in particular cases, or to cancel or withdraw the Offer before settlement, in
each case without notifying any recipient of this Document or any Applicants). If the Offer is cancelled or withdrawn
before the allocation of Shares, then all Application Payments received will be refunded in full (without interest) as
soon as possible in accordance with the requirements of the Corporations Act.
Key Offer Statistics
1
Indicative Price Range
2
$2.75 – $3.15 per share
Total proceeds under the Offer (assuming the Over-allocation Option is not exercised)$1,001 – $1,093 million
Total proceeds under the Offer (assuming the Over-allocation Option is exercised in full) $1,097 – $1,202 million
Proceeds of the Offer raised by the issue of Shares in the Company
3
$394 – $397 million
Proceeds of the Offer paid to Existing Shareholders
(assuming the Over-allocation Option is not exercised)
$607 – $696 million
Proceeds of the Offer paid to Existing Shareholders
(assuming the Over-allocation Option is exercised in full)
$703 – $805 million

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Key Offer Statistics
1
Total number of Shares available under the Offer
(assuming no Over-allocation as referred to in Section 7.6)
3
346.9 – 364.1 million
Total number of Shares available under the Offer
(assuming maximum Over-allocation as referred to in Section 7.6)
3
381.6 – 398.7 million
Total number of New Shares to be issued under the Offer
3
126.0 – 143.2 million
Total number of Existing Shares to be sold under the Offer
(assuming no Over-allocation as referred to in Section 7.6)
220.9 million
Total number of Existing Shares to be sold under the Offer
(assuming maximum Over-allocation as referred to in Section 7.6)
255.6 million
Maximum number of shares that can be Over-allocated
4
34.7 million
Number of Shares to be held by Existing Shareholders at the end of the Stabilisation
Period (assuming the Over-allocation Option is not exercised)
377.5 million
Number of Shares to be held by Existing Shareholders at the end of the Stabilisation
Period (assuming the Over-allocation Option is exercised in full)
342.8 million
Total number of Shares on issue at Completion
3,5
761.6 – 778.8 million
Market capitalisation based on the total number of Shares on issue at Completion
3

and the Indicative Price Range
$2,142 – $2,399 million
Pro forma historical net debt as at 30 June 2021
6
$722 million
Enterprise value based on the Indicative Price Range
7
$2,864 – $3,121 million
Enterprise value/Pro Forma forecast CY2021 EBITA
8
12.5x – 13.6x
Enterprise value/Pro Forma forecast CY2022 EBITA
8
10.4x – 11.3x
Market capitalisation/Pro Forma forecast CY2021 NPATA
8
15.3x – 17.2x
Market capitalisation/Pro Forma forecast CY2022 NPATA
8
12.5x – 14.0x
Market capitalisation/Pro Forma forecast CY2021 NPAT17.4x – 19.4x
Market capitalisation/Pro Forma forecast CY2022 NPAT13.8x – 15.4x
Implied forecast dividend yield for CY2022
9
5.4% – 6.0%
4. Based on an Over-allocation Option size of approximately 10% of the base Offer size (that is, the Offer size prior to any exercise of the Over-allocation
Option). See Section 7.6 for further details.
5.
Includes 37.2
million EIP Shares, which will be reclassified as Shares by Completion as discussed in Section 6.3.4.1.
6. Pro forma historical net debt is the indebtedness of Ventia as of 30 June 2021 (plus lease liabilities, less estimated cash and cash equivalents), adjusted
for the repayment of the Existing Banking Facilities, anticipated drawings under the New Banking Facilities and receipt of the net proceeds of the Offer
upon Completion, as if these actions took place as at 30 June 2021 (refer Section 4.7.2 for further details).
7.
Enterprise value is calculated as the sum of the market capitalisation of Ventia (based on the total number of Shares on issue at Completion and the
Indicative Price Range) and pro forma historical net debt.
8.
Refer to Section 4.2.8 for an explanation of EBITA and NPATA. Refer to footnote 1 regarding Forecast Financial Information.
9. Calculated as the implied dividend per Share based on a 75% dividend payout ratio on forecast CY2022 NPATA divided by the Indicative Price Range.
The payment of a dividend by the Company is at the discretion of the Directors and will be a function of a number of factors the Directors may consider
relevant. No assurances can be given by any person, including the Directors, about the payment of any dividend or the level of franking on any such
dividend. For more details on the Company’s dividend policy, see Section 4.12.

AT A GLANCE
Ventia is a
leading essential
infrastructure
services provider
in Australia and
New Zealand.
Our purpose
is making
infrastructure
work for our
communities.
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Australia
•
85% of revenue
•
Over 13,000 employees
•
~350 sites
•
Provides services to 50% of
private motorways and tunnels
•
Provides services to over 70%
of defence sites
•
#1 telecommunications
infrastructure services provider
New Zealand
•
15% of revenue
•
Over 2,000 employees
•
~50 sites
•
Provides services to
over 90% of the electricity
transmission network
•
#1 telecommunications
infrastructure services
provider
$4.6bn
total revenue in
CY2020
~40%
of revenue from
regional and rural
areas
CY2020
$15.5bn
work in hand as at
31 July 2021
$62.0bn
total estimated
addressable market
in FY21F
Note, all Australia and New Zealand statements as at CY2020 with the exception of employee numbers (as at 30 June 2021), sites (as at 30 June 2021),
and telecommunications infrastructure services provider market position (based on Ventia’s actual LTM revenue to 30 June 2021).
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On behalf of the Board of Ventia, I am pleased to present you with the opportunity to become an investor in Ventia.
Ventia’s purpose is ‘making infrastructure work for our communities’ and our number-one brand promise is ‘safety and health
above all else’.
Ventia operates throughout Australia and New
Zealand and is one of the largest providers of Maintenance Services for critical
public and private infrastructure. We have a very strong management team, led by CEO Dean Banks. We believe the team
has the skills, experience and values to deliver profitable growth, by meeting our clients’ and the community’s needs and by
managing risk successfully. With highly relevant experience, in the same or similar industries, our Board of Directors are fully
equipped to support management in executing its strategy.
Ventia is the sum of its considerable and successful predecessor entities, namely: Broadspectrum, formerly Transfield
Services, Leighton Contractors Services and Thiess Services. Now integrated and operating under one primary brand, one
leadership team and a core systems and governance platform, Ventia is positioned for sustainable growth.
We deliver services to over 100 clients across Australia and New Zealand and approximately 40% of our work is in regional and
rural areas. With over 15,000 employees and access to a subcontractor workforce of over 20,000 people, we are a significant
employer and are very proud of our achievements in Indigenous employment and broader community engagement.
Ventia differentiates through a clear focus on providing Maintenance Services. We are not a construction company. We are
committed to being client-focused, innovative and sustainable in all that we do. These capabilities matter to us, our clients
and the communities we serve.
Ventia operates in a very large addressable market, over $60 billion p.a. and growing. We had work in hand of $15.5 billion
as at 31
July 2021, providing high visibility over revenue in future years. For the 12 months to 31 December 2021, pro forma
total revenue is forecast to be $4.5 billion and pro forma net profit after tax is forecast to be $123.4 million. For the 12 months
to 31 December 2022, pro forma total revenue is forecast to be $4.9 billion and pro forma net profit after tax is forecast to be
$155.5 million. Refer to Section 4 for further details in relation to these forecasts, including the underlying assumptions and
a discussion of the drivers of our historical and forecast financial performance, and Section 5 for details of risks affecting
Ventia’s business which may affect its ability to achieve these forecasts.
We have continued to provide services and support our clients during the ongoing COVID-19 pandemic. Ventia’s performance
through the COVID-19 pandemic highlights the resilience of our business and the importance of the services we provide.
We have historically generated, and are forecasting, strong free cash flow supporting our initial forecast dividend
yield of 5.4% – 6.0%
1
.
The purpose of this Offer is to raise new capital to repay debt, allow Existing Shareholders to realise part of their investment,
provide Ventia with access to capital markets and added financial flexibility to pursue further growth opportunities, and to
create a liquid market for Ventia’s shares.
Following the IPO, Ventia will have an investment grade financial profile, giving it the financial strength necessary to pursue
considerable growth opportunities.
Through the Offer, Ventia and SaleCo are seeking to raise $1.1 to $1.2 billion through the issue and sale of 382 to 399
million
2

shares, assuming the Final Price is set within the indicative range of $2.75 to $3.15 per share.
SaleCo is seeking proceeds of $0.7 to $0.8 billion through the sale of approximately 256 million shares in Ventia, currently
owned by the Existing Shareholders, Apollo and CIMIC, at the Final Price
2
.
Following Completion of the Offer, the Existing Shareholders will each hold 22.3% of the Shares on issue (or a total of 44.5%
of
such Shares)
2,3
.
This Prospectus contains detailed information about the Offer, Ventia’s business and the industry in which Ventia operates,
forecast and historical information, as well as key risks associated with an investment in the Company.
Please read this Prospectus carefully, and in its entirety, before deciding to invest in our Company.
On behalf of the Board of Directors, I look forward to welcoming you as a Ventia Shareholder.
Sincerely,
David Moffatt
Chairman
1. Calculated as the implied dividend per Share based on a 75% dividend payout ratio on forecast CY22 NPATA divided
by the Indicative Price Range. The payment of a dividend by the Company is at the discretion of the Directors and
will be a function of a number of factors the Directors may consider relevant. No assurances can be given by any
person, including the Directors, about the payment of any dividend or the level of franking on any such dividend.
For more details on the Company’s dividend policy, see Section 4.12.
2.

These figur
es assume the Over-allocation Option is exercised in full.
3.
These per
centages assume that the Final Price is set at the midpoint of the Indicative Price Range. As noted in
Section
7.1, the number of New Shares to be issued by the Company will be increased or decreased to ensure
materially constant issue proceeds are raised by the Company, and any such variations will have a slight effect on
these percentages.
CHAIRMAN’S LETTER

NSW/QLD border, Mungindi QLD
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INVESTMENT OVERVIEW
SECTION 1
1.
1
Sydney, NSW
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1.1. Introduction and overview of Ventia
QuestionAnswerSection
Who is Ventia?Ventia is a leading essential infrastructure services provider in Australia and New Zealand
and is structured across four Sectors:
•
Defence & Social Infrastructure (D&SI);
•
Infrastructure Services (IS);
•
Telecommunications; and
•
Transport.
Ventia has extensive capabilities across the full asset lifecycle including Operations
and Maintenance (O&M), Facilities Management (FM), Minor Capital Works (MCW),
Environmental Services (ES) and other solutions.
Ventia’s purpose is ‘making infrastructure work for our communities’ and its number-one
brand promise is ‘safety and health above all else’. Ventia’s strategy is to ‘Redefine Service
Excellence’, by being client-focused, innovative and sustainable.
3.1.1
What is Ventia’s
history?
Ventia’s legacy entities date back to the 1950s. Ventia as a corporate entity was formed in
2015 through the carve-out and integration of leading infrastructure services businesses
Leighton Contractors Services, Thiess Services and Visionstream by an investment
partnership between CIMIC Group Limited (CIMIC) (formerly Leighton Holdings) and funds
managed by affiliates of Apollo Global Management, Inc. (Apollo Global Management).
In June 2020, Ventia acquired Broadspectrum (previously known as Transfield Services) to
form one of the largest infrastructure services companies in Australia and New
Zealand.
3.1.3
Which
geographies does
Ventia operate
in?
Ventia operates in all states and territories of Australia and throughout New
Zealand. Ventia
operates across a broad geographic footprint with ~40% of its CY2020 revenue generated in
regional and rural areas. The diverse nature of Ventia’s operations is further evidenced by no
single state or territory contributing more than 29% of total revenue during CY2020.
During CY2020, Ventia generated 85% of its revenue from Australia and 15% of its revenue
from New
Zealand.
3.1.4
What are
Ventia’s service
capabilities?
Ventia provides a broad range of Maintenance Services and other solutions across its
four Sectors. Ventia’s service delivery capability is complemented by technology-enabled
solutions and technical expertise. Ventia does not provide Major Capital Construction works.
Ventia’s service capabilities cover:
•
Operations and Maintenance (O&M): Focuses on ensuring infrastructure assets function
efficiently, safely and cost-effectively throughout their lifecycle.
•
Soft Facilities Management (Soft FM): Focuses on the provision of services to help
ensure clients’ facilities operate efficiently and safely by maintaining the hygiene, security
and aesthetic quality of an asset.
•
Hard Facilities Management (Hard FM): Includes maintenance and upgrade services
of physical building elements such as structure and finishes as well as fixed plant and
equipment.
•
Environmental Services (ES): Relates to the remediation of contaminated land and
waterways to return them safely to clients or local communities.
•
Minor Capital Works (MCW): Relates to services provided to smaller value capital
projects and project management involving design, documentation, construction and
commissioning of new assets as well as renewal and refurbishment of existing assets.
•
Other solutions: Includes technology solutions, property and consulting.
3.1.5

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QuestionAnswerSection
What services
does Ventia
provide?
Ventia’s business is structured across four Sectors: D&SI, IS, Telecommunications and
Transport. Each Sector includes several Business Units.
•
Defence & Social Infrastructure (D&SI): Ventia’s D&SI Sector provides maintenance and
support services to clients operating across Defence, Social Infrastructure (Education,
Social Housing, Justice and Health), Local Government and Critical Infrastructure. Ventia
also provides property and consulting services to public and private clients.
•
Infrastructure Services (IS): Ventia’s IS Sector supports the ongoing maintenance of
infrastructure including utility infrastructure (including Water and Electricity & Gas) and
Resources & Industrial assets (including mine operation facilities, Oil & Gas processing
facilities, gas wells and industrial facilities). Ventia also provides complex and large-scale
environmental remediation services and leverages technologies aimed at enhancing
client productivity.
•
Telecommunications: Ventia’s Telecommunications Sector has an end-to-end service
capability that spans design, supply, minor construction, installation, commissioning and
maintenance of telecommunications networks and infrastructure.
•
Transport: Ventia’s Transport Sector provides maintenance, project delivery and
technology solutions to owners and operators of road, motorway, tunnel and rail
networks. The Sector aims to deliver long-term value to clients through proactive
engagement across operations and asset management in the delivery of services.
3.2
Who are Ventia’s
clients?
Ventia has long-term relationships with a diverse range of public and private sector clients.
In CY2020:
•
70% of Ventia’s revenue was generated from public sector clients and 30% from private
sector clients.
•
Ventia delivered services to 60+ public sector clients including government departments,
agencies and authorities at federal, state and local levels.
•
Ventia delivered services to 65+ private sector clients ranging from medium-sized
domestic organisations to large national and global corporates.
Ventia is focused on developing long-term relationships with its clients and has maintained
many client relationships for decades across all of its Sectors.
3.3.1
How many
employees does
Ventia have?
As at 30 June 2021, Ventia has over 15,000 employees.
The employee workforce is supplemented by access to over 20,000 subcontractors which
allows the business to adapt to changing work volume and demand levels.
3.6.1
What has been
the impact of
COVID-19 on
Ventia?
Ventia’s business has remained resilient during 2021 despite the continuing impact
of COVID-19 on the broader economies of Australia and New
Zealand. At the time of
publication, COVID-19 has impacted Ventia’s operations in a number of ways including:
•
delays in some existing projects and in the commencement of some projects;
•
reductions in the scope of work or deferrals in the expansion of services in respect of
some projects; and
•
localised temporary restrictions on Ventia’s ability to undertake certain work in Australia
and New Zealand; offset in part by
•
increased demand for cleaning services; and
•
increased revenue associated with greater government spending following government
stimulus measures introduced in response to COVID-19.
3.9 and
4.8.1.4

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QuestionAnswerSection
How has Ventia
responded to
COVID-19?
Ventia has implemented a comprehensive COVID-19 response to support its workforce and
the continuity of services to clients, including the following initiatives:
•
supporting worker welfare;
•
maintaining client services;
•
continuity of key functions;
•
communication and feedback;
•
risk mitigation; and
•
establishment of a Coronavirus Hub (a resource that operates 24/7 to support managers
in providing a timely and coordinated response to known COVID-19 cases).
3.9
Why is the Offer
being conducted?
The Offer is being conducted to:
•
reduce the Company’s existing debt levels;
•
provide Ventia with access to capital markets and added financial flexibility to pursue
further growth opportunities;
•
create a liquid market for Ventia’s Shares; and
•
allow Existing Shareholders to realise part of their investment in Ventia.
7.1.2
1. BIS Oxford Economics (2021). Refer to Section 2.1.2 for further detail.
1.2. Overview of the Maintenance Services Industry
QuestionAnswerSection
What is the
estimated
addressable
market size
and the growth
outlook?
Ventia’s total addressable market for Maintenance Services in FY21F is estimated to be
$62.0 billion and is expected to grow at a CAGR of 5.5% from FY21F to FY25F, reaching
$76.9
billion in FY25F
1
.
The addressable market for Maintenance Services covers the outsourced component of
a number of industry segments in Australia and New Zealand. An alignment of industry
segments to Ventia’s Sectors is provided below.
2.1.2

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QuestionAnswerSection
What industry
segments are
included in the
addressable
market?
Ventia operates in a number of industry segments across its four Sectors, all of which are
expected to grow from FY21F to FY25F
2
.
Ventia Sectors and industry segments
Estimated addressable
market size
(FY21F, $bn)
CAGR
(FY21F –
FY25F)
Defence & Social Infrastructure (D&SI)
Social infrastructure17.64.6%
Defence3.58.6%
Total D&SI
21.15.3%
Infrastructure Services (IS)
Electricity and Gas Transmission & Distribution7.66.5%
Water 4.76.3%
Resources & Industrial 4.04.1%
Oil & Gas2.810.4%
Electricity Generation2.17.5%
Environmental 1.05.7%
Total IS
22.26.6%
Telecommunications
Telecommunications
7.86.8%
Total Telecommunications
7.86.8%
Transport
Roads4.91.3%
Rail
0.74.3%
Total Transport
5.61.6%
New
Zealand
All
3
5.33.9%
Total New Zealand
5.33.9%
Total estimated addressable market
62.05.5%
2.1.2
2. BIS Oxford Economics (2021). Refer to Section 2.1.2 for further detail.
3. With the exception of Resources & Industrial, Oil & Gas and Rail.

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QuestionAnswerSection
What are the
key drivers of
demand for
Maintenance
Services?
Several drivers are expected to support demand for Maintenance Services in Australia and
New
Zealand:
•
Population growth: Contributes to increased utilisation of existing assets and the need
for additional investment in infrastructure.
•
Size and growth of asset base: An existing large and growing asset base supports higher
levels of Maintenance Services.
•
Outsourcing rates: Grow the extent of O&M services delivered by service providers,
separate to the size and growth of the underlying asset base.
•
Technology adoption and automation: Strengthens the proposition for asset owners to
engage a third party to deliver services given productivity efficiencies.
•
Environmental regulation: Drives greater requirement for specialised environmental
services due to changing environmental regulation and standards, the reclaim and reuse
of land and planned improvements to fuel quality.
2.1.3
Who are the
key market
participants?
The Maintenance Services market in Australia and New
Zealand is fragmented, with a diverse
range of service providers from domestic and international markets.
Key domestic competitors in Australia include Downer, Service Stream and Lendlease
Services
4
, all of which operate across a number of Ventia’s Sectors, however each with a
different mix of industry segments and services.
Key competitors in New Zealand include Downer, Fulton Hogan, Fletcher Building and VINCI.
International service providers, including Serco, Sodexo and ISS, also operate in some of
Ventia’s Sectors (particularly in D&SI) and a long tail of smaller niche service providers
operate in specific industry segments and geographies.
2.1.4
What has been
the impact of
COVID-19 on the
Maintenance
Services
industry?
Although the COVID-19 pandemic and related restrictions and border closures impacted
overall economic growth, the Maintenance Services market has only suffered some
temporary negative impacts in some end markets – particularly those more closely impacted
by restrictions on the movement of people, such as tertiary education and non-residential
building.
The emergence of the COVID-19 pandemic has also seen some positive trends, which have
supported Maintenance Services expenditure in a number of industry segments and have
largely offset any negative impacts noted above.
Some of this expenditure represents a pull forward of planned activity to provide more
immediate economic stimulus, or a temporary increase to meet heightened needs, and is
therefore expected to be unwound in coming years as the economy begins to recover from
the COVID-19 pandemic. However, BIS Oxford Economics expects that overall activity in the
Maintenance Services market will grow in FY22F and experience a 5.5% CAGR from FY21F to
FY25F, primarily due to the large asset base requiring Maintenance Services and the likelihood
that O&M and FM contracts will increasingly be integrated into larger packages (as an efficiency
and cost saving measure) and hence enter Ventia’s addressable market.
At the time of publication, COVID-19 related restrictions in New
Zealand and some eastern
states of Australia present near-term challenges for the Maintenance Services market
associated with the deferral of some works. BIS Oxford Economics expects that any deferred
activity during lockdowns will be recovered once restrictions ease.
While much of this recovery is anticipated to occur in FY22, unanticipated delays to the
easing of restrictions could see the recovery extend into FY23.
2.3
4. Service Stream announced on 21 July 2021 that it has entered into an agreement to acquire Lendlease Services.

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1.3. Key features of Ventia’s business model
5. Average renewal rate for the period 2016-2020. Calculated as the contract value of renewal opportunities won divided by the contract value of total
renewal opportunities tendered.
6.

Based on C
Y2020 revenue weighted average contract term at inception.
7.
F
rom CY2018 to CY2020.
QuestionAnswerSection
How does Ventia
generate its
revenue?
Ventia enters into client contracts with relatively long-term durations under various contract
profiles including Schedule of Rates, Fixed Price and Cost Reimbursable. Most of Ventia’s
revenue (80% in CY2020) is from contracts with Schedule of Rates profiles.
3.3.2.1
What is the
nature of
Ventia’s client
relationships
and contracts?
Ventia has long-term relationships with a diverse range of public and private sector clients.
The quality of client relationships and the account management approach is evidenced
through Ventia’s historical performance:
•
Experienced an average contract renewal rate of >80% since 2016
5
.
•
Multiple contracts for individual clients, showcasing the diversity of services provided.
In CY2020 Ventia delivered services to its top five clients across 31 separate contracts.
•
The average contract term at inception is over five years
6
. Including extension options,
the average contract term at inception increases to over seven years.
Contracts with over $50 million of work in hand represent 91% of the total work in hand
balance as at 31 July 2021. Of these contracts, 94% contain some form of embedded price
escalation mechanism or relate to panel arrangements where specific projects are short-
term and individually priced taking into account the prevailing market conditions at the
time of the tender. Ventia believes that these pricing mechanisms provide it with a degree of
margin protection against escalating costs such as labour.
3.3
What is Ventia’s
work in hand
and what is
the typical
percentage of
forward revenue
secured?
Ventia has $15.5 billion of work in hand as at 31 July 2021.
The stability of Ventia’s revenue profile is supported by relatively high visibility over future
revenue with ~70-80% of Ventia’s next 12 months revenue historically supported by work
in
hand
7
.
3.3.2.3
What is Ventia’s
operating
model?
Ventia has an enterprise-wide operating model, including a core technology platform and
business management systems and processes which aim to deliver a number of favourable
outcomes across risk management, profitable growth, efficiency and consistency in
operational delivery.
Ventia views its enterprise-wide operating model as a key source of competitive advantage
which generates economies of scale and supports earnings.
Ventia’s tender risk management process helps to ensure it strategically targets the right
opportunities and ensures the work winning process is comprehensively managed.
New
business is evaluated through an enterprise risk management framework before a
contract is signed and new works commence.
Responding to tender opportunities requires a five-stage internal approval process, which
(depending on the size and type of opportunity) may start ~18 months prior to submission
of
the tender.
3.5
What was the
rationale for the
acquisition of
Broadspectrum?
Ventia’s acquisition of Broadspectrum brought together two infrastructure services
businesses with complementary capabilities and clients across Australia and New
Zealand.
With the major integration activities substantially complete, Ventia has demonstrated
significant benefits from the integration including operational efficiencies, strengthened
regional presence in key geographies and broader capabilities that have supported
contract
wins.
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1.4. Financials and dividend policy
QuestionAnswerSection
What is Ventia’s
historical and
forecast financial
information?
The following table contains Ventia’s Pro Forma Financial Information. While it does not
represent the statutory results, Ventia believes it provides useful information as it permits
investors to examine what it considers to be the underlying financial performance of the
business.
Pro Forma HistoricalPro Forma Forecast
$ millionsCY2018CY2019CY2020CY2021FCY2022F
Total revenue4,754.54,803.84,591.94,501.74,942.6
EBITDA354.1351.5354.5365.8408.6
EBITA172.8175.0201.0229.9276.2
NPAT78.682.0106.0123.4155.5
NPATA
100.0101.5119.5139.8171.8
4.3
How does
Ventia fund its
operations?
Ventia’s principal sources of funds are cash generated from operations, cash on hand and
committed facilities under the New Banking Facilities.
Ventia expects to have a $400.0 million revolving cash facility which is expected to be
undrawn at Completion of the Offer and pro forma cash on hand of $153.2 million as at
30
June 2021.
Ventia is forecast to continue to generate strong cash flows, with pro forma forecast
operating cash flow of $309.7 million in CY2021F and $373.7 million in CY2022F, representing
operating cash flow conversion of 84.7% and 91.4% respectively.
4.5 to 4.7
What is Ventia’s
dividend policy?
The Directors intend to pay out between 60% and 80% of Ventia’s pro forma NPATA as a
dividend. For the period from Completion to 31 December 2022, Ventia expects to pay
dividends equivalent to approximately 75% of pro forma NPATA.
The level of payout ratio is expected to vary between periods depending on factors the
Directors may consider, including the general business environment, the operating
results and financial condition of Ventia, future funding requirements, capital
management
initiatives, tax considerations (including the level of franking credits available),
any contractual, legal or regulatory restrictions on the payment of dividends by Ventia, and
any other factors the Directors may consider relevant.
4.12
What will be the
first dividend
and when will it
be
paid?
The first dividend will be for the period from Completion to 31 December 2021, which will be
payable in or around April 2022.
4.12
1.5. Key strengths
TopicSummarySection
Attractive
industry outlook
Ventia operates in a large and growing market supported by a number of favourable demand
drivers including population growth, size and growth of the asset base, increasing outsourcing
rates, technology adoption and automation and environmental regulations.
BIS Oxford Economics estimates the addressable outsourced Maintenance Services market
across Australia and New
Zealand to be $62.0 billion in FY21F and projects it to grow at a
CAGR of 5.5% to reach $76.9 billion in FY25F.
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TopicSummarySection
Dedicated focus
on Maintenance
Services with
broad
service
offering
Ventia only delivers Maintenance Services and does not provide Major Capital Construction
works.
The depth of expertise and focus on Maintenance Services differentiates Ventia’s service
offering and supports its value proposition to clients.
Ventia can offer clients a wide range of services and can add incremental services to existing
contracts or client relationships. It is often not practical for clients to develop specialised
Maintenance Services capabilities in-house which enhances the appeal to clients of
outsourcing services to Ventia.
3.1.6
Scale and
national
platform
Ventia has a number of market-leading positions in each of its Sectors. The Company’s
presence across urban, regional and rural communities throughout Australia and
New
Zealand enables it to deliver essential infrastructure services across geographically
diverse contracts. Supported by its scalable workforce model, Ventia believes it has more
flexibility to respond to clients’ needs and achieve economies of scale driving value for both
Ventia and its clients. Ventia’s ability to offer services across multiple regions in an integrated
manner also simplifies the execution of services for clients with large geographic footprints.
2.1.4.2 and
3.1.6
Enterprise-
wide, scalable
operating model
Ventia’s established and robust core enterprise platform drives consistency and operating
efficiencies for the benefit of clients and their customers. The scalable operating model
allows Ventia to harness best practices across the Company in areas such as operations,
safety, compliance and risk management.
3.1.6 and
3.5.1
Brand and
reputation
Ventia believes that its track record of delivering essential infrastructure services
and large-scale contracts positions it for projects of state and national significance.
Through
developing strategic relationships and a focus on safety, Ventia has built trust
to deliver highly sensitive and complex projects across its Sectors.
The quality of Ventia’s services has been recognised through several industry awards.
3.1.6
Long-term
relationships
and track record
of renewals
Ventia has developed long-term and trusted relationships with a diverse client base, with
numerous examples of relationships that have been sustained for decades. Clients often use
Ventia repeatedly and for a range of projects, demonstrating the strength of Ventia’s
offering.
3.1.6
Highly qualified
workforce
supported by
experienced
management
team and Board
With access to a workforce of over 35,000 employees and subcontractors, Ventia can
leverage a deep pool of highly qualified talent across Australia and New Zealand.
The
subcontractor base allows for flexible staffing, enables Ventia to scale the workforce
up
and down on short notice and provides wide geographical coverage.
The workforce is supported by a highly experienced senior management team, led by
CEO Dean Banks.
Ventia’s Board is comprised of four Independent Non-Executive Directors and four
Non
-Executive Directors with a broad and diverse range of experiences. It is chaired by
David Moffatt, who has been Chairman of Ventia since its formation in 2015.
3.1.6, 6.1
and 6.2
Diversified and
predictable
earnings with
high degree of
forward visibility
Ventia’s track record of financial performance has been underpinned by resilient revenue
and stable margins.
The stability of Ventia’s revenue profile has historically been supported by relatively high
visibility over future revenue, which is represented by work in hand. Between CY2018 and
CY2020, ~70-80% of Ventia’s next 12 months revenue was supported by work in hand.
As at July 2021, Ventia has $15.5 billion of work in hand, which is expected to cover over
~98% of the total revenue for CY2021F and ~80% of the total revenue for CY2022F.
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TopicSummarySection
High cash flow
conversion
Ventia has historically generated operating cash flow conversion of between 80% and 90% of
EBITDA between CY2018 and CY2020, which is forecast to increase to over 90% in CY2022F.
In addition, Ventia has a capital-light business model with capital expenditure typically less
than 1% of total revenue.
4.5 and 4.6
Attractive growth
opportunities
Ventia’s ability to service its clients across a diverse range of essential infrastructure has
underpinned its historical performance. In addition to pursuing opportunities within its
existing markets from both new and existing clients, Ventia believes its national scale across
Australia and New
Zealand, established client relationships and breadth of capabilities
present it with a range of options to strategically expand into market adjacencies.
Ventia targets growth opportunities across three main categories:
•
Market growth
–
The Maintenance Services market is projected to grow at a 5.5% CAGR from FY21F
to FY25F with all industry segments expected to grow. The market is expected
to benefit from various underlying tailwinds and the Company believes it is well
positioned to benefit.
•
Capturing market share
–
Ventia has a history of selectively pursuing and successfully bidding for new work,
leveraging its deep client relationships, industry capabilities, scale and operating
platform. Ventia has also secured significant contract wins to date in CY2021.
–
Ventia also seeks opportunities within existing contracts to expand the scope of
services offered and to deliver additional works. This is often driven by client demand
for services to be bundled in order to maximise efficiencies, reduce costs and enhance
service outcomes.
–
As an integrated end-to-end essential infrastructure services provider, Ventia has
identified significant opportunities to cross-sell its service capabilities across its
existing client base. This may be achieved via the bundling of services such as O&M
and FM on an existing contract or seeking to expand the services delivered to other
client sites.
•
Expansion into adjacencies
–
Ventia continually monitors potential adjacency opportunities across new
geographies, service capabilities and industry segments. Ventia has a strong
track record of expanding into new market adjacencies, both organically and via
acquisitions or strategic partnerships.
3.4
1.6. Key risks
TopicSummarySection
Ventia may fail
to renew existing
contracts or win
new contracts
Ventia’s ability to renew contracts with existing clients and win new contracts is fundamental
to its business, growth and profitability. Ventia has existing contracts at various stages,
including contracts that have either expired or are due to expire in the next 12 months.
Ventia faces competition in all the industry segments in which it operates. Contract renewals
and new contracts, including contracts entered into with an existing client where a previous
contract has expired, are usually subject to a competitive process. There is a risk that Ventia
may not win these contracts for any of a number of reasons.
Failure to successfully renew existing contracts (including a number of long-term contracts
with key government clients) or to win new contracts could negatively impact Ventia’s
financial performance, including, in the case of a failure to retain an existing client, leaving
Ventia with excess capacity or excess labour or redundancy costs, and adversely impacting
its ability to grow its operations by reducing its profitability.
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TopicSummarySection
Panels and
tender processes
Ventia has been appointed to a number of client panels, which may enable Ventia to
participate in certain tender processes that it would otherwise not be able to participate in; but
this does not guarantee that Ventia will be awarded contracts from the panel appointments.
The appointment to these panels is for a fixed period (for example, three or five years) and
Ventia is generally one of a number of service providers appointed to each panel.
If Ventia is unable to secure its position on a panel which it currently sits on, is unable to
secure work under that panel arrangement or is unable to secure future panel positions, this
may adversely impact Ventia’s financial performance and growth prospects.
5.2.2
Commencement
of Ventia’s new
contracts may be
delayed
Where Ventia wins a new contract, commencement of the contract can be delayed past
the expected commencement date. Ventia is also a party to a number of contracts where
Ventia’s ability to perform its obligations and commence earning revenue is dependent on
third parties performing their own contractual arrangements in a timely manner.
Ventia may not have any contractual protection against such delays. Any delay in the
commencement of a contract or any issues which may result in an impact on mobilisation may
result in a delay in Ventia receiving revenue or may cause Ventia to incur additional costs, and
therefore could have an adverse impact on Ventia’s operations and financial performance,
including its ability to achieve management’s forecasts for the business.
5.2.3
Some contract
counterparties
may have the
right to terminate
their contracts
or may seek
to renegotiate
during the
contract term
Ventia is a party to a number of contracts and agreements with a broad range of clients,
as well as with service providers, technology providers and lessors. Ventia’s ability to
operate its business depends on such contracts. In particular, Ventia’s client contracts are
fundamental to Ventia’s business, growth and profitability. There is a risk that Ventia’s
existing contracts, including client contracts, may be terminated, impaired, reduced in scope
through a variation, or renegotiated on less favourable terms.
Termination of Ventia’s services by a client before the end of a contract’s term will reduce
Ventia’s future revenue and, in some situations, may leave Ventia with excess capacity or
excess labour or redundancy costs. Upon termination, Ventia may not receive adequate
compensation, or any compensation, for such losses and costs, which could adversely affect
Ventia’s financial performance and financial position.
From time to time, contract counterparties may seek to renegotiate existing contracts for
various reasons during the term of the contract. To the extent such contract counterparties
have a right to terminate a contract, they may seek to use this right as leverage in the
renegotiation process, and may seek terms that are potentially less favourable to Ventia.
Although the frequency of client contract renegotiations has historically been low,
the frequency of client contract renegotiations may increase in the future. If contract
renegotiations lead to the parties entering into new contracts on terms less favourable to
Ventia, or if the parties fail to reach an agreement and the client terminates the existing
contract, Ventia’s financial performance could be adversely impacted.
5.2.4
Claims for
abatements,
damages or
indemnities
may arise in
connection with
Ventia’s service
delivery under
client contracts
Ventia is subject to on-going obligations and various levels of liability if it does not meet its
obligations under its client contracts. Some of Ventia’s client contracts contain abatement,
damages and indemnification provisions that (although not uncommon in the industry
in which Ventia operates) can be complex to manage and may disadvantage Ventia in
some
circumstances.
In such cases, Ventia may be subject to claims for abatements, liquidated damages or
liability under indemnity provisions, or Ventia’s invoices may otherwise not be paid.
Furthermore, these types of liabilities (unlike other liabilities such as public injury liability
or liability for third party property damage) are not typically insurable. In the event
that such claims are not insured or insurable, Ventia’s financial performance could be
adversely
impacted.
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TopicSummarySection
Ventia may fail
to properly
understand client
requirements,
drivers of client
demand or cost
inputs
A large number of Ventia’s contracts are large, complex multi-year contracts. In some
circumstances, there is a risk that Ventia may enter into contracts where the agreed revenue
is insufficient to cover Ventia’s costs of delivering the services or to provide adequate profit
margins. The risk of such failures occurring may increase as Ventia seeks to enter into new
adjacent markets, or to expand its product offering into adjacent services in which it has less
experience and less industry knowledge.
Any failure on the part of Ventia or its clients to properly understand client requirements,
drivers of demand or cost inputs may adversely impact Ventia’s operating and financial
performance and financial position.
5.2.6
Ventia’s existing
and target clients
may choose to
change from
outsourcing to
in-sourcing of
services
Ventia’s financial performance and anticipated growth depends on its clients continuing
to outsource services. In addition, Ventia’s anticipated future growth depends in part on
additional services being outsourced in the future.
A significant portion of Ventia’s existing business consists of providing services to a diverse
range of government departments and bodies at national, state and local levels in Australia
and New
Zealand. Outsourcing decisions by government departments and bodies may
be driven by political and public policy considerations and preferences, as well as budget
considerations and the priorities and agendas of political parties or other stakeholders. These
are subject to change, including as a result of changes in government.
A decline in outsourcing or adverse outsourcing decisions by Ventia’s clients, including by
government departments and bodies, may adversely affect Ventia’s future revenue and
profitability and its prospects for growth.
5.2.7
Joint venture
risk
Certain subsidiaries of Ventia have entered into unincorporated joint ventures or are
shareholders in incorporated joint ventures on certain projects. Whilst Ventia ordinarily
shares control of joint ventures through equal participating interests or shareholdings, it does
not ordinarily have the means to exert overall control of its joint ventures. At times, major
decisions are required to be made in respect of these joint ventures, which may impact the
manner of the delivery of the services for that project or the financial outcome for the joint
venture. Ventia may also be reliant upon its joint venture partner providing specific resources
or expertise to deliver the joint venture obligations. Ventia’s interests may not always be the
same as those of its joint venture partners in relation to these matters and conflicts can have
adverse time and cost implications. Ventia’s joint venture partners may not deliver on their
obligations, which may cause financial and reputational impacts to
Ventia.
The contractual terms governing Ventia’s joint venture arrangements may give joint venture
partners rights that are adverse to the interests of Ventia in certain circumstances (for
example where Ventia breaches a term of the arrangement or as a result of other events
following the Offer), including buy-out rights, and may give rise to disputes between the
joint venture partners. If the joint venture is incorporated, the directors of the joint venture
are required to act in the best interests of the joint venture company, which may not align
with the best interests of Ventia.
While the majority of Ventia’s joint venture partners are large corporate entities, there is
the risk that such partners may default on their obligations or otherwise act in a manner
which adversely affects Ventia. Any default by a joint venture party could result in Ventia
ultimately
being jointly or severally liable for the obligations of the joint venture (or the joint
venture partner).
5.2.8
Ventia’s
performance
is linked to its
ability to attract
and retain key
management and
skilled labour
Ventia’s performance is dependent on the ability of its senior executives and other key
personnel to manage and grow its business and respond to clients’ needs. Continuity and
retention of senior executives and other key personnel is important for client retention and
ongoing client negotiations.
The loss of the services of Ventia’s senior executives or other key personnel, or an inability to
attract and retain qualified and competent senior executives or other key personnel, could
have an adverse effect on Ventia’s operating and financial performance.
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TopicSummarySection
Managing a large
and complex
workforce
Ventia manages a large and complex workforce consisting of more than ~15,000 full-time,
part-time and casual employees and a subcontractor workforce of 20,000 as at 30 June 2021.
Ventia’s service quality is dependent on Ventia’s ability to attract, develop, motivate and
retain appropriately skilled personnel in these categories and on Ventia’s ability to provide a
sufficient level of training and oversight in order to achieve consistent standards.
If Ventia does not manage its workforce effectively, this may affect Ventia’s reputation as an
employer; and as a consequence, it may not be able to attract and retain personnel or may
not be able to find suitable replacements in a timely manner. This could have an adverse
effect on Ventia’s business and financial performance.
5.2.10
Pandemic and
other public
health risks
(COVID-19)
Notwithstanding that Ventia’s business remained resilient during 2021, COVID-19 and the
related restrictions and border closures are impacting a number of industry segments within
the Maintenance Services market. There is a risk that the continuing impact of COVID-19
on the broader economy, government/public health orders, directions and alert levels
restricting people movement, mandating vaccination and limiting business operations in a
number of Ventia’s addressable markets, could have a business impact on Ventia. Although
the effects of COVID-19 have in part been offset by increased demand in some industry
segments, it is not currently possible to fully predict the impact and potential adverse effects
that the ongoing COVID-19 pandemic could have on Ventia’s business in the future. The
ongoing outbreaks and spread of COVID-19 and any other possible future variants of the
disease may have a significant adverse impact on Ventia’s activities.
There is continuing uncertainty as to the extent, duration and final effects of the COVID-19
pandemic or other possible disease outbreaks, including in relation to the government
response, work stoppages, government restrictions, quarantines, border closures (including
effects on worker migration), travel restrictions, unemployment, federal or state funded
worker allowances, the extent and timing of stimulus initiatives, mandating of vaccinations
and the effect such factors may have on Ventia, the Australian, New
Zealand and global
economies, and share markets.
5.2.20
Other risksA number of other risks relating specifically to an investment in Ventia are set out in
Section 5 including:
•
industrial relations and employee risks;
•
contractual and general litigation risk;
•
Ventia may fail to meet its workplace health and safety obligations;
•
PPP defects and handover risk;
•
brand and reputation;
•
reliance on subcontractors and suppliers; and
•
other specific and general investment risk factors, including misconduct, risk of
non-compliance or change in regulation, cyber security, data protection risks and
performance of third party technology providers, inability to secure adequate insurance,
third party injury or commercial operations interruption, impact of natural events and
climate change, capital and maintenance expenditure, disposals, acquisitions and
investments by Ventia may not be successful, business operating risks, contingent
liabilities, financing issues, general economic conditions, accounting and taxation
changes and force majeure events.
5

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1.7. Key Offer Statistics
QuestionAnswerSection
What are the key
Offer statistics?
Key Offer Statistics
Indicative Price Range $2.75 – $3.15 per share
Total proceeds under the Offer
(assuming the Over-allocation Option is not exercised)
$1,001 – $1,093 million
Total proceeds under the Offer
(assuming the Over-allocation Option is exercised in full)
$1,097 – $1,202 million
Proceeds of the Offer raised by the issue of Shares in the Company$394 – $397 million
Proceeds of the Offer paid to Existing Shareholders
(assuming the Over-allocation Option is not exercised)
$607 – $696 million
Proceeds of the Offer paid to Existing Shareholders
(assuming the Over-allocation Option is exercised in full)
$703 – $805 million
Total number of Shares available under the Offer
(assuming no Over-allocation as referred to in Section 7.6)
346.9 – 364.1 million
Total number of Shares available under the Offer
(assuming maximum Over-allocation as referred to in Section 7.6)
381.6 – 398.7 million
Total number of New Shares to be issued under the Offer126.0 – 143.2 million
Total number of Existing Shares to be sold under the Offer
(assuming no Over-allocation as referred to in Section 7.6)
220.9 million
Total number of Existing Shares to be sold under the Offer
(assuming maximum Over-allocation as referred to in Section 7.6)
255.6 million
Maximum number of shares that can be Over-allocated34.7 million
Number of Shares to be held by Existing Shareholders at the end
of the Stabilisation Period (assuming the Over-allocation Option is
not exercised)
377.5 million
Number of Shares to be held by Existing Shareholders at the end
of the Stabilisation Period (assuming the Over-allocation Option
is
exercised in full)
342.8 million
Total number of Shares on issue at Completion761.6 – 778.8 million
Market capitalisation based on the total number of Shares on
issue at Completion and the Indicative Price Range
$2,142 – $2,399 million
Pro forma historical net debt as at 30 June 2021$722 million
Enterprise value based on the Indicative Price Range$2,864 – $3,121 million
Enterprise value/Pro Forma forecast CY2021 EBITA12.5x – 13.6x
Enterprise value/Pro Forma forecast CY2022 EBITA10.4x – 11.3x
Market capitalisation/Pro Forma forecast CY2021 NPATA15.3x – 17.2x
Market capitalisation/Pro Forma forecast CY2022 NPATA12.5x – 14.0x
Market capitalisation/Pro Forma forecast CY2021 NPAT17.4x – 19.4x
Market capitalisation/Pro Forma forecast CY2022 NPAT13.8x – 15.4x
Implied forecast dividend yield for CY20225.4% – 6.0%
Key Offer
Statistics
on pages 6
to 7
For detailed footnotes on the above, refer to notes in Key Offer Statistics on pages 6 and 7.

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1.8. Directors and senior management
QuestionAnswerSection
Who are the
Directors of
Ventia?
•
David Moffatt (Chairman, Non-Executive Director)
•
Jeff Forbes (Lead Independent Non-Executive Director, Chair of the Nomination Committee)
•
Lynne Saint (Independent Non-Executive Director and Chair of the Audit and
Risk Committee)
•
Sibylle Krieger (Independent Non-Executive Director and Chair of the People and
Remuneration Committee)
•
Anne Urlwin (Independent Non-Executive Director and Chair of the Safety and
Sustainability Committee)
•
Kevin Crowe (Non-Executive Director, Chair of the Work Winning and Tender Committee)
•
Robert Cotterill (Non-Executive Director)
•
Ignacio Segura (Non-Executive Director)
6.1
Who are Ventia’s
executive
leadership team?
•
Dean Banks (Group Chief Executive Officer)
•
Stuart Hooper (Chief Financial Officer)
•
Jonathan Dockney (Group General Counsel)
•
Karen O’Driscoll (Group Executive – Digital Services)
•
Christian Frost (Group Executive – Safety, Health, Environment and Quality)
•
Mark Ralston (Group Executive – Strategy and Corporate Affairs)
•
Charmaine Higgins (Interim Group Executive – People and Capability)
•
Derek Osborn (Group Executive – Defence & Social Infrastructure)
•
Peter Borden (Group Executive – Transport)
•
Richard Kelleway (Group Executive – Infrastructure Services)
•
Tim Harwood (Group Executive – Telecommunications)
6.2
1.9. Significant interests of key people and related party transactions
QuestionAnswerSection
Who are
the Existing
Shareholders and
what will their
interest in Ventia
be following
Completion of
the Offer?
•
The following table represents the Existing Shareholders’ interests in Shares on
Completion, assuming the Final Price is set at the midpoint of the Indicative Price Range
and the Over-allocation Option is exercised in full:
Existing Shareholders interest in Ventia on Completion
CIMIC22.3%
Apollo
22.3%
Total interest
44.5%
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QuestionAnswerSection
Will any Shares
be subject to
restrictions
on disposal
following
Completion of
the Offer?
Each Escrowed Shareholder has entered into a voluntary escrow deed in respect of all the
Shares they will hold on Completion of the Offer
8
, which prevents them from dealing in their
Escrowed Shares for an agreed period.
Under the terms of the voluntary escrow arrangements with the Escrowed Shareholders,
subject to certain customary exceptions, the Escrowed Shares held by the Escrowed
Shareholders will be subject to escrow until 4.15pm on the date on which the Company
releases its financial results for the period ending 31 December 2022.
In addition,13,720,431 Shares held by current employees and issued under Ventia’s legacy
incentive plans may not be sold or otherwise dealt with by those employees until released
from disposal restrictions as further described in Section 6.3.4.
6.3.3,
6.3.4.1 and
9.8.2
What significant
benefits and
interests are
payable to
Directors and
other persons
connected with
Ventia or the
Offer and what
significant
interests do
they
hold?
•
The following table represents the Directors’ respective interests in Shares on
Completion, assuming the Final Price is set at the midpoint of the Indicative Price Range:
Directors’ respective interest in Ventia on Completion
David Moffatt
1.3%
Total Directors’ interest
1.3%
•
Certain Company executives and other members of management are eligible to
participate in the Company’s STI Plan and LTI Plan and the Ventia Incentive Plan, as
disclosed in Section 6.3.3.
•
Directors and management are entitled to remuneration, fees and other payments as set
out in Section 6.3.
•
Professional advisers to the Offer are entitled to the fees set out in Section 6.3.1.
•
The Joint Lead Managers are entitled to fees as set out in Section 6.3.1.
•
The Company has entered into commercial agreements with Apollo and CIMIC, as
disclosed in Section 9.8.
6.3 and 9.8
8. Excluding any Shares acquired for cash in the Offer.
9.
See Sec
tion 7.1 for further details.
10.
In addition, a further 4.9% will be held b
y certain other persons who are minority shareholders as at the date of this Prospectus. These persons are
executives or former executives of Ventia and Ventia Services Group EIP Pty Ltd as trustee for participants under EIP 1 and EIP 2.
11.
See Section 7.1 for further details. Assumes the Over-allocation Option is exercised in full.
1.10. Details of the Offer
QuestionAnswerSection
Who is the
issuer of this
Prospectus?
•
This Prospectus is issued by Ventia Services Group Limited (ABN 53 603 253 541) (Ventia)
and Ventia SaleCo Limited (ACN 654 078 878) (SaleCo).
7.1
What is the
Offer?
•
The Offer is an initial public offering of 126 to 143 million Shares for issue by the Company
and 221 million Shares for sale by SaleCo, assuming the Over-allocation Option is not
exercised (or 256 million Shares assuming the Over-allocation Option is exercised in full)
9
.
•
Following the end of the Stabilisation Period for the Offer and assuming the Over-
allocation Option is exercised in full, the Existing Shareholders will hold a maximum of
45.0% of the Shares on issue
10
. Depending on the proportion of Shares retained by the
Existing Shareholders, the Shares offered under this Prospectus will represent ~50.1% to
51.2% of the Shares on issue following the Offer
11
.
•
All Shares will be issued at the Final Price.
7.1

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QuestionAnswerSection
What is SaleCo?
•
SaleCo is a special purpose vehicle established to enable Selling Shareholders to sell part
or all of their investment in Ventia on Completion.
9.3
What are Market
Stabilisation
Activities?
•
The Stabilisation Manager may determine to facilitate Market Stabilisation Activities post-
Listing as outlined in Section 7.6.
•
At any time during the 30-day period following Listing, the Stabilisation Manager may
engage in Market Stabilisation Activities on the ASX by bidding for or purchasing Shares
on-market (Market Stabilisation Activities). No Market Stabilisation Activities will
occur on the NZX Main Board. During the 30-day period following Listing when Market
Stabilisation Activities may occur on the ASX, trading on the NZX Main Board in respect of
the Shares will commence at the same time as the open of trading of the Shares on the
ASX.
•
The purpose of any Market Stabilisation Activities would be to adjust the available supply
of Shares if a decline in market price below the Final Price were to indicate excess supply.
The Stabilisation Manager’s purchase of Shares may have the effect of stabilising the
trading price for Shares on the ASX in circumstances where the trading price is at or below
the Final Price. The Stabilisation Manager may also offer to resell (on-market) some or
all of the Shares purchased pursuant to Market Stabilisation Activities. The resale of
Shares may also affect the trading price for Shares on the ASX (by increasing supply and
therefore restraining a rise in price).
7.6
What would
be the impact
of any Market
Stabilisation
Activities on the
Shareholding
of the Existing
Shareholders?
Prior to the
Offer
After Completion of the Offer
and after the Stabilisation
Period
Percentage
Shareholding
Shares held
(million)
Percentage
Shareholding
If there are no Market Stabilisation Activities
12

Existing Shareholders94.1% 342.8 44.5%
EIP shareholders5.9% 37.2 4.8%
New Shareholders
0.0%389.6 50.6%
If there are Market Stabilisation Activities to the maximum extent permitted
12

Existing Shareholders94.1% 377.5 49.0%
EIP shareholders5.9% 37.2 4.8%
New Shareholders
0.0%354.9 46.1%
7.1.4
What is the
proposed use
of funds raised
pursuant to the
Offer?
•
The Offer is being conducted to raise new capital to repay debt, allow Existing
Shareholders to realise part of their investment, provide Ventia with access to capital
markets and added financial flexibility to pursue further growth opportunities and to
create a liquid market for Ventia’s shares and to pay the costs of the Offer.
7.1.2
12. See Section 7.6 for further details. Assumes the Final Price is set at the midpoint of the Indicative Price Range.

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QuestionAnswerSection
Will the Shares
be quoted on the
ASX?
•
Yes. On or about the date of this Prospectus, the Company will apply to the ASX for
admission to the Official List of the ASX and quotation of Shares on the ASX under the
code ‘VNT’.
•
Completion of the Offer is conditional on the ASX approving this application. If approval
is not given within three months after such application is made (or any longer period
permitted by law), the Offer will be withdrawn and all Application Payments received will
be refunded without interest as soon as practicable in accordance with the requirements
of the Corporations Act.
7.9
Will the Shares
also be quoted on
the NZX?
•
Yes. Ventia will apply for listing with the NZX as a foreign exempt issuer and for quotation
of the Shares on the NZX Main Board.
•
Completion of the Offer is conditional on NZX approving this application. If approval is
not given within three months after such application is made (or any later date permitted
by law), the Offer will be withdrawn and all Application Payments received will be
refunded without interest as soon as practicable in accordance with the requirements of
the Corporations Act.
7.9
How is the Offer
structured?
•
The Offer will comprise:
–
the Broker Firm Offer;
–
the Employee Offer;
–
the Priority Offer;
–
the CIMIC Group Limited Shareholder Offer; and
–
the Institutional Offer.
•
No general public offer of Shares will be made under the Offer.
7.1.1
Will the Offer be
extended into
New
Zealand?
•
Yes. All Shares offered to investors in New Zealand under the Offer are being offered
under the Mutual Recognition Regime.
•
No offer of Shares is being made to investors in New Zealand until such time as the
relevant notice and accompanying documents required to be lodged under the Mutual
Recognition Regime have been lodged.
•
Investors in New Zealand should refer to the section ‘Important Notice to New Zealand
investors’ on page 3 of this Prospectus.
•
Shares will be allocated to the NZX Main Board and held on the New Zealand share
register if payment under the Retail Offer has been made in New Zealand dollars.
Sections
7.9.4 and
7.9.5 and
‘Important
Notice
to New
Zealand
investors’
on page 3
Is the Offer
underwritten?
•
No. The Offer is not underwritten.7.2
What is the
allocation policy?
•
The allocation of Shares between the Broker Firm Offer, Employee Offer, Priority Offer,
CIMIC Group Limited Shareholder Offer and Institutional Offer will be determined by the
Company in agreement with the Joint Lead Managers.
•
The allocation of Shares to participants under the Institutional Offer will be determined
by the Company in agreement with the Joint Lead Managers.
•
For Broker Firm Offer participants, the relevant Broker will decide how it allocates Shares
among its retail clients, and it (and not the Company or the Joint Lead Managers) will be
responsible for ensuring that retail clients who have received an allocation from their
Broker receive the relevant Shares.
•
The Company will determine the allocation of Shares to participants in the Employee
Offer and Priority Offer in its absolute discretion.
•
The allocation of Shares to participants under the CIMIC Group Limited Shareholder Offer
will be determined by the Company and SaleCo.
7.3 and 7.4

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QuestionAnswerSection
Is there any
brokerage,
commission
or stamp duty
payable by
Applicants?
•
No brokerage, commission or stamp duty is payable by Applicants on the acquisition of
Shares under the Offer.
7.2 and 9.6
What are the
tax implications
of investing in
Shares?
•
A summary of certain Australian and New Zealand tax consequences of participating in
the Offer and investing in Shares is set out in Sections 9.11 and 9.12.
•
The tax consequences of any investment in Shares will depend upon an investor’s
particular circumstances.
•
Applicants should obtain their own tax advice prior to deciding whether to invest
in Shares.
7.2, 9.11
and 9.12
When will
I receive
confirmation that
my Application
has been
successful?
•
Confirmations of successful Applications in the form of holding statements and allotment
confirmation notices are expected to be mailed on or around 24 November 2021.
7.2
How can I apply?
•
Eligible investors may apply for Shares under the Offer by completing a valid Application
Form attached to or accompanying this Prospectus.
–
Applicants under the Broker Firm Offer should complete a hard copy Broker Firm Offer
Application Form and follow the instructions of their Broker.
–
Priority Offer applicants, who have been invited by Ventia to participate in
the Offer, may apply for Shares by completing a valid online Application Form
at www.ventiaipo.com.
–
Employee Offer applicants, who have been invited by Ventia to participate in
the Offer, may apply for Shares by completing a valid online Application Form at
www.ventiaipo.com.
–
CIMIC Group Limited Shareholder Offer applicants may apply for Shares by completing
a valid online Application Form at www.ventiaipo.com.
–
If you are an Institutional Investor, separate instructions in relation to the Institutional
Offer will be provided to you by the Joint Lead Managers.
•
To the extent permitted by law, an Application is irrevocable.
7.3 and 7.4
Where can I find
more information
about this
Prospectus or the
Offer?
•
Please call the Ventia Offer Information Line on 1300 140 281 (within Australia) or 0800
453 521 (within New Zealand) or +61 3 9415 4015 (outside Australia and New Zealand)
from 8.30am to 5.30pm (Sydney time), Monday to Friday.
7.2
Can the Offer be
withdrawn?
•
The Company and SaleCo reserve the right to not proceed with the Offer at any time
before the issue and transfer of Shares to successful Applicants.
•
If the Offer does not proceed, Application Payments will be refunded. No interest will be
paid on any Application Payments refunded as a result of the withdrawal of the Offer.
7.8

INDUSTRY OVERVIEW
SECTION 2
Heatherton, VIC
Defence & Social
Infrastructure (D&SI)
Infrastructure
Services (IS)
TelecommunicationsTransport
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2.1. Overview of the Maintenance Services market
Ventia operates in the Maintenance Services market across Australia and New Zealand, across a broad range of
industry segments. BIS Oxford Economics estimates that the total addressable market for Maintenance Services in
FY21F will be $62.0 billion
1
.
Ventia’s addressable market covers four service types including Operations and Maintenance (O&M), Facilities
Management (FM), Minor Capital Works (MCW) and Environmental Services (ES), as outlined in Section 2.1.1.
This Section provides an overview of the Maintenance Services market, including the estimated outsourced market
size, key demand drivers, competitive landscape and outlook for the industry segments in which Ventia operates.
It
also provides a summary of Ventia’s regulatory environment and recent market trends resulting from the
COVID-19 pandemic.
To assist the Company with preparing this Section of the Prospectus, the Company commissioned a report
(Industry Report) by BIS Oxford Economics which covered market drivers, the estimated addressable market size of
Maintenance Services, the outlook for each industry segment and Ventia’s estimated market share across each of its
Sectors. To enable potential investors to assess the reasonableness of the estimates of the total addressable market
and the assumptions underlying these estimates, a description of the methodology BIS Oxford Economics used
to calculate these estimates is set out in Appendix 1. Certain statistics, data and other information in this Section
are based on the Industry Report. All information provided in Sections 2.1.2, 2.1.3, 2.2 and 2.3 is sourced from the
Industry Report unless indicated otherwise. BIS Oxford Economics has estimated Ventia’s addressable market
based on the services that Ventia delivers (outlined in Figure 2). Throughout the Industry Report, the total estimated
addressable market refers to the outsourced component of the Maintenance Services market, which BIS Oxford
Economics defined with the assistance of Ventia. Further detail on the methodology used to size Ventia’s estimated
addressable market is provided in Appendix 1.
BIS Oxford Economics has consented to the inclusion in this Prospectus of references to the Industry Report and to
the inclusion of statements based on the findings of its report, in the form and context in which those references and
statements are included. Unless otherwise stated, the numbers reflected in this Section are in Australian dollars.
2.1.1 Service types
Ventia’s essential Maintenance Services capabilities span the asset lifecycle across plan, build, in-life and end of life
phases, as summarised in Figure 1. Whilst Ventia does not deliver Major Capital Construction services, construction
activity supports growth in the asset base requiring Maintenance Services
2
.
1. BIS Oxford Economics (2021).
2. Major Capital Construction services have not been included in the estimated addressable market for any industry segment. Further information on the
methodology BIS Oxford Economics used to estimate the addressable market is included in Appendix 1.

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Figure 1: Overview of the infrastructure asset lifecycle
3
3. Ventia also performs a small amount of design, engineering and decommissioning for MCW.
4.
R
efer to Appendix 1 for an overview of how BIS Oxford Economics has sized each service in the Maintenance Services market.
5.
Non-built envir
onment refers to infrastructure that does not include building structures.
PlanBuildEnd of life
Phases
Key services
Major Capital Construction
(typically delivered by construction oriented
contractors and subcontractors)
3. Minor Capital Works (MCW)
(Sustaining MCW and Upgrade and New MCW)
1. Operations and
Maintenance (O&M)
2. Facilities Management (FM)
(Hard FM and Soft FM)
Infrastructure asset lifecycle
Maintenance Services market (Ventia’s addressable market)Excluded from the Maintenance Services market
In-life
4. Environmental Services
(ES)
The Maintenance Services market in which Ventia operates and which is sized in this Section includes the
outsourced component of the four service types outlined below in Table 1. Further detail on Ventia’s services is
provided in Section 3.1.5.
Table 1: Services delivered in the Maintenance Services market
4
Service typeDescription
1. Operations and
Maintenance
(O&M)
•
Work undertaken on an asset which improves the standard and/or quality of the asset but
does not improve upon the original design standard.
•
Covers preventative and reactive maintenance, plant shutdown maintenance and minor
alterations of operational assets.
•
Includes aspects of the operation of specific core assets and processes on behalf of asset
owners.
•
O&M services occur within the non-built environment
5
across a number of industry
segments such as Roads, Telecommunications, Water and Resources & Industrial.

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Service typeDescription
2. Facilities
Management
(FM)
•
All services associated with running or maintaining a building facility.
•
Includes building maintenance and excludes any O&M services of non-building related
processes or operations.
•
Key industry segments delivering FM services include Social Infrastructure and Defence.
•
FM can be divided into Soft FM and Hard FM as outlined below.
a. Soft FM
•
Ancillary services such as janitorial or cleaning, security, justice logistics, catering,
laundry, landscaping and other related support services.
•
The size of the larger bundled or integrated outsourced Soft FM services market is more
relevant to Ventia
6
.
b. Hard FM
•
Technical services, typically involving trades skills, such as the maintenance, asset
management and refurbishment of electrical and mechanical systems, including
machinery, Heating, Ventilation and Air Conditioning (HVAC), building automation
systems, fire detection and alarm systems, security systems, process control, lift systems
and plumbing.
3. Minor Capital
Works (MCW)
•
Refers to smaller value capital projects, defined as a subset of broader spending on
building or civil infrastructure and is typically captured in construction industry activity.
•
Whilst the size of projects associated with MCW can differ by industry segment, in general,
projects up to $100 million in contract value have been included in the analysis of the
total estimated addressable market size
7
.
•
MCW can be divided into Sustaining MCW and Upgrade and New MCW as outlined below.
a. Sustaining MCW
•
Sustaining MCW relates to works required to return an asset to its original design standard
(for example, the resurfacing of a road).
•
Closely related to O&M and Hard FM services.
b. Upgrade and
New MCW
•
Involves MCW associated with upgrading an existing asset to improve its design standard
(for example, upgrading the capacity of an existing sewerage treatment facility), or
building a new asset (for example, a telecommunications network).
4. Environmental
Services (ES)
•
Relates to a range of remediation services to restore contaminated land and waterways.
•
Involves the removal of contaminants and pollution, and the mitigation of any
associated negative effects (for example, per- and polyfluoroalkyl substances (PFAS) soil
remediation).
6. The estimated addressable market for Soft FM has been defined as the bundled or integrated outsourced Soft FM services market.
7.
R
efer to Appendix 1 for further information on the size of projects associated with MCW by industry segment.
8.

All number
s presented in this Section are reflected in current prices (nominal value) per BIS Oxford Economics (2021).
2.1.2 Estimated addressable market size
Ventia operates across a number of industry segments which have been sized by BIS Oxford Economics. Table 2
aligns the industry segments to Ventia’s Sectors and includes a summary of each industry segment’s estimated
addressable market size for FY21F and growth outlook from FY21F to FY25F
8
. The methodology BIS Oxford
Economics applied to calculate the estimated addressable market size for each industry segment is described in
Appendix 1.
BIS Oxford Economics estimates Ventia’s total addressable market for Maintenance Services in FY21F to be
$62.0 billion. While the market size has remained flat over recent years, BIS Oxford Economics is forecasting market
growth over coming years, with a CAGR of 5.5% forecast over the four years to FY25F. BIS Oxford Economics forecasts
Ventia’s estimated addressable market to reach $76.9 billion in FY25F.

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Table 2: Summary of industry segments across Ventia’s Sectors
9
9. BIS Oxford Economics (2021).
10.
All Sec
tors except Telecommunications exclude equipment and materials from the total estimated addressable market.
11.
Ne
w Zealand has been sized including the same industry segments as Australia with the exception of Resources & Industrial, Oil & Gas and Rail.
Further information on the methodology BIS Oxford Economics used to estimate the addressable market is included in Appendix 1.
Estimated addressable market size
10

Industry segmentVentia Sector
FY21F
($bn)
Forecast CAGR
(FY21F – FY25F)
Social Infrastructure
Defence & Social
Infrastructure (D&SI)
17.64.6%
Defence3.58.6%
Total D&SI21.15.3%
Electricity and Gas Transmission & Distribution (T&D)
Infrastructure Services (IS)
7.66.5%
Water4.76.3%
Resources & Industrial4.04.1%
Oil & Gas2.810.4%
Electricity Generation2.17.5%
Environmental1.05.7%
Total IS22.26.6%
Telecommunications Telecommunications 7.86.8%
Total Telecommunications7.86.8%
Roads
Transport
4.91.3%
Rail 0.74.3%
Total Transport5.61.6%
New Zealand All
11
5.33.9%
Total New Zealand5.33.9%
Total estimated addressable market 62.05.5%
Ventia’s total estimated addressable market grew at a CAGR of 0.8% from FY18 to FY20. Excluding Telecommunications,
which experienced a decline in spending as the construction phase of the National Broadband Network (NBN)
moved towards completion, the Maintenance Services market grew at a CAGR of 2.7% over the same period.
Whilst FY21F is a forward estimate, it reflects the estimated impact of trends in industry segments during FY21
based on current data available. This includes both the continued decline in Telecommunications spending and
a step up in Roads Maintenance Services during FY21F. The Maintenance Services market is estimated to contract
from FY18 to FY21F at a CAGR of (0.8%). During this same period, non-Telecommunications industry segments are
estimated to grow at a CAGR of 2.1%.
From FY21F to FY25F, the Maintenance Services market is expected to grow at a CAGR of 5.5% supported by
new investment in the Telecommunications industry segment (including upgrades to the NBN and the rollout
of 5G networks) and increased activity in the Upgrade and New MCW components of the Water, Electricity T&D
and Electricity Generation industry segments. Refer to Section 2.2 for the key factors supporting the outlook for
each industry segment.
A summary of the estimated addressable market for Maintenance Services across Australia and New Zealand is
provided in Figure 2.

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Figure 2: Total estimated addressable market for Maintenance Services across Australia and New Zealand ($bn)
12. The difference in the split of estimated addressable market by Sector between Australia and New Zealand is predominantly due to differences in Ventia’s
operations in each country. Further information on the methodology BIS Oxford Economics used to estimate the addressable market is included in
Appendix 1.
76.9
72.3
67.7
64.7
62.0
64.5
64.4
63.5
FY25FFY24FFY23FFY22FFY21FFY20FY19FY18
Figure 3: FY21F total estimated addressable market by Ventia Sector (Australia and New Zealand)
12
Australia ($56.7bn)
TransportTelecommunicationsISD&SI
39%
10%
14%
37%
New Zealand ($5.3bn)
TransportTelecommunicationsISD&SI
45%
20%
9%
26%
As shown in Figure 4, BIS Oxford Economics estimates that O&M, FM, Sustaining MCW and ES services represent the
majority of the estimated addressable market in Australia for FY21F at $40.1 billion (71% of the total addressable
market). The estimated Upgrade and New MCW of $16.5 billion (29% of the total addressable market) for FY21F
largely comprises spend across the Telecommunications, Water and Electricity T&D industry segments.

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Figure 4: FY21F total estimated addressable market by service type in Australia
13
Australia ($56.7bn)
ES
Upgrade and New MCW
FM and Sustaining MCW
O&M and Sustaining MCW
36%
29%
2%
33%
2.1.3 Demand drivers
A summary of the key drivers that are expected to support demand for Maintenance Services in Australia and
New Zealand is provided in Table 3.
Table 3: Summary of expected key demand drivers for Maintenance Services
14
Demand driver
Impact on
Maintenance ServicesKey trends
1. Population
growth
•
Contributes to increased
utilisation of existing
assets.
•
Contributes to the need for
additional investment in
infrastructure.
•
Larger populations support higher urban densities,
increased congestion, and increased burden on existing
infrastructure.
•
Over the five years to FY20, Australia experienced
population growth of 1.5% p.a., although BIS Oxford
Economics forecasts that growth will slow to 0.2% during
FY21F as a result of the international border closures in
response to the COVID-19 pandemic, with population
growth expected to remain weak into FY22F.
•
BIS Oxford Economics expects population growth in
Australia to return to a stronger growth rate of 1.4% p.a.
from FY22F to FY25F assuming international borders
reopen and the backlog of immigration resumes
15
. This is
a higher rate of population growth than most developed
countries
16
.
•
The growth in urban populations across Australia is
expected to closely resemble overall population growth in
the future
17
, despite recent increases in intra-state regional
migration due to the COVID-19 pandemic
18
.
13. The BIS Oxford Economics dataset for Maintenance Services captures spend on O&M, Hard FM and Sustaining MCW. Further information on the
methodology BIS Oxford Economics used to estimate the addressable market is included in Appendix 1.
14. BIS Oxford Economics (2021).
15.
While the A
ustralian Government has not advised on an exact date for the reopening of borders, in July 2021 the federal and state governments released
a four-phase plan to achieve uncapped inbound arrivals for all vaccinated persons.
16. BIS Oxford Economics notes that population growth within OECD countries typically does not surpass 0.5% p.a.
17. Particularly once overseas migration resumes, as most migrants tend to settle in urban areas.
18.

A
ustralian Bureau of Statistics (2020).

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Demand driver
Impact on
Maintenance ServicesKey trends
2. Size and
growth of asset
base
•
Large existing asset base
requires maintenance,
separate to the level of
new infrastructure being
developed.
•
Growing size of the asset
base supports higher levels
of Maintenance Services.
‒
Economic activity
necessitates a larger
asset base to sustain
GDP growth and
improve productivity.
‒
Construction activity
across the public and
private sectors directly
adds to the asset base
which needs to be
maintained.
‒
Government funding
supports investment in
infrastructure.
Large existing asset base:
•
The size of the asset base of non-residential buildings
totalled $2.9 trillion in FY20, having grown at a CAGR of
4.7% from FY05 to FY15 before slowing to a CAGR of 2.5%
over the next five years to FY20.
Economic activity:
•
Australian GDP declined 0.2% in FY20 during a period of
significant government policy responses to mitigate the
impact of the COVID-19 pandemic.
•
Australian GDP is forecast to grow by 1.3% in FY21F as the
economy recovers from the impact of COVID-19. Following
a quarterly GDP decline of 7.0% in the June quarter of
2020, there was a relatively strong rebound in the first
three quarters of FY21 as lockdown conditions eased,
which saw quarterly GDP rise above pre-COVID levels.
•
The September 2021 quarter is expected to see another
temporary fall in Australian GDP as lockdown conditions
persist, although essential services are expected to
continue to operate throughout this period. With the
Delta variant of the virus likely to see sustained local
transmission, lockdown restrictions may not be fully eased
until vaccination rates rise to 70-80%. An eventual easing
is likely to drive a recovery in growth in late 2021 and/or
early 2022.
•
Overall, Australian GDP is forecast to increase 2.0% in
FY22F and 5.0% in FY23 before easing over FY24F and
FY25F. This is supported by the vaccine rollout, a large
buffer of household savings to support spending as
restrictions ease, and elevated levels of government
spending on infrastructure.
Construction activity:
•
Excluding private housing construction, total construction
in Australia is forecast to grow at a CAGR of 4.3% from
FY21F to FY25F to reach an annual value of $161.3 billion in
FY25F.
•
Public construction activity is expected to be focused
on transport, telecommunications networks, utilities,
education and health buildings. Private sector construction
activity is expected to focus on resources, electricity,
telecommunications networks and commercial and
industrial buildings.
•
However, labour constraints associated with increased
competition for skilled workers may limit growth in
construction activity and subsequently Maintenance
Services activity.

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Demand driver
Impact on
Maintenance ServicesKey trends
2. Size and
growth of asset
base continued
Government infrastructure expenditure:
•
Total public sector construction expenditure has grown
at a CAGR of 3.7% from FY05 to FY20 to reach $50.3 billion
in FY20.
•
BIS Oxford Economics expects public sector funded
construction to grow at a CAGR of 4.4% from FY21F to
FY25F to reach $60.2 billion in FY25F, representing 37.3%
of total non-dwelling construction spend in FY25F.
•
State and federal governments have been increasing
infrastructure construction funding to respond to
a variety of factors including growing populations,
historical underinvestment in some infrastructure (such
as rail, roads, schools and hospitals), the need to reduce
the strain on existing infrastructure, and to stimulate
economic activity.
Private investment and construction activity:
•
While private business investment and construction
activity declined in FY20 and is expected to decline in
FY21F, a combination of government investment incentives
and a recovery in the Australian and global economies has
prevented a larger decline, with a turnaround in private
investment expected in FY22.
•
Privately funded non-dwelling construction is expected
to grow at a CAGR of 3.8% from FY21F to FY25F to reach
$101.1 billion in FY25F, representing 62.7% of total
non-dwelling construction spend in FY25F.
3. Outsourcing
rates
•
Grows the extent
of outsourcing of
Maintenance Services,
separate to the size and
growth of the underlying
asset base.
•
Outsourcing rates are increasing as organisations seek to
reduce costs, focus on core activities and avoid the need to
hold specialist Maintenance Services capabilities in-house.
•
BIS Oxford Economics estimates that the proportion of
outsourced Maintenance Services across addressable
industry segments
19
has risen from 49.1% in FY11 to
58.3% in FY20. Outsourcing rates are expected to increase
to 59.7% by FY25F, potentially adding $800 million to the
size of these segments from outsourcing alone.
4.

Technology
adoption and
automation
•
Strengthens the
proposition for asset
owners to engage a third
party to deliver services.
•
Advancements in technology can improve service
outcomes through efficiency gains that support further
investment in infrastructure. ‘Intelligent automation’ or
‘smart technology’ also has the potential to support the
level of outsourcing rates across industry segments.
•
Technology may also limit the need for ‘physical’
maintenance for preventative purposes, but increase the
demand for specialised, technology-based services.
19. Includes all industry segments except Soft FM Services in Defence and Social Infrastructure and Environmental; Upgrade and New MCW services are also
excluded from the outsourcing calculations.

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Demand driver
Impact on
Maintenance ServicesKey trends
5. Environmental
regulation
•
Drives greater requirement
for specialised ES.
•
Increasing demand for ES driven by higher fuel quality
standards, carbon emission targets and review of existing
environmental regulations.
•
One reason for this trend is expected to be governments
seeking to reclaim land in inner city areas due to land
shortages. Other factors include governments bringing
forward planned improvements to fuel quality to
2024 (from 2027)
20
which is expected to necessitate
infrastructure upgrades.
6. New Zealand
•
Several factors are
supporting the demand for
Maintenance Services in
New Zealand.
Population growth:
•
The past five years have seen the strongest growth in
population in New Zealand since the mid-1900s
21
of
2.0% p.a., although near-term growth is expected to be
tempered by the lack of international migration as a result
of the COVID-19 pandemic.
Economic activity:
•
New Zealand’s economy contracted by only 1% in FY20,
owing to its early elimination of COVID-19 infections in
the community. Fiscal stimulus and attractive borrowing
conditions have prompted strong rebounds in household
spending and private investment – such that GDP growth
is estimated to have recovered to 5.1% in FY21F and is
forecast to average 2.4% per annum over the five years
to FY25F.
Growth in the asset base:
•
Non-residential construction in New Zealand is forecast
to grow at a CAGR of 4.5% from FY21F to FY25F, supported
by federal government infrastructure packages totalling
NZD57.3 billion. Catering to a larger population, a historic
underspend on maintenance
22
and the need for stimulus
following the COVID-19 pandemic are the key drivers
behind rising investment.
20. Associated with improving community health standards by requiring domestic petroleum refineries to undertake the necessary infrastructure upgrades
for low sulphur fuel production.
21.
Stats NZ, Estimated Resident Population.
22. Transport, water and defence infrastructure have been targeted for significant increases in public investment, per Civil Contractors (2021), Water Industry
Commission for Scotland (2021), and New Zealand Defence Force (2019).

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2.1.4 Competitive landscape
2.1.4.1 Competitors in the Maintenance Services market
The Maintenance Services market in Australia and New Zealand is fragmented, with a diverse range of service
providers from domestic and international markets. This Section provides a summary of Ventia’s key competitors
across each of its four Sectors. Additional information on Ventia’s Sectors is included in Section 3.2.
Defence & Social Infrastructure
Ventia’s D&SI Sector provides maintenance and support services to clients operating across Defence, Social
Infrastructure (Education, Social Housing, Justice and Health), Local Government and Critical Infrastructure.
Competition in the D&SI Sector tends to be based on service breadth, quality and cost to deliver services. Ventia
competes against several companies in this Sector, with Downer being the main domestic competitor. There are
also several international Soft and Hard FM service providers operating in the market including Serco, Sodexo,
ISS, BGIS and Programmed
23
, while companies such as Thales and BAE compete in services associated with Army
Sustainment
24
.
Infrastructure Services
Ventia’s IS Sector supports owners and operators of utilities, resources and industrial assets. Key competitors in the
IS Sector are domestic companies which vary by industry segment and geography. Medium to large competitors
include Downer, Service Stream
25
, Lendlease Services
25
and UGL, although none of these peers operate across all of
the industry segments that Ventia’s IS Sector operates in. Subsidiaries of international service providers also operate
within the Australian market, although these competitors typically focus on specific industry segments or services.
For example, SUEZ operates in the Water industry segment and Veolia operates in the Water, Environmental and
Resources & Industrial industry segments.
Telecommunications
Ventia’s Telecommunications Sector provides end-to-end services including design, supply, minor construction,
installation, commissioning and maintenance. The competitive landscape in the Telecommunications Sector is
characterised by a number of companies operating across the NBN and carrier networks. These include Downer,
Service Stream
25
, Lendlease Services
25
and to a lesser extent Fulton Hogan and BSA. The balance of the market
comprises smaller, niche service providers operating in local geographies.
Transport
Ventia’s competitors in the Roads industry segment include both national and regionally based service providers.
Service providers that compete against Ventia on a national basis across Australia include Downer and Fulton
Hogan. Other competitors include Lendlease Services
25
and Maca, while companies such as Johnson Controls
compete in Road Intelligent Transport Systems. Key competitors in the Roads industry segment in New Zealand
include Downer, Fulton Hogan, Fletcher Building and VINCI.
Ventia’s competitors in the Rail industry segment operate across a range of capabilities such as rollingstock, rail
construction and below rail infrastructure
26
. Key competitors include John Holland, UGL, Downer and Acciona.
Ventia only delivers Maintenance Services to below rail infrastructure in Australia.
23. Programmed is a subsidiary of PERSOL GROUP.
24.
R
elates to the maintenance of land-based vehicles and equipment.
25.
Service Stream announced on 21 July 2021 that it has entered into an agreement to acquire Lendlease Services.
26. Below rail infrastructure refers to fixed infrastructure assets as opposed to rollingstock and locomotives.

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2.1.4.2 Market position
BIS Oxford Economics has estimated Ventia’s market share across each of its Sectors in Australia and New Zealand
as presented in Figure 5 below. A summary of the methodology applied by BIS Oxford Economics is provided in
Appendix 1.
Figure 5: Ventia’s estimated market share in Australia and New Zealand (FY21F)
27,28
7%
13%
5%5%
22%
TransportTelecommunicationsInfrastructure ServicesSocial InfrastructureDefence
D&SI
Within each of its Sectors, Ventia holds leading market positions in specific services including those summarised
below in Table 4.
Table 4: Estimated market positions
29

Sector Ventia’s estimated market position
Defence & Social
Infrastructure
•
#1 provider of defence estate and base services in Australia.
•
#1 provider of social housing maintenance in NSW.
Infrastructure Services
•
#1 complex ES remediation provider in Australia.
•
A leading water infrastructure maintenance provider in Australia.
Telecommunications
•
#1 telecommunications infrastructure services provider in Australia and New Zealand.
•
A leading provider in delivery of premises ready for service for NBN Co. Limited (nbn)
(Australia) and Chorus (New Zealand).
Transport
•
#1 in private motorways and tunnels servicing and maintenance in Australia.
27. BIS Oxford Economics (2021).
28.
V
entia’s actual revenue for July 2020 to June 2021 was used for the purpose of calculating market share by adding actual H2CY2020 revenue to actual
H1CY2021 revenue. See Appendix 1 for further information.
29.
Management estimates. Refer to Appendix 1 for additional information on the approach management applied to estimating the Company’s
market positions.

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2.1.5 Key barriers to entry
The Company believes that there are several barriers to entry that can prevent the easy replication of a
Maintenance Services provider’s offering by new entrants to the industry:
•
Scale and capabilities: The size and scope of projects tend to require larger service providers to be able
to address the complex demands, such as the need to mobilise large workforces in short periods and the
requirement to meet cybersecurity and data and analytics requirements. This is supported by holding the
required accreditations and certifications to deliver services.
•
Industry segment coverage: Service providers operating across a diverse mix of industry segments can reduce
the financial impact of a decline in any specific industry segment.
•
Financial strength: PPP projects, as well as other large, outsourced infrastructure projects, require significant
financial resources which generally limits the types of companies that can service these projects.
•
Experience and track record: Clients are focused on ensuring outsourcing risk is minimised. Large clients
therefore tend to outsource services to large service providers with a track record of delivery.
•
Established client relationships: Existing service providers are better positioned to understand the client’s
underlying business or activities and are considered to be well positioned to deliver the services with a lower
level of risk.
•
Specialist technical expertise and intellectual property: Industry segments such as Telecommunications and
Environmental require significant technical expertise for which only a small number of service providers hold the
capabilities, credentials and track record.
2.2. Maintenance Services market outlook
This Section provides a summary of the estimated addressable market size and outlook for Ventia’s Sectors across
each industry segment sized by BIS Oxford Economics
30
. All commentary and values contained in Sections 2.2.1,
2.2.2, 2.2.3 and 2.2.4 relate to the outlook for Ventia’s addressable market in Australia only. A summary of the
outlook for Ventia’s addressable market in New Zealand is provided in Section 2.2.5.
2.2.1 Defence & Social Infrastructure
BIS Oxford Economics estimates that the addressable market for the industry segments relating to Ventia’s D&SI
Sector will total $21.1 billion in FY21F, including $17.6 billion (83.4%) in Social Infrastructure and $3.5 billion (16.6%)
in Defence, and forecasts it to grow at a CAGR of 5.3% from FY21F to FY25F.
Figure 6: Maintenance Services to the D&SI Sector (FY18-FY25F) ($bn)
FY25FFY24FFY23FFY22FFY21FFY20FY19FY18
25.8
24.4
23.1
22.0
21.1
20.2
19.6
18.7
4.8
4.4
4.1
3.6
3.5
3.2
3.1
2.8
21.0
20.0
19.0
18.4
17.6
17.0
16.5
15.9
DefenceSocial Infrastructure
30. All numbers presented in this section are reflected in current prices (nominal value) per BIS Oxford Economics (2021).

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Table 5: Summary of key market drivers for the D&SI Sector
31
31. The estimated addressable market refers to the outsourced component of the Maintenance Services market. Further information on the methodology
BIS Oxford Economics used to estimate the addressable market is included in Appendix 1.
32.
Defence Estate and Infrastructure Group is the consolidated service delivery organisation for Defence.
33. Defence capital expenditure on projects >$15 million for Defence Estate and other infrastructure is expected to increase from $2.0 billion to $3.5 billion
from FY21F to FY25F at a CAGR of 14.3%.
Industry segmentKey market drivers
Forecast CAGR
(FY21F – FY25F)
Social
Infrastructure
•
In the near-term, building Hard FM activity is expected to be supported
by strong increases in public funding to address the large backlog in
social housing maintenance – a measure which is also being used as
economic stimulus. This is expected to offset the temporary weakness
in building segments exposed to the impact of COVID-19, notably the
tertiary education sector.
•
On a longer-term basis, building Hard FM is expected to grow as
the stock of assets increases and as asset owners increasingly outsource
maintenance to seek higher efficiencies.
•
Soft FM activity has been supported by rising demand for outsourced
Soft FM from remote camps, justice logistics, transport, utilities and
bundled government services contracts.
•
Soft and Hard FM providers will benefit from rising levels of
non-residential building capital spend from FY22F, following a dip in FY21F.
4.6%
Defence
•
Growth in Defence Estate and Infrastructure Group
32
Sustainment
expenditure, which includes spending related to base services (such
as estate maintenance and garrison support), is expected to remain
relatively flat from FY21F to FY25F, having increased by 50% over FY18
to FY20.
•
Defence Army Sustainment expenditure in the 2021-22 Commonwealth
Budget is projected to rise from $1.8 billion in FY21F to $3.1 billion
in FY25F – Ventia currently has a small share of this market, but the
expected growth is a key driver of the outlook for Ventia’s estimated
addressable market.
•
Although not directly addressable by Ventia, growing capital works
on defence bases and government funding for Defence more broadly
present additional opportunities within the Defence industry segment.
‒
This does not directly support immediate growth within Ventia’s
current estimated addressable market; however, it will support
growth in the overall asset base which will need to be maintained
33
.
8.6%

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2.2.2 Infrastructure Services
BIS Oxford Economics estimates that the addressable market for the industry segments related to Ventia’s IS
Sector will total $22.2 billion in FY21F, including $7.6 billion (34.3%) for Electricity and Gas T&D, $4.7 billion (21.2%)
for Water, $4.0 billion (18.0%) for Resources & Industrial, $2.8 billion (12.6%) for Oil & Gas, $2.1 billion (9.6%) for
Electricity Generation and $1.0 billion (4.3%) for Environmental. The market is forecast to grow at a CAGR of 6.6%
from FY21F to FY25F.
Figure 7: Maintenance Services to the Infrastructure Services Sector (FY18-FY25F) ($bn)
FY25FFY24FFY23FFY22FFY21FFY20FY19FY18
Water
Resources & Industrial
Oil & GasElectricity Generation Environmental Electricity and Gas T&D
28.7
26.4
24.0
22.5
22.2
23.2
23.1
22.9
9.8
9.1
8.4
7.67.6
8.5
8.1
8.0
6.0
5.3
4.7
4.84.7
4.4
4.3
4.8
4.7
4.5
4.3
4.1
4.0
4.0
3.9
3.7
4.1
2.4
3.6
3.2
2.8
2.4
1.91.4
4.0
2.9
1.2
1.1
1.9
1.1
1.7
1.0
2.1
1.0
3.0
0.9
3.9
0.9
4.2
0.8
Table 6: Summary of key market drivers for the IS Sector
34
Industry segmentKey market drivers
Forecast CAGR
(FY21F – FY25F)
Electricity and
Gas T&D
Electricity T&D:
•
Electricity T&D represents the majority of the estimated addressable
market size of the Electricity and Gas T&D industry segment
35
.
•
A projected decline in MCW in FY21F is expected due to a focus on
Major Capital Construction projects, limiting both the need for MCW
and capacity for service providers to perform MCW.
•
Historical maintenance spend has been supported by long-term growth
in Electricity T&D networks
36
.
•
Although Maintenance Services are expected to fall during FY21F, the
outlook is supported by the increasing demand for electricity and
renewables:
‒
The national move towards renewable electricity generation is
driving the need to upgrade existing transmission networks.
‒
The need to grow distribution networks to cater for rising electricity
demand, as well as rising reactive works in the wake of increasing
climatic events, is expected to support growth in distribution O&M
(and construction) works.
6.5%
34. The estimated addressable market refers to the outsourced component of the Maintenance Services market. Further information on the methodology
BIS Oxford Economics used to estimate the addressable market is included in Appendix 1.
35.
Electricity T&D is estimated to be $7.4 billion in FY21F and Gas T&D is estimated to be $0.2 billion in FY21F.
36. Electricity transmission networks grew by 1,921km to 43,264km in the decade to 2020, while Electricity distribution networks grew by 6,215km to
750,487km over the same time period.

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Industry segmentKey market drivers
Forecast CAGR
(FY21F – FY25F)
Electricity and
Gas T&D
continued
Gas T&D:
•
Growth in gas pipeline construction has declined from FY15 to FY20
following the end of the boom in oil and gas construction.
•
Total gas pipeline construction is expected to pick up strongly over FY20
to FY25F, largely due to major new connections expected to be built to
large offshore fields in WA and the NT and the development of a number
of smaller onshore gas fields in QLD and the NT. The Maintenance
Services market is expected to benefit from this growing asset base.
6.5%
Water
•
Maintenance Services have been stable over recent years given the
significant investment in water infrastructure in the late 2000s and early
2010s in response to prolonged drought conditions.
•
Water and wastewater maintenance is expected to steadily increase
from FY21F to FY25F supported by the need to service both an ageing
and larger asset base.
•
The market outlook is supported by the following:
‒
Governments increasingly focused on addressing water security
issues in regional areas across Australia, with over $170 million
committed to 63 feasibility studies through the Australian
Government’s National Water Infrastructure Development Fund
37
.
‒
Growing populations in key metropolitan areas are expected to
support demand for sewerage and drainage maintenance work.
‒
Replacement of ageing metropolitan water infrastructure in capital
cities to ensure water supplies keep pace with population growth.
6.3%
Resources &
Industrial
•
Growth is driven by several factors:
‒
The overall market environment for Resources & Industrial has
improved significantly over the past year, supported by improving
global demand, commodity prices rebounding and growing
investment opportunities.
‒
Strong growth in activity on Australian resources projects, across a
number of major iron ore projects and smaller gold, copper, nickel
and lithium resource sectors.
•
The need to spend more on, and eventually replace, depleting mines is
expected to also boost MCW spend over the coming years.
4.1%
Oil & Gas
•
Oil & Gas maintenance requirements have increased over the last
five years following a significant rise in Liquefied Natural Gas (LNG)
investment and subsequent lift in production.
•
The Maintenance Services market is expected to grow strongly over
the next four years, as newly commissioned LNG facilities (including
upstream gas fields feeding the LNG plants) approach full capacity.
•
Increasing major and minor Oil & Gas-related capital projects, in
response to the recent rebound in oil prices and depleting gas fields
(both onshore and offshore).
10.4%
37. As per the National Water Grid Authority.

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Industry segmentKey market drivers
Forecast CAGR
(FY21F – FY25F)
Oil & Gas
continued
•
Recent requirement to strengthen Australia’s fuel storage capacity to
enhance fuel security
38
is expected to drive investment in downstream
infrastructure.
10.4%
Electricity
Generation
•
Electricity Generation Maintenance Services have fallen from FY18 to
FY20, primarily due to:
‒
Falling levels of capital spending on renewable generation projects,
which had historically been boosted by a range of large and small
projects encouraged by incentives to meet renewable energy targets.
‒
Falls in prices of large-scale generation certifications, a lack of
national energy policy and the inability of the transmission network
to cope with an influx of new renewable generation.
‒
Major projects, such as Snowy 2.0
39
, are limiting the capacity to
undertake smaller projects, reducing the size of the estimated
addressable market.
•
As transmission investment increases, there is expected to be an
increase in both smaller and larger renewables projects from FY23.
•
A growing asset base of renewable generation assets, driven by state
government renewable energy targets, is expected to support medium-
term growth in electricity generation Maintenance Services
40
.
‒
Renewable electricity generation construction activity on projects
less than $100 million in value is expected to pick up from the current
trough and grow at a CAGR of 10.0% from FY21F to FY25F to reach
$2.3 billion.
•
The outlook for O&M services in this industry segment is flat, due to a
structural transition away from fossil fuel electricity generation and the
associated closures of coal fired power stations reducing demand for
O&M services.
7.5%
Environmental
•
Demand for remediation services is supported by tightening
environmental regulation, rising land prices and increasing building and
construction activity.
•
Major remediation works supporting growth over the medium-term
include the removal of land contamination from the use of PFAS
at Department of Defence sites associated with firefighting foams,
environmental works on Australia’s two closing oil refineries
41
and
rising mine remediation requirements as mines reach the end of their
useful lives.
•
Unanticipated major environmental incidents or land developments
may potentially drive an additional step up in demand for remediation
services.
5.7%
38. To comply with the International Energy Agency’s 90-day oil stockholding obligation by 2026.
39.
Sno
wy 2.0 is the largest committed renewable energy project in Australia, which involves linking two existing dams through 27km of tunnels and building
a new underground power station.
40.
Clima
te Council of Australia (2017), Renewables Ready: States Leading the Charge.
41.
Closing refineries include Kwinana and Altona.

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2.2.3 Telecommunications
BIS Oxford Economics estimates that the addressable market for the industry segment corresponding to Ventia’s
Telecommunications Sector will total $7.8 billion in FY21F, and forecasts it to grow at a CAGR of 6.8% from FY21F
to FY25F.
Figure 8: Maintenance Services to the Telecommunications Sector (FY18-FY25F) ($bn)
42. The estimated addressable market refers to the outsourced component of the Maintenance Services market. Further information on the methodology
BIS Oxford Economics used to estimate the addressable market is included in Appendix 1.
43.
New fibre and wireless technologies are less maintenance intensive.
44. Refers to the Federal Government’s $4.5 billion NBN investment announced in September 2020.
10.2
9.9
9.29.2
7.8
10.8
11.8
12.5
FY25FFY24FFY23FFY22FFY21FFY20FY19FY18
Table 7: Summary of key market drivers for the Telecommunications Sector
42
Industry segmentKey market drivers
Forecast CAGR
(FY21F – FY25F)
Telecom-
munications
•
The estimated market size over the historical period reduced as the
construction phase of the NBN reached completion.
•
O&M activity has risen marginally in recent years given the requirements
of maintaining the ‘last mile’ copper network. In the medium to
longer-term, O&M activity is expected to stabilise in real terms as
efficiencies from new technologies offset growth in the asset base
43
.
•
Key drivers of the growth expected to FY25F include the recently
commenced NBN investment
44
to enhance the network via upgrading its
Fibre-to-the-Node (FTTN) network to Fibre-to-the-Premises (FTTP) and
the rollout of new technologies by network carriers, including 5G.
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2.2.4 Transport
BIS Oxford Economics estimates that the addressable market for the industry segments corresponding to Ventia’s
Transport Sector will total $5.6 billion in FY21F, including $4.9 billion (88.1%) related to Roads and $0.7 billion
(11.9%) related to Rail. The market is forecast to grow at a CAGR of 1.6% from FY21F to FY25F.
Figure 9: Maintenance Services to the Transport Sector (FY18-FY25F) ($bn)
FY25FFY24FFY23FFY22FFY21FFY20FY19FY18
0.8
0.8
0.7
0.7
0.7
0.6
0.6
0.6
5.2
4.9
4.7
4.8
4.9
4.3
4.2
4.0
RailRoads
6.0
5.6
5.4
5.5
5.6
5.0
4.8
4.5
Table 8: Summary of key market drivers for the Transport Sector
45
45. The estimated addressable market refers to the outsourced component of the Maintenance Services market. Further information on the methodology
BIS Oxford Economics used to estimate the addressable market is included in Appendix 1.
46.
T
otal capital works on road projects are expected to grow from $20.9 billion in FY21F to $30.2 billion in FY25F, representing a CAGR of 9.7%.
Industry segmentKey market drivers
Forecast CAGR
(FY21F – FY25F)
Roads
•
Significant increase in outsourced Maintenance Services during FY21F
to $4.9 billion (13% increase on FY20) supported by stimulus measures
implemented by federal and state governments in response to the
COVID-19 pandemic.
•
Activity is expected to ease during FY22F and FY23F, albeit remaining
above pre-pandemic levels, with subsequent growth supported
by growing road networks, freight usage, and increasing levels of
outsourcing of road Maintenance Services by state governments.
•
Growth in the road network presents further opportunities for providers
of Maintenance Services in the longer-term by adding to the stock of road
network assets that will need to be maintained
46
.
1.3%
Rail
•
Strong pipeline of government funded major rail infrastructure projects
supporting growth in the asset base for Maintenance Services.
4.3%

50
Ventia Prospectus
50
Ventia Prospectus
50
Ventia Prospectus
50
Ventia Prospectus
50
SECTION 2 INDuSTRy OvERvIEw
Ventia Prospectus
2.2.5 New Zealand
BIS Oxford Economics estimates that the addressable market for Maintenance Services in New Zealand will total
$5.3 billion in FY21F and is forecast to grow at a CAGR of 3.9% from FY21F to FY25F.
Figure 10: New Zealand Maintenance Services (FY18-FY25F) ($bn)
6.2
6.0
5.8
5.5
5.3
5.4
5.1
4.7
FY25FFY24FFY23FFY22FFY21FFY20FY19FY18
Table 9: Summary of key market drivers for New Zealand
47
Industry segmentKey market drivers
Forecast CAGR
(FY21F – FY25F)
Maintenance
Services in
New Zealand
•
Federal Budget infrastructure investment is expected to drive growth
in Maintenance Services across the majority of industry segments.
The Federal Budget in FY20 included NZD57.3 billion of infrastructure
investment over the next five years.
•
Growing investment in water and road infrastructure (approximately 52%
of the total estimated addressable market in FY21F) to address historic
underinvestment, safety concerns and future demand pressures.
‒
BIS Oxford Economics estimates an increase in annual expenditure
of approximately NZD250 million on road maintenance by FY25F.
‒
Estimates suggest NZD115 to NZD185 billion of water investment is
required over the next 30 years (average NZD3.8 billion to
NZD6.2 billion p.a.
48

•
Social Infrastructure is expected to grow steadily over FY21F to FY25F
– expenditure is projected to grow in line with population growth.
•
Telecommunications is the only industry segment in New Zealand that is
expected to contract over FY21F to FY25F as the rollout of the Ultra-Fast
Broadband network reaches completion.
3.9%
47. The estimated addressable market refers to the outsourced component of the Maintenance Services market. Further information on the methodology
BIS Oxford Economics used to estimate the addressable market is included in Appendix 1.
48.
A
s per an independent review conducted by the Water Industry Commission for Scotland (2021).