Slide 1: Full Year Results Presentation Financial Year 2021
FULL YEAR RESULTS PRESENTATION Financial Year 2021 1 www.mitchellservices.com.au
Slide 2: Disclaimer
DISCLAIMER This investor presentation has been prepared by Mitchell Services Limited (“the Company”). Information in this presentation is of a general nature only and should be read in conjunction with the Company’s other periodic and continuous disclosure announcements to the ASX, which are availab
Slide 3: Mitchell Services Market Profile
MITCHELL SERVICES MARKET PROFILE ASX Information* Major Holders * ASX Stock Symbol MSV Mitchell Group 18.4% Shares Issued 199,954,290 Dream Challenge Pty Ltd 7.2% Share Price A$0.43 Market Capitalisation A$85.98m Washington H Soul Pattinson 6.0% *Current as at 23/08/2021 Board of Directors Executive
Slide 4: People, Risk and Sustainability
PEOPLE, RISK AND SUSTAINABILITY • Implemented critical risk management program. Infield program designed to verify the presence and effectiveness of critical control measures to prevent life changing injuries and fatalities. • Covid 19 has continued to present logistical changes but credit to our en
Slide 5: FY21 Business Overview
FY21 BUSINESS OVERVIEW 42,633 shifts in FY21 650+ Industry leading safety ↑ 20% from FY20 performance driven by critical risk control verification program experienced employees Total revenue of $191m $29.6m gross bank debt Underlying* FY21 EBITDA of $35.7m at 30 June 21 representing a 25% decrease ↑
Slide 6: MSV's Demonstrated Ability to Deliver Growth
MSV’S DEMONSTRATED ABILITY TO DELIVER GROWTH Annual Average Operating Rig Count vs Revenue $200-$220m $191.4m $175.56m $120.21m Average Operating Rig Count Average Operating Rig 71.6 Count $72.69m Average 67.7 Operating Rig Count $40.30m 48.9 $32.97m Average Operating $25.17m Rig Count 37.4 $15.02m
Slide 7: Revenue Quality and Diversity
REVENUE QUALITY AND DIVERSITY FY21 Revenue by State and Commodity Revenue by Drilling and Client Type ◼ Surface Drilling 30.0% ◼ Underground Drilling 50% 46.3% 44% 45% 5.4% 55% 56% 50% 16.8% 63% 55% 1.6% 65% 45% 75% 37% 92% 93% 34% QLD SA NSW WA VIC FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 F ◼ T
Slide 8: Organic Growth Strategy
ORGANIC GROWTH STRATEGY • Mitchell Services is embarking on an organic growth strategy including a material capital investment program to deliver anticipated FY22 EBITDA of between $40m and $44m. • This investment includes the purchase of 9 LF160 drill rigs that are expected to be delivered by 31 De
Slide 9: Opportunity to Leverage the Cycle
OPPORTUNITY TO LEVERAGE THE CYCLE • Significant increase in demand in the gold and base metals sectors with a positive long-term industry outlook. • Global government stimulus and subsequent investment into infrastructure and other projects will drive demand for copper and other base metals. • In a
Slide 10: Significant Barriers to Entry
SIGNIFICANT BARRIERS TO ENTRY • Access to funding for new mining services providers is challenging given limited lender appetite to the mining services sector. • Complex and highly regulated industry. • Increasing lead time in relation to the supply of rigs, ancillary equipment and consumables. • Si
Slide 11: Profit and Loss
PROFIT AND LOSS Strong underlying EBITDA performance Underlying Profit & Loss FY21 FY20 Change $000's $000's % • At an underlying level, revenue and EBITDA have Revenue 191,466 175,555 9% continued to grow and underlying EBITDA margins EBITDA 35,685 34,951 2% remain strong. EBIT (before Amortisation
Slide 12: Balance Sheet
BALANCE SHEET Strong balance sheet provides flexibility 30-Jun-21 30-Jun-20 Change $000’s $000’s % • Mitchell Services is well funded to take advantage of significant growth opportunities as Balance Sheet Summary Current assets 47,429 58,553 (19%) it embarks on an organic growth strategy Non-current
Slide 13: Cash Flow
CASH FLOW Strong operating cash flows and Cash Conversion Ratio Operating Cash Flow Summary FY21 FY20 Change $35m $000's $000's % $30m Receipts from customers 186,372 173,205 8% $25m 2nd Half Payments to suppliers / employees (152,772) (140,136) (9%) 2nd Half $20m Cash generated from operations 33,6
Slide 14: Debt Profile Overview
DEBT PROFILE OVERVIEW Seek to maintain leverage at below 1 x EBITDA Facility 30 June 21 30 June 20 Movement $000’s $000’s $000’s Revolving equipment finance 11,248 9,882 (1,366) Other equipment finance 7,429 15,440 8,011 Corporate/Acquisition loan 10,932 14,169 3,237 $10m overdraft/working capital -
Slide 15: Capital Expenditure
CAPITAL EXPENDITURE Organic growth strategy and capital investment program underway Growth Capex $18m $16m $14m 2nd Half • FY21 maintenance capex represents $12m approximately 60% of FY21 depreciation. $10m $8m 2nd Half $6m 1st Half • Growth Capex relates to new rigs and ancillary $4m equipment to s
Slide 16: Summary
SUMMARY • Mitchell Services vision is to be Australia’s leading provider of drilling services to the global exploration, mining and energy industries. • Mitchell Services is embarking on an organic growth strategy including a material capital investment program to deliver anticipated FY22 EBITDA of
Slide 17: Appendix A - FY21 EBITDA Reconciliation
APPENDIX A - FY21 EBITDA RECONCILIATION $0.2m $3.0m • FY21 reported EBITDA includes a $6.6m trade receivable impairment $6.6m in relation to SMS Innovative Mining Pty Ltd. The $6.6m reflects the gross receivable at 30 June 2021 of $9.6m less $3m being the $35.7m first tranche received pursuant to a
Slide 18: Appendix B
APPENDIX B FY21 and FY20 reconciliation of statutory to underlying results FY21 EBITDA EBIT NPBT NPAT $000's $000's $000's $000's Statutory Results 25,875 (4,357) (7,134) (5,899) Impairment of trade receivables 1 6,625 6,625 6,625 6,625 1 Legal expenses related to impairment of receivables 210 210 2
Slide 19: Appendix C - Definitions
APPENDIX C Definitions Capex Capital expenditure The ratio of A to B; where A is the reported cash flows from operating activities (excluding interest and income tax paid) and B is the Cash Conversion Ratio reported EBITDA Earnings before interest, tax, depreciation and amortisation; calculated as N