dof subsea group sub/ir/2017/dof subsea...dof subsea group at a glance 3 2005 established 20 896 nok...
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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 Exchange7
DOF Subsea Group at a glance
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2005Established
20 896NOK million
total assets(according to management reporting)
Modernhigh-end fleet
and equipment
21owned subsea
vessels
3vessels
on order
1vessel
on charter
69ROVs,
2 ROVs
on order
First Reserve
Corporation (49%)
1 176employees
DOF Subsea
DOF Subsea Holding(100%)
DOF ASA(51%)
DOF Subsea
337
553 563
8971 014
1 246
1 4921 354
1 6671 858
1 566
1 278
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2019
11 1113
1618
21
24 25 26 27 24
21
25
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2019Owned 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
2010Century SubseaCovus 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
BRAZILASIA PACIFIC
Macaé
Rio de Janeiro
Buenos
Aires
Houston
St John’s
Aberdeen
Bergen
Luanda
Singapore
Manila
Melbourne
Jakarta
BruneiKuala Lumpur
Darwin
Perth
3118
4127
1872
2665
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
options
• 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
offshore Eastern Canada
• 10 years + 10 years options
• IMR scope comprising supply
of 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 2017Husky 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
optionsoptions
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 yearsSelected 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 PhilipsIMR
2011 8 years + 13 years
North Sea / AtlanticBrazil Asia PacificNorth America
Gradually built up the
region, becoming a top
three supplier of IMR
services in the GoM
Strong position being one
of 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 OlindaPredominantly day-rate based as DOF Subsea
mainly provides vessel servicesRemuneration
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
operating 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
operation
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 2021Subsea
vessel
Built
year
Current
client
Firm
end
Option
end
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~5.5 yearsAverage contract coverage
NOK 0.8 bnEBITDA contribution
in 2016
~5.3Operational vessels
in 20161)
9Vessels 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
operations 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
offering an integrated engineering and
vessel solution
IMR
/ L
igh
t
Co
ns
tru
cti
on
SU
RF
La
rge p
roje
cts
(de
ep
wa
ter)
Dayrate / Support services Small to medium EPCI contracts Larger EPCI contracts
Illustrative
= Chapter 11 / liquidation
Source: ABGSC
DOF Subsea
15,516
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 4227 251
5 426
2012 2013 2014 2015 2016
1 799
1 949
2 0972 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
EB
ITD
A m
arg
in
NO
K m
illi
on
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
NO
K b
illi
on
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
Newbuilds12 %
2007-201563 %
2000-200625 %
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!