Hunting Plc · LSE:HTG

Hunting — FY2014 Earnings Presentation

30 slides from Hunting's earnings presentation, 2015

  1. Slide 1: Hunting PLC – 2014 Full Year Results

    Global Presence Hunting PLC – 2014 Full Year Results

  2. Slide 2: Financial Highlights

    Financial Highlights  Strong 2nd half performance which provided record results for the year.  Balance sheet in good order with modest net debt.  Sale of Gibson Shipbrokers on track for 31 March 2015 close. • Sale proceeds equal to net asset value. • Accounted for as discontinued.  Capital inves

  3. Slide 3: 2014 Full Year Results Summary

    2014 Full Year Results Summary* ) 2014 Margin 2013) Margin Change $m % $m) % % Revenue 1,386.5 1,293.6 +7.2 EBITDA 269.8 19 244.0 19 +10.6 Depreciation (52.0) (44.0) +18.2 Profit from operations 217.8 16 200.0 15 +8.9 Finance expense (4.9) (2.9) Share of associate result (0.5) 0.4 Profit before tax

  4. Slide 4: Segmental Results

    Segmental Results* 2014 2013 Profit from Profit from Revenue Operations Margin Revenue Operations Margin $m $m % $m $m) % Hunting Energy Services Well Construction 378.3 53.0 14 380.9 58.6 15 Well Completion 862.6 140.8 16 796.1 124.5 16 Well Intervention 135.5 23.8 18 108.6 15.7 14 1,376.4 217.6 16

  5. Slide 5: Geographical Segmental Results

    Geographical Segmental Results* 2014 2013 Profit from Profit from) Revenue Operations Margin Revenue Operations) Margin $m $m) % $m $m) % Hunting Energy Services USA 867.3 170.0 20 798.8 155.8 20 Canada 95.5 3.8 4 75.3 (2.4) UK 163.5 8.4 5 148.6 11.3 8 Rest of Europe 30.7 2.5 8 27.4 3.0 11 Asia Paci

  6. Slide 6: Amortisation & Exceptional Items – Continuing Operations

    Amortisation & Exceptional Items – Continuing Operations ) 2014 2013 $m $m Amortisation of intangible assets 42.8 43.4 Goodwill impairment 49.6 - Oil & Gas reserve impairment and dry hole costs 11.3 10.5 Foreign exchange on liquidation of subsidiaries 4.8 - Excess property provision release (4.6) -

  7. Slide 7: Balance Sheet

    Balance Sheet ) 2014 2013 $m $m Property, plant and equipment 473.0 431.8 Goodwill 440.6 495.2 Other intangible assets 224.8 263.0 Working capital 470.6 467.6 Provisions (24.7) (33.4) Taxation (55.2) (48.7) Other 40.2 45.1 Net debt (131.0) (205.8) Net assets 1,438.3 1,414.8 Gearing 9% 15% Results fo

  8. Slide 8: Capital Investment

    Capital Investment 2014 $m Hunting Energy Services New drill tools and rental equipment 28.9 Manufacturing facility – Houma, Louisiana 25.4 Premium threading and test facility – Houston, Texas 23.0 Other facility expansion programmes 9.4 Asia Pacific machinery and equipment 3.1 North American machin

  9. Slide 9: Cash Flow

    Cash Flow 2014 2013 Change $m $m $m EBITDA 269.8 244.0 Working capital 3.8 (22.7) Interest and bank fees (5.6) (6.5) Tax paid (26.6) (19.9) Replacement capital investment (69.0) (44.8) Other 9.9 (4.5) Free cash flow 182.3 145.6 +36.7 Expansion capital investment (54.5) (50.0) Dividend to equity hold

  10. Slide 10: Capital Investment – Major project update

    Capital Investment – Major project update  Houma, Louisiana • Phase II expansion • Serving the Gulf of Mexico and deepwater market • Complete Q4 2014  Total project spend - $36.4m  Ameriport, Houston, Texas • State of the art premium threading and testing facility • High speed production • Produc

  11. Slide 11: Capital Investment – Major project update

    Capital Investment – Major project update  Cape Town • Anchor base for expansion in Sub Sahara Africa • Operational mid 2015  Total project spend - $20.0m • Spend to date - $8.7m • Spend to complete - $11.3m  Dearborn Expansion (Fryeburg, Maine) • Expanding our world class ultra precision capabil

  12. Slide 12: Observations: Commodity Price Fundamentals Support

    Observations: Commodity Price Fundamentals Support  The oil price has been supported by a combination of controlled supply, growing economies and the relationship between currency valuation and commodities  Typically, these fundamentals keep the price of oil at economically viable levels across th

  13. Slide 13: Crude Oil Market Share – US and Saudi Arabia

    Observations: Crude Oil Market Share – US and Saudi Arabia  In recent years, the US crude oil production has been increasing rapidly: • 2010 to 2014 US crude oil production increased 57%, Saudi Arabia’s production increased 10% • From a market share perspective, the US has gained ground on Saudi Ar

  14. Slide 14: Gross Domestic Product (GDP)

    Observations: Gross Domestic Product (GDP)  Global GDP is growing, however at a slower pace  The rate of GDP growth is flat in the US, down in China and Russia  India is currently one of the fastest growing economies World United States China Russia Europe India -1% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9%

  15. Slide 15: Build Up of Oil Inventory

    Observations: Build Up of Oil Inventory  Global crude oil storage = 34 days of consumption 3.5 36.0 Global Crude Oil In Storage bn barrels 35.5 Number of Days in Inventory 3.0 35.0 2.5 34.5 2.0 34 34.0 1.5 33.5 1.0 33.0 0.5 32.5 0.0 32.0 2010 2011 2012 2013 2014 2015 (Feb) Global Crude Oil in Stora

  16. Slide 16: US Oil Stockpiling

    Observations: US Oil Stockpiling 450 2015 • US crude oil in storage million barrels 400 • • 1980 350 • •• •• 2010 • • • • • • • • •• • • 2005 • • •• • • 1990 • • 300 • • 1995 1985 • • • • • • 2000 • 250 4 5 6 7 8 9 10 US daily oil production (million barrels / day) Results for the year ended 31 Dece

  17. Slide 17: Strong US Dollar Weak Price of Oil

    Observations: Strong US Dollar Weak Price of Oil $160 115 $140 110 Price Per Barrel WTI (USD) US Dollar Index (USDX) $120 105 $100 $80 100 $60 95 $40 90 $20 $0 85 Price of Oil (WTI) US Dollar Index Results for the year ended 31 December 2014 17 Source: EIA, US Federal Reserve USDX index

  18. Slide 18: Oil Commodity Prices

    Observations: Oil Commodity Prices  While exploration and production spending has consistently grown in previous years, 2015 will decline  The downward movement in commodity prices influencing the industry is very similar to what happened in 2008 and 2009 Price Per Barrel WTI (USD) $150 $100 $50 $

  19. Slide 19: Estimated Production-Weighted Average Annual Post Peak Decline Rates

    Observations: Estimated Production-Weighted Average Annual Post Peak Decline Rates  If the average global depletion rate is 6.7%, the net 2015 loss in supply due to depletion is over 6.2 mb/d  The difference between 2015 and 2020 demand is 5.6 mb/d 14% 12% 10% 8% 6% 4% 2% 0% North Europe Pacific E

  20. Slide 20: Average Oil Production Per Shale Well During First 48 Months

    Observations: Average Oil Production Per Shale Well During The First 48 Months Of Operation Source: EIA Results for the year ended 31 December 2014 20

  21. Slide 21: E&P Spending - A Moving Target

    Observation: E&P Spending - A Moving Target  Driven by economics, the industry players have scaled back spending. Initial projections continue to be revised • Early 2015 industry view • Global E&P spending down 8.8% End of 2014 • North America down 14.1% • International down 6.7% • E&P companies ma

  22. Slide 22: Managing Within The Market: Flexing Our Global Presence

    Managing Within The Market: Flexing Our Global Presence  However, we leverage our global footprint and balance throughput across the organisation to lower cost and maximise production  Geographic Diversity • 43 manufacturing facilities • 34 distribution locations  Experienced local and senior Mar

  23. Slide 23: Managing Within The Market: Adjust Locally

    Managing Within The Market: Adjust Locally  Our philosophy is to operate from a lean, decentralised framework, keeping decision making at the local levels to adapt quickly to the market  We adjust and apply the correct measures based on market conditions  Measures • Reduction in work force • Redu

  24. Slide 24: Typical North America Manufacturing Operation: Fixed Cost to Revenue

    Typical North America Manufacturing Operation 3 Shifts 2 Shifts 1 Shift 25 15 20 Fixed Cost to Revenue (%) EBITDA Margin (%) 10 15 10 5 5 0 0 125 100 75 50 25 Oil Price ($) Results for the year ended 31 December 2014 24

  25. Slide 25: New Products: KnockOut Circulating Charge

    New Products  KnockOut™ Circulating Charge • State of the art energetic which allows perforation in horizontal and directional wells that have multiple strings of production tubing • Allows a specific charge to maximise hole size in primary production string while minimising damage to the secondary

  26. Slide 26: New Products: EQUAfrac Shaped Charge

    New Products  EQUAfrac™ Shaped Charge • Patented charge technology that provides an industry solution to non- centered perforating systems within the well bore • Provides hole consistency no matter where the perforating gun is positioned in the wellbore which allows for reduced time for pumping ope

  27. Slide 27: New Products: Digital Bonding Tool

    New Products  Digital Bonding Tool • A tool used to evaluate the integrity of the bonding of the casing to the cement • The design of our transmitter and receiver provides highly directional information and produces an accurate view of the cement bond to the casing • This tool provides a 360 degree

  28. Slide 28: New Products: Hydraulic Shuttle Valve

    New Products  Hydraulic Shuttle Valve • Developed for Subsea oilfield drilling control applications, including BOP control systems where high pressure can destroy other shuttle valve technologies • Accepts flow from two different sources and directs the highest pressure source to a single outlet, w

  29. Slide 29: New Products: WEDGE-LOCK SF

    New Products  WEDGE-LOCK SF™ • Patented “Wedge” specially designed for High Pressure High Temperature (HPHT) Deepwater applications • The full thread engagement and dual metal-to-metal sealing provides maximum performance under tension, compression and bending with torsional loads Results for the y

  30. Slide 30: Hunting PLC – 2014 Full Year Results

    Global Presence Hunting PLC – 2014 Full Year Results

Hunting — FY2014 Earnings Presentation on 6ix