Slide 1: Full Year Results Financial Year 2023
FULL YEAR RESULTS FINANCIAL YEAR 2023 ASX:MSV
Slide 2: Disclaimer
2 DISCLAIMER This investor presentation has been prepared by Mitchell Services Limited (“the Company”). The information contained in this presentation does not take into account the investment Information in this presentation is of a general nature only and should be read in conjunction with objecti
Slide 3: Agenda
3 AGENDA 1. MARKET PROFILE 2. FY23 BUSINESS SUMMARY 3. OVERVIEW 4. OPERATIONAL UPDATE 5. PROFIT AND LOSS 6. RETURN ON INVESTED CAPITAL 7. BALANCE SHEET 8 CASH FLOW 9. DEBT PROFILE 10. CAPITAL EXPENDITURE 2023 FULL YEAR RESULTS 11. CAPITAL MANAGEMENT UPDATE 12. FY23 CAPITAL MANAGEMENT PERFORMANCE 13.
Slide 4: Market Profile
4 MARKET PROFILE ASX INFORMATION BOARD OF DIRECTORS ASX Stock Symbol MSV Nathan Mitchell Executive Chairman Shares on Issue (at 21/08/2023) 215,827,424 Scott Tumbridge Non- Executive Director Share Price (at 21/08/2023) A$0.40 Peter Miller Non-Executive Director Market Capitalisation A$86.3m Robert
Slide 5: FY23 Business Summary
5 FY23 BUSINESS SUMMARY RECORD REVENUE $243.1m RECORD EBITDA $41.2m PROFIT AFTER TAX $7.6m 14% FROM FY22 28%FROM FY22 100% FROM FY22 OPERATING CASHFLOW $35.6m SAFETY PERFORMANCE RETURN ON INVESTED CAPITAL 12.5% 60% 941% INDUSTRY LEADING DRIVEN BY CRITICAL RISK 2023 FULL YEAR RESULTS CONTROL VERIFICA
Slide 6: Overview
6 OVERVIEW ▪ High commodity prices driving continued strong demand for drilling services particularly for highly skilled specialist drilling services ▪ Inflationary pressures are beginning to ease ▪ Company’s capital investment program is complete. All 12 LF160 rigs are working for global major mine
Slide 7: Operational Update
7 OPERATIONAL UPDATE ▪ Capital investment program to deliver MSV’s organic growth strategy now complete ▪ All 12 new LF160 drill rigs now operating for global mining majors and have driven record annual revenue and EBITDA ▪ Multiple rainfall events and unplanned contract variations temporarily reduc
Slide 8: Profit and Loss
8 PROFIT AND LOSS Exceptional second half performance $30m $20m $32.2m $24.6m $10m $16.6m $10.0m $7.4m $0m FY22 1H23 2H23 2023 FULL YEAR RESULTS EBITDA EBT NPAT ▪ The strong second half profit of $7.4m talks to the full year earnings potential of the business ▪ The FY23 second half EBT improvement o
Slide 9: Return on Invested Capital
9 RETURN ON INVESTED CAPITAL $100m 15.0% $80m 12.0% $92.3m $60m 9.0% $76.4m $40m 6.0% $23.3m $20m 3.0% $26.7m $1.4m $12.6m $0m 0.0% FY22 FY23 2023 FULL YEAR RESULTS PPE & Intangibles Working capital EBIT ROIC ▪ ROIC increased exponentially from 1.2% in FY22 to 12.5% in FY23 ▪ ROIC is expected to inc
Slide 10: Balance Sheet
10 BALANCE SHEET FY23 OPERATING RESULT HAS MATERIALLY STRENGTHENED THE BALANCE SHEET 30 Jun 23 30 Jun 22 Change $000's $000's % • The net asset position has improved by circa Balance Sheet Summary 9% Current assets 56,782 49,208 15.4 ▪ No current intention to raise equity to further Non-current asse
Slide 11: Cash Flow
11 CASH FLOW SIGNIFICANTLY IMPROVED CASH CONVERSION RATIO OPERATING CASH FLOW SUMMARY ▪ As temporary working capital requirements reduced, FY23 operating cashflows began to normalise. FY23 FY22 Change $000's $000's % ▪ The EBITDA to cash conversion ratio in the second half of FY23 was 109% Receipts
Slide 12: Debt Profile
12 DEBT PROFILE CONTINUED REDUCTION IN DEBT AND LEVERAGE FACILITY ▪ FY23 performance delivered a 55% reduction in net debt 30 Jun 23 30 Jun 22 Movement ▪ MSV remains on track to reach its net debt $000's $000's $000's target of $15m by 30 June 2024 Equipment finance 24,217 35,189 (10,972) ▪ Current
Slide 13: Capital Expenditure
13 CAPITAL EXPENDITURE MATERIAL REDUCTION IN CAPEX IN FY23 YEAR ON YEAR CAPITAL EXPENDITURE ▪ Pursuant to a structured capital management $50m policy, capex has decreased significantly in FY23 vs FY22 whilst maintaining excellent productivity, mechanical availability and $40m safety performance $18.
Slide 14: Capital Management Update
14 CAPITAL MANAGEMENT UPDATE The Company is committed to returning surplus cash to shareholders under a capital management policy with the following summarised key terms. ▪ The Company will prioritise a portion of free cash flow to reduce leverage and has set a net debt target of $15.0m by 30 June 2
Slide 15: FY23 Capital Management Performance
15 FY23 CAPITAL MANAGEMENT PERFORMANCE Prioritise leverage reduction Sensible Capex allocation Dividends Share buy-backs* NET DEBT $17.6m CAPEX $12.6m FINAL DIVIDEND OF 2.08cps BUYBACK PAYMENTS $4.0m 55% 71% 100% Representing a capital reduction of approx. 4% based on the number of shares on hand at
Slide 16: Why Invest in Mitchell Services?
16 WHY INVEST IN MITCHELL SERVICES? ▪ Our culture and safety performance ▪ World class rig fleet ▪ Strong client base ▪ Earnings expected to increase into FY24 ▪ Focused capital management strategy delivering: o Reduction in net debt to $15m by the end of FY24 o Expected cash flow to deliver strong
Slide 17: Definitions
17 DEFINITIONS Capex Capital expenditure Cash Conversion The ratio of A to B; where A is the reported cash flows from operating activities (excluding interest and income tax paid) and B is the reported EBITDA Ratio Earnings before interest, tax, depreciation and amortisation; calculated as NPAT plus
Slide 18: Contact
CONTACT Andrew Elf Chief Executive Officer 112 Bluestone Circuit Seventeen Mile Rocks Qld 4073 PO Box 3250 Darra Qld 4076 P: 07 3722 7222 M: 0413 608 018 E: a.elf@mitchellservices.com.au