Imdex Ltd · ASX:IMD
Imdex — Merrill Lynch Australian Emerging Companies Conference 2008
30 slides from Imdex's conference presentation, Jun 18, 2008
Slide 1: ASX cover letter for conference presentation
For personal use only 18 June 2008 Company Announcements Office Australian Stock Exchange Limited Exchange Centre 20 Bridge Street SYDNEY NSW 2001 Dear Sir/Madam Merrill Lynch Australian Emerging Companies Conference Please find attached a copy of the Imdex Limited presentation being made at the Mer
Slide 2: Imdex Limited - Merrill Lynch Australian Emerging Companies Conference
For personal use only Imdex Limited Merrill Lynch Australian Emerging Companies Conference 18 June 2008 1
Slide 3: Disclaimer
Disclaimer For personal use only This presentation has been prepared by Imdex Limited (“the Company”). It contains general background information about the Company’s activities current as at the date of the presentation. It is information given in summary form and does not purport to be complete. Th
Slide 4: Introduction to Imdex
Introduction to Imdex For personal use only 1. Defined and focused - our business is the manufacture, supply and distribution of high quality drilling fluids and down hole instrumentation. 2. Excellent position – historically high long term demand for more minerals, oil and gas underpinning buoyant
Slide 5: Corporate Strategy – Global Reach
Corporate Strategy – Global Reach For personal use only Consolidating market presence throughout mineral rich regions in Africa, Latin America, Asia Pacific and Canada Americas Europe East Vallentuna (Sweden) Calgary Sussex Timmins Riegel Aktau (Kazakhstan) Africa Asia Pacific Johannesburg Brisbane
Slide 6: Exposure to High Growth Industries: Resources
Exposure to High Growth Industries For personal use only Resources Record minerals exploration spend and increased production activity US$13.1B in 2008 - up 25% on US$10.5B in 2007 Strong demand for drilling fluids and down hole instrumentation If more drillers available, demand would be even strong
Slide 7: Exposure to High Growth Industries: Resources exploration spend
Exposure to High Growth Industries For personal use only Resources Estimated Exploration Spend Worldwide (Non Ferrous) Increased exploration by US$ Billions commodity: $14.0 Gold 42% $12.0 Base Metals 36% $10.0 Diamonds 10% $8.0 Uranium 9% $6.0 PGM’s 3% $4.0 Uranium exploration $2.0 US$936m, up from
Slide 8: Exposure to High Growth Industries: Exploration budgets
Exposure to High Growth Industries For personal use only Resources Worldwide Exploration Budgets* Worldwide Exploration Budgets* by Region 2007 (%) by Stage 2007 (%) Pacific / SE Asia 4% United States 8% Minesite 20% Australia 12% Grass roots 39% Africa 16% Rest of World 17% Late stage 41% Canada 19
Slide 9: Exposure to High Growth Industries: Oil & Gas
Exposure to High Growth Industries For personal use only Oil & Gas Oil & Gas Exploration Spend 30,000 30% Exploration spend as a % Shows declining trend in of total E&P spend 25,000 25% exploration over last 10-12 years 20,000 20% Recent activity showing a $millions 15,000 15% reversal of that trend
Slide 10: Exposure to High Growth Industries: Oil & Gas outlook
Exposure to High Growth Industries For personal use only Oil & Gas Strong investment into exploration and development of new reserves. Delays experienced due to lack of resources. Interest in new exploration in all parts of the industry has not been higher for 30 years. Complex exploration places a
Slide 11: Our Critical Skills
Our Critical Skills For personal use only Quality people – Industry respected operational personnel – Experienced locally based management Customer service Strong brands IP ownership Own manufacture = control of supply Scalability – Low labour component – High revenue per employee – Strong global di
Slide 12: Our Customers
Our Customers For personal use only Global distribution and supply agreements with: Oil and Gas clients: And a broad range of medium to smaller sized clients globally 11
Slide 13: Proven Growth Model
Proven Growth Model For personal use only Successful transformation expansion 2005-2008 Growth achieved via non core asset divestments and eight acquisitions Maximising opportunities through consolidation, synergies Resources Oil & Gas focus focus and additional resources South Africa Asia Pacific C
Slide 14: Corporate Strategy - Product Model
Corporate Strategy - Product Model For personal use only Continued operational earnings improvement Two global operational divisions: Drilling fluids and chemicals – Building significant market share in the supply of drill fluids to international oil and gas industry – Manufacture and sell – Cool an
Slide 15: Corporate Strategy: Down hole instrumentation – oil & gas
Corporate Strategy For personal use only Down hole instrumentation – oil & gas industry We are penetrating the oil and gas down hole instrumentation market Estimate market size US$500m per annum We provide world leading technology to major independent service providers to compete with Scientific Dri
Slide 16: Proven Growth Model
Proven Growth Model For personal use only Extracting benefits from new acquisitions and expand manufacturing capability – Suay – Poly-Drill – Southernland – SEG Releasing new products/tool improvements Disposal of non core SGE investment Migrating SEG customers to rental model to expand future profi
Slide 17: SEG acquisition update
SEG acquisition update For personal use only Imdex acquired German based System Entwicklungs GmbH (SEG) in January 2008. Majority of existing customer purchase orders successfully migrated. Adopting Imdex’s preferred rental model will build a better long term sustainable business and profits. Transf
Slide 18: Managing Growth and Risks
Managing Growth and Risks For personal use only Operating in an environment of increasing costs present certain challenges. Imdex’s strategy includes the following: – Diligent cost control. Where applicable, pass costs on through price increases – Expand/build manufacturing facilities in local juris
Slide 19: Management Depth
Management Depth For personal use only Strong operational management Gary Weston Group GM – founder of AMC and over 30 years experience, Imdex and Baroid Derek Loughlin Divisional Manager - Instrumentation – 19 years experience, Boart Longyear and others Esmond Lange Divisional Manager - Fluids – 25
Slide 20: Achieving Revenue Growth
Achieving Revenue Growth For personal use only Revenue ($M) Normalised Revenue by Division Normalised Revenue by Region Forecast $160.0 Forecast $147.5m $160.0 $147.5m $140.0 $140.0 $120.0 $120.0 $59m $100.0 $100.0 $41.5m $80.0 $80.0 $60.0 $60.0 $40.0 $40.0 $20.0 $20.0 $0.0 $0.0 FY04 FY05 FY06 FY07
Slide 21: Strong organic growth
Strong organic growth For personal use only Organic vs. Acquisition Growth ($M) Normalised Revenue Growth Normalised EBITA Growth $80.0 +16% $25.0 +29% $70.0 +24% $60.0 $20.0 +63% $50.0 $15.0 $40.0 $30.0 $10.0 $20.0 $5.0 $10.0 $0.0 $0.0 1H07 Organic Acquisition 1H08 1H07 Organic Acquisition 1H08 The
Slide 22: Building Shareholder Value
Building Shareholder Value For personal use only EPS, DPS and Profits Earnings and Dividends per Share Normalised EBITA 12.0 c $45.0 Forecast $40.0 $39m 10.0 c $35.0 31 May 08 (unaudited) $36m 8.0 c $30.0 31 Dec 07 Half Year (audit reviewed) $25.0 6.0 c $20.0 $21m 4.0 c $15.0 2.0 c $10.0 $5.0 0.0 c
Slide 23: Strong Industry Benchmarks
Strong Industry Benchmarks For personal use only Profit Margins Forced ranking by EBIT margin, FY08F 25% 20% 15% 10% 5% 0% AAX IMD IDL AJL TBG HST TSE ORI LEI BKN NOD CDD MND GRD MAH RCR EHL BOL LYL ASL EAL UGL ANG VMG MRM SDM BLY NMS CPB NFK FWD NWH WOR DOW SWK Source: ABN AMRO Construction & Engin
Slide 24: Strong Balance Sheet
Strong Balance Sheet For personal use only Balance Sheet Dec 07 Jun 07 Strong cash $000’s $000’s Cash 16,614 15,271 Reduced debt position Receivables 32,381 27,806 Inventory 17,158 13,839 Investment in SGE 16,746 16,056 Uplift in assets due to acquisitions Property, plant & equipment 8,481 13,207 Go
Slide 25: Our Growth strategy - What will Imdex look like in the medium term?
Our Growth strategy - What will Imdex look like in the medium term? For personal use only Strong relationships, leading technology, sustainable growth and attractive end-markets Medium Term Objective Past Present (3-5 years) Greater penetration into Oil & Gas markets with End-market Early Stage expo
Slide 26: IMDEX Limited - Australia's Global Drilling Products & Services Company
For personal use only IMDEX Limited Australia’s Global Drilling Products & Services Company 25
Slide 27: Appendix – ASX Details
Appendix – ASX Details For personal use only Current share price $1.765 Number of shares 183.42m Market capitalisation $323.74m December 2007 Key Ratios Gearing (D/D+E) 24% Current Ratio (CA/CL) 2.73 Quick Ratio (CA-Inv/CL) 2.17 Interest Cover (NPBT/Int) 12.7x 26
Slide 28: Appendix – Register/Corporate
Appendix – Register/Corporate For personal use only Top 10 Shareholders Ian Burston Non-Exec Chairman (as at 13 June 2008) Fiberform Vinidic Holding AB 11.3% Bernie Ridgeway Managing Director National Nominees 8.7% Ross Kelly Non-Exec Director Kevin Dundo Non-Exec Director HSBC Custody Nominees (Aus
Slide 29: Appendix – Directors
Appendix – Directors For personal use only Non Executive Chairman, Ian Burston AM – Appointed Chairman 2000 – Experienced leader of many mining and exploration companies including Hamersley Iron, Kalgoorlie Consolidated Gold Mines, Aurora Gold Ltd and Portman Limited – Current Chairman of NRW Holdin
Slide 30: Appendix – Directors
Appendix – Directors For personal use only Non Executive Director Ross Kelly BE(Hons) FAICD – On the Boards of Clough Limited and the WA Football Commission – Former Chairman of Clough Limited, Sumich Group Limited, Orbital Engine Corporation Limited, Beltreco Limited and a former director of Aurora
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