Mitchell Services Limited · ASX:MSV
Mitchell Services — Wilsons Rapid Insights Conference 2019
13 slides from Mitchell Services's conference presentation, May 30, 2019
Slide 1: Wilsons Rapid Insights Conference
WILSONS RAPID INSIGHTS CONFERENCE 30 May 2019 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 Shares Issued (ASX:MSV) 1,738,376,346 Mitchell Group 20.4% Share Price (at 21/05/2019) A$0.070 Market Capitalisation A$121.69m Washington H Soul Pattinson 9.9% 1H19 EBITDA A$14.0m CVC Limited 6.1% Net Debt (at 31/12/2018) A$2.6m Boa
Slide 4: Safety Update
SAFETY UPDATE • Finishing each day without harm is a core Mitchell Services value • Continued year on year reduction in recordable incident occurrence and severity • Focus on training to attract, retain and further develop our own drillers in an improving market • Mitchell Services’ safety culture w
Slide 5: Company Overview
COMPANY OVERVIEW Recent analyst coverage FY19 Guidance Revenue FY19 Guidance EBITDA initiation from $110m-$120m $21m-$23m Wilsons and Morgans Strong balance sheet provides flexibility 400+ experienced employees Total recordable injury frequency rate continues to reduce 5 www.mitchellservices.com.au
Slide 6: Impact of Increased Utilisation on Revenue
IMPACT OF INCREASED UTILISATION ON REVENUE $72.70m $63.29m • Average operating revenue per rig continues to increase 2nd Half due to improved productivity and $40.30m pricing $32.97m 1st Half • Mitchell Services 2nd Half $25.17m anticipates further 2nd Half increases in operating 2nd Half 1st Half r
Slide 7: Revenue Diversity
REVENUE DIVERSITY Revenue by Commodity 1H19 63.6% 11.2% 14.7% • Demand for drilling services continues to strengthen across all commodities 1H18 52.9% 20.0% 13.2% 9.4% 1H17 51.1% 26.5% 7.2% 13.2% • Entry into the underground coal sector has driven the increase in coal and Coal Gold Copper Lead/Zinc/
Slide 8: High Quality Revenue Streams
HIGH QUALITY REVENUE STREAMS Revenue by Client Type • Tier 1 Clients are large / multinational mining & energy companies • Tier 1 Clients generally operate long life, low cost mine sites 93.0% 88.9% 91.3% • A majority of Mitchell Services revenue comes from Tier 1 Clients at operating mine sites • A
Slide 9: Stages of the Cycle
STAGES OF THE CYCLE • STAGE 1: UTILISATION INCREASES (THIS IS HAPPENING) • More rigs start working • STAGE 2: PRODUCTIVITY IMPROVES AS UTILISED RIGS WORK MORE SHIFTS (THIS IS HAPPENING) • Seasonality impact reduces as rigs work through the wet season • More rigs work 24 hours a day 7 days a week ver
Slide 10: Financial Summary
FINANCIAL SUMMARY EBITDA Capital Expenditure $25m $10m $20m Q4 Guidance Q3 2nd Half $15m Q3 $10m $5m 1st Half $5m 2nd Half 2nd Half 1st Half 1st Half 1st Half - 2nd Half 1st Half 1st Half ($5m) - FY17 FY18 FY19 FY17 FY18 FY19 Operating Cash Flow Net Debt $20m $20m Q3 $15m $15m $10m 1st Half $10m $5m
Slide 11: Outlook
OUTLOOK • Pipeline of identified opportunities remains strong Revenue ($M) and demand continues to increase for drilling $120m services particularly from Tier 1 clients $100m 2nd Half – At current conversion rates, rigs required $80m exceed rigs available $60m 2nd Half $40m 2nd Half 1st Half • Mitch
Slide 12: Capital Management
CAPITAL MANAGEMENT • Debt reduction was determined to be the most efficient use of cash generated in 1H19 and has strengthened the balance sheet creating a platform for further growth • Mitchell Services has invested in organic growth opportunities in 2H19 to fund material contract awards and extens
Slide 13: Summary
SUMMARY • 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 quality client base w
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