Hunting Plc · LSE:HTG
Hunting — FY2010 Earnings Presentation
36 slides from Hunting's earnings presentation, 2011
Slide 1: Hunting PLC Annual Results 2010
Hunting PLC Annual Results 2010
Slide 2: 2010 Highlights
2010 Highlights Completed acquisition of Innova-Extel - £80.3m New facilities in US (Casper, Conroe and Latrobe) and China (Wuxi) add over 800,000 sq ft of manufacturing capacity – now approximately 2 million sq ft Facility expansion / consolidation programmes underway at National Coupling, US
Slide 3: 2010 Results Summary
2010 Results Summary* 2010 2009 Change £m £m % Revenue 461.6 359.9 +28 EBITDA 68.3 15% 50.6 14% +35 Profit from operations 47.7 35.8 +33 Finance income 1.3 1.8 Profit before tax 50.0 38.5 +30 Effective tax rate 30% 32% Dividend per share 12.0p 10.5p +14 Basic EPS 24.7p 17.7p +40 *Pre-exceptional con
Slide 4: Segmental Results
Segmental Results 2010 2009 Profit Profit from from Revenue Operations Margin Revenue Operations Margin £m £m % £m £m % Hunting Energy Services Well Construction 111.3 8.0 7 77.9 3.3 4 Well Completion 224.2 23.1 10 176.2 20.3 12 Well Intervention 58.7 9.3 16 29.4 4.0 14 Exploration & Production 6.5
Slide 5: Exceptional Items
Exceptional Items 2010 £m Oil and gas reserve impairment 5.3 Dry hole costs 3.1 Acquisition costs 3.1 Continuing operations 11.5 Tax credits (3.5) Foreign exchange loss on Can$ tax provision 4.6 Continuing and discontinued operations 12.6 Page 5
Slide 6: Balance Sheet
Balance Sheet 2010 2009 £m £m Property, plant and equipment 154.1 121.4 Intangible assets & goodwill 122.9 59.2 Available for sale financial assets 45.1 29.8 Working capital 137.2 72.2 Provisions (56.1) (78.9) Other (20.8) (6.9) Net cash 212.2 365.0 NET ASSETS 594.6 561.8 Page 6
Slide 7: Capital Expenditure – by segment
Capital Expenditure – by segment 2010 2009 £m £m Hunting Energy Services Well Construction 20.6 9.1 Well Completion 17.1 8.3 Well Intervention 3.9 1.8 Exploration & Production 7.1 1.9 Others 1.0 0.5 49.7 21.6 Split: Maintenance 12.9 9.9 New Business 36.8 11.7 49.7 21.6 Page 7
Slide 8: Capital Expenditure – by Project
Capital Expenditure – by Project 2010 £m Well Construction Casper/Conroe/Latrobe facilities - US 8.6 New Drills tools 7.5 Other equipment 4.5 Well Completion Houma land purchase - US 3.9 Wuxi facility – China 4.7 Consolidation and expansion of Scotland operations – UK 5.8 Other equipment 2.7 Well In
Slide 9: Cash Flow
Cash Flow 2010 2009 £m £m Profit from operations 47.7 35.8 Depreciation and amortisation 20.6 14.8 Changes in working capital (48.0) 11.9 Interest and tax (3.8) (7.0) Capital expenditure (49.7) (21.6) Acquisitions / disposals (81.1) (20.3) Tax indemnity payments (25.2) (4.1) Dividends paid (14.1) (1
Slide 10: Facilities Footprint
Facilities Footprint Page 10
Slide 11: Our Strategy: Realising significant potential
Our Strategy INTEGRATE NEW Proprietary TECHNOLOGY BUSINESS Products R&D Market Realising Global Footprint Pricing Leverage Share Strength significant potential PRODUCTS PRODUCT SERVICES Synergies OFFERING CUSTOMERS FOOTPRINT Page 11
Slide 12: Organic Growth
Organic Growth Casper, Wyoming Conroe, Texas Latrobe, Pennsylvania Fordoun, Scotland Page 12
Slide 13: Wuxi, China
Wuxi, China G sununc Page 13
Slide 14: Well Construction
Well Construction G wwrne Casing Annular Pressure Release System Roller Reamer Logging While Drilling Measurement While Drilling Connection Technology Vibration Mud Motors D 5 Non-Magnetic al Drill Collars Non-Magnetic Integral Blade
Slide 15: Well Construction
Well Construction Profit from Operations £m 15 10 5 0 2006 2007 2008 2009 2010 Highlights Premium connection sales and marketing agreement signed with Arcelor Mittal for their new seamless OCTG mill in Saudi Arabia One expansion and two new facilities for Drilling Tools in the US and one in Duba
Slide 16: Footprint Servicing Shale and Tight Gas Plays
Footprint Servicing Shale and Tight Gas Plays Source : Schlumberger / Hunting Page 16
Slide 17: Global Shale Reserves
Global Shale Reserves Source : Schlumberger / Hunting Page 17
Slide 18: Thread Technology 40-40 RTC and WEDGE-LOCK
Thread Technology 40-40 RTC and WEDGE-LOCK Enhanced design for positive torque stop Trouble free running Ideal for Shale Plays The only high torque integral flush connection qualified to the most severe level of ISO 13679 The only high torque integral connection which has a dedicated metal
Slide 19: Innova and Drilling Tools
Innova and Drilling Tools Innova Acquisition Circuit Board technology MWD / LWD Application Drilling Tools Mud Motors Shock Tools Non Mag Drill Collars Page 19
Slide 20: Well Completion
Well Completion te Premium Tubing Pup Joints ‘pte Flow Couplings Bull Plugs Blast Joints Crossovers = fy fee
Slide 21: Well Completion
Well Completion Profit from Operations £m 40 30 20 10 0 2006 2007 2008 2009 2010 Highlights Lean manufacturing initiatives rolled out to all facilities Manufactures over 2,300 different part numbers Integration of Extel assets Capacity 2008 : 562,000 sq ft 2010 : 856,000 sq ft Page 21
Slide 22: Well Intervention
Well Intervention GY HUNTING \ Thru Tubing | Technology \ Coiled Tubing Tools a VariBall Roller System -s Running Tools E-Line Tools Kickover Tools uw << <= Slickline Tools — Pulling Tools Positioning Tools
Slide 23: Well Intervention
Well Intervention Profit from Operations £m 10 8 6 4 2 0 2006 2007 2008 2009 2010 Highlights Commercialisation of Chemical Injection Systems – 2 for BP Gulf of Mexico relief wells Continued Expansion of Slickline, Wireline and Thru Tubing Market Presence Capacity: 2008 : 88,000 sq ft 2010 : 16
Slide 24: Downhole Tools, Chemical Injection System, Pressure Control Equipment, Thru-Tubing Technology
Downhole Tools, Chemical Injection System, Pressure Control Equipment, Thru-Tubing Technology Page 24
Slide 25: Gibson Shipbrokers
Gibson Shipbrokers Enlarged geographic coverage with new Oslo office and growth of London and doubling of Singapore broker team Continued staff development and recruitment to strengthen market position Profit from Operations £m 8 6 4 2 0 2006 2007 2008 2009 2010 Page 25
Slide 26: Other
Other Exploration and Production Profit from Operations £m 8 6 4 2 0 2006 2007 2008 2009 2010 Field Aviation Profit from Operations £m 8 6 4 2 0 -2 2006 2007 2008 2009 2010 Page 26
Slide 27: World Oil Supply and Demand
World Oil Supply and Demand Page 27
Slide 28: U.S. Land Rig Count
U.S. Land Rig Count* Number of Land Rigs 400 200 | 2006 2007 2008 2009 * Source: Baker Hughes, Spears and Associates {| 2010 2011 2012 Grune BB Actual UD Projected Page 28
Slide 29: Horizontal Rig Count
Horizontal Rig Count* Page 29
Slide 30: International Land Rig Count
International Land Rig Count* Page 30
Slide 31: International Offshore Rig Count
International Offshore Rig Count* Page 31
Slide 32: Global Subsea Trees
Global Subsea Trees 1400 1200 g 1000 ec 3 800 2 Ei a 600 3 E 2 400 200 0 2010-2011e * Source: Quest Offshore 2012-2013e 2014-2015e Grune } South America UD North America @@ North Sea BB Asia/Pacific OB Africa/Mediterranean 2010-2015 are normalised Page 32
Slide 33: Global Subsea Capex Forecast spending 2011-2015: US$139bn
Global Subsea Capex Forecast spending 2011-2015 : US$139bn Page 33
Slide 34: Depletion Rates by Vintage
Depletion Rates by Vintage* Isolating production from fields that started this decade yields a decline rate that is twice as steep (14% per annum) in the first 5 years vs 7% for all fields commencing production since 1970). Page 34
Slide 35: IOC Reserve Replacement Ratio versus E&P Spending
IOC Reserve Replacement Ratio versus E&P Spending* Page 35
Slide 36: G sunnnc
G sunnnc