Boart Longyear — H1 2019 Earnings Presentation
24 slides from Boart Longyear's earnings presentation, August 2019
Slide 1: HY 2019 Results
HY 2019 Results August 2019 Jeff Olsen – Chief Executive Officer
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: Boart Longyear is
Boart Longyear is The world’s leading provider of drilling services An expert in providing valuable orebody knowledge A pioneer in drilling equipment and performance tooling HY 2019 Results – See page 24 for footnote descriptions 3
Slide 4: First Half 2019 Highlights
FIRST HALF 2019 HIGHLIGHTS - Return to Net Profit After Tax FINANCIAL OPERATING STRATEGIC SAFETY PERFORMANCE PERFORMANCE OBJECTIVES GROWTH 3 MANUFACTURING +4.6% EFFICIENCY ABL & BACKSTOP TERM LTIR >3% LOAN EXTENSION & UPSIZE 0.00 NET PROFIT AFTER TAX Margin Improvement (2018 – 0.15) 1 US$ 2M OVER 10
Slide 5: Drilling Services: 2019 Operations
Drilling Services: 2019 Operations Change Revenue by Commodity Key Financials (US $M): HY 2019 HY 2018 Fav / (Unfav) Revenue 270.9 266.9 1% COGS 216.7 226.8 4% SG&A 10.4 11.9 13% EBITDA 57.0 38.9 46% EBITDA as % of Revenue 21% 15% 2019 Financial Highlights 2019 Operating Highlights GROWTH 3 – 4.4%
Slide 6: Global Products: 2019 Operations
Global Products: 2019 Operations Change Key Financials (US $M): HY 2019 HY 2018 Fav / (Unfav) Revenue by Product Category Revenue 117.0 127.4 (8%) COGS 85.2 99.5 14% SG&A 16.4 15.7 (5%) EBITDA 17.3 15.3 13% EBITDA as % of Revenue 15% 12% Change Pro Forma4 Revenue (US $M) HY 2019 HY 2018 Fav / (Unfav
Slide 7: HY 2019 Results – Miguel Desdin, Chief Financial Officer
HY 2019 Results August 2019 Miguel Desdin– Chief Financial Officer
Slide 8: HY19 – Financial Metrics
HY19 – FINANCIAL METRICS - Significant improvement in all financial performance metrics GROWTH PROFITABILITY OPERATING CASH FLOW NET WORKING CAPITAL US$ 58M 20M 34.2% +4.6% (2018 – US$37M) US$ Adjusted EBITDA2 (2018 – Neg $12M) of SALES After eliminating impacts of Continued improvement in FX, disco
Slide 9: Consolidated Results Summary: HY19
Consolidated Results Summary: HY19 Volumes increasing (US $M) Consolidated Revenue Bridge • Excluding FX, discontinued operations and slow moving inventory sales, revenue increased $17M (4.6%) • Healthy bidding activity in Drilling Services and Products backlogs growing HY 2019 Results – See page 24
Slide 10: Consolidated Results Summary: HY19
Consolidated Results Summary: HY19 Continued operational improvements (US $M) Consolidated Adjusted EBITDA2 Bridge Adjusted EBITDA2 up $21M (58%) driven by: • Flow through from increased volumes and price improvements • Improvements from ongoing productivity initiatives HY 2019 Results – See page 24
Slide 11: Balance Sheet Improvement
Balance Sheet Improvement Meeting objectives to improve Net Debt Leverage (US $M) Net Debt Leverage • Net Debt increasing with adoption of IFRS16 Accounting for Leases (US$32M) • Net Debt/Adj EBITDA improved 3.9x on June 2018 • Next maturing Debt Facility – July 2022 HY 2019 Results – See page 24 fo
Slide 12: Balance Sheet Improvement
Balance Sheet Improvement Meeting objectives to improve Liquidity (US $M) Liquidity Management • First half 2019 Cash generation from operations greater than full year 2018 • Financiers agreed to increase ($25M) and extend the Asset Back Lending Revolver (ABL) and Backstop Term Loan Facilities (2022
Slide 13: HY 2019 Results – Business Overview
HY 2019 Results August 2019 Jeff Olsen – Business Overview
Slide 14: Stronger Industry Fundamentals
Stronger Industry Fundamentals - Improving industry metrics mitigate global trade uncertainty STRONGER BALANCE SHEETS6 UNDERINVESTMENT ACROSS SECTOR6 Net Debt to EBITDA ratio improve 4 x fold since 2015 Capex vs D&A shows industry running below replacement 2.5 2 Net Debt/ EBITDA 1.5 1 0.5 0 2015 201
Slide 15: Commodity Price Outlook Continues to Improve
Commodity Price Outlook Continues to Improve REVENUE SPLIT BY COMMODITY Significant exposure to Gold & Copper BLY WEIGHTED AVERAGE COMMODITY PRICE5 150 140 Gold Price History5 130 1,500 120 1,300 US$/oz. 1,100 110 900 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 100 Copper Price History5
Slide 16: Leading innovation in the industry
Leading innovation in the industry - Improving drill productivity and data collection Geological Data Services Product Offering Drilling Services Offering TruScan™ Longyear™ Bits MDR500™ (On-site Assay) (Diamond Coring) (Diamond Coring) In Market XQ Rods ™ In Market TruShot™ (Next Generation Thread
Slide 17: Summary: Delivering on Strategic Objectives
Delivering on Strategic Objectives We build our customers’ orebody knowledge Demonstrating strong improvement Summary First positive NPAT in 7 Years Adjusted EBITDA up 58% on lower revenue over 2018 Net Cash Flow from Operating Activities up $32M Progressing with strong upside potential Market
Slide 18: Questions?
Questions? @ BOART LONGYEAR
Slide 19: Appendix
LFTM500 Surface Coring Rig and Operator HY 2019 Results February 2019 Appendix
Slide 20: Safety & Environment
Safety & Environment Leading safety performance focused on continuous improvement Leading safety performance KPI’s • LTIR – 0.00 • TCIR – 1.22 Safety Performance 2019 Lost time incidents – 0 (vs 4 LTI’s over same period 2018) Over 10 Million hours worked Lost Time Free Total Case incident rate –
Slide 21: 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) HY 2019 HY 2018 (US $M) HY 2019 HY 2018 Fav / (Unfav) Fav / (Unfav) Revenue 388 394 (2%) Revenue 388 394 (2%) Gross Margin 86 64 33% Adjusted Gross Margin
Slide 22: Key Performance Indicators by Quarter
Key Performance Indicators by Quarter Quarters ended 2019 Quarters ended 2018 Quarters ended 2017 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Total Com pany Revenue (US$ millions) 198.0 189.9 180.1 196.4 206.4 187.8 183.7 199.2 192.5 163.7 EBITDA (US$ millions) 34.2 19.5 5.1 20.7 15.3 13.0 (20.1) (4.5) (7.6) (4.4
Slide 23: Diversified End-Market Exposure
Diversified End-Market Exposure Revenue by Type – Products & Services Revenue by Region – Products & Services Drilling Services Revenue by Stage HY 2019 Results – See page 24 for footnote descriptions 23
Slide 24: 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 Earnings are non-IFRS measures and are used internally by management to assess the underlying performance of the b