Miclyn Express Offshore FY2013 results presentation

Miclyn Express OffshoreFY13 Results Presentation – 26 August, 2013

Live Webcast DetailsPresenter: Diederik de Boer, CEO

Date: 26 August, 2013

Time: 11:00am AEST

Access: http://www.brrmedia.com/event/114725

www.miclynexpressoffshore.comMICLYN EXPRESS OFFSHORE

FY13US$m

Normalised1 FY13US$m

FY12US$m Variance

Revenue 245.3 245.3 269.0 9%

Operating EBITDA 83.1 87.6 96.9 10%

EBITDA 84.7 89.2 97.4 9%

NPAT 46.5 53.8 65.5 18%

EPS (cents) 16.6 19.3 23.7 19%

Financial Year 2013 Results

1

Operating EBITDA declined by 9% after reporting 34% growth in FY12

Core OSV and Crew/Utility Vessel segments grew, albeit below expectations

Tug and Barge fleet performed well, however margins contracted versus record FY12 performance post DB Schenker project

Supplementary segments, Shipyard and Third Party Vessels, contracted substantially with roll off of DB Schenker project

Express Offshore Solutions had another strong year with higher revenue and improving margins

Withdrawal from Iran, one off provision of $4.5m impacting FY13 earnings

Refinancing of core facility at attractive terms resulting in US$2.8m write off of unamortised upfront fees

Continued operational excellence, MEO is a provider of choice

1. Excluding the impact of the $4.5m one-off Iran provision and $2.8m write off of the unamortised upfront fees associated with the refinancing of core facility


FY13 FY12 Variance

Revenue (US$m) 74.9 70.2 7%

Gross Profit (US$m) 45.9 43.8 5%

Gross Margin (%) 61.2 62.5

Utilisation improved to 84% in FY13 despite a weak 3rd Quarter (73% utilisation) due to

a number of high end OSV’s undergoing dockings and prep work for new contracts

Endurance, Endeavor, Galaxy, Constructor II, Magellans and Sovereigns all experienced downtime

FY14 looking positive with a number of long term contracts secured, full year contribution from 4 vessel additions in FY13

Fleet expansion continues

2 x 2,000 DWT PSV’s in Batam Shipyard to be delivered in 1HFY14; one has secured a contract

Uniwise Offshore (Thailand JV) has two AHTS on order with Chinese Shipyard, delivery mid FY15

MEO has taken up purchase option for two additional AHTS with the same Shipyard, delivery late FY15

Segment Highlights

Segment PerformanceOffshore Support Vessels (OSVs)

2

9182 84

64.3

70.2

74.9

50.0

55.0

60.0

65.0

70.0

75.0

80.0

0

10

20

30

40

50

60

70

80

90

100

FY11 FY12 FY13

Revenue (U

S$m

)

Util

isat

ion

(%)

Utilisation Revenue


Segment Highlights

Segment PerformanceCrew/Utility Vessels

3

91 92 93

49.1

54.7

56.5

44.0

46.0

48.0

50.0

52.0

54.0

56.0

58.0

0

10

20

30

40

50

60

70

80

90

100

FY11 FY12 FY13

Revenue (U

S$m

)

Util

isat

ion

(%)

Utilisation Revenue

FY13 FY12 Variance

Revenue (US$m) 56.5 54.7 3%



93% utilisation in FY13

Stable, dominant market leader in this segment

5 new vessels delivered in 2HFY13, with 2 more being delivered in early FY14

Frame agreement with Singaporean Shipyard to deliver 6 additional vessels between Dec-13 and Dec-14, with an option to acquire 4 more in CY 2015

8 older vessels sold during FY13; renewal activity to continue


76% utilisation in FY13

Margin contraction due to lower activity in Australia post DB Schenker contract completion

EOS projects are keeping a portion of the fleet busy

Subsea 7 (Gorgon) and Heerema (Ichthys) contracts will utilise a number of Barges in FY14 and FY15

Tarka was purchased in 2HFY13

330 x 120 foot Barge purchased in early FY14

2 x 400ft Ballastable Barges to be delivered in 1HFY14 from our internal Shipyard

Segment Highlights

Segment PerformanceTugs and Barges

4

FY13 FY12 Variance

Revenue (US$m) 46.9 42.3 11%



53

77 76

20.7

42.346.9

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

0

10

20

30

40

50

60

70

80

90

100

FY11 FY12 FY13

Revenue (U

S$m

)

Util

isat

ion

(%)

Utilisation Revenue


Legacy assets from Samson acquisition

Small, non core segment

Utilisation improved to 55% in 2H FY13

One vessel being used internally for logistics support

One more vessel divested in early 2H FY13, four remaining

Plan to exit this segment over time

Segment Highlights

Segment PerformanceCoastal Survey Vessels

5

68

4740

5.0

5.7

5.5

4.6

4.8

5.0

5.2

5.4

5.6

5.8

0

10

20

30

40

50

60

70

80

90

100

FY11 FY12 FY13

Revenue (U

S$m

)

Util

isat

ion

(%)

Utilisation Revenue

FY13 FY12 Variance

Revenue (US$m) 5.5 5.7 3%




Vessels chartered in from Third Parties to supplement MEO’s core fleet

Non-core, opportunistic earnings stream

Significant decline in earnings in this segment as anticipated due to large spread of vessels chartered in for DB Schenker project in FY12

Project contingency released in FY13 improving margin

Segment Highlights

Segment PerformanceThird Party Vessels

6

FY13 FY12 Variance

Revenue (US$m) 26.0 53.1 51%



15.1

53.1

26.0

0.0

10.0

20.0

30.0

40.0

50.0

60.0

FY11 FY12 FY13

Rev

enue

(US

$m)


Third party revenue down as a result of DB Schenker project completion

Continued efforts to build prospects for third party earnings (fabrication, repair, newbuilding)

Margin enhancement due to efficiency improvements and release of project contingencies

Newbuilding activity continues

2 x 2,000 DWT Platform Supply Vessels (“PSVs”) expected delivery in mid CY14

2 x 400ft Ballastable Barges expected delivery in 1H FY14

Segment Highlights

Segment PerformanceShipyard

7

FY13 FY12 Variance

Revenue (US$m) 8.5 16.6 49%




Project and pipe transportation business continues to gain momentum

Low capital intensity

Margin enhancement track record is established

Further expansion of client base, with a number of new pipe delivery and structure transport contracts won in SE Asia and Middle East

Bidding on a number of new major Australian opportunities

Expanding pipeline prospects in this niche segment

Utilisation upside for MEO’s Tug and Barge fleet

Segment Highlights

Segment PerformanceExpress Offshore Solutions

8

FY13 FY12 Variance

Revenue (US$m) 36.7 30.1 22%




41%

34%

23%

2%FY13 Revenue

Asia

Australia

Middle East

Other Inter-regional

Regional Update and Outlook

Dip in activity levels in Australia in FY13, however new opportunities are shaping up for the new year

Long term OSV contract won in May-13 for Sovereign I

Large Barge contract awarded by Heerema for Icthys project

Large AHT & Barge contract awarded by Subsea 7 for Gorgon project

Middle East continues to deliver high utilisation levels

Exposure to Qatar grew in FY13

Local setup created in Abu Dhabi

Continued focus on developing Saudi and UAE businesses

South-East Asia remains our core market

Thailand operations continued to expand in FY13; increased from 6 OSV’s in FY12 to 8 OSV’s in FY13

More vessels deployed into Indonesia and Malaysia

Regional Update

FY14 Outlook

Positive outlook for the group, return to earnings growth expected in FY14

No adjustment to earnings guidance issued on 23 April 2013

9


Clear Fleet Strategy

11

Maximise Utilisation

Expand OSV Fleet

Renew Crew/Utility Vessel Fleet

Value Added Deployment of Transport

Assets

Support Infrastructure

Customer Focus

Operational Excellence


17.9

80.67.7

28.1

88.214.0

8.4 6.6 0.0 17.10.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

US

$m

Finance Update

12

Strong cash generation off a lower earnings base

Growth CAPEX program largely funded by operating cashflows

Non collection of Iran receivable due to exit from the region impacted operating cashflow in FY13

Fleet renewal activity continues with proceeds reinvested into more relevant assets

Core facility refinanced, significantly pushing back amortisation of the facility

Ope

ning

Cas

h

Ope

ratin

g C

ashf

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Deb

t Ser

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/ U

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Gro

wth

CA

PE

X

Mai

nten

ance

CA

PE

X

Div

iden

ds Tax

Clo

sing

Cas

h

0.0

20.0

100.0

80.0

60.0

40.0

120.0

140.0

US

$m

160.0

Oth

er

Ves

sel D

ives

tmen

ts


Core facility refinanced on attractive terms

US$160 Term Loan + US$140m RCF

Margin of 2.45% + LIBOR

RCF drawn to US$56m as at 30 June 2013

Finance Update (cont.)

14

Strong balance sheet, conservative gearing Dividend on hold

Dividend is currently on hold

Company prefers to preserve cash for future growth opportunities

FY13 FY12

Net Debt 219.5 179.2

Net Debt / EBITDA 2.51 1.8

Gearing (%)2 36.4% 33.9%

1. Excluding the one off US$4.6m Iran provision2. Net Debt / (Net Debt + Equity)


Solid execution capability

Financial capacity to fund growth

Well positioned in a healthy industry

Attractive pipeline of opportunities

Proven operational excellence

Strong balance sheet

Summary

13

Clear strategy for future growth


Appendix 1Statement of Financial Performance

US$m FY13 FY12 Variance %Revenue 245.3 269.0 (9%)Operating Costs (125.7) (145.8) 14% Gross Profit 119.7 123.2 (3%)GP Margin 48.8% 45.8%

Other Income 2.0 3.5 (43%) Overheads (32.6) (29.3) (11%) Iran Provision (4.5) - NMForex (1.4) (0.5) (180%) Operating Earnings 83.1 96.9 14%

Gain on disposal of vessels 1.5 0.8 88% EBITDA 84.7 97.7 (13%) EBITDA Margin 34.5% 36.2%

Depreciation & Amortisation (24.6) (20.6) (19%)EBIT 60.0 77.1 (22%)

Net Finance Costs (9.6) (6.9) (39%)Income Tax Expense (2.9) (4.3) (33%)Income Tax Expense Rate 5.8% 6.1%PAT 47.5 65.9 (28%)

Minority Interest (1.0) (0.4) (150%) NPAT 46.5 65.5 (29%) NPAT Margin 18.9% 24.3%

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Appendix 2Segments

FY13 Revenue

FY13Gross Profit

OSVs 74.9 45.9

Crew/Utility Vessels 56.5 32.9

Tugs and Barges 46.9 24.7

Coastal Survey Vessels 5.5 0.8

Third Party Vessels 26.0 6.9

Shipyard 8.5 3.1

EOS 36.7 5.4

EOS Elimination1 (9.7) -

Total 245.3 119.7

17

1. Elimination for intercompany charter of vessels from MEO to EOS


Appendix 3Statement of Financial Position

(US$’000) As at 30 Jun 2013 As at 30 Jun 2012Current assetsCash and cash equivalents 17.1 17.9Trade receivables 75.0 67.9Other receivables and prepayments 11.4 15.3Inventories 6.0 6.1Vessels held for sale 1.8 -Total current assets 111.2 107.1Non-current assetsProperty, plant and equipment 499.0 431.6Other assets 3.0 1.6Goodwill 59.2 62.6Intangible assets 0.5 0.7Total non-current assets 561.8 496.5 TOTAL ASSETS 673.0 603.6Current liabilitiesTrade and other payables 50.1 49.4Current tax payable 1.7 6.1Loans and borrowings 23.1 23.9Other liabilities 0.3 0.4 Total current liabilities 75.2 79.8Non-current liabilitiesLoans and borrowings 213.5 173.2 Other non-current liabilities 0.9 1.3 Total non-current liabilities 214.4 174.5TOTAL LIABILITIES 289.6 254.3NET ASSETS 383.4 349.4Shareholders equityShare capital 190.4 184.0 Other equity reserves (42.7) (43.4)Translation reserve (4.1) 1.5Retained earnings 238.3 206.8Minority interests 1.5 0.5 TOTAL EQUITY 383.4 349.4

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Appendix 4Cash Flow Statement

US$m FY13 FY12

EBIT 60.0 77.1

Depreciation and amortisation 24.6 20.6

EBITDA 84.7 97.7

Vessel disposal gains (1.5) (0.8)

Non-cash and other items 5.7 (0.6)

Working capital movement (8.1) (7.0)

Cash flows available from operations 80.8 89.3

Proceeds from sale of property, plant and equipment (including vessels) 7.7 1.8

Capital expenditure - growth (88.2) (90.7)

Capital expenditure - maintainance (14.0) (9.9)

Other investing activities (0.2) (16.3)

Cash flows before financing and tax (13.9) (25.8)

Financing (19.7) (25.0)

Debt repayment (287.4) (44.3)

Debt drawdown 327.0 92.6

Tax (6.6) (4.1)

Cash flows after financing and tax (0.7) (6.7)

19


Appendix 5Fleet Composition as at 30 June 20131

20

124 vessels + 17 under

construction / to be delivered

Vessels under construction / to be delivered

1. Excludes Third Party Vessels

25

63

114

6

8

21

3

0

10

20

30

40

50

60

70

80

OSV Crew/Utility Vessels

Tugs and Barges

Coastal Survey Vessels

Num

ber o

f ves

sels

BargesTugs


Reliance on Third Party InformationThe views expressed here contain information that has been derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the information. This presentation should not be relied upon as a recommendation or forecast by Miclyn Express Offshore Limited (“Miclyn Express Offshore”).

Forward Looking StatementsSome of the information contained in this document may constitute forward-looking statements that are subject to various risks and uncertainties. Nothing in this document is a promise or representation as to the future. Statements or assumptions in this document as to future matters may prove to be incorrect. Miclyn Express Offshore does not make any representation or warranty as to the accuracy of such statements or assumptions. You acknowledge that circumstances may change and the contents of this document may become outdated as a result. You also acknowledge that no audit or review has been undertaken by an independent third party of the assumptions, data, results, calculations and forecasts contained in or referred to in this document. You should make your own independent assessment of the information.

No WarrantiesWe makes no warranty, express or implied, nor assumes any responsibility in its contents for its accuracy, completeness, its use for any general of particular purpose, nor that such items or use of such items would not violate or infringe rights of others.

No Offer of SecuritiesNothing in this release should be construed as either an offer to sell or a solicitation of an offer to buy or sell Miclyn Express Offshore securities in any jurisdiction.

Pro-Forma Financial InformationReferences to pro forma financials exclude any exceptional items. A reconciliation to statutory financials is contained within the prospectus, available at our website www.miclynexpressoffshore.com.

Important notice and disclaimer

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Miclyn Express Offshore FY2013 results presentation

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