Boart Longyear — Shareholder Meeting (May 2016)
21 slides from Boart Longyear's shareholder meeting presentation, May 24, 2016
Slide 1: Annual General Meeting
TruCore™ Core Orientation Tool Annual General Meeting May 2016 – Adelaide
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
Chairman’s Address Marcus Randolph
Slide 4: Who We Are
Who We Are RESULTS GLOBAL PEOPLE HISTORY DRILLING TECHNOLOGY PRODUCTS INTEGRITY Boart Longyear is the leading provider of drilling services, drilling equipment, and performance tooling for mining and drilling companies globally Customers rely on our unique ability to develop, field test, and deliver
Slide 5: Global Drilling Services
Global Drilling Services Active across all mining stages Stage Boart Longyear Service Offering FY 2015 Drilling Services Revenue by Stage • Surface coring Explore • Reverse Circulation ("RC") to get through overburden quickly • Rotary for water exploration to build hydrology intelligence Exploration
Slide 6: Global Products
Global Products Technology Innovator Minerals & Environmental & Key Rock Drill & Blast Energy Infrastructure Innovations • UMX™ Diamond Bits Drilling Tools - Higher penetration/longer life • RQ™ Drill Rods - Most reliable deep hole rod • V-Wall™ Coring Rods - Increases rig depth capacity • Roller La
Slide 7: Global Presence
Global Presence Serving our customers in major mining markets 2015 Total Revenue by Region 2015 Drilling Revenue by Commodity Other 7% LAM 16% Non-Mining Water 5% USA 27% Other Metals 5% Nickel 5% Gold 47% APAC 22% Energy 8% Canada 19% Copper 21% EMEA 16% 7
Slide 8: FY 2015 Summary
FY 2015 Summary Safety o Total case rate moderately better – 8% improvement year-over-year o Increase in lost time rate – 0.18 vs. 0.11 in 2014 o No fatalities Revenues o Down $131M (15%) o FX the key driver – $74M of the decrease o Price down $30M; volume down $27M Costs o Markedly improved o COGS
Slide 9: Productivity Initiative
Productivity Initiative Example of Driller Productivity Chart Progress Reviewed Regularly Every drill crew gets instantaneous feedback on shift results (compared to other drillers & target) New incentive program with substantial bonuses for high performers Following metrics reported in detail: o Dri
Slide 10: Significant improvement in productivity in first 8 months
31-Aug-15 07-Sep-15 14-Sep-15 21-Sep-15 28-Sep-15 05-Oct-15 12-Oct-15 19-Oct-15 first 8 months 26-Oct-15 02-Nov-15 09-Nov-15 Expect trend to continue 16-Nov-15 23-Nov-15 30-Nov-15 07-Dec-15 14-Dec-15 21-Dec-15 28-Dec-15 04-Jan-16 Meters / Feet per Shift 11-Jan-16 18-Jan-16 25-Jan-16 Trend 01-Feb-16
Slide 11: Experienced Board of Directors
Experienced Board of Directors Board of Directors • Appointed February 2015 • Appointed November 2015 Marcus Randolph (Executive • Most recently chief executive of BHP Deborah O’Toole • Most recently CFO and EVP of Aurizon Billiton’s Ferrous and Coal business Holdings Chairman) • 35 years of mining
Slide 12: CEO's Address
CEO’s Address FY Jeff Olsen % LONGYEAR’ BOART
Slide 13: Safety & Environment
Safety & Environment Our goal is to add value with zero harm – leading our industry with our employees returning home safely each day and performing our work with minimal impact to our neighbors or the environment. Total Case Incident Rate Lost Time Incident Rate 3.26 0.34 2.33 2.15 2.23 1.78 1.62 0
Slide 14: Productivity & cost control efforts have moved the dial
Productivity & cost control efforts have moved the dial FY 2014 FY 2015 Variance (YOY) (US $M) 1H 2H Total 1H 2H Total 1H 2H Total Revenue 421 445 867 387 348 735 (34) (97) (131) Adjusted EBITDA 19 13 31 2 (2) (0) (17) (14) (31) Cash From Operations (15) 3 (11) (85) 30 (55) (71) 27 (44) 2H 2015 cash
Slide 15: Continuing to manage our cost structure
Continuing to manage our cost structure (US $M) Reduced expenditure profile by over ~$1.3 billion since 2012 Realised in 2013 Realised in 2014 Realised in 2015 2,081 (460) (232) (115) 1,274 (252) (20) (58) 944 (124) 5 (9) 816 Over $800M of expenditure Over $325M of expenditure Over $125M of expendit
Slide 16: Consolidated Results Summary: FY 2015
Consolidated Results Summary: FY 2015 (US $M) Revenue • FY 2015 was a difficult year for the industry and the 867 735 Company due to lower commodity prices • Demand stable for underground and production drilling and products • Revenue down $131M, driven by unfavorable currency FY 2015 FY 2014 transl
Slide 17: Q1 2016 Update
Q1 2016 Update Consolidated Results Quarter % Change (US $M) Ended Fav/(Unfav) Total Company 31-Mar-16 31-Mar-15 Revenue 142 187 -24% • Q1 2016 revenue down 24% compared Statutory EBITDA (12) (14) 13% Adjusted EBITDA (6) (10) 34% to Q1 2015 Statutory Net Profit After Tax (61) (71) 14% Adjusted Net P
Slide 18: Long-term commodity trends are negative but recent trends are improving
Long-term commodity trends are negative but recent trends are improving Long-Term Commodity Trends Recent Commodity Trends (since Dec-15) Gold ($/oz.) Gold ($/oz.) 2,000 1,350 1,250 1,500 1,150 1,000 1,050 950 500 12/15/15 12/22/15 12/29/15 1/5/16 2/2/16 2/9/16 3/1/16 3/8/16 4/5/16 12/1/15 12/8/15 1
Slide 19: Difficult market conditions persist
Difficult market conditions persist Key Risks Inherent to Our Business: Market – The Company’s results, financial condition, and ability to achieve shareholder returns are directly linked to underlying market demand for drilling services and drilling products Operational – We have implemented signif
Slide 20: 2016 Priorities
2016 Priorities Focus on Safety, Productivity, Innovation & Cash Focus on Increased Use Improved Safety Behaviours & of Physical Engineering Culture Change Barriers Continuous Commercial Operations Support Costs Improvement Practices Real-time Lower Technology Geological Automation Operating Cost Da
Slide 21: Questions?
Questions? @ BOART LONGYEAR