HALF YEAR RESULT 2013 Matrix Composites & Engineering 28 February 2013
AGENDA CEO Overview 1HY 13 Financial Results Operational Review Group Strategy Outlook 3
CEO OVERVIEW Aaron Begley
FINANCIAL OVERVIEW - 1H FY13 Total revenue - 81.6m 2.3% MCM revenue 6.0% MOSE revenue 23.2% MCM revenue adversely impacted by continuing strong AUD, lower than anticipated production output and continued unit pricing pressure…
EARNINGS GUIDANCE UPDATE Revised Previous Guidance million Guidance Low High Revenue m 145.0 165.0 175.0 EBITDA m 13.0 21.1 26.9 NPAT m 1.0 6.6 10.9 Forecast revenue adversely impacted by: Lower buoyancy output Lower…
GUIDANCE BRIDGE EBITDA Bridge from October Earnings Outlook to February Outlook 25 20 15 millions 10 5 0 EBITDA Fcst Actual to Jan Buoyancy WC Margin SURF Margin People Facilities & Other Expenses EBITDA Fcst…
OPERATIONAL OVERVIEW - 1H FY13 Rebuilding order book Current backlog of 10 months (target 12 months) Order conversion has improved since December 2012 Continued strong quotation activity across all product lines Reconfigured plant…
QUOTE & ORDER BOOK 550 450 350 US (m) 250 150 50 -50 Current Orders Pending Orders Quotes Q1 FY2013 73 167 492 Q2 FY2013 110 163 440 Production Plan Target Growth in order book as order conversion rates improve…
PRODUCTION Actual v Target Production HY13 100% 90% 80% No. Parts Produced (%) 70% 60% 50% 40% 30% 20% 10% 0% July August Sept Oct Nov Dec Actual Target Output adversely impacted by change in shift roster and…
OUTLOOK SUMMARY Strengthening order conversion for buoyancy products Production stabilised Cost and labour structures improving Centraliser volumes improving with new product development Services revenue softening 11
1H FY13 FINANCIAL RESULTS CFO Peter Tazewell
FINANCIAL PERFORMANCE OVERVIEW 1H 2013 1H 2012 Change (%) Revenue m 81.6 83.5 2.3% EBITDA1 m 6.4 (1.3) 592.3% Depreciation m (5.1) (5.1) - EBIT m 1.3 (6.4) 120.3% Interest/Finance costs m (0.7) (1.1) 33.7% Pre-tax Operating Profit m…
BALANCE SHEET m Dec 2012 June 2012 Dec 2011 Low net debt Cash 13.9 29.9 17.9 Working capital stabilised Receivables 26.6 13.5 29.6 Inventory 21.9 34.6 34.0 Major capex spend completed Other 2.1 3.8 5.5 Fixed assets 107.9 110.0 101.8…
BANKING METRICS Dec 12 June 12 Dec 11 Bank covenants renegotiated Total Assets 191.9 210.4 200.2 and achieved Total Equity 137.6 136.7 114.8 Gross debt amortising quickly Net Debt 9.6 (3.2) 19.5 (3 years) Interest Cover 9.0…
OPERATIONAL REVIEW
DRILLING PRODUCTS US100m+ contracts awarded over 1HFY13 Order conversion for riser buoyancy began to strengthen over 1H Introduction of two-shift roster to align production with current market demand Production stabilised through…
SURF ANCILLARY EQUIPMENT Awarded contracts for new SURF products installation/ ROV and distributed buoyancy Building sales in Australia/ Europe/ West Africa Qualified, and in the process of being qualified by a number of European…
WELL CONSTRUCTION PRODUCTS Delays in short term sales in Q2 sales volumes re-established and growing Earnings adversely impacted by reduced sales volumes Continued to supply centralisers to operators and equipment integrators in…
OFFSHORE SERVICES & ENGINEERING Following a softening in construction expenditure in the mineral resources sector, MOSE has diverted resources towards: Inspection, repair and maintenance oil and gas Specific engineering services to…
GROUP STRATEGY
DRILLING PRODUCTS SURF ANCILLARY EQUIPMENT Short Term Medium Term Increase participation in Continue to drive material costs aftermarket down Drilling (inspection & servicing) Build relationships with major Products Improve unit…
WELL CONSTRUCTION Capitalise on ongoing growth in the US horizontal well completions market Increase sales to blue chip operators in Asia, Australia, US, Canada and the Middle East Continue development of regional distribution…
OFFSHORE SERVICES Ongoing transition of greater maintenance capacity to the offshore services sector Service offering expanded by: Increase range of services to OEMs Increase services to drilling contractors operating in…
OUTLOOK
DRILLING PRODUCTS Subsea Wells & Trees - Global Capex World Number of Confirmed Newbuilds Units/km by Component Data Source: Douglas-Westwood 2012 Source: Company Data, January 2013 29
DRILLING PRODUCTS DRBM for Newbuilds Growth projections for subsea wells and tree installation is driving demand for deepwater drillships and semi-submersibles Number of inquiries to shipyards supports growth beyond current…
SURF ANCILLARY EQUIPMENT Forecast increase in deployment of subsea flowlines, risers and umbilicals 2013 - 2016 key demand driver for SURF products Global Capex - Units/km by Component 31 Data Source: Douglas-Westwood 2012
WELL CONSTRUCTION PRODUCTS Total footage drilled, especially in the US, continues to increase significantly - drives demand for our products designed for directional and horizontal wells in horizontal well completions in the US…
MATRIX OFFSHORE SERVICES & ENGINEERING Demand driven by: ongoing oil and gas hardware capex maintenance services (opex) Australian based project opportunities: Wheatstone Gorgon Inpex Julimar Balnaves Browse LNG 33
OUTLOOK SHORT TERM Target a minimum12 months of committed orders Aggressively penetrate and gain further market share for SURF ancillary equipment and well construction products Continue to expand product groups in line with market…
OUTLOOK LONG TERM Offer integrated services and packages which utilise all aspects of the business Continued R&D, product and materials development Focus on SURF ancillary equipment and well construction products Gain market…
SUMMARY Total revenue 81.6m ( 2.3%) Adversely affected by strong AUD, lower production output and unit pricing pressure Earnings and cash flow positive Stabilised operations Rebuilding order book target 12 months Record high…
CONTACT DETAILS AARON BEGLEY PETER TAZEWELL CEO CFO T: +61 8 9412 1200 T: +61 8 9412 1200 aaron.begleymatrixengineered.com peter.tazewellmatrixengineered.com
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