Magseis Fairfield ASA Q1 2019 28 th May 2019 The industry leader in ocean bottom seismic technology
Disclaimer This presentation (the “ Presentation ") has been prepared by Magseis Fairfield ASA (the The Company makes no representation or warranty, expressed or implied, as to the “ Company ” or “ Magseis Fairfield ”). accuracy, reliability or completeness of the Presentation, and neither the Company nor any of its directors, officers or employees shall be liable to you or to any other party for The Presentation contains forward-looking information and statements relating to the any losses incurred as a result of your or their use of, or reliance on, any information business, financial performance and results of the Company and/or industry and contained in the Presentation. markets in which it operates. Forward-looking statements concern future circumstances and results and other statements that are not historical facts, This Presentation does not constitute or form part of, and is not prepared or made in sometimes identified by the words “aims”, “anticipates”, “believes”, “estimates”, connection with, an offer or invitation to sell, or any solicitation of any offer to “expects”, “foresees”, “intends”, “plans”, “predicts”, “projects”, “targets”, and similar subscribe for or purchase any securities, and nothing contained herein shall form the expressions. Any forward-looking statements and other information contained in this basis of any contract or commitment whatsoever. No reliance may be placed for any Presentation, including assumptions, opinions and views of the Company or cited from purpose whatsoever on the information contained in this Presentation or on its third party sources are solely opinions and forecasts based on the current completeness, accuracy or fairness. The information in this Presentation is subject to expectations, estimates and projections of the Company or assumptions based on verification, completion and change. The contents of this Presentation have not been information currently available to the Company, which are subject to risks, independently verified. The Company’s securities have not been and will not be uncertainties and other factors that may cause actual events to differ materially from registered under the United States Securities Act of 1933, as amended (the “ US any anticipated development. Securities Act ”), and are offered and sold only outside the United States in accordance with an exemption from registration provided by Regulation S under the US Securities Important factors may lead to actual profits, results and developments deviating Act. This Presentation should not form the basis of any investment decision. substantially from what has been expressed or implied in such statements. Although the Company believes that its expectations and the Presentation are based upon The Presentation speaks and reflects prevailing conditions and views as of the date of reasonable assumptions, it can give no assurance that those expectations will be this presentation. It may be subject to corrections and change at any time without achieved or that the actual results will be as set out in the Presentation. The Company notice except as required by law. The delivery of this Presentation or any further assumes no obligation, except as required by law, to update any forward-looking discussions of the Company with any recipient shall not, under any circumstances, statements or to conform these forward-looking statements to its actual results. create any implication that the Company assumes any obligation to update or correct the information herein, nor any implication that there has been no change in the affairs of the Company since such date. 2 Source: Magseis Fairfield
AGENDA Introduction Financials Operations Business Strategy, Backlog and Market Outlook Appendix 3
at a glance • The combination of Magseis, Fairfield and WGP shaped the Industry leader in the Ocean Bottom Seismic market • Largest player in a growing global USD 1bn+ market with improving visibility • Leading edge technology - automated handling systems • Largest nodal pool in the market – ability to scale • Global reach - diverse customer base • Asset light business model - flexible cost structure 4 Source: Magseis Fairfield
Highlights Q1 2019 • Revenue of USD 119.5m Financial • EBITDA of USD 16.0m, including non-cash costs of USD 6.6m performance • Net loss of USD 6.5m • Completed Malaysia survey – learnings operationalized • Completed deepwater GoM survey for new node customer with excellent Operational operational performance and data quality Performance and • Completed mobilization for Middle East start-up late January Execution • Change of deployment platform for GoM surveys – in operation from end of Q1 • Successful delivery of second shipment of MASS I nodes and handling systems • Integration on track – benefits being realized • Revenue guidance of USD 500m and EBITDA of USD 100m in 2019 Outlook • USD 453m already secured through Q1 revenue and current backlog 5 Source: Magseis Fairfield
AGENDA Introduction Financials Operations Business Strategy, Backlog and Market Outlook Appendix 6
Q1 P&L – Revenue and EBITDA on track • Strong margins from delivery of second shipment of USDm sold MASS I nodes 130 • Soft margins in data acquisition 120 120 110 • Zero margin on USD 12m in revenue in Malaysia 100 • Mobilization ahead of contract start-up of large Middle East 90 91 contract in late January 80 • Expensed USD 7.7m for change of deployment platform for 70 deep water GoM projects - start-up of program with new 60 vessels and ROVs at end of Q1 50 40 • Seasonally low activity and soft margins in reservoir 30 monitoring/source 28 20 7 7 • Main part of revenue recognized in Q2, Q3 and Q4 10 16 11 5 • Improving margins and market environment 0 Revenue EBITDA Revenue EBITDA Revenue EBITDA • Higher margins in recently signed contracts and current Magseis Fairfield MASS I node sales Other contract negotiations EBITDA included non-cash costs of ~USD 7m, • Improving utilization going forward related to sale of existing MASS I node sales • Improving revenue generation from reservoir monitoring/ source from Q2 7 Source: Magseis Fairfield
Key financial figures Key figures, USD million EBITDA to Net Cash Flow from Operations – main items (USDm) Profit and loss Q1 2019 Q1 2018 Full Year 2018 25 Revenues 119.5 24.6 136.5 Cost of sales 88.3 9.7 86.8 20 EBITDA 16.0 10.4 23.0 EBIT -2.7 6.6 3.1 15 Net profit (loss) -6.5 5.7 -2.8 Basic earnings (loss), weighted avg. shares -0.04 0.08 -0.04 10 Financial position 5 Total assets 587 165 527 Total liabilities 260 27 194 0 Total equity 327 138 334 Equity ratio 55.7 % 83.5 % 63.3 % -5 EBITDA Non-cash costs Increased Net Other CFFO Cash flow MASS I node Working adjustments to Net cash flow from operating activities -1.9 -6.2 13.7 sales Capital CFFO, net • • EBIT USD -2.7m after total depreciation & amortization of USD 18.8m Net cash flow from operating activities: USD -1.9m • Equipment regular depreciation of USD 10.8m • Net Working Capital increase of USD 24.3m in Q1, mainly • IFRS 16 lease depreciation of USD 4.0m reflecting increased receivables from higher billable revenue • Intangibles (PPA) amortization of USD 4.0m that will be collected as they fall due 8 Source: Magseis Fairfield
AGENDA Introduction Financials Operations Business Strategy, Backlog and Market Outlook Appendix 9
Integration on track - benefits being realized • Moved to common sales, commercialization and bid process – sales objectives being realized • Standardizing vendor management, leveraging purchasing and service providers • Optimizing back-office systems and processes • Moving from three business systems to one global system • Combined and harmonized QHSE and administrative policies, procedures and systems • Moving to a common technology platform 10 Source: Magseis Fairfield
Malaysia Survey Completed • Operation finalized early April • Improved operational performance and source issues resolved in Q1 • Good performance from second ROV vessel entered into operation in January • Project loss covered by provisions in Q4’18 • Lesson learned - corrective actions Customer quote: “…. considering the challenges we faced, I cannot be more implemented and operationalized impressed with the way Magseis have handled this project, and so offer you firstly my congratulations for completing a difficult job with an amazing level of persistence and tenacity….” 11
Efficient delivery of MASS I nodes and MASS modular handling systems • Shipment by air carrier • Delivered 3,000 nodes in the second batch in Q1-19 for large Middle East project • Adding to a delivery of 4,500 nodes in Q4-18 • On track for delivery of remaining 8,500 nodes and two handling systems over the coming two quarters 12 Source: Magseis Fairfield
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