FULL YEAR RESULT 2013 Matrix Composites & Engineering Ltd
OVERVIEW Overview Financial Results Operational Review Group Strategy Outlook 3
MATRIX Matrix manufactures and supplies engineered products and integrated services to the global oil and gas industry Drilling products, SURF ancillary equipment, well construction products, product development Fabrication,…
MATRIX Engineered products and integrated services for the global oil and gas industry 5
CLIENTS & MARKETS Top three export destinations: USA, South Korea and Malaysia Over 75% of revenue derived from exports
OVERVIEW FINANCIALS FY2013 AUm FY2013 FY2012 Variance Revenue 145.5 144.8 0.5% EBITDAF 9.6 (10.8) 188.8% EBITDA 7.5 (13.2) 156.8% Net Loss after Tax (2.9) (14.4) 79.9% Cash Flow from Operations (2.2) 10.9 120.2% Total…
OVERVIEW FINANCIALS: KEY DRIVERS Continued high AUD:USD exchange rate during FY13 Unit pricing pressure stabilised Lower than anticipated well construction sales volumes Reduction in capacity to meet market demand in 1H System…
OVERVIEW HIGHLIGHTS FY2013 Ongoing development of a strong safety culture 0 LTIFR for MCE and MOSE Production levels exceeded nameplate capacity in Q3 and Q4 FY13, with future improvements expected from plant/ labour…
OVERVIEW HIGHLIGHTS FY2013 Strong quoting activity for SURF ancillary products and riser buoyancy (new and replacement) will drive revenue in FY14 and beyond Expansion of SURF ancillary and well construction product lines New…
OVERVIEW - PRODUCTION Production levels exceeded nameplate capacity in Q3 and Q4 FY13 103% (Q3) and 112% (Q4) of designed plant capacity Buoyancy production targets increased by 19% in Q3 in-line with continuous improvement…
OVERVIEW PRODUCTION FY13 Production Output Rate (%) 120.0% 100.0% 80.0% 60.0% 40.0% 20.0% 0.0% Q1 Q2 Q3 Q4 Actual Nameplate Target Production levels exceeded nameplate capacity in Q3 and Q4 FY13 Buoyancy production…
OVERVIEW ORDER BOOK & PIPELINE (US) AS AT 30/6/13 Q4 FY13 current orders US80m. Quote book US449m Current order book will support full production through Q2 FY14 Strong quoting activity for new and replacement riser buoyancy,…
FY 2013 FINANCIAL RESULTS
KEY METRICS FY2013 FY2012 Variance Revenue m 145.5 144.8 0.5% EBITDAF m 9.6 (10.8) 188.8% EBITDA m 7.5 (13.2) 156.8% Net profit/(loss) after tax m (2.9) (14.4) 79.9% Earnings per share c (3.1) (18.4) 83.2% Dividends per share c…
REVENUE m 100 0.5% increase in FY13 revenue Revenue exceeds June 2013 75 guidance Irregular composites revenue 50 recognition H on H Stable revenue contribution from MOSE 25 Impact of strong AUD throughout FY13 evident 0…
EBITDA MATRIX GROUP 30 2nd Half EBITDA adversely m 25 impacted by: Forex losses 20 Superannuation (system error) 15 Higher operating costs 10 Well construction revenue below expectations 5 EBITDA margin of 8% - (normalised…
PROFIT & LOSS FY2013 FY2012 Variance Revenue m 145.5 144.8 0.5% EBITDAF m 9.6 (10.8) 188.8% Forex loss m (2.1) (2.4) 10.0% EBITDA m 7.5 (13.2) 156.8% Depreciation and amortisation m (10.3) (10.4) 1.0% EBIT m (2.8) (23.6)…
FINANCIAL PERFORMANCE OVERVIEW Group result consistent with June 2013 guidance Group margins impacted by: Continued high AUD exchange rate Sharp AUD depreciation in June 2013 resulting in forex losses Lower sales volumes for well…
CASHFLOW GRAPH m 20.0 1.3 2.2 - - 15.0 Cash consumed by bonding and invoicing 11.0 9.3 10.0 5.1 10.3 - - 5.0 8.1 (11.9) - - (2.9) 4.4 (1.1) (2.0) (2.2) Cash released (5.0) (5.6) from working capital (13.9) (10.0) (6.1)…
BALANCE SHEET m FY2013 FY2012 Stable working capital Cash and restricted cash 25.3 29.9 Trade receivables 17.2 12.1 Strong working capital Other receivables 9.6 1.4 metrics (debtors + other Inventory 23.6 34.6 receivables) Property,…
DEBT & BANKING Banking facilities renegotiated during the year to provide: Bonding to support new contracts Working capital facility to support payment terms profile Significant available headroom - 12 million Gross debt continues…
WORKING CAPITAL MCE Dual Working Capital Cycle m 60 50 40 30 20 10 - -10 -20 H1 FY11 FY11 1H FY12 FY12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Trade receivables…
WORKING CAPITAL Matrix operates two independent working capital cycles: 1. Trade working capital (TWC) 2. Progress billing cycle TWC has increased due to: The requirement to cash securitise bank guarantees for shipyard customers…
OPERATIONAL REVIEW 25
DRILLING PRODUCTS 114m worth of contracts awarded in FY13 Order conversion in FY13 for riser buoyancy was slower than anticipated Stronger conversion in FY14 expected due to the continual compression of drillship delivery…
DRILLING PRODUCTS Very strong quotation activity for riser buoyancy (new and replacement) Rapid growth in number of newbuilds until at least 2016 Aging floater fleet Potential Riser Buoyancy Drives medium term demand for riser…
SURF ANCILLARY EQUIPMENT Continued growth in product line revenue Building sales in Australia, Europe and West Africa Expanding capabilities in UK office to aggressively penetrate these markets Qualified, and continuing to seek…
SURF ANCILLARY EQUIPMENT Continued to expand product range Installation buoyancy, distributed buoyancy for flexible flowlines and umbilicals, ROV and tooling buoyancy Global Capex Units/km by Component 2,500 Flowlines 2,000…
WELL CONSTRUCTION PRODUCTS Lower than anticipated sales volume for FY13 Restructured distribution channel in North America to more aggressively penetrate market Ongoing investment in tooling and materials research has allowed…
WELL CONSTRUCTION PRODUCTS Market remains strong - US Drilling & Production Outlook Horizontal Footage Drilled (mil) expenditure in growing shale gas market and continued demand for hydrocarbons in North America drives market…
OFFSHORE SERVICES & ENGINEERING Total No Offshore Wells &Spending (A) in Australia1 Recorded consistent 160 7,000 155 6,000 Offshore Spending (m) revenue to previous year No. Offshore Wells 150 5,000 145 4,000 FY13 -…
OFFSHORE SERVICES & ENGINEERING Margins adversely affected by competitive marketplace, downturn in WAs mineral resources industry and additional costs to transition to a service based model API Q1 certification (with design)…
GROUP STRATEGY 34
BUSINESS STRATEGIES Continue materials and product research to develop improved riser buoyancy systems and grow market share Optimise plant revenue by focusing on high value syntactic foam products Continue to diversify and expand…
MACRO OUTLOOK 36
OUTLOOK Macro outlook for oil and gas sector remains strong Drilling/ SURF ancillary products structural shift to deepwater drilling and production underpins demand Drilling products Global capex for subsea wells and trees expected…
OUTLOOK SURF ancillary equipment global capex and deployment of subsea hardware expected to significantly from 2013 to 2017 Well construction total footage drilled, especially in the US continues to significantly Drives demand for…
IMPACT OF FX REVENUE/ EBITDA Rev m EBITDA m 150 30 Matrix revenue and 145 28 EBITDA highly sensitive 140 26 to movements in 135 24 exchange rate 130 22 125 20 120 18 115 16 110 14 105 12 100 10 1.10 1.05 1.00 0.95 0.90 0.85…
OUTLOOK Drilling Products Subsea Wells & Trees Global Capex World Number of Confirmed Newbuilds Units/km by Component 35 Options 30 Ordered Under Construction 25 No. Newbuilds Built 20 15 10 5 0 2008 2009 2010…
OUTLOOK Drilling Products Floater Supply/ Demand (Under Contract) Age of Mobile Offshore Drilling Unit (MODU) Fleet 27% 1-5 yrs 35% 6-10 yrs 10-15 yrs 16-20 yrs 21-30 yrs 30-+ yrs 23% 13% 2% 0% Source: Morgan…
OUTLOOK SURF Ancillary Products Global Capex Units/km by Component Global Subsea Capex by Component 2,500 8,000 Flowlines Flowlines 7,000 2,000 Risers Risers 6,000 Umbilicals Umbilicals 1,500 5,000 Units/ km millions…
OUTLOOK Well Construction Products World Drilling & Production Outlook US Drilling & Production Outlook Land & Offshore (excludes Russia, China, Central Asia) Horizontal Footage Drilled (mil) 700 Land 600 Offshore 500 TOTAL…
SUMMARY Key financials Revenue (FY13) 145.5m EBITDAF 9.6m Net Loss after Tax (2.9m) High levels of quoting for riser buoyancy (new and replacement) and SURF equipment Production levels exceeded nameplate capacity in Q3 and Q4…
SUMMARY Maintain focus and investment in safety systems and processes Invest in operational and commercial processes, and systems to support future growth Roll-out and adopt internal branding/ culture initiative Strong capital…
CONTACT DETAILS AARON BEGLEY CEO aaron.begleymatrixengineered.com PETER TAZEWELL CFO/ Company Secretary peter.tazewellmatrixengineered.com E: investormatrixengineered.com W: www.matrixengineered.com 46
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