Chesterfield Special Cylinders Holdings Plc · LSE:CSC
Chesterfield Special Cylinders — Pressure Technologies — Shareholder Meeting (February 2017)
21 slides from Chesterfield Special Cylinders's shareholder meeting presentation, Feb 14, 2017
Slide 1: AGM Presentation
AGM Presentation 14 February 2017 Presented by Alan Wilson, Chairman John Hayward, Chief Executive Officer
Slide 2: Agenda
Agenda • Formalities • Oil and gas market conditions • Group overview • Alternative Energy in the news • Lunch • Tour of Chesterfield Special Cylinders 2
Slide 3: Formalities
Formalities AL Pressure . “If Technologies 3
Slide 4: Resolutions
Resolutions Ordinary business Special business • Resolution 1: To approve the annual report and • Resolution 8: To authorise Company to purchase accounts own shares • Resolution 2: To approve the annual report on • Resolution 9: To disapply pre-emption provisions Director’s remuneration • Resolution
Slide 5: Oil and gas market
Oil and gas market Agenda • A brief re-cap… • Recent events…a cause for hope? • Market fundamentals 5
Slide 6: A brief recap…
A brief recap… • Reduced investment - $1 trillion 2015-20 • Job cuts - 500,000 jobs cuts globally, four largest service companies spent $3.12bn in severance costs 2015-2016 • Oil company losses in 2016: • Shell - $2.7bn in upstream • Anadarko - net loss of $3bn • Exxon Mobil - US upstream losses of
Slide 7: A brief recap…
A brief recap… • Bankruptcies - Around 100 US oilfield service firms 2015-16 • Dividend reductions - many oil companies have cut dividends of more than $7.4 billion • Less exploration – 2015: lowest discoveries of oil reserves for more than 60 years • Rigs being scrapped – 2012 worldwide rig count a
Slide 8: A brief recap…
A brief recap… • Production costs dramatically reduced – US shale production costs fallen by around 40%: 60% of oil US shale production profitable at $60/bbl…only 20% of deep-water oil is • Saudi economy damaged – Budget deficit of $100 billion, Government debt of $73 billion, an oil price of $80/bb
Slide 9: Recent developments…a cause for hope?
Recent developments…a cause for hope? • Reputedly 1 Bnbbls of oil in inventories Inventory possible depletion scenarios - 2017 • Global oil demand set to increase by 1.6% in 1,200,000,000 2017 • OPEC and 11 others to cut output by 1.8 1,000,000,000 Mbopd…until June 2017 • North American upstream ind
Slide 10: Market fundamentals
Market fundamentals • World economy expected to double in next 20 years • Mostly driven by productivity - GDP per person • Population projected to grow by 1.5bn by 2035 • More than 2m people lifted from low incomes • Half the increase in population is expected in Africa • Economic growth requires mo
Slide 11: Market fundamentals
Market fundamentals • Fast-growing economies drive energy consumption • Growth decelerates • Virtually all growth comes from China & India • Demand from the OECD barely grows • China initially dominates, but India is excepted to overtake rate of growth 11
Slide 12: Market fundamentals
Market fundamentals • Known oil resources dwarf future consumption forecasts • Global proven reserves have more than doubled over the past 35 years: for every barrel consumed, two new barrels have been discovered • Around 65% of recoverable reserves are located in the Middle East, CIS and North Amer
Slide 13: Market fundamentals
Market fundamentals • Abundant oil resources and slowing demand have seen low-cost producers using their competitive advantage to protect market share • Majority of low-cost resources are located onshore Middle East and Russia, with US tight oil plays following up Key factors in future are: • Balanc
Slide 14: Group overview
Group overview AL Pressure “If Technologies 14
Slide 15: A specialist engineering group supplying niche products & services
A specialist engineering group supplying niche products & services to the global oil and gas, defence, industrial gases and AE markets Pressure Technologies plc Precision Machined Engineered Products Cylinders Alternative Energy Components Manufacturing Divisions Contracting Division 15
Slide 16: Precision Machined Components Division
Precision Machined Components Division Division remains profitable despite its reliance on the oil and gas market Customer ordering patterns continue to be unpredictable but do not appear to be Revenue subject to further deterioration and Al-Met took its single largest ever order of $1.2 million in
Slide 17: Engineered Products Division
Engineered Products Division Business restructured over the last 18 months as cuts in capital expenditure and discretionary service spend in the oil and gas market continue to impact sales Revenue revenues and profitability £4.1m 2015: £6.7m US manufacturing closed and a distributor appointed coveri
Slide 18: Cylinders Division
Cylinders Division Division remains profitable despite major reduction in orders from the oil and gas market as the defence market continues to provide a base load of revenue Revenue £9.5m CSC remains the established naval defence market leader in sales to NATO and 2015: £14.3m NATO-friendly nations
Slide 19: Alternative Energy Division
Alternative Energy Division Good momentum building with nine upgrader contracts secured in the year Revenue totalling £20.8 million Timing of securing orders results in benefits of the order book delayed to 2017 £11.3m 2015: £14.0m with £14.2 million of orders at the year end Kauri upgrader, world’s
Slide 20: Summary & Outlook
Summary & Outlook Group reshaped to reduce the reliance on the oil and gas market which now accounts for 43% of revenues (2015: 57%) Restructuring completed to provide resilience and focus now on expanding into other markets Alternative Energy Division is showing solid momentum with a good order boo
Slide 21: Disclaimer
Disclaimer This presentation has been prepared by Pressure Technologies plc (the “Company“ or “Pressure Technologies”) solely in connection with providing information on the Company and to certain institutional and professional investors in the United Kingdom. This presentation does not constitute o
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