investor presentationresources.inktankir.com/ades/ades-irp-fy2017-final-web.pdf · 2018-03-19 ·...

Investor PresentationMarch 2018

INTRODUCTION TO ADES

3ADES INTERNATIONAL HOLDING | Investor Presentation

ADES at a Glance

Who We Are

• A leading oil & gas drilling and production services provider in the Middle East and North Africa

• Focused on creating value for E&P players in the region

• Constantly evolving portfolio of services that primarily includes offshore and onshore contract drilling, workover and production services

• ADES specialises in acquiring and refurbishing legacy ‘fit for purpose’ offshore assets which (among other cost-saving measures) enable the Group to offer competitive rates to its clients

• Backed by a capable in-house refurbishment and maintenance team, the Group benefits from a highly-skilled, low-cost, largely Egyptian workforce

• The Group’s business revolves around providing tailored solutions and superior service to its clients

• ADES offering is characterized by its commitment to global industry standards and ever-expanding services and solutions

Leading MENA-based O&G Service Provider

Differentiated Low-Cost Business Model

Customer-Centric Approach


ADES – Primary Risk Management Strategy

Activity remains higher due to lower break-even prices in the MENA region than the global average

Focus on workover drilling and maintenance, mainly constituting OPEX expenditure, which is typically less cyclical than CAPEX expenditure

ADES mainly assesses its potential acquisitions through two methods:▪ Buy-to-Contract Model – Securing the contract first, then finalising the acquisition of the asset▪ Contract Acquisition Model – Acquiring chartered assets with on-going contracts

Target backlog of 2x net debt – ensuring maintenance of a minimum level of liquidity to pay its contractual obligations at all times

Focus on Low Cost of Production Areas Such as MENA

Focus on Workover Drilling & Maintenance

Considered Approach to Acquisitions

Backlog Management


Ramped up asset base, expanded geographically

Perfected business model of securing legacy assets and operating with low cost structure

Offshore penetration

Early formation

Corporate Strategy Evolution

1997 - 2003 2004 - 2010 2011 2012 2013 2014 2015 2016 2017+

Scale up operations and expand geographically

1 2 3 4 6 13

USD 10 MN

USD 158 MN16x Revenue Growth

Onshore Drilling & Workover

Jack-up Barge

ROV

Offshore Drilling & Workover

Projects

MOPU

Denotes continuing services Denotes discontinued services

Denotes number of Chartered Rigs

14


Services & Footprint

■ Onshore ■ Offshore ■ Revenue Contribution (2017)

What We Do

12%

64%

16% 6% 3%

Drilling & WorkoverOffshore & onshore drilling & workover services leased at operating day rates

MOPU Mobile offshore platform equipped with production and process facilities and FSO

Jack-up Barge & ProjectsOffshore jack-up barge used to provide

offshore support services to GUPCO

Other ServicesAccommodation, catering and equipment

rental to its offshore rig clients

Where We Operate

Pre-selected markets with natural barriers to entry with a focus on low-risk, non-harsh shallow water environments

KSAEgypt UAEAlgeria

Mexico

Kuwait

India

Iraq

Pre-qualificationsServices

Drilling & Workover | MOPU | Jack-Up Barge & Projects | Other Services

Assets7 Offshore Rigs | 1

MOPU

ServicesDrilling & Workover

Assets2 Onshore Rigs

ServicesDrilling & Workover |

Other Services

Assets6 Offshore Rigs

Algeria Egypt KSA

Egypt52%

Algeria14%

KSA34%

Revenue by Country 2017

Bahrain

Ghana Gulf of New Guinea

MEN

AO

THER

FULL-YEAR RESULTS 2017REVIEW


workforce>1,372

RIFR(1)

0.41

Full-Year Results 2017

Key Highlights

Revenue

USD 158MN

▲18% YoY

Adjusted EBITDA(2)

USD 80MN

51% EBITDA margin

▲11% YoY

Normalised Net Profit(3)

USD 50MN

31% Net Profit Margin

▲31% YoY

Backlog

USD 427MN

5.7x Net Debt

Net Debt

USD 76MN

3.8x Interest Coverage

▼67% YoY

Equity

USD 318MN

▲203% YoY

2017 Financial Highlights

Operational Highlights

New contract awards and renewals

Recruiting the highest calibers

Securing new financing options

Continued exemplary safety performance

Finalized exclusive marketing agreements with leading shipyards

Scaling existing operations and penetrating new markets

Note (1): RIFR refers to Recordable Injury Frequency Rate since inception; Note (2): Adjusted EBITDA - Operating profit for the year before depreciation and amortisation, employee benefit provision and other provisions and impairment of assets under construction under construction; Note (3): Normalised Net Profit – Net Profit for the year before the one-time IPO expense of USD 5.1 million during FY 2017


23 26

38

50

2014 2015 2016 2017

3342

7280

2014 2015 2016 2017

75

101

134158

2014 2015 2016 2017

Income Statement HighlightsFull-Year Results 2017

Income Statement HighlightsNormalised Net Profit(2) | USD MNAdjusted EBITDA(1) | USD MN

Note (1): Adjusted EBITDA - Operating profit for the year before depreciation and amortisation, employee benefit provision and other provisions and impairment of assets under constructionNote (2): Normalised Net Profit – Net Profit for the year before the one-time IPO expense of USD 5.1 million during FY 2017

Revenue| USD MN

CAGR | 2014-17

YoY Growth | FY16-FY17

28.0%

17.5%

CAGR | 2014-17


34.2%

11.2%

CAGR | 2014-17


28.8%

30.6%


52%

14%

34%

FY 2017

Revenue Breakdown Evolution

Backlog Breakdown Evolution (1)

Note (1): As at year-end; Note (2): Calculated as a percentage of revenue before discounts

Increasing Geographic DiversificationRevenue growth was driven by the following:

• The November 2016 deployment of three offshore rigs in

the KSA

• The realization of the full-year impact of our MOPU

operations in Egypt

• The October 2016 launch of operations of ADES 3 in

Algeria

Backlog by CountryTotal backlog as at 31 December 2017 stood at USD 427

million compared to USD 501 million as at 31 December 2016

The PSA between ADES and Nabors Drilling in December 2017

for the acquisition of three operating offshore jack-up rigs in

the KSA (see slide 20) is expected to further strengthen and

diversify our backlog. Once closed, it will add to our revenue

and earnings, with revenues to be marginally weighted

towards 2H 2018

Full-Year Results 2017

Revenue & Backlog

81%

10%

9%

FY 2016 Egypt

Algeria

KSA

Egypt

Algeria

KSA54%

6%

41%

Dec 1744%

8%

48% Dec 16

APPENDIX


USD (‘000) 2016 2017 YoY Growth ('16-'17)

Revenue 134,116 157,590 18%

Cost of Revenue (1) (44,976) (57,897)

Gross Profit 89,140 99,693 12%

Margin 66.5% 63.3%

G&A (2) (14,550) (18,795)

Adjusted EBITDA (3) 74,589 80,897 8%

Margin 55.6% 51.3%

Depreciation (18,460) (20,664)

EBIT 56,130 60,234 7%

Margin 41.9% 38.2%

Interest (9,428) (16,550)

FX Gain / (Loss) - -

Credit Interest - 7,016

Other (4) (5,404) (7,293)

EBT 41,297 43,406 5%

Margin 30.8% 27.5%

Investment Income - -

Taxes (3,284) 1,168

Net Profit 38,013 44,574 17%

Margin 28.3% 28.3%

Normalised Net Profit(5) 38,013 49,637 31%

Margin 28.3% 31.5%

Income Statement

Note (1) & (2) : Does not include depreciation expense; Note (3): Adjusted EBITDA - Operating profit for the year before depreciation and amortisation, employee benefit provision and other provisions and impairment of assets under construction; Note (4): Includes provisions, impairment of trade receivables, impairment of assets under construction, loss on disposal of property and equipment, non recurring income (/expense) and other income; Note (5): Normalised Net Profit – Net Profit for the year before the one-time IPO expense of USD 5.1 million during FY 2017


USD (‘000) Dec-2016 Dec-2017

Cash and Cash Equivalents 5,193 136,964 Accounts Receivable 50,789 65,987 Other Receivables 3,226 6,034 Accrued Revenue 17,587 12,976 Dividend Receivable & Advance Payments 11,339 19,764 Inventory 17,777 20,919 Due from Related Parties 277 306 Total Current Assets 106,188 262,950

Net Fixed Assets 290,677 322,987 Investments & Intangible Assets 1,950 1,950 Total Non-Current Assets 292,627 324,937

Total Assets 398,815 587,886

Bank Overdraft 15,449 21,423 CPLTD 30,356 35,911 Account Payables 27,916 31,171 Accrued Expenses & Other Credit Balances 13,133 13,226 Provisions 2,934 1,836 Due to Related Parties 4,082 2,267 Dividend Payable 7,149 7,149 Tax Liability 2,857 1,119 Total Current Liabilities 103,875 114,101

Long Term Debt 189,930 155,155 End of Service Provision 101 620Total Non-Current Liabilities 190,031 155,775

Paid-up Capital 1,000 42,203 Additional Paid in Capital 30,900 158,224 Merger reserve (1) (6,521) (6,521)Retained Earnings 75,048 119,622 Legal Reserves 4,481 4,481 Total Shareholders Equity 104,908 318,010

Total Shareholders Equity and Liabilities 398,815 587,886

Balance Sheet

Note (1): Represents the difference between consolidation paid under the reorganization plan and nominal value of acquired shares

investor presentationresources.inktankir.com/ades/ades-irp-fy2017-final-web.pdf · 2018-03-19 ·...

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