Bristow Group, Inc. · NYSE:VTOL
Bristow — Q3 FY2016 Earnings Presentation
50 slides from Bristow's earnings presentation, Feb 9, 2016
Slide 1: Third quarter FY16 earnings presentation
February 9, 2016 Third quarter FY16 earnings presentation Bristow Group Inc. Exhibit 99.1
Slide 2: Forward-looking statements
Forward-looking statements Statements contained in this presentation that state the Company’s or management’s intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements. These forward-looking statements include statements regarding earnings guidance and earn
Slide 3: Executive summary and safety review
Executive summary and safety review
Slide 4: Q3 FY16 operational safety review
Q3 FY16 operational safety review AAR includes commercial operations for Bristow Group and consolidated affiliates, Eastern Airways and Airnorth TRIR beginning in FY15 includes consolidated commercial operations, corporate, Bristow Academy, Eastern Airways, and Airnorth employees Targeted focus on o
Slide 5: Energy market deterioration continues as oversupply and demand concerns persist
Energy market deterioration continues as oversupply and demand concerns persist In December, OPEC confirmed its “every-man-for-themselves” market share strategy creating record production and a further collapse in oil prices Demand weakness, primarily from China, creates a more uncertain global macr
Slide 6: Despite progress in FY16, substantial challenges require more action for FY17
Despite progress in FY16, substantial challenges require more action for FY17, including reduction to the dividend Continued successful execution of cost reduction measures We reinforced our liquidity position through the previously announced proactive measures: $200 million term loan Revised debt c
Slide 7: Diversification efforts have been successful, as non-O&G revenue has increased
Diversification efforts have been successful, as non-O&G revenue has increased to 21% of our revenue this year, compared to 2% in FY14 Investment in Sky-Futures, a leading global Unmanned Aerial Vehicle (UAV) System operator for energy and infrastructure $4.2 million investment UAV services are emer
Slide 8: Operational highlights
Operational highlights
Slide 9: We are successfully executing on our Operations Transformation strategy
We are successfully executing on our Operations Transformation strategy FY17 is expected to be more challenging than FY16 as the industry accelerates restructuring, causing further declines in the helicopter market We are stepping up our downturn efforts in FY17: Safety remains a priority as we inte
Slide 10: Europe Caspian
Five year contract for three incremental LACE with an existing client in the North Sea commencing in FY18 Eastern generated $27.3 million of revenue and $4.5 million of EBITDAR in Q3 FY16 FY16 adjusted EBITDAR margin for Europe Caspian lowered from mid to high thirties to ~ low thirties Europe Caspi
Slide 11: U.K. SAR
U.K. SAR U.K. SAR ramp-up progressing with one additional base opened during the quarter Two additional bases began operating on contract on January 1, 2016, bringing the total to nine of ten operational (including two GAP SAR bases) Tenth and final base expected to begin operations in Q1 FY18 *LACE
Slide 12: Africa
Africa Began revenue service with two fixed wing aircraft Revenue negatively impacted by significant decline in activity year over year FY16 adjusted EBITDAR margin for Africa lowered from low thirties to ~ high twenties Nigeria Egypt Operating revenue and adjusted EBITDAR margin $ in millions
Slide 13: Americas
Began SAR/HEMS* service in GoM Continued pressure on activity levels with some incremental ad hoc flying FY16 expected adjusted EBITDAR margin remains ~ low to mid thirties Americas United States Canada Brazil Trinidad Operating revenue and adjusted EBITDAR margin $ in millions * Helicopter Emergenc
Slide 14: Líder update
Líder update * Reconciliation of adjusted EBITDAR, leverage and BVA provided in the appendix Líder adjusted EBITDAR* Petrobras contract cancellations and ongoing cost cutting discussions have reduced market potential in the short term Líder’s cost cutting and capex reduction initiatives successfully
Slide 15: Asia Pacific
Asia Pacific Airnorth generated $17.9 million of revenue and $5.2 million of EBITDAR in Q3 FY16 Decrease in rotary activity levels creates need for efficiency and fixed cost restructuring in FY17 FY16 adjusted EBITDAR margin for Asia Pacific expected to remain ~ mid twenties Russia Australia Malaysi
Slide 16: Current financial performance and guidance for the future
Current financial performance and guidance for the future
Slide 17: Q3 FY16 highlights
Q3 FY16 highlights Q3 FY16 GAAP EPS of $0.09 and adjusted EPS of $0.67 Single digit revenue percentage decline as overall offshore activity levels drop Increased adjusted EBITDAR margin both year over year and sequentially due to successful execution of cost reduction measures and increased contribu
Slide 18: Financial highlights: Adjusted EBITDAR and adjusted EPS summary
Financial highlights: Adjusted EBITDAR and adjusted EPS summary year-over-year Q3 FY15 to Q3 FY16 adjusted EPS bridge Q3 FY15 to Q3 FY16 adjusted EBITDAR bridge (in millions) Note: Adjusted EPS and adjusted EBITDAR amounts exclude gains and losses on dispositions of assets and any special items duri
Slide 19: Bristow has successfully deferred and cancelled capex to enhance financial flexibility
Bristow has successfully deferred and cancelled capex to enhance financial flexibility Over $100 million of capex has been deferred, with much of FY16-17 dollars being used to complete U.K. SAR Total annual aircraft capital expenditures *FY16 as of December 31, 2015 includes both actual aircraft cap
Slide 20: Cash flow and liquidity
Cash flow and liquidity $ in millions Net cash provided by operating activities1 Total liquidity2 $ in millions See 10-Q for more information on cash flow provided by operating activities At period end 402 415 530 370 299 231 267 232 253
Slide 21: LACE and LACE rate
LACE and LACE rate FY16 average LACE guidance range reaffirmed at 165-175 and average LACE rate guidance range reaffirmed at $8.00 - $9.00 million *See appendix hereto for more information on LACE and LACE rate. Consolidated commercial aircraft, LACE and LACE rate exclude Bristow Academy, affiliate
Slide 22: Bristow Value Added (BVA) drives Gross Cash Flow (GCF) performance
Bristow Value Added (BVA) drives Gross Cash Flow (GCF) performance Notes: BVA is computed by subtracting a capital charge (10.5%) for the use of gross invested capital from after tax operating cash flow. GCF Return % is based on trailing twelve months after tax operating cash flows (Gross Cash Flow)
Slide 23: FY16 guidance reaffirmed
FY16 guidance reaffirmed FY16 adjusted EPS guidance reaffirmed at $1.80 - $2.40, excluding special items and gains/loss on aircraft sales. FY16 guidance includes: * Assuming FY16 revenue earned in same regions and same mix as in FY15. Tax rate applicable to pre tax income in the remaining three mont
Slide 24: Final thoughts
Final thoughts We are continuing our significant ongoing investment in safety improvement and refreshing Target Zero programs Successful FY16 cost cutting provides confidence that Bristow can continue to increase our competitiveness and financial flexibility The FY17 oil and gas market outlook will
Slide 25: Appendix
Appendix
Slide 26: Organizational chart - as of December 31, 2015
Organizational chart - as of December 31, 2015 Business Unit (% of current period operating revenue) Corporate Region ( # of aircraft ) Joint Venture (# of aircraft) Key Operated Aircraft Bristow owned and/or operated 360 aircraft as of December 31, 2015 Affiliated Aircraft Bristow affiliates and jo
Slide 27: Aircraft fleet – medium and large
Aircraft fleet – medium and large as of December 31, 2015 Next Generation Aircraft Mature Aircraft Fair market value of our owned fleet is ~$2.1 billion and leased fleet is ~$1.7 billion Medium capacity 12-15 passengers Large capacity 16-25 passengers
Slide 28: Aircraft fleet – small, training and fixed
Aircraft fleet – small, training and fixed as of December 31, 2015 (continued) Mature Aircraft * LACE does not include held for sale, training helicopters and fixed wing Next Generation Aircraft Small capacity 4-7 passengers Training capacity 2-6 passengers
Slide 29: Operating lease strategy
Operating lease strategy: lowering the cost and amount of capital needed to grow Of the 115 aircraft currently leased in our fleet, 73 are commercial (62 LACE), 25 are training and 17 fixed wing 62 LACE aircraft represent approximately 38% of our commercial fleet Our goal is for commercial fleet ope
Slide 30: Consolidated fleet changes and aircraft sales for Q3 FY16
Consolidated fleet changes and aircraft sales for Q3 FY16 See 10-Q Note 5 “Commitments and Contingencies” for more information provided on operating leases. * Includes writeoffs, lease returns, and commencements * Amounts stated in millions
Slide 31: Held for sale and leased fleet by region
Held for sale and leased fleet by region as of December 31, 2015 See 10-Q Note 5 “Commitments and Contingencies” for more information provided on operating leases.
Slide 32: Operating revenue, LACE and LACE rate by region
Operating revenue, LACE and LACE rate by region 4 $ in millions LACE rate is annualized $ in millions per LACE Excludes Bristow Academy, Airnorth and Eastern Airways
Slide 33: Historical LACE by region
Historical LACE by region LACE FY13 FY14 FY15 Qi Q2 Q3 a Qi Q2 Q3 a4 Qi Q2 Q3 a4 Europe Caspian 48 46 52 56 58 60 60 57 62 68 70 72 Africa 23 23 21 21 21 22 23 24 24 24 22 21 mericas 48 46 53 52 51 48 48 47 47 45 46 45 Asia Pacific 29 28 28 30 30 30 34 30 31 29 31 29 Consolidated 147° 142 «(154158 1
Slide 34: Historical LACE rate by region
Historical LACE rate by region $ in millions LACE rate is annualized
Slide 35: Order and options book
Order and options book as of December 31, 2015 17 large aircraft on order are subject to the successful development and certification of the aircraft SAR configured
Slide 36: Total net asset FMV with and without leased aircraft FMV
Total net asset FMV with and without leased aircraft FMV NOTE: The gray shaded area represents the range of FMV with and without the impact of leased aircraft (upper range includes leased aircraft and related NPV of lease payments; lower range excludes FMV of leased aircraft as well as the NPV of le
Slide 37: Net asset FMV reconciliation
Net asset FMV reconciliation as of December 31, 2015
Slide 38: Adjusted EBITDAR margin trend by region
Adjusted EBITDAR margin* trend by region * Adjusted EBITDAR excludes special items and asset dispositions and margin is calculated by taking adjusted EBITDAR divided by operating revenue
Slide 39: Adjusted EBITDAR reconciliation
Adjusted EBITDAR* reconciliation * Adjusted EBITDAR excludes special items and asset dispositions
Slide 40: Bristow Value Added (BVA) sample calculation
Bristow Value Added (BVA) Sample calculation for Q3 FY16 and Q3 FY15 Bristow Value Added = Gross Cash Flow – (Gross Operating Assets X Capital Charge) BVA = GCF – (GOA x 10.5%**) Bristow Value Added calculation for Q3 FY16 $19.2 = $123.0* – ($3,956* x 2.625%**) Bristow Value Added calculation for Q3
Slide 41: Bristow gross cash flow reconciliation
Bristow gross cash flow reconciliation
Slide 42: Bristow adjusted gross operating assets reconciliation
Bristow adjusted gross operating assets reconciliation
Slide 43: Líder Bristow Value Added (BVA) sample calculation
Líder Bristow Value Added (BVA) Sample calculation for Q3 FY16 and Q3 FY15 Bristow Value Added = Gross Cash Flow – (Gross Operating Assets X Capital Charge) BVA = GCF – (GOA x 10.5%**) Bristow Value Added calculation for Q3 FY16 $7.1 = $12.1* – ($190* x 2.625%**) Bristow Value Added calculation for
Slide 44: Líder gross cash flow reconciliation
Líder gross cash flow reconciliation
Slide 45: Líder adjusted gross operating assets reconciliation
Líder adjusted gross operating assets reconciliation
Slide 46: Líder's adjusted EBITDAR reconciliation
Líder's adjusted EBITDAR* reconciliation * Adjusted EBITDAR excludes special items and asset dispositions
Slide 47: GAAP reconciliation
GAAP reconciliation See information about special items in 10-Q or earnings release for Q3 FY16 These amounts are presented after applying the appropriate tax effect to each item and dividing by the weighted average shares outstanding during the related period to calculate the earnings per share imp
Slide 48: Bristow leverage reconciliation
Bristow leverage reconciliation *Adjusted EBITDAR excludes gains and losses on dispositions of assets
Slide 49: Líder leverage reconciliation
Líder leverage reconciliation
Slide 50: Bristow Group Inc. contact details
Bristow Group Inc. (NYSE: BRS) 2103 City West Blvd., 4th Floor Houston, Texas 77042 t 713.267.7600 f 713.267.7620 bristowgroup.com Contact us