National Energy Services Reunited Corp · NASDAQ:NESR
National Energy Services Reunited — Barclays CEO Energy-Power Conference 2019
25 slides from National Energy Services Reunited's conference presentation, September 2019
Slide 1: The National Champion of MENA
National Energy Services Reunited Corp. The National Champion of MENA September 2019 Sherif Foda Chairman and Chief Executive Officer
Slide 2: Safe Harbor and other disclaimers
Safe Harbor and other disclaimers This presentation (the “Presentation”) is for information purposes only and does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation to purchase any equity, debt or other financial instruments of National Energy Services Reunited
Slide 3: NESR – An Introduction
NESR – An Introduction |3 Strictly confidential – Do not reproduce or distribute Copyright NESR Corp.
Slide 4: NESR – Largest indigenous OFS in the region
NESR – Largest indigenous OFS in the region Iraq Bahrain UAE ▪ Head office in Houston and regional offices across MENA and Asia Pacific ▪ Operations Bases: 14 Countries ▪ 4000 Employees USA Libya ▪ 20 Product Lines Algeria India Chad ▪ Clients Portfolio: 25+ Customers Saudi Arabia Malaysia Indonesia
Slide 5: Exceptional growth story
Exceptional growth story 800 300 700 676 250 600 553 196 200 500 458 415 431 162 141 147 400 369 150 328 129 111 0.90 300 104 100 0.77 200 50 100 0 0 2013 2014 2015 2016 2017 2018 2019 Analyst Revenue ($mm) Estimate Adjusted EBITDA ($mm) |5 NPS financial results for 2013,2014 are prepared under IFRS
Slide 6: and…..Significant upside potential
and…..Significant upside potential TEV/EBITDA 2019E TEV/EBITDA 2020E 11.3x 8.1x 7.8x Significant 9.0x Significant valuation valuation upside upside potential 7.4x 5.6x potential 5.3x 5.2x 6.8x 5.4x 4.0x 4.9x Equipment International North European North Equipment International European North North di
Slide 7: Macro Outlook
Macro Outlook |7 Strictly confidential – Do not reproduce or distribute Copyright NESR Corp.
Slide 8: Last drop of oil will come from…
Last drop of oil will come from… Growing demand for liquid fuels in emerging economies met largely by OPEC and US supplies Middle East |8 Source: 2018 BP Energy Outlook Strictly confidential – Do not reproduce or distribute Copyright NESR Corp.
Slide 9: US Well Productivity (Major Oil Basins only)
US Well Productivity (Major Oil Basins only) 600 Down 2% IP90 (Bo/d) 550 500 450 400 350 2015 2016 2017 2018 1Q19 |9 Source: Drilling Info, Raymond James Strictly confidential – Do not reproduce or distribute Copyright NESR Corp.
Slide 10: Global Capex is nearly half its peak
Global Capex is nearly half its peak Capital Spending of Mid/Large-Cap Oil and Gas Companies $600,000 $500,000 $400,000 $ MM $300,000 $200,000 $100,000 $0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019E Multinational Domestic ex-U.S. U.S.-Focused | 10 Source: Company Filings, Raymond James Resear
Slide 11: 2020 Last big non-US growth year
2020 Last big non-US growth year Non-OPEC, Non-U.S. Y/Y Oil Production Change 1,000 872 800 743 559 600 509 400 231 200 120 142 55 MBbls/d 3 8 0 -20 (200) (400) -310 (600) -466 -537 (800) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019E 2020E 2021E 2022E 2023E | 11 Source: IEA, Raymond James Stric
Slide 12: MENA - Significant investments to meet demand
MENA - Significant investments to meet demand Natural Gas Surplus/Deficit (MMcf/d) Natural Gas Production (2019 E) MMcf/d 16,000 Qatar Algeria 12,000 Oman 8,000 Egypt Kuwait 4,000 UAE 0 Saudi Arabia Qatar Saudi Egypt Algeria UAE Oman Kuwait Iraq Arabia -5,000 0 5,000 10,000 15,000 Onshore Unconventi
Slide 13: 3x Unconventionals spent in next 10 years
3x Unconventionals spent in next 10 years Unconventional Spend ($B) 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 2015 2016 2017 2018 2019 2020 2021 2022 2030 Oman Saudi UAE Algeria Source: BTIG Research/Rystad Energy | 13 Strictly confidential – Do not reproduce or distribute Copyright NESR Corp.
Slide 14: ESG & Local Content @ NESR
ESG & Local Content @ NESR | 14 Strictly confidential – Do not reproduce or distribute Copyright NESR Corp.
Slide 15: Local Content - Key
Local Content - Key ▪ All countries in the region are adopting “Local content requirements” – ICV in Oman, IKTVA in Saudi, ICV in UAE, Tawteen in Qatar... ▪ Extremely aggressive goals and non - negotiable targets ▪ Will be critical to be from the region and for the region ▪ Small - to medium - sized
Slide 16: ESG @ NESR
ESG @ NESR Social Enhances long-term Responsibility sustainability Delivering social, environmental and economic value to the communities in NESR which we live and Environmental work Governance ESG Stewardship Strategy Adds value to Incorporates Doing business the environmental Reducing the ethicall
Slide 17: Our Approach
Our Approach Define goals, targets, focus Monitor performance against Evaluate performance and Sustainable and KPIs targets impact Impact Measure Identify Improve Measurable baseline, performance, reporting framework Performance and and ESG metrics and rating agency targets Outcomes Embed ESG Engage
Slide 18: Towards Cleaner Energy – Solar-Powered Light Towers
Towards Cleaner Energy – Solar-Powered Light Towers Emission reduction - 325 TON of CO2 The Problem Reliance on diesel-powered light towers Planned additional - 1500 TON of CO2 for rigless sites (air emissions, spills, noise pollution) CUSTOMER now requires all light towers to be solar-powered Impac
Slide 19: ESG vs Local Content
ESG vs Local Content The objectives of local content programs are aligned with NESR’s values and local strategies. As The Local Champion, NESR is creating synergies between local content programs and community socio- economic development initiatives in different countries.
Slide 20: Aligning ESG and Local Content
Aligning ESG and Local Content Local procurement of goods and services Increase local Hire, train and manufacturing develop local talents Enhancing Social Return on Investment through aligning ESG and LC strategies Support diversity, Develop local inclusion, and suppliers equal opportunities Transfe
Slide 21: First & Only NASDAQ Listed MENA Company
First & Only NASDAQ Listed MENA Company | 21 Strictly confidential – Do not reproduce or distribute Copyright NESR Corp.
Slide 22: Appendix
Appendix | 22 Strictly confidential – Do not reproduce or distribute Copyright NESR Corp.
Slide 23: 2018 Adjusted EBITDA
2018 Adjusted EBITDA (Non-GAAP Reconciliation) NESR ($ Million) 2018 Revenue 552.5 Net income (loss) 39.5 Depreciation and amortization 69.5 Finance Cost 19.5 Goodwill Impairment - Impairment - Tax 13.1 Transaction & Integration Costs 26.2 Earn-out Adjustment (6.1) Adjusted EBITDA 161.7 Source: Comp
Slide 24: 2019 Adjusted EBITDA
2019 Adjusted EBITDA (Non-GAAP Reconciliation) NESR ($ Million) Q1 2019 Q2 2019 Revenue 151.7 159.9 Net income (loss) 13.2 11.4 Depreciation and amortization 19.3 21.3 Finance Cost 3.9 5.8 Tax 2.9 4.4 Transaction, Integration & Start-Up Costs 1.3 2.4 Other Provisions - 0.4 Adjusted EBITDA 40.7 45.7
Slide 25: Historical Adjusted EBITDA
Historical Adjusted EBITDA (Non-GAAP Reconciliation) Adjusted EBITDA NPS financial results for 2013,2014 are prepared under IFRS and 2015-2017 are prepared under USGAAP; GES 2013-2017 financial results are prepared under IFRS EBITDA is adjusted for impairment which is not recognized as part of EBITD
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