DOF Subsea Group Agenda Accounting principles In brief Recent - PowerPoint PPT Presentation

Q1 2014 Presentation DOF Subsea Group

Agenda Accounting principles In brief Recent events Group overview Contract status Financials Outlook Appendix DOF Subsea

Accounting principles – IFRS 11 • Effective from 1st January 2014 DOF Subsea has implemented IFRS 11, changing the consolidation method from proportional consolidation to applying the equity method. • Internally DOF Subsea still applies proportional consolidation for management reporting • Unless otherwise stated, figures in this presentation is according to management reporting. • The table to the right summarises the effect of the implementation of IFRS 11 on the main items from the financial statements. • See DOF Subsea financial report Q1 2014 note 1 and 2 for further details. DOF Subsea 3

DOF Subsea Group – In brief Fleet • One of the largest subsea vessel owners in the world • Owns and operates a fleet of 23 vessels, plus 5 newbuilds on order • In addition 4 vessels on long-term charter • The market value of owned vessels in operation is NOK 16 billion, with a value adjusted age of approx. 5 years • Operates 51 ROVs and 7 ROVs on order Global organization • Head office in Bergen • Regional offices in Australia, Singapore, Norway, UK, Angola, US, Canada and Brazil Total of 2 575 employees • Subsea employees: 1 575 • Of which offshore engineers and project staff: 1 230 • Marine crew approx.: 1 000 Norway Brazil Canada US UK Asia Pacific Angola 332 393 49 110 336 335 20 DOF Subsea 4

DOF Subsea Group – In brief 1 800 40% Quarterly figures 1 600 35% 1 400 30% 19.4 % 1 200 CAGR 25% NOK million 1 000 20% 800 15% 600 10% Key figures 400 27.7 % CAGR 5% 200 Back-log incl. options NOK 33 billion - 0% Market value of fleet NOK 16 billion Q1 2011 Q1 2012 Q1 2013 Q1 2014 Operating revenue EBITDA EBITDA margin Number of shares 119 733 714 Total Per share Book equity NOK 5.7 billion NOK 47.29 Value adj. equity NOK 8.7 billion NOK 72.61 Book equity ratio 29.4 % Value adj. equity ratio 39.0 % * According to internal Management reporting DOF Subsea 5

Key credit metrics Interest Coverage NIBD/EBITDA 2,50 12,00 10,00 2,00 8,00 1,50 6,00 1,00 4,00 0,50 2,00 - - 2009 2010 2011 2012 2013 Last 4 2009 2010 2011 2012 2013 Last 4 Qs Qs NIBD/Total assets Debt/Total assets 1,00 1,00 0,90 0,90 0,80 0,80 0,70 0,70 0,60 0,60 0,50 0,50 0,40 0,40 0,30 0,30 0,20 0,20 0,10 0,10 - - 2009 2010 2011 2012 2013 Last 4 2009 2010 2011 2012 2013 Last 4 Qs Qs * According to internal Management reporting DOF Subsea 6

Recent events Fleet • Chartered the JAC vessel Chloe Candies for a 1 + 1 year period • Chartered the JAC vessel Ross Candies for a 1 + 1 year period • Skandi Bergen was delivered to new owners in beginning of January • Skandi Aker purchase options was exercised by AKOFS 2 AS, transaction in February 2015 Contracts • Statoil call-off under existing frame agreement, utilizing Geosund for minimum 4 months in 2014 and 8 months in 2015 • Several subsea contracts in the Atlantic region, including AUV work for Statoil, replacement of risers for Maersk and turret mooring and riser installation for the Gina Krogh FSO. • Several subsea contracts in the North America region, increasing the utilization of the vessels Skandi Inspector, Harvey Deep-Sea, Chloe Candies and Ross Candies • Several contracts awarded in Asia Pacific, including mooring installation and IMR services, utilizing Skandi Hercules, Skandi Singapore and Skandi Hawk. • Australian Customs and Border control extended the charter on Ocean Protector with 6 months • Subsea 7 extended the charter on Skandi Seven with 2 years, firm until end March 2017 Finance • Repayment of DOFSUB04 in April, with a total net cash effect of NOK 453.5 million DOF Subsea 7

Group overview DOF Subsea

Ownership structure FIRST RESERVE DOF ASA CORPORATION 51% 49% DOF SUBSEA HOLDING AS 100% Modern high-end fleet and equipment  A workforce of 2 575 highly skilled employees  DOF SUBSEA AS 23 owned subsea vessels in operation  5 vessels on order  4 vessels on charter  50 ROVs and 1 AUV in operation  7 ROVs on order  Leading subsea contractor  DOF Subsea 9

DOF Subsea Group structure DOF Subsea AS Ship/asset Management DOF Subsea DOF Subsea DOF Subsea DOF Subsea Engineering owning companies Asia Pacific Atlantic North America Brazil companies companies DOF DOF Subsea Management Norway US Singapore CSL Rederi (34 %) Marin IT DOF Subsea Australia Canada Semar (50%) UK Rederi II (35 %) DOF Installer Indonesia Angola (83.66 %) Arctic DOFTECH Malaysia Russia (50 %) Mashhor DOF TECHDOF Subsea (50%) (50 %) Brunei • DOF Subsea divided into regions, engineering companies and asset-owning companies DOF Subsea ROV • Regions, engineering companies and asset-owning companies are profit centers • Head office in Bergen DOF Subsea 10

DOF Subsea - A global subsea player (668) Bergen Moscow Aberdeen (159) St. Johns Houston Cairo Manila Malaysia Brunei Singapore Angola Jakarta (20) Macaé Perth Rio de Janeiro (393) (335) Buenos Aires GEOGRAPHICAL FOCUS AREAS DOF Subsea 11

DOF Subsea timeline DOF Subsea fleet evolution DOF Subsea employees 28 18 000 1 800 Number of operated vessels MV of fleet 16 000 1 600 24 Number of employees 14 000 1 400 20 12 000 NOK million 1 200 16 10 000 1 000 8 000 800 12 6 000 600 8 4 000 400 4 2 000 200 - 0 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2008 2009 2010 2011 2012 2013 Q1 2014 Owned vessels Chartered vessels MV of owned fleet (r.a.) Employees 2005 - 2009 2010 2011 2012 2013 2014 Fleet: From 11 to 18 vessels Fleet: 21 vessels Fleet: 24 vessels Fleet: 25 vessels Fleet: 26 vessels Fleet: 27 vessels • DOF Subsea was established in • Jan : Delivery of Skandi • Feb: Delivery of Skandi • Mar: Sale of OSCV • Feb: Signed OSCV • Jan: Delivered Skandi 2005 Aker Niteroi newbuild newbuild contract Bergen to new owners • DOF Subsea was listed on the • Feb: Sale of Geo • May : Sale of • Mar: Signed OSCV • Feb: Chartered Harvey • Mar: Chartered Ross Oslo Stock Exchange in 2005, and Challenger Geosounder newbuild contract Deep-Sea Candies taken private by DOF ASA and • Jun: Acquisition of SWG • Jun : Acquisition Skandi • Mar: Chartered Skandi • Mar: Sale of Geobay • Mar: Chartered Chloe FRC in 2008 Candies Constructor Hawk • Jul: Delivery of Skandi • Jun: Delivery of Skandi • Established a global footprint, Vitoria and Skandi • Jul : Delivery of Skandi Bergen present in all major offshore oil & Skolten Skansen • Aug: Signed newbuild gas regions • Dec: Delivery of Skandi contracts for 4 x PLSVs • Sep : Delivery of Skandi • Built a global organization through Hercules Singapore • Nov: Chartered organic growth and acquisitions • JV with Technip Normand Reach • Expanded the fleet by taking • Developed global • Global ISO recertification delivery of 9 newbuilds Business Management System, and achieved global ISO certification DOF Subsea 12

Level of industry barriers to entry Increased engineering requirement Complexity and size of operations Increased system requirement Level of barriers to entry Complex subsea operations Marine transport/ services DOF Subsea’s main presence is in segments with medium to high • barriers to entry and high complexity of operations Higher margins and earnings beyond the time charter rates • DOF Subsea is gradually building engineering capabilities • DOF Subsea 13

New high-end fleet 8,00 Building year DOF Subsea fleet 7,00 Before 2000 4 % 6,00 Newbuild 18 % 5,00 2000 - 2006 21 % 4,00 3,00 2,00 2007 - 2013 57 % 1,00 - Average fleet age Value adjusted • Majority of the fleet delivered after 2007 • Industry leading value adjusted average fleet age of approx. 5 years • High-end vessels capable of a wide scope of operations, world wide DOF Subsea 14

Business management Global business management system accredited by DNV to: Business Management System ISO 9001: 2008 • Health and Safety System OHSAS 18001:2007 • Environmental Management System ISO 14001:2004 • Global recertification by DNV December 2013 • 2009 DOF Subsea 15

HSEQ key statistcs • Substantial HSE-improvement over time DOF Subsea HSE-statistics 12 4 000 000 Frequence: Incident / 1 000 000 man- 3 500 000 10 3 000 000 8 2 500 000 Man-hours 6 2 000 000 hour 1 500 000 4 1 000 000 2 500 000 0 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 LTI (l.h.a.) TR (l.h.a.) Man-hours (r.h.a.) No. of safety observations 1500 High number of safety • 1000 observations reported 500 shows commitment to HSEQ 0 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar * Figures represent number of safety observations 2013 2014 DOF Subsea 16

Projects DOF Subsea

DOF Subsea – Life-of-field services DOF Subsea offers integrated subsea solutions across life-of-field • Field development • Production phase • Field abandonment / decommissioning • DOF Subsea 18