Boart Longyear — FY2018 Earnings Presentation
22 slides from Boart Longyear's earnings presentation, Feb 26, 2019
Slide 1: 2018 Results February 2019
TruScanTM Technology 2018 Results February 2019 Jeff Olsen – Chief Executive Officer Company Confidential – Unauthorized use or distribution prohibited. © 2019 Boart Longyear. All rights reserved.
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer • This presentation has been prepared by Boart Longyear Limited, ABN 49 123 052 728 (Boart Longyear or the Company). It contains general information about the Company’s activities as at the date of the presentation. It is information given in summary form and does not
Slide 3: Total Company – 2018
Total Company – 2018 - Revenue up US$31 Million (4%), Adjusted EBITDA up $38 Million (87%) FINANCIAL OPERATING SAFETY PERFORMANCE PERFORMANCE VOLUMES 3 RIG OPTIMISATION +12.5% >9% LTIR additional shifts worked 0.10 PRICE PRODUCTIVITY (2017 – 0.22) 1 >2.0% +2% Labour as % of Revenue PROFITABILITY 2 T
Slide 4: Leading innovation in the industry
Leading innovation in the industry - Improving drill productivity and data collection Drilling Rigs with FREEDOM™ Geological Data Services Loader Hands-Free Rod Handling (TruCore™, TruShot™, TruScan™) • TruShot™ global rollout in 2018 • Demand for hands-free rod management increasing • Doubled GDS r
Slide 5: Drilling Services: 2018 Operations
Drilling Services: 2018 Operations Change Revenue by Commodity Key Financials (US $M): FY 2018 FY 2017 Fav / (Unfav) Revenue 534 501 7% COGS 448 429 -4% SG&A 26 30 15% EBITDA 83 69 20% EBITDA as % of Revenue 16% 14% 2018 Financial Highlights 2018 Operating Highlights VOLUMES – 9% Increase after el
Slide 6: Global Products: 2018 Operations
Global Products: 2018 Operations Key Financials (US $M): FY 2018 FY 2017 Change Fav / (Unfav) Revenue by Product Category Revenue 237 239 -1% COGS 180 197 8% SG&A 31 37 16% EBITDA 31 11 172% EBITDA as % of Revenue 13% 5% Change Pro Forma4 Revenue (US $M) FY 2018 FY 2017 Fav / (Unfav) Sales to BLY Dr
Slide 7: Title Page for intro to CFO Section
Title Page for intro to CFO Section 2018 Results February 2019 Miguel Desdin– Chief Financial Officer Company Confidential – Unauthorized use or distribution prohibited. © 2019 Boart Longyear. All rights reserved.
Slide 8: FY18 – Financial Metrics
FY18 – FINANCIAL METRICS - Significant improvement in all financial performance metrics VOLUMES PROFITABILITY OPERATING CASH FLOW NET WORKING CAPITAL +12.5% US$ 81M US$ 4M 30.9% (2017 – US$43M) Adjusted EBITDA2 (2017 – Neg $54M) of SALES After eliminating impacts of First reported positive net cash
Slide 9: Consolidated Results Summary: 2018
Consolidated Results Summary: 2018 Volumes increasing (US $M) Consolidated Revenue Bridge • Excluding FX, discontinued operations and slow moving inventory sales, revenue increased $86M (12.5%) • Visible increase in bidding activity in both Drilling Services and Products Company Confidential – Unaut
Slide 10: Consolidated Results Summary: 2018
Consolidated Results Summary: 2018 Continued operational improvements (US $M) Consolidated Adjusted EBITDA2 Bridge Adjusted EBITDA2 up $38M (88%) driven by: • Flow through from increased volumes and price improvements • Improvements from ongoing productivity initiatives • Further reduction in SG&A C
Slide 11: Balance Sheet Improvement
Balance Sheet Improvement Met objectives to improve Net Debt Leverage (US $M) Net Debt Leverage • Net Debt increasing with interest capitalising to debt through 2018 • Net Debt/Adj EBITDA improved 5.4x • Average Cost of Interest falls to 8% in 2019 (9.5% in 2018) • Approximately 50% of Interest conv
Slide 12: Balance Sheet Improvement
Balance Sheet Improvement Met objectives to improve Liquidity (US $M) Cash Flow Management • First positive net cash flow provided by operating activities since 2013 Financial Year • Investing activities continued through 2018 Company Confidential – Unauthorized use or distribution prohibited. © 201
Slide 13: Longyear Diamond Coring Bits 2018 Results
LongyearTM Diamond Coring Bits 2018 Results February 2019 Jeff Olsen – Business Overview Company Confidential – Unauthorized use or distribution prohibited. © 2019 Boart Longyear. All rights reserved.
Slide 14: Stronger Leading Indicators
Stronger Leading Indicators - Significant improvement in key customer metrics and sector outlook BLY Revenues • ~50% Gold Au Cu • ~50% Other Minerals (~21% Copper) MAJORS GOLD RESERVES DEPLETING5 EXPLORATION SPEND TRENDING UPWARD5 25% reduction in average years of reserves since 2008 19% budget incr
Slide 15: Conclusion
Expect further delivery on Strategic Objectives We build our customers’ orebody knowledge Conclusion Boart Longyear is running well Adjusted EBITDA up 87% on 4% increased revenue over 2017 Adjusted EBITDA up US$81 Million on 5% revenue increase over 4 years ago Our markets are improving Market
Slide 16: Questions?
Questions? 16 Company Confidential – Unauthorized use or distribution prohibited. © 2019 Boart Longyear. All rights reserved. 16
Slide 17: Appendix
LSTM250 Sonic Rig 2018 Results February 2019 Appendix Company Confidential – Unauthorized use or distribution prohibited. © 2019 Boart Longyear. All rights reserved.
Slide 18: Safety & Environment
Safety & Environment Leading safety performance focused on continuous improvement Leading safety performance KPI’s • LTIR – 0.10 • TCIR – 1.90 Safety Performance 2018 Lost time incidents – 5 (vs 11 LTI’s over same period 2017) Total case incident rate - Moderate increase “Our goal is to add valu
Slide 19: Year-Over-Year Comparison
Year-Over-Year Comparison Strong focus on productivity and cost control in improving market Statutory Adjusted2 Change Change (US $M except EPS) FY 2018 FY 2017 (US $M) FY 2018 FY 2017 Fav / (Unfav) Fav / (Unfav) Revenue 770 739 4% Revenue 770 739 4% Gross Margin 131 111 19% Adjusted Gross Margin 14
Slide 20: Key Performance Indicators by Quarter
Key Performance Indicators by Quarter Quarters ended 2018 Quarters ended 2017 Quarters ended 2016 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Total Com pany Revenue (US$ millions) 180.1 196.4 206.4 187.8 183.7 199.2 192.5 163.7 156.9 175.0 168.7 141.8 EBITDA (US$ millions) 5.1 20.7 15.3 13.0 (20.1) (4.5) (7
Slide 21: Diversified End-Market Exposure
Diversified End-Market Exposure Revenue by Type – Products & Services Revenue by Region – Products & Services LAM 14% USA 27% APAC 22% Canada 19% EMEA 18% Drilling Services Revenue by Stage Company Confidential – Unauthorized use or distribution prohibited. © 2019 Boart Longyear. All rights reserved
Slide 22: Footnote Disclosures
Footnote Disclosures • Footnote 1: Per 200,000 work hours. • Footnote 2: Loss from Trading Activities, Adjusted Gross Margin, Adjusted Operating Loss, Adjusted SG&A, Adjusted EBITDA and are non-IFRS measures and are used internally by management to assess the underlying performance of the business a