Boart Longyear — H1 2017 Earnings Presentation
26 slides from Boart Longyear's earnings presentation, Aug 24, 2017
Slide 1: 1H 2017 Results
TruScanTM Prototype 1H 2017 Results August 2017 Jeff Olsen – CEO
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 as at the date of the presentation. It is information given in summary form and does not
Slide 3: 1H 2017 Summary
1H 2017 Summary (Results compared to 1H 2016, except as otherwise indicated) Safety1 o Lost time incident rate (LTIR) at 0.12 – in line w/ low level of FY 2016 – reflects success at mitigating significant risks o Moderate increase in total case incident rate (TCIR) – still among the lowest in the in
Slide 4: Drilling Services Productivity Initiative Update
Drilling Services Productivity Initiative Update Shift Productivity Drill Rate Meters per Shift Meters per Hour + 9% + 4% 1H 2015 1H 2017 1H 2015 1H 2017 • Becoming more granular in the elements we track and report on • Making driller-level performance data more visible at the site level • Improving
Slide 5: Productivity & tight cost control driving significant improvement in profitability on higher revenue
Productivity & tight cost control driving significant improvement in profitability on higher revenue Revenue Adjusted EBITDA2 Cash from Operating 356 Activities 21 310 + 15% + 58% 13 + 20% (58) (73) 1H 2016 1H 2017 1H 2016 1H 2017 1H 2016 1H 2017 Significant margin and cash improvement on higher rev
Slide 6: Becoming a data provider, not just a driller
Becoming a data provider, not just a driller • Data acquisition done by third parties at our rigs Today • Assay done off-site • Slow, costly and not user-friendly for our customers • Core orientation, core logging, survey and assay all done by our crews at the rig Future • Direct data feed into cust
Slide 7: Financial Overview
LFTM160 and FreedomTM Loader Financial Overview Brendan Ryan – CFO
Slide 8: Consolidated Results Summary: 1H 2017
Consolidated Results Summary: 1H 2017 (US $M) Revenue 356 310 • Revenue up 15% driven by higher volume • Uptick in coring activity driven by increased exploration • Bidding activity remains robust 1H 2017 1H 2016 EBITDA 21 13 • Adjusted EBITDA up 58% driven by effective cost control 3 and increased
Slide 9: Year-Over-Year Comparison
Year-Over-Year Comparison Statutory Adjusted2 Change Change (US $M except EPS) 1H 2017 1H 2016 (US $M) 1H 2017 1H 2016 Fav / (Unfav) Fav / (Unfav) Revenue 356 310 15% Revenue 356 310 15% Gross Margin 51 39 31% Adjusted Gross Margin 53 40 32% GM as % of Revenue 14% 13% Adj. GM as % of Revenue 15% 13%
Slide 10: Consolidated Overview: 1H 2017
Consolidated Overview: 1H 2017 Significant improvements in volume and productivity (US $M) Consolidated Revenue Bridge Consolidated Adjusted EBITDA2 Bridge 1H 2017 Results – See page 26 for footnote descriptions 10
Slide 11: Debt and Cash Bridges
Debt and Cash Bridges (US $M) Gross Debt Cash Working capital build in 1H 2017 consistent with seasonality of business Improved working capital profile vs. 1H 2016 – ($37M increase in 1H 2016 vs. $28M increase in 1H 2017) Total cash as of 30 June 2017 was $35 million – expected to increase in the se
Slide 12: Business Overview
Drill Site in Nevada, USA Business Overview Jeff Olsen – CEO
Slide 13: Drilling Services: 1H 2017 Operations
Drilling Services: 1H 2017 Operations Significant improvement in revenue and profitability Change Change Key Financials (US $M): 1H 2017 1H 2016 Key Performance Indicators 1H 2017 1H 2016 Fav / (Unfav) Fav / (Unfav) Revenue 241 220 10% Average Operating Rigs 3 300 279 8% COGS 209 200 -5% Headcount (
Slide 14: Drilling Services: Revenue by Commodity
Drilling Services: Revenue by Commodity Gold and copper drive bulk of revenue 2% 2% 7% 4% 4% 3% 1% 2% 5% 5% 7% 5% 6% 6% 5% 6% 5% 8% Percentage of Total DS Revenue 17% 18% Other Iron 21% Non-Mining Water Other Metals Nickel Energy Copper 57% 57% Gold 47% FY 2015 FY 2016 1H 2017 1H 2017 Results – See
Slide 15: Global Products: 1H 2017 Operations
Global Products: 1H 2017 Operations Significant improvement in revenue and order backlog Change Change Key Financials (US $M): 1H 2017 1H 2016 Key Performance Indicators 1H 2017 1H 2016 Fav / (Unfav) Fav / (Unfav) Revenue 115 91 26% Average Backlog (US $M) 23 13 73% COGS 94 70 -33% Headcount (period
Slide 16: Recapitalisation Nearing Completion
Recapitalisation Nearing Completion Recapitalisation Summary o Implementation expected in early September The court in Australia has approved the creditors’ schemes of arrangement Share purchase plan and other recapitalisation components expected to complete in September o Recapitalisation achieves
Slide 17: Conclusion
LFTM350 Deep Hole Rig and FreedomTM Loader Conclusion
Slide 18: Positive signs in recent commodity trends as well as mining equities & junior equity raisings
Positive signs in recent commodity trends as well as mining equities & junior equity raisings Recent Commodity Trends (since Jan-16) Equity Raisings by Juniors Gold ($/oz.) $3.0 1,400 $2.5 +16% 1,300 $2.0 (US $B) 1,200 $1.5 1,100 1,000 $1.0 Jan-16 May-16 Jun-16 Jan-17 May-17 Jun-17 Feb-16 Mar-16 Feb
Slide 19: We remain committed to our Strategic Priorities
We remain committed to our Strategic Priorities Safety o Continue to be an industry leader o Reduce TCIR and LTIR Operations o Continue to improve on the productivity gains we have made in the last year Technology o Focused on acquiring data from our drill holes and delivering to customers in a fast
Slide 20: Questions?
Questions? @ BOART LONGYEAR
Slide 21: Appendix
TruScanTM Core Orientation Unit Appendix
Slide 22: Safety & Environment
Safety & Environment Our goal is to add value with zero harm – leading our industry with our employees returning home safely each day and performing our work with minimal impact to our neighbors or the environment. Total Case Incident Rate1 Lost Time Incident Rate1 3.26 0.34 2.33 2.15 2.23 1.89 1.78
Slide 23: Key Performance Indicators by Quarter
Key Performance Indicators by Quarter Quarters ended 2017 Quarters ended 2016 Quarters ended 2015 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Total Com pany Revenue (US$ millions) 192.5 163.7 156.9 175.0 168.7 141.8 160.9 186.8 200.3 187.2 EBITDA (US$ millions) (7.6) (4.4) (15.3) 13.8 15.5 (12.4) (75.2) (0.7) (25
Slide 24: Diversified End-Market Exposure
Diversified End-Market Exposure 1H 2017 Total Revenue by Type – Products & Services 1H 2017 Total Revenue by Region – Products & Services Production Drilling Other 2% 5% LAM 14% Rotary/RC 19% USA 27% Surface Coring 25% APAC 21% Underground Coring 16% Canada 19% Drilling Equipment Performance 8% EMEA
Slide 25: Debt Maturity Schedule
Debt Maturity Schedule (US $M) Before Recapitalisation After Recapitalisation 474 478 Term Loan Term Loan B B Term Loan Term Loan A A 195 10% Unsecured 7% Notes 10% Unsecured 95 Unsecured 60 Notes 7% Notes ABL / - ABL / - - - - Unsecured Backstop ABL DDTL Notes FY 2018 FY 2019 FY 2020 FY 2021 FY 202
Slide 26: Footnote Disclosures
Footnote Disclosures • Footnote 1: Per 200,000 work hours. • Footnote 2: Loss from Trading Activities, Adjusted Gross Margin, Adjusted Operating Loss, Adjusted SG&A, Adjusted EBITDA and Adjusted NPAT Loss are non-IFRS measures and are used internally by management to assess the underlying performanc