Investor Presentation SECOND QUARTER 2020 KCA Deutag is a - PowerPoint PPT Presentation

Investor Presentation SECOND QUARTER 2020 KCA Deutag is a leadinginternational drilling, engineering and technology company working onshore and offshore with a focus on safety, quality and operational performance 0

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 These forward-looking statements are based on management’s current Deutag. 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 Second Quarter Investor Presentation COVID-19 update 1 Safety & #enhancethebrand 2 5 year restructuring business plan and capital structure 3 Backlog & utilisation 4 Business unit & group financials 5 Market update 6 Summary 7 2

Q2-2020 key highlights 1 Staying focused on proactively managing what we can control during this pandemic 2 Successfully entered into a binding lock-up agreement 3 Q2-20 revenue of $292.3m (Q2-19: $395.1m) and EBITDA of $65.5m (Q2-19: $74.4m) 4 Land Drilling division commences operations on one of the new build Kuwait rigs Offshore Drilling division awarded a contract amendment to manage procurement, 5 maintenance and warehousing activities (through the Turan Drilling JV) in Azerbaijan 6 Contract backlog stable at $4.9bn (at 1 August 2020) across a blue chip customer base 3

COVID-19 updates Company has proactively responded to the pandemic. • Response teams and guidelines established early. • Country teams have executed effectively to maintain overall safety and integrity of our field operations. − THANK YOU to all our employees! • Guidance issued on remote working and wellbeing. • Conducted several Virtual rig visits to maintain contact with field operations teams. • Guidance developed on safely returning to office. • Ongoing review of blended/flexible working plans. 4

Safety performance continues to outperform industry average IADC industry average 0.63 3 for 2019 Q2 2020 0.27 1,2 Rig App CheckIt upgraded KCAD tool to prevent to enhance our field crews’ dropped objects has been ability to follow procedures, shared with the wider assess operational risk and industry to improve safety submit compliance data with maintenance at height (1) Total Recordable Incident Rate per 200,000 man hours. This is a rolling 12 month average (2) Dalma business has been incorporated from May 2018 5 KCAD Total Recordable Incident Rate is directly comparable with IADC’s Total Recordables (RCRD) statistic (3) Note: IADC stands for International Association of Drilling Contractors

#enhancethebrand improvement initiatives The organization continues to deliver significant contributions. Bottom up contributions: • Teams and individual employees have > $3m continued to contribute: − 653 documented ideas. − 84 implemented projects. − Over $3m of annualized benefits achieved. What was achieved in H1-2020: • Annualized savings and cost avoidance > $50m of over $50m achieved in H1 2020: − Hundreds of letters sent to suppliers and many new agreements signed. − Tens of bidding campaigns completed. − Sharing stock across many locations. 6

From focused execution to strategic tactics Designing our Growth Strategy. Execute a focused growth strategy to build a resilient and smart platform that thrives in the face of change, delivers value to all stakeholders, and that will last another 130 years 7

Restructuring business plan assumptions Market backdrop and Scenario planning • Pre-pandemic market backdrop − ‘Lower for longer’ accepted while oil demand was peaking − E&P cash flows improving but Oilfield Services oversupplied − Investors & customers focusing on ESG and Energy Transition − KCA Deutag business activity fundamentals were improving • Impact of OPEC+ and COVID-19 − Unprecedented and historic Supply/Demand divergence − E&P companies aggressively cut CAPEX and Opex − OPEC+ declare historic oil production cuts − KCA Deutag takes action to preserve cash and control costs • Plan developed in May during the standstill period − Uncertainty with near-term oil demand and price recovery − Length of lockdowns to shape economic normalization − A ‘return to a new normal’ was used for the Base case − Upside and Downside Scenarios were also developed • Market Outlook Observations at the time: − Demand destruction may drive industry consolidation − Acceleration of Energy Transition investments to be expected − Activity may recover in time but day rates and pricing to lag More Information available in the LUA document on our website 8

5 year business plan forecast Consolidated Revenues and EBITDA dated Revenue (1)(2) TDA (1)(2) Consolida Consoli Consoli Consolida dated EB EBITD 273 236 231 265 288 319 299 1,263 1,360 1,122 1,094 1,168 1,267 1,359 1500 360 1 1 10 1 5 1 52 8 85 19 3 1 16 4 52 72 159 1 9 1 174 4 96 51 4 114 3 4 77 48 260 48 90 76 89 71 3 91 73 3 1000 92 74 480 70 428 512 432 409 450 160 420 227 211 203 200 192 500 170 169 60 669 672 648 602 616 553 534 (40) 0 (16) (13) (14) (15) (15) (15) (15) $m 2018 A 2019 A 2020 E 2021 E 2022 E 2023 E 2024 E 2018 A 2019 A 2020 E 2021 E 2022 E 2023 E 2024 E $m Ca Cape pex x - cas ash h pr profile ile Consolida Consoli dated For orecast Ca Cash sh Fl Flow $m 2020 2021 2022 2023 2024 EBITDA 236.4 230.8 265.3 288.0 318.6 Exceptional items (3.7) (4.6) (3.6) (3.6) (3.6) Working capital (48.9) 2.4 (18.7) (24.3) (5.5) Other (18.8) (2.3) (2.4) (2.5) (2.5) Capex (45.4) (57.8) (62.2) (63.0) (65.1) Tax (32.9) (27.4) (27.5) (32.6) (35.5) Lease payments (36.9) (45.3) (45.3) (42.3) (42.1) $m Dividends to non-controlling (3.7) (6.3) (8.7) (11.1) (10.8) interest Pre-financing cash flow 46.0 89.4 96.9 108.7 153.4 LAND | OFFSHORE | RDS | BENTEC | CORPORATE 1 2018 figures include 8 months of Dalma operations 9 2 Revenue and EBITDA include Eliminations on Consolidations and General Corporate Overhead Costs

Successfully entered into a binding lock-up agreement KCAD has achieved a comprehensive and holistic solution for its capital structure • Pro forma for the proposed capital structure, the Company would have net leverage of 1.4x (1) and cash on hand / operating liquidity of $117m (4) Pro Forma Capitalization De-leveraging Liquidity & Extended Maturity  $117m (4) of day-one cash  Significant de-leveraging to net Pre Post leverage of 1.4x (1)  Adequate and growing liquidity forecast Restructuring Restructuring  Reduction of annual debt service cost over the course of the business plan from $155m (3) to $49m  Excess liquidity will provide Company Total Debt  Further deleveraging forecast over with a range of potential investment $1.9bn options business plan through EBITDA growth and cash flow generation  Run-way until the next debt maturity Equitisation Supportive Shareholders Operating Flexibility $1.4bn  Improved operational flexibility to:  Shareholder group is committed to the long-term success of the business • Re-invest in the business  Alignment with management on • Capitalise on appealing acquisition / strategy and long-term value creation strategic opportunities such as Total Debt acquisition of rig assets  New Board of Directors to be appointed $510m  Maintains access to WCF and guarantee by Shareholders in consultation with facilities Net Net management Leverage: Leverage:  $225m of super senior basket capacity; could be used to raise RCF and Guarantee 6.3x (2) 1.4x (1) facilities 1) Based on LTM Jun-2020 EBITDA of $293m, pro forma total debt of c.$510m, and current cash at 30-Jun-2020 of $100m (which excludes $80m of transaction costs)) 2) Based on LTM Jun-2020 EBITDA of $293m, total debt at 30-Jun-2020 of c.$1.9bn (SSNs, TLB, RCF/ WCF, Oman debt, and IDTEC debt), and current cash at 30- 10 Jun-2020 of $100m (which excludes $80m of transaction costs)) 3) Based on the cash interest on the 2021, 2022 and 2023 SSNs and the cash interest and scheduled amortisation on the TLB 4) Based on forecast Q3 FY2020 cash of $117m (after deducting $80m of transaction costs while including $52m of overseas cash estimated at Q3 FY2020)

Cost savings have significant impact in Q2 Consoli Consolida dated Revenue Target savings vs previous business plan $m TDA (1) Consoli Consolida dated EB EBITD $m LAND | OFFSHORE | RDS | BENTEC | CORPORATE 1 Before non-recurring items 11