Interim Results 28 th August 2014 Nexen PUQ 0 0 www.lamprell.com - - PowerPoint PPT Presentation

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Interim Results 28 th August 2014 Nexen PUQ 0 0 www.lamprell.com - - PowerPoint PPT Presentation

Interim Results 28 th August 2014 Nexen PUQ 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 industry in which


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Interim Results

28th August 2014

www.lamprell.com

Nexen PUQ

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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.

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Agenda

www.lamprell.com 2

1 Overview 2 Financial Review 3 Operational Review and Improvement Initiatives 4 Summary and Outlook 5 Appendices

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3

Offshore platforms: Jalilah B

Overview

James Moffat, CEO

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Overview

www.lamprell.com 4

 Continued strength in operational performance delivering improved margins  Significant contract awards from major clients  Completion of rights issue and commencement of Project Evolution  Major refinancing completed enabling significant increase in our addressable market  Enhanced business development team to continue focus on pipeline conversion  Strong pipeline and high levels of tendering activity  Continued excellence in our HSEQ performance

Strong progress across the Group

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Financial Review

Joanne Curin, CFO

5

Nexen PUQ

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H1 2014 H1 2013

$m $m Revenue* 632.3 506.6 Gross profit* 85.8 46.2 Gross margin % 13.6% 9.1% Operating profit * 53.4 19.2 Finance costs - net** (7.9) (7.6) Share of profit of equity accounted investments 1.0 0.7 Profit before income tax 46.5 12.3 Income tax expense (0.4) (0.5) Profit from continuing operations 46.1 11.8 Profit / (loss) from discontinued operations 0.3 (4.6) Gain on disposal of subsidiary (Inspec) 31.3

  • Total profit attributable to equity holders

77.7 7.3

Financial summary

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Significant improvement in profitability

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

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Gross Profit – H1 2013 to H1 2014

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H1 improvement driven by outstanding performance in project gross profit

46.2 85.8 12.5 4.4 15.7 7.1 2.8 8.7 11.6 ‐ 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0 H1 2013 Gross Profit Jackup Rev Refurb Rev Offshore Rev Jackup Margin Jackup Phasing Offshore Margin E&C / LRS / Other H1 2014 Gross Profit

Gross margin H1 2013 vs H1 2014

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Balance sheet

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30 Jun 14 31 Dec 13 $m $m Total net assets 635.0 442.8 Tangible net assets 426.4 229.7 Gross cash 361.5 344.6 Available cash* 315.2 296.5 Net cash 280.6 183.8

Significantly strengthened balance sheet

  • Rights Issue completed
  • Proceeds from the sale of Inspec received
  • Partially offset by increased working capital

* Gross cash less cash deposits under lien, less cash deposits with maturity >3 months, plus undrawn available facilities

New build jackup rig: NDC 4

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Borrowings

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30 Jun 141 31 Dec 13 31 Dec 12 31 Dec 11 $m $m $m $m 80.9 160.8 159.3 251.1

New working capital facility now in place

  • Completion of refinancing on 11 August
  • Previous facilities now fully repaid
  • New debt facilities will deliver:
  • reduction in the Group’s average cost

by 2.0%-3.0%

  • reduction of c.1.0% in bonding costs
  • Committed facilities enable greater

bidding/ commercial flexibility

Total borrowings Step up in debt facilities

1 Balance shown as at 30th June 2014 has been subsequently repaid on 14th August 2014 via the proceeds of the new facility drawn on the

same date

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Financial Summary

  • H1 closing backlog of $1.2bn (Dec 13: $0.9bn)
  • Significantly improved balance sheet and liquidity
  • Strong financial performance in H1 with earnings

ahead of our expectations

  • Improved operational performance a major driver
  • Project Evolution started to deliver productivity

improvements and cost savings

www.lamprell.com 10

Continued financial recovery of the Group

Nexen PUQ

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Operational Review and Improvement initiatives

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James Moffat, CEO

Offshore platforms: Leighton topsides & jackets

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Key project update

  • Excellent performance on recent project deliveries
  • 5 major projects delivered in the year to date
  • Commencement of work on major recent awards
  • Current major project activity1:
  • 7 jackups under construction
  • 5 rig refurbishment projects
  • 2 offshore construction projects
  • Land rigs and E&C businesses performed well
  • Ongoing excellence in safety and quality

www.lamprell.com 12

Focus on strong delivery of projects and operational improvements

1 Excludes both Shelf projects and Petrofac UZ750 which have yet to commence

New build jackup rig: Jindal Pioneer

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Market overview

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  • Strong O&G fundamentals - worldwide oil

consumption and production continues to rise

  • Continued strong demand for shallow water

drilling

  • Supply side volumes may lead to slower order

volumes in the near term, particularly those from Chinese rig suppliers

  • Our broadened addressable market is anticipated

to partly offset these market pressures as evidenced by recent awards

  • Attrition of aging global fleet remains a strong

long term driver

  • Increases in offshore and onshore construction
  • pportunities are a positive sign for medium to

long term

Wider market conditions continue to present opportunities and challenges

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Bid pipeline remains strong

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2

¹ As at 30 June 2014 ²Refurbishment value stream has short bid to award profile and therefore limited order book / pipeline values

  • Increasing bid pipeline in core markets of

$4.9bn (Dec 13: $4.7bn)

  • Pipeline strength continues to build despite

significant recent awards

  • Continued major business development

drive across core markets

  • Focused on long term broadening of

revenue mix

  • Smaller rig refurbishment projects remain

competitive

Strong pipeline and high bidding activity

0.0 0.4 0.8 1.2 1.6 2.0 2.4 2.8 3.2 Newbuild Jack Ups Newbuild Lift Boats Offshore and Onshore Const. Rig Refurb Land rigs Others

Bid pipeline of $4.9bn¹

2

($bn)

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Progress on organisational improvements

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Enhanced organisational strength combined with progress on core initiatives

Yard workflow, layout improvements Improved project scheduling Major client awards validate our quality and value mix Procurement synergies across projects & sites

Enhanced focus on broadening customer base and strengthening brand Productivity and efficiency enhancements (Project Evolution) Strengthen and realign

  • rganisation

Completion of capital restructuring Complete organisation realignment Process and technology improvements Enhanced marketing and branding

Key Organisational Improvements Initiatives on track

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Summary and Outlook

  • H1 2014 profitability driven by high number of

deliveries, project execution and contingency releases

  • Recent contract wins with major clients demonstrate

Lamprell’s high quality offering

  • Strategy implementation on target to deliver increased

competitiveness

  • Good backlog coverage for 2015
  • Pipeline growth with large number of bids submitted
  • Continuing to target further reduction in overheads
  • Revenue guidance unchanged, FY2015 expected to

be broadly flat, with fewer deliveries

www.lamprell.com 16

Strong performance and solid bid pipeline

Improving operational and financial performance

Rig refurbishment: EDC Rig 49

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Appendices

17

Fred.Olsen Windcarrier

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Returns Service Focus Efficiency HSEQ

Long term value drivers remain unchanged

www.lamprell.com 18

Maintain our reputation for build quality and strong safety focus Capitalise on significant opportunities in our core markets Best in class customer focus and responsiveness Improve procurement process and labour productivity Deliver sustainably higher returns with improved earnings visibility and reduced project risk

Leveraging our core strengths to deliver sustainable growth

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Order book and bid pipeline

www.lamprell.com

0.0 0.2 0.4 0.6 0.8 1.0 1.2 Newbuild Jack Ups Offshore and Onshore Const. Rig Refurb

Current order book of $1.2bn¹

¹ As at 30 June 2014 ²Refurbishment value stream has short bid to award profile and therefore limited order book / pipeline values

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2

0.0 0.4 0.8 1.2 1.6 2.0 2.4 2.8 3.2 Newbuild Jack Ups Newbuild Lift Boats Offshore and Onshore Const. Rig Refurb Land rigs Others

Bid pipeline of $4.9bn¹

2

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Current project summary

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Project Type Facility Delivery NDC 3 Le Tourneau S116E Hamriyah Delivered - Q1 2014 NDC 4 Le Tourneau S116E Hamriyah Delivered - Q2 2014 Nexen 13,200 tonne PUQ deck Jebel Ali Delivered - Q2 2014 Seajacks - Hydra Gusto MSC NG-2500X Hamriyah Delivered - Q2 2014 Leighton Topside & jackets Sharjah Q3 2014 MOS Major Refurbishment Sharjah Delivered - Q3 2014 EDC2 (Caspian Sea) Le Tourneau S116E Hamriyah Q4 2014 NDC 5 Le Tourneau S116E Hamriyah Q4 2014 NDC 6 Le Tourneau S116E Hamriyah Q1 2015 Jindal 2 Le Tourneau S116E Hamriyah Q1 2015 Greatship 2 Le Tourneau S116E Hamriyah Q1 2015 Petrofac UZ750 Process modules Jebel Ali Q1 2016 Ensco 1 Le Tourneau S116E Hamriyah Q2 2016 Ensco 2 Le Tourneau S116E Hamriyah Q3 2016 Shelf 1 Le Tourneau S116E Hamriyah Q3 2016 Shelf 2 Le Tourneau S116E Hamriyah Q2 2017