Quarterly Presentation Q1 2018 Group
Group at a glance 2005 established NOK 1.1bn 1) Revenues Q1 18 NOK 15.3bn Firm backlog Q1 18 1 108 2) Subsea employees worldwide Q1 18 Integrated Supplier of subsea offshore services Modern State-of-the-art asset base 27 3) Subsea vessels 71 4) ROVs 1) Note: According to management reporting 2) Note: Excluding marine crew 3) Note: Including newbuilds Skandi Olinda and Skandi Recife and chartered-in vessels Harvey Deep Sea, Skandi Chieftain and Skandi Darwin 4) Note: Including 2 AUVs 2
More than a decade of structural growth and consolidation 2005 2008 2010 established following the acquisition of Geoconsult. The Company was listed second half 2005. First Reserve acquires 49% of, which in the following is delisted from the Oslo Stock Exchange Large and global organisation following multiple acquisitions from 2005-2010 Covus Subsea Century Subsea SWG Offshore CSL SEMAR Development in number of Subsea Employees 1) 1492 1354 1246 1014 897 553 563 337 1667 1858 1566 1278 1214 1108 2013 2014 2016 2017 2018 Awarded four PLSV long-term contracts in joint venture with TechnipFMC Expanding organisation on the back of several large contract awards. Number of employees and vessels peaking at 1 858 and 27, respectively Focus on consolidation and streamlining of business operations to improve efficiency and competitiveness in weak market Delivery of two newbuilds entering into long-term contracts and commencement of two long-term IMR contracts Two newbuilds with long-term contracts to be delivered 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q1 2018 Development in number of vessels in operation 2) 24 25 26 27 24 25 25 21 21 18 16 13 11 11 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q1 2018 Owned vessels Chartered-in vessels 1) Note: Marine crew not included 2) Note: Newbuilds not included 3 3) Note: Year-end numbers
Key financials 1) Revenue EBITDA 2) Firm backlog NOK million NOK million NOK billion 8 000 2 500 25 7 000 6 000 2 000 20 5 000 1 500 15 4 000 3 000 1 000 10 2 000 500 5 1 000-2012 2013 2014 2015 2016 2017 LTM - 2012 2013 2014 2015 2016 2017 LTM - 2012 2013 2014 2015 2016 2017 LTM 1) Note: Figures according to management reporting (LTM = Last Twelve Months) 2) Note: EBITDA excl. profit from sale of non-current assets 4
Global footprint Bergen Aberdeen St John s 10 343 4 282 Houston NORTH AMERICA ATLANTIC Kuala Lumpur Singapore Brunei Manila Macaé Rio de Janeiro Luanda Jakarta Darwin Buenos Aires BRAZIL 5 228 ASIA PACIFIC Perth Melbourne 6 255 1) Note: Number of employees as at end of Q1 18, excluding marine crew 2) Note: Vessels in operation as at end of Q1 18, including 3 chartered-in vessels (excluding newbuilds under construction) 5
Local Multi-regional Global holds a leading position in the subsea IMR market through its global presence and integrated solutions offering Positioning Improved competitive position for DOF Subsea when market normalises multiple competitors have scaled down operations or entered financial distress Geographies Illustrative Favourable competitive dynamics in tendering for mid-sized subsea IMR projects Larger EPCI providers typically invited to tender, however less capable and willing to meet specific project requirements due to relatively small project size Vessel suppliers are not invited to tenders due to lack of engineering and project execution capabilities benefits from offering an integrated engineering and vessel solution = Chapter 11 / financial distress Source: ABGSC Dayrate / Support services Small to medium EPCI contracts Larger EPCI contracts Capabilities 6
NOK billion Maintained strong backlog in challenging market Firm backlog Q1 2018 equals firm backlog 2013 45 40 35 30 25 20 15 10 5 0 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2013 2014 2015 2016 2017 2018 Sum of Firm Sum of Options Majority of firm contract backlog with investment grade companies Firm contract backlog in NOK has been relatively steady over time Current firm contract backlog equals ~3x actual 2016 revenue Majority of firm backlog has high EBITDAmargin 7
Segment highlights
Two business segments Last Twelve Months (LTM) Group Subsea / IMR Projects Long-term Chartering 1) Framework agreements Engineering capabilities Opex spending Long-term charters Vessel capabilities Capex spending Revenues LTM 2) NOK 3 139 million EBITDA LTM 3) NOK 297 million ~10% margin Firm backlog 4) NOK 4.0bn Revenues LTM 2) NOK 1 482 million EBITDA LTM 3) NOK 1 148 million ~77% margin Firm backlog 4) NOK 11.4bn 1 108 Employees Q1 18 18 vessels in operation 5) Q1 18 7 vessels in operation Q1 18 2 newbuilds Q1 18 1) Note: Long-term chartering comprises 5 PLSVs in operation and 2 PLSVs under construction, plus Skandi Acergy and Skandi Patagonia 4) Note: Firm backlog as at end of Q1 18 9 2) Note: According to management reporting (LTM = Last Twelve Months) 3) Note: According to management reporting (LTM = Last Twelve Months) 5) Note: Including 3 chartered-in vessels
Subsea IMR Projects Numerous projects completed and ongoing worldwide Built a leading subsea projects division for over a decade Subsea project activity established with a global footprint in all key offshore regions High quality asset base leveraging unrivalled subsea and vessel operating competence A clear action plan to pursue further opportunities Continue to increase the scope and complexity of operations Strengthen presence in selected geographies Further build project backlog with core focus on IMR projects Selected IMR projects Last 5 years Petrobras DSV Contract (2018-2021) ENI Angola IMR Contract (2017-2018) Husky Energy IMR Contract (2017-2027) Shell Prelude IMR Contract (2017-2022) Goliat Field Support ENI (2016) Chevron Gorgon IMR Contract (2015-2019) Shell Malampaya IMR Contract (2014-2021) ConocoPhillips ROV Services (2012 and onwards) ROV Support Vessel Petrobras (2011 and onwards) Selected Mooring projects Last 5 years Aasta Hansteen Mooring Installation (2018) Lam Son Mooring Replacement (2017) Yinson OCTP FPSO Field Dev. (2016-2017) Bongkot Mooring Replacement PTTEP (2017) Raroa Mooring OMV (2016-2017) Gina Krog TMRS Teekay (2016) Catcher Mooring Installation BWO (2016) Goliat FPSO Marine Installation ENI (2011-2015) Lam Son Mooring Installation PTSC (2014) Knarr Mooring Project Teekay (2013-2014) Banff Re-instatement Project Teekay (2013-2014) 10
Long-term Chartering provides state-of-the-art vessels to leading players Skandi Acergy Skandi Acu Skandi Africa 7 vessels in operation 2 contracted newbuilds NOK 11.4bn firm backlog per Q1 18 Construction support vessel Construction & pipe laying vessel Construction & pipe laying vessel Operations High-end vessels operating advanced subsea projects for third party EPCI contractors Skandi Niteroi Skandi Patagonia Skandi Vitoria Contracts Strong long-term contract coverage Construction & pipe laying vessel Dive support vessel Construction & pipe laying vessel Remuneration Day-rate based Skandi Buzios Skandi Recife Skandi Olinda Selected clients Construction & pipe laying vessel Construction & pipe laying vessel Construction & pipe laying vessel 11
Selected long-term contracts Long-term IMR contract offshore Eastern Canada 10 years + 10 years options IMR scope comprising project management, engineering, vessel and ROV services High strategic importance through strengthened presence in the Canadian market Long-term FLNG IMR contract awarded in Australia with Shell 5 years + 4 years options IMR scope comprising project management, engineering, logistics, vessel and ROV services Utilising Skandi Darwin Jun 2018 Sep 2018 Skandi Achiever Feb 2019 Skandi Olinda Jul 2017 Husky Energy Nov 2017 Prelude FLNG Skandi Recife Long-term contract with Petrobras 8 years + 8 years options Vessel owned in joint venture with TechnipFMC Built in Brazil with 300t VLS Long-term DSV contract with Petrobras 3 years + 2 years options ROV and diving services Partnered up with diving partner in Brazil Long-term contract with Petrobras 8 years + 8 years options Vessel owned in joint venture with TechnipFMC Built in Brazil with 300t VLS 12
1 st quarter 2018
Q1 2018 highlights The operating revenue for the quarter was NOK 1 053 million 1), EBITDA was NOK 311 million 1) and overall vessel utilisation was 71%. Firm contract backlog as at 31 March 2018 was NOK 15.3 billion. was awarded several short-term contracts in the Asia Pacific region, the Atlantic region, the Brazil region and the North America region securing utilisation of personnel and assets in the Subsea/IMR Projects segment. The Brazil region was awarded long-term ROV contracts with Petrobras. The Brazil region was awarded a three-year firm contract with a two-year option by Petrobras in Brazil for the provision of the DSV Skandi Achiever and ROV and diving services. The North America region was awarded a contract securing 120 days of utilisation of the chartered-in vessel Skandi Chieftain for seismic support operations from May 2018. 1) Note: Figures according to management reporting 14
NOK million EBITDA margin Quarterly performance 1) 2 500 2 000 1 500 1 000 500 40% 35% 30% 25% 20% 15% 10% 5% - Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Operating income EBITDA EBITDA margin 0% NOK million Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Operating income 1 530 1 963 1 904 2 025 1 656 1 962 1 991 1 642 1 406 1 660 1 232 1 128 982 1 199 1 093 1 275 1 053 EBITDA 502 543 552 502 458 515 553 516 456 510 447 320 279 400 332 402 310 EBITDA margin 32,8% 27,7% 29,0% 24,8% 27,7% 26,2% 27,8% 31,4% 32,4% 30,7% 36,3% 28,4% 28,4% 33,4% 30,4% 31,5% 29,4% Current assets 3 247 3 252 2 998 4 223 3 414 3 414 3 674 3 752 2 900 3 010 2 742 2 483 2 808 2 595 2 501 2 607 2 399 Non-current assets 16 012 16 151 16 215 15 796 16 726 16 578 16 447 16 818 17 652 18 206 18 514 18 043 18 087 18 428 17 926 17 829 16 881 Total assets 19 258 19 403 19 213 20 019 20 140 19 992 20 121 20 570 20 552 21 216 21 256 20 526 20 896 21 023 20 427 20 436 19 280 Current liabilities 3 470 3 741 3 607 4 505 4 139 4 577 4 492 3 650 2 991 3 022 2 645 2 478 2 444 3 010 3 051 2 440 2 345 Non-current liabilities 10 126 9 701 9 668 9 402 9 924 9 009 9 988 11 228 11 482 11 864 12 174 11 993 12 503 11 942 11 221 11 648 10 485 Equity 5 662 5 962 5 938 6 112 6 077 6 405 5 641 5 692 6 078 6 330 6 437 6 055 5 948 6 071 6 156 6 348 6 450 Total equity and liablilites 19 258 19 404 19 213 20 019 20 140 19 991 20 121 20 570 20 551 21 216 21 256 20 526 20 896 21 023 20 427 20 436 19 280 1) Note: Figures according to management reporting, and excluding profit from sale of non-current assets 15
Condensed profit & loss 1) 1) Note: Financial statement according to IFRS. Condensed financial statement according to management reporting is included in the Quarterly Financial Report 16
Condensed balance sheet 1) 1) Note: Financial statement according to IFRS. Condensed financial statement according to management reporting is included in the Quarterly Financial Report 17
NOK million Debt maturity profile 1) Debt maturity profile, 2018E 2022E 3 000 2 500 2 000 1 500 1 000 500-2018E 2019E 2020E 2021E 2022E Thereafter Bond Loan Bank Debt Balloons 1) Note: Figures according to management reporting and based on exchange rates as at end of Q1 18 The figures reflect amortisation and balloon payments on outstanding debt 18
NOK billion Backlog 1) As at 31 March 2018, the Group s firm contract backlog was NOK 15.3 billion 20,0 15,0 10,0 5,0 0,0 2018 2019 2020 2021 2022 Thereafter Options 0,4 0,8 0,5 0,9 1,0 14,1 Firm 2,3 2,6 2,4 2,0 1,7 4,4 Firm Options 1) Note: Figures based on remaining backlog as at end of Q1 18 and exchange rates as at end of Q1 18 2) Note: Contract backlog excludes master service agreements (MSAs) within the Subsea IMR Projects segment only confirmed POs are included in the backlog 19
Years Modern high-end fleet Year of delivery fleet 1) (number of vessels) 10,0 Fleet age 1) 2000-2006 6 Newbuilds 2 9,0 8,0 Skandi Africa, Ship of the Year 2015 2013-2017 4 7,0 6,0 2007-2012 12 5,0 4,0 3,0 2,0 1,0 Skandi Buzios, PLSV built 2017 - Average fleet age Value adjusted average fleet age Majority of the fleet is younger than 10 years Modern fleet with a value adjusted average fleet age of 6.7 1) years High-end vessels, capable of a wide scope of worldwide operations Skandi Vinland, CSV built 2017 1) Note: Excluding newbuilds under construction and chartered-in vessels, and figures as at end of Q1 18 20
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