Hunting Plc · LSE:HTG
Hunting — H1 2017 Earnings Presentation
20 slides from Hunting's earnings presentation, August 2017
Slide 1: Results presentation for the six months ended 30 June 2017
Results presentation For the six months ended 30 June 2017 RESULTS PRESENTATION : AUGUST 2017 1
Slide 2: Group Summary
Group Summary Strong US onshore markets, but uncertainties remain Improved results driven by US onshore activity levels. New technologies continue to be developed helping customers enhance production and contain cost. Manufacturing and distribution footprint maintained. • 3.1m square foot of c
Slide 3: Summary Income Statement
Summary Income Statement1 Higher activity levels with improving margins H1) H1) 2017 Margin 2016 Margin $m % $m % Revenue 318.9) 228.4) Gross profit 71.0) 22 23.8) 10 EBITDA2 12.1) (29.5) Loss from operations (9.1) (50.8) Finance expense (1.1) (0.6) Loss before tax (10.7) (51.5) Tax credit 0.1) 7.5)
Slide 4: Segmental Results
Segmental Results1 Perforating systems sales driving Well Completion H1 H1 2017 2016 Results from Results from Revenue Operations Revenue Operations $m $m $m $m Hunting Energy Services Well Construction 62.9 (9.5) 51.3 (10.8) Well Completion 226.6 8.0) 149.1 (28.5) Well Intervention 27.4 (7.1) 26.7
Slide 5: Geographical Segmental Results
Geographical Segmental Results1 Strong North American onshore market H1 H1 2017 2016 Results from Results from Revenue Operations Revenue Operations $m $m $m $m Hunting Energy Services USA 212.9 5.8) 144.3 (20.5) Canada 23.4 (2.0) 18.6 (3.0) Europe 43.3 (3.3) 40.5 (13.5) Asia Pacific 29.5 (5.5) 18.3
Slide 6: Amortisation & Exceptional Items
Amortisation & Exceptional Items No exceptional charges in H1 2017 H1 H1 2017 2016 $m $m Amortisation of acquired intangible assets 14.6 17.4 Restructuring costs - 3.9 European drill tools rental business - 2.9 UK Pension Scheme closure - 2.0 Continuing operations 14.6 26.2 RESULTS PRESENTATION : AU
Slide 7: Balance Sheet
Balance Sheet Net debt and working capital controls remain in place June December 2017 2016 $m $m Property, plant and equipment 403.2) 419.0) Goodwill 230.0) 229.8) Other intangible assets 137.1) 150.7) Working capital1 333.7) 300.2) Taxation 1.8) (3.4) Provisions (17.3) (15.7) Other 22.3) 38.7) Net
Slide 8: Capital Investment
Capital Investment Spend remains restricted to essential investment only H1 2017 $m Facilities - Premium Threading and Testing – AmeriPort, Texas 0.1 - Other facility spend 0.3 Machinery and Equipment - EMEA 0.7 - North America 3.0 - Asia 0.4 4.5 RESULTS PRESENTATION : AUGUST 2017 8
Slide 9: Cash Flow
Cash Flow Working capital includes $22m inventory increase due to activity levels H1 H1 2017 2016 $m $m Underlying EBITDA 12.1) (29.5) Add: share-based payments 7.1) 4.8) 19.2) (24.7) Working capital (32.0) 26.7) Interest and bank fees (1.6) (1.8) Tax (paid) received (0.1) 29.2) Capital investment (
Slide 10: Market Overview
Market Overview US Onshore • The increase in wells drilled and shortage of frack equipment/crews has left the industry with a sizeable backlog of uncompleted wells. • Over 6,000 drilled but uncompleted (DUCs) a 50% increase since January 2014. Offshore • Offshore spending is down, but a few key
Slide 11: We Provide Technology That Assists Our Customers With Completion Efficiencies
We Provide Technology That Assists Our Customers With Completion Efficiencies All About Well Cost and Production: In the US onshore market, the lateral • Increase production section is the highest spend per foot Customers are willing to spend 10% of the well. more to extend the lateral, increasing
Slide 12: US Onshore Average Lateral Growth
US Onshore Average Lateral Growth 2007 Longest Lateral In History • 2,500 ft lateral Maersk Oil Qatar • 7 Stages, spaced 300 to 400 ft apart Al-Shaheen Field • 400,000 lbs of sand Well BD-04A 35,770 Feet Used Hunting Premium Connections 2012 • 7,000 ft lateral Recent Notables • 20 Stages, spaced mor
Slide 13: US Onshore Perforating System Game Changer
US Onshore Perforating System Game Changer Fewer and Less Experienced Hands By eliminating the labour intensive and high margin for error assembly process, the Run More H-1 system requires not only less people, but also a lower level of technical ability to Guns Per deploy. Hour Reducing cost an
Slide 14: Offshore
Offshore Two trillion dollars of E&P investment stripped out of the industry since 2014. The impact of production decline rates and increased demand means that 20 million barrels of new oil production is needed over the next five years. A gap in new production this size can not be filled by US
Slide 15: We Remain Technology Focused
We Remain Technology Focused JET CUTTERS H-1 PERFORATING SYSTEM WEDGE LOCK SUBSEA VALVES CONTROLFIRE SWITCHES LOGGING TOOLS RESULTS PRESENTATION : AUGUST 2017 15
Slide 16: We are a Global Supplier, Manufacturer and Distributor
We are a Global Supplier, Manufacturer and Distributor Manufacturing • Subsea Equipment • HDD Equipment • Perforating Systems • Premium Connections • Downhole Accessories • Ultra Precision Machining Distribution • Perforating Systems • MWD Tools • OCTG / Premium Connections • Drilling Tools • Cased
Slide 17: Competitive Landscape
Competitive Landscape Highly Leveraged Firms Are Folding North America Oilfield Services Bankruptcies Bankruptcies continue in North America: $7.1 2017 YTD April • Since the end of 2014, 127 companies filed 16 for bankruptcy protection with $25.9 billion of associated debt. $13.5 2016 72 • So far
Slide 18: Booked to Billed
Booked to Billed • 2016 booked to billed ratio was 0.93 on a backlog of $82 million. Booked to billed ratio • First half of 2017 improved booked to billed ratio to 1.35 with a improves backlog of $144.6 million. • 76% increase in backlog based on dollar volume. Not included in our booked • Hunting h
Slide 19: Strategy Execution
Strategy Execution Our strategy has left us in a good position for the future: There is an opportunity to re-stock the Well Completion market Develop • High levels of DUC’s and re-frac proprietary, Industry opportunities increases our deliverable innovative leading quality perforating and completi
Slide 20: Results presentation for the six months ended 30 June 2017
Results presentation For the six months ended 30 June 2017 RESULTS PRESENTATION : AUGUST 2017 20