Global reach and scale - Magseis Fairfield · 2019. 2. 28. · 2 This presentation (the...
Transcript of Global reach and scale - Magseis Fairfield · 2019. 2. 28. · 2 This presentation (the...
Magseis Fairfield ASA Q4 201828th February 2019
Global reach and scale
Disclaimer
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This presentation (the “Presentation") has been prepared by Magseis Fairfield ASA (the“Company” or “Magseis Fairfield”).
The Presentation contains forward-looking information and statements relating to thebusiness, financial performance and results of the Company and/or industry andmarkets in which it operates. Forward-looking statements concern futurecircumstances and results and other statements that are not historical facts,sometimes identified by the words “aims”, “anticipates”, “believes”, “estimates”,“expects”, “foresees”, “intends”, “plans”, “predicts”, “projects”, “targets”, and similarexpressions. Any forward-looking statements and other information contained in thisPresentation, including assumptions, opinions and views of the Company or cited fromthird party sources are solely opinions and forecasts based on the currentexpectations, estimates and projections of the Company or assumptions based oninformation currently available to the Company, which are subject to risks,uncertainties and other factors that may cause actual events to differ materially fromany anticipated development.
Important factors may lead to actual profits, results and developments deviatingsubstantially from what has been expressed or implied in such statements. Althoughthe Company believes that its expectations and the Presentation are based uponreasonable assumptions, it can give no assurance that those expectations will beachieved or that the actual results will be as set out in the Presentation. The Companyassumes no obligation, except as required by law, to update any forward-lookingstatements or to conform these forward-looking statements to its actual results.
The Company makes no representation or warranty, expressed or implied, as to theaccuracy, reliability or completeness of the Presentation, and neither the Company norany of its directors, officers or employees shall be liable to you or to any other party forany losses incurred as a result of your or their use of, or reliance on, any informationcontained in the Presentation.
This Presentation does not constitute or form part of, and is not prepared or made inconnection with, an offer or invitation to sell, or any solicitation of any offer tosubscribe for or purchase any securities, and nothing contained herein shall form thebasis of any contract or commitment whatsoever. No reliance may be placed for anypurpose whatsoever on the information contained in this Presentation or on itscompleteness, accuracy or fairness. The information in this Presentation is subject toverification, completion and change. The contents of this Presentation have not beenindependently verified. The Company’s securities have not been and will not beregistered under the United States Securities Act of 1933, as amended (the “USSecurities Act”), and are offered and sold only outside the United States in accordancewith an exemption from registration provided by Regulation S under the US SecuritiesAct. This Presentation should not form the basis of any investment decision.
The Presentation speaks and reflects prevailing conditions and views as of the date ofthis presentation. It may be subject to corrections and change at any time withoutnotice except as required by law. The delivery of this Presentation or any furtherdiscussions of the Company with any recipient shall not, under any circumstances,create any implication that the Company assumes any obligation to update or correctthe information herein, nor any implication that there has been no change in the affairsof the Company since such date.
AGENDA
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Operations and business strategy
Financials
Market outlook
Introduction
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Headquarter in Oslo, Norway with offices in Houston, Stockholm, Singapore and Brazil
~430 employees
As of 27th February, 6 crews in operation with 28 200 nodes deployed
Coupling industry leading nodes with automated handling systems, Flexible deployment systems and next generation source technologies Creating the new future in marine seismic
OSE:MSEIS• Market Cap MUSD~435 • Revenue Guidance 2019: MUSD 500Node Pool: • 9 500 MASS• 20 700 ZNODAL
Geophysical company founded in 2009 with first operation in 2013.
December 2018 Magseis acquired Fairfield’s Seismic Technologies business.
4Source: Magseis Fairfield
At a glance
Highlights Q4 2018
5Source: Magseis Fairfield
Financial Performance
Operational Performance
Technology
Further growth, backlog and outlook
• Successfully completed MUSD 233 aquisition of Fairfield• Revenue of MUSD 76.2 and EBITDA of MUSD 8.0
• MUSD 150 technology sale to BGP Offshore• Mobilisation for Middle East survey of 15 000 Z700 nodes• Portable modular triple source system for Johan Sverdrup
• Delivered first crew to BGP offshore ahead of schedule• Operational challenges in Malaysia
• Record total backlog of MUSD 418 (MUSD 388 in 2019)• Revenue guidance for 2019 of MUSD 500
AGENDA
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Introduction
Financials
Market outlook
Operations and business strategy
Malaysia operationsThe Malaysia project has been delayed with three months and one additional ROV vessel has been engaged to complete the project in a timely manner
• Short time between award and start-up in a challenging operational environment
• Delayed permitting process with changing local regulations
• Poor ROV performance vs. modelled timeline
• Lack of Source vessel performance due to unusual amount of technical downtime
The project will make a loss of MUSD 14 and full provision taken in Q418 financial despite end-date in late Q119
Measures taken to mitigate similar risks for future projects in combination with cross knowledge transfer across the Magseis Fairfield organisation. Already seen effect on mobilisation and start of the subsequent project. GoM project mobilised and commenced operation ahead of schedule.
7Source: Magseis Fairfield
GK
Kikeh
KBBMalakai
Technology sale to BGP – MUSD 150Antonov transport of seismic equipment from Sola Airport Norway.
8Source: Magseis Fairfield
Stavanger
Abu Dhabi
• Air freight of full MASS Modular system and 4 500 MASS I nodes to BGP in Abu Dhabi ahead of schedule
• Demonstrates flexibility uniqueness of MASS modular nodes
• Equipment in operation January 2019 • Allows for ultra fast mobilisations
across the world.
Magseis Fairfield integration process
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• Magseis Fairfield operated from “Day 1” as one company
• Focused integration process well underway
Integration Management Office established
Operational knowledge sharing on ongoing and future contracts
Coordinated account management and tender process
Technology coordination and integration
Back-office systems and process optimisation
TechnologyWestern
HemisphereOperations
EasternHemisphereOperations
Source: Magseis Fairfield
Focus areas for growth and operational efficiency
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• Continuously advance technology pool and leverage IP portfolio• Full system development to further drive efficiency• Leverage new operating platform to increase utilisation
• Sale and rental of nodes for use in shallow / transition zone• Ability to capitalise on previous generations of technology at attractive margins• Optimise deployment of node pool by assessing technology vs. acquisition opportunities
• New business unit focusing on multi-client business development• E&P companies are showing increased interest in the benefits of nodal seismic data • Partnership or proprietary surveys
• Drive down the high costs associated with the current reservoir monitoring systems• Introduce a coordinated operating model• Leverage existing customer base
Source: Magseis Fairfield
Contract data acquisition
Technology lease and sale
Multi-clientprojects
Reservoir monitoring/Near field exploration
Building our business
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BUSINESS MODELKEY GOALS BY 2020• Operational excellence• Client focus• Technology champion
• Recording nodes• Handling systems • Deployment systems• Source technology
• Asset light and modular business model
• Focus on total system efficiency
• Robotics and automation• Deployment via cable, rope
and ROV • Diversified revenue model
• 6-8 parallel operations• 3 -4 regional operational hubs• Contract acquisition, multi-client and
reservoir monitoring• Automated containersed handling
and deployment systems• Leading edge modular source
technology• Equipment lease, sales and services
Source: Magseis Fairfield
AGENDA
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Introduction
Market outlook
Financials
Operations and business strategy
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In USD thousands Q4 2018(unaudited) % Q4 2017
(unaudited) %Full Year
2018(unaudited)
%Full Year
2017(audited
%
Revenue 76 198 4 752 136 477 73 877
Cost of sales 55 874 5 455 86 764 35 701
Research and development 2 183 494 3 995 2 002
SG&A and other expenses 10 160 3 318 22 705 10 039
EBITDA 7 980 10.5 -4 514 - 23 012 16.9 26 136 35.4
Depreciation 7 591 3 395 19 097 15 148
Amortisation 266 116 839 463
Impairment 0 0 0 233
EBIT 123 0.2 -8 025 - 3 077 2.3 10 292 13.9
Net interest and fx (gain)/loss 638 684 2 430 397
Other finance cost 0 0 0 0
Net finance costs 638 684 2 430 397
EBT -515 -8 709 647 9 895
Tax 1 484 1 078 3 468 3 199
Net income -1 998 - -9 787 - -2 821 - 6 696 9.1
Other comprehensive income 0 0 0 0
Total comprehensive income -1 998 -9 787 -2 821 6 696
Q4 2018 P&L – (Includes 18-31 DEC 2018 legacy FF & WGP) Revenue• First Crew of nodes to BGP - MUSD 40.8• Data aquisition legacy MS - MUSD 32.0• Revenue legacy FF&WGP (13 days) - MUSD 3.4
Cost of sales• COS finished goods to BGP - MUSD 21.0• COS Malaysia - MUSD 24.2 (incl. MUSD 7.4 2019)• COS legacy MS – MUSD 8.7• COS legacy FF&WGP (13 days) MUSD 2.0
SG&A• Legacy MS – MUSD 8.9 (bonus 2.8, cons.fee 1.8)• Transaction costs of MUSD 6.2 against Equity• Legacy MS&WGP MUSD 1.2
Depreciation• Legacy MS MUSD 6.7
Finance• Net gain on Warrants of MUSD 0.3
Tax• Withholding Tax and Corporate tax in Saudi Arabia and
Malaysia
Source: Magseis Fairfield
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Q4 2018 Balance Sheet Goodwill• Purchase price MUSD 231.4 + Warrants MUSD 7.0• Booked Equity in FF & WGP (OB) MUSD 98.8 • WGP (OB) MUSD 0.7• PPA will be included in Annual Report – reallocations
Equipment• Legacy MS MUSD 82.6 (intangibles 4.6)• Legacy FF MUSD 62.5 (intangibles 0.7)• Legacy WGP MUSD 22.2 (intangibles 9.0)
Trade receivables• Legacy MS MUSD 48.1• Legacy FF MUSD 25.0• Legacy WGP MUSD 2.2
Inventory• Legacy MS MUSD 2.7 (fuel + batteries)• Legacy FF MUSD 29.0 (fuel 1.1)• Legacy WGP MUSD 7.3
Equity• Net Equity of MUSD 176.2 after transaction costs in 2018
Non-current Liabilities• DNB loan MUSD 50 @ 4,5% margin (non-current MUSD 33)• Shell contingent liability MUSD 7.9• Warrants of MUSD 6.7
Current liabilities• Company settled the MUSD 6.1 to GIEK/IN Jan 2019• Prepayment clients MUSD 25.6• Project related accruals MUSD 15.8• Provisions MUSD 8.4
In USD thousands Year End 2018(unaudited)
Year End 2017(unaudited)
Goodwill 140 333 0Equipment and other intangibles 167 256 74 416Multi-client library 0 0Cash and cash equivalents 68 110 29 776Trade receivables 75 335 9 137Inventory 38 994 1 752Other current assets 28 672 8 469TOTAL ASSETS 518 701 123 549
Share capital 1 166 438Share premium 382 152 141 486Retained earnings and other reserves -49 744 -46 884TOTAL EQUITY 333 573 95 040
Other non-current financial liabilities 54 703 13 049TOTAL NON-CURRENT LIABILITIES 54 703 13 049
Trade payables 48 037 6 010Current tax liability 1 855 1 111Other current liabilities 80 532 8 338TOTAL CURRENT LIABILITIES 130 424 15 460
TOTAL LIABILITIES 185 128 28 509
TOTAL EQUITY AND LIABILITIES 518 701 123 549
Source: Magseis Fairfield
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Q4 2018 Cash FlowEarnings before tax -515 -8 709 647 9 895Depr, Amor, Impair(non cash-effect) 7 771 3 424 19 497 15 405Finance and taxees paid(cash-effect) -594 -995 -1 912 -2 850
Cost of sales Nodes (non cash-effect) 9 221 0 9 221 0
Net working capital adjustments(Increase)/decrease in current assets -33 796 4 975 -43 033 2 368Increase/(decrease) in trade and other payables and accruals 27 036 3 685 29 313 -660
Net cash flow from operating activities 9 123 2 380 13 732 24 157
Interest received 134 18 182 23
Acquisition of equipment 1 336 -17 430 -33 765 -44 366
Acquisition of Fairfield Geotechnologies´Seismic Technologies business -163 263 -73 -163,263 -214
Net cash flow from investing activities -161 793 -17 485 -196 845 -44 557
Proceeds from loan net 50 000 117 50 027 934
Installment finance lease and loan -1 622 -419 -4 033 -7 412
Proceeds from issue of share capital 145 243 0 183 823 40 511
Expenses related to issue of share capital -6 146 0 -7 597 -1 485
Interest paid -198 -245 -772 -1 347
Net cash flow from financing activities 187 277 -547 221 447 31 201
Net change in cash and cash equivalents 34 606 -15 651 38 334 10 801
Cash balance at the beginning of the period 33 504 45 427 29 776 18 974
Cash balance at period end 68 110 29 776 68 110 29 776
In USD thousands Q4 2018(unaudited)
Q4 2017(unaudited)
Full Year 2018(unaudited)
Full Year 2017(audited)
Source: Magseis Fairfield
Operating Cash flow• NCF effect from node sale ~MUSD 20• AR partly related to node sale and Malaysia project
Investing Cash flow• Cash consideration for Fairfield MUSD 166.2• Disposal of new assets ~MUSD 10
Financing Cash flow• Net Loan facility from DNB MUSD 48.8• Net equity MUSD 139.1
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KEY FIGURES
Q4 2018
Source: Magseis Fairfield
76.2REVENUE
8.0EBITDA
-2.0NET PROFIT
68.1CASH BALANCE
$ MILLION
$ MILLION $ MILLION
$ MILLION $ MILLION
EBITDAREVENUE EBITDA
Q42018
REVENUE
Q42018
-4.54.7
8.0
76.2
17Source: Magseis Fairfield
KEY FIGURES
Full Year 2018
136.5REVENUE
23.0EBITDA
-2.8NET PROFIT
68.1CASH BALANCE
$ MILLION
$ MILLION $ MILLION
$ MILLION $ MILLION
26.1
EBITDA
136.5
REVENUE
23.0
EBITDA
YTD2018
REVENUE
YTD2018
73.9
Source: Magseis Fairfield
AGENDA
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Introduction
Financials
Market outlook
Operations and business strategy
Significant backlog provides near-term visibility
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“Magseis” 2019
Backlog
500----
400----
300----
200----
100----0
“Fairfield” 2019
Backlog
COMBINED2019
Backlog
2019Gap
to close
2019REVENUE
GUIDANCE
Full Year 2019 Guidance:• EBITDA: MUSD 100• Maintenance CAPEX and R&D: MUSD 15• Growth CAPEX: MUSD 50
152
236 388112
500
Source: Magseis Fairfield
2019 Guided Revenue breakdown
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Revenue by status
In Tender
Leads
Firm
500----
400----
300----
200----
100----0
Acquisition
Systems
Reservoir Monitoring/Near field exploration
Multi-client
Revenue by type
Source: Magseis Fairfield
creating the leading provider of marine seismic solutions
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Successfully acquired Fairfield Seismic Technologies
Sale of 17 000 MASS I Nodes to BGP Offshore
Record backlog of MUSD 418