Boart Longyear — FY2015 Earnings Presentation
26 slides from Boart Longyear's earnings presentation, Feb 29, 2016
Slide 1: 2015 Full-Year Results
LS™250 MiniSonic™ Drill Rig 2015 Full-Year Results February 2016
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: FY 2015 Summary
FY 2015 Summary Safety o Total case rate moderately better – 8% improvement year-over-year o Increase in lost time rate – 0.18 vs. 0.11 in 2014 o No fatalities Revenues o Down 131M (15%) o FX the key driver – $74M of the decrease o Price down $30M; volume down $27M Costs o Dramatically improved o CO
Slide 4: Productivity Initiative
Productivity Initiative Example of Driller Productivity Chart Progress Reviewed Regularly Every drill crew gets instantaneous feedback on shift results (compared to other drillers & target) New incentive program with substantial bonuses for high performers Following metrics reported in detail: o Dri
Slide 5: Significant improvement in productivity in first 5 months
Significant improvement in productivity in first 5 months Meters per Shift: First 5 Months Meters / Feet per Shift - (All) (31-Aug-15 through 07-Feb-16) Meters / Feet per Shift Bid Meters / Feet per Shift Trend Good data in a timely manner with meaningful incentives works! Expect trend to continue F
Slide 6: Productivity & cost control efforts have moved the needle
Productivity & cost control efforts have moved the needle FY 2014 FY 2015 Variance (YOY) (US $M) 1H 2H Total 1H 2H Total 1H 2H Total Revenue 421 445 867 387 348 735 (34) (97) (131) Adjusted EBITDA 19 13 31 2 (2) (0) (17) (14) (31) Cash From Operations (15) 3 (11) (85) 30 (55) (71) 27 (44) 2H 2015 ca
Slide 7: Innovative New Products
Innovative New Products Released in 2015 Coming soon: 2 new surface coring rigs Evolutionary LS250 MiniSonicTM Rig LF160 LF350 • Compact sonic rig • Compact surface coring rig w/ • Deep hole surface coring rig • Strong potential in environmental deep hole capabilities • High performance & productivi
Slide 8: Financial Overview
Financial Overview
Slide 9: Consolidated Results Summary: FY 2015
Consolidated Results Summary: FY 2015 (US $M) Revenue • FY 2015 was a difficult year for the industry and the 867 735 Company due to lower commodity prices • Demand stable for underground and production drilling and products • Revenue down $131M, driven by unfavorable currency FY 2015 FY 2014 transl
Slide 10: Year-Over-Year Comparison
Year-Over-Year Comparison Statutory Adjusted1 Change Change (US $M except EPS) FY 2015 FY 2014 (US $M) FY 2015 FY 2014 Fav / (Unfav) Fav / (Unfav) Revenue 735 867 -15% Revenue 735 867 -15% Gross Margin 0 44 -99% Adjusted Gross Margin 77 84 -9% GM as % of Revenue 0% 5% Adj. GM as % of Revenue 10% 10%
Slide 11: Consolidated Overview: FY 2015
Consolidated Overview: FY 2015 Price concessions partially offset by productivity improvements and SG&A cost reductions (US $M) Consolidated Revenue Bridge 867 (74) 792 (30) (27) 735 FY 2014 FX FY 2014 Flexed Price Volume / Mix FY 2015 Consolidated Adjusted EBITDA1 Bridge 31 (7) • Negative volume re
Slide 12: Debt and Cash Bridges
Debt and Cash Bridges (US $M) Gross Debt Cash 716 (16) 700 (35) 42 (66) 25 690 66 235 (13) 1 2 (25) 169 4 (37) 5 (23) 3 113 2 Cash Recap Post Operations Chg in Taxes & Investing Financing FX Cash Debt Recap Post Recap Term Loan Accreted Debt Dec 2014 Recap Working Interest Dec 2015 Dec 2014 Tranche
Slide 13: Continuing to manage our cost structure
Continuing to manage our cost structure (US $M) Reduced expenditure profile by over ~$1.3 billion since 2012 Realised in 2013 Realised in 2014 Realised in 2015 2,081 (460) (232) (115) 1,274 (252) (20) (58) 944 (124) 5 (9) 816 Over $800M of expenditure Over $325M of expenditure Over $125M of expendit
Slide 14: Business Overview
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Slide 15: Drilling Services: FY 2015 Operations
Drilling Services: FY 2015 Operations Significant headwinds from price as well as volume reductions and currency movements Change Change Key Financials (US $M): FY 2015 FY 2014 Key Performance Indicators FY 2015 FY 2014 Fav / (Unfav) Fav / (Unfav) Revenue 528 636 -17% Average Operating Rigs 2 331 35
Slide 16: Drilling Services: Revenue by Commodity
Drilling Services: Revenue by Commodity Gold drives bulk of revenue 2% 6% 12% 7% 7% 5% 5% 1% 0% 5% 9% 8% 5% 4% 7% 8% Percentage of Total DS Revenue 9% Iron 7% Other 21% Non-Mining Water 19% 22% Other Metals Nickel Energy Copper Gold 45% 47% 39% FY 2013 FY 2014 FY 2015 FY 2015 Results – See page 26 f
Slide 17: Global Products: FY 2015 Operations
Global Products: FY 2015 Operations Increase in volume offset by headwinds in currency translations Change Change Key Financials (US $M): FY 2015 FY 2014 Key Performance Indicators FY 2015 FY 2014 Fav / (Unfav) Fav / (Unfav) Revenue 207 230 -10% Average Backlog3 (US $M) 17 18 -6% COGS 166 186 11% He
Slide 18: Conclusion
Conclusion y BOART re LONGYEAR™
Slide 19: Key indicators negative but recent gold trend positive
Key indicators negative but recent gold trend positive Long-Term Commodity Trends6 Exploration Spend Trend SNL MEG5 - Exploration Spend (US $B) Gold ($/oz.) 2,000 21.5 18.2 1,500 14.4 15.2 1,000 11.4 12.1 11.4 500 10.0 8.4 - Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Copper ($/MT
Slide 20: 2016 Outlook
2016 Outlook 2016 Outlook Safety More focus on leading indicators Revenue Volumes broadly consistent with second-half 2015 run rate COGS - Continued productivity gains will reduce costs Costs SG&A - Cost reductions implemented in second-half 2015 will lower SG&A profile by $25M vs. first-half 2015 C
Slide 21: Questions?
Questions? FY 2015 Results – See page 26 for footnote descriptions 21
Slide 22: Appendix
Appendix » BOART re LONGYEAR™
Slide 23: Key Performance Indicators
Key Performance Indicators Quarters ended 2015 Quarters ended 2014 Quarters ended 2013 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Total Com pany Revenue (US$ millions) 160.9 186.8 200.3 187.2 205.8 239.3 224.1 197.4 224.5 279.5 348.7 370.2 EBITDA (US$ millions) (75.2) (0.7) (25.2) (14.2) (61.9) 12.3 (31.1)
Slide 24: Safety & Environment
Safety & Environment Our goal is to add value with zero harm – leading our industry with our employees returning home safely each day and performing our work with minimal impact to our neighbors or the environment. Total Case Incident Rate7 Lost Time Incident Rate7 3.26 0.34 2.33 2.15 2.23 1.78 1.62
Slide 25: Debt Maturity Schedule
Debt Maturity Schedule (US $M) 7% Senior 40 Notes (unsecured) Term Loan 105 Tranche B 1 284 10% Senior ABL 40 Notes 195 (secured) Term Loan Tranche A 85 2016 2017 2018 2019 2020 2021 Senior Notes Term Loan ABL If Term Loan – Tranche B and 10% Senior Secured Notes have not been refinanced prior to Ju
Slide 26: Footnote Disclosures
Footnote Disclosures • Footnote 1: Loss from Trading Activities, Adjusted Gross Margin, Adjusted Operating Loss, Adjusted SG&A, Adjusted EBITDA and Adjusted NPAT Loss are non-IFRS measures and are used internally by management to assess the underlying performance of the business and have been derive