Analyst presentation 28 September 2000
1. TREVI Group 2. Financial Overview as at 30th june, 2000 3. Core business 4. Drilling Business Area 5. Parking Business Area
TREVI Group - Business Mix Oil wells Drilling Oil, gas & water drilling rigs Core Business Gound engineering services Ground engineering machinery TreviPark Parking Project Financing Parking management Integrated parking management system (parking on line)
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
Ground engineering equipment Design and manufacturing of a broad range of ground engineering machinery and equipment Used for piling, micropiling, soil consolidation, diaphragm walls, tunnelling, etc. Emphasis on innovative, technologically-advanced products
Drilling rigs Design and manufacturing of conventional and specialised drilling rigs and rig components for oil, gas and water wells Also 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
Contract drilling 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
Parking TreviPark Design and construction of automated, underground parking garages Aimed at urban or environmentally-sensitive locations given its minimal surface area, can be incorporated into the foundations of a building Integrated parking management system (parking on line)
World Wide Presence Trevi S.p.A. Cesena (Italia) Trevi Icos Corporation Boston (USA) Trevi Cimentaciones Caracas (Venezuela) Trevi Foundations Nigeria Lagos (Nigeria) Trevi Foundations Philippines Inc (Filippine) Trevi Fundacoes Lda Lisbon(Portugal) Pilotes Trevi Buenos 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. Ltd Abu Dhabi (Dubai) Algeria - Argentina - P.R. China Germany - Egypt - Hong Kong - Mozambique - Nigeria - Oman - Qatar Philippines - Portugal - Singapore - Sweden - Thailand-Turkey - U.A.E. - United Kingdom - United States - Venezuela Soilmec S.p.A. Cesena (Italia) Soilmec S.p.A. Drilling Equipment Division Piacenza (Italia) Soilmec S.p.A. Representative Office Beijing (Cina) Soilmec Branham Inc. (USA) Lianyungang Soilmec Machinery Co. Ltd. Lianyungang (Cina) Soilmec Japan Co. Ltd. Tokyo (Giappone) Soilmec Far East Pte. Ltd. (Singapore) SMFE Sdn. Bhd. (Malesia) Soilmec Misr Cairo (Egitto) Soilmec Ltd Peterborough (UK) Soilmec International B.V. Amsterdam ( Netherlands)
TREVI Group 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 Mobile, hydraulic drilling rigs Continuous Diaphragm Walls Pretunnel system TreviPark Deep Mixing More than 1,000 projects in over 40 countries, across five continents Machinery and equipment distributed in more than 80 countries 75% of 1H 2000 consolidated revenues outside Italy Leadership in ground engineering Leading ground engineering company Strong brand recognition Leading-edge innovation Strong operating margins
Strategic Guidelines Aim at new business area: high margins and high growth rates Intensive exploitation of technical and commercial synergies of the Group Diversification of activities inside business areas High investments in R&D and equipment Commercial exploitation of technological innovations TurboJet: first contracts won in USA and Thailand Launch of R-930 : the most powerful piling rig Oil drilling rigs: turnover tripled in Venezuela
Strategic Guidelines Consolidate the presence in the key-markets (even through acquisitions) USA: CAGR in the last three years +16,5%; first contracts won in the West Coast Far East: net sales of foundation equipment +175%; set up of Soilmec Hong Kong Search for high profitable market niches Dam restoration Assistance and maintenance of oil rigs Parking management
Trend of the six month period The income trend of the half year is attributable to the following factors, which have affected mainly the first three months of the year: The seasonality of foundation activities, which slow down during winter The delayed start of some important sites, above all in Africa, and the negative progress of some sites in Italy The high costs borne to increase the Group presence in the USA market, notably in the Mid Atlantic Area
Drilling: boom of turnover and orders Euro mil 40 35 30 25 20 15 10 5 0 CAGR (year) +76,2%E 38,7 Year +162%E 14,8 10,8 7,1 6,5 3,8 1998 1999 2000 Six Months Year Backlog 2001: US$ 59 milions
1. TREVI Group 2. Financial Overview as at 30th june, 2000 3. Core business 4. Drilling Business Area 5. Parking Business Area
Turnover Year + 12,7E% (Euro Mil) 320 280 265,8 299,6E 240 200 180,0 199,0 214,8 160 120 80 40 0 1996 1997 1998 1999 2000
Net Sales (Euro mil) + 10,9% 150 120 90 60 30 119,0 131,9 0 1H 1999 1H 2000 Italy Rest of Europe USA and Canada Central and South America Africa Midle East Far East
Business Mix of net sales Business 1H 2000 % 1H 1999 % Var. % Core Business Ground engineering Services 81,2 61,6 76,2 64,1 +6,4% Groun Engineering Machinery 38,3 29,0 33,9 28,4 +13,3% Drilling Oil, gas & water drilling rigs 6,7 5,1 5,6 4,7 +7,2% Oil drilling activity 4,1 3,1 0,8 0,8 +387% Parking TreviPark 1,6 1,2 2,4 2,0-30,4% Total 131,9 100 119,0 100 +10,9
Core Business - Net Sales 1H 1999-1H 2000 1H 2000 - Geografical Split (Euro mil) + 8,5% 140 120 100 80 60 40 20 110,1 119,5 Far East 14% Middle East 7% USA & Canada 32% Africa 6% Italy 21% Europe 11% Central- South America 9% 0 1H 1999 1H 2000
Drilling - Net Sales 1H 1999-1H 2000 1H 2000 - Geografical Split (Euro mil) + 66,4% 14 12 10 8 6 4 2 6,4 10,8 Far East 2% USA & Canada 25% Italy 36% Central- South America 37% 0 1H 1999 1H 2000
Parking - Net Sales (Euro mil) 1H 1999-1H 2000 * 5-30,4% 4 3 2,4 2 1,6 1 0 1H 1999 1H 2000 *All the net sales are obtained in Italy
Quarterly Comparison (Euro mil) 2Q 2000 1Q 2000 4Q 1999 3Q 1999 Turnover 74,3 62,9 75,4 63,9 EBITDA 8,5 4,4 7,5 6,5 EBIT 4,7 1,0 1,9 3,7 Income before taxes 3,6-1,9 2,2 Minority Interests - - 0.5 (0,5) Net Income 3,6-2,4 1,7 Orders Backlog 266,3 243,8 203,4 168,9
TREVI Group orders backlog Total amount of 266,3 Euro mil 58% will be completed in the second half of the year 19,1 Euro mil. of drilling equipment to be delivered in the second half of the year Geographical split: 1H 2000 % 1999 % 1998 % Europe 55,0 20,7 79,4 39,0 79,8 38,3 USA and Canada 73,3 27,5 44,6 22,0 50,8 24,6 Central-South America 24,7 9,2 24,7 12,2 27,5 13,3 Africa 29,7 11,1 23,3 11,4 29,2 14,2 Middle East 67,8 25,5 20,6 10,1 15,9 7,7 Far East 15,8 6,0 10,8 5,3 3,9 1,9 Total 266,3 100,0 203,4 100,0 206,2 100,0
Debt / Equity ratio (Euro mil) 80 70 60 50 40 30 20 10 0-10 -20 2,3x 1.6x 21,3 30,0 44,2 28,1 0,44x 0.25x 34,6 36,9 13,2-10,8 1997 1998 1999 1H 2000 3x 2x 1x 0x -1x Long term debts Short term debts
Tangible asset investments and R&D Expenses Tangible assets* R&D Expenses (Euro Mil) 40 35 30 25 20 15 10 5 0 14.8 35.9 33.8 23.3 22.2 9.1 31.8 26.9 1997 1998 1999 1H 2000 (Euro Mil) 6 5 4 3 2 1 0 3,6 4,2 4,2 2,0 1997 1998 1999 1H 2000 Gross Investments Net Investments * Net of Swissboring Overseas Piling Corp. Ltd acquisition
Summary Consolidated Income Statement (Euro mil) 1999 1H 2000 1H 1999 260,4 Revenues 137,1 123,7 253,3 Net sales 131,9 119,0 7,1 Other revenues 5,2 4,7-247,1 Total production costs 130,8-113,4-12,9 of which depreciation and ammortization -7,1-4,5 28,80 EBITDA 12,9 14,8 11,3% % Net Sales 9,7% 12,5% 15,9 Operating income 5,7 10,3 6,2% % Net Sales 4,3% 8,6% -3,6 Financial and non-recurring charges -2,1-2,0 12,3 Profit before taxes 3,6 8,3 0,5 Minority interest - -0,8-5,7 Income taxes 7,1 Group income 3,6 7,5
Summary Consolidated Balance Sheet ( Euro mil) Current Assets 196,5 161,0 Intangeble Fixed Assets 8,1 3,4 Tangible Fixed Assets 99,9 77,0 Financial Fixed Assets 6,3 7,9 Total Assets 310,8 249,3 Short Term Debts 147,9 161,7 Long Term Debts 49,7 39,0 Minority Interests in Capital and Reserves 4,3 6,4 Group Interests in Stockholder's Equity 108,9 42,2 Total Liabilities and Stockholder's Equity 310,8 249,3 Net Indebtedness 47,8 59,6 Short Term 13,2 30,0 Long Term 34,6 29,6
1. TREVI Group 2. Financial Overview as at 30th june, 2000 3. Core business 4. Drilling Business Area 5. Parking Business Area
Core business (Ground engineering services and equipment) Net sales pertaining to core business, services and equipment, have been 119,6 millions Euros (90,6% of total net sales) +8,5% increase on last year +13,3% growth in sales of ground engineering equipment, +175% in the Far East The orders backlog amounts to 197,3 millions Euros, the 37% of which (73,9 millions Euros) will be executed in 2001
Core business - Technological news (Ground engineering services and machinery) Great success of Turbo Jet technology, a soil mixing and consolidation mechanical system allowing high increase in productivity, and of the equipment related with its application; Launch of the R-930 rig, the most powerful equipment for foundation piles, and of the Active grab, used for underground diaphragm walls.
Main Projects Projects Place Country Works value to be completed (Euro mil.) Building Boston USA 12,9 Building Boston USA 11,4 Building Washington USA 8,5 Building Boston USA 7,6 Bridges Massachussetts USA 5,7 Bridges New York USA 5,7 Building Boston USA 5,4 Building Miami USA 4,7 Building S. Francisco USA 1,0 Harbour Messina Italy 12,2 Tunnel T.A.V. Bo-Fi Italy 8,6 Dam Gilgel Gibe Ethiopia 3,6 Bridge Rosario-Victoria Argentina 5,8 Dam Paso Piedras Argentina 2,9 Dam Lagos Nigeria 1,8 Building Abu Dhabi U.A.E. 1,5 Bridge Hong Kong P.R. of China 1,0 Dam Casecnan Philippines 1,0
Central Artery / Tunnel Chardon to North Street Boston Millenium Place Boston
1. TREVI Group 2. Financial Overview as at 30th june, 2000 3. Core business 4. Drilling Business Area 5. Parking Business Area
Industry Outlook 36 Brent Crude - Last 6 months Fonte: U.S. DOE/EIA 34 32 30 28 26 24 22 20 Fonte: Deutsche Bank
Industry Outlook Drilling activities will strongly increase due to the rising demand and the fall of the production of the existing wells In the next years, about 90% of the oil production will be removed from new wells 20% Depth > 4.000 m 80% of new wells is placed at a depth lower than 4.000 m 80% Depth < 4.000 m
Industry Outlook The 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 an oil price level of 23-26 US$/bbl and the possibility to reduce the operating costs make the exploitation of marginal wells convenient
Drilling business area The expected net sales of drilling business area for the year amount to 38,8 millions Euros, which is equal to 12% of total net sales (6,8% in 1999) 20% of total net sales is the target for the next three years Higher margins than core business The orders backlog, as at 15 September 2000, amounts to US$ 82 millions Contracts under negotiation for US$ 90 millions * Contracts with more than 50%of possibilities to be awarded
Drilling Rigs Drillling rigs for 6,7 millions Euros delivered in the first half of the year (+7,2% on 1999) Delivery of drilling rigs for US$ 20,4 millions scheduled in the second half of the year, for a total amount of 30 millions Euros (+160% on 1999). Orders backlog to be delivered in 2001, as at 15 September 2000 : US$ 49 millions
Drilling Contracts 4,1 millions Euros of oil wells drilled in the first six months (+387% on 1999) 5,2 millions Euros of contracts won and scheduled for the second half of the year 10,4 millions Euros is the amount of orders backlog for 2001
ADVANCE Rigs - Hydraulic Hoist Type HH is a completely automatic hydraulic drilling rig type able to satisfy the new millenium needs in the oil and gas research. HH rigs technical features allow to reach the following main targets: Average reduction of the total drilling cost up to 30% and consequently an average improvement of drilling performances up to 30% Average reduction of the mobilization and transport cost up to 40%; Reduction of the environmental impact by reducing the yard area and by realizing a truly sound-proof rig; High improvement of staff safety.
Drilling Equipment Trevi Group proposes to the international drilling industry a large variety of complete rig packages. Also manufactures specially designed state-of-art individual taylor made components 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 automation Drilling parameters regulated by hydraulic device Future application drilling rig totally automated Fast rig up / Easy mouvement Assembled on 3-axle semitrailer; weight and dimensionde signed for moving without convoy car Substructure and mast rigged up by hydraulic cylinders
Main Advantages Reduce Footprint Traditional Rig G-125 Rig
Main Advantages G-125 vs. Standard Rig Standard rig 1000 Hp TRADITIONAL MAST Hydraulic rig G-125 TELESCOPIC NOT INSTALLED TOP DRIVE MOVABLE F/WELLCENTRE TO MOUSE HOLE 50 m STANDARD STANDARD PIPE RACK VERTICAL SYSTEM 24 m Nr. of 70 22 LOADS
Oritupano Leona - Venezuela 0 Drilling time Vs Depth 1.000 2.000 Soilmec Rig Traditional Rig 3.000 Depth (ft) 4.000 5.000 6.000 7.000 8.000 1 foot = 30,48 cm 0 1 2 3 4 5 6 7 8 9 10 Days 11 12 13 14 15
HH Type - Drilling Improvements 19 Drilling Hours 14 9 ORM-134 ORM-135 ORM-136 ORM-137 ORM-138 ORM-139 ORM-140 ORM-141 ORM-142 ORM-143 ORM-144 ORM-145 ORM-146 ORM-147 ORM-148 WELL ORM-134 ORM-135 ORM-136 ORM-137 ORM-138 ORM-139 ORM-140 VERTICAL & DEVIATED WELLS DEPTH 2299 piedi 2285 piedi 2256 piedi 2300 piedi 2300 piedi 2295 piedi 2325 piedi HOURS 18.5 16.5 17.5 14 16 13 13.5 Drilled Wells ORM-141 ORM-142 ORM-143 2290 piedi 2308 piedi 2330 piedi Drill. 12 1/4 14 11.5 12 ORM-144 2318 piedi 12 ORM-145 2318 piedi 11 ORM-146 2330 piedi 10.5 ORM-147 2318 piedi 11 ORM-148 2320 piedi 11
1. TREVI Group 2. Financial Overview as at 30th june, 2000 3. Core business 4. Drilling Business Area 5. Parking Business Area
Parking TreviPark New car parks are under construction, even if they are subject to slackening in production, due to bureaucracy procedures Project Financing We are promoters of the first tenders for car parks construction in project financing (about 1.000 car places)
Parking Management We are negotiating the acquisition of car parks direct management with 30 year contracts Integrated parking management systems (Parking on line) -An agreement has been signed with the European leading company in parking automatic systems to supply Parking on line services -The supply of integrated management systems is under negotiation with some national parking management companies