Site visit 30 November 2015 ENSCO 140 & 141 www.lamprell.com - - PowerPoint PPT Presentation

site visit
SMART_READER_LITE
LIVE PREVIEW

Site visit 30 November 2015 ENSCO 140 & 141 www.lamprell.com - - PowerPoint PPT Presentation

Site visit 30 November 2015 ENSCO 140 & 141 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


slide-1
SLIDE 1

Site visit

30 November 2015

www.lamprell.com

ENSCO 140 & 141

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 Welcome to Lamprell 2 Operations (part 1) and recent improvements in Hamriyah 3 Business development and marketing 4 Operations (part 2) and recent improvements in Jebel Ali 5 Strategy and current trading 6 Appendices

slide-4
SLIDE 4

Welcome to Lamprell

Jim Moffat, CEO

MIS Arabia

slide-5
SLIDE 5

Welcome to Lamprell

Jim Moffat, CEO

www.lamprell.com 4

Your hosts today Further information

  • The information pack: Lamprell Times, photos, plan and itinerary
  • Available for Q&A over dinner

Tony Wright, CFO

Niall O’Connell, COO

Karl Roberts, CCO

slide-6
SLIDE 6

Programme

9.00 – 9.45: Welcome to Lamprell (Jim Moffat) 9.45 – 10.30: Overview of operations in Hamriyah, recent improvements (Niall O’Connell) 10.30 – 10.45: Safety induction for Hamriyah 10.45 – 12.30: Hamriyah yard visit 12.30 – 1.00: Lunch and Q&A 1.00 – 2.00 Travel to Jebel Ali 2.00 – 2.25: Marketing and business development (Karl Roberts) 2.25 – 3.15: Overview of operations in Jebel Ali (Niall O’Connell) 3.15 – 3.30: Safety induction for Jebel Ali 3.30 – 4.30: Jebel Ali yard visit 4.30 – 5.00: Wrap Up & Q&A 5.00: Depart 6.30 – Pick-up for dinner 7.30: Dinner

www.lamprell.com 5

Schedule for the day

slide-7
SLIDE 7

Safety moment – heat stress

www.lamprell.com 6

TAKE SAFETY AT WORK, HOME

  • Drink plenty of water throughout the day
  • Do not stay in direct sunshine for long periods
  • Observe urine colouring
  • Wear light coloured, loose fitting clothing
  • Avoid liquid that contains alcohol or large

amounts of sugar – they cause you to lose more body fluid

  • Never leave anyone in a closed, parked vehicle
  • Look out for friends/family/colleagues to see signs
  • f heat stress
  • NO WATER NO WORK – if you see a yard

worker without water, stop him

slide-8
SLIDE 8

Safety awareness

7 www.lamprell.com

slide-9
SLIDE 9

Focus on world-class safety

www.lamprell.com 8

Strong foundation for remaining competitive

  • Renewed focus on safety: management, campaigns, culture
  • Safety as a competitive advantage (clients, labour, cost)

2 1 5 4 5 7 4 2 2 3 3 1 4 3 2 3 2 4 3 6 3 5

1 2 3 1 1 1 1 1 1 1 TRIFR Target FY 2014 0.55 TRIFR Target FY 2015 0.22

0.63 0.55 0.48 0.44 0.42 0.39 0.35 0.33 0.32 0.31 0.27 0.28 0.29 0.33 0.32 0.32 0.31 0.27 0.27 0.28 0.31 0.29 0.33

0.02 0.02 0.02 0.03 0.03 0.05 0.05 0.05 0.05 0.06 0.06 0.06 0.05 0.07 0.08 0.06 0.06 0.04 0.03 0.04 0.05 0.03 0.04 Incident Frequency Rates Total Number of DAFWC & Recordable Incidents

DAFWC TRC TRIR Target TRIR Actual DAFWC Actual

slide-10
SLIDE 10

Values & Strengths

COMPETITIVE SOLUTIONS FOR COMPLEX PROJECTS HSSE Mind Set: We deliver world class safety standards and leave nothing to chance so everyone goes home safely Integrity: We conduct

  • ur business honesty,

with professional integrity, fairness and transparency Customer Drive: Building customer trust is key to

  • ur business

Team Work: We will strive to work Together and believe Great teams achieve Incredible things. Accountability: We deliver what we say we will Fiscal Responsibility: We are all accountable to ensure that we achieve the most cost effective solutions

9

Lamprell’s Key Strengths Strong management & highly skilled, low cost workforce Commitment to reliability World class safety Focus on client satisfaction Strategic location First class quality

www.lamprell.com

slide-11
SLIDE 11

Driving excellence at all levels

www.lamprell.com 10

Best practices in business

  • Project Compass
  • Online Business Code of Conduct launched
  • Treasury award

Employees:

  • Launch of Lamprell’s new in-house employee health and wellness site
  • HR Employee Engagement survey
  • Daman Corporate Health Award

PRODUCTIVITY IMPROVEMENTS ACROSS THE GROUP

slide-12
SLIDE 12

Workforce

www.lamprell.com 11

Workforce demographics Further information

  • Yard Core Workforce…………………..4,333
  • Yard O & M resources ………………...1,249
  • Yard Labour Supply resources……… .2,188
  • Total Active Yard Workforce…………...7,770
  • O&M externally seconded……………….601
  • Admin Payroll in core business……….1,433
  • Admin Payroll in Service entities……….174

TOTAL WORKFORCE…………………….9,978

4% 40% 33% 18% 5%

Age Demographics (Total Workforce)

< 25 26-35 36-45 46-55 56-65 >65

slide-13
SLIDE 13

Wellness Campaigns & Employee Engagement

Cricket Tournament April 2015 Women's Wellness Campaign March 2015 12 www.lamprell.com Bowling Tournament May 2015 Health Awareness Campaign February 2015 Yard Christmas party December 2014 Football Tournament January 2015

slide-14
SLIDE 14

Keeping employees active and engaged

www.lamprell.com 13

slide-15
SLIDE 15

NDC 8

Operations (part 1)

Niall O’Connell, COO

slide-16
SLIDE 16

Key facts

www.lamprell.com 15

Strong position

  • Approximately 10,000 people employed across facilities; three categories of workforce
  • Primary facilities: Hamriyah and Jebel Ali
  • Total surface: 899,000 m2 with 2 km of quayside
  • Limited number of comparable competitors
  • Regional position is an advantage, particularly in the current market
slide-17
SLIDE 17

Other Group Businesses

www.lamprell.com 16

Synergies and complementary services

  • LRS
  • Sunbelt
  • E&C
  • O&M
slide-18
SLIDE 18

Hamriyah Yard

www.lamprell.com 17 UAE Land (m2)

365,000

UAE Quayside (m)

1,400

  • No. of Workforce

4,600

slide-19
SLIDE 19

Hamriyah Yard

www.lamprell.com 18

Engineering Procurement Finance Information Technology HR & Admin

Major execution centre of:

slide-20
SLIDE 20

www.lamprell.com

New Build Jackup Rigs - Hamriyah

www.lamprell.com 19

Established, Reliable and Proven builder of state of the art drilling rigs

  • Regional market leader for the construction of new build jackup drilling rigs
  • Highly sophisticated engineering capabilities, custom-built construction and load-out facilities

Specialised expertise

  • 35 years’ experience in the jackup business
  • In-house expertise across all disciplines to deliver in today’s demanding market

Solutions to meet client needs

  • Committed to on-time delivery, achieving world class HSE and quality standards
  • Highly competitive edge for the complete package

www.lamprell.com

ENSCO 140 PEMSA HAFFAR 2

19

slide-21
SLIDE 21

Efficiency and productivity improvements

www.lamprell.com 20

  • Project Evolution - Hamriyah:
  • Semi-automatic welding
  • 3D robotic beam cutting line
  • Installation of new cranes
  • Air & gas supply
  • Panel line / T-master
  • In-house scaffolding in Jebel Ali
  • Yard transporter delivered
  • Layout improvement
  • Procurement initiatives
  • Blasting and painting process
  • SEWA connection – Hamriyah

Major changes on organisation, infrastructure and operations

Committed to date:$50m Savings on track Payback within 3-4 years of full run-rate

  • Back to basics:
  • Organisational streamlining
  • Change in operational structure:
  • Overheads reduction
  • Reporting lines
  • Schedule Management
  • Procurement synergies
  • Customer service culture
  • Return to operational excellence
  • Completion of legacy projects
  • Culture of continuous improvement
  • Training
slide-22
SLIDE 22

Today you will see

www.lamprell.com 21

Large scale construction

slide-23
SLIDE 23

Today you will see

www.lamprell.com 22

High Grade Welding

slide-24
SLIDE 24

Today you will see

www.lamprell.com 23

Major Panel line

slide-25
SLIDE 25

Today you will see

www.lamprell.com 24

High class Electrical & Instrumentation performance

slide-26
SLIDE 26

Today you might see

www.lamprell.com 25

Major lifts

slide-27
SLIDE 27

26 www.lamprell.com

Business development and marketing

Karl Roberts, CCO

Petrofac UZ750

slide-28
SLIDE 28

Current Oil price, market impact and forecast price

www.lamprell.com 27

2015 tough year for oil prices; recovery expected in 2H 2016 and into 2017

Source: Wood Mackenzie (Global Energy Markets Review – 26 Oct 2015)

Wood Mackenzie expects Brent prices to recover to US$70 beginning 2017 and reach US$76 by Q4 2017. The rationale for this recovery:

Steady demand growth in 2015 and 2016 US onshore production declines Non-OPEC year-on-year decline in 2015 & 2016 Lower investments in 2015 / 2016 consequently reducing the supply Higher cost of developing new supply to meet growing demand lifts price outlook

slide-29
SLIDE 29

Current market and competitive environment

www.lamprell.com 28

  • Oil & gas industry downturn continuing
  • Capex cuts impact on project sanctioning

specifically

  • Unconventional shale
  • Oil sands, and
  • Deep / ultra-deepwater developments
  • Capex drop from $610bn in 2014 to

$482bn in 2015 and a further drop to $437bn in 2016, with Middle East showing resilience

  • Longer term prospects (2017-2020)

positive in the Upstream O&G market

  • Opportunities in Downstream and LNG

markets (Global LNG market and MENA downstream market total $245bn for 2015- 2020)

Strong position in a market with tough competition

Capex by Region

Russia Europe America N America S Africa Middle East Asia Australia

*Covers O&G capex (excludes Opex, LNG expenditure, Downstream)

*

slide-30
SLIDE 30

Strong bid pipeline in challenging markets

www.lamprell.com 29

  • Solid bid pipeline over the next three

years

  • Proactively sourcing opportunities
  • Focus on diversification across markets:
  • Leveraging strong position in the Middle East
  • Broadening addressable market in the longer

term

Despite the downturn, strong bid pipeline and diversification across markets

39% 57% 2% 2%

Reported bid pipeline breakdown

New Build Jackup rigs Offshore/ Onshore construction Rig refurbishment and conversion Land Rig services

$5.2bn

32% 58% 0.32% 10%

Current bid pipeline breakdown

New Build Jackup rigs Offshore/ Onshore construction Rig refurbishment and conversion Land Rig services

  • Continued strong levels of bidding,

although there is a slow-down in awards

  • Current bids within Offshore / Onshore

include:

  • Fixed Platforms
  • Onshore LNG and Petrochemical modules
  • Onshore construction & pressure vessels
  • Renewables – Wind farm jackets
  • Subsea
slide-31
SLIDE 31

Lamprell’s Key Differentiators

www.lamprell.com 30 30

Cost Competitive & Geographically well positioned for Global project deliveries

Safe

World class Statistics Impact on overall project performance

Quality

Strong Reputation On time On budget Experienced and dedicated PM’s and Site construction teams No carry over Reduced risk

Competitive

Multiple UAE Free Zone facilities Load out and in house rolling capacity Facilities offer cost competitive, high quality fabrication track record

Reliability

Management People Ethics Regional fabrication and jack-up rig market leader (i.e. NDC) Flexible Financially Sound

slide-32
SLIDE 32

Enhanced Business Development Strategy

  • Refined Business Development Strategy:
  • Increase external customer focus including

target EPC(I) companies based on target markets and prospects.

  • Grow Bid Pipeline with prioritised target

prospects

  • Increase competitiveness
  • Refresh the Lamprell brand awareness

campaign, with particular focus on the Middle East

  • Strengthening the position:
  • Access larger opportunities through

strategic alliances / partnerships

  • Adjustment of approach and resources in

the sales team

www.lamprell.com 31

Refining and adapting the strategy

slide-33
SLIDE 33

32 www.lamprell.com

Operations (part 2)

Petrofac UZ750

Niall O’Connell, COO

slide-34
SLIDE 34

Jebel Ali Yard

www.lamprell.com 33 UAE Land (m2)

163,000

  • No. of Workforce

650

Access to quayside

Committed load-out corridor

slide-35
SLIDE 35

Jebel Ali Yard

  • Modern facility – Purpose Built
  • Good yard shape for projects and flexibility
  • Local load out facilities in Jebel Ali Port
  • First class links to main transport arteries
  • Excellent client track record

www.lamprell.com 34

Key strengths Major clients

slide-36
SLIDE 36

Location of Fabrication : UAE Location of Deployment: UK, North Sea Description: Engineering (shop drawings and as-built), Procurement & Construction

  • f 4,800MT Wellhead Topside

& 13,500MT Process, Utility & Quarters Topside Weight (MT): 18,300 Te (Overall) Project Startup Date:

  • Oct. 2011

Delivery Date: June 2013 (Wellhead) April 2014 (PUQ)

www.lamprell.com 35

Client / End User: Nexen Petroleum

Golden Eagle Area Development

Jebel Ali Yard Project Reference 1

Click to watch the time-lapse video

slide-37
SLIDE 37

Jasmine Development Project

Location of Integration: UAE Location of Deployment: UK, North Sea Description: Fabrication, Assembly and Pre-commissioning of Jasmine Living Quarter Topsides (Utility Deck) and full EPC of 38 man Accommodation Module Weight (MT): 5,217 Project Startup Date: August 2010 Delivery Date: May 2013

www.lamprell.com 36

Client / End User : ConocoPhillips

Jebel Ali Yard Project Reference 2

slide-38
SLIDE 38

Laggan Tormore Gas Field Development

End User: Total Location of Integration: UAE Location of Deployment: Shetland Islands, UK Description: Fabrication of 15 preassembled units (PAU) for Total ‘Laggan Tormore’ Gas Field

  • Development. The PAUs

includes high pressure gas processing facilities for integration into the ‘Laggan Tormore’ onshore gas plant. Weight (MT): 4,500 Project Startup Date: October 2012 Delivery Date: October 2013

www.lamprell.com 42

Client : Petrofac

Jebel Ali Yard Project Reference 3

slide-39
SLIDE 39

ZADCO UZ750 PARs, PAUs & PAMs

Client / End User: Petrofac

www.lamprell.com 43

Location of Fabrication: UAE Location of Deployment: Abu Dhabi Description: Engineering (shop drawings and as-built), Procurement & Construction of 39 PARs (14,500 Te) 3 PAUs (5,700 Te) 3 PAMs (1,400 Te) Weight (MT): 21,600 Te (Overall) Project Startup Date:

  • Oct. 2014

Delivery Date: Mar 2016 ( 34 PARs) Sept 2016 (3 PAUs & 5 PARs) Oct 2016 ( 3 PAMs)

Jebel Ali Yard project reference 4

slide-40
SLIDE 40

Windcarrier 2 – Bold Tern

Fred Olsen Windcarrier

www.lamprell.com 44

Location of Fabrication: UAE Location of Deployment: North Sea Description: Design, construction and delivery of Gusto MSC NG-9000 design self- elevating and self- propelled offshore wind turbine installation vessel. Weight (MT): 14,800 Project Startup Date: March 2010 Delivery Date:

  • Feb. 2013

Jebel Ali Yard Project Reference 5

slide-41
SLIDE 41

What is makes Lamprell Different?

www.lamprell.com 40

Strengths

  • Proven track record of timely project delivery
  • World Class QHSE
  • Competitive labour costs
  • Geographical location
  • A regional fabrication and jackup rig market leader
  • International, experienced management team
  • Strong balance sheet

People

  • Training school and related skills benefits
  • Long term commitment to Lamprell
  • Health, safety and wellness efforts
  • Skills base and capability to supplement teams
  • Flexibility of approach to support delivery

Location

  • Cultural alignment due to long-time operations in ME
  • Good communication links locally and internationally
  • UAE Oil and Gas based economy
  • Excellent support infrastructure of vendors, specialist

services and equipment

  • Climate supports construction activities
slide-42
SLIDE 42

Focus on delivery

www.lamprell.com 41

  • Commitment to safety
  • Flexibility to meet schedule demands
  • Labour flex
  • Equipment flex
  • Material flex
  • High skill levels particularly with specialized trade labour
  • Quality assurance and related certifications and accreditations
  • Project execution tools and related processes
  • Transparency due to strong communication culture

Excellent track record of delivery

slide-43
SLIDE 43

Shelf 1 - Hamriyah

Strategy and Current trading

Jim Moffat, CEO and Tony Wright, CFO

slide-44
SLIDE 44

Strong operational performance

  • Further module awards from Petrofac -

grown from 26 PARs to a total of 45 PARs, PAMs & PAUs

  • Record of seven concurrent jackups

being constructed in Hamriyah

  • Added 1,500 people to project

workforce

  • New Land Rig design – marketing

started

  • Slow-down in refurbishment continues
  • Rig stacking for clients (currently eight)

www.lamprell.com 43

  • High levels of activity

Land Rigs Services

slide-45
SLIDE 45

Steady financial performance

www.lamprell.com 44

Strong platform

  • Reported 1H15 revenue of $351.4m and net profit
  • f $20.3m; to be strongly weighted towards 2H15
  • Improved debtors collection
  • Focus on maintaining appropriate overhead levels
  • Reduced interest margins and lower bonding costs

(offset by increased commitment fees on the revolver)

  • Project Evolution offsetting margin pressure: gross

margin 11.6% in 1H15

  • Net cash of $316.3m at end 1H15; trending

downwards as projects progress

  • Significant headroom available
  • 1H15 revenue coverage: over 90% of 2015 and
  • ver 60% of 2016
  • Performing in line with expectations

Debt package $m Term loan 89 Working capital facility 50 Revolver 200 Total funded facilities 339 Committed bonding 250 Financial strength to support growth

slide-46
SLIDE 46

Positive outlook

  • High levels of bidding maintained
  • Slow-down in awards but bid-to-win ratio healthy

and stable

  • Focus on conversion of the pipeline

Strong performance in tough markets On track to deliver

www.lamprell.com 45

  • High levels of commercial activity
  • Strong operational performance continues
  • Recent improvements a competitive advantage
  • Contribution to bottom line through protection of

margins

  • Strong balance sheet to weather the storm
  • Operational performance driving repeat business
  • Benefits in savings from improvements and

efficiencies

  • Leveraging geographical location
  • Bid pipeline remains strong

Position of strength in current environment

Noble Paragon refurb

slide-47
SLIDE 47

Driving forward with our Strategy

www.lamprell.com 46

slide-48
SLIDE 48

47 www.lamprell.com

Appendices

ENSCO 140

slide-49
SLIDE 49

Revenue split by business segment

www.lamprell.com 48

  • Revenue dominated by jackups
  • Slow year for offshore construction
  • Refurbishment slow-down

244.9 36.7 19.9 17.7 32.2

1H2015

$m

New Build Rigs Rig Refurbishment Onshore/Offshore Land Rig Services Other 420.1 87.5 61.9 23.7 39.2

1H2014

$m

351.4 632.3

slide-50
SLIDE 50

Current project summary

www.lamprell.com 49

Project Type 2014 1H 2015 2H 2015 1H 2016 2H 2016 1H 2017 NDC 9 Le Tourneau S116E NDC 7 Le Tourneau S116E NDC 8 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

49