for personal use only2012/05/15 · the distribution of this presentation in jurisdictions outside...

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© 2012 Boart Longyear. All rights reserved.

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BOART LONGYEAR

2012 ANNUAL GENERAL MEETING CRAIG KIPP - CEO

Water Services – Arizona, USA F

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IMPORTANT NOTICE AND DISCLAIMER

• This presentation has been prepared by Boart Longyear Limited, ABN 49 123 052 728 (Boart Longyear or the Company). It

contains general information about the Company’s activities as at the date of the presentation. It is information given in summary

form and does not purport to be complete. The distribution of this presentation in jurisdictions outside Australia may be

restricted by law, and you should observe any such restrictions.

• This presentation is not, and nothing in it should be construed as, an offer, invitation or recommendation in respect of securities,

or an offer, invitation or recommendation to sell, or a solicitation of an offer to buy, securities in any jurisdiction. Neither this

document nor anything in it shall form the basis of any contract or commitment. This presentation is not intended to be relied

upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or

needs of any investor. All investors should consider such factors in consultation with a professional advisor of their choosing

when deciding if an investment is appropriate.

• The Company has prepared this presentation based on information available to it, including information derived from public

sources that have not been independently verified. No representation or warranty, express or implied, is provided in relation to

the fairness, accuracy, correctness, completeness or reliability of the information, opinions or conclusions expressed herein.

• This presentation includes forward-looking statements within the meaning of securities laws. Any forward-looking statements

involve known and unknown risks and uncertainties, many of which are outside the control of the Company and its

representatives. Forward-looking statements may also be based on estimates and assumptions with respect to future business

decisions, which are subject to change. Any statements, assumptions, opinions or conclusions as to future matters may prove to

be incorrect, and actual results, performance or achievement may vary materially from any projections and forward-looking

statements.

• Due care and attention should be undertaken when considering and analysing the financial performance of the Company.

• All references to dollars are to United States currency unless otherwise stated.

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33 52

85 74

86

160

0

50

100

150

200

1H 2H Full Year

2010

2011

685 791

1,476

959 1,061

2,020

0

500

1000

1500

2000

2500

1H 2H Full Year

2010

2011

98 124

222

165 191

356

0

100

200

300

400

1H 2H Full Year

2010

2011

• Record revenue

• Emerging market strength: Africa & South America

• Strong 2H: With a shortened holiday shutdown

2011 RESULTS SUMMARY (US $M)

Revenue

EBITDA

• Operating leverage on volume

• Continued 2H price and margin recovery

• Excellent cost control

• Record profit

• Operating leverage off-setting higher interest cost

• Earnings per share increased 89% to US 35.1 cents

Net Profit after Tax (NPAT)

14% 17% 24% 24% 15% 18%

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2.1

3.4

4.8

5.6

1H 2010 2H 2010 1H 2011 2H 2011

0

10

20

30

40

50

60

70

80

90

100

NPAT Dividend

DIVIDEND PAYMENT

30% Payout Ratio

15% Franked

2H 2011 (US $M)

Record Date: 16 March 2012 Payment Date: 13 April 2012

Dividend History (US cents)

86

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106

120

162

194

0

50

100

150

200

250

H1 2010 H2 2010 H1 2011 H2 2011 H1 2012

8%

14%

~19%

2010 2011 2012

$221M

CAPEX

$300M

CAPEX

ORGANIC INVESTMENT PAYING OFF

Return on Equity EBITDA

$140M

CAPEX

(US

$M

)

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0.9x

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

3.5x

4.0x

1

Gro

ss D

eb

t /

EBIT

DA

$250M Revolver Covenant Compliance

3.5x Max.

Financial Leverage Gross Debt/EBITDA

(US $M)

LEVERAGE < 1x EBITDA

14.8x

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

14.0x

16.0x

1

EB

ITD

A /

In

tere

st

Interest Cover EBITDA/Interest

3.0x Min.

As of 31 December 2011

Conservative Capital Structure

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ORACLE: ONE GLOBAL PLATFORM IN +40 COUNTRIES

Inventory Planning

Sales Quoting

Sales Ordering Order Fulfillment

Order Shipping

Revenue Collection

Not to mention: HR

Engineering

Statutory Reporting

Manufacturing

Fleet Management

Time & Labour

Accomplishment #1 F

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Drilling Equipment

Surface/Underground

Coring

Multi-Purpose / Sonic

RC / Rotary

Percussive

LX11 Sonic 600C LX12

S250M S36 Upgrade

Tooling

Swivel

Geo-Tech Bit

10UMX

UMX Casing Shoe

Cross Over

Sub

RC Rods Core Lifter

UMX Reamer

Surface Roller Latch

DTH Bits

LF130 Shack & RH

LM90DCi

LF120A LF240

LCH35 Head

LF300

LR500

LR90 LR140A+

NEW PRODUCTS

Sonic Rods

IN FIELD TEST OR ON THE SHOP FLOOR Accomplishment #2 F

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Drilling Equipment

Surface/Underground

Coring

Multi-Purpose / Sonic

RC / Rotary

Percussive

LX11 Sonic 600C LX12

S250M S36 Upgrade

Tooling

Swivel

Geo-Tech Bit

10UMX

UMX Casing Shoe

Cross Over

Sub

RC Rods Core Lifter

UMX Reamer

Surface Roller Latch

DTH Bits

LF130 Shack & RH

LM90DCi

LF120A LF240

LCH35 Head

LF300

LR500

LR90 LR140A+

NEW PRODUCTS

Sonic Rods

IN FIELD TEST OR ON THE SHOP FLOOR Accomplishment #2 F

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75% of 2012 rig adds are in areas with high utilisation

> 80% Utilisation

ORGANIC GROWTH: ADDING RIGS Accomplishment #3

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$2,396

$1,352

$2,069

$4,649

$3,403 $3,250

$1,972

$2,364

$5,539

$4,121

$-

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

L. America W. Africa EMEA Other N. America APAC

Exp

lora

tio

n S

pen

d (

US

$M

)

2008 2011

GLOBAL EXPLORATION SPEND – 2008 vs. 2011

Source: Metals Economics Group

L. America & W. Africa are driving exploration spend

+36%

+46% +14%

+19%

+21%

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GEOGRAPHIC EXPANSION

NAM 47%

APAC 28%

LAM 12%

EMEA 13%

2009 Revenue

NAM 39%

APAC 26%

LAM 14%

EMEA 21%

2011 Revenue

Expanding into high growth areas

Accomplishment #3 F

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SAFETY

Safety

Equipment

Green Hat

Program

3.50

0.65

0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00

ASX Average*

BLY 2011

Lost Time Incident Rate

71%

25%

57%

39%

2008

2009

2010

2011

% of Employees < 1 year BLY Lost Time Incidents

• Training

• Job familiarization

• Safety programs

10.61

4.45

4.65

3.08

1.90

2007

2008

2009

2010

2011

Severity Rate**

*Source: Citi Investment Research & Analysis – Safety Spotlight: ASX 100 Companies & More (27 January 2012)

**Severity Rate = (# of Lost Time Days x 200,000)/# of man hours

Accomplishment #4

Water Services

Training

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Registered to do Business

Pay All Taxes Ethical Business

Partners Proper Import Procedures

No Improper Payments

Visas and Work Permits

Internal

Audit

Legal

Counsel

Internal

Audit

Legal

Counsel

Internal

Audit

Legal

Counsel Internal

Audit

Legal

Counsel

Corporate

Latin America

EMEA

Asia Pacific

Internal

Audit

Legal

Counsel

North America

Resourced to address…

• New country

approval process

• No “Hit & Run”

• Payroll

• Corporate

• VAT

• Suppliers

• Distributors

• Customers

• Broker monitoring

• Regular global

customs audits

• FCPA

• UK Bribery Act

• Australia Criminal

Code

• Drillers

• Professionals

• Hiring regulations

INVESTING IN TALENT: DOING BUSINESS THE RIGHT WAY

Accomplishment #5 F

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DIVERSITY

• Committed to creating a diverse and motivated workforce

• Representing the many communities in which we operate

• New Board approved diversity policy

• Two new female Non-Executive Directors

• New internal Women’s Network

Female leaders in:

• Corporate Communications

• Corporate Controller

• Finance

• Global Procurement

• Global Training

• Human Resources

• Regional General Counsel

• Treasury

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2010 2011

Equivalent to

~226 cars off

roads

2010 20112010 2011

• Transition to water based paints

• High efficiency paint spray guns

Air Quality Controls Water Conservation

• Installation of membrane filter system

• Reuse of filtered water for floor washing

SUSTAINABILITY: 2011 PROJECT EXAMPLES

Global ISO 14001 certified since 2005

2010 2011

Tonnes o

f V

OC

Tonnes o

f w

aste

• Relamping with high-efficiency fixtures

Energy Conservation Waste Minimisation

MW

h c

onsum

ption

Tonnes o

f

carb

on w

aste

• Manufacturing plant recycling program for

diamond bit carbon waste

Equivalent to

~2,970 car

washes

Equivalent to annual

electricity use of ~41

homes

Equivalent to

annual waste of

~79 homes

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Rainbow Elizabetta Project - Zambia

In kind Water Well Drilling - Asia

Children’s Charity - Chile

COMMUNITY INVOLVEMENT: 2011 EXAMPLES

- USA

Emergency Medical Services - APAC Technical Education - USA

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SUSTAINABILITY: PEOPLE

+ 11,000 People employed worldwide

+ $700M Compensation & Benefits worldwide

Compensation Training Global

Exposure Technology Skills

Not just a job…A CAREER

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2012 GUIDANCE

• Pricing: Continued positive trends (as expected)

• Rig Utilisation: Robust at 75%-80% (as expected)

• Factory Utilisation: 60%-80% (steady demand)

• Labor/Material Cost: Increasing, but no surprises (as budgeted)

• “Majors”: Robust (on-going 36 month trend)

• “Juniors”: Marginal projects challenged

• Backlog: Remains strong (Services & Products)

(US $M)

Growth on Plan

2011 Actual2012

GuidanceYOY %

Change

Revenue 2,020 2,300 14%

EBITDA 356 460 29%EBITDA Margin % 18% 20%

36%CAPEX 221 300

# of Rigs 1,180 1,250

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for personal use only2012/05/15 · the distribution of this presentation in jurisdictions outside...

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