Capital Limited · LSE:CAPD
Capital — Capital Drilling — FY2012 Earnings Presentation
29 slides from Capital's earnings presentation, Mar 18, 2013
Slide 1: Capital Drilling Limited 2012 Annual Results Presentation
Capital Drilling Limited 2012 Annual Results Presentation 18 March 2013
Slide 2: Disclaimer
Disclaimer IMPORTANT NOTICE This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of Capital Drilling Ltd. (the “Company”), nor shall any part of it nor the fact of its distribution
Slide 3: 2012 Highlights
2012 Highlights al Caeser: oruuins
Slide 4: Financial Highlights
Financial Highlights Revenue up 21.8% to USD158.9 million EBITDA up 9.1% to USD37.1 million EBIT down 8.3% to USD21.0 million PBT down 13.0% to USD 18.9 million NPAT down 19.8% to USD14.1 million Diluted EPS down 19.8% to 10.5 cents NAV per share up 17.9% to $0.69 per share Return on capital employe
Slide 5: Operational & Strategic Highlights
Operational & Strategic Highlights » Continued fleet expansion, adding a (net) 8 rigs (commenced 2013 with 93 rigs). » Substantial capital investment in new rigs and asset upgrades. » Youngest “scale” fleet in the industry. » Maintained elevated levels of utilisation at 76% for 2012, well above indu
Slide 6: Financial Performance
Financial Performance
Slide 7: Financial Result
Financial Result » Revenue up 22% to $158.9 million (2011: $130.5 million) Revenue KPIs FY 2012 FY 2011 Change % Softer utilisation due to weaker global economic conditions; 22% increase in ARPOR due to operational performance and Average Fleet Size 88 78 13 contract mix. Fleet Utilisation (%) 7
Slide 8: Revenue KPI's
Revenue KPI’s No of rigs 100 93 Fleet Growth 90 85 80 74 » Added a further (net) 8 rigs in 2012 and started 2013 with a 70 60 fleet of 93 rigs. 60 49 50 » Average fleet size of 88 rigs for 2012. 40 30 25 20 19 » Slightly slower growth than historical trend which is expected 11 10 to continue into 20
Slide 9: Earnings and Margins
Earnings and Margins Gross Profit and Margins EBITDA and Margins US$m US$m 30.0 45% 25.0 28.2% 30.0% 41.1% 27.3% 27.5% 38.6% 40% 26.5% 36.3% 25.0% 25.0 33.3% 35.2% 25.0% 32.6% 32.6% 20.0 35% 24.9% 31.4% 20.2% 20.0 30% 20.0% 15.0 25% 18.8% 15.0 15.0% 20% 10.0 10.0 15% 10.0% 10% 5.0 5.0 5.0% 5% 0.0 0%
Slide 10: Balance Sheet
Balance Sheet FY 2012 FY 2011 Change Balance Sheet $m $m % » Solid growth in shareholder equity, increasing 18% on Cash and cash equivalents 9.1 7.7 17 2011. Receivables 34.1 28.1 21 Inventory 22.6 20.4 11 Property, plant and equipment 74.0 61.5 20 » Strong returns despite weaker operating performan
Slide 11: Net Debt Movement
Net Debt Movement 2012 Net Debt Movements 25 20.0 20 14.6 37.1 15 10 5 - Finance & Tax payments $7.4m (5) Working capital outflow $6.4m (10) 29.4 1.7 (15) 2.2 5.4 (20) 2.0 0.8 (25) 6.0 (30) Opening Net Debt 2012 EBITDA Non-cash expenses Increase in Receivables Increase in inventory Increase in trade
Slide 12: Capital Expenditure
Capital Expenditure CAPITAL EXPENDITURE - ANNUAL » 2012 capital expenditure of $30.0 million, increasing 12% on 2011. US$m 35.0 30.0 » Substantial investment in PPE over the past 2 years as the business is 30.0 26.7 re-aligned to predominantly major mining houses. 25.0 19.0 » Safety & efficiency upg
Slide 13: Strategy and Outlook
Strategy and Outlook
Slide 14: 2013 Improvement Initiatives
2013 Improvement Initiatives » Increased focus on cost efficiency and capital discipline. » Initiatives include: Significant senior management changes (refer slide 16). Increased focus on operational performance − New Head of Operations, Bill Schuts; − Goal to optimize project performance. » 201
Slide 15: Management Restructuring
Management Restructuring Building a stronger management team EXECUTIVE DIRECTOR, Brian Rudd, effective 01 January 2012 BUSINESS DEVELOPMENT New role, existing personnel Tony Woolfe, effective 01 January 2012 GROUP ASSET MANAGER New role, existing personnel David Payne, effective 16 April 2012 CHIEF
Slide 16: Outlook
Outlook » Continued volatility in the external environment, cautious spending from mining companies & juniors remain absent from the market. » Seniors showing delays in project ramp up in some regions in 2013, consistent with tighter focus on budgeted spend. » Despite the more subdued demand environ
Slide 17: Appendices
Appendices » Company Overview » Safety » Market » Corporate
Slide 18: Quality Service: Excellence in Drilling
Quality Service: Excellence in Drilling People » Our key asset, strong focus on KPI goals and career path progression. » Training and career development programs provided by Capital Support Services (training division). » Hire from local communities, strong focus on cultural awareness. Equipment » S
Slide 19: Quality Partners & Projects
Quality Partners & Projects 100% Quality Clients 6% 7% 4% 13% 14% 90% 23% » Exposure to major and mid tier mining houses with strong balance sheets, quality 80% 30% assets & positive cash flows. 41% 70% 35% » Majors contributed 73% of 2012 earnings, up from 63% in 2011, highest exposure in 60% 53% t
Slide 20: Sustainable Financial Returns
Sustainable Financial Returns 50.0% 45.4% 45.2% Net Debt / Equity (%) Capital Discipline 40.0% » Rigorous contract assessment & approval process. 30.0% 23.6% 21.4% » Focus on utilizing existing assets. 18.5% 20.0% » Conservative and strict gearing policy to maintain discipline. 10.0% 2.7% -2.0% -0.3
Slide 21: Quality, Long Term Clients
Quality, Long Term Clients Well Capitalised Clients Client Market Caps1 Location Commodity Active Since Type of Drilling US$1.4bn Tanzania Gold December 2008 E, D, P US$9.5bn Tanzania Gold April 2007 E, D, P US$15.7bn Chile Copper July 2012 E,D US$28.9bn Zambia Copper July 2006* E, D, P US$0.9bn Egy
Slide 22: Rig Locations
Rig Locations Mauritania Egypt Since 2010 Since 2005 6 rigs 24 Rigs Ghana Ethiopia Since 2011 Since 2011 5 rigs 1 Rig Chile Solomons Since 2010 Since 2008 10 rigs 2 Rigs Zambia Tanzania Since 2005 Since 2005 25 Rigs 17 Rigs Current Operations 2 rigs in transit Regional Offices Registered Offices/Pre
Slide 23: Safety Performance
Safety Performance Capital Drilling Progressive AIFR » Capital Drilling Group’s primary KPI pertaining to incident frequency rates is the All Injury Frequency Rate (AIFR) 7 6 5.92 » Strong safety culture & commitment driven from Senior Management through to ground personnel. 5 4 3.89 » Five projects
Slide 24: Size of the Market
Size of the Market 20121 Worldwide Exploration Budgets by Region 20121 20121 Fast growth markets Worldwide (non-ferrous) in 2012: exploration market = $20.5bn Pacific/SE Asia(35%) United States 8.2% Africa (31%) Africa 16.6% Pacific/SE Asia 6.6% Drilling generally accounts Latin America Other Areas
Slide 25: Key Demand Drivers
Key Demand Drivers 60.0 Gold1 52.8 50.0 47.9 47.2 More than 44.0 US$250 billion in 42.1 40.0 equity raisings by mining companies since 2006 30.0 28.7 Copper1 20.4 20.0 15.3 13.9 9.5 10.0 8.2 4.2 1.3 0.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 *Source – Dealogic 1. Source: Bl
Slide 26: Management & Board
Management & Board Executive » Over 15 years experience in finance industry » 25 years experience in the mining industry in » Co-founder of Capital Drilling Africa and Australia » Previously Executive Director and Head of Asian » Co-founder of Capital Drilling Equity Syndication and Corporate Brokin
Slide 27: Corporate Snapshot
Corporate Snapshot Capital Structure Shareholding Blocks Fully paid ordinary shares 134,592,800 Share price (as at 18 March 2013) USD 0.61 Free float Market capitalisation (undiluted) ^ USD 82.65m 30% Cash (as at 31 Dec 2012) USD 9.06m Founding Shareholders Debt (as at 31Dec 2012) *includes bank bor
Slide 28: Glossary
Glossary The following words used in the presentation have the following meaning: ARPOR Average Revenue Per Operating Rig LTM Last Twelve Months Earnings Before Interest and Taxes/Profit from NAV Net Asset Value EBIT operations Earnings Before Interest, Taxes, Depreciation/Profit from Short Term and
Slide 29: Company Contact Details
Company Contact Details Capital Drilling Limited UK Broker Details Jamie Boyton Liberum Capital Limited Executive Chairman and Interim CEO 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@liber