A GLOBAL LEADER IN MINERAL DRILLING SERVICES TSX: FAR

Transcription

1 A GLOBAL LEADER IN MINERAL DRILLING SERVICES

2 TABLE OF CONTENTS Slide # 3. Forward Looking Statements 4. Key Takeaways Points 1 to 4 5. Foraco Market Profile (as of March 3, 2015) 6. Tracking Stock Performance (as of March 3, 2015) 7. Key Takeaway - Point 1 - Global Mineral & Water Driller 8. Strong & Experienced Management Team 9. Global Reach 10. Skilled People Based Business 11. Versatile and Modern Drill Fleet 12. Delivering Drilling Solutions (Stages of the Mine Life Cycle) 13. Competitive Landscape (Global Mineral Rig Counts) 14. Consistent Strategy (Focus on Leveraging our Position) 15. Key Takeaway - Point 2 Diversified by Commodity & Geography 16. Diversified Commodity Exposure (Revenue by Commodity Full Year 2014) 17. Expanding Geographic Coverage (Revenue by Region Full Year 2014) 18. Leveraging Strong Customer Relationships (Revenue by Customer Full Year 2014) 19. Key Takeaway - Point 3 Financial Data 20. Selected Financials (Income Statement Actuals 2014, 2013, 2012) 21. Selected Financials (Balance Sheet 2014, 2013, 2012) 22. A Target Acquisition Strategy (2007 Current) 23. Key Takeaway - Point 4 Adapting to a Changing Market 24. Mineral Drilling Services Macro Environment 25. Adapting to a Changing Market 26. Compelling Investment Proposition 27. Contact Information 28. Analyst Coverage 2

3 FORWARD LOOKING STATEMENTS Certain statements herein, including all statements that are not historical facts, contain forward-looking statements and forward-looking information within the meaning of applicable securities laws. Such forward-looking statements or information include, but are not limited to, statements or information with respect to: the business and development of the Company; the Company s future business and strategies; and requirements for additional capital and future financing. Forward-looking statements or information also includes information contained in pro forma financial statements. Often, but not always, forward-looking statements or information can be identified by the use of words such as plans, expects or does not expect, is expected, budget, scheduled, estimates, forecasts, intends, anticipates or does not anticipate or believes or variations of such words and phrases or statements that certain actions, events or results may, could, would, might or will be taken, occur or be achieved. With respect to forward-looking statements and information contained herein, we have made numerous assumptions including among other things, the assumptions made in connection with the preparation of the pro forma financial statements. Although our management believes that the assumptions made and the expectations represented by such statement or information are reasonable, there can be no assurance that a forwardlooking statement or information referenced herein will prove to be accurate. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statement or information. Readers should also refer to the Company s Annual Information Form for the year ended December 31, 2013 and the Company s most recent Management Discussion and Analysis and the risk factors discussed in such documents for additional information on risks and uncertainties relating to forward-looking statements and information. Although we have attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in the forward-looking statements or information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Also, many of the factors are beyond the control of the Company. Accordingly, readers should not place undue reliance on forward-looking statements or information. The Company undertakes no obligation to reissue or update any forwardlooking statements or information as a result of new information or events after the date hereof except as may be required by law. All forwardlooking statements and information contained in this presentation are qualified by this cautionary statement. 3

4 KEY TAKEAWAYS 1. Global Mineral & Water Driller 2. Diversified by Commodity & Geography 3. Financial Data 4. Adapting to a Changing Market 4

5 FORACO MARKET PROFILE Stock Symbol: Shares Issued and Outstanding: Share Price (as of March 3, 2015): Market Capitalization: 2013 Dividend: 2012 Dividend: Major Shareholder: JPC-DS million C$0.50 C$44.97 million Nil C$0.055 per share 42.0% basic 1 Shares of JPC-DS are held by Financière Marville SARL, Financière Berlaimont SARL, Financière Tornaco SARL 5

6 TRACKING STOCK PERFORMANCE 1 Year 5 Years As of March 3,

7 KEY TAKEWAY Point 1 Global Mineral & Water Driller 7

8 STRONG & EXPERIENCED MANAGEMENT TEAM Daniel Simoncini Chairman and Co-CEO Director & CEO since incorporation Over 30 years of industry experience Based in Singapore Jean-Pierre Charmensat Co-CEO and CFO Director & Executive Officer since incorporation Over 35 years of management experience Based in London Timothy Bremner SVP North America Ibrahim Baderi VP Africa Thierry Merle VP Europe & Middle East Santiago Marin SVP Latin America Philippe Violle SVP Engineering Andrey Popov VP CIS Peter Jacobs SVP Asia Pacific Olivier Demesy VP Brazil Fabien Sevestre Deputy CFO TSX: TSX: FAR FAR 8

9 GLOBAL REACH Canada United States Brazil Mexico Argentina Chile Peru England France Germany Turkey Russia Burkina Faso Chad Republic of Congo Ivory Coast Ghana Guinea Mali Niger Kazakhstan Australia New Caledonia Singapore 24 countries TSX: TSX: FAR FAR 9

10 SKILLED PEOPLE BASED BUSINESS 1,600+ experienced employees located around the globe 10

11 VERSATILE AND MODERN DRILL FLEET Global Drill Rig Fleet 302 Drill Rigs 62 Rotary 212 Diamond 28 Combination 11

12 DELIVERING DRILLING SOLUTIONS At Every Stage of the Mine Life Cycle Exploration Geotechnical Drilling Activity Metallurgical Sampling Water 12

13 COMPETITIVE LANDSCAPE Global Mineral Rig Counts Boart Longyear Major Drilling Foraco Energold Layne Christensen Orbit Garant Geotec Boyles Capital Drilling Ausdrill Swick Mining Cabo Geodrill Highly fragmented market with a small group of globally active companies. Foraco has grown to become the 3 rd largest global driller with approximately 5% share of the world s mineral drilling fleet. There remains abundant room for consolidation and future growth. There is a growing number of contractors going under administration or liquidation. Source: CLSA Reports and Company Reports TSX: TSX: FAR FAR 13

14 CONSISTENT STRATEGY Focus on Leveraging our Position 1 Growth in the Americas 2 Solidify our preferred driller status with Majors 3 Continue to capitalize on African opportunities 4 Expand Asia, Far East and CIS presence 14

15 KEY TAKEAWAY Point 2 Diversified by Commodity & Geography 15

16 DIVERSIFIED COMMODITY EXPOSURE Revenue By Commodity Full Year 2014 OIl & Gas 3% Base Metals 2% Coal 12% Uranium 1% Gold 31% Water 12% Nickel 11% Copper 14% Iron 14% TSX: TSX: FAR FAR 16

17 EXPANDING GEOGRAPHIC COVERAGE Revenue By Region Full Year 2014 A global leader in the mineral drilling industry. Presence in all major mining markets. TSX: TSX: FAR FAR 17

18 LEVERAGING STRONG CUSTOMER RELATIONSHIPS Revenue By Customer Full Year 2014 Main Customers 14% 86% Majors & Multinational Institutions Juniors 18

19 KEY TAKEAWAYS Point 3 Financial Data 19

20 SELECTED FINANCIALS 1 Includes amortization and depreciation expenses ² Net Cash generated from operations less Capex Source: Company Reports. 20

21 SELECTED FINANCIALS Source: Company Reports. 21

22 A TARGETED ACQUISITION STRATEGY TO REACH A GLOBAL SCALE Acquisition History January 07: Connors Drilling September 08: North West Sequoia April 09: Mosslake Drilling Services April 10: Eastern Drilling Company April 10: Adviser Drilling April 12: Servitec November 12: John Nitschke Drilling Geography Added North America North America Australia Russia Lat Am Brazil Australia Rigs Acquired Rigs end of the year % of Worldwide Mineral Drilling Market Foraco Operations Touch 73% 76% 36% 43% 56% Current 22

23 KEY TAKEAWAY Point 4 Adapting to a Changing Market 23

24 MINERAL DRILLING SERVICES MACRO ENVIRONMENT Metals pricing is the key driver to mineral drilling. Prices entered a bear market in the second half of 2012 and have continued to deteriorate since then. Majors have reviewed their cost structures and significantly decreased their CAPEX, including exploration. Market sentiment towards mining in general, and juniors in particular, is still negative; few explorers can raise capital on the market today. Drilling market is in the low part of the cycle, and everybody hopes it will bottom-up later in 2015 or in 2016 as producers ultimately need to replace depleting reserves through exploration activity. Worldwide Mineral Exploration Spending 1 FAR Activity by Mine Stage 2014: More exposed to Production 1 Source: MEG and CIBC Research estimate Exploration Feasibility Stage Life of Mine Extension Water 24

25 ADAPTING TO A CHANGING MARKET Macro Environment Pressures Actions towards a leaner, more efficient Organization ready for the next phase of Growth Decrease in Activity Downward Pricing Pressure Rigs Moved to more Active Regions Reduced Total Headcount from 4,400 (2012 peak) to 1,600 today Reduced Supplier Costs and Optimize Performance Reduced Visibility SG&A Costs Reduced by 33% YoY Continuous CAPEX & Working Capital Scrutiny - FORACO is Free Cash Flow Positive TSX: TSX: FAR FAR 25

26 COMPELLING INVESTMENT PROPOSITION World s 3 rd Largest Global Mineral Driller. Reliable and innovative, with a safety and customer first culture. Solid management team, with a world-class customer base who, on average, rated FAR services at 82.4/100 in a 2014 customer survey. Increased Financial Resilience: Free Cash Flow Positive - Net Debt down 20% YoY - Successfully negotiated a 2 year debt holiday with its banks. Well positioned for next phase of growth. 26

27 FOR MORE INFORMATION PLEASE CONTACT Brenda Patterson-Mack T: M:

28 ANALYST COVERAGE Broker Analyst Contact CIBC World Markets Kevin Chiew Cormark Securities Maggie MacDougall Mackie Research Capital Ryan Hanley