Tekmar Group Plc · LSE:TGP
Tekmar — Investor Day (July 2021)
38 slides from Tekmar's investor day presentation, July 2021
Slide 1: Capital Markets Day
Capital Markets Day Capital Markets Day (LON:TGP) July 2021 Page 1
Slide 2: Why Offshore Wind, Why Tekmar
Why Offshore Wind, Why Tekmar Last 30 Years The Challenge – Net Zero by 2050 33GW Offshore Wind is fundamental to securing this energy Next 10 Years 210GW transition Tekmar – a key part of the industry response • Acceleration in Offshore Wind • • Energy transition and the role to play of Oil & Gas E
Slide 3: Presenters
Presenters Alasdair MacDonald Derek Bulmer Chief Executive Officer Chief Financial Officer Capital Markets Day (LON:TGP) July 2021 Page 3
Slide 4: Our Ambition
Our Ambition Expand Tekmar’s technical Double Tekmar’s Deliver a capability, its revenue within 5 Reinforce sustainable service and years through Tekmar’s industry Provide our mid to high teens geographical organic growth leadership people with the EBITDA margin in reach to and complement position a
Slide 5: Strong Leadership Team To Deliver Our Strategy
Strong Leadership Team To Deliver Our Strategy The Board Julian Brown Christopher Gill Ian Ritchey Alasdair MacDonald Derek Bulmer Sue Hurst Non-executive Chairman Non-executive Director Non-executive Director Chief Executive Officer Chief Financial Officer Director Julian joined Tekmar Group in Chr
Slide 6: Tekmar Group - Innovative Marine Technology
Tekmar Group - Innovative Marine Technology (LON:TGP)
Slide 7: What We Do – Innovative Marine Technology
What We Do – Innovative Marine Technology Assess I Analyse I Design I Protect I Stabilise Capital Markets Day (LON:TGP) July 2021 Page 8
Slide 8: Superior Global Reach
Superior Global Reach Capital Markets Day (LON:TGP) July 2021 Page 9
Slide 9: Our Value Proposition
Our Value Proposition We optimise and de-risk projects, solve customer’s engineering challenges, improve safety and lower project costs Geotechnical Simulation & Bespoke Subsea Services, solutions Subsea Stability Design & Engineering Equipment Protection and technology Analysis Analysis Design & Bu
Slide 10: Applied Engineering Solutions Addressing Complex Industry Problems Are In Our DNA
Applied Engineering Solutions Addressing Complex Industry Problems Are In Our DNA Emergency Pipeline Repair System (EPRS) PLET Installation Tower Cable Protection Systems (CPS) N2 Block CPS Cleaning Tool High Payload Wet Storage Unit Capital Markets Day (LON:TGP) July 2021 Page 11
Slide 11: Unrivalled Engineering Capabilities
Unrivalled Engineering Capabilities An unrivalled service and technology offering spanning the project timeline Geotechnical Design Simulation & Bespoke Equipment Subsea Protection Subsea Stability & Analysis Engineering Analysis Design & Build Technology Technology Competitor 1 Competitor 2 Competi
Slide 12: Customers
Customers The breadth of our relationships across the industry creates a clear platform for growth Reduce Levelised Cost of Energy (“LCoE”) Energy Companies Reduce cost over the project lifecycle Reduce installation time and manage risk Tier 1 Contractors Product life extension Partner of choice for
Slide 13: Sustainable Competitive Advantage
Sustainable Competitive Advantage A comprehensive suite of products and services combined with a global track record and a recognised position as market leader in established and emerging markets Strong Highly Unrivalled Industry Engineered Group Leadership Solutions Offering • Track record • IP for
Slide 14: The Market Trends Align With Tekmar's Strategy
The Market Trends Align With Tekmar's Strategy (LON:TGP)
Slide 15: Strong Political Support
Strong Political Support Global capacity to increase by 210GW in the next ten years G7 commit US commits to G7 commits to $100bn per 30GW by 2030 UK commits to EU commits to half carbon year for green & re-enters the 40GW by 2030 60GW by 2030 emissions by growth in Paris Agreement 2030 developing co
Slide 16: Global Wind Outlook To 2030
Global Wind Outlook To 2030 1 1.9 1.9 Project visibility on +350 projects for construction by 2030 Other 7GW Asia 19 USA 11GW Europe 28GW 12GW Europe 70GW 38GW under 172GW entering 33GW fully construction construction commissioned(1) / FID made (1) by 2030 (1) Europe Asia 22GW 26GW Asia 67GW (1) 4cO
Slide 17: Offshore Wind Market Growth
Offshore Wind Market Growth The lead indicators highlight recovery and growth in construction activity from 2022 following a slowdown in new project and tender activity in 2019 and 2020. This momentum will support Tekmar’s growth plan over the period • New projects and tenders decreased by 19% and 9
Slide 18: O&M Market - A Major Emerging Addressable Market For Tekmar
O&M Market - A Major Emerging Addressable Market For Tekmar As the offshore wind market scales up and matures, the strong relative growth in O&M provides a major opportunity for Tekmar to grow in this OpEx segment of the market by leveraging our existing technologies and customer relationships 24 £b
Slide 19: Offshore Infrastructure
Offshore Infrastructure Offshore Infrastructure(1) activities provide both balanced growth for Tekmar and the opportunity to support the transition to cleaner energy Global Offshore Project Commitments, Split by 5 year periods Number of Projects (3) “The oil and gas industry could play a key role in
Slide 20: Market Fundamentals Underscore The Growth Opportunity For Tekmar
Market Fundamentals Underscore The Growth Opportunity For Tekmar More complex projects require more technically advanced solutions Acceleration in offshore wind capacity Emerging markets will look to Tekmar for skills and expertise Exponential Growth in the O&M market Stable competitive environment
Slide 21: Our Strategy Achieves A Doubling Of Organic Revenue And Mid To High Teens EBITDA
Our Strategy Achieves A Doubling Of Organic Revenue And Mid To High Teens EBITDA Margin Over The Five Years Of The Plan (LON:TGP)
Slide 22: 5 Year Strategic Plan - Delivering On The Opportunity
5 Year Strategic Plan - Delivering On The Opportunity “The next phase of Tekmar’s strategy will see us capitalise on our strong foundations, diversifying further into the Offshore Wind Industry by disciplined investment in new technology and innovation” INNOVATION IN APPLIED ENGINEERING LEVERAGE OUR
Slide 23: Growth Journey
Growth Journey 01 Historic 02 Current 03 Future Building the foundations Transition for growth Accelerated growth • Development and launch of a pioneering • Refreshed strategic plan implemented technology into the new emerging • Market recovery and structural offshore wind market • Repositioning ali
Slide 24: Growth Strategy
Growth Strategy Ambition to double organic revenue Deliver a sustainable mid to high M&A complements the strategy – bolt-on growth over the next 5 years from FY20 teens EBITDA margin in the later technologies and services that align with revenue of ~£40m years of the plan our offshore wind focused g
Slide 25: Key Investment Themes
Organic Key Investment Themes Growth £10-12m investment earmarked over The incremental investment required under these growth Investment anticipated to be self-funded the course of the plan, with ~half on initiatives is relatively modest, building on prior from cash generation the below priorities i
Slide 26: Investment In Product And Market Development
Organic Investment In Product And Market Development Growth Incremental investment in priority areas to drive growth in significant markets Addressable Market Strategic Initiative Outcome Phasing (per annum)(1) Offshore Wind Technology Product Development Maintain market position and future proof ou
Slide 27: Diversification
Organic Diversification Growth Organic growth through increased involvement in all aspects of the project lifecycle – commonality of customers enhances the Tekmar value proposition Engineering & Construction (CAPEX) Operational (OPEX) Feasibility Engineering Manufacture Installation O&M Life Extensi
Slide 28: Diversification - O&M Case Study
Diversification - O&M Case Study Applied Engineering Expertise Across The Whole Project Lifecycle Customer Engineering Challenge – life extension of installed equipment Tekmar analysed potential failure Tekmar designed a remedial solution Tekmar engineered and manufactured retrofit solutions and ass
Slide 29: ESG Strategy
Sustainable ESG Strategy Business Board commitment to a sustainable future is aligned with broader value creation strategy • Developed our ESG strategy • Adopted appropriate UN SDG’s • Assessed the here and now • Developing a roadmap for improvement • Identify targets and measures • Committed to ann
Slide 30: People Strategy - Investing In Our People
Sustainable People Strategy - Investing In Our People Business Commitment to EDI across full HR Company values drive behaviours lifecycle. Educate, reiterate Treat each other with respect Equality, Culture, Values Diversity & Behaviours & Inclusion Competency framework Health & Wellbeing initiatives
Slide 31: M&A Strategy
Acquisition M&A Strategy M&A focused on technologies and services that strengthen our position in offshore wind IPO Acquisition Phase Integration Phase Future Float on Subsea Ryder Pipeshield Integration Future AIM Innovation Geotechnical International Phase through M&A Covid M&A Execution Clear, Co
Slide 32: Commercial Outlook
Commercial Outlook Enquiry Book growing in line with market demand, with most awards expected to be in offshore wind. Order Book anticipated to be boosted by contracts currently in negotiation £320m £13m ~£10m Enquiry Book Order Book in advanced negotiation Enquiry Book up 17% since H2 with stable O
Slide 33: Revenue Characteristics - Diversifying Further Into Offshore Wind
Revenue Characteristics - Diversifying Further Into Offshore Wind Our strategy sees us maintaining our balance as a business strongly weighted to Offshore Wind M&A Market Maintaining market position + market £80m Growth pull + O&M organic revenue Acquired Commercial traction across global in 2026 Bu
Slide 34: Geared For Profitable Growth
Geared For Profitable Growth ➢ Operational leverage drives accelerated EBITDA growth from EBITDA break-even at revenue of ~£30m ➢ Model is geared for growth - with stable cost base, revenue growth flows through to improved EBITDA ➢ Mid to high teens % EBITDA margin expected in outer years of the pla
Slide 35: Investment Is Self-funded Under The Plan
Investment Is Self-funded Under The Plan Targeted investment of £10m-£12m in plant, technology, product development and regional footprint ~£10m-£12m investment over 5 years ~£6.0m investment on priority growth initiatives 44% • O&M represents the single largest investment under 56% the plan, primar
Slide 36: Balance Sheet Strengthens And Liquidity Improves Significantly
Balance Sheet Strengthens And Liquidity Improves Significantly Net cash generation of £15m-£20m, post the £12m investment programme Recently upgraded bank funding through: Liquidity • CBILs and Working Capital Facility of £6m (previously £3m) • Guarantee (bond) facility to c.£7m (previously £6m) Wor
Slide 37: Summary
Summary Strong Foundations Global Customer Base Significant Market Opportunity Sustainable Competitive Advantage Clear Growth Strategy Capital Markets Day (LON:TGP) July 2021 Page 38
Slide 38: Building on our early success within Offshore Wind
“ Building on our early success within Offshore Wind, the next phase of Tekmar’s strategy will see us capitalise on our strong foundations, diversifying further into the Offshore Wind Industry by investing in new technology and innovation both organically as well as through complementary acquisition