Capital Limited · LSE:CAPD
Capital — Capital Drilling — Investor Presentation (November 2015)
28 slides from Capital's investor presentation, November 2015
Slide 1: Capital Drilling Limited Corporate Presentation
Capital Drilling Limited Corporate Presentation November 2015
Slide 2: Disclaimer
Disclaimer IMPORTANT NOTICE This document 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 Drilling Ltd. (the “Company”), nor shall any part of it nor the fact of its distribution
Slide 3: Trading Update
_ Cot aria: DRILLING wi EXCELLENCE IN DRILLING
Slide 4: Challenging trading conditions …
Challenging trading conditions … GOLD AND COPPER SPOT RATES1 2,000 12,000 MACRO PRESSURES REMAIN 1,800 10,000 Industrial metals continue to test mutli-year lows 1,600 1,400 Golds relative resilience under threat from rising US interest rates Copper - US$/tonne 8,000 1,200 Sector access to capi
Slide 5: … but Capital Drilling performing well
… but Capital Drilling performing well GROSS PROFIT AND MARGINS US$m Early decisive actions taken in 2012/2013 to manage the cost base 30.0 50% 41.1% 36.3% 35.2% 25.0 32.6% 38.6% 33.3% 31.4% 34.5% 32.0% 34.5% 40% Operating margins back to 7 year trend levels despite the fall in 20.0 32.6% 28.1%
Slide 6: Our goal for 2015 … Rebuild Utilisation
Our goal for 2015 … Rebuild Utilisation IMPROVE THE BUSINESS REBUILD Managing Costs STRENGTHEN THE BALANCE SHEET - Continued cost control, UTILISATION margins maintained Capex Discipline DELIVER GROWTH - Substantial reduction in Improve Operating H1 New Management Team Performance - Transiti
Slide 7: Rebuilding utilisation: Lean Operating Model
Rebuilding utilisation: Lean Operating Model Lean Mobile Operating Units » Streamlined site personnel to operations only, with support functions engineered out » High standard “fit for purpose” equipment » Mobilise sufficient capability to sustain campaign » Enhanced capability at site – Financial
Slide 8: Case Study: Khoemacau Copper, Botswana
Case Study: Khoemacau Copper, Botswana Lean Mobile Operating Units » High performance rigs, support equipment and full contingency of inventory mobilised from neighbouring Zambia » Capital Drilling trained Zambian crews accompanied rig Process & Planning » New country start up & registration » D
Slide 9: Focused on a performance driven culture
Focused on a performance driven culture Mechanical Availability Quarterly Performance Reviews on major projects Participants include senior representatives of the client and Capital 100% 99% 99% 100% 99% 100% 98% 96% 97% 99% 99% 98% 98% Drilling, along with Capital’s senior management team Track
Slide 10: Multi-year contracts underpin the revenue …
Multi-year contracts underpin the revenue … EGYPT MAURITANIA » Commenced operations in 2005 » Commenced operations in 2010 » Blast hole, grade control & delineation » Exploration & delineation drilling drilling » Contract renewed in 2015 and » Contract renewed in 2015 and runs to runs to December 20
Slide 11: … Providing the platform of the Group strategy
… Providing the platform of the Group strategy Geographic focus on: » Africa » Strategic clients in other emerging economies Core long term contracts to underpin the revenue base » Focus on multi-year blast hole and grade contracts and projects with expansion opportunities Utilise base operati
Slide 12: First Half 2015 Financial Performance
First Half 2015 Financial Performance
Slide 13: Financial Overview
Financial Overview H1 2015 H1 2015 Revenue KPIs Reported Underlying H1 2014 Change % FY 2014 Revenue down 27.5% to $39.0m (H1 2014: $53.8m) Average Fleet Size 97 97 95 2.1 96 » Soft utilisation driven by continued weak sector demand Fleet Utilisation (%) 34 34 45 (24.4) 43 » Robust ARPOR reflectin
Slide 14: Revenue Metrics
Revenue Metrics Fleet Growth Utilisation (%) 93 95 96 100 85 100% 90 74 90% 80 80% 76% 74% 70 60 80% 66% 60 49 70% 50 62% 60% 40 46% 45% 25 50% 30 19 38% 20 11 40% 34% 33% 10 30% 0 Jan'06 Jan'07 Jan'08 Jan'09 Jan'10 Jan'11 Jan'12 Jan'13 Jan'14 Jan'15 20% Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4
Slide 15: Early movers on costs, margins maintained
Early movers on costs, margins maintained GROSS PROFIT AND MARGINS Continued to maintain operating margins at 5 year trend levels despite lower revenue US$m » Reflects continued focus on cost management 30.0 41.1% 45% 38.6% 35.2% 36.3% 31.4% 40% 25.0 33.3% 34.5% 34.5% 32.6% 32.0% 35% H1 2015 GP
Slide 16: Outstanding cash generation
Outstanding cash generation H1 2015 NET DEBT MOVEMENTS OPERATING CASH FLOW / FREE CASH FLOW 20 12.0 15 10.0 10 8.0 5 6.0 0 4.0 2.18 (5) 2.0 (10) - (15) (0.36) (2.0) (20) Opening net EBITDA Working capital Capex Dividends paid Others Closing net cash Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 D
Slide 17: Capital Expenditure: Focus on sustaining
Capital Expenditure: Focus on sustaining CAPITAL EXPENDITURE RIG REBUILDS US$m Rig 67 30.0 25.0 14.1 20.0 14.3 15.0 12.7 2.9 10.0 15.9 12.4 5.0 7.4 10.7 6.2 1.7 2.6 3.4 - 1.0 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 H1 2015 Before After H1 Capex H2 Capex Rig 70 Reduced capital spend, purchasing one add
Slide 18: Our balance sheet is strong
Our balance sheet is strong 1H 2015 1H 2014 Change Continued deleveraging strategy: Balance Sheet » Net Debt to Equity decreased from 9.5% in June 2014 to net $m $m % cash to equity of 2.6% Cash and cash equivalents 15.2 11.4 33.3 » Net cash at June 30 2015 of $2.1mn Investment 0.9 0 - Receivables
Slide 19: Interim dividend declared
Interim dividend declared Declared a maiden interim dividend of US 1.1cps Board Approved Policy » When determining the amount to be paid the Board will take into consideration the underlying profitability of the Company … and aim to approve an annual dividend within the range of 25-50% of the Co
Slide 20: Appendices
Appendices » » Company Overview Market » Corporate » Glossary
Slide 21: Safety Performance
Safety Performance KPI Milestone Improvements Committed to ZERO Harm Significant safety achievements including: Strong Speak Up Culture » Tanzania (Geita Project) achieved 8 years LTI free » Improved Environment reporting » Mauritania (Tasiast Project) achieved 4 years LTI free » Improved Hazard
Slide 22: Quality Partners & Projects
Quality Partners & Projects 100% 6% 4% 3% 2% QUALITY CLIENTS 7% 10% 13% 14% 90% 23% » Exposure to major and mid tier mining houses with strong balance sheets, quality 80% 41% 30% 39% 41% assets and positive cash flows 70% 35% 40% 60% 53% » Majors contributed 50% of H1 2015 revenue 50% 40% 73% 30% 63
Slide 23: Capital Drilling's Clients
Capital Drilling’s Clients EGYPT ARMENIA » Lydian » Gippsland » Thani Dubai (AngloGold Ashanti) SERBIA » Dundee MAURITANIA PAKISTAN » Antofagasta » Barrick Gold » Redblack » Knight Piesold PNG & SOLOMONS ERITREA » Allied Gold » Andiamo » Barrick Gold » Chalice Gold » Oil Search GHANA » Sunridge » St
Slide 24: Key Demand Drivers
Key Demand Drivers GOLD1 COPPER1 US$/oz US$/tonne 2,000 12,000 10,000 1,600 8,000 1,200 6,000 800 4,000 400 2,000 0 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Gold Spot 12-Month Trailing Copper Spot 12
Slide 25: Management & Board
Management & Board CHAIRMAN CHIEF EXECUTIVE OFFICER EXECUTIVE DIRECTOR » Over 15 years experience in » Over 35 years experience » 25 years experience in the finance industry in Mining and the oil & mining industry in Africa » Co-founder of Capital gas industry and Australia Drilling » Previous execu
Slide 26: Corporate Snapshot
Corporate Snapshot CAPITAL STRUCTURE SHAREHOLDING BLOCKS Fully paid ordinary shares 134,603,681 Share price (as at 30 June 2015) USD0.45 Free float Market capitalisation (undiluted) ^ 30% USD 60.31m Cash (as at 30 June 2015) USD 15.20m Founding Shareholders Debt (as at 30 June 2015) *includes bank b
Slide 27: Glossary
Glossary The following words used in the presentation have the following meaning: ARPOR Average Revenue Per Operating Rig LTM Last Twelve Months Capital Cash used on acquisition of property plant and equipment Profit or loss after tax adjusted for non-cash items +/- the Expenditure less proceeds on
Slide 28: Company Contact Details
Company Contact Details CAPITAL DRILLING LIMITED UK BROKER DETAILS Jamie Boyton GMP Securities Europe LLP Chairman Stratton House [email protected] 5 Stratton Street, London W1J 8LA Telephone: +44 (0) 207 647 2800 Mark Parsons Richard Greenfield Chief Executive Officer richard.greenfield@gmp
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