Hunting Plc · LSE:HTG
Hunting — FY2023 Earnings Presentation
37 slides from Hunting's earnings presentation, Feb 29, 2024
Slide 1: Hunting PLC 2023 Full Year Results
INA CHANGING Hunting PLC 2023 Full Year Results g HUNTING
Slide 2: Disclaimer
Disclaimer By attending the meeting where this presentation is made, or by reading the presentation slides, you acknowledge and agree to comply with the following restrictions. This document and the accompanying verbal presentation (together the "Presentation”) have been prepared by Hunting PLC (the
Slide 3: Highlights
Highlights Strong increases in activity across most product groups leading to a return to bottom-line profitability Revenue $929. 1m +28% Non-oil and gas sales increasing — predominantly within the Dearborn and Electronics business units Non-oil and gas revenue $75.9m +59% EBITDA doubling due to str
Slide 4: Delivering the Hunting 2030 Strategy (i)
Delivering the Hunting 2030 Strategy (i) Product group Initiative 2030 Strategic pillar OCTG + Entered 10-year strategic alliance with Jiuli Strategic supply chain + Opened premium threading facility in Nashik, India Global growth + Delivered strong growth within TEC-LOCK™ product line * Launched ne
Slide 5: Delivering the Hunting 2030 Strategy (ii)
Delivering the Hunting 2030 Strategy (ii) Product line Initiative 2030 Strategic pillar Advanced Manufacturing Increased non-oil and gas sales at Dearborn and Electronics Revenue diversification + Excellent progress in sales to aviation, commercial space, defence and medical markets Energy Transitio
Slide 6: ESG
ESG Internal manufacturing reject rate 0.20. (2022 - 0.13%) Total recordable incident rate 0.91 (2022 - 0.97) Scope 1 and 2 emissions in tonnes COze 24,042..... (2022 - 22, ie tonnes) CO,e intensity factor 25.9 (2022 - 30.9) Employee engagement survey — “How satisfied are you with your organisation
Slide 7: Product group: OCTG
+ Strong global momentum for OCTG, premium connections and accessories across all regions * Key drivers including significant CNOOC order; $91m Cairn Oil and Gas order; expanded TEC-LOCK™ market share in North America; strong growth in well completion orders in South America; record year in Canada *
Slide 8: Product group: Perforating Systems
Product group: Perforating Systems • • • • • • • 8
Slide 9: Product group: Advanced Manufacturing
Product group: Advanced Manufacturing • • • • • 9
Slide 10: Product group: Subsea
Product group: Subsea • • • • • • 10
Slide 11: Product group: Other Manufacturing
Product group: Other Manufacturing • • • • • • 11
Slide 12: Energy Transition
Energy Transition • • • • Seal-Ring Corrosion • Barrier • SEAL-LOCKTM® FLUSH- SR-GL SEAL-LOCKTM FLUSH-SR – GRE Lined LOD FLUSH CASING 12
Slide 13: Financial Overview
FINANCIAL OVERVIEW q GB wwnrwe
Slide 14: Financial Overview
Financial Overview Revenue up by 28% — led by Record sales order book of Diluted earnings per share up EBITDA up 98% to $103.0m OCTG, AMG and Subsea in the | $565.2m providing visibility for 332% from 4.7 cents to 20.3 offshore and international 2024 and beyond cents markets a cum MT Bess a + Non-oi
Slide 15: Strong revenue growth post-COVID despite 21% decrease in US land rig count
Strong revenue growth post-COVID despite 21% decrease in US land rig count Source: Company 15
Slide 16: Earnings and profitability growth in the year
Earnings and profitability growth in the year *Results for the year, as reported under IFRS, adjusted for certain items as determined by management. 16
Slide 17: Record order book providing visibility for 2024 and beyond
Record order book providing visibility for 2024 and beyo Order book by product group - $m OCTG ™Perforating Systems Advanced Manufacturing ™Subsea ™ Other Manufacturing Order book by operational activity - $m Oil and Gas Medical Other non-oil and gas ‘Aviation ™=Commercial space Geothermal = Naval
Slide 18: Product groups and operating segments 2023 performance
Product groups and operating segments 2023 performance Hunting North Subsea Asia _External EBITDA Titan America _—‘Technologies EMEA Pacific += - Revenue —- EBITDA Margin $m $m $m $m $m $m $m % ocTe 61 192.4 - 46.5 150.8 395.8 46.7 12% Perforating Systems 236.1 - - 77 - 243.8 25.1 10% Advanced Manuf
Slide 19: Strong balance sheet, recognition of US deferred tax assets
Strong balance sheet, recognition of US deferred tax assets 2023 2022 Group Balance Sheet $m $m Property, plant and equipment 254.5 256.7 Right-of-use assets 26.2 26.0 Goodwill and other intangible assets 195.2 191.2 Associates and joint ventures 20.5 20.1 Working capital 415.9 362.8 Supporting the
Slide 20: Working capital
Working capital 2023 2022 Working Capital $m $m Inventories - Hunting Titan 140.5 122.6 Long lead times on charges - North America 107.8 90.4 - Other segments 80.1 59.1 Net inventories 328.4 272.1 Receivables 251.5 233.0 Payables (164.0) (142.3) Total 415.9 362.8 Working capital to annualised revenu
Slide 21: Investment in working capital and assets supporting sales order book
Investment in working capital and assets supporting sales order book 21
Slide 22: 2024 Guidance
2024 Guidance EBITDA EBITDA margin $125m -$135m | 12% - 13% ae Effective tax rate Capex Free cash flow conversion (post capex) 25% - 28% $35m - $45m 50%
Slide 23: Market Overview
MARKET OVERVIEW q GB wwnrwe
Slide 24: Spears & Associates Drilling and Production Outlook
Source: Spears & Associates – December 2023 Drilling and Production Outlook 24
Slide 25: Our end markets — US & Canada
Our end markets — US & Canada Further growth for TEC-LOCK™ semi premium connection across North America as further market share gains are made Canada remaining a strong growth story as drilling intensity continues + Pre-Loaded Gun offering being introduced to clients from the Grande Prairie operatin
Slide 26: Our end markets — Brazil and Guyana
4 Our end markets — Brazil and Guyana + Huge success for Subsea Spring business unit — steel and titanium stress joints sales into Guyana have driven growth in the year + Well completion sales volumes accelerated strongly during the year, driven by Guyana activity + Tubacex contract, through the EME
Slide 27: Our end markets — Europe, Middle East and Africa
Our end markets — Europe, Middle East and Africa + Strengthening well intervention sales into Middle East as global capex accelerated + Geothermal orders completed at the Netherlands OCTG facility for project in The Netherlands + Expansion of Dubai facility commenced, with opening in H2 2024 - one f
Slide 28: Our end markets — India
Our end markets — India + Premium threading facility in Nashik now operational + The facility provides the Group with early mover opportunities in the country, given the government’s local content requirements and diversify Hunting’s supply chain + Hunting’s precision engineered premium connection t
Slide 29: Our end markets — Asia and Oceania
\ \ 3. Our end markets — Asia and Oceania Strong growth in OCTG sales since August 2022, as Group secured major CNOOC order and $91m Cairn Oil and Gas order Success in combining pipe sourced from China strategic suppliers and with Hunting’s proprietary connections Qualification of Jiuli OCTG materia
Slide 30: Strong year of delivery across Hunting's diversified energy portfolio
Strong year of delivery across Hunting’s Improvements to pricing and utilisation Offshore international markets poised to diversified energy portfolio driving improved profit margins deliver further growth in 2024 m Improved FCF generation in H2 b Energy Transition sales increasing _ Improved ESG me
Slide 31: Appendices
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Slide 32: Statutory Group Income Statement
Statutory Group Income Statement 2023 2022 $m Margin $m Margin Revenue 929.1 725.8 Gross profit 227.7 25% 171.4 24% Operating profit 61.0 7% 2.0 - Share of associates’ & JVs' results (0.6) (2.7) Profit (loss) before tax 50.0 (2.4) Tax credit (charge) 69.0 (1.3) Profit (loss) after tax 119.0 (3.7) Di
Slide 33: Product groups and operating segments 2022 performance
Product groups and operating segments 2022 performance Hunting North Subsea Asia External EBITDA Titan America Technologies EMEA Pacific Revenue EBITDA Margin $m $m $m $m $m $m $m % ocTe 35 154.3 > 32.4 68.6 258.8 16.2 6% Perforating Systems 246.5 - - 5.4 - 251.9 27.3 11% Advanced Manufacturing 78 6
Slide 34: Strong offshore and international demand drives activity
Strong offshore and international demand drives activity 34
Slide 35: Product groups delivering
Product groups delivering 35
Slide 36: Historic results for product groups
Historic results for product groups 2022 2021 Revenue EBITDA Margin Revenue EBITDA Margin $m $m % $m $m % OcTG 258.8 16.2 6% 172.5 (7.4) -4% Perforating Systems 251.9 27.3 11% 181.7 8.5 5% Advanced Manufacturing 75.1 0.9 1% 59.6 07 1% Subsea 69.0 3.4 5% 58.8 47 8% Other Manufacturing 71.0 4.2 6% 49.
Slide 37: G HUNTING https: ora RSS com/channel/ UC_BhC9wo00pV- OxAhinOooYA
G HUNTING https: ora RSS com/channel/ UC_BhC9wo00pV- OxAhinOooYA