Hunting PLC · LSE:HTG
Hunting — Investor Presentation (2024)
44 slides from Hunting's investor presentation, Sep 20, 2024
Slide 1: Hunting PLC 2024 Corporate Presentation
INA CHANGING Hunting PLC 2024 Corporate Presentation g HUNTING
Slide 2: Disclaimer
Disclaimer By attending the meeting where this presentation is made, or by reading the presentation slides, you acknowledge and agree to comply with the following restrictions. This document and the accompanying verbal presentation (together the "Presentation”) have been prepared by Hunting PLC (the
Slide 3: A global technology and engineering Group
A global technology and engineering Group supported by a deep knowledge of the global energy industry. Our core competencies Group financial performance 2020 – 2024e* • Leadership in components and systems design. 1200 180.0 • Print-part and bespoke precision manufacturing. 160.0 • Expertise in meta
Slide 4: Product groups: Perforating, Subsea, OCTG, Advanced Manufacturing
Oil and gas Non-oil and gas PERFORATING SUBSEA OCTG ADVANCED ENERGY SYSTEMS MANUFACTURING TRANSITION • Market leading • High performance • Three key proprietary • Precision engineered • Key offering includes: perforating components products and solutions premium and semi-premium products for the oil
Slide 5: Global manufacturing and distribution sites
16 8 sites sites Conventional oil and gas basins 4 sites Unconventional oil and gas basins 5
Slide 6: Over 500 patents and trademarks across key technologies
Over 500 patents and trademarks across key technologies and geographies * Strong R&D focus * Competitive edge * Market leadership * Countries with patent coverage 6
Slide 7: Blue chip customer base across multiple critical markets
Blue chip customer base across multiple critical markets LP @) Hrtacn sions <> Baker & Hughes: Cc >) LIBERTY Gauntinc a a < Beacon OFFSHORE ENERGY SPACE™ ExxonMobil UW Marathon Oil BLUE ORIGIN ms (8) EXPRO MURPHY OIL CORPORATION s . Solar Turbines HALMISUBTON Weatherford A Caterpillar Company > MOLG
Slide 8: Acquisition and disposal history
Acquisition: Titan Acquisition: National US$771.4m Coupling Company Acquisition: (Stafford) Dearborn US$52.4m US$81.9m Acquisition: Acquisition: PT SMB Doffing US$10.5m US$23.0m Acquisition: Investment: Acquisition: RTI Energy Cumberland Acquisition: Innova Acquisition: Acquisition: Systems Acquisit
Slide 9: Perforating Systems
• Proprietary perforating technologies including integrated gun systems, energetics charges, detonation cord, jet cutters and control instrumentation. • Four manufacturing sites and 12 distribution centres across US and Canada. • Strong IP platform to maintain market leadership – c.185 patents activ
Slide 10: Subsea Technologies
• Three distinct businesses, which provide technology and products to accelerate global offshore field developments and project cash flows. • Stafford – metal-to-metal seal couplings used in subsea tree systems. • Spring – steel and titanium stress joints (TSJs), applied to FPSOs. • Enpro – flow acc
Slide 11: OCTG
• Three proprietary connection families covering all resource developments: SEAL-LOCK ; WEDGE-LOCK ; and TEC-LOCK . • ‘Virtual Mill’ concept providing cost and supply flexibility to customers. • Serving global markets from North America, EMEA and Asia Pacific facilities. • North America business mod
Slide 12: Advanced Manufacturing Group
• Focus of AMG is on high-precision engineering and high-value electronic PCBs for critical, premium end-markets. • Dearborn – precision engineering of measurement tool housings, turbine shafts, rotor housings, and periscope tubes. End-markets include aviation, naval, power generation, and commercia
Slide 13: Energy transition and non-oil and gas growth
• Strong, long-term opportunities in geothermal and carbon capture • AMG initiatives driving Hunting’s non-oil and gas sales. projects. • Strong non-energy order book provides a platform for further revenue • Strategy to be a key supplier of premium connections, which are qualified diversification.
Slide 14: Market Backdrop
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Slide 15: Worldwide oil demand and upstream capex
Worldwide oil demand by region (2022 – 2030) Upstream capex by category (2022 – 2030) 120 600 100 500 80 400 mmbopd $bn 300 60 200 40 100 20 0 0 2022 2023 2024 2025 2026 2027 2028 2029 2030 2022 2023 2024 2025 2026 2027 2028 2029 2030 US - L48 RoW - on production Asia North America Europe Middle Eas
Slide 16: Drilling investment, rig counts, geothermal and carbon capture
Drilling capital investment Projected global geothermal capacity - MW Global onshore capital investment Global offshore capital investment $bn $bn 2024e 135.9 2024e 72.9 2025e 144.5 2025e 76.6 2026e 154.2 2026e 81.7 Source: Spears and Associates, Inc Source: Wood Mackenzie Rig counts Carbon capture
Slide 17: Geographic
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Slide 18: USA, Canada, Guyana and Brazil
• Core manufacturing centre for the Group, servicing onshore US basins, Gulf of Mexico, Canada and USA South America. • Supplies broadest range of products including OCTG, Connections, Perforating Systems, Electronics and Precision MWD tools. • Highly profitable third party OCTG threading business m
Slide 19: UK, Norway, Holland, UAE and Saudi Arabia
• TEK-HUB provides access to high technology as demonstrated by organic oil recovery business. UK • Optionality on North Sea activity. • Access to African markets. NORWAY • Positioned for medium-term growth through energy transition markets like geothermal. & HOLLAND • Sales and distribution busines
Slide 20: China, Singapore, Batam and India
• Key manufacturing site to support domestic and international activity. CHINA • Key OCTG mill partners who are supporting international strategy. • Solid domestic market. SINGAPORE • OCTG threading and manufacturing in high & efficiency facility. BATAM • Market access into Asia and Middle East. • J
Slide 21: Hunting 2030 Strategic Framework
HUNTING 2030 STRATEGIC FRAMEW q GB wwnrvc
Slide 22: Hunting's strategic pillars
Hunting’s strategic pillars Growth Strong returns Operational excellence ESG and sustainability • $2bn revenue p.a. by 2030 achieved • Target of 15% ROCE by 2025. • Continue to introduce new • 2030 target to reduce scope 1 and 2 through organic growth and M&A. technologies including H-4 Perforating
Slide 23: 2023 key achievements
• Entered 10-year strategic alliance with Jiuli. • Increased non-oil and gas sales at Dearborn and • Opened premium threading facility in Nashik, India. Electronics. • Delivered strong growth within TEC-LOCK product • Excellent progress in sales to aviation, commercial line. space, defence and medic
Slide 24: Capex and dividend policy
01 02 03 04 Invest in Dividends Value accretive Additional the business Progressive M&A Shareholder Capex and dividend policy Disciplined Distributions investment in approach to organic growth valuation Target of 1.0 – 1.25 x 10% growth per annum Target sectors include Surplus cash offers depreciati
Slide 25: Financial Overview
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Slide 26: FY 2023 financial overview
FY 2023 financial overview Revenue up by 28% -— led by Record sales order book of Diluted earnings per share up EBITDA up 98% to $103.0m OCTG, AMG and Subseainthe — $565.2m providing visibility for 332% from 4.7 cents to 20.3 offshore and international 2024 and beyond cents markets + Non-oil and gas
Slide 27: Order book by product group and activity
Order book by product group - $m Order book by operational activity - $m ocTe = Perforating Systems Advanced Manufacturing Oil and Gas ‘Aviation Geothermal ™Subsea . 7 Medical = Commercial space mNaval ™ Other Manufacturing ™ Other non-oil and gas q Gruniwnc
Slide 28: Product groups and operating segments FY 2023 performance
Product groups and operating segments FY 2023 performance Hunting North Subsea Asia External EBITDA Titan America Technologies EMEA Pacific Revenue EBITDA Margin $m $m $m $m $m $m $m % OcTG 61 192.4 - 46.5 150.8 395.8 46.7 12% Perforating Systems 236.1 - - 7.7 - 243.8 25.1 10% Advanced Manufacturing
Slide 29: Reported results adjusted for certain items
*Results for the year, as reported under IFRS, adjusted for certain items as determined by management. 29
Slide 30: FY 2023 strong balance sheet, recognition of US deferred tax assets
FY 2023 - strong balance sheet, recognition of US deferred tax assets As at 31 Dec As at 31 Dec 2023 2022 Group Balance Sheet $m $m Property, plant and equipment 254.5 256.7 Right-of-use assets 26.2 26.0 Goodwill and other intangible assets 195.2 191.2 Associates and joint ventures 20.5 20.1 Working
Slide 31: Positive start to 2024
• Positive start to 2024, with EBITDA of c.$28.9m (Q1 2023 – c.$22.4m). EBITDA margin 12% - in line with full year guidance. • Sales order book $544.0m (Q1 2023 – $492.9m) - OCTG tender activity remains buoyant, particularly in the Middle East. • Subsea and international market activity continues to
Slide 32: 2024 guidance
2024 guidance EBITDA EBITDA margin $130m - $135m 12% - 13% ae Effective tax rate Capex Free cash flow conversion (post capex) 25% - 28% $35m - $45m 50,
Slide 33: ESG
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Slide 34: Board of directors
Stuart M. Brightman Jim Johnson Bruce Ferguson Non-executive Company Chair Chief Executive Finance Director and Chair of Nomination Committee Margaret Amos Annell Bay Carol Chesney Paula Harris Keith Lough Non-executive Director Non-executive Director Non-executive Director Non-executive Director Se
Slide 35: ESG highlights and Scope 1 and 2 GHG data
The environment People and society Responsible products Governance Safety remains a priority The 2023 employee Continued focus on Board Scope 78% accountability for ESG Zero engagement survey of our facilities are Ethics and 1 and 2 fatalities recorded an engagement compliant with ISO 9001: 2015, Su
Slide 36: Continued improvement in key ESG metrics
Skilled employees driving quality and HSE Continued improvement in key ESG metrics driving client loyalty Manufacturing reject rate Renewable energy purchased 60% 0.25% 0.20% 50% 0.20% 50% 40% 0.15% 0.13% 0.13% 30% 0.10% 20% 23% 20% 0.05% 10% 16% 12% 8% 0.00% 0% 2021 2022 2023 2019 2020 2021 2022 20
Slide 37: Tenure, workforce diversity and engagement
Tenure – average years of service Workforce diversity Workforce engagement 16 Male 14 25% Female 12 10 8 75% 6 4 2 Board diversity* 0 Workforce Management Male Female Voluntary attrition 50% 50% 16% 14% *17 April 2024 12% Management diversity 10% 8% Male 6% 32% Female 4% 2% 68% 0% 2018 2019 2020 202
Slide 38: Summary
Summary Strong year of delivery across Hunting’s Improvements to pricing and utilisation Offshore international markets poised to diversified energy portfolio. driving higher margins. deliver further growth in 2024. Improved FCF generation in H2. r Energy Transition sales increasing - Improved ESG m
Slide 39: Appendices
INA CHANGING APPENDICES
Slide 40: FY 2023 statutory group income statement
FY 2023 statutory group income statement 2023 2022 $m Margin $m Margin Revenue 929.1 725.8 Gross profit 227.7 25% 171.4 4% Operating profit 61.0 7% 2.0 - Share of associates’ & JVs' results (0.6) (2.7) Profit (loss) before tax 50.0 (2.4) Tax credit (charge) 69.0 (1.3) Profit (loss) after tax 119.0 (
Slide 41: Product groups and operating segments 2022 performance
Product groups and operating segments 2022 performance Hunting North Subsea Asia External EBITDA Titan America Technologies EMEA Pacific Revenue EBITDA Margin $m $m $m $m $m $m $m % ocTe 35 154.3 > 32.4 68.6 258.8 16.2 6% Perforating Systems 246.5 - - 5.4 - 251.9 27.3 11% Advanced Manufacturing 78 6
Slide 42: Historic results for product groups
Historic results for product groups 2022 2021 Revenue EBITDA Margin Revenue EBITDA Margin $m $m % $m $m % OcTG 258.8 16.2 6% 172.5 (7.4) -4% Perforating Systems 251.9 27.3 11% 181.7 8.5 5% Advanced Manufacturing 75.1 0.9 1% 59.6 07 1% Subsea 69.0 3.4 5% 58.8 47 8% Other Manufacturing 71.0 4.2 6% 49.
Slide 43: Energy and greenhouse gas emissions data
2019 Units 2023 2022 2021 2020 base line year Energy type Natural gas – Group GWh 7.2 7.9 8.5 13.7 17.8 Natural gas – UK GWh 0.8 0.8 0.9 2.6 4.2 Vehicle consumption and process emissions – Group tonnes CO2e 3,575 3,367 2,491 3,338 2,972 Vehicle consumption and process emissions – UK tonnes CO2e 76 7
Slide 44: Hunting
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