Bristow Group, Inc. · NYSE:VTOL
Bristow — Investor Day (April 2013)
71 slides from Bristow's investor day presentation, Apr 10, 2013
Slide 1: Bristow Group Inc. Analyst Day 2013
Bristow Group Inc. Analyst Day 2013 April 10, 2013 Exhibit 99.1
Slide 2: Forward-looking statements
Forward-looking statements This presentation may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements about our future business, operations, capital requirements and funding sources therefor, fl
Slide 3: Zero Accidents / Zero Downtime / Zero Complaints
WEEI@] zeRo ACCIDENTS / ZERO DOWNTIME / ZERO COMPLAINTS AF Bristow
Slide 4: Third Floor 57th Street
Third Floor 57th Street Ir" Sine Sent fee arose 56th Street YRRS@ ZERO ACCIDENTS / ZERO DOWNTIME / ZERO COMPLAINTS 3 Bristow
Slide 5: Agenda
Agenda Introduction (Linda McNeill, Director Investor Relations) Bristow’s Vision and Mission (Bill Chiles, President and CEO) UK Search and Rescue Contract (Jeremy Akel, SVP Global Operations; Mike Imlach, Managing Director Bristow Helicopters Limited) UK SAR Finance Discussion (Jonathan Baliff, SV
Slide 6: Bristow's Vision and Mission
Bristow’s Vision and Mission Bill Chiles, President and CEO
Slide 7: Objectives for today
Objectives for today Discuss operational details of UK Search and Rescue (SAR) contract Understand the expected financial impact of UK SAR Discuss the implications of UK SAR on our business model Review future global market opportunities
Slide 8: Bristow is the leading provider of helicopter transportation services to the global offshore industry
Bristow is the leading provider of helicopter transportation services to the global offshore industry $67 ~20 countries 556 aircraft ~3,400 employees Ticker: BRS Stock price*: $63.08 Market cap*: ~$2.3 billion Secured: BBB-/Ba1 (stable outlook) Corporate: BB/Ba2 (stable outlook) FY13 TSR: 40.5% * Ba
Slide 9: Our Vision, Mission and Core Values
Our Vision, Mission and Core Values Our mission is to provide the safest and most efficient helicopter services and aviation support worldwide . We will achieve this by focusing on and committing to: Working in innovative partnerships with customers Further developing highly professional workforce E
Slide 10: Our strategic objectives 2012-2016
Our strategic objectives 2012-2016
Slide 11: What do we mean by "Operational Excellence"?
What do we mean by “Operational Excellence”? World-class performance and a commitment to do the best job we can in everything we do A means of achieving our strategic objectives for people, growth, execution and clients An ongoing journey where every employee plays an important role in continuous im
Slide 12: Why pursue Operational Excellence?
Why pursue Operational Excellence? Operational Excellence will help Bristow achieve lasting competitive differentiation It aligns Bristow with its clients It represents best practices Leadership has a long-term strategic plan for Bristow to be the leading global helicopter services company, and we w
Slide 13: Target Zero, our industry leading safety program
TARGET ZERO , our industry leading safety program, creates differentiation and client loyalty Safety is our primary core value Bristow’s ‘Target Zero’ program is now the leading example emulated industry-wide Safety performance accounts for 25% of management incentive compensation Flight Safety Foun
Slide 14: Bristow services are utilized in every phase of offshore oil and gas activity
Bristow services are utilized in every phase of offshore oil and gas activity ABANDONMENT EXPLORATION SEISMIC DEVELOPMENT PRODUCTION Largest share of revenues (>60%) relates to oil and gas production, ensuring stability and growth There are ~8,000 offshore production installations worldwide - compar
Slide 15: Contract and operations structure results in more predictable income
Bristow’s contract and operations structure results in a more predictable income with significant operating leverage Revenue sources Our ongoing capex is low as we expense almost all of our maintenance costs Bristow earns 65% of contract revenue through the monthly standing charge (MSC) in most mark
Slide 16: FY13 total stock return
FY13 total stock return Source:Factset (from April 1, 2012 to March 29, 2013) Note: Simmons Offshore Transportation Service Index includes: Bourbon, Dockwise, DOF, ERA Group Inc., Farstad Shipping, Gulfmark, Hornbeck, Kirby Corp, Seacor, Solstad Offshore and Tidewater 04/01/12 09/28/12 03/29/13 2.1%
Slide 17: UK Search and Rescue (SAR) Contract
UK Search and Rescue (SAR) Contract Jeremy Akel, SVP Global Operations Mike Imlach, Managing Director, Bristow Helicopters Limited and European Business Unit Director
Slide 18: Importance of this contract for the UK government
Importance of this contract for the UK government Releases UK military from the obligation of providing SAR resulting in a better value for money solution (eliminates military overhead) SAR is not a front line activity, so the UK government is able to release people back to the military Cohesive ope
Slide 19: Why was BHL awarded UK SAR contract?
Why was Bristow Helicopters Limited (BHL) awarded UK SAR contract? BHL will provide modern, robust, reliable and effective SAR system for the UK through: Commitment to operational excellence SAR service continuity Delivering a national solution Demonstrating value for money Meeting and exceeding env
Slide 20: SAR service continuity
SAR service continuity Ten bases equipped with 22 technologically-advanced helicopters Two aircraft at each base plus one additional of each aircraft type for training purposes State-of-the-art SAR and safety technology: Night vision Mission management Increased on-board medical capabilities Infrare
Slide 21: Bristow bases overall radius of action coverage
Bristow bases overall radius of action coverage Availability 24/7/365 Cover all UK SAR incidents expected 10,000 flying hours per year (6,000 training and 4,000 missions) Ability to surge up to seven aircraft simultaneously to a single SAR incident Average annual number of missions between 250 - 300
Slide 22: Bristow's year history of world class SAR services in the UK
Bristow’s 36 year history of world class SAR services in the UK Long history of world class UK SAR services From 1971 to 2007 Bristow operated S-55 helicopters at RAF Manston in Kent and S-61 SAR helicopters from Stornoway, Sumburgh, Portland and Lee-on-Solent Over 44,000 SAR operational hours in th
Slide 23: Global SAR service provider
Global SAR service provider Our affiliate, FB Heliservices, provides all military helicopter pilot training including SAR through the Defence Helicopter Flying School We also conduct SAR operations in Australia, Brazil, Canada, Cyprus, Norway, the Dutch Antilles, the Netherlands, Trinidad, and Russi
Slide 24: UK SAR management structure
UK SAR management structure BHL Managing Director Head of Training Ground Operations SAR Head of Flight Ops SAR Head of Engineering ENGINEERS SAR FACILITIES MANAGER SAR TRAINING BASE ADMIN CHIEF ENGINEER CHIEF PILOT Base Manager REARCREW Global quality and standards Independent auditing function SAR
Slide 25: Managed transition process
EXECUTIVE SUMMARY Managed transition process Legally binding agreement with the UK Ministry of Defence Method to safeguard SAR activities by ensuring that SAR pilots and crews do not leave the military simultaneously Managed transition of pilots and crews over the next 2.5 years Important skills req
Slide 26: SAR helicopter crew composition
SAR helicopter crew composition SAR aircraft fly with a minimum crew of four: One SAR Captain One SAR Co-Pilot Two SAR Aircrewmen One operates the rescue hoists One operates the mission management system and goes down the wire and carries out the rescue SAR Aircrewmen are qualified Paramedics
Slide 27: Bristow's SAR people
Bristow’s SAR people Simon Tye B.Sc. SAR Business Development Manager and UK SAR Project Lead Based in UK and Den Helder, the Netherlands With Bristow for 15 years as a SAR helicopter pilot Flown over 350 SAR missions Dian Jonathan Lacy QGM – “Cags” Crewman, Winch Operator, Trainer Logged over 300 S
Slide 28: Bristow's SAR people
EXECUTIVE SUMMARY Bristow’s SAR people Tony Laws Aircrew Training Instructor (SAR) On assignment in Australia and Southeast Asia With Bristow for nine years Logged over 300 SAR missions Received a Commendation for Bravery as Royal Navy SAR crewman Chris Bond SAR Global Standards Manager and UK SAR T
Slide 29: UK SAR – Maritime Coastguard Agency new bases
UK SAR – Maritime Coastguard Agency 10 new bases – long-term investment for 30+ years
Slide 30: Aircraft solution for UK SAR
Aircraft solution for UK SAR Large aircraft solution – Sikorsky S-92 Two aircraft at each operating base Three aircraft at Stornoway operating / training base Preliminary cost per aircraft is ~$35 - $40M Large aircraft solution – AgustaWestland AW189 Two aircraft at each operating base Three aircraf
Slide 31: Aircraft solution for UK SAR: old and new technology
Aircraft solution for UK SAR Old technology New technology Air speed = 145 knots Radius of action = in excess of 250 nautical miles Operational range = in excess of 600 nautical miles Normal flight crew = Capacity = 3 stretchers, 10 seated, additional persons Air speed = 145 knots Radius of action =
Slide 32: UK SAR base footprint
UK SAR base footprint Stornoway Aberdeen Sumburgh Humberside Caernarfon Inverness Prestwick Manston Lee-on-Solent Cardiff Bristow large base S-92 aircraft 2 at each Newquay Training base at Stornoway with 3 S-92 Bristow large base AW189 aircraft 2 at each base Training base at Inverness with 3 AW189
Slide 33: Base transition dates
Base transition dates AW189 (1) S-92 (1) S-92 (2) AW189 (2) S-92 (2) AW189 (2) AW189 (2) AW189 (2) AW189 (2) S-92 (2) S-92 (2) S-92 (2) Service Date Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Cumulative aircraft count Sumburgh (existing facility)* Stornoway (existing facility)* Shared (training
Slide 34: UK SAR Transition Timeline
4 ae UK SAR TRANSITION TIMELINE Steady State = e BEBO revo accioewrs / zeno nownrine / zexo comPuatnrs 2 Bristow
Slide 35: Conclusion
Conclusion Bristow is the preferred service provider with a proven history of SAR services in the UK and continued commitment to operational excellence SAR service continuity through a managed transition which includes local content job creation Demonstrates value for money and potential for other g
Slide 36: UK SAR Finance Discussion
UK SAR Finance Discussion Jonathan Baliff, SVP and CFO George Bruce, Global Operations Finance Director
Slide 37: Executive summary
Executive summary Describe the capital requirements for UK SAR and the timing of these expenditures Provide our financing strategy to meet the UK SAR capital requirements Show the impact on financial guidance, especially from an EPS perspective Highlight how UK SAR is transformative by lowering our
Slide 38: UK SAR summary
UK SAR summary The UK SAR total anticipated capital requirement is ~$965M and is expected to be funded using operating leases, cash flow from operations and existing revolver Assuming today’s base business growth profile, we do not expect that we will need to issue equity to fund the UK SAR capital
Slide 39: Base
Base WAS@ ZERO ACCIDENTS / ZERO DOWNTIME / ZERO COMPLAINTS AF Bristow sib
Slide 40: GAP SAR highlights
GAP SAR highlights UK SAR UK SAR S-92 (2) S-92 (2) GAP SAR is already included in our 10-15% base business annual growth rate projection provided on our last earnings call in February Average LACE rate for GAP SAR is expected to be similar to EBU’s average LACE rate in FY13 Contract starts late Q1 F
Slide 41: UK SAR sources and uses of finance
UK SAR sources and uses of finance The table below shows the approximate expected sources and uses of finance, split between aircraft, ground infrastructure and equipment, and pre-operating costs * Liquidity includes cash on hand and unused revolver capacity Year ending USD millions Uses Owned aircr
Slide 42: Base / Location
Base / Location YRCH© ZERO ACCIDENTS / ZERO DOWNTIME / ZERO COMPLAINTS AT Bristow
Slide 43: Capital expenditure profile for UK SAR
Bristow’s current perspective on the capital expenditure profile for UK SAR Four S-92s for GAP SAR have already been purchased for ~$140M Total UK SAR capital expenditures are estimated at ~$965M Capital expenditures include ~$560M and are shown in the table to the right: ~$195M of pre-operating cos
Slide 44: UK SAR Financing Strategy and Impact
UK SAR Financing Strategy and Impact
Slide 45: Overall financial strategy for UK SAR involves a corporate guaranteed solution
Bristow’s overall financial strategy for UK SAR involves a corporate guaranteed solution Cash Flow and Support Operating Leases Several prospective lessors provided support letters in October 2012 and another ~15 prospective lessors submitted financing proposals ~60% of the aircraft will be leased a
Slide 46: UK SAR can be financed with prudent balance sheet management
UK SAR can be financed and with prudent balance sheet management maintained Backstop facility put in place during the tender process and permanent financing is being arranged Anticipated 10-15% long-term annual growth in the base business yields significant operating cash flow UK SAR capital require
Slide 47: UK SAR stand alone financial performance is highly stable
UK SAR stand alone financial performance during contract period is highly stable SAR-configured aircraft have a higher capital requirement (S-92s cost ~30% more and AW189s cost ~15% more than oil and gas aircraft) ~85%/15% mix of MSC/Variable in UK SAR vs. ~70%/30% mix in EBU LACE rates at full run-
Slide 48: Bristow UK SAR financial parameters
Bristow UK SAR financial parameters Total Contract Financial Metric Anticipated Contract Totals* Operating Revenue ~$2,500M EBITDAR ~$1,100M BVA ~$300M UK SAR contract is ~10 years in term with an option for a two year extension by the UK government Two training aircraft are delivered in FY15 with t
Slide 49: Base business adj. EPS growth rate can be maintained
Base business adj. EPS growth rate can be maintained as UK SAR contract builds to forecast ~$1/share contribution $2.58 $2.69 $3.08 $3.12 $3.73 * Base business projections are for illustrative purposes only and are not intended to be viewed as specific annual guidance $1.00 $2.00 $3.00 $4.00 $5.00 $
Slide 50: UK SAR shifts contract mix to more stable cash flow
UK SAR is transformative by shifting contract mix to even more stable cash flow Bristow’s largest share of revenue remains related to oil and gas production, providing stability and growth opportunities UK SAR brings more stable cash flow (production, SAR and other) to ~75% given higher and more cer
Slide 51: Bristow asset FMV including UK SAR aircraft expected to remain resilient
Bristow asset FMV including UK SAR aircraft are expected to remain resilient and higher than current asset FMV per share The UK SAR aircraft are expected to add significant asset FMV in FY18, even after netting the imputed leases $44.06 $53.62 $52.89 ~ $71 $35 $40 $45 $50 $55 $60 $65 $70 $75 12/2010
Slide 52: Concluding perspectives
Concluding perspectives The UK SAR total capital requirement is ~$965M and Bristow intends to maintain prudent balance sheet management throughout contract start up and full operations Assuming today’s base business growth profile, we do not expect to issue equity to fund the UK SAR capital requirem
Slide 53: Future Market Opportunities
Future Market Opportunities Mark Duncan, SVP Commercial
Slide 54: Future market opportunity
Future market opportunity SAR The evolving SAR market Oil and gas SAR Oil and gas market update EC225 Opportunity tracker 2013-2018 Aircraft supply/demand Opportunity tracker 2013-2014
Slide 55: The evolving SAR market
The evolving SAR market Further outsourcing of SAR to civilian sector will continue as it is successfully deployed Civilian SAR (non-oil and gas) today UK Gap SAR (seven aircraft) Ireland SAR (five aircraft) Dutch Antilles (two aircraft) UK SAR (22 aircraft) Civilian SAR (non-oil and gas) next to be
Slide 56: Oil and gas SAR
4 4 4 42 2 12 10 Oil and gas SAR 6 aircraft North America South America West Africa Europe Australia Russia / Sakhalin Greenland
Slide 57: Zero Accidents / Zero Downtime / Zero Complaints
‘WREI@ ERO ACCIDENTS / ZERO DOWNTIME / ZERO COMPLAINTS
Slide 58: EC225 update
EC225 update ~80 EC225 continue to be suspended from operations globally (16 from BRS) BRS mainly affected in Aberdeen; however, we have recovered well by redeploying or increasing utilization of existing aircraft In addition to aircraft, crewing is the critical bottleneck in Aberdeen October 2012 =
Slide 59: Aircraft capacity in Aberdeen since October 22, 2012
Aircraft capacity in Aberdeen – October 22, 2012 – to date Date No of Operational Aircraft Comments October 22, 2012 12 EC225s, 2 S-92s October 23, 2012 2 S-92s October 24, 2012 1 S-76C++ from Southern North Sea (SNS) October 26, 2012 1 AS332L from SNS October 28, 2012 1 S-92 from Norway October 29,
Slide 60: EC225 update (continued)
EC225 update (continued) Solutions for return to operations are under consideration FINAL/PERMANENT = re-design shaft ~18 months INTERIM = new operating procedures for enhanced monitoring and early detection ~6 months (subject to regulators approval) Criticality of helicopter transportation to offsh
Slide 61: Opportunity tracker FY14-FY18
56 Opportunity tracker FY14-FY18: 474 Bristow growth opportunities identified 30 430 56 15 3 233 222 85 31 17 9 101 2 11 44 9 17 27 10 51 13 10 26 11 26 North America Brazil, Peru, Trinidad Gulf of Guinea Europe Mid East, East Africa, India, Bangladesh Malaysia, Thailand Indonesia Australia Total Op
Slide 62: Supply/demand balances for large aircraft segment
Supply/demand balances for large aircraft segment Supply curves do NOT take account of operational limitations of older generation large aircraft Supply curves include EC225 Large aircraft production capacity ~36 per year per type (S-92 and EC225) Historically half to two-thirds of supply goes to oi
Slide 63: Opportunity tracker 2013-2014 award dates
Opportunity tracker 2013-2014 award dates Bristow moved in November 2012 to secure additional S-92 aircraft capacity available for delivery in 2013 and 2014 Supply/demand tightness exists in large helicopter sector, exacerbated by EC225 suspension New large types (AW189, EC175 and Bell 525) are not
Slide 64: Conclusion
Conclusion UK SAR contract can be catalyst for further outsourcing of SAR by governments Bristow is successfully managing through the global suspension of EC225 fleet Market demand is increasing and Bristow is positioned to support our customers with value adding solutions
Slide 65: Contact us
Contact us Bristow Group Inc. (NYSE: BRS) City West Blvd., th Floor Houston, Texas 77042 t 713.267.7600 f 713.267.7620 bristowgroup.com
Slide 66: Zero Accidents / Zero Downtime / Zero Complaints
‘WREI@ ERO ACCIDENTS / ZERO DOWNTIME / ZERO COMPLAINTS
Slide 67: Bios
Bios William E. Chiles – President and Chief Executive Officer William E. Chiles (Bill) is Chief Executive Officer and President of Bristow Group Inc. Prior to joining Bristow in July 2004, Mr. Chiles served as Executive Vice President and Chief Operating Officer for Grey Wolf, Inc. Prior to his ten
Slide 68: Bios
Bios Jonathan E. Baliff – Senior Vice President and Chief Financial Officer Jonathan Baliff joined the company as Senior Vice President and Chief Financial Officer in October 2010. Prior to joining Bristow, Mr. Baliff was Executive Vice President, Strategy, at NRG Energy since May 2008, where he led
Slide 69: Bios
Bios George Bruce – Global Operations Finance Director George Bruce is Global Operations Finance Director of Bristow Group, and joined Bristow in February 2008 after spending over 25 years in the oilfield services industry. Mr. Bruce graduated with distinction from university in Dundee with a BA in
Slide 70: Bios
Bios Hank Williams– General Manager, Cougar Helicopters Hank Williams has 20 years of experience in the transportation industry with the last 16 years in the aviation sector. Mr. Williams joined Cougar Helicopters in 1997 as Passenger Movements Coordinator, quickly moving to Base Operations Manager
Slide 71: Contact Us
Contact Us Bristow Group Inc. (NYSE: BRS) City West Blvd., th Floor Houston, Texas 77042 t 713.267.7600 f 713.267.7620 bristowgroup.com