Hunting Plc · LSE:HTG
Hunting — FY2016 Earnings Presentation
21 slides from Hunting's earnings presentation, March 2017
Slide 1: Results presentation for the year ended 31 December 2016
Results presentation For the year ended 31 December 2016 www.huntingplc.com 1
Slide 2: Group Summary
Group Summary Adapting to a difficult trading environment Core manufacturing and distribution capabilities maintained Our product offering continues to broaden, providing our clients with efficient and cost effective hydrocarbon production technology Disciplines over costs and capital investme
Slide 3: Summary Income Statement
Summary Income Statement1 Revenue and margin declines across all business units 2016 Margin 2015 Margin $m % $m % Revenue 455.8) 810.5) Gross profit (52.1) 11% 195.2) 24% EBITDA2 (loss) profit (48.9) -11% 61.9) 8% (Loss) profit from operations (92.2) 16.4) Finance expense (0.7) (6.8) (Loss) profit b
Slide 4: Segmental Results
Segmental Results1 Cost savings have mitigated trading losses 2016 2015 Results from Results from Revenue Operations Revenue Operations $m $m $m $m Hunting Energy Services Well Construction 105.5 (24.2) 211.4 1.9) Well Completion 295.1 (45.9) 488.6 14.2) Well Intervention 52.2 (19.5) 106.3 4.6) 452.
Slide 5: Geographical Segmental Results
Geographical Segmental Results1 US onshore remains a key market in this trading environment 2016 2015 Results from Results from Revenue Operations Revenue Operations $m $m $m $m Hunting Energy Services USA 290.5 (36.4) 507.0 31.7) Canada 38.8 (4.5) 56.1 (3.6) Europe 70.2 (25.7) 134.6 (4.2) Asia Paci
Slide 6: Amortisation & Exceptional Items
Amortisation & Exceptional Items Goodwill carrying values supported by trading projections 2016 2015 $m $m Amortisation of acquired intangible assets 33.2 38.9 Restructuring costs 12.2 7.1 UK Pension Scheme closure 3.1 - Bank facility fees written off 2.5 - Goodwill impairment - 208.2 Intangible ass
Slide 7: Balance Sheet
Balance Sheet Equity raise neutralises debt position 2016 2015 $m $m Property, plant and equipment 419.0) 460.8) Goodwill 229.8) 230.6) Other intangible assets 150.7) 180.4) Working capital1 300.2) 365.8) Taxation (3.4) 10.7) Provisions (15.7) (18.0) Other 38.7) 48.3) Net debt (1.9) (110.5) Net asse
Slide 8: Capital Investment
Capital Investment Controls over capital allocations remain with spend less than half annual depreciation charge 2016 $m Facilities - Premium Threading and Testing – AmeriPort, Texas 3.6 - Manufacturing – The Netherlands 1.8 - Dearborn – Fryeburg, Maine 4.4 - Other 1.3 Machinery, Equipment and Drill
Slide 9: Cash Flow
Cash Flow Focus on cash generation, particularly working capital 2016 2015 $m $m Underlying EBITDA1 (loss) profit (48.9) 61.9) Working capital 58.4) 96.0) Interest and bank fees (4.6) (7.4) Tax refunded (paid) 31.3) (10.5) Restructuring costs (5.9) (5.9) Replacement capital investment (4.2) (22.0) O
Slide 10: What? How? Why?
What? How? Why? RESULTS PRESENTATION: MARCH 2017 10
Slide 11: Why? To create customer engagement, solve problems
Why? To create customer engagement, solve problems We have not based our strategy on being a commodity or a market share / low price oriented company We pursue the higher end of the spectrum and position ourselves to solve the customers’ difficult problems Basic Specialised Advanced Technology &
Slide 12: Why? Difficult problems = premier markets
Why? Difficult problems = premier markets What Our Customers Face Daily Extreme well conditions Downhole to High Varied and and mitigation surface real temperature complex of time High pressure geology environmental information risk RESULTS PRESENTATION: MARCH 2017 12
Slide 13: Why? Different customers and different needs
Why? Different customers and different needs International and National Oil Companies Looking for flexibility with a global footprint Hunting integrates directly with their supply chain Oilfield Service Companies A trusted partner to make their products Global manufacturing to facilitate sup
Slide 14: Why? Trust, it is valued the most
Why? Trust, it is valued the most Every problem our customers’ face leads to an important question…. TRUST - Who do I trust? • Safety Safety for the people/ environment • Risk Mitigation Risk mitigation = flight to quality • Operational Operational efficiency through flawless product Efficie
Slide 15: Why? Has led us to our markets
Why? Has led us to our markets Deepwater exploration and subsea components The ever evolving unconventional market High technology and instrumentation components Quick turn manufacturing Ultra precision machining RESULTS PRESENTATION: MARCH 2017 15
Slide 16: Why? Quality: We Seek Perfection
Why? Quality We Seek Perfection The price of quality is Quality is our culture immeasurable World class quality Historically, excluding acts systems of war, the world’s largest oil related spills have been caused by a wellbore Standards beyond ISO and component failure API requirements Based on US s
Slide 17: As the industry returns new themes emerge
As the industry returns new themes emerge • Cost of capacity is • Flight to at a premium quality Flexible Quality Manufacturing Retained Model Customer Technology Oriented and Commercial Innovation Model • Evolution & • Cost drivers restructuring of to well Supply Chain profitability RESULTS PRESENT
Slide 18: Customer technology engagements
Customer technology engagements • Connection • Well • Titan Technology Intervention Well Construction Well Intervention Division Well Completion Division Division • Next • Joint • Optimize and generation enhance engineering perforating work on WEDGE LOCK SF for systems pressure Deepwater technology
Slide 19: US Onshore 600 rigs is the new 1,000+
Onshore acceleration • For every rig the consumption of kit is accelerating US Onshore 600 rigs • Super laterals (extensions > 15,000 feet) with Total Depth Measurements extending 27,000 is the new 1,000 + feet with over 120 stages increases the number of perforating systems, completion accessories
Slide 20: Offshore still an industry force
Offshore still an industry force Each deepwater well is a large capital expenditure 30% of global oil production comes from offshore Ranges between $80 to over $300 million dollars per well Long lead time to develop and procure all of the components (up to five years) 20 projects expected to
Slide 21: Train wreck waiting to happen?
Train wreck waiting to happen? US unconventional cannot supply all the future oil demand growth Oil discoveries at historic lows, creating future shortfalls Depletion rates will remain at 6% to 9% lowering available production Most industry analysts forecast oil demand growth of 1–2% per yea