Boart Longyear — Shareholder Meeting (June 2017)
24 slides from Boart Longyear's shareholder meeting presentation, Jun 13, 2017
Slide 1: Annual General Meeting
LR500 Drill Rig – Nevada, USA Annual General Meeting June 2017 – Melbourne
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer • This presentation has been prepared by Boart Longyear Limited, ABN 49 123 052 728 (Boart Longyear or the Company). It contains general information about the Company’s activities as at the date of the presentation. It is information given in summary form and does not
Slide 3: Chairman's Address
TruScanTM Prototype Chairman’s Address Marcus Randolph
Slide 4: Who We Are
Who We Are PERFORMANCE PRODUCTS SAFETY & HEALTH TEAMWORK DRILLING INNOVATION TECHNOLOGY CUSTOMER FOCUS Boart Longyear is the leading provider of drilling services, drilling equipment, and performance tooling for mining and drilling companies globally 4
Slide 5: Global Drilling Services
Global Drilling Services Active Across all Mining Stages Stage Boart Longyear Service Offering FY 2016 Drilling Services Revenue by Stage • Surface coring Explore • Reverse Circulation ("RC") to get through overburden quickly • Rotary for water exploration Non-Mining 5% Water Services Greenfield 13%
Slide 6: Global Products
Global Products Technology Innovator Key Innovations • NEW LongyearTM Diamond Bits (to be released in 2017) - Easier to use / higher penetration rates / longer life Drilling Tools • NEW XQTM Drill Rods (to be released in 2017) - Easier to use / longer life / more depth capacity • Roller LatchTM - In
Slide 7: FY 2016 Summary
FY 2016 Summary (Results compared to FY 2015, except as otherwise indicated) Safety o Lost time incident rate (LTIR) at 0.11 – 39% improvement over FY 2015 o Moderate increase in total case incident rate (TCIR) to 1.41 o No fatalities; 6 lost time incidents Adjusted EBITDA o Up $32M despite a $93M (
Slide 8: Drilling Services Productivity Initiative Update
Drilling Services Productivity Initiative Update Shift Productivity Drill Rate + 12% + 9% • Tracking key metrics daily • Results reported and highly visible throughout company • Coaching and performance management for underperformers Productivity initiative driving measureable improvements with cust
Slide 9: Becoming a data provider, not just a driller
Becoming a data provider, not just a driller • Data acquisition done by third parties at our rigs Today • Assay done off-site • Slow, costly and not user-friendly for our customers • Core orientation, core logging, survey and assay all done by our crews at the rig Future • Direct data feed into cust
Slide 10: CEO's Address
CEO’s Address FY Jeff Olsen % LONGYEAR’ BOART
Slide 11: Safety & Environment
Safety & Environment Our goal is to add value with zero harm Total Case Incident Rate Lost Time Incident Rate 3.26 0.34 2.33 2.15 2.23 1.78 1.62 0.19 0.18 1.56 1.35 1.41 1.24 0.14 0.12 0.13 0.10 0.11 0.11 0.08 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2007 FY
Slide 12: Productivity & cost controls are improving results
Productivity & cost controls are improving results - 13% + 32M + 8% Significant improvement in EBITDA and cash despite revenue decline 12
Slide 13: Q1 2017 Update
Q1 2017 Update Consolidated Results 3 Months % Change (US $M) Ended Fav/(Unfav) Total Company 31-Mar-17 31-Mar-16 Revenue 164 142 15% Statutory EBITDA (4) (12) 64% Adjusted EBITDA 9 (6) NMF Statutory Net Profit After Tax (47) (61) 23% Adjusted Net Profit After Tax (34) (55) 38% • Q1 2017 revenue up
Slide 14: Long-Term Commodity Trends
- 50 100 150 200 - 500 1,000 1,500 2,000 - 2,000 4,000 6,000 8,000 10,000 Jan-12 Jan-12 Apr-12 Jan-12 Apr-12 Jul-12 Apr-12 Jul-12 Jul-12 Oct-12 Oct-12 Oct-12 Jan-13 Jan-13 Jan-13 Apr-13 Apr-13 Apr-13 Jul-13 Jul-13 Jul-13 Oct-13 Oct-13 Oct-13 Jan-14 Jan-14 Jan-14 Apr-14 Apr-14 Apr-14 Jul-14 Jul-14 Ju
Slide 15: Positive movements in mining equities and junior equity raisings
…as well as positive movements in mining equities and junior equity raisings MSCI World Metals & Mining Index 260 240 + 59% 220 (Index Price) 200 180 160 140 120 100 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Equity Raisings
Slide 16: We remain committed to our Strategic Priorities
We remain committed to our Strategic Priorities Safety o Continue to be an industry leader Operations o Continue to improve on the productivity gains we have made in the last year Technology o Focused on acquiring data from our drill holes and delivering to customers in a faster, lower-cost and user
Slide 17: Recapitalisation Update
LFTM160 Surface Coring Rig w/ FreedomTM Loader Recapitalisation Update Marcus Randolph
Slide 18: Capital Structure Review
Capital Structure Review Capital Structure Review o Proposed recapitalisation is the outcome of a capital structure review that commenced in August 2016 o Primary objectives were to: Reduce Debt Improve Liquidity Extend Debt Maturities o Independent Non-Executive Directors led process with significa
Slide 19: Recapitalisation Summary
Recapitalisation Summary Recapitalisation Summary o BLY has reached an agreement with its key debt holders that will achieve the following: Reduce Debt • $196M (in principal) of existing 7% unsecured notes will be converted to equity (and warrants issued) • Remaining $88M (in principal) of unsecured
Slide 20: Independent Expert's Report – Fair and Reasonable
Independent Expert’s Report – Fair and Reasonable Independent Expert’s Report o Key factors supporting the Independent Expert’s conclusion that the recapitalisation is fair and reasonable: Represents the “most superior option” currently available to non-associated shareholders Provides Boart Longyea
Slide 21: Benefits of the Recapitalisation to BLY
Benefits of the Recapitalisation to BLY Boart Longyear gains additional liquidity, maturity extensions & deleveraging Additional Liquidity (US $M) Maturity Extensions (US $M) $163 $745 $666 Cash Interest Saved on 7% Notes (4.5 $89 Years) $195 Cash Interest Saved on 10% Notes (2 $39 Years) Additional
Slide 22: Implementation Timetable
Implementation Timetable Projected Remaining Key Milestones Completion Date • Shareholder meeting and vote June 13 • Second court hearing for schemes July 4 • SPP offer period opens July 7 • Completion date / implementation of the schemes (shares, warrants and new debt issued) July 12 • SPP offer pe
Slide 23: Conclusion
Conclusion Our underlying business is solid and our data services business opens up exciting new opportunities for us – but debt relief is essential The recapitalisation provides $163 million of additional liquidity, reduces debt by $201 million (about 27%) and extends maturities until 2022 Because
Slide 24: Current Proxy Results
Current Proxy Results Lodged Lodged % Lodged % Total Shares % of Issued Resolution Description % For For Open Open Against Against Lodged Capital 1 Election of Conor Tochilin 611,630,218 98% 12,676,630 2% 2,680,655 0% 626,987,503 66.1% 2 Re-Election of Peter Day 608,969,362 97% 12,282,827 2% 4,041,2