TIDMHTG
RNS Number : 2131M
Hunting PLC
13 September 2023
For Immediate Release 13 September 2023
Hunting PLC
("Hunting" or "the Company" or "the Group")
Capital Markets Day
Hunting PLC (LSE:HTG), the global engineering group, provides
the following update ahead of its Capital Markets Day that will be
held today at 2.00pm BST / 8.00am CST at the London Stock
Exchange.
The Company's senior management team will set out details of the
Hunting 2030 Strategy and how they will drive the evolution of the
business, whilst building on the Group's compelling product,
technology and manufacturing platform to deliver strong growth and
returns over the rest of the decade.
The Hunting 2030 Strategy is expected to deliver against the
following targets:
-- c.$1.3 billion sales p.a. by 2025 and c.$2 billion p.a. by the end of the decade
-- EBITDA margins of c.15% by 2025 with further progression by 2030
-- c.$325 million of cumulative free cash flow generated by 2025
and greater than $1 billion by 2030
-- ROCE of c.15% by 2025 and further improvement by 2030
-- Net leverage of less than 1.5x through the period to 2030
-- Increasing dividend policy delivering 10%+ growth per annum
with potential for additional share buybacks
Management will provide further details that support the 2030
Strategy, including a focus on driving strong cash generation and
an updated capital allocation policy aimed at supporting stronger
returns.
The Company's belief in its ability to deliver the Hunting 2030
Strategy is supported by:
-- The Company's compelling portfolio of IP, leading technology
and manufacturing expertise
-- The strength of its blue chip customer base across multiple end markets
-- Long-term term resilience through diversification and growth in energy transition
-- Exposure to high-growth markets, including offshore and international
-- HSE, Quality Assurance and Carbon Ownership driving stronger customer relationships
Hunting is also reiterating its forecasts for 2023 and for
2024:
2023 2024
EBITDA $96m - $100m $125m - $135m
EBITDA Margin 10 - 11% 11 - 13%
Free Cash Flow $30m - $60m >70% of EBITDA
Jim Johnson, Chief Executive of Hunting, said:
"We are excited to present our focused growth strategy and the
ambitious targets associated with it. Hunting's product portfolio
of industry leading, IP protected technology and manufacturing
expertise, coupled with the strong market dynamics we can see
unfolding, give us confidence in our ability to deliver on our
ambitions.
"The evolution of the Group's strategy is underpinned by our
established position as a global manufacturer of world-class
precision engineered, high reliability products, trusted client
relationships and the diversity of our product applications across
multiple end markets. We see the energy transition as a fantastic
opportunity to enhance our existing business and enter into
high-margin, high-growth sectors that will allow Hunting to
prioritise growth and innovation, and service the long-term energy
requirements of a changing world.
"Over the last few years, Hunting has delivered a consistent
recovery, during which it optimised its operating footprint, grew
sales and enhanced margins, all of which leaves the Company well
placed to deliver strong growth and shareholder returns through the
remainder of this decade and beyond."
Capital Markets Day Arrangements
The Capital Markets Day will be held at the London Stock
Exchange, 10 Paternoster Square, London, EC4M 7LS and will also be
livestreamed.
To register for the event in person, please email :
HTG.2023.CMD@hunting-intl.com
or
To view / register for the live broadcast of the event, please
follow the link below:
https://www.lsegissuerservices.com/spark/Hunting/events/58e097af-27ca-44bc-8ef4-fb451bf3d499
OCTG
OCTG in North America is seeing robust growth, as demand for
premium and semi-premium connections continues to build. The
accessories manufacturing business reported exceptionally strong
performance in H1 2023 as turnkey manufacturing, premium threading
and well completion accessories manufacturing orders increased
materially, as well as a notable increase in sales for offshore
activity with orders received from the Gulf of Mexico and from
Guyana in support of the major drilling projects and developments
in those regions. Hunting's reputation for reliability in
connection technology is an essential competitive advantage in this
market. In Hunting's Netherland's OCTG facility, the Tubacex
contract for South America has led to the facility being at full
capacity, with the order now being shared with the Group's Aberdeen
facility. The Netherlands OCTG facility also completed a number of
orders for geothermal applications as projects accelerate across
Europe. The increase in international drilling activity and the
growth in energy markets have been the core drivers of revenue
growth for H1 2023 for the Asia Pacific businesses, with the
Group's China and Singapore facilities working on the large OCTG
order from CNOOC. In May 2023, Hunting won a $91m order from Cairn
Oil and Gas, Vedanta Limited. This three-year contract will see the
Group providing OCTG with Hunting's SEAL-LOCK XD(TM) premium
connection applied, for a programme of up to 100 wells in
Rajasthan, India. The commissioning of the Group's new threading
facility in Nashik Province, India with Hunting's joint venture
partner Jindal SAW was completed in July 2023, with the opening to
be held on 19 September 2023. With this facility, the Group now has
a leading position in the manufacture and provision of Premium
Connections and OCTG in China, India, Indonesia and Singapore, with
unique raw material supply channels in place to service the Middle
East and Asia Pacific.
Perforating Systems
Trading within Hunting Titan has been resilient, despite the
decline in the North America onshore rig count this year. The
segment is seeing strong growth in its international sales as
horizontal drilling and completion technologies that have been
developed in the US are adopted in key drilling basins in South
America, the Middle East and China. Hunting Titan has a
comprehensive product offering supported by strong intellectual
property and is a market leader in components and systems
technology. The H-3 Perforating System(TM) has continued to be
commercialised in 2023, and has seen good customer acceptance. The
self-orientating H-4 Perforating System(TM) is due to be launched
shortly, and will contribute to Titan's revenue mix in the second
half of the year.
Subsea
Subsea has a diverse product offering and an extensive library
of intellectual property that underpin its position as a market
leader. Subsea reported incremental revenue growth during H1 2023
as sales of hydraulic valves and couplings increased in line with
the continued growth of offshore markets, and orders continued to
be completed for titanium stress joints for clients in the Gulf of
Mexico and South America. This has led to a strengthening financial
performance and an improvement in margins. Further sales
opportunities in South America and West Africa are being pursued as
international market activity strengthens. We expect revenues and
margins to ramp with growing activity from this sector.
Advanced Manufacturing
The Advanced Manufacturing businesses have reported improving
results, as both the Dearborn and Electronics businesses have seen
supply chain constraints ease. The Electronics business has seen an
increase in traditional oil and gas orders and both the Electronics
and Dearborn businesses have secured non-oil and gas orders as
defence, power generation, aviation and commercial space market
activity increases. New equipment has been commissioned at
Dearborn, which will lead to higher facility utilisation and order
completion in the second half of the year.
Energy Transition
The Energy Transition markets of carbon capture and geothermal
provide Hunting with immediate opportunities for its current
product portfolio, as Hunting already has a strong technology base
and critical supply chain channels in place to capitalise on these
high growth markets. The geothermal energy market outlook is
supported by numerous projects across North America, Europe and
Asia Pacific and is a 'wells-driven' market with rapidly growing
demand for higher grade material and advanced performance premium
connection OCTG. The Strategic Alliance with Jiuli provides Hunting
with a partner who will provide corrosion resistant alloys
including high nickel and chrome OCTG, which is required in
challenging operating conditions. Carbon capture is widely
considered by global authorities to be a vital part of their Net
Zero strategies and is the primary route for decarbonising the
energy industry. There are strong, global legislative drivers
underpinning CCUS investment in North America, Europe and Asia
Pacific.
New Technology
Hunting's TEK-HUB facilitates entry into new sectors and product
lines, and enables Hunting to access and accelerate the
commercialisation of new technology developed by third parties,
such as titanium composite tubing used in CCUS, the Helios
micro-hydro and Organic Oil Recovery that materially enhances
production in brownfield wells. The Organic Oil Recovery technology
is rapidly establishing itself as a high value product and
continues to see strong interest from a range of major
international energy companies, with pilot and field trials either
underway or being planned for the UK, Europe and the Middle East in
the second half the year.
For further information please contact:
Hunting PLC Tel: +44 (0) 20 7321 0123
Jim Johnson, Chief Executive
Bruce Ferguson, Finance Director
lon.ir@hunting-intl.com
Buchanan Tel: +44 (0) 20 7466 5000
Ben Romney
Barry Archer
George Pope
Notes to Editors:
About Hunting PLC
Hunting is a global engineering group that provides
precision-engineered equipment and premium services, which add
value for our customers. Established in 1874, it is a premium
listed public company traded on the London Stock Exchange. The
Company maintains a corporate office in Houston and is
headquartered in London. As well as the United Kingdom, the Company
has operations in China, Indonesia, Mexico, Netherlands, Norway,
Saudi Arabia, Singapore, United Arab Emirates and the United States
of America.
The Group reports in US dollars across five operating segments:
Hunting Titan; North America; Subsea Technologies; Europe, Middle
East and Africa ("EMEA") and Asia Pacific.
Hunting PLC's Legal Entity Identifier is
2138008S5FL78ITZRN66.
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END
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