Full Year 2018 Results Presentation March 2019 ADES at a Glance - - PowerPoint PPT Presentation

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Full Year 2018 Results Presentation March 2019 ADES at a Glance - - PowerPoint PPT Presentation

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Full Year 2018 Results Presentation March 2019 ADES at a Glance WHO WE ARE ADES International Holding (ADES or the Group) is a leading oil & gas drilling and production services provider Leading MENA- in the Middle East and

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Full Year 2018 Results Presentation

March 2019

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ADES INTERNATIONAL HOLDING | Full Year 2018 Results Presentation

ADES at a Glance

  • ADES International Holding (“ADES” or the “Group”) is a

leading oil & gas drilling and production services provider in the Middle East and North Africa (“MENA”) focused on creating value for E&P Players in the region

  • Portfolio of services focused on offshore and onshore

contract drilling, workover and production services

  • ADES specializes in acquiring and refurbishing legacy ‘fit

for purpose’ offshore assets which (among other cost- saving measures) enable the Group to offer competitive rates to its clients

  • Backed by a capable in-house refurbishment and

maintenance team, the Group benefits from a highly- skilled and relatively low-cost workforce

  • The Group’s business revolves around providing tailored

solutions and superior service to its clients

  • ADES’s offering is characterized by its commitment to

global industry standards

Leading MENA- based O&G Service Provider Differentiated Low- Cost Business Model Customer-Centric Approach

WHO WE ARE

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ADES INTERNATIONAL HOLDING | Full Year 2018 Results Presentation

10 19 49 75 101 134 158 206 2011 2012 2013 2014 2015 2016 2017 2018 Revenue (USD MN) Brent Crude (USD/bbl)

109 USD/bbl 105 USD/bbl 91 USD/bbl 100 USD/bbl 48 USD/bbl 46 USD/bbl 51 USD/bbl 78 USD/bbl

Activity remains higher due to lower break-even prices in the MENA region than the global average Focus on workover drilling and maintenance, mainly constituting OPEX expenditure, which is typically less cyclical than CAPEX expenditure ADES mainly assesses its potential acquisitions through two methods: ▪ Buy-to-Contract Model – Securing the contract first, then finalising the acquisition of the asset ▪ Contract Acquisition Model – Acquiring chartered assets with on- going contracts Target backlog of 2x net debt – ensuring maintenance of a minimum level of liquidity to pay its contractual

  • bligations at all times

Focus on Low Cost of Production Areas Such as MENA Focus on Workover Drilling & Maintenance Considered Approach to Acquisitions Backlog Management

▼ 53%

Brent Crude

▲ 174%

Group Revenue

▲ 212%

Group EBITDA(1)

2014-18 Resilient Business Model

1EBITDA - Operating profit for the year before depreciation and amortisation, employee benefit provision and other provisions and impairment of assets under construction under construction

Backlog (USD)

7 MN

Backlog (USD)

67 MN

Backlog (USD)

78 MN

Backlog (USD)

117 MN

Backlog (USD)

225 MN

Backlog (USD)

501 MN

Backlog (USD)

427 MN

Resilient Business Model Supported by Lean Cost Structure

Backlog (USD)

1.2 BN

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ADES INTERNATIONAL HOLDING | Full Year 2018 Results Presentation

18 14 13 11 10 7 7 4 4 4 4

8% 7% 5% 15% 16% 11% 11% 9% 18%

ADES ADC Burgan Drilling Sinopec Nabors KDC ZP Arabia Saipem Others

IOCs NOCs Independents ABS ISO Certification Company Pre-Qualifications Memberships

Solid Track Record

Ranked #2 Offshore Jack-Up Driller in MENA (1)

High Profile Client Base

Comprising a diverse range of leading

  • il companies

World Class Qualifications

Adhering to Global best practice

ABS Class Certificate The Group’s

  • perational drilling
  • ffshore fleet is either

ABS certified or currently pending recertification

 ISO 9001:2008 Certification ISO 29001:2012 Certification 

Note (1): By number of active rigs in March 2019; Source: Westwood Global Energy Group 21 March 2019 Note (2) “The number includes MOPU and Jack up Barge Note (3) “Others” is players with < 20 rigs, Source: Westwood Global Energy Group 21 March 2019

  • No. of Rigs

Significant Barriers to Entry

Growing Market Share in KSA and Kuwait Onshore Drilling(2) (2) (3)

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5 ADES INTERNATIONAL HOLDING | Full Year 2018 Results Presentation

To ensure that the Group continues to deliver exemplary safety and health standards, ADES has appointed a top tier HSE consultant to review the Group’s safety procedures and ensure its continued adherence to the highest safety standards.

Robust HSE Policies with Exemplary Track Record

HSE Overview HSE Incident Statistics

2016 2017 2018

Total Working hours (‘000) 2,792 4,343 5,272 Recordable injury rate (200,000 man-hours) 0.40 0.41 0.57 IADC worldwide RECORD incident rate up to date 0.58 0.45 0.68

  • As an oil and gas service provider, ADES is committed to complying

with occupational health, safety and environmental care standards as a sign of its commitment to excellent quality service

  • The HSE Management System provides ongoing identification,

prioritization and control of any risk that may arise. This system establishes a continuous improvement process for the implementation of the HSE policy, leadership expectations and core values

Improve Plan Perform Measure Act

Incident and Injury Free Workplace (IIF)

HSE Management System

The consultants have carried out a preliminary safety culture assessment, which addresses the following topics:

I

A full safety culture assessment through interviews of more than 45 employees from cross section of ADES.

2

Plan IIF sessions in town, for the crews of three select rig sites as well as Cairo office employees in. To be rolled-out in the KSA at a later stage

3

Carry out IIF coaches training which shall be provided to ADES nominated IIF coaches

4

Post-IIF sessions, Offshore unit visits to evaluate IIF measures have been adequately employed

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ADES INTERNATIONAL HOLDING | Full Year 2018 Results Presentation

Markets & Asset Base

ADES Operating Markets

▪ The Group has presence in Egypt, Algeria, Kingdom of Saudi Arabia and Kuwait ▪ Most recently the group expanded its offshore and onshore presence in KSA and entered Kuwait via the acquisition of select assets from Weatherford 1 2 4 3

1 Algeria 2 Egypt 3 KSA 4 Kuwait 5 Other

(1) ADES continues to work towards closing the acquisition of two remaining Weatherford rigs in Algeria, and two rigs in Iraq whi ch is closing imminently in Q1 2019. (2) Refers to ADM 260 rig which is planned to work in Egypt once operational. (3) Refers to ADES I which is currently used for tendering activity in Egypt. (4) The figure does not include the two new-build onshore rigs for which contracts were secured in February 2019.

Total 34

Onshore Rigs

13

Offshore Rigs

1

MOPU

1

Jack-up Barge Country Onshore Rigs Offshore Jack-Up Rigs MOPU Offshore Jack-up Barge

8

(1)

  • 6

1 1 11

(4)

6

  • 12
  • 3

(1)(3)

1

(2)

  • 49 Rigs in 4 Countries
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7 ADES INTERNATIONAL HOLDING | Full Year 2018 Results Presentation

Highly Experienced Management Team

Year Joined ADES Years of Experience

◼ Ph.D. Systems Engineering and Control, Case Western

Reserve University, USA

◼ M.Sc. Electrical Engineering and Control, Faculty of

Engineering, Cairo University, Egypt

◼ B.Sc. Electrical Engineering, Faculty of Engineering,

Cairo University, Egypt

  • Dr. Mohamed Farouk

Chief Executive Officer

27 Years 2012

✓ Senior Vice President, Invensys Operations

Management (Now Schneider Electric)

✓ Director, Global Engineering Excellence Centers

27 Years Ayman Ragai Chief Information Officer 2016 28 Years Aly Makhlouf

International Markets Director

2014 24 Years Ahmed Mohy

Egyptian Market GM

2009 10 Years Hussein Badawy Investor Relations Officer 2016 12 Years Omar Saleh Chief Strategy Officer 2016 14 Years Morcos William Legal Counsel 2015 Project Manager Country Financial Controller Country HR Manager Maintenance Superintendent HSE Superintendent Supply Chain Manager QMS Manager Country Manager Project Manager Country Financial Controller Country HR Manager Maintenance Superintendent HSE Superintendent Supply Chain Manager QMS Manager IT Manager 12 Years Gamal Mohamed Ahmed HR Director 2006 44 Years Mohamed Khalil VP Operations 2012 18 Years Mohamed Saad Maintenance Director 2015 18 Years Mohamed Hegawy Supply Chain Director 2017 33 Years Mahmoud Habashi QMS Director 2013 22 Years Amr Wafik HSE Director 2009 21 Years Ahmed El Khatib Chief Financial Officer 2017 38 Years Shoukry El Sayed VP Projects 2013 IT Manager Country Manager

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8 ADES INTERNATIONAL HOLDING | Full Year 2018 Results Presentation

2018 FINANCIAL REVIEW

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9 ADES INTERNATIONAL HOLDING | Full Year 2018 Results Presentation

2018 Key Highlights – A Transformative Year

Successfully Finalised Two Landmark Acquisitions Entered a New Market and Further Established Position in KSA Increased Total Number

  • f Rigs by: ▲ 2.9x

(#14 to #41) Increased Total Backlog:▲ 3x (US$ 427m to US$ 1.2bn) Backlog /Net Debt: 2.9x

  • vs. min 2.0x

financial policy Further Invested in HSE Culture FY 2018 Revenue: US$ 206m ▲30.4% (vs. FY 2017)

▲57.9% (H218 vs. H1 18)

FY 2018 EBITDA: US$ 101m ▲25.8% (vs. FY 2017) Robust EBITDA Margin: 49.2% Improved Utilisation Rate: 85% in FY 2018 vs 78% in FY 2017 … And Conservative Capital Structure and Exemplary HSE Track Record… … Supported by Industry Leading Operating and Financial Performance… In 2018 ADES Successfully Advanced its Long-term Strategic Ambitions… … Establishing a Robust Platform for Future Growth

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10 ADES INTERNATIONAL HOLDING | Full Year 2018 Results Presentation

Strong Historical Financial Performance

Revenue (US$ m) EBITDA (US$ m / %) Backlog (US$ m) Operating Profit (US$ m / %) Group Equity (US$ m) Net Profit (US$ m / %)

42 71 80 101 40.4% 53.9% 51.0% 49.2%

2015A 2016A 2017A 2018A

225 501 427 1214

2015A 2016A 2017A 2018A

101 134 158 206

2015A 2016A 2017A 2018A 2015-2018 CAGR: 34% 2015-2018 CAGR: 74% 2015-2018 CAGR: 27%

84 105 318 424

2015A 2016A 2017A 2018A

32 51 59 71 28.5% 37.9% 37.3% 34.7%

2015A 2016A 2017A 2018A

26 38 45 75 50 45 25.4% 28.3% 28.3% 36.6%

2015A 2016A 2017A 2018A

Normalised Net Profit

LSE IPO 2015-2018ECAGR: 42% 2015-2018 CAGR: 31% 2015-2018E CAGR: 72%

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11 ADES INTERNATIONAL HOLDING | Full Year 2018 Results Presentation

2.6x 3.2x 0.9x 2.4x

2015A 2016A 2017A 2018A

Prudent Financial Policies

Backlog / Net Debt (x) EBITDA / Net Interest Expense (x) Net Debt / EBITDA (x)

Covenant level: 4.0x Based on Covenant Calculated EBITDA Based on Covenant Calculated EBITDA

2.1 2.2 5.7x 2.9x

2015A 2016A 2017A 2018A Covenant level: 2.0x

9.5x 7.6x 8.4x 6.4x

2015A 2016A 2017A 2018A

✓ The group targets maintaining a minimum Backlog at 2.0x Net Debt ➢ This level has consistently been maintained, supported by the “buy-to-contract” model (i.e. securing contract before finalising the asset acquisition) ✓ In addition, ADES targets Net Leverage at 2.5-3.0x (vs 4.0x covenant) and Gearing (Net Debt / Book Equity) 1.5-2.0x (vs 2.75x covenant) ✓ The group targets to maintain, at all times, a minimum cash on balance sheet at ~10% of annual group turnover for liquidity purposes

Target Financial Policies

Banks Covenant EBITDA – refers to the (Actual EBITDA contributed for the Existing rigs) + (Annualised Revenue for the Newly Acquired Contraced rigs* 35% EBITDA margin *90% utilization factor)

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12 ADES INTERNATIONAL HOLDING | Full Year 2018 Results Presentation

Cash Generation profile

(US$ 000s unless indicated) 2015 2016 2017 2018 Accounts Receivable 16,841 50,789 65,987 100,757 Inventory 7,167 17,777 20,919 52,508 Accrued Revenue 713 17,587 12,976 36,370 Other Receivables: 14,224 14,565 25,798 43,915 Working Assets 38,946 100,718 125,680 233,551 Accounts Payable 14,229 27,916 31,171 37,409 Accrued Expenses & Other Credit Balances 3,370 13,133 13,226 44,405 Working Liabilities 17,598 41,050 44,397 81,814 Net Working Capital 21,347 59,669 81,283 151,737 Change in WC(1) (6,137) (38,321) (21,615) (70,454)

Capital Expenditure(4) & Free Cash Flow(3) (US$ m) Operating Cash Flow(2) pre and post WC (US$ m)

▲ in Working Capital Net Operating Cash Flow (post WC) 40 35 49 27 (4) (39) (25) (67) 2015A 2016A 2017A 2018A (98) (134) (53) (347) (58) (99) (4) (320) 2015A 2016A 2017A 2018A Free Cash Flow Total Capex ’15-’17

(1) Changes in WC Includes changes in accounts receivables, Inventory, Accrued Revenue, other recievables, accounts payable and Accrued Expenses & other credit balances

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ADES INTERNATIONAL HOLDING | Full Year 2018 Results Presentation

INDUSTRY OVERVIEW

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ADES INTERNATIONAL HOLDING | Full Year 2018 Results Presentation 20 40 60 80 100 120

Canada Tar Sands Barents Sea Angola Deepwater Australia US Tight Oil Nigeria Deepwater North Sea Brazil Pre- Salt UAE Egypt Egypt Saudi Arabia UAE Kuwait Saudi Arabia Onshore Offshore

US$/bbl Range

NB: Breakeven prices can vary widely within areas, countries and even basins

38% 22% 19% 10% 5% 4% 2% Middle East North America CIS Africa Asia Pacific

  • S. & Cent. America

Europe

The Middle East Continues to be the Region with the Leading Oil Production and Proven Reserves

Key Market Characteristics

The Middle East is the leading oil-producing region globally with almost 40% of the world’s proven reserves. The sector constitutes a significant share of GDP and is a major source of FDI Distribution of Proven Reserves(1) Distribution of Oil Production(1)

(1) Source: Westwood Global Energy Group, 21 Mar-19

Middle East has the Lowest Extraction Cost Globally

27% 19% 23% 9% 8% 8% 5% 2% Middle East Eastern Europe & FSU North America Asia Africa Latin America Western Europe Australasia

ADES operates in countries characterized by low extraction costs, non harsh environments and the pre-dominance of drilling intensive legacy fields

2018 Average Brent Price: US$ 71.1/bbl

✓ ✓ ✓ ✓

ADES’ current presence

✓ CORE MARKETS

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ADES INTERNATIONAL HOLDING | Full Year 2018 Results Presentation (80%) (60%) (40%) (20%) 0% 20% 40% 60% 80%

7% 22% 28% 36% 49% 50% 55%

(100%) (80%) (60%) (40%) (20%) 0% 20% 40% 60% 80%

Middle East Drilling Industry Has Exhibited Strong Growth While Keeping Utilizations High

(1): Source: Westwood Global Energy Group, 21 Mar-19

Regional Jack-up Rigs Growth & Utilisation Rates(1)

Size of the bubble Jack-up Utilization (Avg. 2018)

Rig CAGR (’08- ‘18) Eastern Europe North America Jack-up Rig Utilisation Rate – Yearly Average

Onshore Rigs Growth & Utilization Rates (1)

Size of the bubble Onshore Utilization (Avg. 2018)

Rig CAGR (’08- ‘18)

The Middle East is the only region to witness rig growth since 2009 and enjoys the highest Jack-up utilization rate

Onshore Rig Utilisation Rate – Yearly Average South America Africa Western Europe Middle East Asia Africa Latin America MENA Eastern Europe North America Western Europe 88% 75% 71% 70% 76% 81% 80% 71% 59% 55% 57% 87% 76% 73% 72% 78% 82% 84% 81% 72% 64% 65% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Global Middle East 61% 47% 55% 57% 59% 57% 55% 46% 39% 43% 45% 55% 48% 49% 50% 50% 50% 54% 49% 49% 53% 50% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Global Middle East 37% 39% 51% 61% 60% 40% 37% 66% Asia-Pacific

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Post-IPO Accomplishments

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17 ADES INTERNATIONAL HOLDING | Full Year 2018 Results Presentation

Transaction Highlights

Asset

  • 3 ultra-shallow offshore drilling jack-up rigs

Location

  • KSA

Current Charterer

  • Saudi Aramco

Purchase Price

  • US$ 83m (75% Cash - 25% ADESshares)

Additional Details

  • Deal closed June 2018
  • Three rigs were operational with backlog at closing of $140

million

  • Successfully added additional $150 million of backlog through

contract renewal post closing

  • $60 million expected annual revenue

Transaction Highlights

Asset

  • 31 onshore drilling rigs

Location

  • KSA, Algeria, Kuwait and Southern Iraq

Current Charterer

  • Kuwait Oil Company and Saudi Aramco

Purchase Price

  • US$ 287.5m, paid by a combination of cash

and secured debt instruments

Additional Details

  • Closed Kuwait, Saudi, & Algeria(1) on November, December, &

February respectively

  • 20 of the acquired 31 rigs were operational with backlog at

closing of c. $700 million

  • Successfully added additional $228 million of backlog through

contract renewals post closing

  • $200 million expected annual revenue

Efficient Execution of Accretive Acquisitions at Attractive Pricing

Nabors Acquisition

(1) ADES continues to work towards closing the acquisition of two remaining Weatherford rigs in Algeria, and two rigs in Iraqwhich is closing imminently in Q1 2019

Weatherford Acquisition

Admarine 655 Admarine 656 Admarine 657

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18 ADES INTERNATIONAL HOLDING | Full Year 2018 Results Presentation

Game Changing Acquisitions Associated with Attractive Values

The new strategic acquisitions have secured ADES’ position as one of the major players in the MENA region The newly acquired rigs are expected to more than double ADES’ annual revenue in 2019

Total Fleet Addition Expected Annual Revenue

(No.Rigs) 56

Attractive Values associated with the Acquisitions

Algeria

6

Southern Iraq

2

Kuwait

12 12

KSA

11 11 3

New markets Existingmarkets

Geographic Distribution of the Acquired Fleet

ExistingRigs NewAcquisitions 34 34 15

3 12 15 31 3 34 Onshore Offshore Total

49

(1)

158 60 200 FY17 New Acquisitions

Nabors Weatherford

260

Acquisition consideration was executed on accretive EV/EBITDA multiple Diversified backlog with long-term revenue visibility Entry to the onshore gas drilling market in KSA Entry to very exclusive market with high barriers to entry (Kuwait) Very well distributed asset base Further underpins our position in our existing platforms

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19 ADES INTERNATIONAL HOLDING | Full Year 2018 Results Presentation

Testament to Our Clients’ Confidence in ADES to Consistently Deliver High- Quality Services

February 2019 – New Contracts Secured Through Tendering Activity

Location

  • KSA (2 newly build onshore

rigs)

Current Charterer

  • Aramco

Expected Backlog

  • USD 150 million

Contract Tenor

  • 7 years (5 years + 2-year

extension)

February 2019 – Contract Renewals

Location

  • KSA (6 onshore drilling rigs)

Current Charterer

  • Aramco

Expected Backlog

  • USD 228 million

Contract Tenor

  • 3 years

The Group will order two newly built onshore rigs that meet the contract specifications for a total cost up to USD 45mn

  • Each of the secured contracts has a tenure of seven years versus the KSA average of

3 years

  • Operations are due to commence in the second half of 2019.
  • ADES sees long-term potential for these assets in the Saudi market and ADES

expects to generate a strong return on this investment

  • The six onshore operating rigs in the KSA were acquired in December 2018 as part of

the Weatherford acquisition

  • Due to commence in February 2019 upon expiry of existing contracts
  • The renewals are further endorsement of clients’ confidence in ADES as it scales up

its business across the region

December 2018 – Contract Renewal

Location

  • KSA (Admarine 657)

Current Charterer

  • Aramco

Expected Backlog

  • USD 150 million

Contract Tenor

  • 7 years (5 years + 2-year extension)

Other recent renewals, extensions and new contracts secured

  • The renewal for Admarine 657, which is currently contracted and operating

in Saudi Arabia, is effective after the expiry of its existing contract during Q1 2019

  • The renewed contract has a tenure of seven years versus the KSA average of

3 years

  • ADES now has a long-term contracted visibility, underlining its ability to

consistently sustain its backlog through a customer-centric approach that delivers a tailored service with superior quality and an impeccable safety record

  • During the first quarter of 2019, ADES successfully renewed or extended all expiring contracts across its Egyptian assets. The renewals across its Egyptian assets are, once

again, evidence of ADES’ pristine reputation in its home market that the Group has been able to build over years of excellent service provision

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20 ADES INTERNATIONAL HOLDING | Full Year 2018 Results Presentation

Expansion into Deepwater Drilling

ADVantage – Joint Venture with Vantage Drilling

ADES to provide deepwater drilling services in Egypt’s Mediterranean basin, operating Vantage’s deepwater drilling units Vantage’s drillships to be leased to ADES on a bareboat charter agreement basis

$

Profit Share

Benefits

Vantage to gain access to the attractive Mediterranean basin, optimise access to local workforces and service providers and increase marketability of its ultra-deepwater fleet Enables ADES to generate additional revenue without incurring the significant capital expenditure associated with deepwater drilling, maintaining the Group’s asset-light model

Subsidiary of

Secured Dana Gas Contract

In March 2018, ADES secured a short-term exploration contract with Dana Gas for deepwater drilling services in the Egyptian Mediterranean basin, subcontracted to ADVantage. Key Contract Highlights:

  • One firm well estimated to last for 77 days;
  • Option to extend to a further three wells;
  • Served using Vantage’s Tungsten Explorer.

The contract capitalises on ADES’ pre-qualification in the Mediterranean basin and gives ADES access to the deep drilling market amid significant gas discoveries in Egypt.

Offshore drilling contractor which

  • perates and manages a fleet of

modern, high specification drilling rigs on a worldwide basis.

$

Building on its proven track record of offering exceptional value for money in shallow, non-harsh environments, the Group has extended its reach into deepwater drilling while retaining its low-cost model through a strategic joint venture with Vantage Drilling International

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21 ADES INTERNATIONAL HOLDING | Full Year 2018 Results Presentation

69% 31%

2% 10% 38% 50%

61 53 35 3

  • 197

207 166 54 42 43 42 135 114 87 77 77 78 25

24

417 374 288 134 119 120 67 14

2019 2020 2021 2022 2023 2024 2025 2026 Egypt KSA Kuwait Algeria Total

PETROBEL

Robust Cashflow and Revenue Visibility underpinned by Strong diversified Backlog

Backlog Breakdown by Client

(1) Excluding Algeria (unrated); (2) Assuming 50/50 weighted rating between the sovereign and JV partner credit rating;

88%

Saudi Aramco Kuwait Oil Co. PetroZenima GPC Sonatrach AGIP GUPCO

50% 38% 4.5% 5% 1% 0.4% 0.1%

88% of Backlog is derived from KSA and Kuwait

USD 1.5bn

Backlog Breakdown by Country and Currency

By Country By Segment

Sovereign Credit Rating (as a reflection of NOC risk) JV Partner Credit Rating % of total Backlog (in blue) Total Backlog AA N/R A- N/R B N/R B N/R N/R A- B A- B A-

➢ Sovereign implied weighted average client rating: A-(1) ➢ Sovereign implied w.a. client rating inc. JV Partner: A-(1) (2)

Backlog Runoff (USD mn, of total backlog over forecast period) Expected Backlog Runoff: USD 1.5bn

◼ Onshore ◼ Offshore ◼ KSA ◼ Kuwait ◼ Egypt ◼ Algeria

12% 88%

USD 1.5bn

◼ KSA ◼ Kuwait ◼ Egypt ◼ Algeria

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ADES INTERNATIONAL HOLDING | Full Year 2018 Results Presentation

2017A 2018A 2019E 2020E 2021E 2022E 2023E 2024E 2025E Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 ADMARINE I Egypt ADMARINE II Egypt ADMARINE III Egypt ADMARINE IV Egypt ADMARINE V Egypt ADMARINE VI Egypt ADMARINE VIII Egypt ADMARINE 88 Egypt ADMARINE 261 KSA ADMARINE 262 KSA ADMARINE 266 KSA ADMARINE 655 KSA ADMARINE 656 KSA ADMARINE 657 KSA

Offshore Backlog Overview

Contracted GoodChanceforRenewal OptionalExtension Contractedwith PreviousOwner

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ADES INTERNATIONAL HOLDING | Full Year 2018 Results Presentation

2017A 2018A 2019E 2020E 2021E 2022E 2023E 2024E 2025E Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 ADES 2 Algeria ADES 3 Algeria Rig 155 Kuwait Rig 776 Kuwait Rig 870 Kuwait Rig 871 Kuwait Rig 180 Kuwait Rig 878 Kuwait Rig 808 Kuwait Rig 809 Kuwait Rig 144 KSA Rig 158 KSA Rig 798 KSA Rig 157 KSA Rig 173 KSA Rig 174 KSA Rig 040 KSA Rig 799 KSA Rig 889 KSA ADES 13 KSA ADES 14 KSA

Onshore Backlog Overview

Contracted GoodChanceforRenewal OptionalExtension Contractedwith PreviousOwner

Newly Build Assets

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Post - Acquisitions Strategy

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ADES INTERNATIONAL HOLDING | Full Year 2018 Results Presentation

Hatem Soliman

Board Member

  • 37 Years Executive management with Schlumberger

Asset Integration Program

Solid Integration

By Tier 1 Consultant Group Improving Our Value Delivery

Internal assessments and external benchmarking to devise integration plan for the company as a whole focusing on

Organization & People Change Management

Integration

Systems & Procedures Key Objectives

Realize "synergies" & value creation opportunities. Create a common culture and bind key people. Design and build the new

  • rganization.

Continue day-to-day business. Assess Design Deliverables Plan Implement

Strengthen ADES Organization

Ihab Gueneid

Country Director

  • 35 Years Experience
  • Executive management positions

with Schlumberger & ADC

Mohamed Merad

Head of Integration

  • 21 Years Experience
  • Executive Management

experience with SLB in Saudi Market

Norbert Heitmann

Head of Operational Excellence

  • 35 Years Experience
  • Extensive Well Construction

Knowledge, leading Industry innovation

Steve Weisl

Head of Performance Excellence

  • 30 Years Experience
  • Senior Operational Management

with Transocean & Seadrill

Billy Mitchell

Training & Competence Manager

  • 40 Years Experience
  • Global training management with

Transocean & WDI

Paul Belliss

HSE Manager

  • 40 Years Experience
  • Proven HSE & Engineering

experience with BP & BG

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ADES INTERNATIONAL HOLDING | Full Year 2018 Results Presentation

Focus on Organic Growth

Post-acquisition, we will focus on organic growth, using our well- distributed asset base to enter into competitive contract bidding across the region and leveraging the following

Tender Activity

Unutilized Rigs Existing Platforms across footprint Pre-qualifications across MENA

drilling while retaining its low-cost model through strategic agreements

ADES to provide deepwater drilling services in Egypt’s Mediterranean basin, operating Vantage’s deepwater drilling units with Vantage’s drillships to be leased to the JV “ADVantage “on a bareboat charter agreement basis

Agreement with a subsidiary of

Asset-Light Model

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ADES INTERNATIONAL HOLDING | Full Year 2018 Results Presentation

  • Evaluate proposed

acquisition

  • pportunities

IPO of ADES

Smart Execution Evaluating Acquisitions and Backlog Renewal

Roadmap to Growth

  • Signed Definitive

Acquisition Agreement 31 onshore drilling rigs – Weatherford (KSA, Algeria, Kuwait and Southern Iraq)

  • Finalised Nabors

Acquisition 3 operating offshore jack-up rigs (KSA)

  • Extensive integration

plan - Restructure the new business for a streamlined integration with the Group’s newly acquired assets

  • Incorporate newly

acquired assets within governance to safeguard the interests

  • f all our stakeholders
  • Working with top-tier

consultants for a seamless Integration as well as the enhancement of Group’s HSE and Governance framework

  • In the medium-term

ADES’ is expected to generate strong cash- flows supporting the distribution of dividends

  • ADES will continue to

grow organically by participating in accretive tenders and growing its backlog

  • Capitalise on increased

tendering capacity through strategic agreements with leading shipyards

  • Secured Standby

Credit Facility SAR 525 million (US$140 million) from Alinma bank

Integration & Governance Organic Growth  Dividends

  • Secured Syndicated

Credit Facility US$450 million - arranged by the Bank

  • f America Merrill

Lynch and the EBRD

Market Sentiment

  • Positive Market

Sentiment drives management’s decision to IPO

  • Participated in

Competitive processes for promising tenders, which led to Nabros and Weatherford acquisition) while consistently renewing Group backlog

  • Acquisitions resulted

in:

  • USD 1.2bn of

additional backlog

  • USD 260mn of

additional revenue

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ADES INTERNATIONAL HOLDING | Full Year 2018 Results Presentation

Key Takeaways

Leading Market Position with Significant Barriers to Entry 2 Resilient Business Model Supported by Lean Operating Cost Structure 1 Track Record of Value-enhancing Acquisitions at Attractive Prices 4 Robust HSE Policies with Exemplary Track Record 6 Strong Corporate Governance and Highly Experienced Management Team 7 High Quality Client Relationships, Robust Contracts and Predictable Cash Flows Underpinned by Strong Backlog 3 Prudent Financial Policies and Conservative Capital Structure 5

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ADES INTERNATIONAL HOLDING | Full Year 2018 Results Presentation

Appendix

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ADES INTERNATIONAL HOLDING | Full Year 2018 Results Presentation

Income Statement

In USD unless otherwise stated FY 2018 FY 2017 YoY Change Total Revenues 205,563,390 157,590,031 30.4% COGS (Exc. Depreciation)

  • 79,656,871
  • 57,897,224

COGS / Sales, % 38.8% 36.7% Gross Profit 125,906,519 99,692,807 26.3% GPM, % 61.2% 63.3% SG&A (Exc. Depreciation)

  • 23,585,405
  • 18,795,499

25.5% % of Revenue 11.5% 11.9% Impairment of Accounts Receivable

  • 1,250,607
  • 579,115

EBITDA 101,070,507 80,318,193 25.8% EBITDA Margin, % 49.2% 51.0% Total Depreciation

  • 28,235,346
  • 20,663,710

Provisions

  • 1,589,053
  • 898,464

Operating profit 71,246,108 58,756,019 21.3% EBIT Margin, % 34.7% 37.3% Interest Expense

  • 31,472,518
  • 16,550,209

Interest Income 2,738,844 7,015,552 Other (expense)/ income

  • 1,602,982

821,475 Bargain Purchase Gain 44,377,441

  • IPO expense
  • 5,063,369

Transaction Expenses

  • 5,617,088
  • Other taxes
  • 295,960
  • 1,573,448

EBT 79,373,844 44,591,818 78.0% EBT Margin, % 38.6% 28.3% Income Taxes

  • 3,788,784
  • 17,881

Tax Rate, % 4.8% 0.0% Net Profit 75,585,060 44,573,939 69.6% Net Profit Margin, % 36.8% 28.3% Minority Interest

  • 254,222

Net Profit attributable to the Equity Parent 75,330,838 44,573,939 69.0%

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ADES INTERNATIONAL HOLDING | Full Year 2018 Results Presentation

Balance Sheet

In USD unless otherwise stated Dec-2018 Dec-2017

Non Current Assets Net Fixed Assets 710,704,139 322,441,974 Intangible Assets 456,189 544,541 Available for Sale Investments 2,184,382 1,950,000 Total Non Current Assets 714,547,296 324,936,515 Current Assets Cash & Cash Equivalents 130,875,239 136,964,417 Accounts Receivable 100,757,512 65,987,303 Accrued revenue 36,369,649 12,975,535 Advance Payments to Suppliers 5,437,050 6,027,286 Due from Related Parties 43,915,642 305,615 Prepayments and Other Receivables 377,345 19,770,254 Inventory 52,508,041 20,919,477 Total Current Assets 370,240,478 262,949,887 Total Assets 1,084,787,774 587,886,402 Current Liabilities Long-Term Interest-bearing loans and borrowings 42,258,585 35,911,111 Bank overdraft 2,999,769 21,422,509 Trades and Other Payables 37,409,013 31,170,944 Tax liability 3,040,754 1,118,662 Accrued Expenses 22,807,262 11,869,877 Other Credit Balances 21,598,435 1,355,726 Due to Related Parties 56,106 2,267,344 Dividends Payable

  • 7,149,034

Provision 1,874,654 1,836,000 Total Current Liabilities 132,612,538 114,101,207 Non Current Liabilities Interest-bearing loans and borrowings 510,010,564 155,155,414 End of Service provision 12,331,933 620,083 Total Non Current Liabilities 527,734,070 155,775,497 Total Liabilities 660,346,608 269,876,704 Shareholder Equity Paid-in Capital 43,793,882 42,203,030 Share Premium 178,746,337 158,224,346 Retained Earnings 193,033,967 117,703,129 Merger Reserve (6,520,807) (6,520,807) Legal Reserve 6,400,000 6,400,000 Total Shareholder's Equity 415,453,379 318,009,698 Total Liabilities and Shareholder's Equity 1,084,787,774 587,886,402