Quarterly Presentation Q4 2018 DOF Subsea Group
DOF Subsea Group at a glance NOK 1.2bn 1) 1 311 2) 2005 NOK 15.5bn DOF Subsea Revenues Firm backlog Subsea employees Q4’18 Q4’18 worldwide Q4’18 established Integrated Modern 28 3) 71 Supplier of subsea State-of-the-art Subsea vessels ROVs offshore services asset base 1) Note: According to management reporting 2 DOF Subsea 2) Note: Excluding marine crew 3) Note: Including newbuild Skandi Olinda and chartered-in vessels Harvey Deep-Sea, Harvey Subsea, Skandi Chieftain and Skandi Darwin
Global footprint Bergen Aberdeen St John’s 10 389 Houston 4 250 ATLANTIC Manila NORTH AMERICA Brunei Kuala Lumpur Singapore Luanda Jakarta Darwin Macaé Rio de Janeiro 5 294 BRAZIL Perth ASIA PACIFIC Buenos Aires Melbourne 8 378 Local operating model ensuring on-the- ground responsiveness towards clients’ needs Note: Number of employees as at end of Q4’18, excluding marine crew 1) 3 DOF Subsea Note: Vessels in operation as at end of Q4’18, including 4 chartered -in vessels (excluding newbuild under construction) 2)
More than a decade of structural growth and consolidation DOF Subsea established following the Development in number of DOF Subsea Employees 1) acquisition of Geoconsult. The Company was 1858 2005 listed second half 2005. 1667 1566 1492 First Reserve acquires 49% of DOF Subsea, 1354 1311 1278 1246 1214 which in the following is delisted from the Oslo 2008 Stock Exchange 1014 897 Large and global organisation following multiple 563 553 acquisitions from 2005-2010 Covus Subsea Century Subsea 337 2010 SWG Offshore CSL SEMAR Awarded four PLSV long-term contracts in joint 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q4 2018 venture with TechnipFMC 2013 Development in number of vessels in operation 2) Expanding organisation on the back of several large contract awards. Number of employees 27 27 26 and vessels peaking at 1 858 and 27, 25 25 2014 24 24 respectively 21 21 Focus on consolidation and streamlining of 18 business operations to improve efficiency and 16 competitiveness in weak market 2016 13 11 11 Delivery of two newbuilds entering into long-term contracts and commencement of two long-term IMR contracts 2017 Delivery of one JV newbuild entering into long- term contract and award of several long-term contracts within both business segments and start 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q4 2018 2018 rebuilding the organization Owned vessels Chartered-in vessels Total 1) Note: Marine crew not included 4 DOF Subsea 2) Note: Newbuild not included 3) Note: Period-end numbers
Key financials 1) EBITDA 2) Revenue Firm backlog NOK million NOK million EBITDA margin NOK billion 8 000 2 500 40% 25 7 000 35% 20 2 000 6 000 30% 5 000 25% 1 500 15 4 000 20% 1 000 10 3 000 15% 2 000 10% 500 5 1 000 5% - - 0% - 2012 2013 2014 2015 2016 2017 2018 2012 2013 2014 2015 2016 2017 2018 2012 2013 2014 2015 2016 2017 2018 1) Note: Figures according to management reporting 5 DOF Subsea 2) Note: EBITDA excl. profit from sale of non-current assets
Segment highlights
Two business segments DOF Subsea Group Long-term Chartering 1) Subsea / IMR Projects Framework Engineering Opex Long-term Vessel Capex agreements capabilities spending charters capabilities spending Revenues Q4’18 2) EBITDA Q4’18 3) Revenues Q4’18 2) EBITDA Q4’18 3) Firm backlog 4) Firm backlog 4) NOK 767 million NOK 44 million NOK 4.2bn NOK 399 million NOK 298 million NOK 11.3bn ~6% margin ~75% margin 1 newbuild Q4’18 1 311 Employees 19 vessels in 8 vessels in Q4’18 operation 5) Q4’18 operation Q4’18 1) Note: Long-term Chartering comprises 6 PLSVs in operation and 1 PLSV under construction, plus 3) Note: According to management reporting 7 DOF Subsea Note: Firm backlog as at end of Q4’18 Skandi Acergy and Skandi Patagonia 4) 2) Note: According to management reporting 5) Note: Including 4 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 Selected Mooring projects – Last 5 years ✓ Petrobras DSV Contract (2018-2021) ✓ Egina FPSO Hook-up (2018) ✓ Petrobras RSV Contract (2018-2020) ✓ Lam Son Mooring Replacement (2017) ✓ ENI Angola IMR Contract (2017-2019) ✓ Bergading FPSO Pre-Tensioning (2017) ✓ Husky Energy IMR Contract (2017-2027) ✓ Yinson OCTP FPSO Field Dev. (2016-2017) ✓ Shell Prelude IMR Contract (2017-2022) ✓ Bongkot Mooring Replacement PTTEP (2017) ✓ Goliat Field Support ENI (2016) ✓ Raroa Mooring OMV (2016-2017) ✓ Chevron Gorgon IMR Contract (2015-2019) ✓ Gina Krog TMRS Teekay (2016) ✓ Shell Malampaya IMR Contract (2014-2021) ✓ Catcher Mooring Installation BWO (2016) ✓ ConocoPhillips ROV Services (2012 and onwards) ✓ Goliat FPSO Marine Installation ENI (2011-2015) ✓ ROV Support Vessel Petrobras (2011 and onwards) ✓ Lam Son Mooring Installation PTSC (2014) 8 DOF Subsea
Long-term Chartering DOF Subsea provides state-of-the-art vessels to leading players Skandi Acergy Skandi Acu Skandi Africa 8 1 NOK 11.3bn vessels in contracted firm backlog per Q4’18 operation newbuild Construction Construction & pipe Construction & pipe support vessel laying vessel laying vessel Skandi Niteroi Skandi Patagonia Skandi Vitoria High-end vessels operating advanced subsea projects for third party EPCI Operations contractors Strong long-term contract coverage Contracts Construction & pipe Dive support Construction & pipe laying vessel vessel laying vessel Skandi Buzios Skandi Recife Skandi Olinda Remuneration Day-rate based Selected clients Construction & pipe Construction & pipe Construction & pipe laying vessel laying vessel laying vessel 9 DOF Subsea
Selected long-term contracts Feb 2019 • Long-term contract with Sep 2018 Petrobras • 8 years + 8 years options • Vessel owned in joint venture • Long-term FLNG IMR contract with TechnipFMC Skandi Olinda awarded in Australia with • Built in Brazil with 300t VLS Shell • 5 years + 4 years options • IMR scope comprising project Aug 2018 Skandi Achiever management, engineering, logistics, vessel and ROV services • Utilising Skandi Darwin • Long-term contract with Jun 2018 Petrobras • 8 years + 8 years options • Vessel owned in joint venture Skandi Salvador with TechnipFMC • Built in Brazil with 300t VLS Nov 2017 Skandi Recife • 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 Prelude FLNG Petrobras in Brazil • Vessel and ROV services 10 DOF Subsea
DOF Subsea newbuild program completed The Group took delivery of Skandi Vinland and the vessel entered a 10-year contract with Husky Energy in July 2017 The DOFCON JV has since 2016 taken delivery of four PLSVs (two from yard in Norway and two from yard in Brazil) ▪ Skandi Açu delivered and on-hire on 8-year contract with Petrobras in August 2016 ▪ Skandi Buzios delivered and on-hire on 8-year contract with Petrobras in April 2017 ▪ Skandi Recife delivered and on-hire on 8-year contract with Petrobras in June 2018 ▪ Skandi Olinda delivered and on-hire on 8-year contract with Petrobras in Feb 2019 The PLSV project was delivered according to budgeted cost, giving DOF Subsea an annual EBITDA of USD 110 million All newbuild contracts provide stable earnings visibility for the Group Skandi Vinland (Subsea), delivered 2017 Skandi Açu (PLSV), delivered 2016 Skandi Buzios (PLSV), delivered 2017 Skandi Recife (PLSV), delivered 2018 Skandi Olinda (PLSV), delivered 2019 11 DOF Subsea
4 th quarter 2018
Q4 2018 highlights • The operating revenue for the quarter was NOK 1 166 million 1) , EBITDA was NOK 342 million 1) and overall vessel utilisation was 69%. • During the quarter, the Group strengthened the organization and management team. • 2 year extension of existing IMR contract with Chevron Australia. • Refinancing of Skandi Achiever with an international shipping bank. • Issued a new 5-year bond loan of NOK 900 million in the Norwegian High-Yield market. 1) Note: Figures according to management reporting 13 DOF Subsea
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