Investor Presentation First Quarter 2014 KCA Deutag is a leading - PowerPoint PPT Presentation

Investor Presentation First Quarter 2014 KCA Deutag is a leading international drilling and engineering company working onshore and offshore with a focus on safety, quality and operational performance www.kcadeutag.com

Disclaimer The distribution of this presentation in certain jurisdictions may be restricted by law. Persons into whose possession this presentation comes are required to inform themselves about and to observe any such restrictions. This presentation contains forward-looking statements concerning KCA Deutag. These forward- looking statements are based on management’s current expectations, estimates and projections. They are subject to a number of assumptions and involve known and unknown risks, uncertainties and other factors that may cause actual results and developments to differ materially from any future results and developments expressed or implied by such forward-looking statements. KCA DEUTAG has no obligation to periodically update or release any revisions to the forward-looking statements contained in this presentation to reflect events or circumstances after the date of this presentation. 1

Agenda Key Highlights 1 Commercial Developments 2 Business Overview 3 Group Results 4 Summary 5 2

Q1 Key highlights KCA Deutag is a leading international drilling and engineering company working onshore and offshore with a focus on safety, quality and operational performance Group revenue and EBITDA of $513.9m (Q1 2013: $474.7m) and $80.8m 1 (Q1 2013: $56.2m) respectively Improved operational and financial performance from Land Drilling, RDS, 2 Platforms and MODUs Successful refinancing has pushed our earliest significant maturities out to 3 2018 Contract backlog of $8.5bn (as at 1 May 2014) across a blue chip 4 customer base Net debt/LTM EBITDA leverage fell from 4.0x at Q4 2013 to 3.4 1 x by Q1 5 2014 1 Pro-forma Q1 2014. See slide 17 for full details. 3

Market-leading international drilling & engineering company Integrated Land Drilling Offshore Drilling Services & Design US$181m EBITDA (54% of total) ¹ US$154m EBITDA (46% of total) ¹ Land Drilling Bentec Platform Services Rig Design Services (RDS) • Leading international • Design and manufacture of • Leading global platform service • Rig design engineering from premium drilling rig owner high-end premium land rigs and operator outside North America concept to commission and operator components • Operations: Russia, Africa, • Facilities: Germany, Russia, • Operations: UK North Sea, • Offices: Aberdeen, Baku, Middle East, Europe and SE Oman Norway, Azerbaijan, Russia, SE Bergen, Houston, London Asia Asia and Africa Design & Design & Own & Operate Own & Operate Manage Manage Manufacture Engineering • Staff: c.850 engineers • Rigs: High end fleet of • Facilities: Capacity for • Staff: c.3,050 managing and support staff 53 drilling rigs, 4 12-16 rigs and 50 top drilling operations on 39 drives 2 p.a. workover rigs platforms • 94% of new rigs since • Approx. 60% of 2007 have been built by platforms designed or Bentec refurbished by RDS ¹ LTM BITDA pre-exceptional items, excluding MODUs and prior to allocation of central overheads. EBITDA by segment for 2013 has been re-presented to reallocate support costs which were previously shown as central overheads (such as HR, Supply Chain and IT 4 costs) to the operational business segments. 2014 figures are presented on the same basis. 2 High-specification mechanical equipment turning the drill string.

Continued strong market position and balanced portfolio of assets across highly attractive international markets PRESENCE IN KEY AREAS 150 126 120 90 Years 55 50 60 40 15 30 0 Europe North Middle North Sea Russia Africa East Russia North Sea St. 15 Rigs /Norway 25 Plat. Johns Sakhalin Bergen 3 Plat. Tyumen Stavanger Aberdeen (HQ) Europe & Azerbaijan Caspian Houston 7 Plat. 8 Rigs London Bad Ben Loyal Bentheim jack-up rig Middle East Baku 12 Rigs Myanmar 1 Plat. Africa 17 Rigs Brunei Dubai 1 Rig 2013 EBITDA split by region Nizwa Other Angola Europe 9% 3 Plat. SE Asia (inc North 10% Sea) 23% Ben Rinnes jack-up rig Middle East 11% Russia 20% Caspian 13% Africa 14% Regional offices Land Drilling Platform Services RDS offices MODUs Bentec 1 EBITDA excludes results from the Ben Avon jack-up which was disposed of in March 2013 and is stated before normalisation 5 adjustments and excluding central overheads of $53m. Map excludes work over land rigs, defined as being below 900HP.

Health, safety and environmental performance Total Recordable Incident Rate Improvement (TRIR) 1.6 KCAD TRIR at IADC industry average end Q1 2014 was 0.81 2 for 2013 1.4 0.50 1 injuries per 200,000 man hours worked 1.2 TRIR per 200,000 man hours 1.0 0.8 0.6 0.4 TRIR (average) 0.2 0.0 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Mar -14 Jan-15 1 Total Recordable Incident Rate per 200,000 man hours. This is a rolling 12 month average. 2 KCAD Total Recordable Incident Rate is directly comparable with IADC’s Total Recordables (RCRD) statistic. 6 IADC figures are annual and are not released until after year end, therefore no 2014 information is available. Note: IADC stands for International Association of Drilling Contractors.

Significant new contracts – Platforms, Canada Drilling operations and maintenances services on the Hebron platform in Contract nature Canada Contract length & 12 years fixed (3 years pre-operations, 9 years operations and maintenance) timeframes with option to extend Customer ExxonMobil Contract value Multi-million dollar “The award of our first contract in Canada by ExxonMobil Canada Properties is an excellent result. We look forward to continuing to develop a strong working relationship as we work on this project together.” Rune Lorentzen, President of Offshore, KCA Deutag 7

Healthy backlog providing high level earnings visibility for the future Total contract backlog as at 1 March 2014 1 Total contract backlog as at 1 May 2014 $1,022m $6,330m $8,478m $1,126m $1,310m $980m $5,610m $7,899m 10,000 10,000 8,000 8,000 6,000 $4,626 6,000 $4,207 4,000 $4,445 4,000 $4,015 2,000 $3,692 2,000 $51 $3,852 $141 $127 $54 $1,595 $1,258 $1,885 $839 $1,072 $895 0 0 $m Mar to Dec 2014 2014 2015 2016 and thereafter Total backlog $m May to Dec 2014 2015 2016 and thereafter Total backlog Contract Option Contract Option Contract backlog by BU as at 1 March 2014 1 Contract backlog by BU as at 1 May 2014 $12m $55 $173m Land Drilling Land Drilling $144 $1,726m $1,635 Bentec Bentec $273 $251m Platforms Platforms RDS RDS $5,737m $6,370 MODUs MODUs 1 As presented in Q4 2013 pack. 8

Land Drilling Financial Performance to 31 March 2014 Q1 Q1 2014 2013 Variance Variance 2014 2013 YTD YTD $m $m $m % $m $m $m % Revenue 168.0 150.5 17.5 11.6 168.0 150.5 17.5 11.6 EBITDA 38.5 30.3 8.2 27.1 38.5 30.3 8.2 27.1 pre support costs allocation 1 Support costs allocation (2.8) (2.4) (2.8) (2.4) EBITDA 35.7 27.9 7.8 35.7 27.9 7.8 28.0 28.0 post support costs allocation 1 21.3 18.5 21.3 18.5 Margin % • Strong Q1 2014 performance with utilisation of 81% for the quarter (80% in Q1 2013) • Improved utilisation and cost savings from the business efficiency programme have contributed to improving EBITDA in Europe versus Q1 2013 and Q4 2013 • Africa also saw improvement versus Q1 and Q4 2013 with two new rigs delivered in Algeria in mid 2013 contributing to the year on year uplift in EBITDA • Russia results softened for the quarter due to a seasonal downturn in CDS activity and a rig moving between clients 1 EBITDA by segment for 2013 has been re-presented to reallocate support costs which were previously shown as central 9 overheads (such as HR, Supply Chain and IT costs) to the operational business segments. 2014 figures are presented on the same basis.

Bentec Financial Performance to 31 March 2014 Q1 Q1 2014 2013 Variance Variance 2014 2013 YTD YTD $m $m $m % $m $m $m % Revenue 26.3 40.9 (14.6) (35.7) 26.3 40.9 (14.6) (35.7) EBITDA 0.8 3.3 (2.5) (75.8) 0.8 3.3 (2.5) (75.8) pre support costs allocation 1 Support costs allocation (0.7) (0.8) (0.7) (0.8) EBITDA 0.1 2.5 (2.4) 0.1 2.5 (2.4) (96.0) (96.0) post support costs allocation 1 0.4 6.1 0.4 6.1 Margin % • Q1 2014 saw a significant reduction in revenue and EBITDA compared to the same period in 2013 and Q4 2013 • This is simply due to the manufacturing completion status of current rig orders and timing of component sales • The order backlog is strong and higher EBITDA is expected later in the year, particularly in the second half • During Q4 2013 we announced Bentec’s biggest ever contract award for 7 desert rigs for Enafor, Algeria • Order intake on top drives has also been strong during Q1 2014 1 EBITDA by segment for 2013 has been re-presented to reallocate support costs which were previously shown as central 10 overheads (such as HR, Supply Chain and IT costs) to the operational business segments. 2014 figures are presented on the same basis.