Bristow Group, Inc. · NYSE:VTOL
Bristow — Q1 FY2016 Earnings Presentation
49 slides from Bristow's earnings presentation, Aug 7, 2015
Slide 1: First quarter FY16 earnings presentation
Exhibit 99.1 First quarter FY16 earnings presentation Bristow Group Inc. August 7, 2015
Slide 2: First quarter FY16 earnings call agenda
First quarter FY16 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 Jonathan
Slide 3: Forward-looking statements
Forward-looking statements Statements contained in this news release 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: Q1 FY16 operational safety review
Q1 FY16 operational safety review Air Accident Rate 1 (AAR) per 100,000 • Continued Target Zero air flight hours (fiscal year) safety for over two years 0.96 through Q1 FY16 0.53 0.53 • Q1 FY16 Total Recordable 0 0 0 Injury Rate of 0.26 FY11 FY12 FY13 FY14 FY15 Q1 FY16 • Increased investment in Tota
Slide 6: Bristow is proactively repositioning for a longer downturn
Bristow is proactively repositioning for a longer downturn • Industry-wide overcapacity continues with fundamental changes occurring in the North Sea as clients aggressively rebase cost structures • Our initial cost management ($75 to $95 million reduction announced previously) has been largely succ
Slide 7: Bristow has substantial advantages to enhance our competitiveness in an extended downturn
Bristow has substantial advantages to enhance our competitiveness in an extended downturn • Modern fleet (average age of ~9 years), allows for deferral of new aircraft deliveries reducing capex needs without compromising safety or client service • Strong balance sheet gives us full access to capital
Slide 8: Operational highlights
Operational highlights Jeremy Akel, SVP and COO
Slide 9: Europe Caspian
Europe Caspian Operating revenue and adjusted EBITDAR margin Norway United Kingdom Turkmenistan Challenging market will continue; recent new tender win and contract extension while awaiting results of other tenders in our most uncertain Falkland market Islands Benefits from startup of U.K. SAR in Ap
Slide 10: U.K. SAR update
U.K. SAR update • U.K. SAR start up continues as Caernarfon began operations July 1, 2015 with additional bases starting up during the remainder of the fiscal year • Operations are meeting contractual availability thresholds and financial performance is in line with expectations • More than half of
Slide 11: Africa
Africa Operating revenue and adjusted EBITDAR margin Egypt Nigeria Tanzania Market uncertainty continues and smaller clients are under pressure as activity declines Cost cutting measures were implemented ahead of the activity reduction with additional efficiencies expected FY16 expected adjusted EBI
Slide 12: Americas
Americas Operating revenue and adjusted EBITDAR margin Canada United States Trinidad GoM small and medium aircraft activity decline partially offset by large aircraft Brazil demand Americas FY16 adjusted EBITDAR margin expected to remain ~ mid thirties 12
Slide 13: Líder
Líder • Absolute BVA contribution to Bristow from Líder was $3.9M* in Q1 FY16 • Adjusted debt to TTM adjusted EBITDAR increased to 3.9x as of June 30, 2015 from 3.3x as of March 31, 2015 • Current market activity is down but tempered in part by management’s aggressive cost cutting 140 Líder adjusted
Slide 14: Asia Pacific
Asia Pacific Operating revenue and adjusted EBITDAR margin Russia Malaysia Incremental short term wins; expansion into new countries Australia Clients are proceeding with existing project developments FY16 expected adjusted EBITDAR margin for Asia Pacific expected to remain ~ mid twenties 14
Slide 15: Current financial performance and guidance for the future
Current financial performance and guidance for the future John Briscoe, SVP and CFO
Slide 16: Q1 FY16 highlights
Q1 FY16 highlights • U.K. SAR execution led to increased Operating revenue and revenue and partially offset margin adjusted EBITDAR margin declines in oil and gas both sequentially and over prior year • Adjusted EBITDAR margins down due to lower activity levels and decreased utilization in oil and g
Slide 17: Financial highlights
Financial highlights: Adjusted EBITDAR and adjusted EPS summary year-over-year Q1 FY15 to Q1 FY16 adjusted EBITDAR bridge (in millions) $3.6 $0.5 $127.6 $2.5 $121.0 Q1 FY15 Operations Corporate and Other FX Changes Q1 FY16 Q1 FY15 to Q1 FY16 adjusted EPS bridge $1.32 $0.56 $0.19 $0.01 $0.56 Q1 FY15
Slide 18: LACE and LACE rate
LACE and LACE rate Consolidated commercial aircraft Large Aircraft equivalent (LACE)* 300 264 261 LACE* LACE Rate* ($ in millions) 180 $12 250 241 242 234 $9.34 $9.33 $9.25 $10 170 $7.89 $8.35 200 166 164 $8 158 158 149 150 160 $6 100 166 $4 164 150 158 158 50 $2 149 - 140 $- FY12 FY13 FY14 FY15 Q1
Slide 19: Bristow Value Added (BVA) drives Gross Cash Flow (GCF) performance
Bristow Value Added (BVA) drives Gross Cash Flow (GCF) performance 14.0% 70.0 13.0% 13.1% 13.2% 13.2% 12.0% 12.8% 60.0 10.0% 50.0 8.0% 40.0 29.3 6.0% 30.0 24.5 26.1 19.7 20.0 4.0% 9.7 10.0 2.0% - 0.0% Q1 FY15 Q2 FY15 Q3 FY15 Q4 FY15 Q1 FY16 • Q1 FY16 absolute BVA is positive $9.7 million; 16 consecu
Slide 20: Cash flow and liquidity
Cash flow and liquidity 600 Net cash provided by operating activities1 Total liquidity 2 530 300 500 266 253 250 415 231 232 402 204 400 370 365 200 216 104 300 120 152 211 150 262 178 216 196 200 100 126 326 266 245 100 199 50 140 53 55 26 36 37 16 - 0 FY11 FY12 FY13 FY14 FY15 Q1 FY16 FY12 FY13 FY1
Slide 21: FY16 guidance revised
FY16 guidance revised FY16 adjusted EPS guidance range is lowered to $3.10 - $3.75, excluding special items and aircraft sales. FY16 guidance includes: FY16 guidance as of June 30, 2015 Average LACE count ~ 165-175 Interest expense ~ $25 - $35M Average LACE rate ~ $8.00 – $9.00M Rent expense (aircra
Slide 22: Bristow is committed to maintaining our financial strength and strategic flexibility in this downturn
Bristow is committed to maintaining our financial strength and strategic flexibility in this downturn • Safety is and will remain our number one priority, as we build on two consecutive years of Target Zero air safety and continue to proactively engage with the industry through HeliOffshore • The oi
Slide 23: Appendix
Appendix
Slide 24: New organizational chart - as of June 30, 2015
New organizational chart - as of June 30, 2015 Bristow Europe BRS Academy Africa Americas Asia Pacific Caspian 1%* 18% 18% 17% 46% U.K. – 84 Nigeria – 53 U.S. GoM – 51 Australia – 39 Florida – 54 Norway – 22 Tanzania – 3 Canada – 8 Russia – 7 Louisiana – 13 Falklands – 3 Brazil – 8 Other – 2 U.K. –
Slide 25: Aircraft fleet – medium and large as of June 30, 2015
Aircraft fleet – medium and large as of June 30, 2015 Type Capacity Engine Cons Unconsl Total Large capacity 16-25 passengers Large Helicopters AS332 L Super Puma 18 Twin Turbine 4 - 4 AW189 16 Twin Turbine 5 - 5 H175 16 Twin Turbine - - - H225 19 Twin Turbine 26 - 26 Mil Mi 8 20 Twin Turbine 7 - 7
Slide 26: Aircraft fleet – small, training and fixed as of June 30, 2015
Aircraft fleet – small, training and fixed as of June 30, 2015 (continued) Type Capacity Engine Cons Unconsl Total Small capacity 4-7 passengers Small Helicopters AS 350BB 4 Turbine - 2 2 Bell 206B 4 Turbine 1 2 3 Bell 206 L Series 6 Turbine 5 6 11 Bell 407 6 Turbine 27 - 27 BK-117 7 Twin Turbine 2
Slide 27: Operating lease strategy: lowering the cost and amount of capital needed to grow
Operating lease strategy: lowering the cost and amount of capital needed to grow Leased aircraft as of June 30, 2015 Small Medium Large Total Leased LACE Total LACE % Leased Europe Caspian - 5 38 43 41 74 55% Africa - 1 1 2 2 22 7% Americas 1 13 5 19 12 42 28% Asia Pacific 2 2 8 12 10 27 35% Total 3
Slide 28: Consolidated fleet changes and aircraft sales for Q1 FY16
Consolidated fleet changes and aircraft sales for Q1 FY16 Fleet changes Q1 FY16 # of aircraft Cash Fleet Count Beginning 371 sold received* Delivered Q1 FY16 9 $ 9.3 Large 1 Medium 1 Total 9 $ 9.3 Total Delivered 2 * Amounts stated in millions Removed Sales (6) Other* (2) Total Removed (8) 365 * Inc
Slide 29: Held for sale and leased fleet by region as of Q1 2016
Held for sale and leased fleet by region as of Q1 2016 Held for sale aircraft in consolidated fleet Small Medium Large Training Total Europe Caspian - - 2 - 2 Africa - 5 - - 5 Americas - 6 - - 6 Asia Pacific - - 2 - 2 Academy - - - - - Total - 11 4 - 15 Leased aircraft in consolidated fleet Small Me
Slide 30: 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 June 30, 2015 FY16 op revenue 1 LACE LACE Rate2,3,4 Europe Caspian $169 74 $9.16 Africa 77 22 14.42 Americas 76 41 7.41 Asia Pacific 53 27 7.91 Total $3794 164 $9.25 1) $ in millions 2) LACE rate i
Slide 31: 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 32: 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 $10.49 $10.94 $9.69 $9.10 $9.59 $9.92 $10.27 $10.82 $10.55 $9.74 $9.37 $8.95 Africa 11.54 11.70 13.06 13.28 14.26 13.95 13.25 13.34 14.10 14.11 15.86 15.81 Americas 6.10 6.38 5.82 6.06 6.37
Slide 33: Order and options book as of June 30, 2015
Order and options book as of June 30, 2015 1 ORDER BOOK OPTIONS BOOK Helicopter # Helicopter Delivery Date # Class Delivery Date Location Contracted 1 Large September-15 Americas 1 of 1 1 Large September-16 1 Large September-15 Europe Caspian2 2 Large December-16 4 Medium September-15 Africa 1 Mediu
Slide 34: 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 35: Net asset FMV reconciliation as of June 30, 2015
Net asset FMV reconciliation as of June 30, 2015 June 30, 2015 (in millions) Including leases Excluding leases (+) FMV of aircraft $1,967 $1,967 (+) FMV of leased aircraft $1,712 - (+) NBV of PPE without aircraft $413 413 (+) Working capital $257 257 (-) LT debt ($918) (918) (-) Leased imputed debt
Slide 36: Adjusted EBITDAR margin trend by region
Adjusted EBITDAR margin* trend by region FY13 FY14 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Europe Caspian 32.0% 34.4% 39.2% 35.8% 35.4% 30.4% 35.3% 35.6% 37.8% 35.0% Africa 31.5% 26.5% 35.0% 32.0% 31.4% 34.1% 30.1% 31.7% 36.6% 33.3% Americas 28.5% 28.3% 38.0% 40.0% 33.9% 42.5% 35.7% 37.4% 38.4% 38.1% Asia Pacific 3
Slide 37: Adjusted EBITDAR reconciliation
Adjusted EBITDAR* reconciliation Fiscal year ended, 3/31/2013 3/31/2014 ($ in millions) Q1 Q2 Q3 Q4 FY13 Q1 Q2 Q3 Q4 FY14 Net income $24 $30 $37 $40 $132 $27 $110 $19 $32 $188 Income tax expense $6 $8 $8 $13 $35 $8 $41 $3 $6 $57 Interest expense $9 $9 $15 $10 $42 $20 $9 $7 $8 $45 Gain on disposal of
Slide 38: Bristow Value Added (BVA) sample calculation for Q1 FY16 and Q1 FY15
Bristow Value Added (BVA) Sample calculation for Q1 FY16 and Q1 FY15 Bristow Value Added = Gross Cash Flow – (Gross Operating Assets X Capital Charge) BVA = GCF – (GOA x 10.5%**) Bristow Value Added calculation for Q1 FY16 $9.7 = $110.6* – ($3,841* x 2.625%**) Bristow Value Added calculation for Q1
Slide 39: Bristow gross cash flow reconciliation
Bristow gross cash flow reconciliation (in millions) Gross cash flow reconciliation Q1 FY15 Q1 FY16 Net income $ 44 $ (3) Depreciation and amortization 25 37 Interest expense 7 8 Loss on extinguishment of debt 0 Interest income (0) (0) Rent 33 54 Other income/expense-net 1 (4) Gain/loss on asset sal
Slide 40: Bristow adjusted gross operating assets reconciliation
Bristow adjusted gross operating assets reconciliation (in millions) Adjusted gross operating assets reconciliation Q1 FY15 Q1 FY16 Total assets $ 3,541 $ 3,243 Accumulated depreciation 536 507 Capitalized operating leases 423 674 Cash and cash equivalents (134) (120) Investment in unconsolidated en
Slide 41: Líder Bristow Value Added (BVA)
Líder Bristow Value Added (BVA) Sample calculation for Q1 FY16 and Q1 FY15 Bristow Value Added = Gross Cash Flow – (Gross Operating Assets X Capital Charge) BVA = GCF – (GOA x 10.5%** ) Bristow Value Added calculation for Q1 FY16 $3.9 = $9.5* – ($211* x 2.625%**) Bristow Value Added calculation for
Slide 42: Líder gross cash flow reconciliation
Líder gross cash flow reconciliation ($ in millions) Gross cash flow reconciliation Q1 FY15 Q1 FY16 Net income (loss) $13 ($7) Depreciation and amortization 3 3 Rent 7 6 Interest expense 4 3 Interest income (1) (1) FX (gains) losses 1 27 Other income/expense-net (0) (16) Special Adjustment- remove L
Slide 43: Líder adjusted gross operating assets reconciliation
Líder adjusted gross operating assets reconciliation ($ in millions) Adjusted gross operating assets reconciliation Q1 FY15 Q1 FY16 Total assets $623 $553 Cash and cash equivalents (76) (74) Accumulated depreciation 80 64 Capitalized operating leases 149 116 Investments & escrow deposits (44) (44) I
Slide 44: Líder's adjusted EBITDAR reconciliation
Líder's adjusted EBITDAR* reconciliation ($ in millions) Q2 CY14 Q3 CY14 Q4 CY14 Q1 CY15 Q2 CY15 Gross revenue 113.7 116.4 100.9 80.2 82.7 (-) Revenue deductions (7.3) (7.7) (6.1) (4.5) (4.9) Net operating revenue 106.4 108.7 94.8 75.7 77.8 (-) Cost of products and services (79.5) (82.0) (72.1) (56.
Slide 45: GAAP reconciliation
GAAP reconciliation Three months ended June 30, 2015 2014 (In thousands, except per share amounts) Adjusted operating income $36,467 $69,304 Gain (loss) on disposal of assets (7,695) 610 Special items 1 (23,938) (4,722) Operating income $4,834 $65,192 Adjusted EBITDAR $121,047 $127,623 Gain (loss) o
Slide 46: Bristow leverage reconciliation
Bristow leverage reconciliation Debt Investment Capital Leverage (a) (b) (c) = (a) + (b) (a) / (c) (in millions) As of June 30, 2015 $ 945.2 $ 1,613.8 $ 2,559.0 36.9% Adjust for: Unfunded pension liability 101.9 101.9 NPV of lease obligations @ 6% 644.5 644.5 Letters of credit 10.7 10.7 Adjusted $ 1
Slide 47: Líder leverage reconciliation
Líder leverage reconciliation (in millions) Jun-14 Jun-15 Total book debt $ 290 $ 338 NPV of leases 59 39 Total adjusted debt 349 378 TTM adjusted EBITDAR $ 114 $ 97 Adjusted debt / TTM adj. EBITDAR 3.1x 3.9x 47
Slide 48: We are Bristow
—= LIDER. Me) 440 annaorth y | tagether we fly li=n. =i Bristow Eastern (cougar <9 aviashelf
Slide 49: 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 49