16 slides from Mitchell Services's shareholder meeting presentation, Oct 30, 2018
Slide 1: Annual General Meeting
ANNUAL GENERAL MEETING 30 OCTOBER 2018 &KLHI([HFXWLYH2IILFHU 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 Shareholders ASX Stock Symbol MSV Mitchell Group 20.4% Shares Issued 1,738,376,346 Washington H Soul Pattinson 9.9% Share Price (at 26/10/2018) A$0.046 CVC Limited 6.1% Market Capitalisation A$80.0m Board of Directors Senior Management Team Nath
Slide 4: Safety Update
SAFETY UPDATE Finishing each day without harm is a core Mitchell Services value Key initiatives implemented to strengthen safety culture and performance have primarily focused on key risks and field leadership Continued year on year reduction in recordable incident occurrence and severity Fo
Slide 5: 2018 Business Overview
2018 BUSINESS OVERVIEW Utilised an additional Total revenue of $72.70m Total EBITDA of $6.3m 22% of the fleet year on year Ĺ 80% from FY2017 279% of FY2017 EBITDA Successful acquisition and Total recordable injury 350+ integration of earnings frequency rate improved by accretive Radco Drilling furth
Slide 6: Results Overview
RESULTS OVERVIEW Profit & Loss EBITDA ($000's) FY18 FY17 FY16 Change FY2016 FY2017 FY2018 7,000 $000's $000's $000's % 6,000 Revenue 72,700 40,303 32,970 80% 5,000 ϮŶĚ,ĂůĨ EBITDA 6,254 2,238 522 179% 4,000 3,000 EBIT (1,361) (3,197) (4,795) 57% 2,000 NPBT (2,340) (4,407) (6,049) 47% ϭƐƚ,ĂůĨ ϭƐƚ,ĂůĨ
Slide 7: Impact of Increased Utilisation on Revenue
IMPACT OF INCREASED UTILISATION ON REVENUE $72.70m Average operating revenue per rig continues to increase Average Operating $40.30m Rig Count We anticipate further $32.97m 37.1 material increases in revenue and $25.17m Average Operating profitability in FY19 Rig Count $15.02m Average Operating
Slide 8: Leverage as Operating Rig Count Increases
LEVERAGE AS OPERATING RIG COUNT INCREASES 65 Rigs in Fleet Average operating rig count increased by 15.4 rigs year on year Q1 FY2019: 46.7 Operating Rigs (average) Utilisation improvement from 35% in FY2017 to 57% in FY2018 FY2018: 37.1 Operating Rigs (average) Revenue up 80% year on year REVE
Slide 9: Operating Revenue by Client Type
OPERATING REVENUE BY CLIENT TYPE Strong year on year revenue growth anticipated to continue in FY19 Tier 1 Revenue Other Revenue VALUE OF TIER 1 $72.7m Large / multinational mining and energy companies Very high safety and business system $40.3m requirements $65.23m $33.0m $25.2m Generally
Slide 10: Operating Revenue by Commodity
OPERATING REVENUE BY COMMODITY FY16 $32.97m FY17 $40.30m FY18 $72.70m 1.3% 3.1% 5.7% 14.0% 6.0% 14.9% 12.6% 28.6% 32.8% 2.6% 13.2% 21.2% 44.4% 17.8% 18.5% 4.8% 5.5% 46.0% 55.6% 50.9% Gold Copper Coal Lead/Zinc/Silver Other Management remains mindful of the importance of diversification in revenue st
Slide 11: Operating Revenue by Drilling Type
OPERATING REVENUE BY DRILLING TYPE FY16 $32.97m FY17 $40.30m FY18 $72.70m 2.0% 1.3% 1.2% 22.6% 33.9% 38.5% 60.3% 64.8% 75.4% Surface Underground Non-Drilling Increase in underground revenue strengthens overall revenue diversity Management remains mindful of the importance of diversification in reven
Slide 12: Leverage in an Improving Market
LEVERAGE IN AN IMPROVING MARKET STAGE 1: UTILISATION INCREASES More rigs start working (This is happening) STAGE 2: PRODUCTIVITY IMPROVES AS UTILISED RIGS WORK MORE SHIFTS Seasonality impact reduces as rigs work through the wet season (This is starting to happen in limited areas) More rigs
Slide 13: FY19 Q1 Overview
FY19 Q1 OVERVIEW Strong FY19 Q1 performance Continued Steady Increases to Productivity & Utilisation Rig Count Revenue EBITDA 60 $31m $7.0m 50 40 30 20 10 EBITDA to operating Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Operating Cash Flow cash conversion rate 12 Months Ended 30 Sept 2017 12 Mont
Slide 14: FY19 Q1 Overview (Cont)
FY19 Q1 OVERVIEW (CONT) Strong Operating Cash Flows and EBITDA Conversion Low CAPEX Requirements Operating Cash Flows Capital Expenditure 6 10 Millions Millions 4 2 8 0 6 (2) FY17 FY18 Q1 FY19 35% Reduction in Net Debt 4 30-Jun-18 30-Sep-18 $000's $000's Equipment finance facilities 8,358 7,425 2 Sh
Slide 15: Market Outlook
MARKET OUTLOOK Competitive Profile of the market has stabilised and prices have started to increase but remain competitive in certain sectors Pipeline of identified opportunities remains strong and demand continues to increase for drilling services Clients are more active across all sectors
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 Tender pipeline provides opportunity to further increase rig utilisation Previous acquisitions of surface assets early in the cycle has positione