Magseis ASA Q3 2018 30 th October 2018 Transformative technology - - PowerPoint PPT Presentation

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Magseis ASA Q3 2018 30 th October 2018 Transformative technology - - PowerPoint PPT Presentation

Magseis ASA Q3 2018 30 th October 2018 Transformative technology deal Disclaimer This presentation (the Presentation ") has been prepared by Magseis ASA (the The Company makes no representation or warranty, expressed or implied, as to


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SLIDE 1

Magseis ASA

Q3 2018

30th October 2018

Transformative technology deal

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SLIDE 2

This presentation (the “Presentation") has been prepared by Magseis ASA (the “Company” or “Magseis”). The Presentation contains forward-looking information and statements relating to the business, financial performance and results of the Company and/or industry and markets in which it

  • perates.

Forward-looking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words “aims”, “anticipates”, “believes”, “estimates”, “expects”, “foresees”, “intends”, “plans”, “predicts”, “projects”, “targets”, and similar

  • expressions. Any forward-looking statements and other information contained in this

Presentation, including assumptions, opinions and views of the Company or cited from third party sources are solely opinions and forecasts based on the current expectations, estimates and projections of the Company or assumptions based on information currently available to the Company, which are subject to risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development. Important factors may lead to actual profits, results and developments deviating substantially from what has been expressed or implied in such statements. Although the Company believes that its expectations and the Presentation are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in the Presentation. The Company assumes no obligation, except as required by law, to update any forward-looking statements or to conform these forward-looking statements to its actual results. The Company makes no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the Presentation, and neither the Company nor any of its directors, officers or employees shall be liable to you or to any other party for any losses incurred as a result of your or their use of, or reliance on, any information contained in the Presentation. This Presentation does not constitute or form part of, and is not prepared or made in connection with, an offer or invitation to sell, or any solicitation of any offer to subscribe for or purchase any securities, and nothing contained herein shall form the basis of any contract or commitment whatsoever. No reliance may be placed for any purpose whatsoever on the information contained in this Presentation or on its completeness, accuracy or fairness. The information in this Presentation is subject to verification, completion and change. The contents of this Presentation have not been independently verified. The Company’s securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “US Securities Act”), and are offered and sold only outside the United States in accordance with an exemption from registration provided by Regulation S under the US Securities

  • Act. This Presentation should not form the basis of any investment decision.

The Presentation speaks and reflects prevailing conditions and views as of the date of this presentation. It may be subject to corrections and change at any time without notice except as required by law. The delivery of this Presentation or any further discussions of the Company with any recipient shall not, under any circumstances, create any implication that the Company assumes any obligation to update or correct the information herein, nor any implication that there has been no change in the affairs

  • f the Company since such date.

Disclaimer

Source: Magseis
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SLIDE 3

AGENDA

3

Financials Market development and operations Summary Introduction

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SLIDE 4

Highlights Q3 2018

Financial Performance Operational Performance Technology Further growth, backlog and outlook

  • Record Backlog of USD 215 million
  • Confirmed guidance of expected revenue for 2018 of USD 100m (timing risk)

and issue revenue guidance for 2019 of USD 190m-210m

  • Revenue of USD 16.0m and EBITDA of USD -0.5m
  • Net cash flow from operations USD 7.6m
  • Sale of 17.000 nodes and 4 handling systems to Chinese BGP Offshore
  • Establish a technology division capitalising on Magseis’ technological excellence
  • Scaling from one to three crews in operation
  • Delay in South East Asia due to permit issues
Source: Magseis

4

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SLIDE 5

Develop and operate proprietary technology to be applied in seismic acquisition operations Headquarter in Oslo, Norway with

  • ffices in Stockholm, Singapore and

Houston ~200 employees of which ~50%

  • ffshore

Geophysical company founded in 2009 with first operation in 2013 OSE:MSEIS Market Cap USD~160 million Revenue Guidance 2018: USD 100m Node Pool: 14 000 MASS I

Corporate snapshot

5

Source: Magseis

$

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SLIDE 6

AGENDA

6

Introduction Market development and operations Summary Financials

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SLIDE 7

Q3 2018 results - Comprehensive income

7

Source: Magseis In USD thousands Q3 2018 (unaudited)

%

Q3 2017 (unaudited)

%

YTD2018 (unaudited) % FY 2017 (audited

%

Revenue 15 996 28 650 60 279 73 877 Cost of sales 11 084 11 590 30 890 35 701 Research and development 581 494 1 812 2 002 SG&A and other expenses 4 862 2 643 12 545 10 039 EBITDA

  • 531
  • 13 923 48.6

15 032 24.9 26 136 35.4 Depreciation 3 940 4 962 11 505 15 148 Amortisation 191 116 573 463 Impairment 233 EBIT

  • 4 662
  • 8 845 30.9

2 954 4.9 10 292 13.9 Net finance costs 290

  • 1 309

1 792 397 EBT

  • 4 952

10 154 1 162 9 895 Tax 997 493 1 984 3 199 Net income

  • 5 949
  • 9 660 33.7
  • 822

6 696 9.1 Total comprehensive income

  • 5 949

9 660

  • 822

6 696

  • Revenue
  • Deferred 1 month of revenue to Q418 due to delay

in South East Asia for permit issues

  • 1 month transit between jobs in Red Sea
  • Start up in July on Northern Europe job that is still
  • ngoing, which will positively impact revenue
  • Cost of sales & SG&A
  • 3 parallel operations in Q318 with capitalised

mobilisation in South East Asia

  • Scaling up organisation and offshore crew
  • SG&A increase due to corporate activities
  • Depreciation
  • Depreciation capitalised for mobilisation in South

East Asia

  • Finance
  • Treasury activities initiated in Q2 yielding results
  • Unrealised net exchange loss of USD 0.2m in Q318
  • Tax
  • Witholding tax in Saudi Arabia
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SLIDE 8

Q3 2018 results - Balance sheet

8

Source: Magseis
  • Equipment
  • Continue to invest in nodes and handling

systems

  • Other current assets
  • Mobilisation of USD 3.1m
  • Equity ratio of 82.3%
  • In compliance with all covenants
  • Liabilities
  • Senior debt from Export Credit Norway and

Innovation Norway of USD 6.3m @ 4.15% interest (split non-current USD 4.4m and USD 1.9m current)

  • Shell Deep Water R&D funding:

USD 7.3m (contingent liability)

In USD thousands YTD 2018 (unaudited) YTD 2017 (unaudited) YE 2017 (audited)

Equipment and other intangibles

101 140 64 234 74 416

Multi-client library Cash and cash equivalents

33 504 45 427 29 776

Trade receivables

15 743 16 394 9 137

Stock (fuel and batteries)

3 720 908 1 752

Other current assets

5 370 2 964 8 469

TOTAL ASSETS

159 477 129 927 123,549

Share capital

545 438 438

Share premium

178 508 141 486 141,486

Retained earnings and other reserves

  • 47 761
  • 37 149
  • 46,884

TOTAL EQUITY

131 292 104 775 95 040

Obligation under finance lease

181

Other non-current financial liabilities

11 771 13 482 13 049

TOTAL NON-CURRENT LIABILITIES

11 771 13 662 13 049

Trade payables

6 408 4 965 6 010

Current tax liability

889 721 1 111

Other current liabilities

9 116 5 804 8 338

TOTAL CURRENT LIABILITIES

16 414 11 490 15 460

TOTAL LIABILITIES

28 185 25 152 28 509

TOTAL EQUITY AND LIABILITIES

159 477 129 927 123 549

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SLIDE 9

Q3 2018 results - Cash flow

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Source: Magseis
  • Cash flow from operations
  • Positive working capital adjustments as

expected

  • Cash flow to investments
  • Disciplined CAPEX spend for equipment
  • Cash flow to financing
  • Down-payment of debt USD 1.1m
  • Cash position
  • Robust cash position of USD 33.5m

Earnings before tax

  • 4 952

10 154 1 162 9 895 Depr, Amor, Impair

(non cash-effect)

4 012 4 959 11 727 15 405 Depr, Amor, Impair

(cash-effect)
  • 617
  • 1 056
  • 1 319
  • 2 850

Net working capital adjustments 9 165 7 128

  • 6 960

1 708 Net cash flow from operating activities 7 609 21 185 4 609 24 157 Net cash flow from investing activities

  • 9 204
  • 8 796
  • 35 052
  • 44 557

Net cash flow from financing activities

  • 1 069
  • 619

34 171 31 201 Net change in cash and cash equivalents

  • 2 664

11 770 3 728 10 801 Cash balance at the beginning of the period 36 168 33 657 29 776 18 974 Cash balance at period end 33 504 45 427 33 504 29 776

In USD thousands Q3 2018 (unaudited) Q3 2017 (unaudited) YTD 2018 (unaudited) FY 2017 (audited)
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KE KEY FIGU GURES

Q3 Q3 2018

Source: Magseis

16.0

REVENUE

  • 0.5

EBITDA

  • 5.9

NET PROFIT

33.5

CASH BALANCE

$ MILLION $ MILLION $ MILLION $ MILLION $ MILLION

13.9

EBITDA

Q3 2017

28.7

REVENUE

Q3 2017

  • 0.5

EBITDA

Q3 2018

REVENUE

Q3 2018

16.0

10

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SLIDE 11

KEY FIGURES

YTD Q3 Q3 2018

Source: Magseis

60.3

REVENUE

15.0

EBITDA

  • 0.8

NET PROFIT

33.5

CASH BALANCE

$ MILLION $ MILLION $ MILLION $ MILLION $ MILLION

30.7

EBITDA

YTD 2017

69.1

REVENUE

YTD 2017

15.0

EBITDA

YTD 2018

REVENUE

YTD 2018

60.3

11

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SLIDE 12

AGENDA

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Financials Introduction Summary Market development and operations

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SLIDE 13 Source: Magseis
  • Selling 17.000 nodes and 4 handling systems for delivery in 2019
  • To be utilised in Abu Dhabi in relation to the USD 1.6 billion and

6 year seismic program BGP Offshore won, sanctioned by ADNOC

  • Deal won after more than 2 years of collaboration in the Red

Sea with BGP with a rock solid track record with consistent data recovery rate above 99%

  • Enables Magseis to capitalise on its technological excellence

and establish its technology division in addition to data acquisition

Transformative technology deal with BGP Offshore

13

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SLIDE 14 Source: Magseis
  • Artemis Athene completed its S78 survey end of July

and then had 1 month transit and preparation for the commencement of the extension survey

  • Northern Europe operation started early July and will

last until November

  • South East Asia project delayed approx. 45 days due

to permit issues. Project now commenced with some timing risk on revenues

Q3 2018 – three operations in the making

14

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SLIDE 15

Three parallel operations

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  • Fully automated MASS Modular Operation
  • Shallow water - Nodes on a Rope
  • Dual node deployment vessels
  • End client - Major oil Company
  • Operating as a subcontractor
  • Artemis Athene – Into her 24th month in the Red Sea
  • MASS Cable operation – Very rugged seabed terrain
  • Zero to 1100 m water depth
  • Nodes on a rope in shallow water
  • Multi vessel operation
  • End client - National Oil Company
  • Operating as a subcontractor
  • Fully automated MASS Modular Operation
  • ROV & Source vessel chartered on project basis
  • Two Major Oilco’s and one National Oil Company
  • Four different surveys combined into one project
  • Magseis operating as prime contractor

ATHENE Crew 1 MASS Modular Crew 3 MASS Modular Crew 2

Source: Magseis

Marine Autonomous Seismic System

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Strong Market Outlook – Undersupply in 2019

16 120 000 100 000 80 000 60 000 40 000 20 000 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020

Node supply vs expected demand

Source: Magseis
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SLIDE 17

AGENDA

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Financials Market development and operations Introduction Summary

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SLIDE 18

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Transformative BGP deal Capitalise on technological excellence Demand driven market in 2019