Apergy Combination with ChampionX May 4, 2020 0 Unlocking energy. Copyright 2020 Apergy. All rights reserved.
Important Additional Info and No Offer or Solicitation Important Information About the Transaction between Apergy, ChampionX, and Ecolab and Where to Find It In connection with our proposed merger with ChampionX, the upstream energy…
Todays Presenters ChampionX Soma Jay Deric SOMASUNDARAM NUTT BRYANT President & Chief Senior Vice President & Executive Vice President & Executive Officer Chief Financial Officer President of Ecolabs Upstream Energy Business…
Agenda A Powerful Combination: Key Messages for Investors Overview of Apergy and ChampionX Apergy + ChampionX: Better Together Synergy Opportunity Overview Combined Company Financial Summary Summary and Q&A Appendix 4…
A Powerful Combination: Key Messages for Investors 5 Unlocking energy. Copyright 2020 Apergy. All rights reserved.
Key Messages for Today Transformative and complementary combination on both strategic and financial dimensions As a global leader in production optimization, the combined company will be an essential player and long-term winner in a…
Introducing Launching a global company with a new name capturing the best of both Distinctive Strategic Vision and Operating Philosophy Positioned to benefit from ChampionXs global brand recognition Improving New logo preserves…
Two Highly Complementary Businesses Apergy ChampionX Leading provider of highly engineered Global leader in onsite, technology driven, equipment and technologies throughout the Production Focused sustainable chemistry programs…
Combination is a Transformative Merger Drilling & Drilling Completions 22% 16% Recurring Diversified equipment and solutions provider with 36% significant recurring revenues Business Mix Recurring1 Integrated platform of…
Prepared for Severe Downturn Scenarios Combined Company Performance Considerations For a During Previous Trough (2016A) Severe Downturn Scenario (before synergies) Topline: Business more production-focused today which Revenue 2,936…
Stronger Balance Sheet With Lower Leverage and Enhanced Liquidity Lower Net Leverage Higher Liquidity No Near-Term Maturities Net Debt / Adj. EBITDA in millions in millions New Term Loan B 455 537 Senior Cash on hand1 224 Term…
Combined Company has Tangible Growth Opportunities Even in a Challenging Market Growth in.. Opportunity Overview Immediately opens up new and attractive geographies (such as OPEC countries in Where ChampionX has a Geographies the…
Both Short and Long-Term Trends Favor the Combined Company Combined Company Positioning Increases focus on production (84% of combined revenues) which Uncertain E&P capex has historically been more resilient through a downturn than…
Apergy Overview 14 Unlocking energy. Copyright 2020 Apergy. All rights reserved.
Apergy at a Glance Production-focused equipment and digital technology provider to the upstream O&G industry Broad artificial lift portfolio, fit-for-purpose digital solutions and 2019 Revenue: 80% Production Focus differentiated…
Active Across the Wellsite Production & Automation Technologies: 8 8 Facilitating the efficient, safe and effective extraction of oil and gas through a suite of premier brands. 5 1 8 9 10 1 2 3 4 Drilling…
Leads Oilfield Products Segment in Customer Satisfaction 1 Total Satisfaction 1 Digital Oilfield 1 Artificial Lift 1 Horizontal & 1 Onshore 1 Shale-oriented Directional Wells Applications Applications 1 High Pressure 1…
ChampionX Overview 18 Unlocking energy. Copyright 2020 Apergy. All rights reserved.
ChampionX at a Glance Global leader in onsite, technology-driven, sustainable chemistry programs and services Consumable, proprietary chemical solutions that enhance well production and 2019 Revenue: 85%+ Production Focus maximize…
Focus on Production Optimization Solutions Across the Well Lifecycle Specialty Oilfield Performance (Production Chemicals) Performance Production Maximization Solutions for emulsions, foaming, viscosity reduction Drilling and…
Highly Innovative, Proprietary Offering with Compelling Value Proposition Innovation Powerhouse Drives Ongoing Highly Trained Technical Experts Applying Value Creation for Customers Our Differentiated Technology Develop cutting edge…
Diversified, Blue-Chip Customer Base Long-standing relationships with highest quality global customers IOCs (Supermajors/Majors) Top 20 Customers by Revenue = NOCs 57% of 2019 Revenue IOCs NOCs (Supermajors/ 19% Majors) 42%…
Apergy + ChampionX: Better Together 23 Unlocking energy. Copyright 2020 Apergy. All rights reserved.
Apergy + ChampionX: A Compelling Combination Differentiated Portfolio of Complementary Products and Services with Well- 1 Known Brands to Enhance Customer Productivity Creates a Global Leader in Production-Optimization Solutions…
1 Differentiated Portfolio of Complementary Products and Services with Well-Known Brands Best in Class Products & Customer Service Iconic Brands Diamond Drill Bit Inserts Combined 160 year history of operational Electric Submersible…
1 Across Artificial Lift & Production Chemicals on a Single Platform to Enhance Customer Productivity Production Chemicals Reduce Artificial Lift Failures and Increase Equipment Run -life Creating Value for Customers Case Study…
2 High Exposure to Production Opex Supports More Stable, Recurring Revenue Through-The-Cycle Drilling Production & Automation Technologies Technologies Specialty Oilfield Performance Performance 16%1 84%1 Cumulative Revenue…
2 Largest Pure-Play Production-Focused Portfolio Production Products and Solutions Revenue1 Production 16% 19% 13% 16% Drilling & Completion 4% 43% 39% 8% Other 73% 22% 65% 80% 84% 19% 84% of Combined Company Revenue from…
2 Bringing Together Apergys Leading Diversified Portfolio of Artificial Lift Only provider of all six major forms of artificial lift solutions Product offering positioned to meet customer needs across the life cycle of the well…
2 With ChampionXs Leading Position in the Global Oilfield Chemicals Segment Estimated Global Production Chemicals Market Share ChampionX benefits from market leadership across key categories: Corrosion management and control All…
3 Combined Customer Base Concentrated with Largest, Most Stable Players Globally Long-standing relationships with diverse, 2019 Top 20 Customers by Combined Revenue blue-chip customers Top 20 Customers = 47% of 2019 Revenue…
4 Global Presence with Balanced Portfolio Across Regions and High Recurring Revenue Revenue by Geography High Recurring Production Revenue1 Drilling & Completions 0.5bn U.S. Non- 12% Recurring Int'l. 0.5 bn 4% U.S. 16% 43%…
5 Platform to Deliver Production Optimization Solutions and Accelerate Digital Adoption in the Oilfield Fluid and Chemical Injection Optimization Controlled dosing of chemicals for well Apergys Strong Track Record Chemical…
5 Platform to Accelerate Digital Adoption in the Oilfield: Chemical Skids Case Study Chemical Skids Market Today: Chemical Skids Market Tomorrow: Underserved Customer Needs Modular, Digitally Enabled Chemical Skids Loss production…
5 Strong R&D Capabilities and Best-in-Industry Technology and Engineering Talent Apergy Patent Portfolio 1 ChampionX Innovation Focus 1000 Combined company IP Innovation powerhouse drives ongoing value-creation for customers…
Synergy Opportunity Overview 36 Unlocking energy. Copyright 2020 Apergy. All rights reserved.
Compelling Value Creation Through Synergies Run-rate Cost Synergy Estimate Status Update High confidence in achievable expected synergies 75mm in expected cost 75mm synergies Corp Cost Avoidance Planning on track for realization…
Cost Synergy Planning Progress on Track Value Tracking Progress Cost Synergy Areas of Focus Status Opportunity Line of Sight Action Plan P&L Impact Estimated Visibility In Place Corp Cost Duplicative Direct and Immediate P&L…
Example: Indirect Savings Opportunity Indirect Savings Initiatives Summary Update on Line of Sight Identified Initiatives Savings Lever Realization Timing Implementation Status Corp Cost Avoidance SG&A SG&A Rates and Identified…
Example: International Artificial Lift Expansion Market Size (mm) 1 Right to Win Rationale Country 1 350 ChampionX relationships with key accounts and enhanced service footprint Share Country 2 300 Value-add well design; local…
Combined Financial Summary 42 Unlocking energy. Copyright 2020 Apergy. All rights reserved.
Historical Combined Company Financial Performance Revenue Adj. EBITDA and Margin1 Commentary Combined business has substantial scale 16 19 CAGR: 6% 16 19 CAGR: 14% 2019A revenue of 3.5 billion 4,912 1,061 400mm in 2016 trough…
Historical Segment Performance Combined Company Production Focused Revenue Combined Company Drilling / Completion Revenue Production and Automation Technologies (Apergy) & Drilling Technologies (Apergy) & Oilfield Performance…
Business Mix More Resilient Today 84% of Combined Company revenue today is from production Higher than either Apergy or ChampionX during 2014 peak Production focused segments performed significantly better than drilling / completion…
Q1 2020 Performance Update Financial Performance Summary Commentary Solid start to the year despite impact of COVID- Revenue % Sequential Growth 19 and OPEC+ actions Apergy 261 5.5% Both companies met expectations ChampionX 559…
Strong Through-Cycle Free Cash Flow Generation and Low Capital Intensity FCF Conversion1 Trough (2016) Capex as a % of Revenue (2016 2019 Average) FCF Conversion1 (2016 2019 Average) 93% 68% 58% 48% 43% 44% 4% 3% 4% 2 3…
Transaction Strengthens Liquidity; No Near-Term Maturities Liquidity FCF Generation3 Combined Company Debt Maturity Schedule New Term Loan B 455 537 Senior Cash on hand1 224 Term Notes Loan B 300 265 Revolver Availability…
Combined Financial and Operating Priorities Consistent with Top Box Framework Top Box Performer Focus portfolio on diverse, production-focused businesses across geographies (equipment + Stronger in Downturn Strong Across Periods…
On Track to June Close April May June ChampionX S-4/S-1 for Exchange Offer Exchange Offer the Exchange Offer launched expiration (6/3) effective Apergy Special Transaction close Apergy S-4 for the Shareholder Meeting Apergy begins…
Summary and Q&A 53 Unlocking energy. Copyright 2020 Apergy. All rights reserved.
Summary Value Creation Thesis for Investors Creates the premier oilfield production-optimization solutions platform Increased Scale with 3.5bn revenue and 600mm of adjusted EBITDA (2019A combined basis) Complementary Combines two…
Appendix 55 Unlocking energy. Copyright 2020 Apergy. All rights reserved.
ChampionX 2019 Performance and Carve-out Cost Detail Business performed well and met projection of 350mm of full year standalone adjusted EBITDA ( in M) 2019A ChampionX Adjusted EBITDA per S-4 (Carve Basis) 382 (-) Standalone…
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