Miclyn Express Offshore FY13 Results Presentation 26 August, 2013 Live Webcast Details Presenter: Diederik de Boer, CEO Date: 26 August, 2013 Time: 11:00am AEST Access: http://www.brrmedia.com/event/114725
Financial Year 2013 Results FY13 US$m Normalised 1 FY13 US$m FY12 US$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% 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 $2.8m write off of the unamortised upfront fees associated with the refinancing of core facility 1
Segment Performance Offshore Support Vessels (OSVs) Segment Highlights Utilisation improved to 84% in FY13 despite a weak 3rd Quarter (73% utilisation) due to a number of high end OSV s undergoing dockings and prep work for new contracts Endurance, Endeavor, Galaxy, Constructor II, Magellans and Sovereigns all experienced downtime FY14 looking positive with a number of long term contracts secured, full year contribution from 4 vessel additions in FY13 Fleet expansion continues 2 x 2,000 DWT PSV s in Batam Shipyard to be delivered in 1HFY14; one has secured a contract Uniwise Offshore (Thailand JV) has two AHTS on order with Chinese Shipyard, delivery mid FY15 MEO has taken up purchase option for two additional AHTS with the same Shipyard, delivery late FY15 FY13 FY12 Variance Revenue (US$m) 74.9 70.2 7% Gross Profit (US$m) 45.9 43.8 5% Gross Margin (%) 61.2 62.5 2
Segment Performance Crew/Utility Vessels Segment Highlights 93% utilisation in FY13 Stable, dominant market leader in this segment 5 new vessels delivered in 2HFY13, with 2 more being delivered in early FY14 Frame agreement with Singaporean Shipyard to deliver 6 additional vessels between Dec-13 and Dec-14, with an option to acquire 4 more in CY 2015 8 older vessels sold during FY13; renewal activity to continue FY13 FY12 Variance Revenue (US$m) 56.5 54.7 3% Gross Profit (US$m) 32.9 32.7 1% Gross Margin (%) 58.2 59.8 3
Segment Performance Tugs and Barges Segment Highlights 76% utilisation in FY13 Margin contraction due to lower activity in Australia post DB Schenker contract completion EOS projects are keeping a portion of the fleet busy Subsea 7 (Gorgon) and Heerema (Ichthys) contracts will utilise a number of Barges in FY14 and FY15 Tarka was purchased in 2HFY13 330 x 120 foot Barge purchased in early FY14 2 x 400ft Ballastable Barges to be delivered in 1HFY14 from our internal Shipyard FY13 FY12 Variance Revenue (US$m) 46.9 42.3 11% Gross Profit (US$m) 24.7 27.5 10% Gross Margin (%) 52.6 64.9 4
Segment Performance Coastal Survey Vessels Segment Highlights Legacy assets from Samson acquisition Small, non core segment Utilisation improved to 55% in 2H FY13 One vessel being used internally for logistics support One more vessel divested in early 2H FY13, four remaining Plan to exit this segment over time FY13 FY12 Variance Revenue (US$m) 5.5 5.7 3% Gross Profit (US$m) 0.8 1.8 56% Gross Margin (%) 14.0 32.0 5
Segment Performance Third Party Vessels Segment Highlights Vessels chartered in from Third Parties to supplement MEO s core fleet Non-core, opportunistic earnings stream Significant decline in earnings in this segment as anticipated due to large spread of vessels chartered in for DB Schenker project in FY12 Project contingency released in FY13 improving margin FY13 FY12 Variance Revenue (US$m) 26.0 53.1 51% Gross Profit (US$m) 6.9 9.9 30% Gross Margin (%) 26.8 18.7 6
Segment Performance Shipyard Segment Highlights Third party revenue down as a result of DB Schenker project completion Continued efforts to build prospects for third party earnings (fabrication, repair, newbuilding) Margin enhancement due to efficiency improvements and release of project contingencies Newbuilding activity continues 2 x 2,000 DWT Platform Supply Vessels ( PSVs ) expected delivery in mid CY14 2 x 400ft Ballastable Barges expected delivery in 1H FY14 FY13 FY12 Variance Revenue (US$m) 8.5 16.6 49% Gross Profit (US$m) 3.1 4.2 26% Gross Margin (%) 36.8 25.4 7
Segment Performance Express Offshore Solutions Segment Highlights Project and pipe transportation business continues to gain momentum Low capital intensity Margin enhancement track record is established Further expansion of client base, with a number of new pipe delivery and structure transport contracts won in SE Asia and Middle East Bidding on a number of new major Australian opportunities Expanding pipeline prospects in this niche segment Utilisation upside for MEO s Tug and Barge fleet FY13 FY12 Variance Revenue (US$m) 36.7 30.1 22% Gross Profit (US$m) 5.4 3.2 69% Gross Margin (%) 14.8 10.6 8
Regional Update and Outlook Regional Update Dip in activity levels in Australia in FY13, however new opportunities are shaping up for the new year Long term OSV contract won in May-13 for Sovereign I Large Barge contract awarded by Heerema for Icthys project Large AHT & Barge contract awarded by Subsea 7 for Gorgon project Middle East continues to deliver high utilisation levels Exposure to Qatar grew in FY13 Local setup created in Abu Dhabi Continued focus on developing Saudi and UAE businesses South-East Asia remains our core market Thailand operations continued to expand in FY13; increased from 6 OSV s in FY12 to 8 OSV s in FY13 More vessels deployed into Indonesia and Malaysia FY14 Outlook Positive outlook for the group, return to earnings growth expected in FY14 No adjustment to earnings guidance issued on 23 April 2013 9
Clear Fleet Strategy Expand OSV Fleet Operational Excellence Renew Crew/ Utility Vessel Fleet Maximise Utilisation Customer Focus Value Added Deployment of Transport Assets Support Infrastructure 11
Finance Update Strong cash generation off a lower earnings base US$m US$m 160.0 140.0 120.0 100.0 80.0 60.0 80.6 7.7 28.1 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 40.0 88.2 20.0 0.0 17.9 14.0 8.4 6.6 0.0 17.1 Opening Cash Operating Cashflows Vessel Divestments Debt Service / Upsize Growth CAPEX Maintenance CAPEX Dividends Tax Other Closing Cash 12
Finance Update (cont.) Strong balance sheet, conservative gearing Dividend on hold FY13 FY12 Net Debt 219.5 179.2 Dividend is currently on hold Company prefers to preserve cash for future growth opportunities Net Debt / EBITDA 2.5 1 1.8 Gearing (%) 2 36.4% 33.9% 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 1. Excluding the one off US$4.6m Iran provision 2. Net Debt / (Net Debt + Equity) 14
Summary Clear strategy for future growth Solid execution capability Well positioned in a healthy industry Attractive pipeline of opportunities Strong balance sheet Financial capacity to fund growth Proven operational excellence 13
Appendix 1 Statement of Financial Performance US$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) - NM Forex (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% 16
Appendix 2 Segments FY13 Revenue FY13 Gross 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 Elimination 1 (9.7) - Total 245.3 119.7 1. Elimination for intercompany charter of vessels from MEO to EOS 17
Appendix 3 Statement of Financial Position (US$ 000) As at 30 Jun 2013 As at 30 Jun 2012 Current assets Cash and cash equivalents 17.1 17.9 Trade receivables 75.0 67.9 Other receivables and prepayments 11.4 15.3 Inventories 6.0 6.1 Vessels held for sale 1.8 - Total current assets 111.2 107.1 Non-current assets Property, plant and equipment 499.0 431.6 Other assets 3.0 1.6 Goodwill 59.2 62.6 Intangible assets 0.5 0.7 Total non-current assets 561.8 496.5 TOTAL ASSETS 673.0 603.6 Current liabilities Trade and other payables 50.1 49.4 Current tax payable 1.7 6.1 Loans and borrowings 23.1 23.9 Other liabilities 0.3 0.4 Total current liabilities 75.2 79.8 Non-current liabilities Loans and borrowings 213.5 173.2 Other non-current liabilities 0.9 1.3 Total non-current liabilities 214.4 174.5 TOTAL LIABILITIES 289.6 254.3 NET ASSETS 383.4 349.4 Shareholders equity Share capital 190.4 184.0 Other equity reserves (42.7) (43.4) Translation reserve (4.1) 1.5 Retained earnings 238.3 206.8 Minority interests 1.5 0.5 TOTAL EQUITY 383.4 349.4 18
Appendix 4 Cash 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 5 Fleet Composition as at 30 June 2013 1 80 70 60 8 124 vessels + 17 under construction / to be delivered Number of vessels 50 40 30 20 6 63 Barges Tugs 3 21 10 0 25 OSV Crew/Utility Vessels 11 Tugs and Barges 4 Coastal Survey Vessels Vessels under construction / to be delivered 1. Excludes Third Party Vessels 20
Important notice and disclaimer Reliance on Third Party Information The 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 Statements Some 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 Warranties We 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 Securities Nothing 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 Information References to pro forma financials exclude any exceptional items. A reconciliation to statutory financials is contained within the prospectus, available at our website. 21