National Energy Services Reunited Corp · NASDAQ:NESR
National Energy Services Reunited — Credit Suisse 25th Annual Energy Summit (March 2020)
31 slides from National Energy Services Reunited's conference presentation, March 2020
Slide 1: National Energy Services Reunited Corp. The national champion of MENA
NEED TO ADD DIVERSITY PIC National Energy Services Reunited Corp. The national champion of MENA March 2020 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: Macro Outlook for NESR
Macro Outlook for NESR |3 Strictly confidential – Do not reproduce or distribute Copyright NESR Corp.
Slide 4: The big story for each country…
The big story for each country… |4 Strictly confidential – Do not reproduce or distribute Copyright NESR Corp.
Slide 5: North Africa Security concerns and Gas Hub
North Africa Security concerns and Gas Hub |5 Strictly confidential – Do not reproduce or distribute Copyright NESR Corp.
Slide 6: MENA - Significant investments to meet the demand
MENA - Significant investments to meet the 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 Unconv
Slide 7: Unconventionals as of now in GCC…
Unconventionals as of now in GCC… |7 Strictly confidential – Do not reproduce or distribute Copyright NESR Corp.
Slide 8: Significant Unconventional spend
Significant Unconventional spend Source: BTIG Research/Rystad Energy |8 Strictly confidential – Do not reproduce or distribute Copyright NESR Corp.
Slide 9: MENA activity is going to be strong for the foreseeable future…
MENA activity is going to be strong for the foreseeable future… Well Counts and Activity Intensity is slated to increase ~60-70 B$ average spend on D&C over the next 5 yrs Vs 40-45 B$ over the last 5 yrs KPC said they expect to spend ~$114bn in capex over the next 5 years, and an additional $394bn b
Slide 10: To achieve that outcome – Need Innovation/New Way
To achieve that outcome – Need Innovation/New Way Wide spectrum of service providers driving process and technology innovations in North America Leading to Productivity gains: new-well production per rig Productivity gains: lower breakeven prices Productivity Gains: New-Well Production per Rig Produ
Slide 11: NESR – Paradigm shift for the Region
NESR – Paradigm shift for the Region | 11 Strictly confidential – Do not reproduce or distribute Copyright NESR Corp.
Slide 12: 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 (15 with SAPESCO) ▪ 4,000 going to 5000 Employees USA Algeria Libya ▪ 20 Product Lines India Chad Saudi Arabia ▪ Clients Portfolio:
Slide 13: Open Platform approach on Technology
Open Platform approach on Technology Strategic partnerships for R&D and portfolio expansion Rotary Steerable System Mutiphase Flow Meter Perforation Systems Wireless Tools for Production Chemicals (RSS) (MPFM) (PERF) Slickline (CHEM) Advanced Production Well Head System for Next Gen Well Head Downho
Slide 14: NESR Oilfield Research and Innovation (NORI)
NESR Oilfield Research and Innovation (NORI) NORI’s model, akin to the larger technological changes we are seeing globally, will create an open platform for innovative technology companies in the upstream space to come to the Kingdom and will benefit the Saudi oil and gas industry - Dr. Mohammed Y.
Slide 15: Unconventionals Innovations
Unconventionals Innovations Unconventionals | 15 Strictly confidential – Do not reproduce or distribute Copyright NESR Corp.
Slide 16: It is being done in Saudi Arabia now…
It is being done in Saudi Arabia now… Leveraging the latest technologies, processes and experience to deliver the same efficiency as USL in the MENA region Competency Explosive Bunkers Sand Handling Transport Explosives Auto Fueler Frac Fleet Water Requirement Quick Connect System | 16 Strictly conf
Slide 17: Acquisition of SAPESCO
Acquisition of SAPESCO | 17 Strictly confidential – Do not reproduce or distribute Copyright NESR Corp.
Slide 18: SAPESCO –The oldest indigenous service company in the MENA region
SAPESCO –The oldest indigenous service company in the MENA region Deal Logic ▪ Egypt ~ 1-1.5 B$ OFS Market, NESR does not exist in Egypt ▪ Solid position in Egypt (Coil, CH WL, SLK, TRS, Production Chemicals) and leading position in downstream Industrial Services (Pipeline Maintenance) ▪ Apart from
Slide 19: ESG & ICV @ NESR
ESG & ICV @ NESR | 19 Strictly confidential – Do not reproduce or distribute Copyright NESR Corp.
Slide 20: 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 ESG Environmental work Governance Stewardship Strategy Adds value to Incorporates Doing business the environmental Reducing the ethicall
Slide 21: Environmental Stewardship
Environmental Stewardship ▪ Tackling environmental performance in 2019 ▪ Reduced plastic consumption in offices and raised environmental awareness ▪ NESR recognized for contributions to environmental campaigns, pioneering environmental initiatives and outstanding environmental accomplishments ▪ Sign
Slide 22: 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 23: Local Content: Investing in Local Communities
Local Content: Investing in Local Communities ▪ Opened a manufacturing facility in Oman ▪ Broke ground on NESR Oilfield Research and Innovation Center (NORI) in Saudi Arabia ▪ Signed a training agreement with SPSP to develop local talents ▪ Signed a technology collaboration framework agreement with
Slide 24: Diversity and Inclusion
Diversity and Inclusion ▪ Targets introduced to increase gender diversity across the company ▪ 4 types of disabilities and more than 40 nationalities represented in the workforce ▪ Engaged with the community, clients and partners to increase awareness on D&I | 24 Strictly confidential – Do not repro
Slide 25: NESR The undervalued Growth story
NESR The undervalued Growth story | 25 Strictly confidential – Do not reproduce or distribute Copyright NESR Corp.
Slide 26: Exceptional and Unmatched Growth story
Exceptional and Unmatched Growth story 823 800 700 658 600 553 500 458 415 431 400 369 328 300 231 186 200 147 162 0.85 129 141 104 111 0.77 0.75 100 0 2013 2014 2015 2016 2017 2018 2019 2020 Analyst Revenue ($mm) Adjusted EBITDA ($mm) | 26 NPS financial results for 2013,2014 are prepared under IFRS
Slide 27: and…..Significant upside potential
and…..Significant upside potential TEV/EBITDA 2020E TEV/EBITDA 2021E 6.3x 6.6x 7.6x Significant 7.3x Significant 5.7x valuation valuation 5.3x 6.2x upside 5.8x upside potential potential 4.8x 3.9x 3.8x 4.5x Equipment International North North Equipment International European North North diversified
Slide 28: First and Only NASDAQ listed MENA Company
First and Only NASDAQ listed MENA Company | 28 Strictly confidential – Do not reproduce or distribute Copyright NESR Corp.
Slide 29: 2018/2019 Adjusted EBITDA
2018/2019 Adjusted EBITDA (Non-GAAP reconciliation) NESR ($million) 2019 2018 (1) Revenue 658.4 552.5 Net income (loss) 39.4 39.5 Depreciation and amortization 93.8 69.5 Finance cost 19.0 19.5 Tax 13.1 13.1 Charges & credits 20.7 20.1 Adjusted EBITDA 186.0 161.7 | 29 (1) Successor and Predecessor Co
Slide 30: 2019 Adjusted EBITDA by Quarter
2019 Adjusted EBITDA by Quarter (Non-GAAP reconciliation) NESR ($million) Q1 2019 Q2 2019 Q3 2019 Q4 2019 Revenue 151.7 159.9 161.6 185.2 Net income (loss) 13.2 11.4 11.1 3.7 Depreciation and amortization 19.3 21.3 23.2 30.0 Finance Cost 3.9 5.8 5.0 4.3 Tax 2.9 4.5 3.5 2.2 Transaction, Integration &
Slide 31: 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 EBIT
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