DOF Subsea Group DOF Subsea Highlights 1 Attractive long-term - - PowerPoint PPT Presentation

Quarterly Presentation Q1 2017

DOF Subsea Group

DOF Subsea Highlights

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Attractive long-term market fundamentals supporting continued demand for subsea offshore solutions One of the true global subsea IMR operators with strong project and execution capabilities Unique strategic position providing expertise and integrated life-of-field subsea services State-of-the-art subsea vessels combined with the world’s 4th largest ROV fleet and 1,176 subsea employees Strong order intake through the down cycle securing tangible near-term growth and highly attractive financial profile Resilient backlog as backbone for stable operating model - PLSV contracts in Brazil cementing strategic position

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DOF Subsea

DOF Subsea Board considering listing of the Company on Oslo Stock Exchange

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DOF Subsea Group at a glance

3

2005

Established

20 896

NOK million total assets

Modern

high-end fleet and equipment

21

• wned subsea

vessels

3

vessels

• n order

1

vessel

• n charter

69ROVs, 2 ROVs

• n order

First Reserve Corporation (49%)

1 176

employees

DOF Subsea DOF Subsea Holding

(100%)

DOF ASA

(51%)

DOF Subsea

337 553 563 897 1 014 1 246 1 492 1 354 1 667 1 858 1 566 1 278 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2019 11 11 13 16 18 21 24 25 26 27 24 21 25 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2019 Owned vessels Chartered vessels

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 Positioned for profitable growth DOF Subsea Board considering listing of

the Company on Oslo Stock Exchange Large and global organisation following multiple

acquisitions from 2005-2010

2010

Century Subsea Covus Subsea CSL

2005

More than a decade of structural growth and consolidation

4

2008 2014 2016 2017

Development in # of Subsea Employees Development in # of vessels

# of vessels # of FTEs

SEMAR Awarded four PLSV long-term contracts in conjunction with TechnipFMC

2013

SWG Offshore

DOF Subsea

Global footprint

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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

311 8 412 7 187 2 266 5

DOF Subsea

Several major and attractive contracts to commence in 2017

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ENI Angola Jan 2017

• IMR contract offshore Angola
• 16 months + 3x4 months
• ptions
• Scope comprising project

management, engineering, supply of vessels and ROVs

• Long-term charter with Petrobras
• 18 months + 18 months options
• On contract with Petrobras since

2010

• Vessel co-owned on a 50% basis

through joint venture with TechnipFMC

• First-pipe lay vessel built in Brazil
• Long-term charter with

Petrobras

• 8 years + 8 years options
• Vessel co-owned on a 50%

basis through joint venture with TechnipFMC

• Built in Norway
• Long-term IMR contract
• ffshore Eastern Canada
• 10 years + 10 years options
• IMR scope comprising supply
• f new well intervention vessel,

two work class ROVs and personnel

• High strategic importance

through strengthened presence in the Canadian market

• Long-term FLNG IMR contract

awarded in Australia with Shell

• 5 years + 4 year option
• Scope comprising underwater

services and Multi-Purpose Vessel (MSVP) services spanning project management, engineering and supply of vessel and ROVs

Skandi Vitoria Jan 2017 Skandi Buzios Apr 2017 Husky Energy Jul 2017 Prelude FLNG Oct 2017

DOF Subsea

Two business segments

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DOF Subsea Group Subsea IMR Projects Long-term Chartering1)

Revenues 2016 NOK 4.4bn EBITDA2) 2016 NOK 0.9bn ~20% margin Firm backlog NOK 4.3bn4) (NOK 5bn) Revenues 2016 NOK 1.0bn EBITDA 2016 NOK 0.8bn ~80% margin Firm backlog NOK 14bn4) (NOK 13bn)

1) Note: Long-term chartering comprises PLSVs, Skandi Acergy and Skandi Patagonia 4) Backlog as at 31 March 2017 2) Note: Excluding gains from sales of assets 3) Note: Skandi Acu delivered August 2016

• ptions
• ptions

1,176 employees 1 newbuild 15 vessels 5.3 vessels in 20163) 9 vessels by Q1’19 6 vessels in Q1’17

DOF Subsea

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Building a leading subsea projects division for over a decade…

Gradual increase in subsea project activity establishing a global footprint in all key offshore regions − Strong presence in all key regions within Subsea IMR and Mooring operations Building a high quality asset base leveraging unrivaled operating and vessel competence and experience − Flexible vessel capacity through combination of owned and chartered-in vessels

…with a clear action plan to pursue further opportunities

• Continue to increase the scope and complexity of operations

− Expand engineering capacity to position for market upcycle − Further build and strengthen presence in selected geographies

• Strengthen project backlog with core focus on IMR projects

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

 Goliat Field Support (2016)  Saipem CRX/Nene (2014)  Call-off for Light Construction Services and Seabed Survey Services for Statoil (2012-15)  Technip Frame agreement (2012-2015)  ConocoPhillips ROV Services (2012 and onwards)  Freeport McMoran IMR support (2013-2016)  Saipem JSM Export Line support (2014-2015)  ROV Support vessel Petrobras (2011 and onwards)  Bongot Mooring Replacement PTTEP (2017)  Raroa Mooring OMW (2016-2017)  Gina Krog TMRS (2016)  Catcher Mooring Installation Project (2016)  Goliat FPSO Marine Installation (2011-2015)  Lam Son Mooring Installation PTSC (2014)  Knarr Mooring Project (2013-2014)  Banff Re-instatement Project (2013-2014)

Developing competence through numerous projects worldwide

Subsea IMR Projects

DOF Subsea

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Location Client Scope Commencement Duration Angola ENI Angola IMR 2017 18 months + 18 months Canada Husky Energy IMR 2017 10 years + 10 years Prelude Shell Australia IMR 2017 5 years + 4 years Brazil Petrobras Inspection 2016 1 year + 1 year Gorgon, Janz and Wheatstone Chevron Australia IMR 2015 3 years + 2 years Malampaya Shell Philippines IMR 2014 7 years + 3 years Brazil Petrobras IMR 2012 6 years + 4 years Brazil Petrobras IMR 2011 6.5 years + 4 years North Sea Conoco Philips IMR 2011 8 years + 13 years

North Sea / Atlantic Brazil Asia Pacific North America Gradually built up the region, becoming a top three supplier of IMR services in the GoM Strong position being one

• f the major suppliers of

IMR services Leading supplier of mooring services in the North Sea and West Africa Leading supplier of IMR services in the region

Selected contracts and framework agreements

Subsea IMR Projects

DOF Subsea

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

Predominantly day-rate based as DOF Subsea mainly provides vessel services Remuneration Strong long-term contract coverage with a typical duration of more than five years – seven out of eight available vessels on contract Contracts Fleet of high-end and sophisticated vessels

• perating advanced subsea projects with

comprehensive work scope for third parties 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

7 vessels in

• peration

2 contracted newbuilds NOK 14bn firm backlog per Q1’17

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

Long-term Chartering

DOF Subsea

Vessel Built Client Firm end Option end J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D Skandi Patagonia 2000 Jun-25 Skandi Acergy 2008 Aug-19 Skandi Niteroi 2010 Feb-17 Skandi Vitoria 2010 Sep-18 Skandi Africa 2015 Aug-20 Aug-25 Skandi Acu Aug-16 Aug-24 Aug-32 Skandi Buzios Apr-17 Apr-25 Jun-33 Skandi Recife Jun-18 Jun-26 Jun-34 Skandi Olinda Feb-19 Jun-27 Mar-35 Contract overview - Long-term Chartering 2017 2018 2019 2020 2021 Subsea vessel Built year Current client Firm end Option end

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~5.5 years

Average contract coverage

NOK 0.8 bn

EBITDA contribution in 2016

~5.3

Operational vessels in 20161)



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Vessels in operation from Q1’19

• Approx. NOK 6.1bn2) of the Group’s debt against long-term chartered vessels

Under negotiation

1) Note: Skandi Acu delivered August 2016 2) As of Q1’17

Strong contract coverage provides robust backbone for growth

Long-term Chartering

DOF Subsea

Competitive landscape and positioning

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Positioning DOF Subsea

• Improved competitive position for DOF

Subsea when market normalises − multiple competitors have scaled down

• perations or entered financial distress
• Favourable competitive dynamics in

tendering for mid-sized subsea IMR projects − Larger EPCI providers typically invited to tender, however less capable and willing to meet specific project requirements due to relatively small project size − Vessel suppliers typically not invited to tenders due to lack of engineering capabilities

• DOF Subsea reaping benefits from
• ffering an integrated engineering and

vessel solution

IMR / Light Construction SURF Large projects (deepwater) Dayrate / Support services Small to medium EPCI contracts Larger EPCI contracts

 

Illustrative

 = Chapter 11 / liquidation

Source: ABGSC

DOF Subsea

15,5 16 17 21,5 18,9 2012 2013 2014 2015 2016

Key financials | DOF Subsea

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Revenue EBITDA1 Backlog (excl. options)

5 249 6 579 7 422 7 251 5 426 2012 2013 2014 2015 2016 1 799 1 949 2 097 2 041 1 733 2012 2013 2014 2015 2016 NOKm NOKm NOKbn

1) Note: EBITDA excl. profit from sale of non-current assets

DOF Subsea

1st Quarter 2017

Recent Events

• Fleet
• In January, the Group took delivery of the second Norwegian-built PSLV Skandi Buzios. The vessel commenced her long-term charter

contract with Petrobras on 13 April 2017

• In April 2017 DOF Subsea AS purchased the remaining shares in Canadian Subsea Shipping Company AS. Before the transaction DOF

Subsea AS owned 45% of the shares in the company. Canadian Subsea Shipping Company AS owns a newbuild vessel, TBN Skandi Vinland, under construction. The vessel will after delivery be employed under a 12 year bareboat charter contract.

• Contracts
• In Asia Pacific, DOF Subsea was awarded a three-year IMR frame agreement with one of the major Oil and Gas Companies in the region. In

addition, a Safety Case has been secured for Geoholm, and the vessel will be available in the Asia Pacific region from the beginning of Q2 2017.

• In February 2017, Geoholm was awarded a contract by Technip Oceania Pty Ltd, part of TechnipFMC in Australia, for the provision of ROV

and light construction support services for the Shell Prelude FLNG project operated by Shell Australia.

• In January the Atlantic region received a Letter of Award (LoA) from and Oil major for a 16-month IMR contract utilising Skandi Seven. The

duration of the contract is over a year, and contract commencement was in Q1 2017.

• In March the Atlantic region was awarded a contract for mooring and installation of an FPSO in the North Sea on the UK Continental Shelf

(UKCS). DOF Subsea will deploy the Skandi Skansen on the project along with several Anchor Handler vessels owned by the DOF Group.

• In January Petrobras awarded the Brazilian-built PLSV Skandi Vitória an 18-month contract. The vessel commenced the contract in January

2017.

• Finance
• In March, the Group successfully completed the issuance of a new unsecured bond with a face value of USD 175 million and maturity in

March 2022. In relation to the bond issue, the Group repurchased parts of the existing bond DOFSUB07 with maturity in May 2018

DOF Subsea 15

Condensed Profit & Loss (IFRS 11) Q1 2017

• Operating income was NOK 861 million in Q1 2017, down from NOK 1 343 million in Q1 2016
• EBITDA (excl. profit from sale of non-current assets) was NOK 240 million in Q1 2017, down from NOK 495 million in Q1 2016
• EBIT (excl. profit from sale of non-current assets) was negative with NOK 29 million in Q1 2017, down from NOK 154 million in Q1 2016

DOF Subsea 16

Condensed Balance Sheet (IFRS 11) Q1 2017

• From year-end 2016, non-current assets have decreased to NOK 13 349 million from NOK 14 479 million
• From year-end 2016, total current receivables have decreased to NOK 928 million from NOK from NOK 1 108 million
• From year-end 2016, cash and cash equivalents have increased to NOK 1 599 million from NOK 1 062 million
• Total liabilities as at 31 March 2017 were NOK 10 929 million
• Net interest bearing debt as 31 March 2017 was NOK 8 389 million
• The book equity was NOK 5 948 million, giving a book equity ratio of approximately 35% to total assets as at 31 March 2017

DOF Subsea 17

Quarterly Performance

(Excl. profit from sales of non-current assets, and according to management reporting)

DOF Subsea 18

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

• 500

1 000 1 500 2 000 2 500 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 Q2 2016 Q3 2016 Q4 2016 Q1 2017 EBITDA margin NOK million Operating income EBITDA EBITDA margin NOK million 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 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Operating income 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 1 660 1 232 1 128 982 EBITDA 329 471 595 550 502 543 552 502 458 515 553 516 456 510 447 320 279 EBITDA margin 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% 30,7% 36,3% 28,4% 28,4% Current assets 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 3 010 2 742 2 483 2 808 Non-current assets 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 18 206 18 514 18 043 18 087 Total assets 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 21 216 21 256 20 526 20 896 Current liabilities 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 3 022 2 645 2 478 2 444 Non-current liabilities 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 11 864 12 174 11 993 12 503 Equity 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 6 330 6 437 6 055 5 948 Total equity and liablilites 19 120 19 663 19 449 19 810 19 258 19 404 19 213 20 019 20 140 19 991 20 121 20 570 20 551 21 216 21 256 20 526 20 896

Debt Maturity Profile

DOF Subsea 19

• 500

1 000 1 500 2 000 2 500 3 000 3 500 4 000 2017E 2018E 2019E 2020E 2021E Thereafter Bond Loan Bank Debt Balloons

Debt maturity profile, 2017E – 2021E

• The figures reflect amortisation and balloon payments on outstanding debt

2017 2018 2019 2020 2021 Thereafter Options 0,4 0,6 0,7 0,5 0,8 15,1 Firm 2,1 2,4 2,6 2,4 2,0 6,7 0,0 5,0 10,0 15,0 20,0 NOK billion

Firm Options

Backlog

DOF Subsea 20

• Figures based on remaining backlog as at end of Q1 2017
• As at 31 March 2017, the total backlog including options was NOK 36.2 billion
• Firm contract backlog counts for NOK 18.3 billion

Modern High-end Fleet

• Majority of the fleet delivered from 2007 and onwards
• Modern fleet with a value adjusted average fleet age of 5.9 years
• High-end vessels, capable of a wide scope of worldwide operations

DOF Subsea 21

• 1,0

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

Years

Fleet age

Average fleet age Value adjusted average fleet age

Newbuilds 12 % 2007-2015 63 % 2000-2006 25 %

Year of delivery DOF Subsea fleet

Skandi Africa, Ship of the Year 2015 Skandi Acu, PLSV built 2016 Skandi Buzios, PLSV built 2017

Thank you!