Gulf Marine Services Plc · LSE:GMS
Gulf Marine Services — FY2019 Earnings Presentation
30 slides from Gulf Marine Services's earnings presentation, May 2020
Slide 1: 2019 Full Year Results
2019 FULL YEAR RESULTS Gulf Marine Services PLC May 2020
Slide 2: Contents
Contents 1 COVID-19 Update 2 2019 Review, Current Status & Trading Update 3 2019 Financial Results • EBITDA • Cost Savings • Fleet Utilisation and Rates • Revenue and Cashflow • Capital Expenditure • Capital Structure 4 2020 Forward View 2
Slide 3: COVID-19 Update
- COVID-19 UPDATE
Slide 4: COVID-19 Managing Business Impact
COVID-19 Managing Business Impact Group • Routine Board updates • Restricted travel • Critical supplier analysis • Onshore and offshore contingency plans • Daily Management Call Onshore • Organisation size reduced • Staff working from home • Working hours and salaries reduced • Leave and business tr
Slide 5: 2019 Review, Current Status & Trading Update
2019 REVIEW, CURRENT STATUS & TRADING UPDATE
Slide 6: 2019 Review: Operations, Governance, Cost Savings, Results
2019 Safe and Reliable Operations • Secure performance and delivery during transformational change Governance • Overhaul of Board and Senior Management Team • Remuneration Policy aligned with performance • Reform of management oversight: financial; cost control; risk Cost Savings • US$ 13m annualise
Slide 7: Current Status
Current Status Capital Structure • Post year-end, term sheet agreed • Documentation to be completed by 30 June 2020 Market Activity • Tender activity continuing in Middle East • Relocation of two E-Class vessels to Middle East • Continued demand within renewables market in NW Europe Strong Contract
Slide 8: Trading Update
Trading Update • 1Q 20 results ahead of Business Plan • 83% of 2020 Business Plan revenues secured (including contracted options) • Blue chip clients with strong, long term relationships • Some pressure for short term rate reductions • GMS will update promptly on significant developments 8
Slide 9: 2019 Financial Results
GMS BB 2019 FINANCIAL RESULTS
Slide 10: 2019 Income Statement
2019 Income Statement US$ m FY 2019 FY 2018 Revenue 108.7 123.3 Cost of sales less impairment * (74.6) (76.3) Impairment charge (59.1) - General and administrative expenses * (17.8) (18.6) Restructuring Costs (6.3) - EBITDA (14.1) 58.0 Adjusted EBITDA 51.4 58.0 Loss for the period/year (85.5) (5.1)
Slide 11: August 2019 EBITDA Guidance
August 2019 EBITDA Guidance 60 55 -7 58 50 -4 51 US$ m -2 45 45-48 40 35 December 2018 Utilisation NW Utilisation Middle Day Rates August guidance 2019 Actual guidance Europe East 11
Slide 12: August EBITDA Guidance Outperformed
August EBITDA Guidance Outperformed 53 51 2 51 49 47 4 US$ m 45 45 - 48 43 41 39 37 35 August guidance Utilisation Cost Savings 2019 Actual 12
Slide 13: Continuous Drive to Reduce Costs
Continuous Drive to Reduce Costs Cost Savings Timeline US$ 13m Annualised Savings All amounts in US$ m Dec Mar Sep Nov Dec Actuals 8% 2 4 35% 6 28% 6 8 8.5 10 10 12 12 12% 17% 13 14 People Facilities Vessel Catering Cost savings programme currently delivering more than double amount announced in Mar
Slide 14: Significant Headcount Reduction
Significant Headcount Reduction G&A as % of Revenue Onshore Headcount 113 108 14 % 79 13 % Dec-17 Dec-18 Dec-19 12 % 2017 2018 2019 30% headcount reduction in 2019 14
Slide 15: Driving Operational Efficiencies
Driving Operational Efficiencies Vessel Core Opex (VCO) VCO is the underlying cost per day of running a vessel, excluding costs arising from client specific requests. Includes costs for: • crew 13 • repair and maintenance All amounts in US$ 000s’ per day • equipment rental 12 • insurance, fees and t
Slide 16: Fleet Utilisation in 2019 Overall Stable
Fleet Utilisation in 2019 Overall Stable 100 97 90 80 75 Percentage Utilisation 73 68 69 69 70 64 60 51 50 40 30 20 10 0 E-Class S-Class K-Class Fleet Average 2019 2018 16
Slide 17: Day Rates Lower but Stable
Day Rates Lower but Stable 50 46 45 41 40 40 US$ 000s’ per day 33 34 35 30 30 25 22 23 20 15 10 5 0 E-Class S-Class K-Class Fleet Average 2019 2018 17
Slide 18: Balanced Revenue Streams
Balanced Revenue Streams Revenue by Geographical Location Revenue by Customer UAE NOC • Increase in revenue from NOCs Strong presence in all three Middle East following strengthened relationships markets • Renewables market remained stable NW Europe EPC despite two contracts concluding • UAE: positi
Slide 19: Capex Discipline
Capex Discipline US$ 109m 110 100 New build 90 Client Specific 80 Maintenance US$ m 70 60 50 40 US$ 32m 30 US$ 23m 20 US$ 10m 10 0 2016 2017 2018 2019 19
Slide 20: Focus on Cash Flow
Focus on Cash Flow FY 2019 All amounts in US$ m 109 44 14 6 3 10 10 42 Revenue Opex Overheads Restructuring Tax Changes in Capex and other Net cashflow working capital FY 2018 123 48 17 0 3 25 24 6 Revenue Opex Overheads Restructuring Tax Changes in Capex and other Net Cashflow working capital 20
Slide 21: Summary Balance Sheet
Summary Balance Sheet Our fleet $54m impairment on 2 E-Class vessels, plus $5m relating to • Net book value US$ 662.7m scrapping of obsolete vessel and • US$ 59.1m impairment equipment Working capital Net Debt US$ m Dec 2018 Dec 2019 US$ m Dec 2018 Dec 2019 Trade Receivables 33.0 25.1 Bank debt 411.
Slide 22: New Loan Facilities
New Loan Facilities • Term sheet agreed • Extended maturity to 30 June 2025 • Enhanced liquidity through new US$ 50m working capital facility • Re-phased amortisation • Increased Financial Covenant headroom • Incentives to de-lever through shareholder equity injection • PIK interest • Contingent equ
Slide 23: Bank Negotiations: Timeline
Bank Negotiations: Timeline Major reprofiling Rollover working Rollover working Term Sheet of maturity dates capital facility to capital facility to Agreed and financial 31 December 28 February covenants Nov Dec Dec Sep Dec Jan Feb Mar 15 17 18 19 19 20 20 20 Waived covenant Announcement of breaches
Slide 24: Banking Process Forward Plan
Banking Process Forward Plan Common Terms Agreement to be Formal credit substantially approvals by the completed by end end of June of April Mar Apr May Jun 20 20 20 20 Major commercial Security and terms agreed and Islamic ratified by Credit documentation Committees completed 24
Slide 25: 2020 Forward View
BB 2020 FORWARD VIEW
Slide 26: 2020 Operations Update
2020 Operations Update • 12 of 13 vessels in fleet currently on hire • 5 vessels on multi-year contracts • Backlog as at 1 April 2020: US$ 239.7m • Robust supply chain • 83% of business plan revenues already secured (80% excluding options) • Pressure on day rates • Clear procedures in place for COVI
Slide 27: Cost Update
Cost Update All amounts in US$ m Cost Savings Timeline 2019 Mar Sep Nov Dec Dec Actual 6 8.5 10 12 13 15 April 2020 Further cost savings have been achieved from: • Operational optimisation • Supplier contract renegotiations • Further headcount reductions 27
Slide 28: G&A Update
G&A Update G&A as % of Revenue Onshore Headcount 22% reduction during 2020 14.0 120 113 108 100 13.0 79 Percentage 80 62 12.0 60 40 11.0 20 10.0 0 Dec-17 Dec-18 Dec-19 Apr-20 2017 2018 2019 2020 28
Slide 29: Summary
Summary Safe and reliable • Continue to deliver excellent safety and operational performance • Cost savings programme currently delivering ahead of plan Low-cost operations • Actions in place to drive further cost improvements Strengthening position in • Backlog strengthening substantially core mark
Slide 30: Disclaimer
Disclaimer This presentation has been prepared by Gulf Marine Services PLC (the "Company") and comprises the slides for a presentation to analysts concerning the Company. This presentation has been prepared solely for informational purposes and does not constitute or form part of or contain any invi