DOF Subsea Group DOF Subsea Group DOF Subsea Group in brief - - PowerPoint PPT Presentation

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Quarterly presentation Q1 2016

DOF Subsea Group

SLIDE 2

DOF Subsea Group

SLIDE 3

DOF Subsea Group – in brief

• Fleet
• One of the largest subsea vessel owners in the world
• Owns and operates a fleet of 21 vessels, plus 4 newbuilds on order
• In addition 2 chartered-in vessels
• The market value of owned vessels in operation is about NOK 16 billion, with a value

adjusted age of approx. 5.9 years

• Operates 62 ROVs and 4 ROVs and 1 AUV on order
• Global organization
• Head office in Bergen
• Regional offices in Australia, Singapore, Norway, UK, Angola, US, Canada and

Brazil

• Total of 1 468 employees
• Subsea employees:

1 468

• Of which offshore engineers and project staff:

898

Norway Brazil Canada US UK Asia Pacific Angola

290 360 54 202 195 352 15

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DOF Subsea Group – in brief

Key figures

Back-log incl. options

• Approx. NOK 38 billion

Market value of fleet

• Approx. NOK 16 billion

Condensed figures 5 last quarters

* According to internal Management reporting

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SLIDE 5

Recent events

• Fleet
• Delivery of first of 4 PLSVs, Skandi Açu
• Delivered Skandi Protector to the new owners
• Contracts
• Several subsea projects awarded in Asia Pacific and Atlantic region during Q4 2015
• Several IMR and subsea projects awarded with a total value in excess of NOK 500 million
• The awards increase the Group’s presence in the Canadian and West-African markets
• Extension of RSV contract with Petrobras on Geograph by 18 months
• Finance
• Refinancing Skandi Achiever, Skandi Neptune, Skandi Patagonia, Geoholm, Geograph and

Skandi Hercules

• Bond repurchase in Q1 2016 of NOK 62 million
• Repaid outstanding amount of DOFSUB05 at maturity in April

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Skandi Açu

• Delivery of first of 4 PLSVs in joint venture with Technip
• Sea trials on going

Skandi Açu Build 2016 Design VARD 3 05 Type Subsea / PLSV LOA 146.0 m Breadth 30.0 m Draught 8.5 m DWT 10 800t Accommodation 120 persons TLS tower 650t

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SLIDE 7

DOF Subsea Group overview

2005

Established

20 552

NOK million total assets

Modern

high-end fleet and equipment

21

• wned subsea

vessels

4

vessels

• n order

2

vessels

• n charter

62 ROVs, 5 ROVs

• n order

First Reserve Corporation (49%)

1 468

highly-skilled employees DOF Subsea DOF Subsea Holding

(100%)

DOF ASA

(51%)

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SLIDE 8

Our global footprint

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

360 9 500 8 256 2 352 3 1

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SLIDE 9

DOF Subsea timeline

DOF Subsea fleet evolution

• 2 000

4 000 6 000 8 000 10 000 12 000 14 000 16 000 18 000 4 8 12 16 20 24 28

200520062007200820092010201120122013201420152016

NOK million Number of operated vessels

Owned vessels Chartered vessels MV of owned fleet (r.a.)

MV of fleet

2005 - 2010

Fleet: From 11 to 21 vessels

• DOF Subsea was established in 2005
• DOF Subsea was listed on the Oslo

Stock Exchange in 2005, and taken private by DOF and FRC in 2008

• Established a global footprint, present

in all major offshore oil & gas regions

• Built a global organization through
• rganic growth and acquisitions
• Developed global Business

Management System, and achieved global ISO certification

• JV with Technip
• Expanded the fleet by taking delivery
• f 10 newbuilds

2011

Fleet: 24 vessels

• Feb: Delivery of

Skandi Niteroi

• May: Sale of

Geosounder

• Jun: Acquisition

Skandi Constructor

• Jul: Delivery of

Skandi Skansen

• Sep: Delivery of

Skandi Singapore

2012

Fleet: 25 vessels

• Mar: Sale of OSCV

newbuild

• Mar: Signed OSCV

newbuild contract

• Mar: Chartered

Skandi Hawk

2013

Fleet: 26 vessels

• Feb: Signed OSCV

newbuild contract

• Feb: Chartered

Harvey Deep-Sea

• Mar: Sale of

Geobay

• Jun: Delivery of

Skandi Bergen

• Aug: Signed

newbuild contracts for 4 x PLSVs

• Nov: Chartered

Normand Reach

• Global ISO

recertification

2014

Fleet: 28 vessels

• Jan: Delivered

Skandi Bergen to new owners

• Mar: Chartered

Ross Candies

• Mar: Chartered

Chloe Candies

• Nov: Delivered

Skandi Skolten to new owners

DOF Subsea employees

200 400 600 800 1 000 1 200 1 400 1 600 1 800 2 000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Number of employees

Employees

2015

Fleet: 24 vessels

• Feb: Delivered

Skandi Aker to new

• wners
• Mar: Delivery of

Skandi Africa

• May: Acquired

Skandi Hawk

• June: Sale of

Skandi Arctic

• Nov: Sale of

Skandi Inspector * As per 31st March 2016

2016

Fleet: 23 vessels

• Jan: Delivered

Skandi Protector to new owners

• Apr: Delivery of

Skandi Açu

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Modern high-end fleet

• Majority of the fleet delivered after 2007
• Modern fleet with a value adjusted average fleet age of approx. 5.9
• High-end vessels capable of a wide scope of worldwide operations

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Business management

• Global business management system accredited by DNV to:
• Business Management System

ISO 9001: 2015

• Health and Safety System

OHSAS 18001:2007

• Environmental Management System

ISO 14001:2015

• Sustainability reporting according to Global Reporting Initiative G4 implemented
• Achieved Carbon Disclosure Project reporting result of 99B (report for 2014)
• IMCA International Contractor membership
• ISO recertification in 2016

2009

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HSEQ key statistics

• Substantial HSE-improvement since 2005
• Substantial increase in activity level measured by total man-hours

1 000 000 2 000 000 3 000 000 4 000 000 5 000 000 6 000 000

• 2,0

4,0 6,0 8,0 10,0 12,0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Man-hours Frequence: Incident / 1 000 000 man-hour

DOF Subsea HSEQ-statistics

LTI TR Man-hours

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DOF Subsea – Projects

• DOF Subsea has built a global

presence over the last 10 years

• DOF Subsea has developed the

project business gradually

• Increased project activity and

complexity driving growth

• IMR focused operations
• Project business going forward
• Gradually increase the

complexity of work done

• Build a larger project

back-log with focus on IMR

• Mix between owned and

chartered in vessels

* According to internal Management reporting

Operating income by segment

2013 2014 2015 Subsea projects 4 971 5 187 4 810 Chartering of vessels 1 609 2 236 2 442 Total 6 580 7 422 7 252

1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 Chartering of vessels Subsea projects

Q1 2014 Q1 2015 Q1 2016 Subsea projects 1 035 1 086 904 Chartering of vessels 496 570 502 Total revenue 1 531 1 656 1 406

200 400 600 800 1 000 1 200 1 400 1 600 1 800 Chartering of vessels Subsea projects

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Contract coverage

• DOF Subsea Group has a good cash flow visibility over the next 3-5 years
• By end-March 2016 the total back-log (incl. options) was approx. NOK 38 billion
• Firm contracts counts for approx. NOK 20 billion
• Options counts for approx. NOK 18 billion

* Figures based on remaining back-log from beginning of April 2016

2016 2017 2018 2019 2020 2021 2022 2023 Firm 20 17 15 12 9 7 5 4 Option 18 17 17 16 15 15 14 13

• 5

10 15 20 25 30 35 40 NOK billion 14

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Financials

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Condensed profit & loss (IFRS 11)

• Operating income was NOK 1 343 million in Q1 2016, down from NOK 1 558 million in Q1 2015
• EBITDA (excl. gain on sale of assets) was NOK 425 million in Q1 2016, up from NOK 373 million in Q1 2015
• EBIT (excl. gain on sale of assets) was NOK 84 million in Q1 2016, down from NOK 237 million in Q1 2015

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Condensed balance sheet (IFRS 11)

• From year end 2015 non-current assets has increased to NOK 15 543 million from NOK 15 417 million
• From year end 2015 total receivables has decreased to NOK 1 400 million from NOK 1 560 million
• From year end 2015 cash and cash equivalents has decreased to NOK 1 300 million from NOK 1 464 million
• Total liabilities as per 31st March 2016 was NOK 12 165 million
• The net interest bearing debt as per 31st March 2016 was NOK 9 474 million
• The book equity was NOK 6 078 million giving a book equity ratio of 33.3 % to total assets as per 31st March 2016

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Quarterly performance (excl. asset sales)

* According to internal Management reporting

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

• 500

1 000 1 500 2 000 2 500

Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016

NOK million Operating income EBITDA EBITDA margin

NOK million

Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Operating income 1 223 1 384 1 354 1 288 1 225 1 679 1 804 1 871 1 530 1 963 1 904 2 025 1 656 1 962 1 991 1 642 1 406 EBITDA 411 470 489 417 329 471 595 550 502 543 552 502 458 515 553 516 456 EBITDA margin 33,6% 34,0% 36,1% 32,4% 26,9% 28,1% 33,0% 29,4% 32,8% 27,7% 29,0% 24,8% 27,7% 26,2% 27,8% 31,4% 32,4% Current assets 2 782 2 962 2 704 2 612 3 077 3 319 3 119 3 470 3 247 3 252 2 998 4 223 3 414 3 414 3 674 3 752 2 900 Non-current assets 16 455 16 230 16 056 16 012 16 043 16 344 16 330 16 340 16 012 16 151 16 215 15 796 16 726 16 578 16 447 16 818 17 652 Total assets 19 238 19 192 18 760 18 624 19 120 19 663 19 450 19 810 19 258 19 403 19 213 20 019 20 140 19 992 20 121 20 570 20 552 Current liabilities 2 543 2 495 2 260 1 989 2 000 2 805 2 808 3 167 3 470 3 741 3 607 4 505 4 139 4 577 4 492 3 650 2 991 Non-current liabilities 11 723 11 735 11 439 11 534 12 051 11 862 11 474 11 427 10 126 9 701 9 668 9 402 9 924 9 009 9 988 11 228 11 482 Equity 4 970 4 963 5 061 5 102 5 069 4 996 5 167 5 216 5 662 5 962 5 938 6 112 6 077 6 405 5 641 5 692 6 078

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Debt maturity profile

DOFSUB05 (Repaid)

• NOK 750 million
• Maturity April 2016

DOFSUB07

• NOK 1 300 million
• Maturity May 2018
• The figures reflects amortization and balloon payments on debt drawn.
• Debt maturity profile excludes approx. NOK 0.4 billion in payments to Eksportfinans which is serviced by a corresponding

amount of restricted cash.

• The bond loan DOFSUB05 was repaid end-April 2016

Debt maturity profile DOF Subsea AS level, 2016E – 2020E

• 500

1 000 1 500 2 000 2 500 3 000 2016E 2017E 2018E 2019E 2020E 2021E Thereafter Bond Loan Bank Debt Balloons 19

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Risk mitigating factors

Risk mitigating factors

Global presence provide access to more market

• pportunities

Strong back-log provides stable earnings Diversified blue- chip customers reduce counterparty risk Value added services provide increased earnings potential Modern, high- end fleet provides safe collateral Strong bank and investor relationships provide access to credit Spare leveraging capacity on existing fleet Recent sale of vessels confirm values

Weaker subsea market

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Outlook

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Challenging fundamentals for subsea activity

• Demand
• Weak and volatile oil price
• Continued cost focus by oil companies
• Reduced offshore E&P spending
• Uncertain project timing
• Counterpart risk
• Increased focus on newer, technologically

advanced and flexible vessels and engineering capabilities

• DOF Subsea owns the world’s most

sophisticated fleet and has a global

• rganization

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Challenging fundamentals for subsea activity

• Supply
• Fleet of subsea vessels increasing
• Several vessels in lay-up
• Number of subsea contractors to be reduced

Weaker market conditions

Reduced demand Increasing supply

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Challenging fundamentals for subsea activity

Weak subsea market and pressure

• n margins

Lower IMR activity globally Lower rig activity and delayed field development Reduced E&P spending Low and volatile oil price Number of niche subsea players Improved access to qualified personnel Increased supply of subsea vessels

DOF Subsea has mitigated the weaker fundamentals through a global footprint, a diversified portfolio of clients, strengthened balance sheet and a back-log of NOK 38 billion

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Thank you!