Abl Group Asa · OSL:ABL
Abl Group Asa — AqualisBraemar — Q2 2019 Earnings Presentation
36 slides from Abl Group Asa's earnings presentation, Aug 29, 2019
Slide 1: AqualisBraemar ASA 2019 Q2 results and business stream presentations
AqualisBraemar ASA 2019 Q2 results and business stream presentations August 29, 2019 aqualisbraemar.com
Slide 2: Disclaimer
Disclaimer ▪ This Presentation has been produced by AqualisBraemar ASA (the “Company” or “Aqualis ”) solely for use at the presentation to investors and other stake holders and may not be reproduced or redistributed, in whole or in part, to any other person. This presentation is strictly confidentia
Slide 3: 1. Highlights
1. Highlights David Wells CEO 2. Financial review Kim Boman CFO 3. Outlook David Wells (CEO) / Glen Rødland (Chairman) 3
Slide 4: Financial figures for Q2 2019 – effects of the acquisition of BTS
Financial figures for Q2 2019 – effects of the acquisition of BTS • BTS consolidated statement of financial position as at 30 June 2019 was consolidated in AqualisBraemar’s consolidated statement of financial position as at 30 June 2019 • Consolidated statement of income reflects profit and loss res
Slide 5: Q2 2019 Highlights
Q2 2019 Highlights • Announcement and closure of the acquisition of the majority Braemar Technical Services (“BTS”) and creation of united brand AqualisBraemar • On 30 June 2019, BTS was consolidated in AqualisBraemar accounts • Revenues of USD 9.9 million in Q2 2019 vs USD 9.6 million in Q2 2018 •
Slide 6: Successful acquisition of Braemar Technical Services
Successful acquisition of Braemar Technical Services • Acquisition of the majority of Braemar Technical Services completed • A compelling strategic combination • Successful rights issue and private placement completed in July 2019 • Integration proceeding according to plan since closing 21 June 2019
Slide 7: AqualisBraemar – a leading adjusting, marine, offshore and renewables consultancy
AqualisBraemar – a leading adjusting, marine, offshore and renewables consultancy Regional revenue 1H 2019 (%) Business stream revenues 1H 2019(%) 12% 19 % 28 % Middle East 15% Offshore O&G Far East Marine 47% Net sales 1H Net sales June 2019 1 Europe 1H 2019 1 Adjusting 24 % Americas Offshore Wind
Slide 8: AqualisBraemar global footprint
AqualisBraemar global footprint Corporate HQ: London Operating in 48 offices in 33 countries Listed Oslo Stock Exchange ISO 9001 & OHSAS 18001 Certified 8
Slide 9: AqualisBraemar service offering
AqualisBraemar service offering Offshore Oil & Gas Marine Adjusting Offshore Renewables • Specialist offshore • Worldwide emergency • Loss adjusting, risk • Specialized and globally engineering and casualty, accident or assessment, legal/expert focused engineering consultancy services to incident re
Slide 10: Order backlog development
Order backlog development Order backlog Highlights Q2 2019 12 • Order backlog at USD 10.7 million and excludes figures for BTS 10 • Pipeline of future opportunities rising • Pipeline of work expected from call 8 out contracts is positive and increasing, but visibility in our USDm 6 industry is limit
Slide 11: Staff level development
Staff level development Staff level development1 Highlights Q2 2019 500 • Figures for Q2 2019 includes BTS 450 and is based on the number full time 400 equivalent staff at the end of the quarter for Aqualis and BTS 350 300 • Staff levels for former Aqualis increased from Q1 2019 to Q2 2019 250 200 •
Slide 12: Billing ratio development (excluding BTS)
Billing ratio development (excluding BTS) - Total technical staff (including subcontractors), billing ratio1 % 90% Billing ratio 88% Gliding 3m average billing ratio 86% 84% 82% 80% 78% 76% 74% 72% 70% 1) Billing ratio for technical staff including subcontractors. It excludes management, business de
Slide 13: Synergy estimate increased to ~3 USDm
Synergy estimate increased to ~3 USDm Cost synergies (2 USDm) Revenue synergies (USD 0.9m) • Progress will be reported • Challenging to monitor and quantify • Synergies phased in over 2 years • Win of projects based on • Lower general and administrative competence, size and footprint – all costs reg
Slide 14: 2. Financial review
1. Highlights David Wells CEO 2. Financial review Kim Boman CFO 3. Outlook David Wells (CEO) / Glen Rødland (Chairman) 14
Slide 15: The Combined Group
The Combined Group • Due to the integration progress, from Q3 2019, the presentation will be only AqualisBraemar and not split for legacy entities • Solid growth in former Aqualis • Weak performance in BTS impacted by trading losses. Reported figures impacted by restruturing provisions and additiona
Slide 16: Revenue and adjusted EBIT
Revenue and adjusted EBIT Revenue (USDm) Adjusted EBIT1development (USDm, %) 12,0 1,0 10% 10,0 0,8 8% 8,0 0,6 6% 6,0 0,4 4% 4,0 0,2 2% 2,0 0,0 0,0 0% 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 Adjusted EBIT (left axis) Adjusted EBIT margin (%) Revenue L
Slide 17: Regional split
Regional split Revenue split (USDm) Adjusted EBIT1 split 6,0 0,6 5,0 0,5 4,0 0,4 3,0 0,3 2,0 0,2 1,0 0,1 0,0 Middle Far East Europe Americas Other 0,0 -1,0 East Middle Far East Europe Americas Other -2,0 -0,1 East -3,0 -0,2 Q2 18 Q2 19 Q2 18 Q2 19 • Regional revenue differences y-o-y for entities re
Slide 18: Income Statement
Income Statement USD thousands Consolidated income statement Q2 19 Q2 18 H1 19 H1 18 FY 18 • Revenues for Q2 2019 up 3 % Revenues 9,869 9,595 18,051 17,754 36,185 from Q2 2018 Total revenues 9,869 9,595 18,051 17,754 36,185 • Results impacted by transaction Payroll and payroll related expenses (4,11
Slide 19: Cash flow and financial position
Cash flow and financial position Highlights Q2 2019 Working capital1 (%) • Solid financial position with no interest Aqualis 160% Braemar bearing debt and USD 7.8 million in cash • Working capital increase to USD 27 140% million due to acquisiton of BTS 120% – 152% combined working capital %1 (Aqual
Slide 20: 3. Outlook
1. Highlights David Wells CEO 2. Financial review Kim Boman CFO 3. Outlook David Wells (CEO) / Glen Rødland (Chairman) 20
Slide 21: The Challenge and the Potential
The Challenge and the Potential Metric Aqualis BTS Combined Comment Number of employees No. 192 253 445 FTE equivalents, including subcontractors, average Utilisation LTM % 82 % 61 % 71 % Billable hours / available hours (total technical staff) Average charge out rate USD/hour 153,5 198,0 173,6 Gros
Slide 22: Consideration for BTS represented only ~35-50 % of NWC
Consideration for BTS represented only ~35-50 % of NWC Consideration vs Braemar Technical NWC1 Consideration vs Braemar Technical net assets1 20.2 USDm 22.0 USDm 0,9 0,9 9.9 9,9 20,2 7.1 7,1 EV Equity Nova, purchase no vesting of EV Equity Nova full vesting of purchase NWCininBraemar NWC Nova EV Equ
Slide 23: AqualisBraemar value drivers (1/2)
AqualisBraemar value drivers (1/2) • Significant net cash position – Equity Value1: USD 29m – Adj. Net Cash2: USD 11m – Enterprise Value3: USD 18m • Potential for improved capital efficiency – Net Working Capital USD 27m – Targeting reduction in days outstanding + unbilled revenue – Targeting increa
Slide 24: AqualisBraemar value drivers (2/2)
AqualisBraemar value drivers (2/2) • Aligned incentives – Sharing with the employees – Senior management own ~11% of the company’s shares – Management incentive scheme with options/warrants to be implemented * – Bonus program • Improving markets – Renewables (offshore wind): Rapid growth and globali
Slide 25: Outlook
Outlook • The formation of AqualisBraemar creates an exciting and more robust network of offices and direct exposure to new service lines (marine claims and loss adjusting) • The merger has been well received by clients and the insurance markets and gives confidence of full support • Management focu
Slide 26: Appendix
Appendix 26
Slide 27: Adjustment items
Adjustment items USD thousands Adjustment items (EBITDA) Q217 Q317 Q417 FY17 Q118 Q218 Q318 Q418 FY18 Q119 Q2 19 Transaction costs related to acquisition - - - - - - - - - 384 715 Integration costs - - - - - - - - - - 48 Gain (loss) on disposal of interest in associates (7) 113 3,080 3,426 - (291) -
Slide 28: General
General Basis of preparations Alternative Performance Measures (APMs) This presentation provides consolidated AqualisBraemar discloses APMs in addition to those normally required by IFRS. APMs are meant to provide an enhanced financial highlights for the quarter of the insight into the operations, f
Slide 29: APMs and Key Figures
APMs and Key Figures USD thousands Profitability measures Q118 Q318 Q418 FY 18 Operating profit (loss) (EBIT) 406 130 (6,383) (5,628) 197 1,032 594 859 2,684 (248) (284) Depreciation, amortisation and impairment 31 343,963 4,061 33 34 30 32 129 38 38 EBITDA 437 164 (2,420) (1,566) 231 = 1,066 624 89
Slide 30: APMs and Key Figures
APMs and Key Figures 1) Full time equivalent numbers include subcontractors on 100% utilization equivalent basis 2) Billing ratio for technical staff includes subcontractors on 100% basis 3) Net working capital for Q2 19 adjusted for current portion of lease liabilities of USD 1.5 million and USD 3.
Slide 31: Consolidated Statement of Income
Consolidated Statement of Income 31
Slide 32: Consolidated Statement of Financial Position
Consolidated Statement of Financial Position 32
Slide 33: Consolidated Statement of Cash Flow
Consolidated Statement of Cash Flow 33
Slide 34: Revenues and EBIT - split per segments
Revenues and EBIT - split per segments 34
Slide 35: Trade receivable & Cash and cash equivalents - split per segments
Trade receivable & Cash and cash equivalents - split per segments 35
Slide 36: Top 20 shareholders
Top 20 shareholders # Name Shares % 1 Braemar Shipping Services Plc 19 240 621 27,3 2 Gross Management As 9 367 996 13,3 3 Bjørn Stray 2 266 121 3,2 4 Holmen Spesialfond 2 193 431 3,1 5 Mp Pensjon Pk 1 801 128 2,6 6 Oma Invest As 1 694 000 2,4 7 Lgt Bank Ag 1 502 923 2,1 8 Saxo Bank A/S 1 481 974 2,