Boart Longyear — Shareholder Meeting (May 2013)
20 slides from Boart Longyear's shareholder meeting presentation, May 21, 2013
Slide 1: Annual General Meeting
Western Australia Annual General Meeting 21 May 2013 - Melbourne © 2013 Boart Longyear. All rights reserved.
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer • This presentation has been prepared by Boart Longyear Limited, ABN 49 123 052 728 (Boart Longyear or the Company). It contains general information about the Company’s activities current as at the date of the presentation. It is information given in summary form and
Slide 3: Our 120+ year legacy provides a solid foundation
Our 120+ year legacy provides a solid foundation … 21 May 2013 3
Slide 4: With world class Global Drilling Services
With world class Global Drilling Services … 2012 Global Rig Count 1180* • Largest fleet • Modern fleet 711 • Strong safety culture • Support all phases of exploration & 222 200 192 186 development 125 104 85 85 69 26 • Proven and productive drilling practices Cabo Geodrill Geotec Ausdrill Foraco Maj
Slide 5: A history of setting the industry benchmark in product innovation
…and a history of setting the industry benchmark in product innovation 1890 1950’s 1999 First “Core Rig” Wireline Coring Link Latch 1930’s 1996 2012 Diamond Drill Bits RQ Thread Ultramatrix™ Series 21 May 2013 5
Slide 6: Strong, consistent values enable our global reach
Strong, consistent values enable our global reach • Core Value Safety • ASX100*: Top 10% Lost Time Injury Frequency Rate • Members of World Economic Forum: Partnering Against Corruption Initiative Compliance (PACI) • Resources dedicated to ensure we are doing things the right way • Dedicated to our
Slide 7: Declining commodity prices and major miners' share price declines
Declining commodity prices and major mining companies’ share price declines … Mining Performance Key Commodity Trends Jan-09 ($/oz) Gold Thomson Reuters Global Integrated Mining Index* Dec-12 900 - Price Performance- Apr-13 850 - 500 1,000 1,500 2,000 Jan-09 800 Copper ($/lb) Dec-12 Apr-13 750 - 1.0
Slide 8: Announced reductions in major miners' capital spending
…combined with announced reductions in major miners’ capital spending … Recent news headline from the global metals and mining conference in Barcelona: “BHP Billiton said on Tuesday that its capital and exploration expenditure next year would fall to around $18 billion, down about a fifth from $22 b
Slide 9: Reduced demand for our products and services
…has led to reduced demand for our products and services DS Historical Utilisation 80% 70% • Anticipate average utilisation rates down ~15-20% on a full 60% year basis 50% • Decreasing utilisation rates and 40% excess capacity, creating pricing headwinds 30% May-12 Dec-09 Apr-10 May-10 Apr-11 Apr-12
Slide 10: Key Performance Indicators
Key Performance Indicators* 2013 Mid-Feb 2013 Mid-May Change 2012 Mid-May Rig Count** 1,065 ~1,040 ↓ ~3% ~1,060 Rig Utilisation 58% ~60% ~Flat ~70% Product Backlog $51M ~$35M ↓ ~30% ~$70M Headcount 8,680 ~8,000 ↓ ~8% ~11,400 Net Debt $554M ~$585M ↑ ~5% ~$400M Price • Products pricing stable • Expect
Slide 11: Analysts' forecasts have also come down
Analysts’ forecasts has also come down… 2013 Analysts’ Revenue Forecast 2013 Analysts’ EBITDA Forecast 1,900 High: 350 $1,824 High: 1,800 $1,785 High: High: $307 High: $1,726 1,700 300 $293 High: $271 Low: 1,600 $1,650 Low: 250 1,500 $1,590 Low: Low: $235 1,400 $1,466 200 Low: 1,300 Low: $199 $193 1
Slide 12: Increasing Operating Margin to that of Peers Creates Substantial Value
Increasing our Operating Margin to that of our Peers Creates Substantial Value 2012 Proforma EBITDA $600 Potential EBITDA Increase: $173M* +/- relating to Macro Economics $500 49 495 • Commodity prices $ in 000's $400 124 $300 68 • Production levels 322 $200 254 • Mining capex & exploration spend $1
Slide 13: Committed to Delivering Synergies from Drilling Services and Products
Committed to Delivering Synergies from Drilling Services and Products Drilling Services Products Current Spend Maintenance ~$150M Processes Supply Chain Management ~$45M Collaboration of Resources (Rooftops) ~145 rooftops Product Technology and Innovation 21 May 2013 13
Slide 14: Product Technology and Innovation
Product Technology and Innovation Leveraging experience and support of our Drilling Services business to respond to our key customers’ needs Key Example: LX™11 Multipurpose Drill • Conceptualized by our Drilling Services crew working in Thailand - Recognized gap in market - Lower cost exploration mu
Slide 15: Reducing Debt Remains a Key Focus
Reducing Debt Remains a Key Focus Net Debt/EBITDA BLY is covenant compliant 4.2X Focus on balance sheet improvement is prudent in light of market conditions • No plans to tap equity markets Peer Group Mean: 1.4x 2.1X Large investment in modern rig fleet made 1.5X over last few years reduces fu
Slide 16: Improving Performance: Profitability & Cash Flow
Improving Performance: Profitability & Cash Flow • Position business to perform better “Through- the-Cycle” • Improve cash flow and • New leadership reduce debt levels • Launched operational • Increase operational and business review functional efficiencies and Shareholder Value • Reduced overhead &
Slide 17: Even in a challenging market BLY adds compelling customer value
Even in a challenging market BLY adds compelling customer value… One Source Quality • Global Distribution • Globally consistent • Global Aftermarket & Drilling Services Fleet Services • Products offering • Comprehensive Drilling • Customer service Solutions • Top notch safety • Innovative Products p
Slide 18: Diversified revenue stream
…and benefits from a diversified revenue stream through… …breadth of product offering …a global footprint Production Other Drilling Drilling 5% 3% Equipment Canada 7% 14% Underground Surface Asia Pacific Coring Latin 27% Coring 39% America 10% 16% Performance Tooling EMEA United States 18% Rotary/ 2
Slide 19: And a stable customer base
…and a stable customer base. 90% 14.0 +75% 81% 80% 80% 76% 12.0 11.5 71% 70% +14% 62% 10.0 60% 8.0 (US $B) 50% 8.0 7.0 6.6 40% 6.0 30% 21% 4.0 20% 14% 17% 18% 11% 12% 12% 10% 8% 10% 7% 2.0 1.1 0.2 0% - Major / Intermediate Junior Non-Mining Major / Junior Other Intermediate 2008 2009 2010 2011 2012
Slide 20: From The World's Largest Provider to the World's Most Valued Provider
Our actions will move BLY from “The World’s Largest Provider” to the “World’s Most Valued Provider” Drilling Equipment & Drilling Services Performance Tooling From Discovery to Production 21 May 2013 20