Attached files
| file | filename |
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| 8-K - FORM 8-K - MRC GLOBAL INC. | d839109d8k.htm |
 December 17, 2014
TM
Investor Presentation
Exhibit 99.1 |
 2
2
This
presentation
contains
forward-looking
statements
within
the
meaning
of
Section
27A
of
the
Securities
Act
and
Section
21E
of
the
Exchange
Act.
Words
such
as
“will,”
“expect,”
“expected”,
“looking
forward”,
“guidance”
and
similar
expressions
are
intended
to
identify
forward-looking
statements.
Statements
about
the
company’s
business,
including
its
strategy,
the
impact
of
changes
in
oil
prices
and
customer
spending,
its
industry,
the
company’s
future
profitability,
the
company’s
guidance
on
its
sales,
adjusted
EBITDA,
adjusted
gross
profit,
tax
rate,
capital
expenditures
and
cash
flow,
growth
in
the
company’s various markets and the company’s expectations, beliefs, plans,
strategies, objectives, prospects and assumptions are not guarantees of future
performance. These statements are based on management’s expectations that
involve a number of business risks and uncertainties, any of which could
cause actual results to differ materially from those expressed in or implied by the
forward-looking statements. These statements involve known and unknown
risks, uncertainties and other factors, most of which are difficult to predict and
many of which are beyond our control, including the factors described in the
company’s SEC filings that may cause our actual results and performance to be
materially different from any future results or performance expressed or
implied by these forward-looking statements.
For a discussion of key risk factors, please see the risk factors disclosed in the
company’s SEC filings, which are available on the SEC’s website at
www.sec.gov
and
on
the
company’s
website,
www.mrcglobal.com.
Our
filings
and
other
important
information
are
also
available
on
the
Investor
Relations
page
of
our
website
at
www.mrcglobal.com.
Undue reliance should not be placed on the company’s forward-looking
statements. Although forward-looking statements reflect the company’s good faith
beliefs,
reliance
should
not
be
placed
on
forward-looking
statements
because
they
involve
known
and
unknown
risks,
uncertainties
and
other
factors,
which
may
cause
the
company’s
actual
results,
performance
or
achievements
or
future
events
to
differ
materially
from
anticipated
future
results,
performance
or
achievements or future events expressed or implied by such forward-looking
statements. The company undertakes no obligation to publicly update or revise
any forward-looking statement, whether as a result of new information, future
events, changed circumstances or otherwise, except to the extent required by
law.
Forward Looking Statements and Non-GAAP Disclaimer |
 3
Diversification by Industry Sector -
Revenue
Note: Percentage of sales for the twelve months ended September 30, 2014.
Upstream
47%
Downstream 25%
28% Midstream
Diversified Across All Three Major Energy Sectors
Transmission
18%
Drilling & Completion
Tubulars
(OCTG)
9%
Production
Infrastructure,
Materials &
Supplies
38%
Other/
Industrial
13%
Chemicals &
Refining
12%
Gas Utility
10% |
 4
By Product Line
Revenue by Geography and Product Line
Note: Percentage of sales for the twelve months ended September 30, 2014.
By Geography
Houston, TX
Edmonton, AB
Bradford, UK
Singapore
Perth, AU
Stavanger, NO
Diversified Across Multiple Geographies -
Domestically (all shale plays) and Internationally
12%
14%
16%
17%
18%
23%
Canada
Asia / Europe
Western US
Southwest
Gulf Coast
Eastern US
32%
21%
19%
19%
9%
Valves
Fittings & Flanges
General Oilfield
Products
Line Pipe
OCTG
32%
21%
19%
19%
9% |
 5
Downstream
Midstream
Upstream
MRC Global plays a vital role in the complex, technical, global energy supply
chain Long-Term Supplier & Customer Relationships
CUSTOMERS
SUPPLIERS
IOCs
Phillips 66
Valero
DOW
DuPont
Marathon
Petroleum
Access
Midstream
AGL
Resources
Atmos
NiSource
PG&E
Williams
DCP
Midstream
Chesapeake
Energy
ConocoPhillips
Devon
Apache
Anadarko
CNRL
Hess
Husky
Energy
Marathon
Oil
Statoil
Energy Carbon Steel
Tubular Products
Valves
Fittings, Flanges and General
Use Products
Tenaris
TMK-
IPSCO
U.S.
Steel
CSI Tubular
JMC
Wheatland
Balon
Cameron
Flowserve
Kitz
Neway
Velan
Boltex
Bonney
Forge
Chevron
Phillips
Chemical
Tube
Forgings of
America
WL Plastics
Emerson |
 6
Strategic Shift in Product Mix to Higher Margin Products
($ millions)
Total Revenue less Carbon Energy Tubulars (OCTG & Line Pipe)
15% CAGR Over Past 4 Years
$2,384
$2,989
$3,697
$3,705
~$4,200
2010
2011
2012
2013
2014E |
 7
2014 and 2008 –
What Is Different in Product Mix?
•
Product mix has changed significantly
•
More volatile carbon pipe is a smaller part of our business today
•
Impact of downturn in customer spending is expected to impact higher
margin products less than carbon pipe
2008
2014
55%
Higher
Margin
Products
OCTG
24%
Line Pipe
21%
Valves
15%
22%
45%
Carbon
Pipe
72%
Higher
Margin
Products
19%
OCTG
9%
Valves
32%
19%
28%
Carbon
Pipe
Fittings &
Flanges
18%
General
Products
Oilfield
General
Oilfield
Products
Line Pipe
Fittings &
Flanges
21%
Note: Percentage of sales for the year ended December 31, 2008 and for the twelve months
ended September 30, 2014. |
 8
•
Historically high inflation impacted both OCTG and LP in 2008
•
This resulted is a significant reduction in prices in 2009
•
Today, prices are at more normalized levels and have less to fall in a
downturn
Line Pipe
OCTG
48%
47%
2014 and 2008 –
What Is Different in Carbon Steel Pricing
Prices
are
per
ton
as
reported
in
published
market
data.
Amounts
reflect
peak
prices
in
September
2008,
trough
prices
in
November
2009
and
current
prices
in
November
2014
are per ton as reported
in published market data.
The amounts reflect peak (September) prices in 2008, trough (November) prices in
2009, and current (November) prices in 2014 $3,242
$1,675
$1,789
2008
2009
2014
$3,036
$1,614
$1,624
2008
2009
2014 |
 9
1.
Reflects reported revenues for 2013.
Building an International Platform
2014 International Acquisitions
Date
Acquisition
Rationale
Region
Revenue¹
($ millions)
Jan-14
Stream
International Offshore PVF
Norway
$ 271
May-14
MSD Engineering
Valve Automation
Singapore & SE Asia
26
Jun-14
HypTeck
International Offshore
Norway
38
$0
$52
$256
$330
$567
$554
>$900
2008
2009
2010
2011
2012
2013
2014E
International Segment Revenue
($ millions) |
 10
Capital Structure |
 Balance
Sheet Metrics Total Debt
Capital Structure
Net Leverage
($ millions)
September 30,
2014
Cash and Cash Equivalents
$ 31
Total Debt (including current portion):
Term Loan B due 2019, net of discount
782
Global ABL Facility due 2019
632
Other
3
Total Debt
$ 1,417
Total Equity
$ 1,425
Total Capitalization
$ 2,842
Liquidity
$ 307
1. The
net
leverage
ratio
is
3.25x
pro
forma
for
the
acquisition
of
Stream,
Flangefitt,
MSD and HypTeck.
11
4.1x
2.6x
2.5x
3.4x
1
2011
2012
2013
September 30, 2014
3x
2x
Target range 2x-3x
$1,527
$1,257
$987
$1,417
2011
2012
2013
September 30, 2014 |
 12
Summary of Certain Debt Terms
•
Repayment
•
Global ABL and Term Loan B mature in 2019
•
Term Loan B has 1% per year amortization, paid quarterly
•
Term Loan B requires repayment in form of annual excess cash flow sweep
(currently at the maximum of 50% of annual “Excess Cash Flow”)
•
Financial Maintenance Covenants
•
No maintenance covenants are currently in effect in either the Global ABL or
Term Loan B
•
Under the Global ABL, if “Excess Availability”
is less than the greater of 10%
of the “ABL Commitment”
or $79.8 million, then a “Fixed Charge Coverage
Ratio”
of 1.0:1.0 is required.
•
The threshold is approximately $105 million (10% of the $1.050 billion
commitment) •
“Excess Availability”
is approximately $268 million as of November 30, 2014
•
“Fixed Charge Coverage Ratio”
was 2.36 at September 30, 2014 (the most recent
compliance certificate) |
 13
Summary of Certain Debt Terms
•
The Global ABL and Term Loan B also contain customary restrictive
covenants that limit our ability to make investments, prepay certain
indebtedness, grant liens, incur additional indebtedness, sell assets,
make fundamental changes, enter into transactions with affiliates and
pay dividends. |