Interim Results 28 th August 2014 Nexen PUQ 0 0 www.lamprell.com - PowerPoint PPT Presentation

Interim Results 28 th August 2014 Nexen PUQ 0 0 www.lamprell.com

Disclaimer This presentation contains certain forward-looking statements relating to the business, financial performance and results of the Company and/ or the industry in which it operates. Forward-looking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words “believes”, “expects, “predicts”, ”intends”, “projects”, “plans” “estimates”, “aims”, “foresees”, anticipates”, “targets” and similar expressions. The forward-looking statements, contained in this document, including assumptions, opinions and views of the Company or cited from third party sources are solely opinions and forecasts which are uncertain and subject to risks. A multitude of factors can cause actual events to differ significantly from any anticipated development. Neither the Company nor any of its officers or employees guarantees that the assumptions underlying such forward-looking statements are free from errors nor does any of the foregoing accept any responsibility for the future accuracy of the opinions expressed in this document or the actual occurrence of the forecasted developments. No representation or warranty (express or implied) is made as to, and no reliance should be placed on, any information, including projections, estimates, targets and opinions, contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein, and, accordingly, neither the Company nor any of its subsidiary undertakings nor any such person’s officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document. www.lamprell.com 1

Agenda Overview 1 2 Financial Review 3 Operational Review and Improvement Initiatives 4 Summary and Outlook 5 Appendices www.lamprell.com 2

Overview James Moffat, CEO Offshore platforms: Jalilah B 3

Overview Strong progress across the Group  Continued strength in operational performance delivering improved margins  Significant contract awards from major clients  Completion of rights issue and commencement of Project Evolution  Major refinancing completed enabling significant increase in our addressable market  Enhanced business development team to continue focus on pipeline conversion  Strong pipeline and high levels of tendering activity  Continued excellence in our HSEQ performance www.lamprell.com 4

Financial Review Joanne Curin, CFO Nexen PUQ 5

Financial summary Significant improvement in profitability H1 2014 H1 2013 $m $m Revenue* 632.3 506.6 Gross profit* 85.8 46.2 Gross margin % 13.6% 9.1% Operating profit * 53.4 19.2 (7.6) Finance costs - net** (7.9) Share of profit of equity accounted investments 1.0 0.7 Profit before income tax 46.5 12.3 Income tax expense (0.4) (0.5) Profit from continuing operations 46.1 11.8 Profit / (loss) from discontinued operations 0.3 (4.6) Gain on disposal of subsidiary (Inspec) 31.3 - Total profit attributable to equity holders 77.7 7.3 * Relating to continuing operations ** Represents the net balance of finance costs and finance income including exceptional finance costs www.lamprell.com 6

Gross Profit – H1 2013 to H1 2014 H1 improvement driven by outstanding performance in project gross profit Gross margin H1 2013 vs H1 2014 100.0 90.0 80.0 8.7 70.0 2.8 7.1 60.0 4.4 50.0 11.6 15.7 12.5 40.0 30.0 20.0 10.0 46.2 85.8 ‐ H1 2013 Gross Profit Jackup Rev Refurb Rev Offshore Rev Jackup Margin Jackup Phasing Offshore Margin E&C / LRS / Other H1 2014 Gross Profit www.lamprell.com 7

Balance sheet Significantly strengthened balance sheet 30 Jun 14 31 Dec 13 $m $m Total net assets 635.0 442.8 Tangible net assets 426.4 229.7 Gross cash 361.5 344.6 Available cash* 315.2 296.5 Net cash 280.6 183.8  Rights Issue completed  Proceeds from the sale of Inspec received  Partially offset by increased working capital New build jackup rig: NDC 4 www.lamprell.com 8 * Gross cash less cash deposits under lien, less cash deposits with maturity >3 months, plus undrawn available facilities

Borrowings New working capital facility now in place  Total borrowings Completion of refinancing on 11 August 30 Jun 14 1 31 Dec 13 31 Dec 12 31 Dec 11  Previous facilities now fully repaid $m $m $m $m  New debt facilities will deliver: 80.9 160.8 159.3 251.1  reduction in the Group’s average cost by 2.0%-3.0%  Step up in debt facilities reduction of c.1.0% in bonding costs  Committed facilities enable greater bidding/ commercial flexibility www.lamprell.com 9 1 Balance shown as at 30 th June 2014 has been subsequently repaid on 14 th August 2014 via the proceeds of the new facility drawn on the same date

Financial Summary Continued financial recovery of the Group  H1 closing backlog of $1.2bn (Dec 13: $0.9bn)  Significantly improved balance sheet and liquidity  Strong financial performance in H1 with earnings ahead of our expectations  Improved operational performance a major driver  Project Evolution started to deliver productivity improvements and cost savings Nexen PUQ www.lamprell.com 10

Operational Review and Improvement initiatives James Moffat, CEO Offshore platforms: Leighton topsides & jackets 11

Key project update Focus on strong delivery of projects and operational improvements  Excellent performance on recent project deliveries  5 major projects delivered in the year to date  Commencement of work on major recent awards  Current major project activity 1 :  7 jackups under construction  5 rig refurbishment projects  2 offshore construction projects  Land rigs and E&C businesses performed well  Ongoing excellence in safety and quality New build jackup rig: Jindal Pioneer www.lamprell.com 12 1 Excludes both Shelf projects and Petrofac UZ750 which have yet to commence

Market overview Wider market conditions continue to present opportunities and challenges  Strong O&G fundamentals - worldwide oil consumption and production continues to rise  Continued strong demand for shallow water drilling  Supply side volumes may lead to slower order volumes in the near term, particularly those from Chinese rig suppliers  Our broadened addressable market is anticipated to partly offset these market pressures as evidenced by recent awards  Attrition of aging global fleet remains a strong long term driver  Increases in offshore and onshore construction opportunities are a positive sign for medium to long term www.lamprell.com 13

Bid pipeline remains strong Strong pipeline and high bidding activity  Increasing bid pipeline in core markets of Bid pipeline of $4.9bn ¹ $4.9bn (Dec 13: $4.7bn) ($bn) 3.2  Pipeline strength continues to build despite 2.8 significant recent awards 2.4  Continued major business development 2.0 drive across core markets 1.6  Focused on long term broadening of 1.2 revenue mix 0.8  Smaller rig refurbishment projects remain 0.4 competitive 0.0 Newbuild Newbuild Offshore Rig Land rigs Others 2 Jack Ups Lift Boats and Refurb 2 Onshore Const. ¹ As at 30 June 2014 ²Refurbishment value stream has short bid to award profile and therefore limited order book / pipeline values www.lamprell.com 14

Progress on organisational improvements Enhanced organisational strength combined with progress on core initiatives Completion of capital restructuring Strengthen and realign organisation Complete organisation realignment Yard workflow, layout improvements Productivity and Procurement synergies across projects & sites efficiency enhancements (Project Evolution) Improved project scheduling Process and technology improvements Enhanced focus on Major client awards validate our quality and value broadening customer mix base and Enhanced marketing and branding strengthening brand Key Organisational Improvements Initiatives on track www.lamprell.com 15

Summary and Outlook Strong performance and solid bid pipeline  H1 2014 profitability driven by high number of deliveries, project execution and contingency releases  Recent contract wins with major clients demonstrate Lamprell’s high quality offering  Strategy implementation on target to deliver increased competitiveness  Good backlog coverage for 2015  Pipeline growth with large number of bids submitted  Continuing to target further reduction in overheads  Revenue guidance unchanged, FY2015 expected to be broadly flat, with fewer deliveries Improving operational and financial performance Rig refurbishment: EDC Rig 49 www.lamprell.com 16

Appendices Fred.Olsen Windcarrier 17

Long term value drivers remain unchanged Leveraging our core strengths to deliver sustainable growth HSEQ Maintain our reputation for build quality and strong safety focus Capitalise on significant opportunities in our core markets Focus Service Best in class customer focus and responsiveness Improve procurement process and labour productivity Efficiency Deliver sustainably higher returns with improved earnings Returns visibility and reduced project risk www.lamprell.com 18