Bristow Group, Inc. · NYSE:VTOL
Bristow — Q4 FY2015 Earnings Presentation
62 slides from Bristow's earnings presentation, May 21, 2015
Slide 1: Fourth quarter FY15 earnings presentation
Exhibit 99.1 Fourth quarter FY15 earnings presentation Bristow Group Inc. May 21, 2015
Slide 2: Fourth quarter FY15 earnings call agenda
Fourth quarter FY15 earnings call agenda Introduction Linda McNeill, Director Investor Relations CEO remarks and safety review Jonathan Baliff, President and CEO Operational highlights Jeremy Akel, SVP and COO Current and future financial performance John Briscoe, SVP and CFO Closing remarks Jonatha
Slide 3: Forward-looking statements
Forward-looking statements Statements contained in this presentation that state the Company’s or management’s intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements. These forward-looking statements include statements regarding earnings guidance and earn
Slide 4: CEO remarks and safety review
CEO remarks and safety review Jonathan Baliff, President and CEO
Slide 5: FY15 operational safety review
FY15 operational safety review • Achieved one full year of global FY15 Air Accident Rate 1 (AAR) per Target Zero in August 2014 and 100,000 flight hours (fiscal year) two consecutive years with zero air accidents in March 2015 • FY15 Total Recordable Injury Rate of 0.23, a 12% improvement from 0 0 F
Slide 6: FY15 highlights
FY15 highlights • High reliability and excellent client service led to 13.9% revenue growth to $1.7 billion in FY15 • Proactive cost and capital efficiency led to FY15 adjusted EBITDAR* of $474 million, BVA** of $100 million, and operating cash flow of $253 million • On-time, on-budget launch of $2.
Slide 7: Bristow market perspectives
Bristow market perspectives • Bristow continues to believe this is not just a supply-oriented decline, but is driven by weaker than expected demand for Overall oil market perspective • Bristow believes in a U-shaped recovery that will continue for 18-24 months from today • Delayed recovery and oil p
Slide 8: Operational highlights
Operational highlights Jeremy Akel, SVP and COO
Slide 9: Europe (EBU)
Europe (EBU) • Europe contributed 44% of Bristow operating revenue and 37% of adjusted EBITDAR* in Q4 FY15 • Operating revenue increased 3.8% to $177.2M in Q4 FY15 from $170.7M in Q4 FY14 • Adjusted EBITDAR decreased 16.6% to $53.1M in Q4 FY15 from $63.6M in Q4 FY14 with adjusted EBITDAR margin of 2
Slide 10: UK SAR update
UK SAR update • From the start of the Gap SAR contract on June 1, 2013 through March 31, 2015, we have conducted 583 missions and rescued and/or assisted 581 people • Sumburgh and Stornoway (Gap SAR) bases generated a total of $11.1M of operating revenue in Q4 FY15 and $87.2M since the beginning of
Slide 11: West Africa (WASBU)
West Africa (WASBU) • West Africa (Nigeria) contributed 19% of Bristow operating revenue and 25% of adjusted EBITDAR* in Q4 FY15 • Operating revenue decreased to $75.3M in Q4 FY15 from $83.8M in Q4 FY14 • Adjusted EBITDAR increased to $35.9M in Q4 FY15 from $27.8M in Q4 FY14 and adjusted EBITDAR mar
Slide 12: North America (NABU)
North America (NABU) • North America contributed 14% of Bristow operating revenue and 20% of adjusted EBITDAR* in Q4 FY15 • Operating revenue increased to $58.3M in Q4 FY15 from $55.6M in Q4 FY14 • Adjusted EBITDAR increased to $28.2M in Q4 FY15 vs. $19.7M in Q4 FY14 while adjusted EBITDAR margin in
Slide 13: Australia (AUSBU)
Australia (AUSBU) • Australia contributed 16% of Bristow operating revenue and 12% of adjusted EBITDAR* in Q4 FY15 • Operating revenue increased by 55.0% to $62.9M in Q4 FY15 from $40.6M in Q4 FY14 • Adjusted EBITDAR increased 80.4% to $17.6 million in Q4 FY15 from $9.7M in Q4 FY14 and adjusted EBIT
Slide 14: Other International (OIBU)
Other International (OIBU) • Other International contributed 8% of Bristow operating revenue and 5% of adjusted EBITDAR* in Q4 FY15 • Operating revenue decreased to $31.8M in Q4 FY15 vs. $38.0M in Q4 FY14 • Adjusted EBITDAR decreased to $7.5M in Q4 FY15 vs. $20.2M in Q4 FY14 and adjusted EBITDAR mar
Slide 15: Líder update
Líder update • Q1 CY15 EBITDAR was $21.9 million, down 25% from Q1 CY14 due to reduced activity with Petrobras • Absolute BVA contribution to Bristow from Líder was $2.4M* in Q4 FY15 • Adjusted debt to TTM adjusted EBITDAR increased to 3.3x as of March 31, 2015 from 3.0x as of March 31, 2014 Outlook
Slide 16: Current financial performance and guidance for the future
Current financial performance and guidance for the future John Briscoe, SVP and CFO
Slide 17: Financial highlights: adjusted EBITDAR and EPS bridges
Financial highlights: Adjusted EBITDAR and adjusted EPS summary year-over-year Q4 FY14 to Q4 FY15 adjusted EBITDAR bridge (in millions) $24.6 $7.7 $13.5 $122.9 $126.3 Q4 FY14 Operations Corporate and Other FX Changes Q4 FY15 Q4 FY14 to Q4 FY15 adjusted EPS bridge $0.12 $0.26 $1.35 $0.30 $0.91 Q4 FY1
Slide 18: Brazilian real per USD
Brazilian real per USD Source: Factset 18
Slide 19: LACE and LACE rate
LACE and LACE rate FY16 average LACE guidance range initiated at 170-180 and average LACE rate guidance range initiated at $8.00 -$9.00 million *See appendix hereto for more information on LACE and LACE rate. Consolidated commercial aircraft, LACE and LACE rate exclude Bristow Academy, affiliate air
Slide 20: Bristow Value Added drives improving Gross Cash Flow performance
Bristow Value Added (BVA) drives improving Gross Cash Flow (GCF) performance • Q4 FY15 absolute BVA is positive $29.3M, a $0.6M or 2% increase from Q4 FY14 • Year-over-year change in BVA is driven by: Revenue growth Margin improvement Capital efficiency efforts • EBU and NABU generated key improveme
Slide 21: Progress on BVA yields stronger operating cash flow
Our progress on BVA yields stronger operating cash flow for growth, dividends and share repurchases Net cash provided by operating activities 1 Total liquidity2 530 415 402 370 261 1) See 10-K for more information on cash flow provided by operating activities. 2) At period end 21
Slide 22: FY16 guidance initiated
FY16 guidance initiated • FY16 adjusted EPS guidance range is initiated at $3.90 - $4.40, excluding special items and aircraft sales. FY16 guidance includes: FY16 guidance as of March 31, 2015 Average LACE (Large AirCraft ~170-180 Interest expense ~ $35 - $45M Equivalent) Average LACE Rate ~ $8.00 -
Slide 23: FY16 adjusted EPS guidance bridge from FY15
FY16 adjusted EPS guidance bridge from FY15 • FY15 results adjusted for foreign exchange effect of $0.88 bridges to reported adjusted EPS of $3.77 (~$4.65 in total) • FY16 expected net decline in oil and gas with addition of UK SAR yields an approximate $0.50 adjusted EPS decrease Bristow estimates
Slide 24: Bristow remains well positioned for the future
Bristow remains well positioned for the future • Safety is and will remain our number one priority, as we build on two consecutive years of air Target Zero and continue to proactively engage with the industry through HeliOffshore • We continue to differentiate ourselves through first class efficienc
Slide 25: Appendix
Appendix
Slide 26: Organizational chart - as of March 31, 2015
Organizational chart - as of March 31, 2015 Bristow EBU WASBU NABU AUSBU OIBU BRS Academy 42% 18% 14% 15% 8% 3%* UK – 85/7 Nigeria – 46/6 U.S. GoM – 59/6 Australia – 40/12 Brazil – 8/4 Florida – 51/1 Norway – 21/4 Canada – 9/2 Egypt – 0/0 Louisiana – 13/1 Falklands – 3/1 Russia – 7/3 Nevada – 3/1 Ta
Slide 27: New organizational chart - as of March 31, 2015
New organizational chart - as of March 31, 2015 Bristow Europe BRS Academy Africa Americas Asia Pacific Caspian 1%* 19% 21% 16% 43% UK – 85/7 Nigeria – 46/6 U.S. GoM – 59/6 Australia – 40/12 Florida – 51/1 Norway – 21/4 Tanzania – 3/1 Canada – 9/2 Russia – 7/3 Louisiana – 13/1 Falklands – 3/1 Brazil
Slide 28: Organizational changes
Organizational changes Old business unit New region EBU Europe Caspian Europe, Eastern Airways and UK EBU and Turkmenistan SAR AUSBU Asia Pacific Australia and Airnorth AUSBU, Malaysia and Russia NABU Americas U.S. and Canada NABU, Trinidad and South America (including Brazil) WASBU Africa Nigeria W
Slide 29: Aircraft fleet – medium and large
Aircraft fleet – medium and large as of March 31, 2015 Aircraft Large capacity 16-25 passengers Type No. of PAX Engine Consl Unconsl Total Ordered Large Helicopters AS332 L Super Puma 18 Twin Turbine 4 - 4 - AW189 16 Twin Turbine 4 - 4 13 H175 16 Twin Turbine - - - 17 H225 19 Twin Turbine 26 - 26 1
Slide 30: Aircraft fleet – small, training and fixed
Aircraft fleet – small, training and fixed as of March 31, 2015 (continued) Aircraft Small capacity 4-7 passengers Type No. of PAX Engine Consl Unconsl Total Ordered Small Helicopters AW109 6 Twin Turbine - 1 1 AS 350BB 4 Turbine - 2 2 Bell 206B 4 Turbine 1 2 3 - Bell 206 L Series 6 Turbine 5 6 11 -
Slide 31: Operating lease strategy
Operating lease strategy: lowering the cost and amount of capital needed to grow Leased aircraft as of March 31, 2015 Small Medium Large Total Leased LACE Total LACE % Leased EBU - 5 36 41 39 71 54% WASBU - 1 1 2 2 20 8% NABU 1 13 5 19 12 33 35% AUSBU 2 2 8 12 10 22 44% OIBU - - - - - 21 - Total 3 2
Slide 32: Consolidated fleet changes and aircraft sales for Q4 FY15
Consolidated fleet changes and aircraft sales for Q4 FY15 Q1 FY15 Q2 FY15 Q3 FY15 Q4 FY15 FY15 Fleet Count Beginning 363 363 363 369 363 Delivered Large 6 2 4 2 14 Medium 3 - 2 2 7 Total Delivered 9 2 6 4 21 Removed Sales (4) (7) (4) (15) (30) Other* (5) 5 4 13 17 Total Removed (9) (2) - (2) (13) 36
Slide 33: Held for sale and leased fleet as of Q4 FY15
Held for sale and leased fleet as of Q4 FY15 Held for sale aircraft in consolidated fleet Small Medium Large Training Total EBU - - 2 - 2 WASBU - 3 - - 3 NABU - 3 - - 3 AUSBU - - - - - OIBU - 4 - - 4 Academy - - - - - Total - 10 2 - 12 Leased aircraft in consolidated fleet Small Medium Large Trainin
Slide 34: Leased aircraft by region as of Q4 2015
Leased aircraft by region as of Q4 2015 Leased aircraft as of March 31, 2015 Small Medium Large Total Leased LACE Total LACE % Leased Europe Caspian - 5 36 41 39 72 54% Africa - 1 1 2 2 21 7% Americas 1 13 5 19 12 45 26% Asia Pacific 2 2 8 12 10 29 33% Total 3 21 50 74 61 166 37% * * The percentage
Slide 35: Held for sale and leased fleet by region
Held for sale and leased fleet by region as of Q4 2015 Held for sale aircraft in consolidated fleet Small Medium Large Training Total Europe Caspian - - 2 - 2 Africa - 3 - - 3 Americas - 7 - - 7 Asia Pacific - - - - - Academy - - - - - Total - 10 2 - 12 Leased aircraft in consolidated fleet Small Me
Slide 36: Operating revenue, LACE and LACE rate by BU
Operating revenue, LACE and LACE rate by BU Operating revenue, LACE, and LACE rate by BU as of March 31, 2015 1 2,3,4 FY15 op revenue LACE LACE Rate EBU $633 71 $8.91 WASBU 296 20 14.99 NABU 234 33 7.04 AUSBU 197 22 9.18 OIBU 136 21 6.63 4 Total $1,528 166 $9.21 1) $ in millions 2) LACE rate is annu
Slide 37: Operating revenue, LACE and LACE rate by region
Operating revenue, LACE and LACE rate by region Operating revenue, LACE, and LACE rate by region as of March 31, 2015 1 2,3,4 FY15 op revenue LACE LACE Rate Europe Caspian $642 72 $8.97 Africa 316 21 14.88 Americas 348 45 7.77 Asia Pacific 226 29 7.93 4 Total $1,528 166 $9.21 1) $ in millions 2) LAC
Slide 38: Historical LACE by BU
Historical LACE by BU LACE FY10 FY11 FY12 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 EBU 45 45 45 42 42 43 48 46 44 46 46 45 WASBU 23 23 24 25 24 24 21 22 23 22 22 22 NABU 39 36 36 36 39 35 34 29 30 29 30 30 AUSBU 20 20 22 22 20 23 24 20 19 20 20 19 OIBU 36 34 34 35 33 33 33 38 39 38 38 34 Consolidated 163
Slide 39: Historical LACE by region
Historical LACE by region LACE FY13 FY14 FY15 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Europe Caspian 48 46 52 56 58 60 60 57 62 68 70 72 Africa 23 23 21 21 21 22 23 24 24 24 22 21 Americas 48 46 53 52 51 48 48 47 47 45 46 45 Asia Pacific 29 28 28 30 30 30 34 30 31 29 31 29 Consolidated 147 142 154 158 1
Slide 40: Historical LACE rate by BU
Historical LACE rate by BU LACE Rate1,2 FY10 FY11 FY12 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 EBU $8.36 $8.28 $8.40 $8.76 $8.20 $8.50 $7.90 $8.40 $9.80 $9.60 $9.63 $10.09 WASBU 9.08 8.81 8.66 8.34 9.70 9.40 10.70 9.90 9.10 10.30 11.17 11.46 NABU 5.05 5.44 5.26 5.23 5.40 6.10 6.00 6.60 5.80 6.30 5.89 5.
Slide 41: Historical LACE rate by region
Historical LACE rate by region LACE Rate1,2 FY13 FY14 FY15 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Europe Caspian $10.50 $10.94 $9.70 $9.12 $9.63 $9.96 $10.31 $10.86 $10.57 $9.77 $9.38 $8.97 Africa 11.54 11.70 13.06 13.28 14.26 13.95 13.25 13.34 14.10 14.11 15.86 14.88 Americas 6.11 6.53 5.89 6.13 6.66
Slide 42: Flight hours by BU
Flight hours by BU Flight hours by BU FY13 FY14 Q1 Q2 Q3 Q4 FY13 Q1 Q2 Q3 Q4 FY14 EBU 17,236 15,900 14,399 13,807 61,342 16,294 16,871 16,428 19,537 69,130 WASBU 10,754 10,635 11,060 10,941 43,390 11,716 11,396 11,485 10,984 45,581 NABU 20,169 20,561 17,159 15,014 72,903 15,922 16,419 12,345 11,322
Slide 43: Flight hours by region
Flight hours by region Flight hours by region FY13 FY14 Q1 Q2 Q3 Q4 FY13 Q1 Q2 Q3 Q4 FY14 Europe Caspian 17,354 16,062 14,610 14,111 62,137 16,457 17,056 16,597 19,706 69,816 Africa 10,754 10,634 11,061 10,941 43,390 11,716 11,395 11,509 11,383 46,003 Americas 22,697 22,952 19,480 17,429 82,558 18,2
Slide 44: Order and options book as of March 31, 2015
Order and options book as of March 31, 2015 1 ORDER BOOK OPTIONS BOOK Helicopter Helicopter # Class Delivery Date Location Contracted # Class Delivery Date 3 Medium June-15 Africa 1 Large June-16 1 Medium June-15 Americas 1 of 1 2 Large September-15 Europe Caspian2 3 Medium June-16 1 Large September
Slide 45: Order and options book (continued): UK SAR configured order book
Order and options book as of March 31, 2015 (continued) UK SAR CONFIGURED ORDER BOOK Helicopter # Class Delivery Date Location Contracted 5 Large June-15 Europe Caspian 5 of 5 2 Large June-15 Europe Caspian 2 of 2 2 Large September-15 Europe Caspian 2 of 2 2 Large December-15 Europe Caspian 2 of 2 1
Slide 46: Total net asset FMV with and without leased aircraft FMV
Total net asset FMV with and without leased aircraft FMV NOTE: The gray shaded area represents the range of FMV with and without the impact of leased aircraft (upper range includes leased aircraft and related NPV of lease payments; lower range excludes FMV of leased aircraft as well as the NPV of le
Slide 47: Net asset FMV reconciliation as of March 31, 2015
Net asset FMV reconciliation as of March 31, 2015 March 31, 2015 (in millions) Including leases Excluding leases (+) FMV of aircraft $1,968 $1,968 (+) FMV of leased aircraft $1,645 - (+) NBV of PPE without aircraft $528 528 (+) Working capital $203 203 (-) LT debt ($846) (846) (-) Leased imputed deb
Slide 48: Adjusted EBITDAR margin trend by BU
Adjusted EBITDAR margin* trend by BU FY12 FY13 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 EBU 33.0% 31.4% 30.7% 36.1% 32.9% 32.2% 34.6% 39.5% 38.3% 36.2% WASBU 29.5% 35.5% 37.2% 36.6% 35.0% 31.9% 26.5% 35.0% 31.8% 31.5% NABU 14.3% 20.6% 14.8% 19.4% 17.3% 23.2% 20.7% 29.1% 29.5% 25.7% AUSBU 20.2% 14.4% 23.5% 35.6% 24.3
Slide 49: Adjusted EBITDAR margin trend by region
Adjusted EBITDAR margin* trend by region FY13 FY14 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Europe Caspian 31.9% 34.4% 39.1% 35.6% 35.3% 30.3% 35.2% 35.4% 37.7% 34.9% Africa 31.5% 26.5% 35.0% 32.0% 31.4% 34.1% 30.1% 31.7% 36.6% 33.3% Americas 28.4% 27.7% 37.6% 39.7% 33.5% 42.2% 35.6% 37.2% 38.1% 37.8% Asia Pacific 3
Slide 50: Adjusted EBITDAR reconciliation
Adjusted EBITDAR* reconciliation Fiscal year ended, 3/31/2012 3/31/2013 ($ in millions) Q1 Q2 Q3 Q4 FY12 Q1 Q2 Q3 Q4 FY13 Net income $21 $3 $26 $15 $65 $24 $30 $37 $40 $132 Income tax expense $7 -$2 $7 $2 $14 $6 $8 $8 $13 $35 Interest expense $9 $9 $10 $10 $38 $9 $9 $15 $10 $42 Gain on disposal of a
Slide 51: Bristow Value Added sample calculation
Bristow Value Added (BVA) Sample calculation for Q4 FY15 and Q4 FY14 Bristow Value Added = Gross Cash Flow – (Gross Operating Assets X Capital Charge) BVA = GCF – (GOA x 10.5%**) Bristow Value Added calculation for Q4 FY15 $29.3 = $128.0* – ($3,759* x 2.625%**) Bristow Value Added calculation for Q4
Slide 52: Bristow gross cash flow reconciliation
Bristow gross cash flow reconciliation (in millions) Gross cash flow reconciliation Q4 FY14 Q4 FY15 Net income 30 15 Depreciation and amortization 26 37 Interest expense 8 8 Interest income (0) (0) Rent 31 50 Other income/expense-net 2 (0) Gain/loss on asset sale (0) 10 Special items 24 1 Tax effect
Slide 53: Bristow adjusted gross operating assets reconciliation
Bristow adjusted gross operating assets reconciliation (in millions) Adjusted gross operating assets reconciliation Q4 FY14 Q4 FY15 Total assets 3,398 3,231 Accumulated depreciation 523 509 Capitalized operating leases 428 623 Cash and cash equivalents (204) (104) Investment in unconsolidated entiti
Slide 54: Líder Bristow Value Added sample calculation
Líder Bristow Value Added (BVA) Sample calculation for Q4 FY15 and Q4 FY14 Bristow Value Added = Gross Cash Flow – (Gross Operating Assets X Capital Charge) BVA = GCF – (GOA x 10.5%** ) Bristow Value Added calculation for Q4 FY15 $2.4 = $9.0* – ($253* x 2.625%**) Bristow Value Added calculation for
Slide 55: Líder gross cash flow reconciliation
Líder gross cash flow reconciliation ($ in millions) Gross cash flow reconciliation Q4 FY14 Q4 FY15 Net income (loss) $ (35) $ (0) Depreciation and amortization 3 3 Rent 7 7 Interest expense 4 2 Interest income (1) 2 FX (gains) losses 3 16 Other income/expense-net (1) (12) Special Adjustment- remove
Slide 56: Líder adjusted gross operating assets reconciliation
Líder adjusted gross operating assets reconciliation ($ in millions) Adjusted gross operating assets reconciliation Q4 FY14 Q4 FY15 Total assets $ 580 $ 588 Cash and cash equivalents (73) (69) Accumulated depreciation 74 76 Capitalized operating leases 145 136 Investments & escrow deposits (33) (42)
Slide 57: Líder's adjusted EBITDAR reconciliation
Líder's adjusted EBITDAR* reconciliation ($ in millions) Q1 CY14 Q2 CY14 Q3 CY14 Q4 CY14 Q1 CY15 Gross revenue 121.2 113.7 116.4 100.9 80.2 (-) Revenue deductions (5.9) (7.3) (7.7) (6.1) (4.5) Net operating revenue 115.3 106.4 108.7 94.8 75.7 (-) Cost of products and services (90.8) (79.5) (82.0) (7
Slide 58: GAAP reconciliation
GAAP reconciliation Three months ended Fiscal year ended March 31, December 31, 2015 2014 2015 2014 (In thousands, except per share amounts) Adjusted operating income $49,261 $68,401 $210,564 $217,348 Gain (loss) on disposal of assets (10,255) 81 (35,849) 8,068 Special items 1 (11,304) (21,061) (28,
Slide 59: Bristow leverage reconciliation
Bristow leverage reconciliation Debt Investment Capital Leverage (a) (b) (c) = (a) + (b) (a) / (c) (in millions) As of March 31, 2015 $ 864.4 $ 1,618.8 $ 2,483.2 34.8% Adjust for: Unfunded Pension Liability 99.6 99.6 NPV of Lease Obligations 640.0 640.0 Letters of credit 10.7 10.7 Adjusted $ 1,614.7
Slide 60: Líder leverage reconciliation
Líder leverage reconciliation (in millions) Mar-14 Mar-15 Total book debt $ 296 $ 300 NPV of leases 63 41 Total adjusted debt 359 341 TTM adjusted EBITDAR $ 120 $ 104 Adjusted debt / TTM adj. EBITDAR 3.0x 3.3x 60
Slide 61: We are Bristow
CaS LIDER,. . mm) 0/07 alrnaorth 4 - together we fly l=, =i Bristow Eastern ((covear aviashelf
Slide 62: Contact us
Contact us Bristow Group Inc. (NYSE: BRS) 2103 City West Blvd., 4 th Floor Houston, Texas 77042 t 713.267.7600 f 713.267.7620 bristowgroup.com 62