Capital Limited · LSE:CAPD
Capital — FY2020 Earnings Presentation
42 slides from Capital's earnings presentation, Mar 18, 2021
Slide 1: Capital Limited 2020 Annual Results
Capital Limited 2020 Annual Results 18 March 2021
Slide 2: Disclaimer
Disclaimer IMPORTANT NOTICE This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of Capital Limited (the “Company”), nor shall any part of it nor the fact of its distribution form par
Slide 3: Section 1 – Summary
Section 1 – Summary
Slide 4: Capital Limited Snapshot
Capital Limited Snapshot We provide full-service mining, drilling, maintenance and geochemical analysis solutions to customers within the global minerals industry, focusing on the African markets YEARS OF EXPERIENCE IN EMPLOYS AFRICA 1,277 P e o p l e * 15+ OPERATING IN REVENUE BY CUSTOMER 10 A f r
Slide 5: Our Strategy
Our Strategy SERVICES ACROSS THE MINING CYCLE D e l i v e r A N E N D - T O - E N D E X P L O R AT I O N TO MINING SERVICES solution Focus on MINE-SITE BASED CONTRACTS across multiple services to leverage established on-site infrastructure Build a SUPERIOR PORTFOLIO OF LONG- TERM CLIENTS with blue-c
Slide 6: FY 2020 Revenue Diversification
FY 2020 Revenue Diversification REGION SERVICES ACTIVITY L O C AT I O N NON MINE NON-DRILLING* NON-DRILLING* SITE EXPLORATION 13% 13% 7% TANZANIA 3% 32% WAF 30% PRODUCTION 43% DELINEATION 30% ROW 5% MINE SITE MENA DRILLING 93% 33% 87% UNDERGROUND 11% Note: * Mining, Maintenance, Laboratory, Equipmen
Slide 7: Long Term Contract Portfolio
Long Term Contract Portfolio 10 O P E R A T I N G M I N E S I T E S MIDDLE EAST AND NORTH AFRICA 93% M I N E - S I T E B A S E D R E V E N U E Egypt Saudi Arabia WEST AFRICA (Jabal Sayid) (Sukari) Commenced in 2005 Commenced in 2019 EAST AFRICA Mauritania Mali Mali (Tasiast) (Syama) (Yanfolila) Comm
Slide 8: FY 2020 Highlights
FY 2020 Highlights S T R AT E G I C A N D O P E R AT I O N A L Multiple contract wins with existing and new customers, including seven new mine-site contracts Transformational waste mining contract with Sukari Increased rig fleet utilisation to 59% (from 54%) TRIFR of 0.77 per 1,000,000 hours worked
Slide 9: Delivering on the Strategy 2020
Delivering on the Strategy 2020 S T R AT E G I C F O C U S A R E A S DELIVERED INCREASE Transformational waste stripping contract at the Sukari Mine (Centamin) SERVICE • Expand range of services into mining, laboratories and maintenance OFFERING Five year lab management contract at the Bulyanhulu Mi
Slide 10: Industry Leading Safety Standards
Industry Leading Safety Standards TOTAL RECORDABLE INCIDENTS FREQUENCY RATE (TRIFR) TREND C O M M E N TA RY • Total Recordable Incident Frequency Rate (TRIFR) of 0.77 2.50 2.29 • Achievement of a number of safety records including: 2.00 ˗ Tanzania, Mwanza Facility: 12 years LTI free in January 2020
Slide 11: Capital's Asset Fleet
Capital’s Asset Fleet DRILL RIG FLEET: 94 RIGS* MINING Purchasing 2 new rigs for WAF (2020 carry over) Multi Purpose 9 Purchasing 2 new RC rigs Diamond 30 Reverse Circulation 7 17 trucks (685) 4 Excavators (6020, 6040 & 390) ANCILLARY Air Core 4 Blast Hole 26 Purchasing 7 new rigs Weep Hole Undergro
Slide 12: Section 2 – Results
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Slide 13: FY 2020 Financial Overview
FY 2020 Financial Overview Drilling Revenue KPIs 2020 2019 % change C O M M E N TA RY Average Fleet Size 98 92 7% • Industry leading revenue growth a strong endorsement of strategy. Key drivers: Fleet Utilisation (%) 59 54 9% - Revenue growth on existing key contracts ARPOR (US$) 171,000 176,000 -3%
Slide 14: Improving Margin Profile
Improving Margin Profile EBITDA AND MARGINS EBIT AND MARGINS EBITDA (USDm) EBITDA (%) EBIT (USDm) EBIT (%) 20.0 27.2% 30% 20.0 17.2% 20% 26.3% 15.6% 18.0 24.3% 14.4% 14.7% 22.9% 23.2% 23.7% 16.0 16% 16.0 22.2% 25% 11.4% 20.3% 10.6% 12.0 8.3% 12% 14.0 18.6% 17.5% 20% 8.0 8% EBITDA US$m 12.0 EBITDA %
Slide 15: FY 2020 Cash Flow
FY 2020 Cash Flow • Strong performance in operating cash flows, up 25% up on 2019 $ • Capex cash outflow of $60.7 million includes: EBITDA cash conversion continues - $43.0 million Capex strong trend with cash conversion - $17.9 million Asset Prepayments at 106% • Stable working capital movement, wi
Slide 16: Capital Expenditure
Capital Expenditure Non Mining Capex Sukari New Contract FY 2020 CAPEX US$m 50.0 45.0 40.0 35.0 30.1 30.0 25.0 MSA Acquisition Sukari New Contract $1.8m $30.1m 20.0 15.0 30.0 26.7 10.0 19.8 18.6 13.6 12.8 11.9 5.0 10.8 7.9 4.3 0.0 New Rigs FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY18 FY19 FY20 $1.
Slide 17: FY 2020 Balance Sheet
FY 2020 Balance Sheet 2020 2019 % change C O M M E N TA RY Balance Sheet US$m US$m from 2019 • Successfully completed an (upscaled) net capital raising of $37.2 million in December Cash and cash equivalents 35.7 17.6 102.6% to facilitate the purchase of equipment required for the Sukari contract Pro
Slide 18: Investments
Investments BACKGROUND PERFORMANCE • Capital has selectively engaged in Direct Investment and Drill for Equity since 2015 • Capital generated substantial (unrealised) returns from the investment portfolio over 2020 • Investments must satisfy a number of criteria: - Strategic alignment with Capital’s
Slide 19: 2020 Final Dividend
2020 Final Dividend • FINAL DIVIDEND DECLARED FOR 2020 of US1.3cps • 2019 final dividend of US0.7 cps paid in CY 2020 Return excess to Shareholders • Capital has consistently delivered shareholder value through dividends since 2014 Investment through • Reflecting the evolved business model, going fo
Slide 20: Section 3 – Outlook
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Slide 21: Strategic Priorities 2021
Strategic Priorities 2021 Grow The Full-service Grow Ancillary Expand Capacity With Increase Utilisation Mining Division Services Revenue Existing Customers Through Idle Fleet • Larger revenue opportunities • Service diversification • Leverage existing relationships • Substantial idle capacity in •
Slide 22: Sukari Waste Mining Contract
Sukari Waste Mining Contract CAPITAL MINING SUKARI – BLUE CHIP, TIER 1 ASSET • Load and Haul creates a fully integrated service offering • Operator: Centamin Plc • Presents a larger revenue opportunity and provides opportunity for further • Location: Egypt long term mine site contracts • Status: In
Slide 23: Sukari Contract Update
Sukari Contract Update • All key senior project roles filled • Personnel ramp up progressing with c175 roles “on boarded” PEOPLE • Integration with the existing drilling, maintenance and support teams on track • Heavy mobile equipment operator training advancing well • Construction of expanded maint
Slide 24: Grow Ancillary Services Revenue
Grow Ancillary Services Revenue ANCILLARY SERVICES LAB SERVICES: MSALABS • Strong growth recorded in 2020 as business moved to positive EBITDA contribution • Secured 5 year laboratory services contract with Bulyanhulu, with full scale operations commencing in 2021 • Acquired ELAM in Côte d'Ivoire in
Slide 25: Expand Capacity with Existing Customers
Expand Capacity with Existing Customers L E V E R A G E E S TA B L I S H E D I N F R A S T R U C T U R E E X PA N D S E R V I C E S A N D A S S E T S • Portfolio of ten long-term mine-site based operations • Allows Capital to leverage existing on-site infrastructure • Long term contracts support con
Slide 26: Increase Exploration Fleet Utilisation
Increase Exploration Fleet Utilisation RIG FLEET 2006 - 2020 U T I L I S AT I O N 2 0 1 0 - 2 0 2 0 No of rigs 90% 82% 100 76% 80% 72% 90 80 70% 59% 70 55% 54% 60% 53% 51% 60 50% 43% 45% 50 40 34% 40% 30 20 30% 11 10 20% 19 25 49 60 74 85 93 95 96 94 92 93 91 98 0 FY10 FY11 FY12 FY13 FY14 FY15 FY16
Slide 27: Revenue Metrics
Revenue Metrics REVENUE vs UTILISATION DRILLING CYCLE STAGES Revenue Utilisation • Rig utilisation increases – H A P P E N I N G N O W 180.0 82% 90% 76% 160.0 72% 80% - Increasing number of rigs working 140.0 59% 70% 55% 53% 54% - Strong increase in demand commenced in Q4 2020 Revenue (US$m) 120.0 5
Slide 28: 2021 Contract Wins & Commencements
2021 Contract Wins & Commencements E X P L O R AT I O N : G R E E N F I E L D & B R O W N F I E L D EGYPT MAURITANIA MALI BURKINA FASO MALI CAMEROON CÔTE D’IVOIRE Él Sidi Tijirit Sanankoro Dynikongolo Tabakorole Bibemi Sissingué Project Gold Project Gold Project Gold Mine Gold Project Gold Project G
Slide 29: Gold Market Overview
Gold Market Overview GOLD PRICE NONFERROUS EXPLORATION BUDGET Last price (US$/oz) Nonferrous Exploration Budget Total 24 2,000 Nonferrous Exploration Budget (US$ billion) $20.53 21 $17.24 1,800 18 $13.87 $14.41 15 1,600 $11.03 $11.51 Gold price (US$/oz) 12 $10.74 $9.62 $9.29 $8.77 $8.33 $8.00 $8.05
Slide 30: Outlook & Guidance
Outlook & Guidance Gold price remains at comfortably high levels, with resurgent pricing for base and battery metals providing further sector support Surging mining equity market activity during 2020 resulted in a nine-year high for capital raisings, a strong lead indicator for demand Strong industr
Slide 31: Appendices
Appendices
Slide 32: Capital Limited Investment Proposition
Capital Limited Investment Proposition FULL-SERVICE PROVIDER H I G H LY S U P P O R T I V E M A C R O • Diversity of services across the mining cycle and shift towards • Strong gold and metals prices, resurgent capital raisings and becoming a full-service provider, increasing recurring revenue eleva
Slide 33: Our Capabilities
Our Capabilities DRILLING MINING L A B O R AT O R Y OTHER SERVICES INVESTMENTS • Since 2005 • Since 2019 • Since 2017 WELL FORCE • Since 2015 • Provides a complete range of • Provides complete • A global provider of • Since 2010 • Investment in junior & mid drilling solutions for projects earthmovin
Slide 34: Technology & Innovation
Technology & Innovation We are INDUSTRY LEADERS IN ADOPTING THE LATEST TECHNOLGIES to improve productivity, safety and environmental performance Remote blast hole drilling Remote site internet / communications We integrate the latest DATA CAPTURE AND TRANSMISSION TECHNOLOGIES to meet our clients nee
Slide 35: 2020 Contract Wins & Extensions
2020 Contract Wins & Extensions E X P L O R AT I O N : G R E E N F I E L D & B R O W N F I E L D EGYPT MALI BURKINA FASO CÔTE D’IVOIRE MALI CAMEROON CÔTE D’IVOIRE GUINEA Él Sidi Diba Dassa Gold Odienné Lakanfla & Bibemi Sissingué Bankan Project Project Project Project Tabakorole Gold Project Gold Mi
Slide 36: Compelling Growth Opportunities in West Africa
Compelling Growth Opportunities in West Africa STRONG EQUITY MARKET SUPPORT 2nd TOP GOLD PRODUCING REGION $4.9 B raised for West African projects 11.1Moz production in 2020 (Estimated) National Gold Production (Estimated) (Moz) Financing for Gold Companies ($B) 2009 – 2021 (current) 14,000 12 11.2 1
Slide 37: Client History
Client History Armenia Chile Antofagasta Anvil DRC APM Ethiopia Lydian Barrick Tiger BHP Billiton BHP Ethiopia Potash CMP Glencore E G Y P T MMG Polar Star M A L I M A U R I T A N I A Eritrea Ghana Kenya Mozambique Andiamo Kinross Acacia Boabab Chalice Gold Riversdale Sunridge Rio Tinto Aton Resourc
Slide 38: Board of Directors
Board of Directors EXECUTIVE NON-EXECUTIVE JAMIE BOYTON BRIAN RUDD DAVID ABERY ALEX DAVIDSON MICHAEL RAWLINSON EXECUTIVE CHAIRMAN EXECUTIVE DIRECTOR SENIOR NED NED NED • Over 20 years’ • Over 30 years’ • Over 20 years • Over 35 years • Over 20 years investment experience in finance experience in the
Slide 39: Corporate Snapshot
Corporate Snapshot C A P I TA L S T R U C T U R E SHAREHOLDING BLOCK Fully paid ordinary shares 188,780,903 As at 31 Jan 2021 Share price (as at 31 December 2020) £0.67 Other Founders 10.7% Market capitalisation (undiluted)^ $171.70m Directors Top 10 Institutions Cash and cash equivalents (as at 31
Slide 40: Capital Limited Competitors
Capital Limited Competitors Footnote: • The share price data is as of 16 March 2021 and sourced from FactSet. Other data sourced from Factset (fiscal years) and most recent company financial reports. CAPD earnings data are Tamesis estimates. 40 • The CAPD yield is calculated using the second interim
Slide 41: Glossary
Glossary The words below used in the presentation have the following meaning: ARPOR Average Revenue Per Operating Rig LTI Loss Time Injury CAPEX Cash used on acquisition of property plant and equipment less Profit or loss after tax adjusted for non-cash items +/- the net Operating Cash flow (Capital
Slide 42: Company Contact Details
Company Contact Details CAPITAL LIMITED UK BROKERS UK PUBLIC RELATIONS Jamie Boyton Berenberg (Joh. Berenberg, Gossler & Co. KG) Buchanan Executive Chairman 60 Threadneedle Street, London EC2R 8HP 107 Cheapside, London EC2V 6DN jamie.boyton@capdrill.com Telephone: +44 20 3207 7800 Telephone: + 44 20