Bristow Group, Inc. · NYSE:VTOL
Bristow — Q2 FY2016 Earnings Presentation
51 slides from Bristow's earnings presentation, Nov 6, 2015
Slide 1: Second quarter FY16 earnings presentation
November 6, 2015 Second quarter FY16 earnings presentation Bristow Group Inc. Exhibit 99.1
Slide 2: Second quarter FY16 earnings call agenda
Second quarter FY16 earnings call agenda Introduction CEO remarks and safety review Operational highlights Current and future financial performance Closing remarks Questions and answers Linda McNeill, Director Investor Relations Jonathan Baliff, President and CEO Jeremy Akel, SVP and COO L. Don Mill
Slide 3: Forward-looking statements
Forward-looking statements Statements contained in this presentation that state the Company’s or management’s intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements. These forward-looking statements include statements regarding earnings guidance and earn
Slide 4: CEO remarks and safety review
CEO remarks and safety review Jonathan Baliff, President and CEO
Slide 5: Q2 FY16 operational safety review
Q2 FY16 operational safety review AAR includes commercial operations for Bristow Group and consolidated affiliates, Eastern Airways and Airnorth TRIR beginning in FY15 includes consolidated commercial operations, corporate, Bristow Academy, Eastern Airways, and Airnorth employees Accident investigat
Slide 6: Bristow sees continued market headwinds but is successfully responding
Bristow sees continued market headwinds but is successfully responding We continue to expect this “lower for longer” oil price environment to persist through 2017 Forecast helicopter demand continues to trend lower due to project delays and deferred offshore infrastructure OEMs shifting production c
Slide 7: Bristow's multi-faceted response is yielding success in FY16
Bristow’s multi-faceted response is yielding success in FY16 Reinforced our liquidity position with ~$100 million in near term capex deferrals, $200 million term loan and revised debt covenants Implementing restructuring measures to lower our costs; ~20% of $150 million of announced cost reductions
Slide 8: Operational highlights
Operational highlights Jeremy Akel, SVP and COO
Slide 9: Europe Caspian
Three year contract for one LACE with new client in Norway commencing Q4 FY16; three year contract for one LACE with a new client in UK commenced Q2 FY16 Eastern generated $32.9 million of revenue and $7.8 million of EBITDAR in Q2 FY16 FY16 adjusted EBITDAR margin for Europe Caspian expected to rema
Slide 10: UK SAR update
UK SAR update UK SAR start up almost complete with two additional bases beginning service: Lydd began operations August 14 and St. Athan began operations October 4 Two additional bases expected to begin contract operations during Q4 FY16, bringing the total number of bases online to nine in FY16 (in
Slide 11: Africa
Africa Fixed wing services with two Eastern aircraft to commence in Q3 FY16 Secured contract extensions with major clients FY16 adjusted EBITDAR margin for Africa expected to remain ~ low thirties Nigeria Egypt Tanzania Operating revenue and adjusted EBITDAR margin $ in millions
Slide 12: Americas
Recent award of one year contract for one and a half LACE in Guyana commencing Q4 FY16 The negative effect of Líder FX decreased Q2 FY16 adjusted EBITDAR by $19.9 million FY16 expected adjusted EBITDAR margin lowered to ~ low to mid thirties Americas United States Canada Brazil Trinidad Operating re
Slide 13: Líder
Líder * Reconciliation of adjusted EBITDAR, leverage and BVA provided in the appendix Líder adjusted EBITDAR* Absolute BVA contribution to Bristow from Líder was $2 million* in Q2 FY16 Adjusted debt to TTM adjusted EBITDAR increased to 3.8x as of September 30, 2015 from 3.2x as of September 30, 2014
Slide 14: Asia Pacific
Asia Pacific Supported a key client on a short-term contract in a new country Airnorth generated $21.6 million of revenue and $4.9 million of EBITDAR in Q2 FY16 FY16 adjusted EBITDAR margin for Asia Pacific expected to remain ~ mid twenties Russia Australia Malaysia Operating revenue and adjusted EB
Slide 15: Current financial performance and guidance for the future
Current financial performance and guidance for the future L. Don Miller, SVP and CFO
Slide 16: FY16 initiatives progressing to support competitiveness and financial strength
FY16 initiatives progressing to support Bristow’s competiveness and financial strength Significant progress on previously announced cost savings: ~20% of $150 million savings has been realized with the remainder on target for FY16; savings are composed of: ~40% workforce reductions ~40% other direct
Slide 17: Q2 FY16 highlights
Q2 FY16 highlights Decrease in operating revenue and adjusted EBITDAR* of $419 million and $93 million, respectively, due to negative effect of FX partially offset by cost cutting The negative effect of foreign exchange decreased adjusted EBITDAR during the current quarter by $30 million and adjuste
Slide 18: Adjusted EBITDAR and adjusted EPS summary year-over-year
Financial highlights: Adjusted EBITDAR and adjusted EPS summary year-over-year Q2 FY15 to Q2 FY16 adjusted EPS bridge Q2 FY15 to Q2 FY16 adjusted EBITDAR bridge (in millions) Note: Adjusted EPS and adjusted EBITDAR amounts exclude gains and losses on dispositions of assets and any special items duri
Slide 19: Significant weakening of BRL during Q2 FY16
28% depreciation Significant weakening of BRL during Q2 FY16 Líder is accounted for under the equity method of accounting. We record our share (~42.5%) of their after-tax net income and are affected by FX including: Transactional gains and losses on USD denominated transactions in Brazil U.S. GAAP a
Slide 20: LACE and LACE rate
LACE and LACE rate FY16 average LACE guidance range reaffirmed at 165-175 and average LACE rate guidance range reaffirmed at $8.00 - $9.00 million *See appendix hereto for more information on LACE and LACE rate. Consolidated commercial aircraft, LACE and LACE rate exclude Bristow Academy, affiliate
Slide 21: Bristow Value Added drives Gross Cash Flow performance
Bristow Value Added (BVA) drives Gross Cash Flow (GCF) performance Notes: BVA is computed by subtracting a capital charge (10.5%) for the use of gross invested capital from after tax operating cash flow. GCF Return % is based on trailing twelve months after tax operating cash flows (Gross Cash Flow)
Slide 22: Cash flow and liquidity
Cash flow and liquidity $ in millions Net cash provided by operating activities1 Total liquidity2 $ in millions See 10-Q for more information on cash flow provided by operating activities At period end 402 415 530 370 315 231 267 232 253
Slide 23: FY16 guidance revised
FY16 guidance revised FY16 adjusted EPS guidance range is lowered to $1.80 - $2.40, excluding special items and gains/loss on aircraft sales. FY16 guidance includes: * Assuming FY16 revenue earned in same regions and same mix as in FY15. Tax rate applicable to pre tax income in the remaining 6 month
Slide 24: Committed to maintaining financial strength and strategic flexibility
Bristow is committed to maintaining our financial strength and strategic flexibility in this downturn We continue to proactively invest in safety with the industry by supporting HeliOffshore’s HUMS best practice manual Our second quarter FY16 results were positive, despite the foreign exchange headw
Slide 25: — LIDER A, .
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Slide 26: Appendix
Appendix
Slide 27: Organizational chart
Organizational chart - as of September 30, 2015 Business Unit (% of current period operating revenue) Corporate Region ( # of aircraft ) Joint Venture (# of aircraft) Key Operated Aircraft Bristow owned and/or operated 359 aircraft as of September 30, 2015 Affiliated Aircraft Bristow affiliates and
Slide 28: Aircraft fleet – medium and large
Aircraft fleet – medium and large as of September 30, 2015 Next Generation Aircraft Mature Aircraft Fair market value of our owned fleet is ~$2.0 billion and leased fleet is ~$1.7 billion Medium capacity 12-15 passengers Large capacity 16-25 passengers
Slide 29: Aircraft fleet – small, training and fixed wing
Aircraft fleet – small, training and fixed as of September 30, 2015 (continued) Mature Aircraft * LACE does not include held for sale, training helicopters and fixed wing Next Generation Aircraft Small capacity 4-7 passengers Training capacity 2-6 passengers
Slide 30: Operating lease strategy
Operating lease strategy: lowering the cost and amount of capital needed to grow Of the 118 aircraft currently leased in our fleet, 76 are commercial (63 LACE), 26 are training and 17 fixed wing 63 LACE aircraft represent approximately 39% of our commercial fleet Our goal is for commercial fleet ope
Slide 31: Consolidated fleet changes and aircraft sales for Q2 FY16
Consolidated fleet changes and aircraft sales for Q2 FY16 See 10-Q Note 5 “Commitments and Contingencies” for more information provided on operating leases. * Includes writeoffs, lease returns, and commencements * Amounts stated in millions
Slide 32: Held for sale and leased fleet by region
Held for sale and leased fleet by region as of Q2 2016 See 10-Q Note 5 “Commitments and Contingencies” for more information provided on operating leases.
Slide 33: Operating revenue, LACE and LACE rate by region
Operating revenue, LACE and LACE rate by region 4 $ in millions LACE rate is annualized $ in millions per LACE Excludes Bristow Academy, Airnorth and Eastern Airways
Slide 34: Historical LACE by region
Historical LACE by region LACE FY13 FY14 FY15 Q Q Qi Q Q Europe Caspian 48 46 52 56 58 60 60 57 62 68 70 72 Africa 23 23 2 24 21 22 23 24 24 24 22 21 Americas 48 46 53 52 51 48 48 47 47 45 46 45 Asia Pacific 29 28 28 30 30 30 34 30 31 29 31 29 Consolidated 147° 142 «(154158 161 160 165 158 163 166 «
Slide 35: Historical LACE rate by region
Historical LACE rate by region $ in millions LACE rate is annualized
Slide 36: Order and options book
Order and options book as of September 30, 2015 17 large aircraft on order are subject to the successful development and certification of the aircraft SAR configured
Slide 37: Total net asset FMV with and without leased aircraft FMV
Total net asset FMV with and without leased aircraft FMV NOTE: The gray shaded area represents the range of FMV with and without the impact of leased aircraft (upper range includes leased aircraft and related NPV of lease payments; lower range excludes FMV of leased aircraft as well as the NPV of le
Slide 38: Net asset FMV reconciliation
Net asset FMV reconciliation as of September 30, 2015
Slide 39: Adjusted EBITDAR margin trend by region
Adjusted EBITDAR margin* trend by region * Adjusted EBITDAR excludes special items and asset dispositions and margin is calculated by taking adjusted EBITDAR divided by operating revenue
Slide 40: Adjusted EBITDAR reconciliation
Adjusted EBITDAR* reconciliation * Adjusted EBITDAR excludes special items and asset dispositions
Slide 41: Bristow Value Added sample calculation
Bristow Value Added (BVA) Sample calculation for Q2 FY16 and Q2 FY15 Bristow Value Added = Gross Cash Flow – (Gross Operating Assets X Capital Charge) BVA = GCF – (GOA x 10.5%**) Bristow Value Added calculation for Q2 FY16 $18.5 = $119* – ($3,829* x 2.625%**) Bristow Value Added calculation for Q2 F
Slide 42: Bristow gross cash flow reconciliation
Bristow gross cash flow reconciliation
Slide 43: Bristow adjusted gross operating assets reconciliation
Bristow adjusted gross operating assets reconciliation
Slide 44: Líder Bristow Value Added sample calculation
Líder Bristow Value Added (BVA) Sample calculation for Q2 FY16 and Q2 FY15 Bristow Value Added = Gross Cash Flow – (Gross Operating Assets X Capital Charge) BVA = GCF – (GOA x 10.5%**) Bristow Value Added calculation for Q2 FY16 $2.0 = $8.1* – ($234* x 2.625%**) Bristow Value Added calculation for Q
Slide 45: Líder gross cash flow reconciliation
Líder gross cash flow reconciliation
Slide 46: Líder adjusted gross operating assets reconciliation
Líder adjusted gross operating assets reconciliation
Slide 47: Líder's adjusted EBITDAR reconciliation
Líder's adjusted EBITDAR* reconciliation * Adjusted EBITDAR excludes special items and asset dispositions
Slide 48: GAAP reconciliation
GAAP reconciliation See information about special items in 10-Q or earnings release for Q2 FY16 These amounts are presented after applying the appropriate tax effect to each item and dividing by the weighted average shares outstanding during the related period to calculate the earnings per share imp
Slide 49: Bristow leverage reconciliation
Bristow leverage reconciliation *Adjusted EBITDAR excludes gains and losses on dispositions of assets
Slide 50: Líder leverage reconciliation
Líder leverage reconciliation
Slide 51: Bristow Group Inc. contact
Bristow Group Inc. (NYSE: BRS) 2103 City West Blvd., 4th Floor Houston, Texas 77042 t 713.267.7600 f 713.267.7620 bristowgroup.com Contact us