Credit Suisse Energy Summit February 6-10, 2012 Bristow Group Inc. February 8, 2012 Exhibit 99.1 |
2 Forward-looking statements This presentation may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements about our future business, operations, capital expenditures, fleet composition, capabilities and results; modeling information, earnings guidance, expected operating margins and other financial projections; future dividends, share repurchase and other uses of excess cash; plans, strategies and objectives of our management, including our plans and strategies to grow earnings and our business, our general strategy going forward and our business model; expected actions by us and by third parties, including our customers, competitors and regulators; the valuation of our company and its valuation relative to relevant financial indices; assumptions underlying or relating to any of the foregoing, including assumptions regarding factors impacting our business, financial results and industry; and other matters. Our forward-looking statements reflect our views and assumptions on the date of this presentation regarding future events and operating performance. They involve known and unknown risks, uncertainties and other factors, many of which may be beyond our control, that may cause actual results to differ materially from any future results, performance or achievements expressed or implied by the forward-looking statements. These risks, uncertainties and other factors include those discussed under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended March 31, 2011 and our Quarterly Report on Form 10-Q for the quarter ended December 31, 2011. We do not undertake any obligation, other than as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. |
3 Bristow is the leading provider of helicopter transportation services to the global offshore industry • ~20 countries • 550 aircraft • ~3,400 employees • Ticker: BRS • Stock price * : $48.63 • Market cap * : ~$1.8 billion • Secured: BBB-/Ba1 (stable outlook) • Corporate: BB/Ba2 (stable outlook) $67 * Based on 36.8 million fully diluted weighted average shares outstanding as of 12/31/2011 and stock price as of 01/27/2012. Bristow flies crews and light cargo to production platforms, vessels and rigs 3 |
• #1 or #2 market position in the major oil and gas provinces: North Sea, GoM, Australia, West Africa and Brazil • Industry-leading safety performance—the key customer requirement • New-technology fleet of medium and large helicopters meets the needs of fast growing and high margin deepwater segment • Financial strength and cash flow generation • Leadership among peers • Continuous management focus on improved safety and capital allocation performance Strategically positioned for global growth 4 |
5 2.79 2.27 0.58 Industry leading safety record creates marketing and cost advantage • Safety is our primary core value • Bristow’s ‘Target Zero’ program is now the leading example emulated industry-wide • Bristow accident rate is less than one fifth the average rates for the oil and gas industry and all civil helicopters • Safety Performance accounts for 25% of management incentive compensation * Averages for most recently available three-year period: Helicopter Association International 2007-2009, International Oil & Gas Producers 2005-2007, Bristow Group, 2009- 2011, excluding Bristow Academy 3-year average air accident rates * per 100K flight hours Bristow Oil & Gas industry All civil helicopters 5 |
Bristow services are utilized in every phase of offshore oil and gas activity • Largest share of revenues (>60%) relates to oil and gas production, ensuring stability and growth • There are ~ 8,000 offshore production installations worldwide—compared with >600 exploratory drilling rigs • ~ 1,700 helicopters servicing oil and gas industry of which Bristow’s fleet is approximately one third • Bristow revenues primarily driven by operating expenditures Typical revenues by segment 6 Production 60% Development 10% 20% Exploration Other 10% EXPLORATION SEISMIC DEVELOPMENT ABANDONMENT PRODUCTION H e l i c o p t e r t r a n s p o r t a t i o n s e r v i c e s |
Bristow’s contract and operations structure results in a more predictable income with significant operating leverage Revenue sources • Our run-rate capex is low as we expense almost all of our overhaul and maintenance • Bristow contracts earn 65% of revenue without flying in most market • Two tiered contract structure includes both: – Fixed or monthly standing charge to reserve helicopter capacity – Variable fees based on hours flown Operating income 7 Variable hourly 35% Fixed monthly 65% Fixed monthly 70% Variable hourly 30% |
Europe (EBU) Outlook: Growth is surprisingly resilient Business Strategy and Overview: • EBU is our largest BU with significant growth opportunities to both diversify and increase market share • Annual Revenue ~ $550 million • # of LACE*: 46 (42 Heavy, 15 Medium) • LACE Rate* (annualized): $9.6 million • Market Share: circa 35% Outlook: • Positive, but we must remain cost effective • New incremental work contracted • Fleet transitioning to all new generation aircraft • Market share gains and new tender activity UK Gap SAR bid Norway West of Shetlands • SAR-H longer term opportunity • Wind farms diversification FY12 operating margin expected to be ~ low twenties Long-term operating margins should remain in the low twenties * LACE and LACE Rate are calculated as of December 31, 2011 8 |
West Africa (WASBU) Outlook: Increased offshore deepwater development and competition and competition Business Strategy and Overview: • WASBU strategy is to maintain the proven and consistent premier brand • Annual Revenue: circa $250 million • # of LACE*: 22 (mostly medium/small aircraft) • LACE Rate* (annualized): circa $11.2 million • Market Share: circa 60% Outlook: • Competition re-emerging in the medium term • Introduction of large new technology aircraft to market with increased activity planned • Deep-water opportunities - greater barriers of entry • Twelve month renewal of key contract • Bids from major clients • Restructuring continues FY12 operating margin expected to be low to mid twenties Long-term operating margins should remain in the low to mid twenties * LACE and LACE Rate are calculated as of December 31, 2011 9 |
Australia (AUSBU) Outlook: Mid and Long term outlook is positive; Expansion delayed Business Strategy and Overview: • AUSBU strategy entails a focus on the organic growth and the Client Promise • # of LACE*: 20 • Annual Revenue: circa $160 million • LACE Rate* (annualized): circa $7.0 million • Market Share: circa 65% Outlook: • Some work delayed until second half FY12; expecting strong activity in Q4 • Total market size is increasing as new projects come on line, driven by demand for gas for Asian markets • Additional new technology work confirmed with key operators FY12 operating margin expected to be mid teens Long-term operating margins should remain in high teens * LACE and LACE Rate are calculated as of December 31, 2011 10 |
Other International (OIBU) Outlook: Emerging growth Business Strategy and Overview: • OIBU strategy is to develop new markets through geographic R&D and partnerships • Annual Revenue: circa $141 million • # of LACE*: 38 • LACE Rate* (annualized): $3.8 million • Multiple countries and joint ventures Outlook: • Work in Equatorial Guinea, Bangladesh, as well as increased rates in Trinidad, set to positively impact second half of FY12 • Expansion of medium and large work with Lider in Brazil • Ongoing dry lease business with Heliservicio, Mexico and MHS, Malaysia FY12 operating margin expected to be low twenties Long-term operating margins should remain in the low to mid twenties * LACE and LACE Rate are calculated as of December 31, 2011 11 |
North America (NABU) Outlook: Slow but steady improvement Business Strategy and Overview: • NABU strategy is to focus on key contracts • Annual Revenue: circa $180-200 million • # of LACE*: 30 • LACE Rate* (annualized): $5.9 million • Market Share: 28% Outlook: • FY12 GoM and Alaska drilling permits continue to be issued but at a slow rate with large aircraft demand slowly increasing • Well positioned to benefit from accelerated return of activity • Two new S-92s arrived for multi-year contracted work • Expect more exploration and development drilling to accelerate in FY13 with large contracts coming up for renewal FY12 operating margin expected to be singles digits * LACE and LACE Rate are calculated as of December 31, 2011 12 Long-term operating margins should increase to low - mid teens |
13 Translating these opportunities into revenue growth: Introduction to LACE and the LACE Rate LACE Math 100% per # of Large Aircraft +50% per # of Medium Aircraft +25% per # of Small Aircraft = Total # of LACE Aircraft x LACE Rate (Revenue/LACE) = Revenue |
Translating these opportunities into revenue growth: LACE and LACE Rate trends LACE and LACE Rate excludes Bristow Academy, affiliate aircraft, aircraft held for sale, aircraft construction in progress, and reimbursable revenue; see appendix for LACE calculation 14 |
What clients are saying? • Newer assets will be required • Pursuing highest operational standard and will require that of contractors • Higher levels of inspection required to award contracts • Certification of training and personnel competency needed • Bids will call for higher specs than needed to perform the actual job • “Every bid now seems to need partner approvals” Our clients have sharply increased their focus on risk related to contractor capabilities, personnel and equipment These requirements favor Bristow’s business model because of its financial strength and demonstrated premier service 15 |
Bristow’s Client Promise is in response to this client focus: Creating value through differentiation Target Zero accidents, downtime and complaints programs deliver value to operators. More zero-accident flight hours than anyone, more uptime than anyone, and hassle-free service creates confidence in flight. Worldwide. Lowers client’s offshore operating costs and improves productivity. Earns us more business to improve BVA. 16 |
Bristow’s new unique investment thesis and commitment to our shareholders for the next 5 years 17 Internal Strategy Temple: FY 2012 - 2016 Prudent Balance Sheet Management Growth Capital Return External Commitment: FY 2012 - 2016 Our New Balanced and Unique Investment Thesis |
Understanding Bristow Value Added (BVA): Treat capital like any other cost • BVA is the key measure to define financial success • BVA is robust enough to captures all trade-offs: Revenue After Tax Margins Asset Intensity Reinvestment Rate Differentiation Sustainability Risk * Represents the average gross operating assets for FY2011 18 |
Operating lease strategy – opportunistically entering market 19 • Aircraft leasing market is very attractive to Bristow, offering lower rates and better terms than previously anticipated • Our initial goal is to utilize this financing strategy for up to 20-30 percent of our LACE aircraft over the next few years • In December 2011 we entered into four operating lease transactions for new technology large aircraft. We expect to execute similar transactions within the next twelve months as the market continues to be strong • Financial statement impact: rent expense is part of direct cost; operating leases will increase cash flow from investing activity and decrease capital expenditures • Going forward, adjusted EBITDAR is a more relevant metric of operational performance compared to adjusted EBITDA as we increase our lease portfolio |
Understanding prudent balance sheet management: How we get there • Minimum total liquidity of $200M • Quarterly dividend growth of 10-15% per annum • Excess cash may be distributed to shareholders with specifics approved by Board of Directors • Balance use of operating cash flow + a/c sales with leases for a/c purchases and other capex • Leases used for initially no more than 20-30% of total Bristow LACE • Adjusted Debt/Capital Ratio less than 45% 20 Capex vs Leases Capital Structure Liquidity Capital Return |
Financial highlights: Revised FY12 guidance • EPS guidance range $2.90 - $3.10, excluding aircraft sales and special items • Depreciation and amortization expense ~ $90 – $95 million • SG & A expense ~ $130 - $135 million • Interest expense ~ $35 - $40 million • Tax ~ 20% - 24 % (assuming revenue earned in same regions and same mix) • LACE* (Large Aircraft Equivalent) = 157 • Revenue/LACE Rate* ~ $7.40 - $7.50 million per LACE aircraft per year * Excludes Bristow Academy, aircraft held for sale, CIP, and reimbursable revenue. 21 |
Understanding Bristow’s unique, balanced investment thesis The “Growth Price Signal” is provided by the commercial markets and outlook for ANNUAL EPS Growth Cash Flow Yield 2 = OCF + A/C sales – Depreciation Market Capitalization FY07 – FY11 EPS 1 Growth We will aim to provide a balanced return, but some years we will “hit the gas” depending on price signals The “Capital Return Price Signal” is provided by the financial markets and our current free cash flow yield Today this equals 9.2% 2.9 % = 1) For the nine months ended December 31 2) Trailing twelve months 22 |
Putting it all together for FY12-16: Over $700 million available for further growth and capital return 23 735 Operating leases Operating leases 116 1,378 103 1,121 238 497 FY11 balance Operating cash flow Asset sales Aircraft purchases Other capex Maintain optimal capital structure Available for dividend/growth/other capital return 735 |
Today’s Key Takeaways Premier service provider with excellent secular expansion opportunities Growth to be executed with care and discipline Expand margins and revenue growth Deepen client relationships with premium market share with the premium clients Push capital efficiency and revenue per asset Proactive reduction of our capital charge Bristow maintains its commitment to prudent balance sheet management Bristow intends to grow the dividend Bristow will demonstrate a balanced return for our investors by using market price signals to grow or harvest our businesses 24 BVA creates a capital allocation discipline Unique investment in oilfield services Target Zero will remain a top priority Client Promise ensures differentiation |
Bristow Group Inc. (NYSE: BRS) 2103 City West Blvd., 4th Floor Houston, Texas 77042 t 713.267.7600 f 713.267.7620 bristowgroup.com/investorrelations Contact Us 25 |
26 Appendix Appendix |
27 Organizational Chart - as of December 31, 2011 Operated Aircraft Bristow owns and/or operates 364 aircraft as of December 31, 2011 Affiliated Aircraft Bristow affiliates and joint ventures operate 186 aircraft as of December 31, 2011 Business Unit (* % of YTD FY12 Operating Revenue) Corporate Region ( # of Aircraft / # of Locations) Joint Venture (No. of aircraft) Key |
28 Aircraft Fleet – Medium and Large As of December 31, 2011 Next Generation Aircraft Medium capacity 12-16 passengers Large capacity 18-25 passengers Mature Aircraft Models Aircraft Type No. of PAX Engine Consl Unconsl Total Ordered Large Helicopters AS332L Super Puma 18 Twin Turbine 30 - 30 - AW189 16 Twin Turbine - - - 6 EC225 25 Twin Turbine 18 - 18 - Mil MI 8 20 Twin Turbine 7 - 7 - Sikorsky S-61 18 Twin Turbine 2 - 2 - Sikorsky S-92 19 Twin Turbine 28 2 30 10 85 2 87 16 LACE 79 Medium Helicopters AW139 12 Twin Turbine 7 2 9 - Bell 212 12 Twin Turbine 2 14 16 - Bell 412 13 Twin Turbine 35 20 55 - EC155 13 Twin Turbine 3 - 3 - Sikorsky S-76A/A++ 12 Twin Turbine 17 6 23 - Sikorsky S-76C/C++ 12 Twin Turbine 54 28 82 - 118 70 188 - LACE 55 |
29 Aircraft Fleet – Small, Training and Fixed As of December 31, 2011 (continued) Next Generation Aircraft Mature Aircraft Models Small capacity 4-7 passengers Training capacity 2-6 passengers •LACE does not include held for sale, training and fixed wing helicopters |
30 Consolidated Fleet Changes and Aircraft Sales for Q3 FY12 EBU WASBU AUSBU OIBU NABU Total Large 3 - 3 - - 6 Medium 2 1 1 3 1 8 Small - 2 - - - 2 Total 5 3 4 3 1 16 Aircraft held for sale by BU * Amounts stated in thousands; In Q3 FY12 two aircraft were sold for $47.9 million and entered into lease back agreements and two aircraft interest previously included in CIP were sold for $23.4 million. Q 1 FY12 Q 2 FY12 Q 3 FY12 YTD Fleet Count Beginning Period 373 372 366 373 Delivered EC225 2 1 3 S-92 2 3 5 Citation XLS 1 1 Total Delivered 2 3 4 9 Removed Sales (3) (5) (7) (15) Other* (4) 1 (3) Total Removed (3) (9) (6) (18) 372 366 364 364 * Includes destroyed aircraft, lease returns and commencements Fleet changes EBU WASBU AUSBU OIBU NABU BA Total Large 3 - - - 2 - 5 Medium - - - - 9 - 9 Small - - 2 - 1 - 3 Fixed - 1 - - - - 1 Training - - - - - 23 23 Total 3 1 2 - 12 23 41 Leased aircraft in consolidated fleet # of A/C Sold Cash Received* Q1 FY12 3 2,478 Q2 FY12 5 10,674 Q3 FY12 9 81,248 Totals 17 94,400 |
Order and options book as of December 31, 2011 31 |
Adjusted EBITDAR margin trend 1) Calculated by taking adjusted EBITDAR divided by operating revenue 2) Adjusted EBITDAR excludes special items and asset dispositions 32 |
Adjusted EBITDAR reconciliation 33 |
Operating margin trend Bristow Group Operating Margin Trend Actual 2008 2009 2010 2011 2012 As Reported Full Year Full Year Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 EBU 23.6% 19.3% 17.2% 16.7% 16.1% 18.1% 17.0% 18.0% 18.4% 19.6% 18.8% 18.8% 17.3% 16.8% 15.5% WASBU 17.9% 21.5% 24.9% 29.3% 25.4% 34.7% 28.5% 26.5% 29.5% 29.8% 24.0% 27.4% 20.6% 25.2% 25.9% NABU 14.5% 12.1% 8.9% 9.7% 3.3% 2.2% 6.1% 10.1% 16.1% 4.2% -4.0% 7.5% 3.6% 5.3% 4.3% AUSBU 17.2% 5.9% 20.1% 23.1% 24.5% 24.5% 23.2% 22.5% 16.3% 17.2% 17.4% 18.2% 10.0% 1.7% 8.7% OIBU 17.3% 27.0% 21.8% 35.1% 15.5% 1.8% 19.2% 6.9% 30.6% 27.7% 45.8% 28.4% 33.6% 5.8% 32.6% Consolidated 16.0% 17.8% 15.4% 18.4% 13.1% 15.2% 15.5% 13.6% 17.1% 14.7% 16.1% 15.4% 11.3% 2.9% 13.1% New methodology (operating income/operating revenue) 2008 2009 2010 2011 2012 Revised * Full Year Full Year Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 EBU 29.2% 24.3% 20.9% 20.5% 19.8% 22.4% 20.8% 21.4% 22.1% 25.4% 23.6% 23.6% 21.5% 20.7% 19.5% WASBU 19.4% 22.8% 26.8% 30.0% 27.3% 35.7% 29.9% 27.1% 30.5% 30.4% 26.1% 28.6% 21.5% 26.4% 27.1% NABU 14.5% 12.2% 8.9% 9.7% 3.3% 2.2% 6.2% 10.2% 16.4% 4.2% -4.0% 7.6% 3.6% 11.0% 4.3% AUSBU 17.9% 6.3% 21.0% 24.5% 25.5% 25.6% 24.3% 23.6% 17.8% 18.8% 19.1% 19.8% 11.1% 1.9% 9.4% OIBU 17.4% 27.3% 21.9% 35.9% 15.3% 1.9% 19.4% 6.9% 30.9% 28.2% 47.1% 28.8% 34.5% 5.9% 33.5% Consolidated ** 16.4% 14.7% 15.9% 17.4% 14.2% 13.9% 15.3% 14.0% 18.0% 15.3% 18.3% 16.4% 12.2% 13.0% 15.6% * - All amounts revised to exclude reimbursable revenue from denominator. ** - Revised to exclude aircraft sales from numerator. 34 |
GAAP reconciliation 35 |
Special items reconciliation 36 |
Leverage Reconciliation *Adjusted EBITDAR exclude gains and losses on dispositions of assets Debt Investment Capital Leverage (a) (b) (c) = (a) + (b) (a) / (c) (in millions) As of December 31, 2011 $ 832.8 $ 1,523.5 $ 2,356.3 35.3% Adjust for: Unfunded Pension Liability 97.2 97.2 NPV of Lease Obligations 165.0 165.0 Guarantees 15.5 15.5 Letters of credit 1.7 1.7 Adjusted $ 1,112.1 (d) $ 1,523.5 $ 2,635.6 42.2% Calculation of debt to adjusted EBITDAR multiple Adjusted EBITDAR*: FY 2012 $ 301.1 (e) Annualized $ 401.4 = (d) / (e) 3.69:1 37 |
Bristow Group Inc. (NYSE: BRS) 2103 City West Blvd., 4 Floor Houston, Texas 77042 t 713.267.7600 f 713.267.7620 bristowgroup.com Contact Us 38 th |