Boart Longyear — FY2016 Earnings Presentation
27 slides from Boart Longyear's earnings presentation, Feb 27, 2017
Slide 1: FY 2016 Results
TruScanTM Prototype FY 2016 Results February 2017 Jeff Olsen – CEO
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: FY 2016 Summary
FY 2016 Summary (Results compared to FY 2015, except as otherwise indicated) Safety1 o Lost time incident rate (LTIR) at 0.11 – 39% improvement over FY 2015 reflects success at mitigating significant risks o Moderate increase in total case incident rate (TCIR) – still among the lowest in the industr
Slide 4: Drilling Services Productivity Initiative Update
Drilling Services Productivity Initiative Update Shift Productivity Drill Rate + 12% + 9% • Tracking key metrics daily • Results reported and highly visible throughout company • Coaching and performance management for underperformers Productivity initiative driving measureable improvements with cust
Slide 5: Productivity & cost controls are improving results
Productivity & cost controls are improving results - 13% + 32M + 8% Significant improvement in EBITDA and cash despite revenue decline FY 2016 Results – See page 27 for footnote descriptions 5
Slide 6: Becoming a data provider, not just a driller
Becoming a data provider, not just a driller • Data acquisition done by third parties at our rigs Today • Assay done off-site • Slow, costly and not user-friendly for our customers • Core orientation, core logging, survey and assay all done by our crews at the rig Future • Direct data feed into cust
Slide 7: Financial Overview
LFTM160 and FreedomTM Loader Financial Overview Brendan Ryan – CFO
Slide 8: Consolidated Results Summary: FY 2016
Consolidated Results Summary: FY 2016 (US $M) • Revenue down $93M, driven primarily by volume and FX • Demand relatively stable in underground and production drilling applications • Increase in bidding activity • Adjusted EBITDA up $32M, driven by cost control and increased productivity • Adjusted C
Slide 9: Year-Over-Year Comparison
Year-Over-Year Comparison Statutory Adjusted2 Change Change (US $M except EPS) FY 2016 FY 2015 (US $M) FY 2016 FY 2015 Fav / (Unfav) Fav / (Unfav) Revenue 642 735 -13% Revenue 642 735 -13% Gross Margin 86 0 NMF Adjusted Gross Margin 89 77 16% GM as % of Revenue 13% 0% Adj. GM as % of Revenue 14% 10%
Slide 10: Consolidated Overview: FY 2016
Consolidated Overview: FY 2016 Volume and price declines offset by operational improvements (US $M) Consolidated Revenue Bridge Consolidated Adjusted EBITDA2 Bridge FY 2016 Results – See page 27 for footnote descriptions 10
Slide 11: Debt and Cash Bridges
Debt and Cash Bridges (US $M) Gross Debt Cash Working capital release in 2H 2016 consistent with seasonality of business Total liquidity as of 31 December 2016 was $64M ($5M available under ABL) FY 2016 Results – See page 27 for footnote descriptions 11
Slide 12: Business Overview
Business Overview Jeff Olsen – CEO
Slide 13: Drilling Services: FY 2016 Operations
Drilling Services: FY 2016 Operations Productivity improvements offset lower volumes Change Change Key Financials (US $M): FY 2016 FY 2015 Key Performance Indicators FY 2016 FY 2015 Fav / (Unfav) Fav / (Unfav) Revenue 448 528 -15% Average Operating Rigs 3 287 331 -13% COGS 401 493 19% Headcount (per
Slide 14: Drilling Services: Revenue by Commodity
Drilling Services: Revenue by Commodity Gold and copper drive bulk of revenue FY 2016 Results – See page 27 for footnote descriptions 14
Slide 15: Global Products: FY 2016 Operations
Global Products: FY 2016 Operations Headwinds from FX offset by cost control Change Change Key Financials (US $M): FY 2016 FY 2015 Key Performance Indicators FY 2016 FY 2015 Fav / (Unfav) Fav / (Unfav) Revenue 195 207 -6% Average Backlog (US $M) 15 17 -13% COGS 152 166 8% Headcount (period-end) 1,00
Slide 16: Update on Capital Structure Review
Update on Capital Structure Review We continue to work with our lenders and advisors to create a sustainable capital structure While the process is incomplete and the outcome is uncertain, we have made significant progress Primary objectives include reducing our debt, securing additional liquidity,
Slide 17: Conclusion
LR500 Rotary Drill Rig Conclusion
Slide 18: Positive signs in recent commodity trends
Positive signs in recent commodity trends… Long-Term Commodity Trends5 Recent Commodity Trends5 (since Jan-16) + 16% + 31% + 116% FY 2016 Results – See page 27 for footnote descriptions 18
Slide 19: Positive movements in mining equities and junior equity raisings
…as well as positive movements in mining equities and junior equity raisings + 75% Note: “Juniors” defined as mining companies with a market cap of less than $500M FY 2016 Results – See page 27 for footnote descriptions 19
Slide 20: We remain committed to our Strategic Priorities
We remain committed to our Strategic Priorities Safety o Continue to be an industry leader Operations o Continue to improve on the productivity gains we have made in the last year Technology o Focused on acquiring data from our drill holes and delivering to customers in a faster, lower-cost and user
Slide 21: Questions?
Questions? @ BOART LONGYEAR
Slide 22: Appendix
Appendix » BOART re LONGYEAR™
Slide 23: Safety & Environment
Safety & Environment Our goal is to add value with zero harm – leading our industry with our employees returning home safely each day and performing our work with minimal impact to our neighbors or the environment. • Safety Performance o Improvement in lost time incident rate o Moderate increase in
Slide 24: Key Performance Indicators by Quarter
Key Performance Indicators by Quarter Quarters ended 2016 Quarters ended 2015 Quarters ended 2014 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Total Com pany Revenue (US$ millions) 156.9 175.0 168.7 141.8 160.9 186.8 200.3 187.2 205.8 239.3 224.1 197.4 EBITDA (US$ millions) (15.3) 13.8 15.5 (12.4) (75.2) (0.
Slide 25: Diversified End-Market Exposure
Diversified End-Market Exposure FY 2016 Total Revenue by Type – Products & Services FY 2016 Total Revenue by Region – Products & Services FY 2016 Drilling Services Revenue by Stage FY 2016 Drilling Services Revenue by Commodity FY 2016 Results – See page 27 for footnote descriptions 25
Slide 26: Debt Maturity Schedule
Debt Maturity Schedule (US $M) 7% Senior 40 Notes (unsecured) Term Loan 105 Tranche B 1 284 10% Senior ABL 40 Notes 195 (secured) Term Loan Tranche A 85 2016 2017 2018 2019 2020 2021 Senior Notes Term Loan ABL If Term Loan – Tranche B and 10% Senior Secured Notes have not been refinanced prior to Ju
Slide 27: 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 Adjusted NPAT Loss are non-IFRS measures and are used internally by management to assess the underlying performanc