Slide 1: Full Year Results Financial Year 2022
FULL YEAR RESULTS FINANCIAL YEAR 2022 ASX:MSV
Slide 2: Disclaimer
2 DISCLAIMER This investor presentation has been prepared by Mitchell Services Limited (“the Company”). The information contained in this presentation does not take into account the investment Information in this presentation is of a general nature only and should be read in conjunction with objecti
Slide 3: Agenda
3 AGENDA 1. Market profile 2. FY22 Business Summary 3. Revenue and earnings growth into FY23 4. Overview 5. Operational update 6. Profit and loss 7. Balance sheet 8. Cash flow 9. Debt profile 10. Capital expenditure 2022 FULL YEAR RESULTS 11. Strong cash generation in FY23 12. MSV is returning funds
Slide 4: Market Profile
4 MARKET PROFILE ASX INFORMATION BOARD OF DIRECTORS ASX Stock Symbol MSV Nathan Mitchell Executive Chairman Shares on Issue (at 22/08/22) 224,232,697 Scott Tumbridge Executive Director Share Price (at 22/08/22) A$0.36 Peter Miller Non-Executive Director Market Capitalisation A$80.72m Robert Douglas
Slide 5: FY22 Business Summary
5 FY22 BUSINESS SUMMARY 44,086 SHIFTS IN FY22 SAFETY PERFORMANCE EXPERIENCED EMPLOYEES 3.4% INDUSTRY LEADING 750 + DRIVEN BY CRITICAL RISK CONTROL VERIFICATION FROM FY21 PROGRAM RIGS FY22 REVENUE EBITDA OF $32.2M IN FY22 100 $213.4M 24% 2022 FULL YEAR RESULTS 90% FROM GLOBAL MINING MAJORS FROM FY21
Slide 6: Revenue and Earnings Growth into FY23
6 REVENUE AND EARNINGS GROWTH INTO FY23 FY23 FY22 FY21 FY23 Expect material FY22 increase $213.4M in revenue $191.4M FY21 Average Average June 2022 operating rig operating rig operating rig Expect count count count was material 71.6 74.8 84 increase in $32.2M earnings $25.9M 2022 FULL YEAR RESULTS R
Slide 7: Overview
7 OVERVIEW ▪ High commodity prices driving increasing demand for drilling services from explorers through to multi-nation resource companies. ▪ Supply constraints on rigs is supporting increased utilisation, pricing and contract terms ▪ Company’s organic growth strategy of pre-ordering new drilling
Slide 8: Operational Update
8 OPERATIONAL UPDATE Monthly Number of Rigs Operating (over the past 24 months) 90 ▪ Capital investment program to deliver MSV’s organic growth strategy 85 now complete 80 75 70 ▪ All 12 new LF160 drill rigs now assigned to global mining major client 65 projects 60 55 ▪ Multiple new and expanding co
Slide 9: Profit and Loss
9 PROFIT AND LOSS IMPROVING EBITDA AND NPAT EBITDA $40m $30m ▪ Despite material levels of COVID-19 related absenteeism and $20m isolation requirements, multiple rainfall events and mobilisation costs $32.2m that temporarily impacted operating margins, EBITDA increased by $25.9m $10m approximately 24
Slide 10: Balance Sheet
10 BALANCE SHEET STRENGTHENED BALANCE SHEET AT CONCLUSION OF ORGANIC GROWTH STRATEGY IMPLEMENTATION 30-Jun-22 30-Jun-21 Change $000's $000's % • Successful completion of the $10.5m equity raise in September 2021 has strengthened the Balance Sheet Summary overall balance sheet at 30 June 2022 Current
Slide 11: Cash Flow
11 CASH FLOW EXPECT STRONG CASH CONVERSION RATIO INTO FY23 OPERATING CASH FLOW SUMMARY ▪ Temporarily increased working capital requirements (see slide 10) have resulted in a Cash Conversion that is lower FY22 FY21 Change than historical trends and longer-term expectations $000's $000's % ▪ With curr
Slide 12: Debt Profile
12 DEBT PROFILE WITH STRONG CASHFLOW GENERATION MSV HAS A TARGET NET DEBT LEVEL OF $15M BY THE END OF FY24 FACILITY ▪ Current blended average cost of debt is 30 Jun 22 30 Jun 21 Movement approximately 4.8% p.a with the significant majority fixed prior to recent rate increases $000's $000's $000's ▪
Slide 13: Capital Expenditure
13 CAPITAL EXPENDITURE MATERIAL REDUCTION IN CAPEX IN FY23 ▪ Operational teams have done an outstanding job to YEAR ON YEAR CAPITAL EXPENDITURE deliver on the organic growth strategy and commission all 12 rigs on time and on budget. $48m $44m ▪ The timing of the significant FY22 capex allows $40m Mi
Slide 14: Strong Cash Generation in FY23
14 STRONG CASH GENERATION IN FY23 A portion of free cashflows will be used to reduce leverage and the company has no present intention to raise equity to reduce leverage or for any other reason REVENUE EBITDA FY23 FY23 FUNDS FOR RETURNS TO SHAREHOLDERS FY23 2022 FULL YEAR RESULTS CAPEX DEBT FY23 FY2
Slide 15: MSV is Returning Funds to Shareholders
15 MSV IS RETURNING FUNDS TO SHAREHOLDERS A disciplined approach to capital management. Over the next two years MSV will significantly reduce the company’s debt profile while paying strong dividends and buying back shares BUY-BACK DIVIDENDS Where appropriate, funds from rig sales (if any) will be Di
Slide 16: Why Invest in Mitchell Services?
16 WHY INVEST IN MITCHELL SERVICES? ▪ World class rig fleet ▪ Strong client base ▪ Revenue and earnings will grow materially year on year into FY23 ▪ Focused capital management strategy over the next 2 years delivering: o Significant reduction in net debt to $15m by the end of FY24 o Expected cash f
Slide 17: Summary
17 SUMMARY ▪ Mitchell Services generated FY22 revenue and EBITDA of $213.4m and $32.2m respectively ▪ FY23 is expected to drive a material year on year increase in earnings ▪ Quality brand with long history and high quality revenue streams ▪ Strong cash flow generation ▪ Targeting material sharehold
Slide 18: Definitions
18 DEFINITIONS Capex Capital expenditure Cash Conversion The ratio of A to B; where A is the reported cash flows from operating activities (excluding interest and income tax paid) and B is the reported EBITDA Ratio Earnings before interest, tax, depreciation and amortisation; calculated as NPAT plus
Slide 19: Contact
CONTACT Andrew Elf Chief Executive Officer 112 Bluestone Circuit Seventeen Mile Rocks Qld 4073 PO Box 3250 Darra Qld 4076 P: 07 3722 7222 M: 0413 608 018 E: a.elf@mitchellservices.com.au