Slide 1: Half-Year Results Presentation
For personal use only HALF-YEAR RESULTS PRESENTATION December 2017 1 www.mitchellservices.com.au
Slide 2: Disclaimer
DISCLAIMER For personal use only This investor presentation has been prepared by Mitchell Services Limited (“the Company”). Information in this presentation is of a general nature only and should be read in conjunction with the Company’s other periodic and continuous disclosure announcements to the
Slide 3: Mitchell Services Market Profile
MITCHELL SERVICES MARKET PROFILE For personal use only ASX Information Board of Directors ASX Stock Symbol: MSV Executive Chairman – Nathan Mitchell Shares Issued: 1,734,965,831 Non-Executive Director – Peter Miller Share Price (at 26/02/2018): A$0.041 Non-Executive Director – Robert Douglas Market
Slide 4: Safety Update
SAFETY UPDATE For personal use only • Finishing each day without harm is a core Mitchell Services value • Key initiatives implemented to strengthen safety culture and performance have primarily focused on key risks and field leadership • Continued reduction in recordable incident occurrence and seve
Slide 5: 1st Half FY18 Business Overview
1ST HALF FY18 BUSINESS OVERVIEW For personal use only 7,234 shifts in 1H FY2018 Total recordable incident ↑ 64% frequency rate less than 10 250+ experienced employees from 1H FY2017 at 31 December 2017 Modest EBITDA increase to Total revenue of $33.22m Major project wins have $2.7m increased geograp
Slide 6: Results Overview
RESULTS OVERVIEW Profit & Loss For personal use only Revenue ($000's) 1st Half 1st Half 1st Half 50,000 Change FY18 FY17 FY16 $000's $000's $000's % 40,000 Revenue 33,215 20,843 18,472 59% 30,000 2nd Half 2nd Half EBITDA 2,678 2,559 131 5% 20,000 1st Half EBIT (374) (114) (2,467) (229%) 10,000 1st H
Slide 7: Group Debt Profile
GROUP DEBT PROFILE For personal use only Balance sheet reflective of growth organisation in an improving market Principal Debt Maturity Shareholder Loans 12 • Originated in 2015 as a funding mechanism for the Millions 10 Nitro asset acquisition 8 • Interest at 10% pa. 6 • Matures July 2020 • Secured
Slide 8: Capital Expenditure
CAPITAL EXPENDITURE For personal use only 7.00 • Growth capital expenditure is primarily Millions made up of new rigs and ancillary 6.00 equipment to support growth in the underground and large diameter 5.00 markets 4.00 • Maintenance capital expenditure 3.00 includes all capital expenditure on 2.00
Slide 9: Month Utilisation to Dec
12 MONTH UTILISATION TO DEC 17 For personal use only Rig Count 45 40 35 30 25 20 15 10 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2016 2017 Number of Shifts 1600 1400 1200 1000 800 600 400 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2016 2017 9 www.mitchellservices.com.au
Slide 10: Impact of Increased Utilisation on Revenue
IMPACT OF INCREASED UTILISATION ON REVENUE For personal use only $40.30m • Rig utilisation $32.97m $33.22m peaked at 41 rigs in November 2017 Average Operating $25.17m Rig Count • Operating rig count Average Operating 36.7 subject to change Rig Count due to seasonality or Average Operating 21.6 othe
Slide 11: Operating Revenue by Client Type
OPERATING REVENUE BY CLIENT TYPE For personal use only Strong year on year revenue growth Tier 1 Revenue $40.30m Other Revenue VALUE OF TIER 1 $32.97m $33.22m • Large / multinational mining and energy companies $25.17m • Very high safety and business $28.65m system requirements $37.29m $28.85m •
Slide 12: Operating Revenue by Commodity
OPERATING REVENUE BY COMMODITY For personal use only 1st Half FY16 $18.29m 1st Half FY17 $20.70m 1st Half FY18 $33.22m 3.3% 0.6% 4.4% 15.3% 9.4% 20.0% 12.9% 23.5% 26.7% 2.6% 13.2% 21.2% 44.4% 18.5% 5.6% 6.2% 13.2% 54.6% 51.1% 52.9% Gold Copper Coal Lead/Zinc/Silver Other Management remains mindful o
Slide 13: Operating Revenue by Drilling Type
OPERATING REVENUE BY DRILLING TYPE For personal use only 1st Half FY16 $18.29m 1st Half FY17 $20.70m 1st Half FY18 $33.22m 1.3% 0.6% 1.4% 12.8% 30.3% 31.9% 69.0% 66.7% 85.9% Surface Underground Non-Drilling Increase in underground revenue strengthens overall revenue diversity Management remain
Slide 14: Leverage in an Improving Market
LEVERAGE IN AN IMPROVING MARKET For personal use only • STAGE 1: UTILISATION INCREASES • More rigs start working (This is happening) • STAGE 2: PRODUCTIVITY IMPROVES AS UTILISED RIGS WORK MORE SHIFTS • Seasonality impact reduces as rigs work through the wet season (This is starting to happen in limi
Slide 15: Radco Acquisition (Post Dec 17)
RADCO ACQUISITION (POST 31 DEC 17) For personal use only • Binding agreement signed to acquire 100% of the shares of • Enters the market of underground coal drilling and Radco Drilling subject to conditions precedent being satisfied gas drainage servicing ‘Tier 1’ client base • Purchase price $5.3mi
Slide 16: Market Outlook
MARKET OUTLOOK • Competitive Profile of the market has continued to improve, For personal use only however, pricing remains competitive • Pipeline of identified opportunities remains strong and demand continues to increase for drilling services • Clients are more active across greenfield and brownfi
Slide 17: Summary
SUMMARY For personal use only • Mitchell Services’ vision is to be Australia’s leading provider of drilling services to the global exploration, mining and energy industries • Tender pipeline provides opportunity to further increase rig utilisation • Previous acquisitions of surface assets early in t