Aj Lucas Group Limited · ASX:AJL
Aj Lucas — Shareholder Meeting (November 2019)
23 slides from Aj Lucas's shareholder meeting presentation, Nov 28, 2019
Slide 1: Annual General Meeting
ANNUAL GENERAL MEETING 28th November 2019 For personal use only
Slide 2: Agenda
AGENDA For personal use only 2017 2018 • Welcome • Australian Chairman’s address Drilling Services (LDS) - continuing 11.4 6.9 (6.9) (13.7) • Austen Perrin (CFO) Presentation Corporate costs (11.2) (5.1) (6.7) (7.3) • Brett Tredinnick (CEO Drilling) Presentation 7.1 • Francis Egan Video Address (Cua
Slide 3: Chairman's Address
For personal use only 2017 2018 Australian Drilling Services (LDS) - continuing 11.4 • CHAIRMAN’S ADDRESS Corporate costs 6.9 (11.2) (5.1) (6.9) (6.7) (13.7) (7.3) 7.1 3
Slide 4: 2019 – a year of consolidation and a debt facilities update
For personal use only Austen Perrin 2019 – a year of consolidation and a debt facilities update November 2019
Slide 5: 2019 – a year of consolidation
2019 – a year of consolidation For personal use only • Significant consolidation of the Australian operations in the last few years: • sale of LEC fixed assets in 2018; • winddown of remaining LEC project commitments in 2019; • Rightsizing and streamlining the Corporate office since 2016 despite inc
Slide 6: 2019-2020 Refinancing the Debt
2019-2020 Refinancing the Debt For personal use only 25 Oct. 18 Nov. Interest Bearing Debt (2) - $’M 2016 2017 2018 2019 2019 2019 Kerogen 75.4 49.6 40.2 52.5 57.3 32.6 Senior Loan notes - OCP 30.2 56.7 44.6 67.2 New debt facilities 71.6(3) 73.0 71.6(3) Total 105.6 106.3 84.8 119.7 130.3 105.6 • In
Slide 7: 2019-2020 Refinancing the Debt (cont.)
2019-2020 Refinancing the Debt (cont.) For personal use only • The new debt facilities comprise: • Investec ABL for $30 million (3 year tenor with senior ranking – not fully drawn at close); and • HSBC term loan for $50 million (3.5 year tenor with junior ranking – fully drawn at close); • ABL and J
Slide 8: Moving to de-leverage
Moving to de-leverage For personal use only • Following the refinancing in October 2019, total debt stood at approx. $129 million; • Kerogens pro-rata right take up in the recent Entitlements offer and use of debt as consideration has seen debt reduce by $25 million to approx. $104 million at presen
Slide 9: Lucas Drilling Overview
For personal use only “Lucas is a leading integrated provider of drilling services to Australia’s coal mining sector” Brett Tredinnick Lucas Drilling Overview November 2019
Slide 10: Lucas has a proven operating platform that sets it apart from competitors
Lucas has a proven operating platform that sets it apart from competitors For personal use only Exploration Large Diameter Directional Drilling resource delineation through chipping and coring drainage of coal mine gas to support long-life technical/innovative services providing efficient services a
Slide 11: Lucas has a long serving, proven, experienced management team
Lucas has a long serving, proven, experienced management team For personal use only “Lucas senior management possesses deep industry experience with broad relationships across key customer decision makers and a combined tenure of over 100 years” Brett Tredinnick CEO Drilling 19 years Greg Runge Dani
Slide 12: Lucas' primary commodity exposure is metallurgical coal
Lucas’ primary commodity exposure is metallurgical coal For personal use only Global 2019 Hard Coking Coal cash cost curve (US$/t) “Lucas customers are low on the cash cost curve, all expected to produce coal at <US$100/tonne” Source: Wood Mackenzie, Dataset May 2019 Bowen Basin Sydney Basin Hail Cr
Slide 13: Lucas financials are underpinned by strong recent contractual activity
Lucas financials are underpinned by strong recent contractual activity For personal use only “Australia produces approximately 110Mt of hard coking coal annually, and is strongly positioned to capture the majority of the 100Mtpa growth in demand from 2018 to 2040.” Customer Coal Type Longest Mine Li
Slide 14: Lucas provides a workplace free from lost time injury
Lucas provides a workplace free from lost time injury For personal use only LDS - Total Recordable Injury Frequency Rate and Lost Time Injury Frequency Rate1 25 21.0 21.4 20 15.4 15 12.3 10.0 10 8.4 11.4 7.7 5 5 2.6 1.2 1.1 3.3 2.5 2.4 0 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 LTIFR TRIFR
Slide 15: Lucas has a solid earnings profile
Lucas has a solid earnings profile For personal use only A$m FY2018A FY2019A ▪ LDS Management has taken active steps in the past few years to restructure the division’s cost Revenue 124.7 143.4 base and refocus it on its core, higher-margin directional and large diameter drilling service Underlying
Slide 16: Francis Egan Address
FRANCIS EGAN ADDRESS For personal use only 2017 2018 Australian Drilling Services (LDS) - continuing 11.4 • Pre recorded Video 6.9 (6.9) (13.7) (11.2) (5.1) (6.7) (7.3) • Corporate costs (Transcript available on ASX Market Announcement Platform) 7.1 16
Slide 17: Formal Business
FORMAL BUSINESS For personal use only 2017 2018 1. Receive and consider Directors and Financial reports 2. Australian ResolutionDrilling 1: Services (LDS) -Remuneration continuing report 11.4 3. Resolution 2: Re-election of Phil Arnall 6.9 (6.9) (13.7) 4. Corporate Resolution costs 3: Re-election of
Slide 18: Formal Business: Receive Directors and Financial reports
FORMAL BUSINESS Item 1 For personal use only 2017 2018 Australian Drilling Services (LDS) - continuing 11.4 Receive and consider Directors and 6.9 (11.2) (5.1) (6.9) (6.7) (13.7) (7.3) Corporate costs Financial reports 7.1 There is no vote on this item 18
Slide 19: Formal Business: Remuneration discussion
FORMAL BUSINESS Item 2 For personal use only During the 2018/19 financial year, the Human Resources and 2017Nominations 2018 Committee met on two occasions. The Committee considered the following matters: • Australian A reviewDrilling of theServices remuneration packages and annual performance revie
Slide 20: Resolution 1: Adoption of the Remuneration Report
FORMAL BUSINESS Item 2 For personal use only 2017 2018 Resolution 1: Australian Drilling Services (LDS) - continuing 11.4 Adoption of the Remuneration Report 6.9 (6.9) (13.7) Corporate costs (11.2) (5.1) (6.7) (7.3) Proxy Votes 7.1 For 859,197,968 99.69% Against 2,269,252 0.26% Open 433,653 0.05% Ab
Slide 21: Resolution 2: Re-Election of Phil Arnall
FORMAL BUSINESS Item 3 For personal use only 2017 2018 Resolution 2: Australian Drilling Services (LDS) - continuing 11.4 Re-Election of Phil Arnall 6.9 (6.9) (13.7) Corporate costs (11.2) (5.1) (6.7) (7.3) Proxy Votes 7.1 For 875,764,523 99.73% Against 1,898,892 0.22% Open 433,653 0.05% Abstain 56,
Slide 22: Resolution 3: Re-Election of Julian Ball
FORMAL BUSINESS Item 4 For personal use only 2017 2018 Resolution 3: Australian Drilling Services (LDS) - continuing 11.4 Re-Election of Julian Ball 6.9 (6.9) (13.7) Corporate costs (11.2) (5.1) (6.7) (7.3) Proxy Votes 7.1 For 875,764,948 99.73% Against 1,898,892 0.22% Open 433,653 0.05% Abstain 56,
Slide 23: Disclaimer
Disclaimer For personal use only 2017 2018 This AGM presentation has been prepared by AJ Lucas Group Limited (“the Company”). Information in this AGM presentation is of a general nature only and should be read in conjunction with the Company’s other periodic and continuous disclosure announcements t