Bristow Group, Inc. · NYSE:VTOL
Bristow — Investor Presentation (January 2011)
48 slides from Bristow's investor presentation, Jan 21, 2011
Slide 1: Bristow Group Inc. Presentation to Investors
11 Bristow Group Inc. Presentation to Investors January 2011 Exhibit 99.1
Slide 2: Forward-looking Statements
Forward-looking Statements This presentation may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements about our future business, operations, capital expenditures, fleet composition, capabilities
Slide 3: ERO = Bristow
ERO = Bristow B® nF Brist
Slide 4: Bristow is the leading provider of helicopter transportation services to the global offshore industry
Bristow is the leading provider of helicopter transportation services to the global offshore industry $275 $67 • Ticker: BRS • Stock price : $38.78 • Market cap : ~$1.42 billion • Enterprise value : ~$2.0 billion • ~20 countries • 578 aircraft • ~3,400 employees • Bristow flies crews and light cargo
Slide 5: Key Investment Considerations
Key Investment Considerations Leading Market Position: #1 or #2 in each market Experienced Management Team: 180 years of Senior Management business experience Industry Leading Safety Record: 0.17 vs. 2.27 OGI accident rate per 100k of flight hours As of September 30, 2010 Stable Revenue and Cash Flo
Slide 6: Bristow Core Values
Bristow Core Values • Safety – Safety first, with a “Target Zero” goal of no accidents • Quality and Excellence – Set and achieve high standards in everything we do • Integrity – Do the right thing in conjunction with our Code of Business Conduct • Fulfillment – Develop our talents and enjoy our wor
Slide 7: Industry leading safety record creates marketing and cost advantage
Industry leading safety record creates marketing and cost advantage • Safety is the primary core value • ‘Target Zero’ safety vision changes culture and behavior to achieve: • Zero accidents • Zero harm to people • Zero harm to the environment • Bristow safety performance protects customer personnel
Slide 8: Key Competitive Advantages
Key Competitive Advantages • Bristow has long-term relationships with the oil and gas operators that account for 80% of global offshore E&P spending • Industry-leading safety performance - the key customer requirement • #1 or #2 market position in the major oil and gas provinces: North Sea, USGoM, A
Slide 9: Bristow services are utilized in every phase of offshore oil and gas activity
Bristow services are utilized in every phase of offshore oil and gas activity, especially production PRODUCTION DEVELOPMENT ABANDONMENT EXPLORATION SEISMIC • Largest share of revenues (>60%) relates to oil and gas production, ensuring stability and growth • There are ~ 8,000 offshore production inst
Slide 10: Low risk contract structure results in more predictable revenue and cash flow
Low risk contract structure results in more predictable revenue and cash flow Two-tiered contract structure includes both: • Fixed or monthly fee to reserve capacity • Variable fees based on hours flown • In most markets, Bristow earns 65% of revenue without flying Revenue Sources Variable hourly 35
Slide 11: Stability of Bristow cash flows through full cycle
Stability of Bristow cash flows through full cycle 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% HOS BRS AIRM PHII RIG NE ESV TDW GLF CKH PDE HERO RDC DO TRMA Coefficient of Variation of EBITDAR Margin, 1999 to 2009 Note: Coefficient of Variation is calculated as (standard deviation of (EBITDAR as a % of re
Slide 12: Our customers are market leaders
Our customers are market leaders
Slide 13: Repositioning fleet toward premium segments
Repositioning fleet toward premium segments 4 9/30/2010 Small 31% Medium 43% Large 26% • Shift of global offshore industry toward deepwater exploration and production creates need for larger and more technologically advanced helicopters • Bristow has responded by upgrading fleet, personnel and train
Slide 14: Senior Management Team
Senior Management Team William Chiles President & CEO July 2004 Richard Burman Senior Vice President Operations October 2004 Mark Duncan Senior Vice President Commercial January 2005 Hilary Ware Senior Vice President Administration August 2007 Randall Stafford Senior Vice President General Counsel &
Slide 15: Key Accomplishments of the Bristow team
Key Accomplishments of the Bristow team • Strengthened relationships with global customers at the executive and operating levels • Implemented return targets by business unit • Improved profitability and cash flow • Established global fleet management • Integrated global operations; established glob
Slide 16: ERO = Bristow
ERO = Bristow B® nF Brist
Slide 17: ag Bristow
ag Bristow
Slide 18: Slide 18
Slide 19: Oil and gas industry expanding to new offshore regions
Oil and gas industry expanding to new offshore regions 14% 14% 30% 7% 16% 2% 17% 10% 15% 16% 12% 21% 6% 20% 6% 17% 10% 13% 25% 8% 21% • Fastest growth in Africa, Brazil and Asia • Europe becoming a mature production province – but intense activity will continue to mitigate decline and leverage infra
Slide 20: Offshore spending—particularly Opex—projected to grow over next decade
Offshore spending—particularly Opex—projected to grow over next decade • All segments will show significant spending increases • As production matures in the deepwater, spending will switch from Capex to Opex Source: PFC Energy, March 2010 Global offshore E&P spending forecast $ billion CAPEX OPEX 2
Slide 21: Deepwater production installations are fastest growing segment
Deepwater production installations are fastest growing segment… • >6% forecast annual real growth in deepwater installations • Typical client facility is – miles offshore with a crew of 150, compared with 20 miles offshore and a crew of 20 in shallow water • Brazil, West Africa and USGoM have 77% of
Slide 22: …driving demand for medium and large helicopters
…driving demand for medium and large helicopters • Expanding markets for medium and large sized twins • Larger and newer aircraft can support locations further offshore and comply with new regulatory and safety requirements • Revenue and income from 3 new large twins approximately equates to 50 smal
Slide 23: Bristow is organized to respond to most attractive global growth opportunities
Bristow is organized to respond to most attractive global growth opportunities Operating Income Q2 FY11* North America 14% Europe 33% West Africa 26% Australia 10% Other International 17% • Geographically focused on strongest growth markets • Global presence creates flexibility to redeploy aircraft
Slide 24: Bristow has responded to evolving market by upgrading helicopter size and technology
52 124 102 328 294 141 445 Bristow has responded to evolving market by upgrading helicopter size and technology Historical fleet profile* Helicopter capital expenditures FY06 FY07 FY08 FY09 FY10 YTD11 • Right-sizing the fleet to meet migration to deepwater – Small 48% 30% – Medium 29% 42% – Large 20
Slide 25: Selected opportunities for 166 additional helicopters
56 145 4 3 7 4 7 17 9 15 4 7 8 20 7 11 12 19 88 59 30 Selected opportunities for 166 additional helicopters North America Brazil, Colombia Mexico, Trinidad Nigeria, Ghana Equatorial Guinea Europe Caspian, Mid-East Libya, East Africa Malaysia, Thailand Indonesia Australia Small Medium Large Total Opp
Slide 26: Plan to capture 33% of identified opportunities while maximizing optionality
Plan to capture 33% of identified opportunities while maximizing optionality 12 on order large medium small orders options As of September 30, 2010
Slide 27: ERO = Bristow
ERO = Bristow B® nF Brist
Slide 28: Our financial strategy
Our financial strategy • Improve capital discipline with a specific capital allocation framework • Prudent balance sheet management is a core principle • Liquidity maintained at $200-$250 million • Best risk/return opportunities attract growth capital • Balance shareholder return between capital app
Slide 29: Proven business model and prudent balance sheet management has delivered even during recent downturn
$56 $124 $1.52 $586 Proven business model and prudent balance sheet management has delivered even during recent downturn CAGR 5.9% CAGR 11.3% CAGR 16.3% CAGR 15.7% 1 1 $60 $125 $104 $74 $58 $58 $0 $20 $40 $60 $80 $100 $120 $140 $136 $134 $277 $230 $126 $165 $- $50 $100 $150 $200 $250 $300 $1.58 $1.6
Slide 30: What is Our Capital Allocation Framework?
What is Our Capital Allocation Framework? Three Principles Return Capital to Shareholders Reduce Leverage Create/Build Liquidity Liquidity Adequate? Capital Structure Targets Achieved? Invest in Growth Opportunities “One-time” Payout “One-time” Payout Organic Growth Growth through Acquisitions Tende
Slide 31: Prudent balance sheet management is board mandated
Prudent balance sheet management is board mandated • Remain conservatively capitalized • Debt to total capitalization below approximately 45% • Debt / EBITDA in the range of 3.0x to 3.5x • Board policy to maintain at least $100 million of liquidity through cash and revolving credit availability at a
Slide 32: Our new $375 million secured bank credit facility aligns well with our financial strategy
Our new $375 million secured bank credit facility aligns well with our financial strategy • $175 million 5-year revolver and $200 million 5-year term loan • $100 million accordion feature • Term loan proceeds was used to repay $230 million 6 1/8% senior notes due 2013 on December 23, 2010; revolver
Slide 33: Today's Strong balance sheet and liquidity position
$1.4 billion Equity Today’s Strong balance sheet and liquidity position $721 million Debt Total capitalization $2.1 billion (September 30, 2010) • Cash on hand at September 30, 2010: $108.5 million • YTD FY11 EBITDAR of $137.4 million • Significant revolver borrowing capacity (~$135 million undrawn
Slide 34: Helicopter aftermarket provides cash and value for Bristow
Helicopter aftermarket provides cash and value for Bristow • Global aftermarket for excess helicopters helps balance supply and demand in the oil and gas sector • Historically, Bristow has been successful in selling its non-core aircraft for prices in excess of book value • From FY07 through FY10, B
Slide 35: Projected operating cash covers capex; over $500 million available for growth and/or distribution
Projected operating cash covers capex; over $500 million available for growth and/or distribution to shareholders 78 100 1400 84 762 800 300 230 217 125 552 Projections based on five-year plan; actual financing choices will depend on evaluation of available options: subject to numerous conditions, u
Slide 36: Our strategy…gaining altitude
Our strategy…gaining altitude • Deliver on the Brand promise though the safest and most valuable services • Create Discipline around capital allocation • Adhere to a prudent balance sheet management philosophy- always • Employ a robust return on capital employed and beyond model for growth capital
Slide 37: Appendix A Aircraft Information
Appendix A Aircraft Information
Slide 38: Aircraft Fleet – Medium and Large
Aircraft Fleet – Medium and Large - As of September 30, 2010 Next Generation Aircraft Mature Aircraft Models Medium capacity 12-16 passengers Large capacity 18-25 passengers Aircraft Type No. of PAX Engine Consl Unconsl Total Ordered Medium Helicopters AW139 Twin Turbine Bell 212 Twin Turbine - Bell
Slide 39: Aircraft Fleet – Small, Training and Fixed
Aircraft Fleet – Small, Training and Fixed As of September 30, 2010 (continued) Next Generation Aircraft Mature Aircraft Models Small capacity 4-7 passengers Training capacity 2-6 passengers Aircraft Type No. of PAX Engine Consl Unconsl Total Ordered Small Helicopters Bell 206B Turbine - Bell 206 L-
Slide 40: Appendix B Other Company Information
Appendix B Other Company Information
Slide 41: Leading market position
#2 #1 #1 #2 #1 #1 #2 #1* #1* #1* #1 #2 #1* Leading market position * Unconsolidated affiliate
Slide 42: Slide 42
Slide 43: Target Zero
TARGET, ZERO Shonen or
Slide 44: ZERO =i Bristow
iw ZERO =i Bristow
Slide 45: North America (NABU)
North America (NABU) • Represents 18%* of revenue • 14% of operating income in Q2 FY11 • Operating margin 16.1% in Q2 FY11 • Additional work from BP in support of the spill control resulted in 6% operating margin increase • Drilling Moratorium was lifted on October 13, * For the three months ended S
Slide 46: Other International (OIBU)
Other International (OIBU) • OIBU represents 12%* of revenue for the quarter • 17% of operating income in Q2 FY11 • Operating margin 30.6% in Q2 FY11 • Brazil – Lider: expecting start up of new contracts • Recent contract awards coming on full force • Focused on improving business performance in Tri
Slide 47: EBITDA and EBITDAR Reconciliations
EBITDA and EBITDAR Reconciliations 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 YTD FY10 YTD FY11 ($ in millions) Income from continuing operations $8.8 $27.9 $42.5 $40.3 $49.6 Income tax expense 3.8 13.3 19.1 17.5 18.5 Interest expense 18.5 18.4 15.8 14.9 16.8 Depreciation and amortizatio
Slide 48: Leverage Reconciliation
Leverage Reconciliation Annualized 366.4 $ Debt Investment Capital Leverage (a) (b) (c) = (a) + (b) (a) / (c) As of September, 2010 720.6 $ 1,432.6 $ 2,153.2 $ 33.5% Adjust for: Unfunded Pension Liability 112.6 112.6 NPV of GE and Norsk Lease Obligations 43.5 43.5 Adjusted 876.7 $ (d) 1,432.6 $ 2,30