DOF Subsea Group Quarterly Presentation Q2 2017 DOF Subsea - - PDF document

Quarterly Presentation Q2 2017

DOF Subsea Group

DOF Subsea highlights

2 Attractive long-term market fundamentals supporting continued demand for subsea offshore solutions A true global subsea IMR operator with strong project and execution capabilities Unique strategic position providing integrated life-of-field subsea services State-of-the-art subsea vessels, the world’s 4th largest ROV fleet and 1 288 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

1 2 3 4 5 6

DOF Subsea

DOF Subsea Group at a glance

3

2005

DOF Subsea established

NOK 1.2bn1)

Revenues Q2’17

1 2882)

Subsea employees worldwide Q2’17

NOK 17.7bn

Firm backlog Q2’17

263)

Subsea vessels

714)

ROVs

Modern

State-of-the-art asset base

Integrated

Supplier of subsea

• ffshore services

1) Note: According to management reporting 2) Note: Excluding marine crew 3) Note: Including newbuilds Skandi Olinda and Skandi Recife and chartered-in vessels Harvey Deep Sea and Skandi Chieftain 4) Note: Including 2 AUVs and 2 ROVs on order

DOF Subsea

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

Owned vessels Chartered-in vessels Total

337 553 563 897 1014 1246 1492 1354 1667 1858 1566 1278 1288 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q2 2017 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 Delivery of two newbuilds entering into long-term contracts 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

DOF Subsea 4

2008 2014 2016 2017

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

# of vessels # of FTEs

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

2013

SWG Offshore

1) Note: Newbuilds not included 2) Note: Marine crew not included

Global footprint

5 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 8 452 8 228 4 297 4

DOF Subsea

1) Note: Number of employees as at Q2’17, excluding marine crew 2) Note: Vessels in operation, including 2 chartered-in vessels (not including newbuilds)

Several major and attractive contracts to commence in 2017

6

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 years options
• 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

DOF Subsea 7

DOF Subsea Group Long-term Chartering1)

Revenues Q2’172) NOK 331 million EBITDA Q2’173) NOK 273 million ~82% margin Firm backlog4) NOK 13.4bn

1) Note: Long-term chartering comprises 5 PLSVs in operation, 2 PLSVs under construction, Skandi Acergy and Skandi Patagonia 2) Note: According to management reporting 3) Note: According to management reporting, and excluding gains from sales of assets 4) Note: Firm backlog as at end of Q2’17 5) Note: Including 2 chartered-in vessels

2 newbuilds Q2’17 7 vessels in

• peration Q2’17

Long-term charters Vessel capabilities Capex spending

Subsea IMR Projects

Revenues Q2’172) NOK 868 million EBITDA3) Q2’17 NOK 127 million ~15% margin Firm backlog4) NOK 4.3bn

1 288 Employees Q2’17 15 vessels in

• peration5) Q2’17

Engineering capabilities Framework agreements Opex spending

8

Numerous projects completed 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 unrivaled 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

 Goliat Field support ENI (2016)  Saipem CRX/Nene (2014)  Call-off for Light Construction Services and Seabed Survey Services Statoil (2012-2015)  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)  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)  Knarr Mooring Project Teekay (2013-2014)  Banff Re-instatement Project Teekay (2013-2014)

DOF Subsea

Selected contracts in backlog

9

Location Client Scope Commencement Duration Angola ENI Angola IMR 2017 16 months + 12 months Eastern Canada Husky Energy IMR 2017 10 years + 10 years Prelude Australia 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 Phillips IMR 2011 8 years + 13 years

Subsea IMR Projects

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

• f the major suppliers of

IMR services North Sea / Atlantic Leading supplier of mooring services in the North Sea and West Africa Asia Pacific Leading supplier of IMR services in the region DOF Subsea

DOF Subsea holds a leading position in the subsea IMR market through its global presence and integrated solutions offering

10 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 benefits from offering an

integrated engineering and vessel solution

Local Multi-regional Global Dayrate / Support services Small to medium EPCI contracts Larger EPCI contracts

Source: ABGSC





= Chapter 11 / financial distress

       

Geographies Capabilities

Illustrative DOF Subsea

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

11

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

7 vessels in

• peration

2 contracted newbuilds NOK 13.4bn firm backlog per Q2’17

Long-term Chartering

DOF Subsea

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

Key financials1)

12 Revenue EBITDA2) 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 NOK million NOK million NOK billion

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

DOF Subsea

2nd Quarter 2017

Highlights Q2 2017

14

• The Norwegian-built PLSV Skandi Buzios, owned by JV with TechnipFMC, commenced her long-term charter contract with Petrobras on 13 April 2017
• In April, DOF Subsea purchased the remaining shares in Canadian Subsea Shipping Company AS, and in May, Canadian Subsea Shipping Company AS took delivery of a

newbuild vessel, Skandi Vinland. The vessel commenced a 12-year bareboat charter contract with DOF Subsea Canada in July, and the vessel will be utilised on a 10-year IMR contract with Husky Energy off the East Coast of Canada

• In the North America region, DOF Subsea extended the charter party for chartered-in Jones Act compliant MPSV Harvey Deep Sea until the end of 2018, plus two one-year

extension options

• The North America region was awarded for Harvey Deep Sea securing 70% contract coverage and NOK 150 million in backlog for the vessel through Q1 2018
• Skandi Chieftain was awarded a 5-month contract in Canada with commencement in June 2017
• The Asia Pacific region was awarded a diving contract, securing utilisation for Skandi Singapore
• Skandi Skansen was awarded contracts on the UKSC and in the Norwegian Sea securing utilisation through most of Q3 2017
• Geosund was awarded contracts to take part in a series of campaigns for a major operator undertaking trenching and survey support activities in the Norwegian Sea region,

securing 50 days’ utilisation until mid-August 2017

• DOF subsea was awarded a contract in the Mediterranean by TMPC to undertake the pipeline inspection on the TMPC's Pipeline System in Q3 2017. DOF Subsea will deploy the

survey vessel Geosund

• DOF Subsea was awarded a subsea oil field support project offshore Newfoundland for a Canadian operator. Skandi Neptune will be utilised on the project
• DOF Subsea has been awarded a contract for Skandi Constructor by Siemens on the Galloper Offshore Wind Farm Project in the North Sea. The contract secures utilisation until

the end of the year

• DOF Subsea announced that Fugro has extended the firm period of hire for the Skandi Carla time charter contract until end of October 2019
• In Brazil, Petrobras has extended the contract for Skandi Salvador by 6 months from August 2017
• In Asia Pacific and Atlantic, DOF Subsea has been awarded several contracts and work under existing frame agreements, securing utilisation of the vessels Skandi Singapore,

Skandi Hercules and Skandi Neptune in Q3 and into Q4 2017.

• In the North America region, DOF Subsea has been awarded several contracts for the Diving Support Vessel Skandi Achiever in the Gulf of Mexico and Trinidad and Tobago. The

contracts secure utilisation of the vessel until mid October 2017

Subsea IMR Projects Long-term Chartering

• The shareholders have concluded to await an improvement in stock market conditions before initiating an IPO
• During the quarter, DOF Subsea secured financing and took delivery of the newbuild Skandi Vinland

Financing

DOF Subsea

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

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

Quarterly performance1)

DOF Subsea 17

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 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 Q2 2017 EBITDA margin NOK million Operating income EBITDA EBITDA margin

NOK million 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 Q2 2017 Operating income 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 1 199 EBITDA 471 595 550 502 543 552 502 458 515 553 516 456 510 447 320 279 400 EBITDA margin 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% 33,4% Current assets 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 2 595 Non-current assets 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 18 428 Total assets 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 21 023 Current liabilities 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 3 010 Non-current liabilities 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 11 942 Equity 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 6 071 Total equity and liablilites 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 21 023

Debt maturity profile

DOF Subsea 18

Debt maturity profile, 2017E – 2021E

• 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

The figures reflect amortisation and balloon payments on outstanding debt

Backlog1)

DOF Subsea 19

As at 30 June 2017, the Group’s firm contract backlog was NOK 17.7 billion

2017 2018 2019 2020 2021 Thereafter Option 0,3 0,8 0,9 0,7 0,8 15,9 Firm 1,7 2,5 2,6 2,4 2,0 6,5 Total 2,0 3,3 3,5 3,0 2,8 22,4 2,0 3,3 3,5 3,0 2,8 22,4

• 5,0

10,0 15,0 20,0 25,0 NOK billion

1) Note: Figures based on remaining backlog as at end of Q2’17 2) Note: Contract backlog excludes master service agreements (MSAs) within the Subsea IMR Projects segment – only confirmed POs are included in the backlog

Modern high-end fleet

Majority of the fleet delivered from 2007 and onwards Modern fleet with a value adjusted average fleet age of 6.0 years High-end vessels, capable of a wide scope of worldwide operations

DOF Subsea 20

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

Newbuilds 8 % 2007-2015 67 % 2000-2006 25 %

Year of delivery DOF Subsea fleet

• 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

Thank you!