DOF Subsea Group DOF Subsea Group at a glance NOK 1.2bn 1) 1 190 2) - - PowerPoint PPT Presentation

Quarterly Presentation Q2 2018

DOF Subsea Group

DOF Subsea Group at a glance

2

2005

DOF Subsea established

NOK 1.2bn1)

Revenues Q2’18

1 1902)

Subsea employees worldwide Q2’18

NOK 15.9bn

Firm backlog Q2’18

283)

Subsea vessels

714)

ROVs

Modern

State-of-the-art asset base

Integrated

Supplier of subsea

• ffshore services

DOF Subsea

1) Note: According to management reporting 2) Note: Excluding marine crew 3) Note: Including newbuild Skandi Olinda and chartered-in vessels Harvey Deep Sea, Harvey Subsea, Skandi Chieftain and Skandi Darwin 4) Note: Including 2 AUVs

Global footprint

3

ATLANTIC NORTH AMERICA BRAZIL ASIA PACIFIC

Macaé Rio de Janeiro Buenos Aires Houston St John’s Aberdeen Bergen Luanda Singapore Manila Melbourne Jakarta Brunei Kuala Lumpur Darwin Perth

292 8 379 10 298 4 221 5

DOF Subsea

1) Note: Number of employees as at end of Q2’18, excluding marine crew 2) Note: Vessels in operation as at end of Q2’18, including 4 chartered-in vessels (excluding newbuild under construction)

Local operating model ensuring on-the-ground responsiveness towards clients’ needs

11 11 13 16 18 21 24 25 26 27 24 21 25 27 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q2 2018

Owned vessels Chartered-in vessels Total

337 553 563 897 1014 1246 1492 1354 1667 1858 1566 1278 1214 1190 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q2 2018

More than a decade of structural growth and consolidation

DOF Subsea 4

Development in number of Subsea Employees1) Development in number of vessels in operation2)

SEMAR Focus on consolidation and streamlining of business operations to improve efficiency and competitiveness in weak market DOF Subsea established following the acquisition of Geoconsult. The Company was listed second half 2005. First Reserve acquires 49% of DOF Subsea, which in the following is delisted from the Oslo Stock Exchange Expanding organisation on the back of several large contract awards. Number of employees and vessels peaking at 1 858 and 27, respectively Large and global organisation following multiple acquisitions from 2005-2010

2010

Century Subsea Covus Subsea CSL

2005 2008 2014 2016

Awarded four PLSV long-term contracts in joint venture with TechnipFMC

2013

SWG Offshore

1) Note: Marine crew not included 2) Note: Newbuild not included 3) Note: Period-end numbers

2018

Delivery of two newbuilds entering into long-term contracts and commencement of two long-term IMR contracts

2017

Delivery of one JV newbuild entering into long- term contract and award of several long-term contracts within both business segments

• 1 000

2 000 3 000 4 000 5 000 6 000 7 000 8 000 2012 2013 2014 2015 2016 2017 LTM

Key financials1)

5

Revenue EBITDA2) Firm backlog

NOK million NOK million NOK billion

DOF Subsea

0% 5% 10% 15% 20% 25% 30% 35% 40%

• 500

1 000 1 500 2 000 2 500 2012 2013 2014 2015 2016 2017 LTM

EBITDA margin

• 5

10 15 20 25 2012 2013 2014 2015 2016 2017 Q2 2018

1) Note: Figures according to management reporting (LTM = Last Twelve Months) 2) Note: EBITDA excl. profit from sale of non-current assets

Maintained strong backlog in challenging market

Firm backlog Q2 2018 equals firm backlog 2013

5 10 15 20 25 30 35 40 45 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2013 2014 2015 2016 2017 2018 NOK billion Sum of Firm Sum of Options

• Majority of firm contract backlog with

investment grade companies

• Firm contract backlog in NOK has been

relatively steady over time

• Current firm contract backlog equals ~3x

actual 2016 revenue

• Majority of firm backlog has high EBITDA-

margin DOF Subsea 6

Segment highlights

Two business segments

DOF Subsea 8

DOF Subsea Group Long-term Chartering1)

Revenues Q2’182) NOK 391 million EBITDA Q2’183) NOK 300 million ~77% margin Firm backlog4) NOK 11.8bn

1) Note: Long-term Chartering comprises 6 PLSVs in operation and 1 PLSV under construction, plus Skandi Acergy and Skandi Patagonia 2) Note: According to management reporting 3) Note: According to management reporting 4) Note: Firm backlog as at end of Q2’18 5) Note: Including 4 chartered-in vessels

1 newbuild Q2’18 8 vessels in

• peration Q2’18

Long-term charters Vessel capabilities Capex spending

Subsea / IMR Projects

Revenues Q2’182) NOK 812 million EBITDA Q2’183) NOK 72 million ~9% margin Firm backlog4) NOK 4.1bn 1 190 Employees Q2’18 19 vessels in

• peration5) Q2’18

Engineering capabilities Framework agreements Opex spending

9

Numerous projects completed and ongoing worldwide

Built a leading subsea projects division for over a decade

• Subsea project activity established with a global footprint in all key offshore regions
• High quality asset base leveraging unrivalled subsea and vessel operating competence

A clear action plan to pursue further opportunities

• Continue to increase the scope and complexity of operations

− Strengthen presence in selected geographies − Further build project backlog with core focus on IMR projects

Subsea/IMR Projects

Selected Mooring projects – Last 5 years Selected IMR projects – Last 5 years

✓ Petrobras DSV Contract (2018-2021) ✓ ENI Angola IMR Contract (2017-2019) ✓ Husky Energy IMR Contract (2017-2027) ✓ Shell Prelude IMR Contract (2017-2022) ✓ Goliat Field Support ENI (2016) ✓ Chevron Gorgon IMR Contract (2015-2019) ✓ Shell Malampaya IMR Contract (2014-2021) ✓ ConocoPhillips ROV Services (2012 and onwards) ✓ ROV Support Vessel Petrobras (2011 and onwards) ✓ Egina FPSO Hook-up (2018) ✓ Lam Son Mooring Replacement (2017) ✓ Bergading FPSO Pre-Tensioning (2017) ✓ Yinson OCTP FPSO Field Dev. (2016-2017) ✓ Bongkot Mooring Replacement PTTEP (2017) ✓ Raroa Mooring OMV (2016-2017) ✓ Gina Krog TMRS Teekay (2016) ✓ Catcher Mooring Installation BWO (2016) ✓ Goliat FPSO Marine Installation ENI (2011-2015) ✓ Lam Son Mooring Installation PTSC (2014)

DOF Subsea

DOF Subsea provides state-of-the-art vessels to leading players

10

Skandi Acergy Skandi Acu Skandi Africa Skandi Niteroi Skandi Patagonia Skandi Vitoria Skandi Buzios Skandi Recife Skandi Olinda

Day-rate based

Remuneration

Strong long-term contract coverage

Contracts

High-end vessels operating advanced subsea projects for third party EPCI contractors

Operations Selected clients Construction support vessel Construction & pipe laying vessel Construction & pipe laying vessel Construction & pipe laying vessel Construction & pipe laying vessel Construction & pipe laying vessel Construction & pipe laying vessel Dive support vessel Construction & pipe laying vessel

8 vessels in

• peration

1 contracted newbuild NOK 11.8bn firm backlog per Q2’18

Long-term Chartering

DOF Subsea

Selected long-term contracts

11 DOF Subsea

• Long-term FLNG IMR contract

awarded in Australia with Shell

• 5 years + 4 years options
• IMR scope comprising project

management, engineering, logistics, vessel and ROV services

• Utilising Skandi Darwin

Prelude FLNG Nov 2017

• Long-term contract with

Petrobras

• 8 years + 8 years options
• Vessel owned in joint venture

with TechnipFMC

• Built in Brazil with 300t VLS
• Long-term DSV contract with

Petrobras

• 3 years + 2 years options
• ROV and diving services
• Partnered up with diving

partner in Brazil

Skandi Recife Jun 2018

• Long-term contract with

Petrobras

• 8 years + 8 years options
• Vessel owned in joint venture

with TechnipFMC

• Built in Brazil with 300t VLS
• Long-term contract with

Petrobras in Brazil

• Vessel and ROV services

Skandi Salvador Aug 2018 Skandi Achiever Sep 2018 Skandi Olinda Feb 2019

2nd quarter 2018

Q2 2018 highlights

• The operating revenue for the quarter was NOK 1 203 million1), EBITDA was NOK 372 million1) and overall vessel

utilisation was 76%.

• Firm contract backlog as at 30 June 2018 was NOK 15.9 billion.
• In June the joint venture with TechnipFMC took delivery of the newbuild PLSV Skandi Recife and the vessel commenced
• n the 8-year charter contract with Petrobras.
• The Brazil region was awarded a 3-year firm contract with a 2-year option by Petrobras in Brazil for the provision of the

DSV Skandi Achiever and ROV and diving services.

• DOF Subsea was awarded a long-term time charter contract for Skandi Acergy, which will commence when the current

contract expires.

• The Brazil region was awarded a long-term RSV contract for Skandi Salvador with Petrobras.
• The Atlantic region was awarded a contract extension for Skandi Seven with Eni.
• DOF Subsea was awarded several short-term contracts in the Asia Pacific region and the Atlantic region securing

utilisation of personnel and assets in the Subsea/IMR Projects segment.

• DOF Subsea completed refinancing of two vessels and made a drawdown on the loan on Skandi Recife.

DOF Subsea 13

1) Note: Figures according to management reporting

Quarterly performance1)

DOF Subsea 14

1) Note: Figures according to management reporting, and excluding profit from sale of non-current assets

NOK million

Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Operating revenue 1 963 1 904 2 025 1 656 1 962 1 991 1 642 1 406 1 660 1 232 1 128 982 1 199 1 093 1 275 1 053 1 203 EBITDA 543 552 502 458 515 553 516 456 510 447 320 279 400 332 402 310 372 EBITDA margin 27,7% 29,0% 24,8% 27,7% 26,2% 27,8% 31,4% 32,4% 30,7% 36,3% 28,4% 28,4% 33,4% 30,4% 31,5% 29,4% 30,9% Current assets 3 252 2 998 4 223 3 414 3 414 3 674 3 752 2 900 3 010 2 742 2 483 2 808 2 595 2 501 2 607 2 399 2 474 Non-current assets 16 151 16 215 15 796 16 726 16 578 16 447 16 818 17 652 18 206 18 514 18 043 18 087 18 428 17 926 17 829 16 881 17 684 Total assets 19 403 19 213 20 019 20 140 19 992 20 121 20 570 20 552 21 216 21 256 20 526 20 896 21 023 20 427 20 436 19 280 20 158 Current liabilities 3 741 3 607 4 505 4 139 4 577 4 492 3 650 2 991 3 022 2 645 2 478 2 444 3 010 3 051 2 440 2 345 2 879 Non-current liabilities 9 701 9 668 9 402 9 924 9 009 9 988 11 228 11 482 11 864 12 174 11 993 12 503 11 942 11 221 11 648 10 485 11 110 Equity 5 962 5 938 6 112 6 077 6 405 5 641 5 692 6 078 6 330 6 437 6 055 5 948 6 071 6 156 6 348 6 450 6 170 Total equity and liablilites 19 404 19 213 20 019 20 140 19 991 20 121 20 570 20 551 21 216 21 256 20 526 20 896 21 023 20 427 20 436 19 280 20 158

0% 5% 10% 15% 20% 25% 30% 35% 40%

• 500

1 000 1 500 2 000 2 500

Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018

EBITDA margin NOK million Operating revenue EBITDA EBITDA margin

Condensed profit & loss1)

DOF Subsea 15

1) Note: Financial statement according to IFRS. Condensed financial statement according to management reporting is included in the DOF Subsea Quarterly Financial Report

Profit & loss (NOK million) 2Q 2018 2Q 2017 YTD 2018 YTD 2017 2017 Operating revenue 999 1 021 1 839 1 882 3 849 Payroll expenses

• 336
• 334
• 676
• 692
• 1 420

Other operating expenses

• 467
• 436
• 835
• 766
• 1 593

Share of net income of associates and joint ventures 116 73 221 138 303 Profit from sale of non-current assets

• 4

1

• 5
• 5

Operating profit before depreciation (EBITDA) 312 320 550 558 1 135 Depreciation and impairment

• 193
• 205
• 425
• 472
• 999

Operating profit (EBIT) 119 115 125 86 136 Financial income 13 20 27 35 55 Financial expenses

• 122
• 141
• 234
• 265
• 521

Realised net gain / loss on derivative instruments and currency position

• 8
• 65
• 32
• 112
• 80

Unrealised net gain / loss on derivative instruments and currency position

• 274

138 19 220 288 Net financial income / loss

• 390
• 48
• 221
• 122
• 259

Profit / loss before tax

• 271

67

• 96
• 36
• 123

Income tax expense

• 20

21

• 16
• 150

Profit / loss for the period

• 292

88

• 112
• 36
• 273

Condensed balance sheet1)

DOF Subsea 16

1) Note: Financial statement according to IFRS. Condensed financial statement according to management reporting is included in the DOF Subsea Quarterly Financial Report

Assets (NOK million) 30.06.2018 30.06.2017 31.12.2017 Tangible assets 11 379 12 167 11 773 Goodwill 361 376 366 Deferred tax asset 227 362 243 Investment in associates and joint ventures 1 249 844 1 027 Non-current receivables 1 132 1 145 1 125 Non-current assets 14 348 14 895 14 534 Trade receivables 736 662 855 Other current receivables 277 295 252 Total current receivables 1 014 957 1 107 Restricted cash 258 263 311 Unrestricted cash and cash equivalents 759 1 022 786 Cash and cash equivalents 1 017 1 285 1 097 Current assets 2 031 2 242 2 204 Total assets 16 378 17 137 16 738 Equity and liabilities (NOK million) 30.06.2018 30.06.2017 31.12.2017 Paid-in equity 4 344 3 844 4 344 Other equity 1 595 2 002 1 778 Non-controlling interests 230 225 226 Total equity 6 170 6 071 6 348 Bond loans 1 928 1 439 1 914 Debt to credit institutions 5 840 7 079 6 518 Financial non-current derivatives 15 28 24 Other non-current liabilities 18 28 24 Non-current liabilities 7 802 8 573 8 481 Current portion of debt 1 581 1 728 1 191 Trade payables 439 408 392 Other current liabilities 387 356 325 Current liabilities 2 407 2 493 1 909 Total liabilities 10 209 11 066 10 390 Total equity and liabilities 16 378 17 137 16 738

Debt maturity profile1)

DOF Subsea 17

Debt maturity profile, 2018E – 2022E

1) Note: Figures according to management reporting and based on exchange rates as at end of Q2’18 The figures reflect amortisation and balloon payments on outstanding debt as at end of Q2’18

• 500

1 000 1 500 2 000 2 500 3 000 3 500 4 000 4 500 2018E 2019E 2020E 2021E 2022E Thereafter

NOK million Bond Loan Bank Debt Balloons

Backlog1)

DOF Subsea 18

1) Note: Figures based on remaining backlog as at end of Q2’18 and exchange rates as at end of Q2’18 2) Note: Contract backlog excludes master service agreements (MSAs) within the Subsea/IMR Projects segment – only confirmed POs are included in the backlog

As at 30 June 2018, the Group’s firm contract backlog was NOK 15.9 billion

2018 2019 2020 2021 2022 Thereafter Option Revenue 0,1 0,6 0,5 0,9 1,1 14,8 Firm Revenue 1,8 2,9 2,6 2,2 1,8 4,6 0,0 5,0 10,0 15,0 20,0 25,0

NOK billion Firm Revenue Option Revenue

Modern high-end fleet

• Majority of the fleet is younger than 10 years
• Modern fleet with a value adjusted average fleet age of 6.31) years
• High-end vessels, capable of a wide scope of worldwide operations

DOF Subsea 19

1) Note: Excluding one newbuild under construction and chartered-in vessels, and figures as at end of Q2’18

Newbuild 1 2013-2018 5 2007-2012 12 2000-2006 6

Year of delivery DOF Subsea fleet1)

(number of vessels)

• 1,0

2,0 3,0 4,0 5,0 6,0 7,0 8,0 9,0 10,0

Years

Fleet age1)

Average fleet age Value adjusted average fleet age Skandi Vinland, CSV built 2017 Skandi Buzios, PLSV built 2017 Skandi Recife, PLSV built 2018

Thank you!