Hunting Plc · LSE:HTG
Hunting — FY2013 Earnings Presentation
30 slides from Hunting's earnings presentation, 2014
Slide 1: Extending and integrating our reach
Extending and integrating our reach Hunting PLC 2013 Full Year Results
Slide 2: Highlights
Highlights Performance* Revenue increasing to $1,334.0m (2012 – $1,309.0m) XX% EBITDA $242.8m (2012 – $242.9m) Profit before tax $196.1m (2012 – $195.3m) Diluted EPS 93.5 cents (2012 – 90.8 cents) Net debt $205.8m (2012: $266.4m) Capital investment Capital investment $95.0m (2012 – $
Slide 3: 2013 Full Year Results Summary
2013 Full Year Results Summary ) 2013) Margin 2012) Margin $m) % $m) % Revenue 1,334.0 1,309.0 EBITDA 242.8 18 242.9 19 Profit from operations 198.5 15 202.5 15 Finance expense 2.8 8.7 Profit before tax 196.1 15 195.3 15 Effective tax rate 27% 28% Diluted EPS 93.5c 90.8c Dividend per share declared
Slide 4: Segmental Results
Segmental Results* 2013 2012 Profit from Profit from) Revenue Operations Margin Revenue Operations) Margin $m $m) % $m $m) % Hunting Energy Services Well Construction 380.9 58.6) 15 442.7 72.5 16 Well Completion 796.1 124.5) 16 725.1 116.6 16 Well Intervention 108.6 15.7) 14 89.8 10.8 12 1,285.6 198
Slide 5: Geographical Segmental Results
Geographical Segmental Results* 2013 2012 Profit from Profit from) Revenue Operations Margin Revenue Operations) Margin $m $m) % $m $m) % Hunting Energy Services USA 798.8 155.8) 20 785.0 155.9 20 Canada 75.3 (2.4) -3 96.7 8.3 9 UK 148.6 11.3) 8 185.5 13.8 7 Rest of Europe 27.4 3.0) 11 28.1 2.7 10 A
Slide 6: Amortisation & Exceptional Items – Continuing Operations
Amortisation & Exceptional Items – Continuing Operations 2013 $m Amortisation of intangible assets 43.4 Inventory fair value charge 4.3 Oil & Gas reserve impairment and dry hole cost 10.5 Settlement of litigation and associated legal expenses 2.9 Continuing operations 61.1 Results for the year ended
Slide 7: Exceptional Items – Discontinued Operations
Exceptional Items – Discontinued Operations 2013 $m Release of Gibson Energy tax warranty provisions 11.5 Refund of tax payments – cash 4.0 Discontinued operations 15.5 Results for the year ended 31 December 2013 7
Slide 8: Balance Sheet
Balance Sheet ) 2013)) 2012) $m)) $m) Property, plant and equipment 431.8) 403.8) Goodwill 495.2) 495.0) Other intangible assets 263.0) 301.1) Working capital 467.6) 435.2) Provisions (33.4) (48.0) Taxation (current and deferred) (48.7) (40.1) Other 45.1) 52.1) Net debt (205.8) (266.4) Net assets 1,
Slide 9: Capital Investment – by Segment
Capital Investment – by Segment 2013 2012 $m $m Hunting Energy Services Well Construction 43.3 38.1 Well Completion 31.2 16.4 Well Intervention 9.2 33.8 83.7 88.3 Exploration & Production 9.5 8.7 Others 1.8 0.4 95.0 97.4 Split: Replacement 45.0 42.6 New Business 50.0 54.8 95.0 97.4 Results for the y
Slide 10: Capital Investment – by Project
Capital Investment – by Project 2013 $m Hunting Energy Services New drill tools and other rental equipment 26.1 US Connections – Test and certification facility 2.1 US Manufacturing – New Threading facility 9.0 US Manufacturing – Houma final phase 2.6 South Africa – New manufacturing facility 5.1 Ot
Slide 11: Capital Investment – Major projects underway
Capital Investment – Major projects underway $m Premium Threading Facility – Houston, Texas 43.0 – 40 acre site operational 2015 Test and Certification Facility – Houston, Texas 11.0 – Operational 2015 Manufacturing Facility – Houma, Louisiana 36.0 – Final phase of the Houma site operational 2014 /
Slide 12: Cash Flow
Cash Flow ) ) 2013) 2012) $m) $m) EBITDA 242.8) 242.9) Working capital (20.3) (29.9) Interest and bank fees (6.3) (8.4) Tax paid (20.4) (23.9) Replacement capital investment (45.0) (42.6) Other (4.9) (1.2) Free cash flow 145.9) 136.9) Expansion capital investment (50.0) (54.8) Purchase of subsidiari
Slide 13: Hunting Strategy
Hunting Strategy Develop leading Market share proprietary products strength and services Acquire Pricing Market the complementary Leverage Hunting brand businesses Develop a global presence Build close relationships with customers Capture product and suppliers sales synergies Results for the year en
Slide 14: Post Acquisition Product Migration
Post Acquisition Product Migration Results for the year ended 31 December 2013 14
Slide 15: 75 Locations Worldwide
75 Locations Worldwide 8% of our manufacturing equipment is product specific. The other 92% can be re-tooled or configured to consistently manufacture the full spectrum of products. 7 120 826 28 3 6 30 158 1 Manufacturing, Distribution and Machine Locations Worldwide 41 Manufacturing 34 Distribu
Slide 16: Hunting Capacity: Room for EBITDA Growth Today and Tomorrow
Hunting Capacity Room for EBITDA Growth Today and Tomorrow In 2013, Hunting Energy Services globally averaged 73% lights on capacity utilisation (based on a 24 hours a day x 6 days a +20% week). +12% In 2013, if our global utilisation reached optimal levels (80%), EBITDA would have increased a p
Slide 17: Infrastructure Project Updates
Infrastructure Project Updates In 2013, Hunting committed over $132m on global projects to organically increase our operating footprint. Due to the size and scope of the projects, many will not be completed until later in 2014 and some extending to the end of 2015. Since 2009, Hunting expanded i
Slide 18: Infrastructure Project Updates
Infrastructure Project Updates AmeriPort Threading and Testing Facility, Houma, Louisiana – Phase II – Facility Houston Texas Area – Completion Q1 2015 Consolidation – Completion 2014 155,000 sq feet of new roofline 257,000 sq foot expansion Threading – Supports GOM deepwater and Second
Slide 19: Infrastructure Project Updates
Infrastructure Project Updates Dearborn Fryeburg, Maine – Expansion of Ultra Precision Facilities – Completion 2015 47,000 sq feet of expanded roofline 36% increase Increases Dearborn’s manufacturing space by 36% in manufacturing in this high demand market footprint Cape Town, South Africa O
Slide 20: Onshore Revenue Opportunities
Onshore Revenue Opportunities Increasing footage and higher spending per well are key market components. Horizontal wells are running between $5 to $9 million per well, which is twice the cost of a vertical well. With such a large investment, operators are looking to increase efficiency and Estima
Slide 21: Offshore Revenue Opportunities
Offshore Revenue Opportunities Based on the amount of industry discussion on unconventional exploration, many would consider these oil and gas plays the future of global supply. However, based on IEA’s forecast, by 2035, unconventional gas will make up 26% of the global supply and unconventional o
Slide 22: Well Construction
Well Construction Results for the year ended 31 December 2013 22
Slide 23: Well Construction Update
Well Construction Update Introduction of SEAL-LOCK XD Strong demand for precision Introduction of Magnum Mud manufacturing Motor Very Strong OCTG/Premium Connection order book “Next generation” oil and gas Strong demand in Bakken, tools Eagle-Ford, Permian and New Connection Test Centr
Slide 24: Well Completion
Well Completion Results for the year ended 31 December 2013 24
Slide 25: Well Completion Update
Well Completion Update Increased demand in “RF Safe” Houma facility expansion Excellent Premium and Control Fire System Semi-Premium Connection OEM/Print part product bookings Development of new large shaped portfolio increasing charge for Canadian heavy oil Strong Completion Deepwater
Slide 26: Well Intervention
Well Intervention Results for the year ended 31 December 2013 26
Slide 27: Well Intervention Update
Well Intervention Update Radial incremented bond tools New Eziclose Wireline Valve Deployment of new Subsea being tested with neutron valve technology New Ballistic VariBall assisting technologies in deployment of Perforating Enhanced chemical injection New jet cutter being field tested
Slide 28: A Week At Hunting
A Week At Hunting As a company, we have to meet the ever changing needs of our customers as kit requirements change based on drilling schedules, changes to design and product disruptions. During any given week our US Manufacturing order book has over 65% short lead time / “made to print” parts s
Slide 29: 2014 Market Outlook Early View
2014 Market Outlook Early View Global spend is forecasted to increase 6.1%. North America – Forecasts a spending increase of 7.3%, mainly in the United States, Canada is projected to increase 3.2%. Onshore – Pad drilling continues to increase in popularity benefitting from efficiencies and cos
Slide 30: 2014 Market Outlook: Recent View – US Markets
2014 Market Outlook Recent View – US Markets The market outlook as depicted on the previous slide was based on surveys of companies during Q4 of 2013. However, with the up tick in activity in the United States, forecasts have been revised, indicating the potential for a robust increase in E&P spen