DOF Subsea Group Q4 2019 highlights The operating revenue for the - - PowerPoint PPT Presentation

Quarterly Presentation Q4 2019

DOF Subsea Group

DOF Subsea

2

Q4 2019 highlights

• The operating revenue for the quarter was NOK 1 329 million1), EBITDA was NOK 543 million1) and overall

vessel utilisation was 77%

• During the 4th quarter, the Group recognised an impairment of tangible assets of NOK 203 million1)
• Good operational performance within the Subsea/IMR Project segment during the quarter, with good

vessel utilisation across regions

• The Group secured several contracts in the Subsea/IMR Project segment during the quarter
• Skandi Seven was awarded two contracts for integrated FSV services, project management and engineering in Angola
• Skandi Skansen secured a contract in Ghana, where she delivered mooring refurbishment and installation
• Fugro extended the contract with Skandi Carla for another year
• Skandi Neptune was awarded a 3-year frame agreement for IMR and light construction in Trinidad
• Skandi Hercules and Skandi Singapore were awarded contracts in New Zealand and South East Asia, respectively, securing 130 vessel days in Q1

2020

• The Group is making progress with its stakeholders, including a constructive dialogue with banks and

bondholders in order to find a long-term financial solution

1) Note: Figures according to management reporting

DOF Subsea

3

DOF Subsea Group at a glance

2005

DOF Subsea established

NOK 1.3bn1)

Revenues Q4’19

1 1812)

Subsea employees worldwide Q4’19

NOK 12.8bn

Firm backlog Q4’19

273)

Subsea vessels

74

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 chartered-in vessels Harvey Deep-Sea, Harvey Subsea and Skandi Darwin

DOF Subsea

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

386 9 319 8 305 5 171 5

1) Note: Number of employees as at end of Q4’19 (excluding marine crew,). 2) Note: Vessels in operation as at end of Q4’19, including 3 chartered-in vessels.

Local operating model ensuring on-the-ground responsiveness towards clients’ needs 4

DOF Subsea

5

11 11 13 16 18 21 24 25 26 27 24 21 25 27 27 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q4 2019

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 1181 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q4 2019

Development in number of DOF Subsea Employees1)

Large and global organisation following multiple acquisitions from 2005-2010

More than a decade of structural growth and consolidation

SEMAR Focus on consolidation and streamlining of business operations to improve efficiency and competitiveness in weak market DOF Subsea established following the acquisition

• f Geoconsult. The Company was listed on the

Oslo Stock Exchange 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. Included hired in contractors of 32 from Norskan 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

2019

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

DOF Subsea

6

Key financials1)

Revenue EBITDA2) Firm backlog

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

• 1 000

2 000 3 000 4 000 5 000 6 000 7 000 8 000 2012 2013 2014 2015 2016 2017 2018 2019 NOK million 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 2019 NOK million EBITDA margin

• 5

10 15 20 25 2012 2013 2014 2015 2016 2017 2018 Q4 2019 NOK billion

Segment highlights

DOF Subsea

8

Two business segments

DOF Subsea Group Long-term Chartering1)

Revenues Q4’192) NOK 504 million EBITDA Q4’193) NOK 396 million ~79% margin Firm backlog4) NOK 9.6 bn

1) Note: Long-term Chartering comprises 7 PLSVs in operation, 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 Q4’19 5) Includes 32 contractors hired in from Norskan 6) Note: Including 3 chartered-in vessels

9 vessels in

• peration Q4’19

Long-term charters Vessel capabilities Capex spending

Subsea / IMR Projects

Revenues Q4’192) NOK 825 million EBITDA Q4’193) NOK 147 million ~19% margin Firm backlog4) NOK 3.2 bn 1 181 Employees5) Q4’19 18 vessels in

• peration6) Q4’19

Engineering capabilities Framework agreements Opex spending

DOF Subsea

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

 3 Petrobras ROV Contracts (2019-2021)  ConocoPhillips ROV Services (2019-2024)  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)  Chevron Gorgon IMR Contract (2015-2020)  Shell Malampaya IMR Contract (2014-2021)  Helang FPSO Mooring and Hook-up (2019)  Ehra FPSO Mooring Replacement (2019)  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)

DOF Subsea

10

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

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

9 vessels in

• peration

No contracted newbuild NOK 9.6 bn firm backlog per Q4’19

Long-term Chartering

DOF Subsea

11

Selected long-term contracts

• 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

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

4th quarter 2019

DOF Subsea

13

Quarterly performance1)

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% 45% 200 400 600 800 1 000 1 200 1 400 1 600 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 EBITDA margin NOK million Operating revenue EBITDA EBITDA margin

DOF Subsea

14

Backlog1)

1) Note: Contract backlog includes DOF Subsea’s share of joint venture vessels, but excludes master service agreements (MSAs) within the Subsea/IMR Projects segment – only confirmed POs are included in the backlog

As at 31 December 2019, the Group’s firm contract backlog was NOK 12.8 billion

2020 2021 2022 2023 2024 Thereafter Option 0,32 0,96 1,20 1,25 1,06 13,39 Firm 3,64 2,44 1,91 1,64 1,51 1,70 2 4 6 8 10 12 14 16 NOK Billion Firm Option

DOF Subsea

15

Modern high-end fleet

• Modern fleet with a value adjusted average fleet age of 6.01) years
• High-end vessels, capable of a wide scope of worldwide operations

1) Note: Excluding chartered-in vessels, and as at the end of Q4’19

Skandi Vinland, CSV built 2017 Skandi Buzios, PLSV built 2017 Skandi Recife, PLSV built 2018 Skandi Olinda, PLSV built 2019 2000-2006; 6 2007-2012; 12 2013-2019; 6

Year of delivery DOF Subsea fleet1)

• 2,0

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

Fleet age

Average fleet age Value adjusted fleet age

DOF Subsea

16

Focus on sustainable operations

• Segment-leader regarding sustainability reporting and

score

• DOF’s total ESG score1 ranks with the top 10 of 100

largest companies2 on OSE

• The Group’s ‘Safe the RITE way’ program creates the

basis for safeguarding our people and the environment

• Continue to improve the Group’s standard to align

with UN Sustainable Development Goals

Sustainability review: DOF in top 10 again

For a second year in a row, DOF’s total ESG score* ranks with the top 10 of 100 largest (by market cap) companies on Oslo Stock

• Exchange. DOF’s score of 3.2 is well above

the “energy sector” average of 0.986.

Sustainable operations, 5 years of GRI reporting

Annual DOF Sustainability report 2018, according to the GRI guideline. The DOF Sustainability Report for 2018 is available at: www.dof.com/Sustainability

ECO Advisor, a marine DSS

Begun in 2019, together with industry leaders including Kongsberg, DOF is developing a proactive, intelligent, and dynamic decision support system (DSS) for optimal vessel operations, giving fuel- and maintenance- reductions. The DSS will be a gamechanger in how marine operational decisions are made by providing more accurate, timely, and easy consumable information to decision makers. The project is funded through sponsorship and support from Innovation Norway.

1) Scoring done by The Governance Group 2) Based on market capitalisation

Appendix

DOF Subsea

18

Condensed profit & loss1)

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

DOF Subsea

19

Condensed balance sheet1)

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

DOF Subsea

20

DISCLAIMER

This presentation by DOF Subsea AS is designed to provide a high-level overview of aspects of the operations of the DOF Subsea AS

• Group. The material set out in the presentation is current as at 21 February 2020.

This presentation contains forward-looking statements relating to operations of the DOF Subsea AS Group that are based on management’s own current expectations, estimates and projections about matters relevant to DOF Subsea AS‘s future financial

• performance. Words such as “likely”, “aims”, “looking forward”, “potential”, “anticipates”, “expects”, “predicts”, “plans”, “targets”, “believes”

and “estimates” and similar expressions are intended to identify forward-looking statements. References in the presentation to assumptions, estimates and outcomes and forward-looking statements about assumptions, estimates and

• utcomes, which are based on internal business data and external sources, are uncertain given the nature of the industry, business risks,

and other factors. Also, they may be affected by internal and external factors that may have a material effect on future business performance and results. No assurance or guarantee is, or should be taken to be, given in relation to the future business performance or results of the DOF Subsea AS Group or the likelihood that the assumptions, estimates or outcomes will be achieved. While management has taken every effort to ensure the accuracy of the material in the presentation, the presentation is provided for information only. DOF Subsea AS , its officers and management exclude and disclaim any liability in respect of anything done in reliance on the presentation. All forward-looking statements made in this presentation are based on information presently available to management and DOF Subsea AS assumes no obligation to update any forward looking- statements. Nothing in this presentation constitutes investment advice and this presentation shall not constitute an offer to sell or the solicitation of any offer to buy any securities or otherwise engage in any investment activity. You should make your own enquiries and take your own advice (including financial and legal advice) before making an investment in the company's shares or in making a decision to hold or sell your shares.

Thank you