Capital Limited · LSE:CAPD
Capital — FY2021 Earnings Presentation
35 slides from Capital's earnings presentation, Mar 10, 2022
Slide 1: Capital Limited 2021 Full Year Results
Capital Limited 2021 Full Year Results 10 March 2022
Slide 2: Disclaimer
Disclaimer IMPORTANT NOTICE This document and any accompanying oral presentation (together the “Presentation”) does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of Capital Limited (the “Company”
Slide 3: 2021 Financial Highlights
2021 Financial Highlights Revenue EBITDA Adjusted NPAT ¹ Equity investment FINANCIAL $226.8 million $73.3 million $36.6 million gains R E S U LT S $33.7 million Up 68% on FY 20 Up 116.9% on FY 20 Up 226.6% on FY 20 Investment portfolio grown to ($135.0 million) ($33.8 million) ($11.2 million) $60.2
Slide 4: Four Pillars Creating Strong Foundation
Four Pillars Creating Strong Foundation DRILLING MINING L A B O R AT O R Y INVESTMENTS E X PA N D I N G S E R V I C E S C R E AT E S N E W R E V E N U E OPPORTUNITIES • End-to-end drilling services for • Load and haul and ancillary • Full range of geochemical • Investments in exploration Total Reven
Slide 5: Maintaining Industry Leading Safety Standards
Maintaining Industry Leading Safety Standards TRIFR TREND C O M M E N TA R Y 2020 TRIFR 2021 TRIFR • Total Recordable Incident Frequency Rate (TRIFR) of 0.98 (well below 2.29 2.50 industry peers) 2.00 1.50 1.25 1.09 • Achievement of 11 LTI free milestones during 2021: 1.06 0.99 0.98 0.83 0.93 1.03 0
Slide 6: Macro Supportive of Increased Activity
Macro Supportive of Increased Activity GOLD PRICE v. NONFERROUS EXPLORATION BUDGET A L L F I N A N C I N G S * A N D E X P L O R AT I O N B U D G E T Gold Price Aggregate Nonferrous exploration budgets US$bn* Gold financings Base/other metals financings GLOBAL Exploration budgets $M 2,000 24,000 1,8
Slide 7: Exploration Lag Increasing Activity Momentum
Exploration Lag Increasing Activity Momentum EXPLORATION BUDGET TRENDS (ALL COMMODITIES) COMMENTARY Africa Australia Canada Latin America Pacific/SE Asia Rest of World USA • Strength in key commodities & capital markets activity yet to meaningfully translate 25,000 into exploration activity: 20,000
Slide 8: Drilling: Strongest Demand in a Decade
Drilling: Strongest Demand in a Decade C O M M E N TA R Y D R L L R I G F L E E T E X PA N S I O N • Strongest demand environment for drilling services in a decade 110 • Rig fleet expanded to 109 rigs, up from 94 in January 2021 100 90 Strong increase in rig fleet utilisation of 79% in Q4 (75% 2021)
Slide 9: Mining: Successfully Commenced First Major Contract
Mining: Successfully Commenced First Major Contract SUKARI WASTE MINING CONTRACT SUMMARY • Project summary: Largest award of new business in Capital’s history • 120Mt open pit waste mining contract to provide load, haul and associated services: - Incremental revenues of $235 - $260 million expected
Slide 10: Laboratories: Platform in Place for Strong Growth
Laboratories: Platform in Place for Strong Growth E X PA N D I N G F O OT P R I N T & T E C H N O L O G Y C O M M E N TA R Y • 2021 revenue of $15.6 million, up 76% on 2020 (~$8.9 million) • Revenue guidance for 2022 of ~$30 million with the continued roll out of six Chrysos PhotonAssay units • Phot
Slide 11: Investments: A Core Pillar of the Group strategy
Investments: A Core Pillar of the Group strategy CAPITAL INVESTMENTS – SERVING A DUAL PURPOSE PORTFOLIO HOLDINGS • Capital has selectively engaged in Direct Investment and Drill for Equity since 2015 • Investments strategy: ˗ Strategic alignment with Capital’s operations PRODUCER ˗ Stand alone inves
Slide 12: Sustainability Focus
Sustainability Focus S I G N I F I C A N T P R O G R E S S O N S U S TA I N A B I L I T Y I N I T I AT I V E S I N 2 0 2 1 N AT I O N A L E M P L OY E E S ENVIRONMENTAL COMMITMENT 12% • In 2021 Capital implemented a Climate Change Strategy: - Capital has set and reported our scope 1 and 2 GHG emissi
Slide 13: Section 2 – Results
Section 2 – Results
Slide 14: 2021 Financial Overview
2021 Financial Overview % CHANGE C O M M E N TA R Y FROM REPORTED EARNING FY 2021 FY 2020 • Gross profit margin improvement: FY 2020 - Significant reduction in cross border asset mobilisations Revenue ($m) 226.8 135.0 68.0% - Improved maintenance practices - Younger fleet, reduced repairs and mainte
Slide 15: Investments a Strong Contributor to Earnings
Investments a Strong Contributor to Earnings BACKGROUND PERFORMANCE • Capital has selectively engaged in Direct Investment and Drill for Equity since 2015 • Capital generated substantial returns from the investment portfolio over 2021 • Investments must satisfy a number of criteria: • Total investme
Slide 16: 2021 Net Cash Waterfall
2021 Net Cash Waterfall NET CASH (DEBT) MOVEMENTS COMMENTARY 90.0 • Investment in working capital predominantly in H1 2021 • Strong operating cash flow generation in H2 2021 70.0 • Increased capex and working capital to fund: 50.0 30.7 - Ramp up of the Sukari load and haul contract - Receivables ass
Slide 17: Capital Expenditure & Cash Flow
Capital Expenditure & Cash Flow CAPEX C O M M E N TA R Y Cash capital expenditure Other financing Prepayments on fixed assets Total • Significant increase in capex over the past 24 months, primarily due to the ramp up of 70 the Sukari earth moving contract: 60 - Cash Capex in 2021 was $46.3 million
Slide 18: Balance Sheet & Work in Hand
Balance Sheet & Work in Hand BALANCE SHEET FY 2021 FY 2020 % CHANGE STRONG BALANCE SHEET Debt 62.5 30.7 104% • Net cash position of $28.3 million at the end of 2021 including investments of $60.2 million: Cash 30.6 35.7 -14% - Net debt / Equity at 14.6% at YE 2021 - Adjusted Net cash (including inve
Slide 19: 2021 Final Dividend
2021 Final Dividend • Final dividend declared for 2021 of US 2.4cps (2020: final dividend of US 1.3cps) • Note: 2021 final dividend of US 2.4 cps paid in CY 2022 Return excess • Capital has consistently delivered shareholder value through dividends since 2014: to Shareholders Investment “The dividen
Slide 20: Section 3 – Outlook & Guidance
Section 3 – Outlook & Guidance
Slide 21: Strategic Priorities
Strategic Priorities L E V E R A G I N G O F F O U R E S TA B L I S H E D P L AT F O R M CONTINUE SERVICES SUPERIOR PORTFOLIO MAINTAIN STRONG DELIVER WORLD EXPANSION OF CONTRACTS BALANCE SHEET CLASS HSE Continue growth of non-drilling services Maintain focus on long life, low cost Provide flexibilit
Slide 22: Outlook & Guidance
Outlook & Guidance ONGOING SUPPORTIVE MACRO CONDITIONS 2022 REVENUE GUIDANCE $270-280 MILLION • Gold price trading at near record highs, a strong tailwind with c.90% of Group revenue • Up from 2021 revenue of $226.8 million: exposed to the African gold mining sector - Drilling: growth supported by a
Slide 23: Appendices
Appendices
Slide 24: Capital Limited Snapshot
Capital Limited Snapshot We provide full-service mining, drilling, maintenance and geochemical solutions to customers within the minerals industry, focusing on the African markets YEARS OF EXPERIENCE IN EMPLOYS AFRICA 2,277 P e o p l e * 16+ OPERATING IN REVENUE BY CUSTOMER 11 A f r i c a n A n d M
Slide 25: Our Strategy
Our Strategy SERVICES ACROSS THE MINING CYCLE D e l i v e r A N E N D - T O - E N D E X P L O R AT I O N T O MINING SERVICES solution Focus on MINE-SITE BASED CONTRACTS across multiple services to leverage established on-site infrastructure Build a SUPERIOR PORTFOLIO OF LONG- TERM CLIENTS with blue-
Slide 26: 2021 Revenue Diversification
2021 Revenue Diversification REGION SERVICES ACTIVITY LOCATION NON MINE NON-DRILLING SOUTH & EAST NON 22% SITE DRILLING PRODUCTION 12% AFRICA 22% 31% 23% WAF 34% EXPLORATION 6% ROW 3% UNDERGROUND 10% DRILLING 78% DELINEATION MENA 31% MINE SITE 39% 88% Note: * Mining, Maintenance, Laboratory, Equipme
Slide 27: Long-term Projects, Multiple Revenue Sources
Long-term Projects, Multiple Revenue Sources MINE SITE PROJECTS:DELINEATION, PRODUCTION, UNDERGROUND, LABORATORIES Bonikro Gold Geita Gold Bulyanhulu Jabal Sayid North Mara Sukari Gold Morila Gold Yanfolila Gold Tasiast Gold Syama Gold Mine Mine Gold Mine Gold Mine Gold Mine Mine Mine Mine Mine Mine
Slide 28: Capital’s Fleet of Rigs and HME
Capital’s Fleet of Rigs and HME DRILL RIG FLEET: 109 RIGS* MINING AND ANCILLARY • Significant increase in Heavy Mining Equipment driven by the Sukari waste mining contract award • All equipment on site and commissioned during H1 2021 MINING MULTI PURPOSE DIAMOND 8 30 REVERSE CIRCULATION 9 AIR CORE 4
Slide 29: Client History
Client History Armenia Lydian Chile Antofagasta Anvil DRC APM Ethiopia Barrick Tiger BHP Billiton E G Y P T BHP Ethiopia Potash CMP Glencore MMG Polar Star M A L I M A U R I T A N I A Eritrea Ghana Mozambique Namibia Andiamo Kinross Boabab Tanga Resources Chalice Gold Riversdale Algold Aton Resource
Slide 30: Board of Directors
Board of Directors EXECUTIVE NON-EXECUTIVE JAMIE BOYTON BRIAN RUDD DAVID ABERY ALEX DAVIDSON MICHAEL RAWLINSON CATHERINE (CASSIE) BOGGS EXECUTIVE CHAIRMAN EXECUTIVE DIRECTOR SENIOR NED NED NED NED • Over 20 years’ • Over 35 years’ • Over 20 years’ • Over 40 years’ • Over 25 years’ investment • Over
Slide 31: Corporate Snapshot
Corporate Snapshot C A P I TA L S T R U C T U R E ( 3 1 D E C 2 0 2 1 ) SHAREHOLDING BLOCK As at 31 December 2021 Fully paid ordinary shares 190,054,838 Other Founders Share price (as at 31 December 2021) $1.12 8.8% Market capitalisation (undiluted) $212.90m Directors Top 10 Institutions 18.9% Debt
Slide 32: Technology & Innovation
Technology & Innovation We are INDUSTRY LEADERS IN ADOPTING THE LATEST TECHNOLGIES to improve productivity, safety and environmental performance Remote blast hole drilling Remote site internet / communications Electric underground drill rigs We integrate the latest DATA CAPTURE AND TRANSMISSION TECH
Slide 33: Capital Limited Competitors
Capital Limited Competitors Perf. Company Mkt. Cap. Cash Debt Net Cash Ent. Val. EBITDA (US$m) EV / EBITDA (x) P / Book Div. Yield (12M) (US$m) (US$m) (US$m) (US$m) (US$m) 2021a 2022e 2023e 2021a 2022e 2023e (x) (%) (%) DRILLING CONTRACTORS Boart Longyear Group Ltd. 531.3 25.6 189.4 (163.9) 692.7 76
Slide 34: Glossary
Glossary The words below used in the presentation have the following meaning: ARPOR Average Revenue Per Operating Rig LTI Loss Time Injury CAPEX Cash used on acquisition of property plant and equipment less Profit or loss after tax adjusted for non-cash items +/- the net Operating Cash flow (Capital
Slide 35: Company Contact Details
Company Contact Details CAPITAL LIMITED UK BROKERS UK PUBLIC RELATIONS Jamie Boyton Berenberg (Joh. Berenberg, Gossler & Co. KG) Buchanan Executive Chairman 60 Threadneedle Street, London EC2R 8HP 107 Cheapside, London EC2V 6DN [email protected] Telephone: +44 20 3207 7800 Telephone: + 44 20