Full Year Results 2014 19 March 2015 Nexen PUQ and wellhead 0 0 - - PowerPoint PPT Presentation

full year results 2014
SMART_READER_LITE
LIVE PREVIEW

Full Year Results 2014 19 March 2015 Nexen PUQ and wellhead 0 0 - - PowerPoint PPT Presentation

Full Year Results 2014 19 March 2015 Nexen PUQ and wellhead 0 0 www.lamprell.com Disclaimer This presentation contains certain forward-looking statements relating to the business, financial performance and results of the Company and/ or the


slide-1
SLIDE 1

Full Year Results 2014

19 March 2015

www.lamprell.com

Nexen PUQ and wellhead

slide-2
SLIDE 2

Disclaimer

www.lamprell.com 1

This presentation contains certain forward-looking statements relating to the business, financial performance and results of the Company and/ or the industry in which it operates. Forward-looking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words “believes”, “expects, “predicts”, ”intends”, “projects”, “plans” “estimates”, “aims”, “foresees”, anticipates”, “targets” and similar expressions. The forward-looking statements, contained in this document, including assumptions, opinions and views of the Company or cited from third party sources are solely opinions and forecasts which are uncertain and subject to

  • risks. A multitude of factors can cause actual events to differ significantly from any anticipated
  • development. Neither the Company nor any of its officers or employees guarantees that the

assumptions underlying such forward-looking statements are free from errors nor does any of the foregoing accept any responsibility for the future accuracy of the opinions expressed in this document

  • r the actual occurrence of the forecasted developments.

No representation or warranty (express or implied) is made as to, and no reliance should be placed on, any information, including projections, estimates, targets and opinions, contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein, and, accordingly, neither the Company nor any of its subsidiary undertakings nor any such person’s officers

  • r employees accepts any liability whatsoever arising directly or indirectly from the use of this

document.

slide-3
SLIDE 3

Agenda

www.lamprell.com 2

1 Highlights 2 Financial Review 3 Operational Review and Market Environment 4 Summary and Outlook 5 Appendices

slide-4
SLIDE 4

Offshore platforms: Jalilah B

Highlights

Jim Moffat, CEO

slide-5
SLIDE 5

2014: a year of significant progress on every level

www.lamprell.com 4

Strong financial position:

  • Exceptional financial performance
  • Improved underlying margins on the back of strong
  • perational performance
  • Significantly strengthened balance sheet

Important operational milestones:

  • Record number of major deliveries
  • Strong project execution
  • All legacy projects now completed
  • World-class safety performance

Strategy implementation:

  • Improved pipeline as a result of new marketing strategy
  • Significant contract awards, from new clients and repeat
  • rders
  • Project Evolution delivering early savings

$5.2bn

Bid Pipeline

0.28 TRIR**

Safety

$272.6m

Net Cash

$93.2m

Net profit*

* From the Group’s continuing operations ** Total Recordable Injury Rate

slide-6
SLIDE 6

5

Greatdrill Chaaru

www.lamprell.com

Financial Review

Tony Wright, Deputy CFO

slide-7
SLIDE 7

2014 Financial highlights

  • Flat revenue at $1,085m (2013: $1,073m)
  • EBITDA almost doubled to $137m (2013: $76m)
  • Significantly improved EBITDA margin of 12.6%

(2013: 7.1%)

  • Underlying net profit of $93.2m (2013: $36.7m)
  • Adjusted for exceptionals, total profit attributable to

equity holders of $118.1m (2013: $36.4m)

  • Earnings per share tripled to $37.4c ($12.7c)
  • Strong balance sheet as a result of the rights issue

and refinancing

  • Net cash of $272.6m (2013: $183.8m)

www.lamprell.com 6

Strong profitability driven by operational performance

Year of exceptional financial performance

EDC “Mercury”

slide-8
SLIDE 8

Outstanding financial performance

www.lamprell.com 7

Material improvement in profitability FY 2013 to FY 2014

  • Strong project execution resulted in improved margins
  • Cost savings from overhead reductions and early results of Project Evolution
  • Exceptionally high margins not expected to be maintained in 2015 due to project

phasing, exceptionals and market environment

36.7 93.2 8.4 22.1 18.7 25.2 19.5

  • 10

20 30 40 50 60 70 80 90 100

2013 Net Profit Exceptional items in 2013 Impact of EDC 2 One off expenses in 2014 Project profit improvements Lower overheads 2014 Net Profit

slide-9
SLIDE 9

Strong cash position

www.lamprell.com 8

Significant contribution from the rights issue and sale of Inspec

  • At working capital sweet spot at end 2013; draw on working capital in 2014 due to phasing
  • Cash position to improve in H1 before trending downwards
  • Ongoing investment of Rights Issue proceeds in Project Evolution (majority in 2015)

183.8 272.6 59.3 111.0 (193.8) 161.6 (49.3)

  • 50

100 150 200 250 300 350 400

Net cash as at 31 Dec 2013 Proceeds from disposal of Inspec Proceeds from rights issue Movement in working capital Operating cash flows Asset additions /

  • ther

Net cash as at 31 Dec 2014

slide-10
SLIDE 10

Significantly strengthened balance sheet

www.lamprell.com 9

31 Dec 14 $m 31 Dec 13 $m Total assets 1,154.3 1,074.6 Net assets 672.2 442.8 Gross cash 371.6 344.6 Available cash* 299.8 275.5 Net cash 272.6 183.8

Financial firepower to support strategy implementation

  • Proceeds from Rights Issue to fund Project Evolution (underway)
  • Committed facilities enable greater commercial flexibility
  • Significant headroom to support growth
  • $20 million term loan repayment due in 2015

* Gross cash less cash deposits under lien, less cash deposits with maturity >3 months.

Debt package $m Term loan 100 Working capital facility 50 Revolver 200 Total funded facilities 350 Committed bonding 250

slide-11
SLIDE 11

Financial Summary

  • Strong financial performance in 2014 with

earnings ahead of initial expectations

  • Improved operational performance a major

driver

  • FY closing backlog of $1.2bn (Dec 13:

$0.9bn)

  • Approximately 80% of 2015 revenue

covered

  • Significantly improved balance sheet and

liquidity to help maintain competitive position

www.lamprell.com 10

Robust financial position in challenging times

Nexen PUQ

slide-12
SLIDE 12

11 www.lamprell.com

Offshore platforms: Leighton topsides & jackets

Operational Review and Market Environment

James Moffat, CEO

slide-13
SLIDE 13

High levels of activity in 2014

  • Nine major orders delivered:
  • Largest rig conversion completed
  • All legacy projects now delivered
  • Land rigs and E&C performed well
  • Lower activity levels in offshore construction
  • 6 jackup orders won
  • Major repeat order from NDC, with three options
  • Orders from new clients (Ensco, Shelf)
  • Focus on key target clients
  • Current major project activity:
  • 6 jackups under construction
  • 1 more jackup to start in May
  • 8 rig refurbishment projects
  • 1 onshore construction project

www.lamprell.com 12

Improved operational performance and business development

Order book (bn) As at 31 December 2014

$1.2

(2013: $0.9)

Our order book ($m) As at 31 December 2014

slide-14
SLIDE 14

Bid pipeline remains strong

www.lamprell.com 13

  • Extensive pipeline, diversified across regions and

products

  • Clear evidence of market softening affecting bidding

and awards

  • Potential project delays
  • Continued major business development drive across

core markets:

  • Greater emphasis on strategic approach to bidding
  • Strict targeting strategy
  • exceptional conversion rate in 2014

$1.4

(2013: $0.9)

$5.2

(2013: $4.7)

New awards in 2014 (bn) Bid pipeline (bn) As at 31 December 2014

Extensive pipeline of $5.2bn at 31 December 2014

slide-15
SLIDE 15

Challenging market environment

www.lamprell.com 14

  • Oil price slide impacted capex budgets globally
  • The full impact remains unclear:
  • Intensifying competition
  • Impact of new jackup supply unknown
  • Expected pressure on pricing
  • NOCs relatively resilient
  • Shallow water drilling expected to be less affected:
  • 84% utilisation in global jackup fleet (Dec 2014)
  • Slow-down in offshore construction globally
  • Opportunities remain in Middle East
  • Underlying fundamentals remain strong, driven by

growing energy demand

Long-term fundamentals remain strong

Focus on maintaining a competitive position

Ageing current global jackup fleet Approximately 30% of the global jackup fleet will be over 35 years old by 2017. This is expected to reflect positively on the demand for new build jackup rigs and rig refurbishment projects. <35 years old >= 35 years old

slide-16
SLIDE 16

Well positioned to weather the storm

  • Ahead of the game to stay competitive:
  • Project Evolution conceived last year, with

implementation progressing well

  • Early rewards from cost savings programme before

the onset of low oil prices

  • Streamlined organisational structure delivering

reduction in overheads

  • Geographical location as competitive advantage
  • Significant flexibility to adjust to new realities:
  • Full runrate of savings from Evolution in 2016
  • Further savings to be realised from overhead

reductions

  • Adaptability through flexible workforce structure

www.lamprell.com 15

Culture of continuous improvement

Rig refurbishment: EDC Rig 49

slide-17
SLIDE 17

Summary and Outlook

  • Strong 2014 profitability driven by construction

phasing (with nine completions), improved project execution and cost savings

  • New marketing strategy delivered major awards
  • Good level of revenue coverage for 2015
  • Extensive pipeline with a large number of bids
  • utstanding despite the challenging markets
  • Balance sheet strength following the Rights Issue
  • Further cost savings through overhead reductions and

project Evolution

  • Earlier revised guidance maintained

www.lamprell.com 16

Strong performance and extensive bid pipeline

Well prepared for challenging times

NDC Al Shuwehat

slide-18
SLIDE 18

Appendices

Fred.Olsen Windcarrier

slide-19
SLIDE 19

11 14 12 7 5 7 6 2 2 1 5 4 5 7 4 2 2 3 3

1 1 1 2 3 1 1 TRIFR Target FY 2013 0.65 TRIFR Target FY 2014 0.55

0.93 0.96 0.93 0.89 0.81 0.75 0.74 0.67 0.63 0.55 0.48 0.44 0.42 0.39 0.35 0.33 0.32 0.31 0.27 0.28

0.04 0.04 0.03 0.04 0.04 0.04 0.02 0.02 0.02 0.02 0.02 0.03 0.03 0.05 0.05 0.05 0.05 0.06 0.06 0.06 Incident Frequency Rates Total Number of DAFWC & Recordable Incidents

DAFWC TRC TRIR Target TRIR Actual DAFWCF Actual

Strong platform for future performance Continuous improvement in safety record

World class safety performance

www.lamprell.com 18

slide-20
SLIDE 20

Driving forward with our Strategy

www.lamprell.com 19

Path to long-term sustainable growth

Integrity State of the Art Facilities Cost Efficiencies Productivity Continuous Improvement Balance Sheet Risk Management Systems & Procedures Safety Quality New Build Jackups Client Relationship

GROWTH REVENUES PROFITS DIVIDENDS

Offshore Topsides Onshore Modules Land Rigs Rig Refurb Fiscal Responsibility Teamwork On Time Delivery FPSOs LNG Modules

Renewables

RESULTS FABRICATION BUSINESS STREAMS FOUNDATIONS

slide-21
SLIDE 21

Operational efficiency and cost reduction

www.lamprell.com 20

Capital investment includes

  • New welding processes
  • Automated equipment and enhanced

processes

  • Reconfigure yard layout and

throughput

  • Enhanced capability
  • Asset management
  • Upgrade of facility infrastructure
  • Phase 2 ERP system, including roll-
  • ut of fully integrated work packs

Estimated 3-4 year payback period Significant savings delivered through

  • Optimising facility and equipment

utilization

  • Improved yard flows
  • Synergies across projects
  • Productivity improvements
  • Reduced material handling
  • Lower utility costs
  • Phase 2 ERP system
slide-22
SLIDE 22

FY 2014 FY 20131

$m $m Revenue* 1,084.9 1,072.8 Gross profit* 182.1 120.0 Gross margin % 16.8% 11.2% Operating profit * 109.1 58.7 Finance costs - net** (18.4) (22) Share of profit of equity accounted investments 3.0 1.1 Profit before income tax 93.7 37.8 Income tax expense (0.5) (1.1) Profit from continuing operations 93.2 36.7 Profit / (loss) from discontinued operations (6.4) (0.2) Gain on disposal of subsidiary (Inspec) 31.3

  • Total profit attributable to equity holders

118.1 36.4

Financial summary

www.lamprell.com 21

Significant improvement in profitability

* Relating to continuing operations ** Represents the net balance of finance costs and finance income including exceptional finance costs

1Financial results for the year 2013 have been re-presented due to IFRS 5 (discontinued operations) and further details are provided in the notes to the

Financial Statements.

slide-23
SLIDE 23

Revenue split by business segment

www.lamprell.com 22

  • Revenue dominated by jackups but strategy in place to diversify
  • Slow year for offshore construction
  • Land Rigs a growing contributor

New build oil & gas New build renewables Refurbishment Offshore construction Other

$1,084 $1,073

As at 31 December 2014 (m) As at 31 December 2013 (m)

slide-24
SLIDE 24

Current project summary

www.lamprell.com 23

Project Type 2014 1H 2015 2H 2015 1H 2016 2H 2016 1H 2017 NDC 6 Le Tourneau S116E NDC 7 Le Tourneau S116E NDC 8 Le Tourneau S116E Jindal 2 Le Tourneau S116E Greatship 2 Le Tourneau S116E Petrofac UZ750 Process modules Ensco 1 Le Tourneau S116E Ensco 2 Le Tourneau S116E Shelf 1 Le Tourneau S116E Shelf 2 Le Tourneau S116E