Hunting Plc · LSE:HTG
Hunting — Investor Day (September 2023)
15 slides from Hunting's investor day presentation, Sep 13, 2023
Slide 1: Financial Framework
FINANCIAL FRAMEWORK Hunting PLC Capital Markets Day, 13 September, 2023 108
Slide 2: Attractive investment case
Attractive investment case 01 Revenue projected to grow to 02 EBITDA margins increasing to c.15% 03 c.$325 million free cash flow c.$1.3 billion p.a. by 2025 driven by by 2025 with further progression generation by 2025 current market momentum, and to by 2030 >$1 billion cumulative free cash flow c.
Slide 3: Strong period of recovery and growth
Strong period of recovery and growth H1 2023 H2 2022 H1 2022 $m $m $m REVENUE 478 390 336 EBITDA 48.7 28.4 23.6 ADJUSTED PROFIT BEFORE TAX 23.1 7.7 2.5 ORDER BOOK 530 473 326 Half year 2023 highlights • Revenue up 42% on H1 2022 • EBITDA margin now >10% as volumes increase along with selected price
Slide 4: Future growth underpinned by record order book, growing tender pipeline and strong market fundamentals
Future growth underpinned by record order book, growing tender pipeline and strong market fundamentals Order book by product Order book by year of delivery $22m $13m $26m $30m $101m $104m $248m OCTG 2023 Advanced Manufacturing 2024 Subsea 2025 $370m Perforating Systems $146m 2026+ Other Manufacturin
Slide 5: c.$2 billion revenue p.a. targeted by 2030
c.$2 billion revenue p.a. targeted by 2030 726 2022 Perforating OCTG Subsea Advanced Other Bolt-on 2030e Systems Manufacturing Manufacturing M&A c.13% of non-oil and gas sales by 2025 and c.25% by 2030 Offshore capex to double by 2028 South America to deliver strong Energy Transition to be a major M
Slide 6: Delivering a more efficient business platform
Delivering a more efficient business platform Efficiency 2020 – 2022 − Reduced fixed costs by $40 million p.a. − Disposed of EMEA OCTG pipe trading business − Divested high capex/low cash generating US drilling tools into joint venture − Consolidated Singapore facilities from three to one − Exited h
Slide 7: EBITDA margin growth to 14-16% through increased efficiencies and operating leverage
EBITDA margin growth to 14 – 16% through increased efficiencies and operating leverage Fixed cost 14 – 16% 16% Operational take out Pricing and leverage/volumes 14% operational 12% efficiencies 10 – 11% Portfolio EBITDA margin improvements 10% 8% 7% 6% 4% 2% 1% 0% 2021 2022 2023e 2025e Expect simila
Slide 8: Driving strong balance sheet efficiency
Driving strong balance sheet efficiency 80% Working Capital Targets: 70% 75% − Inventory days: 130 days 60% − DSO: 75 days − DPO: 45 days Working capital/Annualised revenue 50% 48% Working capital optimisation programmes to deliver 40% 44% 42% further improvements 35% 30% 20% 10% 0% 2020 2021 2022 H
Slide 9: Generating >$325 million of FCF by 2025
Generating >$325 million of FCF by 2025 500 2023 – 2025 450 c.$50m Targeting free cash flow 400 c.$100m conversion of 70% 350 $150m ABL Cash + ABL = $375 million 300 capacity for M&A and c.$130m $m 250 c.$480m shareholder distributions $25m opening cash 200 >$325m 2023 – 2030 Ambition EBITDA to FCF
Slide 10: Capital allocation policy
Capital allocation 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 valuation organic growth Target of 1.0 – 1.25 x 10% growth per annum Target sectors include Surp
Slide 11: Guidance for 2023 and 2024
Guidance for 2023 and 2024 Product Group 2023 Forecast 2024 Forecast EBITDA Margin EBITDA Margin OCTG 10 – 12% Stable Perforating Systems 11 – 13% Improving Subsea 8 – 10% Improving Advanced Manufacturing 9 – 12% Improving Other Manufacturing 5 – 7% Stable EBITDA: $96m – $100m EBITDA: $125m – $135m
Slide 12: Key deliverables
Key deliverables 01 Revenue projected to grow 02 EBITDA margins increasing to c.15% 03 c.$325 million free cash flow to c.$1.3 billion p.a. by 2025, driven by 2025 with further progression generation by 2025 by current market momentum, by 2030 >$1 billion cumulative free cash flow and to c.$2 billio
Slide 13: Final comments
Final comments 01 A diversified product and technology 02 c.$2 billion revenue p.a. by 2030 and 03 c.$325 million of cumulative free cash offering to deliver growth to 2030 an EBITDA margin of c.15% by 2025 flow by 2025 c.$1 billion of cumulative free cash flow by 2030 04 05 06 Targeted ROCE of c.15
Slide 14: Glossary
Maneane 2030 PRE ENGINEERING GLOSSARY 3D Three-dimensional LNG Liquefied Natural Gas AGS Advanced Geothermal System m Million AOR Attic Oil Recovery M&A Mergers and Acquisitions APAC Asia Pacific MEA Middle East and Africa bn Billion mmbopd Millions Barrels Of Oil Per Day bopd Barrels of Oil per Day
Slide 15: 264.7 12.8 5% 172.5 (7.4) (4%) 258.8 16.2 6% 213.4 24.1 11% 154.5 6.4
264.7 12.8 5% 172.5 (7.4) (4%) 258.8 16.2 6% 213.4 24.1 11% 154.5 6.4 4% 181.7 8.5) 5%) 251.9 27.3 11% 126.8 13.7 11% 69.8 4.8 7% 58.8 4.7) 8%) 69.0 3.4 5% 42.5 3.2 8% 74.3 1.9 3% 59.6 0.7) 1%) 75.1 0.9 1% 53.1 4.5 8% 62.7 0.2 - 49.0 (3.4) (7%) 71.0 4.2 6% 42.0 3.2 8% 626.0 26.1 4% 521.6 3.1) 1%) 72