13 april 2000 - trevi finanziaria industriale | financial … · soilmec far east pte. ltd....

Analyst presentation13 April 2000

Contents and presentation team

1. Overview of TREVIGroup

2. Core business

3. Drilling business area

4. Parks business area

5. Financial overview as at 31st Dec, 1999

6. Strategy

1. Overview of TREVIGroup

2. Core business

3. Drilling business area

4. Parks business area

5. Financial overview as at 31st Dec, 1999

6. Strategic guidelines

Activities

Trevi Division operates in :ground engineeringdrilling oil, gas and water wellsautomated, underground parking garages 71% of 1999 revenues

Soilmec Division designs and manufactures:

ground engineering machinery and equipmentdrilling rigs and accessories 29% of 1999 revenues

TREVIGroup – Highlights

Vertical Integration Research & Development Global Reach

Trevi Division – ground engineering services

Soilmec Division –manufacturing of ground engineering machinery and drilling equipment

Dynamic interaction between the divisions drives continuous improvement and innovation

More than 1,000 projects in over 40 countries, across five continents

Machinery and equipment distributed in more than 80 countries

79% of 1999 consolidated revenues outside Italy

Mobile, hydraulic drilling rigsContinuous Diaphragm WallsPretunnel systemTreviParkDeep Mixing

Leadership in ground engineeringLeadership in ground engineering

• Leading ground engineering company• Strong brand recognition• Leading-edge innovation• Strong operating margins

World Wide Presence

Soilmec S.p.A.Cesena (Italia)

Soilmec S.p.A.Drilling Equipment Division

Piacenza (Italia)Soilmec S.p.A.

Representative OfficeBeijing (Cina)

Soilmec Branham Inc.(USA)

Lianyungang SoilmecMachinery Co. Ltd.Lianyungang (Cina)

Soilmec Japan Co. Ltd.Tokyo (Giappone)

Soilmec Far East Pte. Ltd.(Singapore)

SMFE Sdn. Bhd.(Malesia)

Soilmec MisrCairo (Egitto)Soilmec Ltd

Peterborough (UK)Soilmec International B.V.

Amsterdam ( Netherlands)

Algeria - Argentina - P.R. ChinaGermany - Egypt - Hong Kong Mozambique -

Nigeria - Oman - Qatar Philippines - Portugal -Singapore - Sweden Thailand - Turkey - U.A.E. -

United Kingdom - United States - Venezuela

Trevi S.p.A.Cesena (Italia)Trevi Icos CorporationBoston (USA)Trevi CimentacionesCaracas (Venezuela)Trevi Foundations NigeriaLagos (Nigeria)Trevi Foundations Philippines Inc (Filippine)Trevi Fundacoes LdaLisbon(Portugal)Pilotes TreviBuenos Aires (Argentina)Trevi Construction Co. Ltd(Hong Kong)Profuro Lda(Mozambico)Petreven C.A.(Venezuela)Cifuven C.A.(Venezuela)Trevi Contractors B.V.Amsterdam- (Netherlands)Trevi Insaat ve M. A.S.Istanbul (Turchia)Swissboring Piling Overseas Corp. LtdAbu Dhabi (Dubai)

Activities – ground engineering

Specialist foundation and ground consolidation works for

infrastructure, civil engineering and building construction projects

Recently developed leading-edge tunnelling technologies for the

construction of new tunnels and widening existing tunnels

Activities – ground engineering machinery

• Design and manufacturing of a broad range of ground engineering machinery and equipment

• Used for piling, micopiling, soil consolidation, diaphragm walls, tunnelling, etc.

• Emphasis on innovative, technologically-advanced products

Activities – drilling rigs

Design and manufacturing of conventional and specialised drilling rigs and rig components for oil, gas and water wellsAlso manufacturers ancillary equipment (masts, derricks, substructures, mud pumps, draw works etc.)Recently developed a mobile, hydraulic drilling rig which significantly reduces drilling costs for shallow and medium-depth wells

Design and manufacturing of conventional and specialised drilling rigs and rig components for oil, gas and water wellsAlso manufacturers ancillary equipment (masts, derricks, substructures, mud pumps, draw works etc.)Recently developed a mobile, hydraulic drilling rig which significantly reduces drilling costs for shallow and medium-depth wells

Activities – contract drillingContract drilling services to the oil, gas and water industries,focused on onshore wells using Soilmec drilling rigs

SaiTre – joint venture with Saipem, Italy’s largest oil services company, offering contract drilling services in Italy and the Mediterranean basin

Contract drilling services to the oil, gas and water industries,focused on onshore wells using Soilmec drilling rigs

SaiTre – joint venture with Saipem, Italy’s largest oil services company, offering contract drilling services in Italy and the Mediterranean basin

Activities – TreviPark

Design and construction of automated, underground parking Design and construction of automated, underground parking garagesgaragesAimed at urban or environmentallyAimed at urban or environmentally--sensitive locations given its sensitive locations given its minimal surface areaminimal surface areaCan be incorporated into the foundations of a buildingCan be incorporated into the foundations of a building

1. Overview of TREVIGroup

2. Core business

3. Drilling business area

4. Parks business area

5. Financial overview as at 31st Dec, 1999

6. Strategic Guidelines

Main projects Projects Places Country Works value to be

completed (Euro mil.)

Building Washington USA 8,5Bridge New York USA 7,6Bridge Massachussetts USA 5,7Building Miami USA 5,7Tunnel Boston USA 5,4Building Cambridge USA 4,1Airport Terminal Boston USA 3,3Channel Boston USA 2,8Harbour Messina Italy 12,2Tunnel T.A.V. Bo-Fi Italy 8,6Power Plant Ravenna Italy 4,2Oil Drilling Oritupano Venezuela 8,3Bridge Bissau Guinea Bissau 6,7Bridge Rosario-Victoria Argentina 5,8Bridge Abidjan Ivory Coast 5,4Dam Gilgel Gibe Ethiopia 3,6Oil Harbour Port Harcourt Nigeria 2,6Underground railway Hong Kong P.R. of China 2,3

Core business(Ground engineering machinery and services)

The net sales pertaining to the core business, services and equipment, have been 235,9 millions euros, that is 92% of the totalnet sales

24% increase compared to last year

91% of the net sales refers to foreign countries. The most importantgeografical area is USA, with a net sales amount of 73,5 millionseuros (equal to 31% of total net sales) and a 38% increase compared to last year

The Group presence in the USA, “covering” as many States as possible, even through new acquisitions, is considered to be

strategically important

Central ArteryCentral Artery / / TunnelTunnel

Chardon to NorthChardon to North Street Street BostonBoston

Millenium Millenium PlacePlace

BostonBoston

1. Overview of TREVIGroup

2. Core business

3. Drilling business area

4. Parks business area

5. Financial overview as at 31st Dec, 1999

6. Strategic Guidelines

Drilling business area

The net sales of the drilling business area amount to 14,8 millionseuros, which is equal to 5,8% of total net sales, 11,7 million euros of which refer to the sale of equipment and the remaining 3,1 to the drilling activity

109% increase compared to last year

The backlog for the year 2000 amounts to 35,1 millions euros (+137%on the total area revenues of the 1999) and 60,4 millions euros contracts are under negotiation

* Contracts with more than 50%of possibilities to be awarded

Drilling activities will strongly increase due to the rising demand and the fall of the production of the existing wellsIn the next years, about 90% of the oil production will be removed from new wells

80%

20%

Depth Depth < 4.000 m< 4.000 m

Depth Depth > 4.000 m> 4.000 m

Industry Outlook

80% 80% of new wells is placed at of new wells is placed at a a depth lower than depth lower than 4.000 m4.000 m

Industry OutlookThe existing fleet is not able to face the increasing demand of oil products

After the recent escalation of oil price, the Oil Companies have planned strong investments

The business cyclic trend requires a particular attention on operating costs reduction

The forecast to mantain the actual oil price level (23-26 US$/bbl) in the next year and the possibility to reduce the operating costs make the exploitation of marginal wells convenient

Industry OutlookIndustry Outlook

Source: U.S. DOE/EIA

ADVANCE Rigs - Hydraulic Hoist TypeHH is an automatic hydraulic drilling rig that provides the most ground-breaking answer in the last years to the drilling industry's needs.

HH is the result of the joined efforts of Soilmec DED, as manufacturer, and the Italian Energy Group, E.N.I., through AGIP and SAIPEM, to develop a completely new type of drilling rig to satisfy the “new millenium” needs in the oil and gas research.

HH rigs have obtained the worldwide customer’s recognition to have successfully reached the following main targets:

– Average reduction of the total drilling cost up to 30%;– Average reduction of the mobilization and transport cost up to 40%;– Average improvement of drilling performances up to 30%;– Simplify the drilling operations with special care about HSE of the drilling crew;– Automatization of the drill pipe’s and casing’s handling and tripping operations;– Reduction of the environmental impact by reducing the yard area and by realizing

a truly sound-proof rig.– Suitable for: – Stubbing operation;Deviation, Re-entry; Underbalance Drilling

Drilling EquipmentSoilmec DED propose to the international drilling industry a large variety of complete rig packages.Soilmec DED also manufactures specially designed state-of-art individual taylor made components such as derricks, masts, substructures, automatic hydraulic rigs and other high specialised equipment for worldwide operations and any kind of terrain and weather condition.

The PRODUCT RANGE : • Water Wells• Oil Wells

– MAS series– WORKOVER rigs– DERRICKS and OFFSHORE masts– HYDRAULIC HOIST series

• Pumps• Mud Systems• Handling

Main Advantages

Increased automationDrilling parameters regulated by hydraulic device

Future applicationdrilling rig totally automated

Assembled on 3-axle semitrailer; weight and dimensionde signed for moving without convoy car

Fast rig up / Easy mouvement

Substructure and mast rigged up by hydraulic cylinders

Main AdvantagesReduce Footprint

““TraditionalTraditional RigRig””

GG--125 125 RigRig

Main AdvantagesG-125 vs. Standard Rig

Hydraulic rig G-125Hydraulic rig G-125MASTMAST

Nr.Nr. ofofLOADSLOADS

PIPEPIPERACKRACK

70 22

NOT NOT INSTALLEDINSTALLED

MOVABLE F/WELLCENTREMOVABLE F/WELLCENTRETO MOUSE HOLETO MOUSE HOLE

TELESCOPIC

TELESCOPIC

TRADITIONALTRADITIONAL

VERTICAL VERTICAL SYSTEMSYSTEM

STANDARD

STANDARD

Standard rig 1000 Hp

TOPTOPDRIVEDRIVE

50 m50 m24 m24 m

Dep

thD

epth

(ft)

(ft)

00

1.0001.000

3.0003.000

4.0004.000

5.0005.000

6.0006.000

2.0002.000

7.0007.000

8.0008.000

DaysDays00 11 22 33 44 55 66 77 99 101088 1111 1313 14141212 1515

“Traditional” Rig

Soilmec Rig

Oritupano Leona - Venezuela Drilling time Vs Depth

1 foot = 30,48 cm

1. Overview of TREVIGroup

2. Core business

3. Drilling business area

4. Parks business area

5. Financial overview as at 31st Dec, 1999

6. Strategic Guidelines

TreviPark

• Cesena - 3 parks delivered in early 1999

• Roma and Torino - 2 parks to be delivered within September 2000

• Padova, Mantova, Torino, Roma - 5 parks works scheduled to start within this year

• Roma e Torino - 4 parks works scheduled to start within the year 2001

ITALYITALY

ABROADABROAD

• Prague - 2 parks works scheduled to start within this year

• Copenhagen - The signature of the contract for 5 parks has been delayed due toprocedural reasons

• Contracts under negotiation: London (2) and Beijing (4)

1. Overview of TREVIGroup

2. Core business

3. Drilling business area

4. Parks business area

5. Financial overview as at 31st Dec, 1999

6. Strategic Guidelines

Turnover

CAGR + 16,9% Year + 23,8%

122

165,9180

199214,8

265,8

020406080

100120140160180200220240260280

1994 1995 1996 1997 1998 1999

(Euro Mil)

Figures for years 1989 to 1994 are unaudited

Revenues

1030507090

110130150170190210230250270290

1996 1997 1998 1999

Italy Rest of EuropeUnited States and Canada Central and South AmericaAfrica Middle EastFar East

CAGR + 15,5%

(Euro Mil)

170,7194,7

210,4

263.0

Year + 25%

Business mix of net sales(Euro Mil)

Business 1999 % 1998 % Var. %

Ground engineering 171,1 66,8% 124,0 62,2% + 39,7%

Ground engineering machinery 64,8 25,3% 67,3 33,8% - 3,8%

Oil, gas & water drilling rigs 11,7 4,6% 6,3 3,2% + 84,6%

Oil drilling activity 3,1 1,2% 0,7 0,4% +421%

Parks 5,3 2,1% 0,7 0,4% + 685%

Total 256,0 100% 199 100% +28,6%

Trevi Division - Net Sales

1996 1996 -- 19991999 1999 1999 -- Geographical SplitGeographical Split

94103,3

125,5

179,5

80

100

120

140

160

180

200

1996 1997 1998 1999

(Euro Mil) CAGR + 24,1%

Year + 43,2%

Italy23,8%

Central & South

America17,2%

USA & Canada32,8%

Africa13,7%

Middle East 5,9%

Far East5,3%

Europe1,3%

Soilmec Division - Net Sales

1996 1996 -- 19991999 1999 1999 -- Geographical SplitGeographical Split

CAGR + 2,2%

Italy13,9%

Central & South

America3,9%

USA & Canada20,9%

Africa11,1%

Middle East

13,5%

Far East11,3%

Europe25,4%

71,7

84,5

73,776,5

50

60

70

80

90

100

1996 1997 1998 1999

(Euro mil)

Year + 3,8%

TREVI Group order backlog

• Total amount of 203,4 Euro Mil

• 84% will be completed in the second half of the year

• Geographical split

1999 % 1998 % 1997 %

Europe 79,4 39,0 78.9 38,3 55.0 36,1

USA and Canada 44,6 22,0 50.8 24,6 52.0 34,1

Central and South America 24,7 12,2 27.5 13,3 12.9 8,4

Africa 23,3 11,4 29.2 14,2 16.6 10,9

Middle East 20,6 10,1 15.9 7,7 5.1 3,3

Far East 10,8 5,3 3.9 1,9 10.8 7,2

Total 203,4 100,0 206.2 100,0 152.4 100,0

EBITDA

EBITDA EBITDA -- EBITDA marginEBITDA margin

(Euro Mil)

28,822,7

17,914,7

11.3%11,4%

8,9% 9,5%

0

5

10

15

20

25

30

1996 1997 1998 19990%2%3%5%6%8%9%11%12%14%

MarginMargin

CAGR + 25.3% Year + 27.2%

EBIT

EBIT EBIT -- EBIT marginEBIT margin

(Euro Mil)

15,914,4

9,58,4

6.2%7,2%

5,0% 5,0%

02468

1012141618

1996 1997 1998 19990%1%2%3%4%5%6%7%8%

MarginMargin

CAGR + 23,6% Year + 10,6%

Net income

Net income Net income -- Net income marginNet income margin

(Euro Mil)

7,1

4,03,3

1,5

2.9%

2,0%

0,9%

1,8%

012345678

1996 1997 1998 19990,0%

1,0%

2,0%

3,0%

4,0%

5,0%

MarginMargin

CAGR + 66,3% Year + 77,9%

Net debt/Net equity

Year - 55,1%

39,3 44,228,1

-10,8

30,0

30,221,3

36,9

1.4x

2.3x

1.6x

0.25x

-25

-5

15

35

55

75

1996 1997 1998 1999

-1x

0x

1x

2x

3x

Short term debtsLong term debts

(Euro Mil)

Net Net FinancialFinancial Position 1999: 26.1 millions of Position 1999: 26.1 millions of euroseuros

Tangible asset investments and R&D Expenses

TangibleTangible assets*assets* R&D R&D ExpensesExpenses

9.1

14.8

22.2

35.9

23.3

33.8

26.9

31.8

0

5

10

15

20

25

30

35

40

1996 1997 1998 1999

(Euro Mil) (Euro Mil)

3,3 3,64,2 4,2

0

1

2

3

4

5

6

1996 1997 1998 1999

Net InvestmentsGross Investments

* Net of Swissboring Overseas Piling Corp. Ltd acquisition

Summary Consolidated Income Statement(Euro Mil)Euro Mil)

For the year ending December 31 For the year ending December 31 19991999 19981998 19971997

Revenues 263.0 210.4 194.8Revenues from sales and services 253.3 190.0 187.9Change in work in progress 2.6 9.1 -Other revenues 7.1 11.3 6.9

Total production costs (247.1) (195.9) (185.3)Change in stocks (1.1) (1.2) -Ammortisation (12.9) (8.3) (8.4)Capitalised costs 3.9 5.6 4.3

Operating income Operating income 15.915.9 14.414.4 9.59.5

Financial and non-recurring charges (3.6) (5.2) (5,1)

Income before taxes Income before taxes 12.312.3 9.2 9.2 4.44.4

Income taxes (5.7) (4.4) (1.6)

Minority interests 0.5 (0.8) 0.5

Net income Net income 7.17.1 4 4 3.33.3

Dividend - 0,015 euro per share

Summary Consolidated Balance Sheet

(Euro Mil)Euro Mil)

As at December 31 As at December 31 19991999 1998 1998 19971997

Current assets 193.5 138.7 137.9PPE 93 64.9 48.1Intangible assets 9 3.5 4.5Non-current financial assets 6.7 6.8 10.3Total assetsTotal assets 302.2302.2 213.9213.9 200.8200.8

Current liabilities 144.6 136.6 126.7Non-current liabilities 52.0 41.3 41.4Minority interest 5.2 5.1 3.9Equity (excl. minorities) 100.4 30.9 28.8Total liabilities and equityTotal liabilities and equity 302.2302.2 213.9213.9 200.8200.8

Total net financial debt 26.1 58.8 74.4Short term -10.8 30.7 44.2Long term 36.9 28.1 30.2

1. Overview of TREVIGroup

2. Core business

3. Drilling business area

4. Parks business area

5. Financial overview as at 31st Dec, 1999

6. Strategic Guidelines

Strategic Guidelines

Commercial exploitation of technological innovations

Consolidate the presence in the key-markets, especially in the USA

(even through acquisitions)

Aim at new business area: high margins and high growth rates

Search for high profitable market niches