Mitchell Services Limited · ASX:MSV
Mitchell Services — Wilsons Virtual Rapid Insights Conference 2020
19 slides from Mitchell Services's conference presentation, Nov 12, 2020
Slide 1: Wilsons Virtual Rapid Insights Conference
For personal use only WILSONS VIRTUAL RAPID INSIGHTS CONFERENCE 12 November 2020 1 www.mitchellservices.com.au
Slide 2: Disclaimer
DISCLAIMER For personal use only This 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, whic
Slide 3: Mitchell Services Market Profile
MITCHELL SERVICES MARKET PROFILE For personal use only ASX Information Major Shareholders ASX Stock Symbol MSV Mitchell Group 17.9% Scott Tumbridge 7.2% Shares Issued 199,238,740 Other Directors & Management 3.4% Share Price (at 09/11/2020) A$0.52 Institutions 21.0% Market Capitalisation A$103.6m Ot
Slide 4: COVID Response
COVID 19 RESPONSE For personal use only • Detailed response and contingency plans • 10% of our workforce relocated temporarily to keep rigs operational • 20% of our workforce changed rosters on a temporary basis to keep rigs operational • Credit to our entire team who have continued to deliver safe
Slide 5: People and Community
PEOPLE AND COMMUNITY For personal use only • The health and safety of our people and the well being of our communities are essential • We are focused on creating sound value to grow shareholder value and returns • Social value protects our business today and positions us to take advantage of future
Slide 6: FY20 Business Overview
FY20 BUSINESS OVERVIEW For personal use only Revenue of $175.5m EBITDA of $35m Net Debt of $27.6m ↑ 46% ↑ 45% 28% ↑ from FY19 from FY19 reduction from Dec 19 Quality of business Fully franked special Strong balance sheet model proven during dividend provides flexibility global pandemic paid July 202
Slide 7: Operational Highlights
OPERATIONAL HIGHLIGHTS For personal use only • Achieved revenue and EBITDA guidance during a global pandemic proving the quality of the business model • Rig utilisation has been marginally impacted by Covid-19 but utilisation is now increasing again • Revenue diversity continues to improve by commod
Slide 8: Impact of Increased Utilisation on Revenue
IMPACT OF INCREASED UTILISATION ON REVENUE For personal use only Annual Average Operating Rig Count vs Revenue • Average operating $175.56m revenue per rig continued to increase due to improved productivity, pricing and drilling mix $120.21m • Mitchell Services Average Operating Rig anticipates furt
Slide 9: High Quality Revenue Streams
HIGH QUALITY REVENUE STREAMS For personal use only Revenue by Client Type • Tier 1 Clients are large / multinational mining & energy companies • A significant majority of Mitchell Services revenue comes from Tier 1 Clients operating on long life, low cost mine sites 89.7% 91.8% 86.2% • Approximately
Slide 10: Revenue Diversity
REVENUE DIVERSITY For personal use only Diversity in revenue streams sets Mitchell Services apart from competitors Revenue by Commodity Revenue by Drilling Type FY20 44.5% 33.9% 12.8% FY20 45.2% 54.3% FY19 62.0% 14.3% 13.6% FY19 55.1% 43.7% FY18 55.6% 14.9% 17.8% 6.0% FY18 60.3% 38.5% Coking Coal Go
Slide 11: FY20 Profit and Loss
FY20 PROFIT AND LOSS For personal use only Expect FY21 EBITDA to continue to grow EBITDA $40m • Significant revenue and EBITDA growth driven by $30m increased utilisation, increased production and seven months Deepcore contribution $20m $10m • Strong EBITDA margin of 20% maintained in FY20 - FY18 FY
Slide 12: FY20 Balance Sheet
FY20 BALANCE SHEET For personal use only Strong balance sheet provides flexibility 30 Jun 20 30 Jun 19 Change $000’s $000’s % • MSV’s strong balance sheet allowed the entire cash Balance Sheet Summary component of the Deepcore Acquisition to be funded Current assets 58,553 29,717 97% using debt whil
Slide 13: FY20 Cash Flow
FY20 CASH FLOW For personal use only Strong operating cash flow will provide capital management opportunities Operating Cash Flow Summary FY20 FY19 Change $40m $000's $000's % $30m Receipts from customers 173,205 111,535 55% Payments to suppliers / employees (140,136) (90,729) 54% $20m Cash generate
Slide 14: FY20 Net Debt
FY20 NET DEBT For personal use only Well positioned to capitalise on growth opportunities Net Debt Summary • 28% reduction in net debt since 31 Dec 19 30 Jun 20 31 Dec 19 30 Jun 19 $000's $000's $000's • Net Debt to EBITDA well under one times Equipment finance 25,323 29,750 9,792 Acquisition loan 1
Slide 15: FY20 Capital Expenditure
FY20 CAPITAL EXPENDITURE For personal use only Disciplined capital management framework $30m • Maintenance capex continues to trend in line with P&L depreciation multiplied by utilisation rates $25m • Maintenance capex in FY20 ($11.1m) represented $20m 66% of FY20 P&L depreciation ($16.9m) vs 80% in
Slide 16: FY21 Q1 Overview
FY21 Q1 OVERVIEW For personal use only Strong FY21 Q1 performance Monthly Number of Rigs Operating (over the past 24 months) 90 Revenue EBITDA 70 $53.2m $10.4m 50 30 10 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Year to 30 Sept 2019 Year to 30 Sept 2020 EBITDA to operating Operating Cash Flow c
Slide 17: Reasons for Optimism
REASONS FOR OPTIMISM For personal use only • Usually a reliable lead indicator for drilling activity levels, the value of capital raisings for gold projects completed by ASX listed junior Gold project financings for junior/intermediate and intermediate mining and exploration miners & explorers ASX c
Slide 18: Outlook
OUTLOOK For personal use only • Pipeline of identified opportunities remains strong as does the demand for drilling services particularly from Tier 1 clients • Demand for drilling services in gold is very strong and gold as a percentage of revenue will increase in FY21 • Based on current market cond
Slide 19: Summary
SUMMARY For personal use only • Mitchell Services’ vision is to be Australia’s leading provider of drilling services to the global exploration, mining and energy industries • Mitchell Services has a diversified revenue stream by different drilling types and commodities • Mitchell Services has a high
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