DOF Subsea Group DOF Subsea Group at a glance NOK 1.2bn 1) 1 311 2) - - PowerPoint PPT Presentation

Quarterly Presentation Q4 2018

DOF Subsea Group

DOF Subsea Group at a glance

2

2005

DOF Subsea established

NOK 1.2bn1)

Revenues Q4’18

1 3112)

Subsea employees worldwide Q4’18

NOK 15.5bn

Firm backlog Q4’18

283)

Subsea vessels

71

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

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

378 8 389 10 250 4 294 5

DOF Subsea

1) Note: Number of employees as at end of Q4’18, excluding marine crew 2) Note: Vessels in operation as at end of Q4’18, including 4 chartered-in vessels (excluding newbuild under construction)

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

Large and global organisation following multiple acquisitions from 2005-2010 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 Q4 2018

Development in number of vessels in operation2)

Owned vessels Chartered-in vessels Total

337 553 563 897 1014 1246 1492 1354 1667 1858 1566 1278 1214 1311 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q4 2018

Development in number of DOF Subsea Employees1)

More than a decade of structural growth and consolidation

DOF Subsea 4

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

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 and start rebuilding the organization

Key financials1)

5

Revenue EBITDA2) Firm backlog

DOF Subsea

1) Note: Figures according to management reporting 2) Note: EBITDA excl. profit from sale of non-current assets

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

• 500

1 000 1 500 2 000 2 500 2012 2013 2014 2015 2016 2017 2018 NOK million EBITDA margin

• 1 000

2 000 3 000 4 000 5 000 6 000 7 000 8 000 2012 2013 2014 2015 2016 2017 2018 NOK million

• 5

10 15 20 25 2012 2013 2014 2015 2016 2017 2018 NOK billion

Segment highlights

Two business segments

DOF Subsea 7

DOF Subsea Group Long-term Chartering1)

Revenues Q4’182) NOK 399 million EBITDA Q4’183) NOK 298 million ~75% margin Firm backlog4) NOK 11.3bn

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 Q4’18 5) Note: Including 4 chartered-in vessels

1 newbuild Q4’18 8 vessels in

• peration Q4’18

Long-term charters Vessel capabilities Capex spending

Subsea / IMR Projects

Revenues Q4’182) NOK 767 million EBITDA Q4’183) NOK 44 million ~6% margin Firm backlog4) NOK 4.2bn 1 311 Employees Q4’18 19 vessels in

• peration5) Q4’18

Engineering capabilities Framework agreements Opex spending

8

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) ✓ Petrobras RSV Contract (2018-2020) ✓ 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

9

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 11.3bn firm backlog per Q4’18

Long-term Chartering

DOF Subsea

Selected long-term contracts

10 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

DOF Subsea newbuild program completed

The Group took delivery of Skandi Vinland and the vessel entered a 10-year contract with Husky Energy in July 2017 The DOFCON JV has since 2016 taken delivery of four PLSVs (two from yard in Norway and two from yard in Brazil) ▪ Skandi Açu delivered and on-hire on 8-year contract with Petrobras in August 2016 ▪ Skandi Buzios delivered and on-hire on 8-year contract with Petrobras in April 2017 ▪ Skandi Recife delivered and on-hire on 8-year contract with Petrobras in June 2018 ▪ Skandi Olinda delivered and on-hire on 8-year contract with Petrobras in Feb 2019 The PLSV project was delivered according to budgeted cost, giving DOF Subsea an annual EBITDA of USD 110 million All newbuild contracts provide stable earnings visibility for the Group

DOF Subsea 11

Skandi Vinland (Subsea), delivered 2017 Skandi Açu (PLSV), delivered 2016 Skandi Buzios (PLSV), delivered 2017 Skandi Recife (PLSV), delivered 2018 Skandi Olinda (PLSV), delivered 2019

4th quarter 2018

Q4 2018 highlights

• The operating revenue for the quarter was NOK 1 166 million1), EBITDA was NOK 342 million1) and overall

vessel utilisation was 69%.

• During the quarter, the Group strengthened the organization and management team.
• 2 year extension of existing IMR contract with Chevron Australia.
• Refinancing of Skandi Achiever with an international shipping bank.
• Issued a new 5-year bond loan of NOK 900 million in the Norwegian High-Yield market.

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

0% 5% 10% 15% 20% 25% 30% 35% 40% 500 1 000 1 500 2 000 2 500 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 Q3 2018 Q4 2018 EBITDA margin NOK million Operating revenue EBITDA EBITDA margin

NOK million

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 Q3 2018 Q4 2018 Operating revenue 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 1 184 1 166 EBITDA 502 458 515 553 516 456 510 447 320 279 400 332 402 310 372 376 342 EBITDA margin 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 % 31,8 % 29,3 % Current assets 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 2 320 2 532 Non-current assets 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 17 523 17 818 Total assets 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 19 843 20 350 Current liabilities 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 2 983 3 484 Non-current liabilities 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 10 798 11 130 Equity 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 6 063 5 735 Total equity and liablilites 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 19 843 20 350

Debt maturity profile1)

DOF Subsea 15

Debt maturity profile, 2019E – 2023E

1) Note: Figures according to management reporting and based on exchange rates as at end of Q4’18 The figures reflect amortization and balloon payments on outstanding debt as at end of Q4’18

• 500

1 000 1 500 2 000 2 500 3 000 3 500

2019E 2020E 2021E 2022E 2023E Thereafter Bond Loan Bank Debt Balloons

Backlog1)

DOF Subsea 16

1) Note: Figures based on remaining backlog as at end of Q4’18 and exchange rates as at end of Q4’18 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 31 December 2018, the Group’s firm contract backlog was NOK 15.5 billion

2019 2020 2021 2022 2023 Thereafter Option Revenue 0,09 0,26 0,72 1,12 1,17 14,13 Firm Revenue 3,66 2,94 2,35 1,85 1,60 3,13 2 4 6 8 10 12 14 16 18 20

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 6.51) years
• High-end vessels, capable of a wide scope of worldwide operations

DOF Subsea 17

1) Note: Excluding chartered-in vessels, and figures as at end of Q4’18

Skandi Vinland, CSV built 2017 Skandi Buzios, PLSV built 2017 Skandi Recife, PLSV built 2018 2000-2006; 6 2007-2012; 12 2013-2018; 5 Newbuild; 1

Year of delivery DOF Subsea fleet1)

• 2,0

4,0 6,0 8,0 10,0 12,0

Fleet age

Average fleet age age Value adjusted average fleet age Skandi Olinda, PLSV built 2019

Appendix

Condensed profit & loss1)

DOF Subsea 19

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) 4Q 2018 4Q 2017 2018 2017 Operating revenue 945 1068 3 742 3 849 Payroll expenses

• 354
• 368
• 1 375
• 1 420

Other operating expenses

• 431
• 462
• 1 688
• 1 593

Share of net income of associates and joint ventures 104 54 403 303 Profit from sale of non-current assets

• 1
• 5

Operating profit before depreciation (EBITDA) 264 292 1085 1135 Depreciation and impairment

• 291
• 201
• 913
• 999

Operating profit (EBIT)

• 26

91 172 136 Financial income 55 13 96 55 Financial expenses

• 148
• 132
• 507
• 521

Realised net gain / loss on derivative instruments and currency position

• 78

8

• 168
• 80

Unrealised net gain / loss on derivative instruments and currency position

• 244
• 194
• 214

288 Net financial income / loss

• 414
• 305
• 794
• 259

Profit / loss before tax

• 440
• 215
• 622
• 123

Income tax expense

• 18
• 161
• 46
• 150

Profit / loss for the period

• 458
• 375
• 668
• 273

Condensed balance sheet1)

DOF Subsea 20

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) 31.12.2018 31.12.2017 Tangible assets 11 100 11 773 Goodwill 337 366 Deferred tax asset 220 243 Investment in associates and joint ventures 1 553 1027 Non-current receivables 1 204 1 125 Non-current assets 14 414 14 534 Trade receivables 631 855 Other current receivables 289 252 Total current receivables 920 1 107 Restricted cash 223 311 Unrestricted cash and cash equivalents 919 786 Cash and cash equivalents 1142 1 097 Current assets 2 062 2 204 Total assets 16 476 16 738 Equity and liabilities (NOK million) 31.12.2018 31.12.2017 Paid-in equity 4 344 4 344 Other equity 1 197 1 778 Non-controlling interests 194 226 Total equity 5 735 6 348 Bond loans 2 480 1 914 Debt to credit institutions 5 278 6 518 Other non-current liabilities 34 49 Non-current liabilities 7 793 8 481 Current portion of debt 2 177 1 191 Trade payables 406 392 Other current liabilities 366 325 Current liabilities 2 949 1 909 Total liabilities 10 742 10 390 Total equity and liabilities 16 476 16 738

Thank you!