CHC Helicopter Fiscal 2012 Fourth-Quarter Earnings Presentation

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Oct 30, 2013 (3 years and 7 months ago)

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WE MOVE THE INDUSTRY THAT MOVES THE WORLD


CHC Helicopter


Fiscal 2012 Fourth
-
Quarter Earnings Presentation

July 10, 2012

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Presenters

Bill Amelio, CEO

Joan Hooper, CFO

Victor Pang, VP, Financial Planning & Analysis

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Forward
-
Looking Statements

This presentation contains forward
-
looking statements and information within the meaning of certain securities
laws, including the “safe harbor” provision of the United States Private Securities Litigation Reform Act of 1995 and
any applicable Canadian securities legislation. All statements, other than statements of historical fact included in
this presentation, regarding our strategy, future operations, projections, conclusions, forecasts and other
statements are “forward
-
looking statements“. While these forward
-
looking statements represent our best current
judgment, the actual results could differ materially from the conclusions, forecasts or projections contained in the
forward
-
looking information. Certain material factors or assumptions were applied in drawing a conclusion or
making a forecast or projection in the forward
-
looking information contained herein. Such factors include, but are
not limited to, the following: exchange rate fluctuations, trade credit risk, industry exposure, inflation, contract loss,
inability to maintain government issued licenses, inability to obtain necessary aircraft or insurance, competition,
political, economic and regulatory uncertainty, loss of key personnel, work stoppages due to labor disputes, and
future material acquisitions. Should one or more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual outcomes may vary materially from those indicated. The Company disclaims
any intentions or obligations to update or revise any forward
-
looking information, whether as a result of new
information, future events or otherwise.

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Q4: Key Takeaways


Industry demand strong, increasing


Safety record remains industry
-
best


Transformation strategy is working


More consistent, efficient, cost
-
effective


Together, means great opportunity


Chance to set CHC apart in every way


Better growth, profitability, value

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Accident
-
Rate Benchmarking

CHC’s
five
-
year rolling average
through June 30 is 0.23 accidents/100,000
flight
hours

Number of accidents/100K
flight

hours

Safety: Maintaining
Leading Performance

1.8

0.8

0.23

0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
Offshore Operations
Twin Helicopters
CHC 5-Year Rolling Average
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CHC Leadership: Peter
Bartolotta


President and COO, Helicopter Services


Started with CHC June 25


Highly skilled at operational excellence


Successful in broad range of companies


Lenovo Corporation


Allied Signal/Honeywell


NCR Corporation


IBM

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Transformation Update: Strong Progress


After ~one year, significant run
-
rate EBITDAR benefit


Improvement across all disciplines, more to come



Contracts
: Projected savings beyond original targets


Heli
-
One
: Productivity leading to major savings


Overhead
: ‘Future’ organizations shaping decisions


Base Transformation
: Changing how we operate

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Transformation Update: Major Initiatives


CHC Operations Center


Center went ‘live,’ first to Thailand, in early June


Staffing proceeding well, great talent in DFW area


Heli
-
One: expanding global footprint


Poland office opened in June, staffing well under way


Brazil capacity in
Cabo

Frio hangar planned for 2013


Existing H1 sites complementary centers of excellence

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Helicopter Services Highlights


Multiple major new contracts, submissions


Wins: Shell, Total (Australia); Anadarko (Mozambique)


Tenders: Number, size of potential contracts remain strong


Now developing Stage 2 U.K. SAR
-
H submission


CHC among five bidders in process


Up to 20 aircraft needed for all government SAR


Invitation to tender likely in August, awarded early 2013


Nigeria: AOC expected to be issued next month

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Heli
-
One Highlights


Significant contract wins in first two months of Q1


Started far
-
reaching SCM process across regions


Objective: Better parts availability, more ‘birds in the air’


Completed in Australia, focusing on Brazil


Increasing on
-
site support from aircraft manufacturers


Cross
-
discipline team focused on operating costs

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Strong Q4 results on Revenue, EBITDAR & EBITDA


Continued momentum from last few quarters


Revenue $453 million, up 18%


EBITDAR* $111M, up 31%


EBITDA* $64M, up 42%


Adjusted EBITDA*:


FY12
-
Q4: $65M


FY12
-
Full year: $259M


Trailing 12 months in previous quarter: $250M


CHC Consolidated


FY2012 Q4


* See Appendix for reconciliation to GAAP measures.

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Strong revenue growth of $40.4M or 12%


Increases in Australasia, Africa Euro Asia, Americas, and Western North Sea


Partially offset by de
crease in Eastern North Sea



EBITDAR increased by $14.3M or 16%


Additional contribution from revenue increase

Helicopter Services


FY2012 Q4

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Total revenue up $35.5M or 36%


Third
-
party revenue up $28.5M or 83%


EBITDAR up $17.8M or 107%


Increased external MRO revenue in Norway and Canada


Higher internal revenue due to flying hours growth in Helicopter Services

Heli
-
One


FY2012 Q4

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Total Corporate and Other costs increased by $5.9M or 30%


Direct costs increased by $5.2M due to


Higher
costs related to retiring certain aircraft


No change in G&A expenses

Corporate & Other


FY2012 Q4

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Revenue $1,693 million, up $247M or 17%


EBITDAR $421M, up $85M or 25%


Both
Heli
-
Services
&
Heli
-
One saw improvement


Helicopter Services: R
evenue
up 16%, EBITDAR up 12%


Heli
-
One: 3P revenue up 29%, EBITDAR up 104%


EBITDA $244M, up $73M or 43%


Loss from Continuing
O
ps before Tax $31M


YoY

improvement of $64M or 68%


Net Loss $95M


YoY

increase in loss of $30M


$
81M higher tax
expense year over year


Includes non
-
cash valuation
allowance
of $56M

Financial Performance


FY2012

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Free Cash Flow


FY2012


Adjusted cash from ops $43M


$26M higher than LY


Normalized for AR securitization proceeds


EBITDA $73M higher


Partially offset by $25M higher interest expense


Full year impact of senior secured notes


Higher pension expense $21M


H
igher contribution in FY12


FY11 benefit from redemption proceeds


Adjusted cash from investing ($121M)


$40M lower than LY


Normalized for $97M aircraft lease buy
-
out


Related to covenant reset process


Adjusted free cash flow ($78M)


$66M better than LY

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Debt and Liquidity Position


Net Debt at April 30, 2012 = $1.247B


$1.240B at April 30, 2011


Net Debt to EBITDA ratio at April 30, 2012 = 5.1x


Significant improvement from 7.3x at
April 30,
2011


Liquidity Position at
April 30, 2012 =
$275M


Cash and cash equivalent = $56M


Available current bank facilities = $219M


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Q&A

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Q4: Key Takeaways


Industry demand strong, increasing


Safety record remains industry
-
best


Transformation strategy is working


More consistent, efficient, cost
-
effective


Together, means great opportunity


Chance to set CHC apart in every way


Better growth, profitability, value

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APPENDIX

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EBITDAR/EBITDA: Reconciliation to GAAP
measures

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Reconciliation of Segment EBITDAR Reclassification


Reclassification of segment EBITDAR


No impact on consolidated CHC results


Only impacts segment EBITDAR.


Add charges for consigning
Heli
-
One inventory at
Heli
-
Services flying bases


Additional revenue to
Heli
-
One and direct costs to
Heli
-
Services


EBITDAR impact is shown below:



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Adjusted EBITDA

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Net Debt Reconciliation

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Copyright © 2011 CHC Helicopter

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