Capital Limited · LSE:CAPD
Capital — Capital Drilling — IPO Roadshow (July 2012)
26 slides from Capital's IPO roadshow presentation, July 2012
Slide 1: Capital Drilling Limited Corporate Presentation
Capital Drilling Limited Corporate Presentation July 2012
Slide 2: Disclaimer
Disclaimer IMPORTANT NOTICE This document, which is personal to the recipient and has been issued by Capital Drilling Limited (the “Company”), comprises written materials/slides for a presentation in connection with the proposed placing and application for admission to the Official List of the UK
Slide 3: Business Overview
Business Overview High growth drilling company providing services to mining, exploration & energy companies. Who We Are Focus on emerging & developing markets. Currently own 90 drilling rigs. Exploration, development, production & underground drilling in Africa, Asia, and Latin America, the
Slide 4: Management & Board
Management & Board Over 15 years experience in finance industry Over 40 years’ experience in the natural resources Co-founder of Capital Drilling sector Previously Executive Director and Head of Asian Ex President/CEO of Adastra Equity Syndication and Corporate Broking at Ex Merrill Lync
Slide 5: Strategy & Strengths
Strategy & Strengths Strategy Competitive Strengths Focus on quality and solid Continuous improvement to maintain and improve our reputation reputation Quality young fleet for quality customers, average age of less than five years Experience and presence on the ground in developing countries F
Slide 6: Rig Locations
Rig Locations Mauritania Egypt Ethiopia Tanzania Since 2010 Since 2005 Since 2011 Since 2005 7 rigs 23 Rigs 1 Rig 19 Rigs Ghana PNG / Solomons Since 2011 Since 2008 3 rigs 3 Rigs Chile Mozambique Since 2010 Current Operations Since 2009 8 rigs Zambia Support Offices 3 Rigs Since 2005 23 Rigs * June
Slide 7: Quality, Long Term Clients
Quality, Long Term Clients Well Capitalised Clients Client Market Caps1 Location Commodity Active Since Type of Drilling US$2.5bn Tanzania Gold December 2008 E, D, P US$13.2bn Tanzania Gold April 2007 E, D, P US$16.8bn Chile Copper July 2012 E,D US$37.6bn Zambia Copper July 2006* E, D, P US$164.9bn
Slide 8: Fleet Profile
Fleet Profile Deep Hole Multi-purpose Diamond 10 8 Reverse Circulation 10 Diamond 46 Production 16 * as at 30 June 2012 Quality equipment for remote locations 8
Slide 9: 1H 2012 Revenue Compositions
1H 2012 Revenue Compositions DRILLING TYPES Energy Exploration 5% 6% Significant exposure to development (brownfield) & production drilling, Production contributing 89% of 1H 2012 revenue (1H 2011: 84%). 19% Provides higher relative stability and visibility to revenues as drilling activities sup
Slide 10: Returns and Balance Sheet
Returns and Balance Sheet Half year Returns (%) 60.0% Strong returns profile, with 2011 returns: 50.0% Return on Invested Capital: 24% 40.0% Return on Total Assets: 21% 30.0% Solid returns driving growth in shareholder equity which 20.0% increased 28% in 2011. 10.0% Brief history demonstra
Slide 11: Fleet Growth
Fleet Growth Fleet – growth per annum Fleet – average for the quarter 90 85 100 88 80 74 90 83 85 78 78 70 80 75 71 60 70 62 63 64 60 57 58 59 49 60 50 50 50 40 40 30 25 30 19 20 20 11 10 10 0 0 Jan'06 Jan'07 Jan'08 Jan'09 Jan'10 Jan'11 Jan'12 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 09 09 09 09 10
Slide 12: Utilisation & ARPOR
Utilisation & ARPOR Utilisation 100% 90% 85% 84% 83% 93% 80% 79% Slightly softer utilisation rates in Q1 2012 due to rig 70% 80% 64% 74% mobilisations from Mozambique to Tanzania & Zambia. 60% 59% 50% 57% Despite this maintained elevated levels of rig utilisation, 40% noting annual seasonal infl
Slide 13: Pre-Close Highlights
Pre-Close Highlights Revenues 77.0 80 70.5 70 Enlarged fleet, solid utilisation and improving ARPOR all 59.5 60 contribute to record revenue for 1H 2012. 46.3 50 45.8 US$m 40 Expected revenue of $77mn for 1H 2012, representing 29% 28.9 29.7 29.3 28.7 30 growth on 1H 2011. 21.7 20 14.3 Contract
Slide 14: Outlook
Outlook Continued elevated levels for commodity prices. Softer capital markets activity, however sector balance sheets remain strong. Moderation of demand from elevated levels, however levels of tendering activity in both Africa and Latin America remain solid. Robust balance sheet with refin
Slide 15: Appendices
Market Appendices Financial Corporate
Slide 16: Size of the Market
Size of the Market 20111 Worldwide Exploration Budgets by Region 20111 20111 Fast growth markets Worldwide (non-ferrous) in 2011: Pacific/SE Asia exploration market = $18.2bn 6% Latin America (47%) United States Africa (69%) 8% Latin America 25% Drilling generally accounts Australia Latin America 13
Slide 17: Key Demand Drivers
Key Demand Drivers 60.0 Gold1 Gold 52.8 2,000 1,800 50.0 47.9 47.2 1,600 1,400 1,200 US$/oz More than 44.0 1,000 US$250 billion in 42.1 800 600 40.0 equity raisings 400 200 by mining 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 companies since 2006 Gold Spot Trading 30.0 28.7 C
Slide 18: Mineral Drilling Services Industry
Mineral Drilling Services Industry Exploration Development Production Key Activities Requiring Drilling Services Resources Reserves Exploration Greenfield – Discovery of mineral Project deposits Brownfield – Assess size and quality of Value of Mineral Project commissioning deposits Feasibility s
Slide 19: 2011 - Financial Result
2011 - Financial Result Change Revenue KPIs FY 2011 FY 2010 % Average Fleet Size 78 65 21 Revenue up 74% to $130.5 million (2010: $75.1 million) Fleet Utilisation (%) 82 72 14 Solid contributions from larger fleet & higher average annual utilisation ARPOR ($) 158,000 132,000 20 20% increase in
Slide 20: 2011 - Balance Sheet
2011 - Balance Sheet FY 2011 FY 2010 Change Balance Sheet $m $m % Improving returns supported by strong operating Cash and cash equivalents 7.7 18.2 -58 performance Receivables 28.1 15.0 88 Return on total assets 21% (2010 : 18%) Return on invested capital 24% (2010 : 23%) Inventory 20.4 14.9
Slide 21: 2011 - Cash Flow
2011 - Cash Flow FY 2011 FY 2010 Cash Flow $m $m Reduced operating cash flows due to substantial Operating profit before working capital 34.5 20.0 investment in working capital changes Increase in receivables & inventory, consistent Working capital changes -20.3 -4.8 with sales growth Small re
Slide 22: Margins and Returns Metrics
Margins and Returns Metrics 1 Revenues EBITDA1 and Margins 80 77.0 20 45% 71.0 70 18 40% 59.5 16 60 35% 14 30% Margin % 50 45.8 71.0 12 US$m US$m 25% 40 10 28.9 29.7 29.3 28.7 20% 30 8 21.7 15% 6 20 14.3 10% 4 10 2 5% - 0 0% H1 07 H2 07 H1 08 H2 08 H1 09 H2 09 H1 10 H2 10 H1 11 H2 11 H1 12 1H'07 2H'
Slide 23: Health & Safety
Health & Safety Annual Progressive Loss Time Injury Frequency Rate Proactive safety culture with focus and Frequency rate of injuries per 200,000 hours 0.85 commitment to zero harm. Supported by training and development programs driven across Group Culture and commitment allowed the company to r
Slide 24: Corporate Snapshot
Corporate Snapshot Shareholding Blocks Capital Structure Fully paid ordinary shares 134,592,800 Free float Share price (as at 30 June 2012) USD 0.96 30% Market capitalisation (undiluted) * USD 129.2m Founding Shareholders Cash (as at 31 December 2011) USD 7.7m 70% Debt (as at 31 December 2011) *incl
Slide 25: Glossary
Glossary The following words used in the presentation have the following meaning: ARPOR Average revenue per operating rig CAGR Compounded average growth rate Group, Company Capital drilling and its subsidiaries Return on capital employed (ROCE) EBIT/ (Total assets-Current liabilities) Return on tota
Slide 26: Company Contact Details
Company Contact Details Capital Drilling Limited UK Broker Details Jamie Boyton Liberum Capital Limited Executive Chairman Ropemaker Place, Level 12, 25 Ropemaker Street, London, EC2Y 9LY jamie.boyton@capdrill.com Telephone: +44 (0) 20 3100 2000 Clayton Bush Email: clayton.bush@liberumcapital.com Ge