Gulf Marine Services Plc · LSE:GMS
Gulf Marine Services — H1 2018 Earnings Presentation
33 slides from Gulf Marine Services's earnings presentation, Sep 4, 2018
Slide 1: 2018 Interim Results
2018 Interim Results Gulf Marine Services 4 September 2018 | www.gmsuae.com 1
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by Gulf Marine Services PLC (the "Company") and comprises the slides for a presentation to analysts concerning the Company. This presentation does not constitute or form part of any offer to sell or issue, or invitation to purchase or subscribe for, or
Slide 3: Agenda
Agenda 1 Welcome 2 Financial Review 3 Operational Review 4 Outlook 5 Appendices 3
Slide 4: Welcome
Welcome Duncan Anderson CEO 4
Slide 5: Operational Highlights
Operational Highlights ▪ Six vessels mobilised onto new charters in H1 2018 ▪ Secured three new contracts* in first half of the year: for 24 months, eight months and a 16-month extension ▪ All Large and Mid-Size Class vessels on hire by mid-2018 ▪ Secured backlog* of US$ 121.1 million (including opt
Slide 6: Delivering on Strategy to Address Market Challenges
Delivering on Strategy to Address Market Challenges Improved market diversification ▪ Regions (KSA) ▪ Sectors (renewables) ▪ Vessels (Pepper) Successful fleet expansion ▪ Six vessels delivered 2014 – 2017 (very good utilisation of these) ▪ Average age of core fleet seven years is an advantage ▪ Trac
Slide 7: What Differentiates GMS from other Operators?
What Differentiates GMS from other Operators? ▪ In-house expertise to enhance vessels and services ▪ All our SESVs have four legs, safer and more efficient than three-legged vessels ▪ Pioneered development of Large and Mid-Size Class SESVs, which include dynamic positioning systems for closer positi
Slide 8: Significant Barriers to Entry
Significant Barriers to Entry Successfully operating SESVs in GMS’ markets has a number of challenges for new entrants and incumbents: GMS SHAMAL and GMS SCIROCCO GMS SHAMAL and GMS SCIROCCO 1 Operational Track Record Essential to Secure Contracts 2 Safety Case Required for North West Europe O&G wor
Slide 9: Financial Review
Financial Review John Brown CFO 9
Slide 10: 2018 Interim Results Summary
2018 Interim Results Summary Improvement on H2 2017 trading, 6% Adjusted EBITDA increase in adjusted EBITDA US$ 25.4 million Adjusted EBITDA margin of 45% (H2 2017: 44%) Adjusted EBITDA Margin Return to profitability expected in H2 2018 45% 2018 EBITDA expected to be US$ 59.0 – 65.0 million
Slide 11: Trading Summary
Trading Summary (US$m) H1 2018 H1 2017 H2 2017 Revenue 56.1 58.5 54.4 ▪ Certain vessels mobilised during the period reducing on-hire time Cost of sales* 34.8 33.5 37.5 ▪ Cost of sales in period includes a number of vessels required to be operational Gross profit 21.3 19.1 16.8 ahead of contract star
Slide 12: Revenue Analysis
Revenue Analysis Revenue by vessel class Revenue by geographical location 100% 29% 28% 31% 37% 31% 80% H1 H2 42% 9% 60% 13% 2018 2017 40% 48% 37% 27% 34% 20% 15% 18% 0% Large Class Vessels Small Class Vessels H1 2018 H2 2017 Mid-Size Class Vessels UAE Qatar Saudi Arabia Europe Revenue by Activity H1
Slide 13: Performance Indicators for Core SESV Fleet
Performance Indicators for Core SESV Fleet Small Class Mid-Size Class Large Class Total Core SESVs (6 vessels) (3 vessels) (4 vessels) (13 vessels) H1 2018 H2 2017 H1 2018 H2 2017 H1 2018 H2 2017 H1 2018 H2 2017 Utilisation* 58% 55% 84% 64% 100% 69% 72% 61% Average charter day rate 24 24 44 40 49 51
Slide 14: Capital Structure
Capital Structure At 31 December (US$m) At 30 June 2018 At 30 June 2017 2017 Bank Debt* 420.3 411.8 414.1 Obligations under finance lease - - 38.8 Cash at Bank (10.4) (39.0) (35.9) Total Net Debt 409.9 372.8 417.0 End of 2017: renegotiated existing bank facility and extended term by two years In
Slide 15: Operational Review
Operational Review Duncan Anderson CEO 15
Slide 16: Improving Our Market Diversification
Improving Our Market Diversification ▪ Increased the number of vessels supporting clients’ operations in Saudi Arabia, now our largest market ▪ Offshore renewables demand in Europe strong; three vessels deployed to wind farm projects for two new clients ▪ Extended legs on Small Class vessel (Pepper)
Slide 17: Clients – A Well-Diversified Blue Chip Client Base
Clients – A well-Diversified Blue Chip Client Base Oil and Gas Renewable Energy 17
Slide 18: Outlook
Outlook ▪ Continue to be encouraged by levels of enquiries and tender activity ▪ Expect increasing opportunities in a more stable oil price environment, and with the continued development of the offshore renewables sector ▪ Focused on increasing utilisation of Small Class vessels ▪ Expect improving
Slide 19: Q&A
Q&A Wind Turbine Topside Well Commissioning & Installation, Maintenance Intervention Accommodation Maintenance & Accommodation 19
Slide 20: Appendices
Appendices ▪ Introduction to GMS ▪ Historic Results ▪ Key Strengths and Competitive Advantage ▪ Core SESV Fleet Overview – three classes of vessels serve a range of client needs ▪ High Specification Premium Fleet ▪ Large Class SESV Overview ▪ Mid-Size Class SESV Overview ▪ Small Class SESV Overview
Slide 21: Introduction to GMS
Introduction to GMS Operator of a core fleet of 13 self-propelled self-elevating support vessels (SESVs) ▪ SESVs provide a stable platform from which clients perform a wide range of activities throughout the lifecycle of the offshore oil, gas and renewable energy projects ▪ GMS fleet is one of the y
Slide 22: Historic Results
Historic Results Operational and financial performance - a successful track record Revenues Adjusted EBITDA (1) and Margin 250 $ 219.7 160 $ 138.5 100% 196.6 m 124.7 124.8 m 184.3 179.4 140 200 106.8 142.6 120 94.6 EBITDA Margin (%) 100 80% 150 106.9 112.9 69.5 80 58.5 100 60 66% 68% 65% 64% 63% 60%
Slide 23: Key Strengths and Competitive Advantage
Key Strengths and Competitive Advantage YOUNG TECHNICALLY GMS core SESV fleet of 13 vessels youngest in the industry, with an average age of seven years. ADVANCED FLEET FLEXIBLE GMS ensures its fleet is highly flexible in order to provide a variety of offshore solutions to clients. FASTER Faster mov
Slide 24: Core SESV Fleet Overview
Core SESV Fleet Overview Large Class Mid-Size Class Small Class ▪ 4 units ▪ 3 units ▪ 6 units ▪ Avg age: 5 years ▪ Avg Age: 3 years ▪ Avg age: 11 years ▪ Water Depth: 65-80m ▪ Water Depth: 55m ▪ Water Depth: 45m ▪ Accommodation for up to 300 people ▪ Accommodation for up to 300 people ▪ Accomodation
Slide 25: High Specification Premium Fleet
High Specification Premium Fleet Comparative Vessel Capabilities GMS Jackup Semi-subs/ Accommodation WTIVs (3) Mobility Fleet self-propelled fleet drilling rigs construction rigs vessels Rig move Faster jacking time Construction and Maintenance Construction & ✓ ✗ ✓ ✗ ✗ Flexibility Accurate Large and
Slide 26: Large Class SESV Overview
Large Class SESV Overview The flagship of the GMS fleet Main crane ▪ 300 tonnes & 400 tonnes Gusto MSC ▪ Heavy oil & gas lifting 2500X design ▪ Wind turbine installation ▪ Offering higher technical and Four-leg design operational capabilities ▪ Stable and more positioning flexibility ▪ Faster rig ja
Slide 27: Mid-Size Class SESV Overview
Mid-Size Class SESV Overview New generation addition to the GMS fleet Main crane Gusto MSC NG1800-X ▪ 150 tonne main ▪ 15 tonne auxiliary Design ▪ Proven technology Accommodation with high reliability ▪ Accommodates 150 people which can be expanded to and flexibility 300 ▪ Harsh weather capability 5
Slide 28: Small Class SESV Overview
Small Class SESV Overview The origins of the GMS fleet Main crane ▪ 36-45 tonnes Wärtsilä design ▪ Oil & gas lifting Four-leg design ▪ Proven technology with ▪ Stable and more positioning high reliability and flexibility flexibility ▪ Faster rig move ▪ Reduces punch-through risk ▪ Units constantly t
Slide 29: Expansion of Services through Innovation
Expansion of Services through Innovation Cantilever ▪ World’s first cantilever system for an SESV installed on GMS Evolution ▪ UK Safety Case for well operations approved ▪ Cantilever system expands our scope of services, able to supplant higher cost drilling rigs on well workover projects ▪ Encoura
Slide 30: SESV Cantilever System v Drilling Rig
SESV Cantilever System v Drilling Rig GMS is the first to introduce a cantilever capability on a self-propelled SESV, significantly increasing our market opportunities. Allowing delivery of well intervention services previously only carried out by drilling rigs including: ▪ Change out of electric su
Slide 31: Timeline of Achievements and Growth
Timeline of Achievements and Growth ▪ Establishment of Gulf Marine Services 1977 - 2006 ▪ Four Small Class SESVs built (including the world’s first 4-leg SESV 1982) ▪ Acquisition of GMS by Gulf Capital (2007) 2007 - 2008 ▪ Appointment of new CEO and Management team ▪ New strategy: began disposal of
Slide 32: Board Composition
Board Composition Simon Heale ▪ Non-Executive Chairman at Energean Oil and Gas Independent Non- ▪ Non-Executive Chairman at Marex Spectron Executive Chairman ▪ Multiple previous directorships and executive positions ▪ UK Chartered Accountant , degree in Philosophy, Politics and Economics Duncan Ande
Slide 33: Contact
Contact T: +971 (2) 502 8888 E: [email protected] W: www.gmsuae.com John Brown - Chief Financial Officer Anne Toomey - Investor Relations Manager