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TSX: FAR
A GLOBAL LEADER IN MINERAL DRILLING SERVICES
TSX: FAR
Certain statements herein, including all statements that are not historical facts, contain forward-looking statements and forward-looking information within the meaning of applicable securities laws. Such forward-looking statements or information include, but are not limited to, statements or information with respect to: the business and development of the Company; the Company’s future business and strategies; and requirements for additional capital and future financing. Forward-looking statements or information also includes information contained in pro forma financial statements.
Often, but not always, forward-looking statements or information can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate” or “believes” or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. With respect to forward-looking statements and information contained herein, we have made numerous assumptions including among other things, the assumptions made in connection with the preparation of the pro forma financial statements. Although our management believes that the assumptions made and the expectations represented by such statement or information are reasonable, there can be no assurance that a forward-looking statement or information referenced herein will prove to be accurate. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statement or information.
Readers should also refer to the Company’s Annual Information Form for the year ended December 31, 2012 and the Company’s most recent Management Discussion and Analysis and the risk factors discussed in such documents for additional information on risks and uncertainties relating to forward-looking statements and information. Although we have attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in the forward-looking statements or information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Also, many of the factors are beyond the control of the Company. Accordingly, readers should not place undue reliance on forward-looking statements or information. The Company undertakes no obligation to reissue or update any forward-looking statements or information as a result of new information or events after the date hereof except as may be required by law. All forward-looking statements and information contained in this presentation are qualified by this cautionary statement.
FORWARD LOOKING STATEMENTS
2
TSX: FAR
Stock Symbol: TSX: FAR
Shares issued and outstanding: 90.0 million
Share Price1: C$0.61
Market Capitalization1: C$54.8 million
2012 Dividend: Yield
C$0.055 per share 8.9%
Major Shareholder: JPC-DS2
42.0% basic
FORACO MARKET PROFILE
3
1 As at November 5, 2013 2 Shares of JPC-DS are held by Financière Marville SARL, Financière Berlaimont SARL, Financière Tornaco SARL
TSX: FAR 4
TSX: FAR
Daniel Simoncini Chairman and Co-CEO
• Director and CEO since incorporation
• Over 30 years of industry experience
• Based in Singapore
STRONG AND EXPERIENCED MANAGEMENT TEAM
• Director and Executive Officer since incorporation
• Over 35 years of management experience
• Based in London
Jean-Pierre Charmensat Co-CEO and CFO
Timothy Bremner SVP North America
Ibrahim Baderi
VP Africa
Thierry Merle VP Europe & Middle East
Peter Jacobs SVP Asia Pacific
Olivier Demesy
VP Brazil
Fabien Sevestre Deputy CFO
4
Santiago Marin SVP Latin America
Philippe Violle
SVP Engineering
TSX: FAR 5
TSX: FAR
Canada
United States
Brazil
Mexico
Argentina
Chile
Peru
England
France
Germany
Russia
Burkina Faso
Chad
Republic of Congo
Ivory Coast
Ghana
Guinea
Mali
Niger
Kazakhstan
Australia
New Caledonia
Singapore
GLOBAL OPERATIONS
Presence in 23 countries
on 5 continents
5
TSX: FAR
SKILLED PEOPLE BASED BUSINESS
6
• 1,800+ experienced employees located around the world
TSX: FAR
56%
43%36%
73%76%
2007 2008 2009 2010 Current
Russia Australia Lat Am Brazil North America North America
January ‘07: Connors Drilling
September ‘08: North West
Sequoia
April ‘09: Mosslake
Drilling Services
April ‘10: Adviser Drilling
Geography Added
3 Rigs
Acquired
April ‘12: Servitec
April ‘10: Eastern Drilling
Company
8 5 50 90 19
A TARGETED ACQUISITION STRATEGY
7
Acquisition History
% of Worldwide Mineral Drilling Market Foraco Operations Touch
November ‘12:
John Nitschke Drilling
15
Australia
Rigs end of the year
308
2007
108
2008 2009 2010 2011 2012
115 119 192 80
TSX: FAR 8
TSX: FAR
EXPANDING GEOGRAPHIC COVERAGE
8
Revenue By Region 2012
• Significant 2012
additions in Brazil
and Eastern
Australia
• Presence in all
major mining
markets
*Brazil Servitec Revenue 8 months consolidated
** Australia JND Revenue 1 month consolidated
TSX: FAR
50
100
150
200
250
300
350
2007 2008 2009 2010 2011 2012
Dri
ll R
igs
(# D
rills
)
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
2007 2008 2009 2010 2011 2012
EPS
($U
S)
$0
$25
$50
$75
$100
2007 2008 2009 2010 2011 2012
EBIT
DA
($
US
mm
)
$0
$100
$200
$300
$400
2007 2008 2009 2010 2011 2012
Re
ven
ue
($U
S m
m)
EBITDA
PROVEN ABILITY TO DELIVER PROFITABLE GROWTH
CAGR: 31% CAGR: 32%
CAGR: 16% CAGR: 15%
9
Revenue
EPS Rig Count
TSX: FAR 10
PROVEN ABILITY TO DELIVER PROFITABLE GROWTH
• With revenue and profitability
CAGR’s of 25% and 28% in the
last 15 years Foraco has
grown to become a global
leader in Drilling Services
Revenue per active Rig
*Per utilized rig and proforma (2010 Adviser & EDC) and (2012 Servitec &
JND)
TSX: FAR
SATISFYING A WORLD CLASS CUSTOMER BASE
11
Revenue By Customer 2012* Main Customers
* Brazil Servitec Revenue 8 months consolidated, Australia JND Revenue 1 month consolidated
TSX: FAR 12
TSX: FAR
DIVERSIFIED COMMODITY EXPOSURE
12
Revenue By Commodity 2012 *
• Strongly aligned to
global exploration
and production
drilling spend and
trends
Gold 39%
Copper 26%
Iron 9%
Nickel 9%
Water 3%
Uranium 4%
Coal 4%
OIl & Gas 2% Potash 1% Base Metals 3%
* Brazil Servitec Revenue 8 months consolidated, Australia JND Revenue 1 month consolidated
TSX: FAR
Geotechnical
Exploration
Metallurgical
Sampling
Water
Dri
llin
g A
ctiv
ity
DELIVERING DRILLING SOLUTIONS
At Every Stage of the Mine Life Cycle
13
TSX: FAR
63 rotary
218 diamond
27 combination
308 drill rigs
VERSATILE AND MODERN DRILL FLEET
14
Global Drill Rig Fleet
0%
25%
50%
75%
100%
<5 <10 >10
40%
70%
30%
Per
cen
tage
of
Flee
t (%
)
Drill Rig Age (Years)
TSX: FAR 15
TSX: FAR
COMPETITIVE LANDSCAPE
15
• Highly fragmented market with a small group of globally active companies.
• Foraco has grown to become the third largest global driller with
approximately 5% share of the world’s mineral drilling fleet
• There remains abundant room for consolidation and future growth Source: CLSA Reports and Company Reports
Global Mineral Driller Capacities
TSX: FAR
MINERAL DRILLING SERVICES MACRO ENVIRONMENT
2Source: MEG and CIBC Research estimate
• Economic weakness has resulted in
increased volatility and near term
declines in commodity pricing.
• Reduced cash flow and reduced
visibility are inhibiting spend by
mining companies.
• Funding for Juniors remains difficult to access
16
Worldwide Mineral Exploration Spending
0
5
10
15
20
25
$U
S B
illions
• Growth sentiment in 2013
improving compared to late 2012.
• Producers ultimately need to
replace depleting reserves through
exploration activity.
1Source :E&Y Global Capital Confidence Barometer, April 2013
2
1
Organizations % focused on growth
1
TSX: FAR 17
TSX: FAR
EXPOSURE TO LONG TERM DRILLING PROJECTS
17
• Approximately 80% of our revenue comes from longer term Feasibility and Life of
Mine (LOM) Extension activities with 20% coming from early stage exploration
activity.
• As mining companies focus to minimize capital expenditures and return
shareholder value LOM related drilling becomes increasingly important.
Foraco Activity by Mine Life cycle 2012
Exploration
FeasibilityStage
Life of MineExtension
TSX: FAR 18
TSX: FAR
ADAPTING TO A CHANGING MARKET
18
SG&A costs reduced by 21% since Q4 2012
Continuous CAPEX and Working Capital Scrutiny
Reduced total Headcount by 1,469 since the beginning of the year
Macro
Environment
Pressures
Actions towards a leaner, more efficient Organization
ready for the next phase of Growth
Decrease in
activity
Downward
pricing
pressure
Reduced
visibility
Relocation of Rigs to more active regions and increased Global Business Development activities
Reduce supplier costs and optimize performance
TSX: FAR
Focus on Leveraging Our Position
CONSISTENT STRATEGY
1
2
4
3
Growth in the Americas
Solidify our preferred
driller status with Majors
Continue to capitalize
on African opportunities
Expand Asia and Far East presence
19
TSX: FAR
• World’s Third Largest Mineral Driller
• Proven Ability to Deliver Organic & Inorganic Growth
and Profitability
• Further synergies to be developed through the cross
fertilization of expertise and technical offerings
between regions
• Well positioned for next phase of growth
• Very attractive present valuation
20
COMPELLING INVESTMENT PROPOSITION
TSX: FAR
APPENDIX
21
TSX: FAR
FINANCIAL REVIEW
22
1 Includes amortization and depreciation expenses Source: Company Reports.
FY 2011
Actual
FY 2012
Actual
Q3 2013
Actual
Income StatementRevenue (US$ mm) $301.1 $367.5 $66.2Gross Profit
1 (US$ mm) $69.4 $67.9 $9.9EBITDA (US$ mm) $73.3 $83.1 $12.4EBITDA Margin (%) 24% 23% 19%EBIT (US$ mm) $43.4 $45.0 $2.4EBIT Margin (%) 14% 12% 4%Net Profit (US$ mm) $30.4 $32.6 $0.9Net Profit Margin (%) 10% 9% 0%
Shares Outstanding (Diluted) (mm) 78.9 83.0 90.0Earnings Per Share (Diluted) (US$/share) $0.34 $0.35 -$0.01
TSX: FAR
FINANCIAL REVIEW
23
Net Debt/Equity 0.73
30-Sep-13
Balance Sheet 31-Dec-11 31-Dec-12 30-Sep-13
Non-Current Assets (US$ mm) $152.1 $305.0 $262.1Current Assets (US$ mm) $98.7 $123.6 $108.6Cash and Cash Equivalents (US$ mm) $24.3 $35.9 $37.5Total Assets (US$ mm) $275.1 $464.5 $408.2
Equity (US$ mm) $162.5 $221.9 $183.5Long Term Liabilities (US$ mm) $4.7 $9.6 $5.2Borrowings (US$ mm) $49.2 $173.4 $172.1Current Liabilities (US$ mm) $58.7 $59.6 $47.4Total Equity and Current Liabilities (US$ mm) $275.1 $464.5 $408.2
TSX: FAR
ANALYST COVERAGE
24
Broker Analyst Contact
Beacon Securities Michael Mills 902.425.8897
Canaccord Genuity Yuri Lynk 514.844.3708
CIBC World Markets Kevin Chiew 416.594.7457
Cormark Securities Maggie MacDougall 416.943.6733
Mackie Research Capital Ryan Hanley 416.860.8837
TSX: FAR
www.foraco.com
FOR MORE INFORMATION PLEASE CONTACT:
TSX: FAR
Sonia Tercas [email protected]
T: + 1 647 351 5483
25