Quarterly Presentation Q4 2019 DOF Subsea Group
Q4 2019 highlights • The operating revenue for the quarter was NOK 1 329 million 1) , EBITDA was NOK 543 million 1) and overall vessel utilisation was 77% During the 4 th quarter, the Group recognised an impairment of tangible assets of NOK 203 million 1) • • Good operational performance within the Subsea/IMR Project segment during the quarter, with good vessel utilisation across regions • The Group secured several contracts in the Subsea/IMR Project segment during the quarter • Skandi Seven was awarded two contracts for integrated FSV services, project management and engineering in Angola • Skandi Skansen secured a contract in Ghana, where she delivered mooring refurbishment and installation • Fugro extended the contract with Skandi Carla for another year • Skandi Neptune was awarded a 3-year frame agreement for IMR and light construction in Trinidad • Skandi Hercules and Skandi Singapore were awarded contracts in New Zealand and South East Asia, respectively, securing 130 vessel days in Q1 2020 • The Group is making progress with its stakeholders, including a constructive dialogue with banks and bondholders in order to find a long-term financial solution 1) Note: Figures according to management reporting DOF Subsea 2
DOF Subsea Group at a glance 2005 NOK 1.3bn 1) NOK 12.8bn 1 181 2) DOF Subsea Revenues Firm backlog Subsea employees established Q4’19 Q4’19 worldwide Q4’19 Integrated Modern 27 3) 74 Supplier of subsea State-of-the-art Subsea vessels ROVs offshore services asset base 1) Note: According to management reporting DOF Subsea 3 2) Note: Excluding marine crew. 3) Note: Including chartered-in vessels Harvey Deep-Sea, Harvey Subsea and Skandi Darwin
Global footprint Bergen 305 5 Aberdeen NORTH AMERICA St John’s 8 319 ATLANTIC Houston Manila Brunei Kuala Lumpur Singapore Jakarta Luanda Darwin Macaé Rio de Janeiro 171 5 BRAZIL Perth ASIA PACIFIC Buenos Melbourne Aires 386 9 Local operating model ensuring on-the-ground responsiveness towards clients’ needs 1) Note: Number of employees as at end of Q4’19 (excluding marine crew,). DOF Subsea 4 2) Note: Vessels in operation as at end of Q4’19, including 3 chartered-in vessels.
More than a decade of structural growth and consolidation DOF Subsea established following the acquisition Development in number of DOF Subsea Employees 1) of Geoconsult. The Company was listed on the 1858 Oslo Stock Exchange second half 2005. 2005 1667 1566 1492 First Reserve acquires 49% of DOF Subsea, which 1354 in the following is delisted from the Oslo Stock 1311 1278 1246 1214 Exchange 1181 2008 1014 Large and global organisation following multiple 897 acquisitions from 2005-2010 Covus Subsea Century Subsea 2010 563 553 SWG Offshore CSL SEMAR 337 Awarded four PLSV long-term contracts in joint venture with TechnipFMC 2013 Expanding organisation on the back of several 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q4 2019 large contract awards. Number of employees and 2014 Development in number of vessels in operation 2) vessels peaking at 1 858 and 27, respectively 27 27 27 26 Focus on consolidation and streamlining of 25 25 24 24 business operations to improve efficiency and 2016 competitiveness in weak market 21 21 18 Delivery of two newbuilds entering into long-term 16 contracts and commencement of two long-term IMR contracts 13 2017 11 11 Delivery of one JV newbuild entering into long-term contract and award of several long-term contracts 2018 within both business segments Delivery of the last JV newbuild entering into a long- term contract and award of several contracts within 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q4 2019 both business segments 2019 Owned vessels Chartered-in vessels Total 1) Note: Marine crew not included. Included hired in contractors of 32 from Norskan DOF Subsea 5 2) Note: Newbuild not included 3) Note: Period-end numbers
Key financials 1) Revenue EBITDA 2) Firm backlog NOK million NOK million EBITDA margin NOK billion 2 500 40% 25 8 000 35% 7 000 20 2 000 30% 6 000 25% 5 000 15 1 500 4 000 20% 10 1 000 15% 3 000 2 000 10% 5 500 1 000 5% - - - 0% 2012 2013 2014 2015 2016 2017 2018 Q4 2012 2013 2014 2015 2016 2017 2018 2019 2012 2013 2014 2015 2016 2017 2018 2019 2019 1) Note: Figures according to management reporting DOF Subsea 6 2) Note: EBITDA excl. profit from sale of non-current assets LTM = Last Twelve Months
Segment highlights
Two business segments DOF Subsea Group Subsea / IMR Projects Long-term Chartering 1) Framework Engineering Opex Long-term Vessel Capex agreements capabilities spending charters capabilities spending Revenues Q4’19 2) EBITDA Q4’19 3) Revenues Q4’19 2) EBITDA Q4’19 3) Firm backlog 4) Firm backlog 4) NOK 504 million NOK 396 million NOK 825 million NOK 147 million NOK 3.2 bn NOK 9.6 bn ~79% margin ~19% margin 1 181 Employees 5) 18 vessels in 9 vessels in Q4’19 operation 6) Q4’19 operation Q4’19 1) Note: Long-term Chartering comprises 7 PLSVs in operation, plus Skandi Acergy and Skandi Patagonia 4) Note: Firm backlog as at end of Q4’19 DOF Subsea 8 2) Note: According to management reporting 5) Includes 32 contractors hired in from Norskan 3) Note: According to management reporting 6) 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 Selected Mooring projects – Last 5 years 3 Petrobras ROV Contracts (2019-2021) Helang FPSO Mooring and Hook-up (2019) ConocoPhillips ROV Services (2019-2024) Ehra FPSO Mooring Replacement (2019) 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) Chevron Gorgon IMR Contract (2015-2020) Raroa Mooring OMV (2016-2017) Shell Malampaya IMR Contract (2014-2021) Gina Krog TMRS Teekay (2016) Catcher Mooring Installation BWO (2016) DOF Subsea 9
Long-term Chartering DOF Subsea provides state-of-the-art vessels to leading players Skandi Acergy Skandi Acu Skandi Africa 9 NOK 9.6 bn No vessels in contracted firm backlog per Q4’19 operation newbuild Construction Construction & pipe Construction & pipe support vessel laying vessel laying vessel Skandi Niteroi Skandi Patagonia Skandi Vitoria High-end vessels operating advanced Operations subsea projects for third party EPCI contractors Contracts Strong long-term contract coverage Construction & pipe Dive support Construction & pipe laying vessel vessel laying vessel Skandi Buzios Skandi Recife Skandi Olinda Day-rate based Remuneration Selected clients Construction & pipe Construction & pipe Construction & pipe laying vessel laying vessel laying vessel DOF Subsea 10
Selected long-term contracts Feb 2019 • Long-term contract with Petrobras Sep 2018 • 8 years + 8 years options • Long-term FLNG IMR contract • Vessel owned in joint venture awarded in Australia with Shell with TechnipFMC • Built in Brazil with 300t VLS • 5 years + 4 years options Skandi Olinda • IMR scope comprising project management, engineering, Aug 2018 logistics, vessel and ROV services Skandi Achiever • Utilising Skandi Darwin Jun 2018 • Long-term contract with Petrobras Skandi Salvador • 8 years + 8 years options • Vessel owned in joint venture with TechnipFMC Nov 2017 • Built in Brazil with 300t VLS Skandi Recife • Long-term DSV contract with Petrobras • 3 years + 2 years options • ROV and diving services Prelude FLNG • Long-term contract with Petrobras in Brazil • Vessel and ROV services DOF Subsea 11
4 th quarter 2019
Quarterly performance 1) 1 600 45% 40% 1 400 35% 1 200 EBITDA margin 30% NOK million 1 000 25% 800 20% 600 15% 400 10% 200 5% 0 0% Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Operating revenue EBITDA EBITDA margin 1) Note: Figures according to management reporting, and excluding profit from sale of non-current assets DOF Subsea 13
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