National Energy Services Reunited Corp · NASDAQ:NESR
National Energy Services Reunited — Non-Deal Roadshow (November 2020)
33 slides from National Energy Services Reunited's roadshow presentation, November 2020
Slide 1: The National Champion of MENA
National Energy Services Reunited Corp. The National Champion of MENA November 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 informational 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 Reunite
Slide 3: Executive Summary & Outlook
Executive Summary & Outlook § Global economic recovery slow but predictable with increased oil demand as we look to post-pandemic future over next 24 months § Commodities at 30-yr low indicates historic opportunity to invest § Oil & Gas rebound widely expected over the next 12 months § Supply in 202
Slide 4: NESR is a unique OFS play
NESR is a unique OFS play OFS… NESR “… is going to be affected long term In forecasts that predict a drastic shift away from Oil and 70% reduction in carbon emissions by 2050, the Middle East changes by the energy transition” is the major oil producer with the lowest cost/bbl, in countries where NES
Slide 5: Global Demand Will Draw on Inventories into 2021
Global Demand Will Draw on Inventories into 2021… Est. Quarterly Global Inventory Builds (Draws) 6.0 3.9 4.0 4.0 Implied Build (Draw) - (MMpd) 2.0 0.0 (2.0) (2.2) (2.7) (4.0) (3.8) (4.9) (6.0) (6.0) (5.9) (8.0) 1Q20 2Q20E 3Q20E 4Q20E 1Q21E 2Q21E 3Q21E 4Q21E |5 StrictlySource: confidential – Do notJa
Slide 6: As Consumption Begins to Outpace Supply
…As Consumption Begins to Outpace Supply… Annual Global Production & Consumption (mmbpd) 100.9 100.6 100.6 100 Can only 100.2 come from 99.3 98.7 OPEC 97.9 97.4 97 96.8 95.6 94.2 94.2 93.6 93.1 2014 2015 2016 2017 2018 2019 2020 2021 Total Supply Total Worl d Consumption |6 Source: EIA Strictly conf
Slide 7: U.S. recovery only picking up by 2022
… and U.S. recovery only picking up by 2022 |7 StrictlySource: confidential – Do notJames IEA, Raymond reproduce or distribute Research Copyright NESR Corp.
Slide 8: OSX & WTI Correlations
StrictlySource: confidential 9/ - 21 9/ Yahoo–Finance 1.0 2.0 3.0 4.0 5.0 6.0 /1 - 21 100.0 200.0 300.0 400.0 500.0 600.0 700.0 99 /1 9 99 9 9/ 21 9/ /2 21 00 /2 0 00 0 9/ Do not reproduce or distribute 21 9/ /2 21 00 /2 1 00 1 9/ 21 9/ /2 21 00 /2 2 00 2 9/ 21 9/ /2 21 00 /2 3 00 3 9/ 21 9/ /2 21 0
Slide 9: The Fact… MENA has been and will be the most resilient energy market
The Fact… MENA has been and will be the most resilient energy market for the years to come |9 Strictly confidential – Do not reproduce or distribute Copyright NESR Corp.
Slide 10: Middle-East forecast as major producer of Oil regardless of scenario
Middle-East forecast as major producer of Oil regardless of scenario In both the Rapid Transition scenario, which cause carbon emissions from energy use to fall by around 70% by 2050; or the Business-as-usual scenario which assumes that government policies, technologies and social preferences contin
Slide 11: Robust OFS&E activity growth profile
Robust OFS&E activity growth profile Resilient Onshore Rig Market Middle East OFS Spend By Country ($) 400 GCC Rig Count 5% CA GR: to 2021 2016 350 $20bn 300 $16 bn 250 Rig Count Decline Jan-14 to Sept-20 200 GCC + Iraq North America 150 (8%) 100 (86%) 50 0 14 15 16 17 18 19 20 4 5 6 7 8 9 0 l-1 l-1
Slide 12: ESG & ICV @ NESR
ESG & ICV @ NESR | 12 Strictly confidential – Do not reproduce or distribute Copyright NESR Corp.
Slide 13: 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 ethically, legally, c
Slide 14: 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 15: 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 16: 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 17: Employee Engagement and Corporate Giving
Employee Engagement and Corporate Giving § 14 Community Involvement Teams (CIT) in the major countries § Target approximately 5000 hours a year for community volunteering across the Company § Donated to the Health Endowment Fund of the Saudi Arabian Ministry of Health to help fight the spread of COV
Slide 18: Diversity and Inclusion
Diversity and Inclusion § Gender Diversity Targets § WIN (Women In NESR) Initiative § More than 60 nationalities § Localization/Nationalization Targets and Initiatives § Engagement on D&I with communities, clients and partners | 18 Strictly confidential – Do not reproduce or distribute Copyright NES
Slide 19: The Opportunity … NESR - The Deep Undervalued Growth Story
The Opportunity … NESR - The Deep Undervalued Growth Story | 19 Strictly confidential – Do not reproduce or distribute Copyright NESR Corp.
Slide 20: 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: 15 Countries Egypt § 5,000+ Employees USA Algeria Libya § 20 Product Lines India Chad Saudi Arabia § Clients Portfolio: 30+ Customers Indonesia
Slide 21: NESR – We are unique
NESR – We are unique § Started as a SPAC in May 2017 Enhanced services portfolio § Agreed to merge National Petroleum WL WL Stim Coil Cem DM DTR SWT Fluids AL WS Services (NPS) and Gulf Energy OH CH SAOC (GES) in November 2017 NPS GES § Transaction closed June 2018 NESR § Trades under the “NESR” tic
Slide 22: SAPESCO Acquisition complete and more to come
SAPESCO Acquisition complete and more to come § Oldest oilfield service company in the region § Transaction effective from June 1, 2020 § Egypt ~ 1 B$ OFS Market, NESR does not exist in Egypt § Addition of Industrial Cleaning (pipeline maintenance) product line which can be expanded to other NESR ma
Slide 23: Open Platform approach on Technology
Open Platform approach on Technology Strategic partnerships for R&D and portfolio expansion Rotary Steerable System Multiphase Flow Meter Perforation Systems Wireless Tools for Production Chemicals (RSS) (MPFM) (PERF) Slickline (CHEM) Advanced Production Well Head System for Next Gen Well Head Downh
Slide 24: 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 25: Exceptional and Unmatched Growth to continue
Exceptional and Unmatched Growth to continue Growth in the On target to worst 983 surpass the +1B$ downturn in 25 years mark 838 CAGR 2 2% 658 553 9% CAGR 458 415 431 369 328 258 214 186 147 162 129 141 104 111 2013 2014 2015 2016 2017 2018 2019 2020 2021 Revenue ($mm) Analyst Analyst Adjusted EBITD
Slide 26: and Significant Upside Potential
and Significant Upside Potential TEV/EBITDA 2020E TEV/EBITDA 2021E (26%) (48%) (24%) (42%) (28%) 23% YOY Rev Growth* (5%) (0%) (7%) (24%) (5%) 16% 15.3x 15.4x 14.8x 13.3x Significant Significant valuation valuation 9.2x 9.2x 8.4x upside 8.2x upside potential potential 6.2x 6.7x 4.6x 3.9x Equipment N
Slide 27: NESR Outperforming Big 3 Int'l Revenue Growth
NESR Outperforming Big 3 Int’l Revenue Growth (1) Ø Indexed to International Revenue 175 150 125 100 75 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Significant OFS 1 OFS 2 OFS 3 NESR outperformance during 2020 Ø Indexed to Middle East/Asia Revenue COVID market 175 150 125 100 75 Q2 1
Slide 28: NESR beats the Big 3 in every metric…
NESR beats the Big 3 in every metric… Ø Superior projected financial performance 2019 – 2021 Revenue Change % 2021 EBITDA % 2021 Net Margin % 49.4% 26.2% 9.0% 16.8% 13.6% 4.4% 11.8% 3.6% 3.6% -4.7% -15.1% -39.5% OFS 1 OFS 2 OFS 3 NESR OFS 1 OFS 2 OFS 3 NESR OFS 1 OFS 2 OFS 3 NESR Ø Significant upsid
Slide 29: And beats the US Top Tier Independent Frac
And beats the US Top Tier Independent Frac Ø Also exceeding in projected financial performance 2019 – 2021 Revenue Change % 2021 EBITDA % 2021 Net Margin % 49.4% 26.2% 9.0% 12.3% 7.8% 8.8% -5.6% -4.7% -20.4% -42.3% -58.5% -19.1% OFS 4 OFS 5 OFS 6 NESR OFS 4 OFS 5 OFS 6 NESR OFS 4 OFS 5 OFS 6 NESR Ø
Slide 30: NESR is the First NASDAQ listed MENA Co
NESR is the First NASDAQ listed MENA Co
Slide 31: 2020 Adjusted EBITDA by Quarter
2020 Adjusted EBITDA by Quarter (Non-GAAP reconciliation) NESR ($million) Q1 2020 Q2 2020 Q3 2020 Revenue 199.3 203.2 218.4 Net income (loss) 11.4 10.5 11.6 Depreciation and amortization 30.8 32.5 34.3 Finance cost 4.5 4.2 3.8 Tax 2.5 2.8 3.6 Transaction, Integration and Start-Up Costs 1.7 1.8 2.5 O
Slide 32: 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 EBTIDA 186 161.7 | 32 Successor and Predecessor Combined
Slide 33: 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 US GAAP; GES 2013-2017 financial results are prepared under IFRS. | 33 EBITDA is adjusted for impairment, which is not recognized as par
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