Hunting Plc · LSE:HTG
Hunting — H1 2012 Earnings Presentation
31 slides from Hunting's earnings presentation, 2012
Slide 1: Click to edit Master title style
Click to edit Master title style
Slide 2: Highlights
Highlights Record Half Year Performance* • EBITDA £78.4m (2011 - £35.5m) +121% • Improved EBITDA margin 19% (2011 - 14%) • Profit from operations £65.4m (2011 - £25.8m) +153% • Diluted EPS 28.6p (2011 - 12.5p) +129% Continuing internal investment programmes throughout Group • H1 2012 capital expendi
Slide 3: 2012 Half Year Results Summary
2012 Half Year Results Summary* H1) H1) 2012) Margin 2011) Margin Change £m) % £m) % % Revenue 406.9) 251.3) +62 EBITDA 78.4) 19 35.5) 14 +121 Profit from operations 65.4) 16 25.8) 10 +153 Finance expense (3.8) (0.4) Profit before tax 62.0) 15 25.8) 10 +140 Effective tax rate 29% 30% Diluted EPS 28.
Slide 4: H1 2011 - H1 2012 EBITDA Bridge
H1 2011 - H1 2012 EBITDA Bridge 90.0 Aggregate Margin % 22.0 21.2 (0.1) 78.4 80.0 21.0 70.0 20.0 60.0 19.6 19.0 7.3 19.3 19.3 50.0 6.7 18.0 £m 7.8 18.0 40.0 17.0 35.5 30.0 16.0 16.2 15.7 20.0 15.0 10.0 14.0 14.1 0.0 13.0 H1 2011 Construction: Construction: Completion: Completion: Other H1 2012 like-
Slide 5: Segmental Results
Segmental Results* H1 H1) 2012 2011) Profit from Profit from) Revenue Operations Margin Revenue Operations) Margin £m £m % £m £m) % Hunting Energy Services Well Construction 135.9 21.8 16 77.8 9.2) 12 Well Completion 225.0 38.5 17 131.2 11.3) 9 Well Intervention 29.5 3.9 13 26.0 4.1) 16 Exploration
Slide 6: Amortisation & Exceptional Items – Continuing Operations
Amortisation & Exceptional Items – Continuing Operations H1 2012 £m Amortisation of intangible assets 14.4 Inventory fair value charge 6.1 Retention bonuses on acquired businesses 1.2 Oil & Gas reserve impairment 2.7 Continuing operations 24.4 Results for the six months ended 30 June 2012 6
Slide 7: Balance Sheet
Balance Sheet June) December 2012) 2011 £m) £m Property, plant and equipment 247.4) 231.2) Goodwill 315.0) 317.9) Other intangible assets 204.6) 220.8) Working capital 255.8) 261.2) Provisions (59.5) (60.5) Dividend payable (16.1) - Other (13.2) (20.2) Net debt (191.4) (218.4) Net assets 742.6) 732.
Slide 8: Capital Expenditure – by Segment
Capital Expenditure – by Segment H1 Full Year 2012 2011 £m £m Hunting Energy Services Well Construction 12.7 30.0 Well Completion 13.1 19.6 Well Intervention 8.4 5.9 Exploration & Production 2.8 2.3 Others 0.2 0.2 37.2 58.0 Split: Maintenance 12.2 12.8 New Business 25.0 45.2 37.2 58.0 Results for th
Slide 9: Capital Expenditure – by Project
Capital Expenditure – by Project H1 2012 £m Well Construction - New drill tools and spare parts 7.9 - Other equipment 4.8 Well Completion - Houma new facility – US 5.9 - Asia Pacific equipment 3.4 - Other equipment 3.8 Well Intervention - Stafford expansion – US 5.0 - Other equipment 3.4 Exploration
Slide 10: Cash Flow
Cash Flow H1)) H1) 2012)) 2011) £m)) £m) EBITDA 78.4) 35.5) Working capital movements (0.6) (9.0) Interest and bank fees (3.3) (0.3) Tax paid (13.3) (6.4) Replacement capital expenditure (12.2) (4.7) Other 0.5) (0.2) Free cash flow 49.5) 14.9) Expansion capital expenditure (25.0) (17.1) Disposal of
Slide 11: Well Integration
Well Integration Results for the six months ended 30 June 2012 11
Slide 12: Positioning Today to Meet Tomorrow’s Demand
Positioning Today to Meet Tomorrow’s Demand Based on current projections, rig counts worldwide are expected to increase in 2013 creating additional market demand To meet tomorrow’s demand, Hunting continues to strategically increase capacity through geographic expansion and increasing the existing c
Slide 13: Operational Leverage and Financial Return
Operational Leverage and Financial Return 70% Our Customer’s product needs change rapidly based 60% on market demand Sales Revenue % % Chang e H1 2011 Co m pared to H1 2012 Increase • Our challenge is to satisfy our Customer’s needs 50% with on-time deliveries, exceptional quality while increasing t
Slide 14: Hunting Strategy
Hunting Strategy Results for the six months ended 30 June 2012 14
Slide 15: Corporate Activity
Corporate Activity Acquisitions: £710m / Investments: £120m / Disposals: £620m Acquisitions: Dearborn Titan W L Doffing Specialty Supply Acquisitions: Innova 2012 2011 Investments Disposals: Field Aviation Acquisitions: NCC Welltonic 2010 Aberdeen Wuxi Houma Stafford Batam PT SMB Disposals: Hunting
Slide 16: Global Footprint
Global Footprint Canada (3 Mfg) Europe (4 Mfg) USA (26 Mfg / 22 Dist) Mexico (1 Mfg) Middle East (1 Mfg) Asia Pacific (5 Mfg) Results for the six months ended 30 June 2012 16
Slide 17: Hunting’s Facility Breakdown
Hunting’s Facility Breakdown 3.0 2.5 2.0 2.7 million square feet Footprint Sq ft (millions) 62 facilities in 9 countries 1.5 Producing over 8.8 million parts to date 1.0 0.5 - .0 New Facilities / Investments Results for the six months ended 30 June 2012 17
Slide 18: Acquisition Integration and Global Expansion
Acquisition Integration and Global Expansion North America UK and Middle East Asia Loyal and Stable Customer Base Demand for new technology Population and industrial growth fuel the demand for energy Industry testing grounds for new technology and products from proven Hunting’s expansion in the mark
Slide 19: Projected Wells Drilled Globally 2012
Projected Wells Drilled Globally 2012 US China Canada Central South America Russia Far East Middle East Africa Central Asia Europe 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 Source: Spears and Associates Results for the six months ended 30 June 2012 19
Slide 20: Onshore vs. Offshore Revenue Opportunities
Onshore vs. Offshore Revenue Opportunities Drilling Costs: US$6 million Drilling Costs: US$100 million Equipment Supplied: 21% Equipment Supplied: 23% Realised Revenue: US$1.26 million Realised Revenue: US$23 million Results for the six months ended 30 June 2012 20
Slide 21: Business Platforms
Business Platforms Results for the six months ended 30 June 2012 21
Slide 22: Well Construction
Well Construction Continued strengthening of Connections business Continued growth of global offshore activity High manufacturing demand Steady backlog for precision manufacturing and electronics associated with MWD and LWD Results for the six months ended 30 June 2012 22
Slide 23: Advanced Manufacturing Group
Advanced Manufacturing Group Precision Installation and Manufacturing of Electronics for Testing to Customer MWD/LWD MWD/LWD Tools Specifications Components Results for the six months ended 30 June 2012 23
Slide 24: Horizontal Drilling and MWD Market Influences
Horizontal Drilling and MWD Market Influences Horizontal Wells Drilled (US) 2002: 994 Major & Independent Service Companies 2011: 15,004 Horizontal Drilling 2012: 16,799 (PROJECTED) Services Sub-Assemblies & Systems Accessories Mud Motors MWD & LWD Reamers, Stabilizers, Shock subs Components Hunting
Slide 25: Well Completion
Well Completion Integration of the acquisitions Continued product expansion globally Manufacturing demand high Robust work for GOM and global offshore Continued technology development Excellent demand for perforating systems and energetics Up to 42 inches Results for the six months ended 30 June 201
Slide 26: Well Intervention
Well Intervention Increase in drilling = Increase in work overs • Wells are typically re-entered multiple times over their lifespan Newer drilling technologies require enhanced Well Intervention means Growth of our Thru Tubing into Canada and US and Asia Pacific markets Advanced technology where and
Slide 27: Fundamental Business Drivers
Fundamental Business Drivers Results for the six months ended 30 June 2012 27
Slide 28: Steady Global Offshore Wells Drilled
Steady Global Offshore Wells Drilled 4500 4000 3500 3000 2500 2000 1500 1000 500 0 2006 2007 2008 2009 2010 2011 2012 Source: Spears and Associates 2012 projected Results for the six months ended 30 June 2012 28
Slide 29: Horizontal Rig Count
Horizontal Rig Count Percentage Percentage of Rigs of Rigs Drilling Drilling Vertical, Vertical, Directional, Directional, & Horizontal & Horizontal WellsWells 80.0% 70.0% 60.0% 50.0% 40.0% % Horizontal % Vertical % Directional 30.0% 20.0% 10.0% Source: Baker Hughes 0.0% Jan-00 Jan-01 Jan-02 Jan-03
Slide 30: Annual US Horizontal Footage Drilled
US Horizontal Footage Drilled – millions feet US Horizontal US FootageDrilled Horizontal Footage Drilled 300 250 Annual US Horizontal Footage Drilled (Millions feet) 200 150 100 50 Source: Spears & Associates June 2012 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Slide 31: Looking Forward
Looking Forward Continued Integration of Products and Services into Hunting’s Global Footprint Expansion of Global Footprint Product Development Cost Enhancement Opportunities Results for the six months ended 30 June 2012 31