DOF Subsea AS - Presentation Q3 2014

Q3 2014 Presentation
DOF Subsea Group
Agenda
In brief
Recent events
Group overview
Projects
Contract status
Financials
Outlook
DOF Subsea Group – In brief
•
Fleet
•
•
•
One of the largest subsea vessel owners in the world
•
Owns and operates a fleet of 23 vessels, plus 5 newbuilds on order
•
In addition 5 vessels on long-term charter
•
The market value of owned vessels in operation is NOK 16 billion, with a value adjusted
age of approx. 5.9 years
Operates 56 ROVs and 12 ROVs and 1 AUV on order
Global organization
• Head office in Bergen
• Regional offices in Australia, Singapore, Norway, UK, Angola, US, Canada and
Brazil
•
Total of 1 764 employees
•
Subsea employees:
1 764
•
Of which offshore engineers and project staff:
1 300
DOF Subsea
Norway
Brazil
Canada
US
UK
Asia Pacific
Angola
358
426
51
138
452
319
20
3
DOF Subsea Group – In brief
2 000
Quarterly figures
40%
1 800
35%
1 600
30%
NOK million
1 400
•
25%
1 200
1 000
20%
800
15%
600
Key figures
10%
400
Back-log incl. options
NOK 33 billion
200
Market value of fleet
NOK 16 billion
-
119 733 714
14.3 %
CAGR
5%
0%
Q3 2011
Number of shares
18.2 %
CAGR
Q3 2012
Operating revenue
Total
Per share
Book equity
NOK 5.9 billion
NOK 49.53
Value adj. equity
NOK 9.0 billion
NOK 75.20
Book equity ratio
30.9 %
Value adj. equity ratio
40.4 %
Q3 2013
EBITDA
Q3 2014
EBITDA margin
* According to internal Management reporting
DOF Subsea
4
Recent events
•
Fleet
•
•
•
Sold the vessel Skandi Skolten to an international buyer, with delivery end 2014
Contracts
•
Several subsea contracts in the Atlantic region, including a contract for two construction projects
offshore West Africa, increasing utilization of the region’s vessels.
•
Several subsea contracts in the North America region, increasing the utilization of the vessels
Skandi Inspector, Harvey Deep-Sea, Chloe Candies and Ross Candies
•
Several contracts awarded in Asia Pacific, including subsea installation and IMR services,
utilizing Skandi Hercules, Skandi Singapore and Skandi Hawk.
•
AKOFS Offshore extended the charter on Skandi Santos with 5 years, firm until Q1 2020
Finance
•
DOF Subsea
Refinancing of Skandi Constructor
5
Group overview
DOF Subsea
Ownership structure
DOF ASA
FIRST RESERVE
CORPORATION
51%
49%
DOF SUBSEA
HOLDING AS
100%
DOF SUBSEA AS
DOF Subsea

Modern high-end fleet and equipment

A workforce of 1 764 employees

23 owned subsea vessels in operation

5 vessels on order

5 vessels on charter

55 ROVs and 1 AUV in operation

12 ROVs and 1 AUV on order

Leading subsea contractor
7
DOF Subsea Group structure
DOF Subsea AS
DOF Subsea
Asia Pacific
DOF Subsea
Atlantic
DOF Subsea
North America
DOF Subsea
Brazil
Engineering
companies
Ship/asset
owning
companies
Management
companies
Singapore
Norway
US
CSL
DOF Subsea
Rederi
DOF
Management
(34 %)
Australia
UK
Canada
Semar (50%)
DOF Subsea
Rederi II
Marin IT
(35 %)
Indonesia
Angola
DOF Installer
(83.66 %)
Malaysia
Arctic
Russia
DOFTECH
(50 %)
Mashhor DOF
Subsea (50%)
Brunei
DOF Subsea
•
DOF Subsea divided into regions, engineering
companies and asset-owning companies
•
Regions, engineering companies and asset-owning
companies are profit centers
•
Head office in Bergen
TECHDOF
(50 %)
DOF Subsea
ROV
8
DOF Subsea - A global subsea player
10
(810)
Bergen
Moscow
Aberdeen
(189)
St. Johns
Houston
5
Cairo
Manila
Malaysia
Singapore
8
Macaé
Angola
Brunei
Jakarta
(20)
Perth
Rio de Janeiro
(426)
1
4
(319)
Buenos Aires
GEOGRAPHICAL FOCUS AREAS
DOF Subsea
9
DOF Subsea timeline
28
18 000
16 000
14 000
12 000
10 000
8 000
6 000
4 000
2 000
-
MV of fleet
24
20
16
12
8
4
0
Number of employees
DOF Subsea employees
NOK million
Number of operated vessels
DOF Subsea fleet evolution
2 000
1 800
1 600
1 400
1 200
1 000
800
600
400
200
0
2005
2006
2007
2008
2009
2010
2011
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Owned vessels
2005 - 2009
Chartered vessels
MV of owned fleet (r.a.)
2010
2011
2012
2013
Q3
2014
Employees
2012
2013
2014
Fleet: From 11 to 18 vessels
Fleet: 21 vessels
Fleet: 24 vessels
Fleet: 25 vessels
Fleet: 26 vessels
Fleet: 28 vessels
• DOF Subsea was established in
2005
• DOF Subsea was listed on the
Oslo Stock Exchange in 2005, and
taken private by DOF ASA and
FRC in 2008
• Established a global footprint,
present in all major offshore oil &
gas regions
• Built a global organization through
organic growth and acquisitions
• Expanded the fleet by taking
delivery of 9 newbuilds
• Jan: Delivery of Skandi
Aker
• Feb: Sale of Geo
Challenger
• Jun: Acquisition of SWG
• Jul: Delivery of Skandi
Vitoria and Skandi
Skolten
• Dec: Delivery of Skandi
Hercules
• JV with Technip
• Developed global
Business Management
System, and achieved
global ISO certification
• Feb: Delivery of Skandi
Niteroi
• May: Sale of
Geosounder
• Jun: Acquisition Skandi
Constructor
• Jul: Delivery of Skandi
Skansen
• Sep: Delivery of Skandi
Singapore
• Mar: Sale of OSCV
newbuild
• Mar: Signed OSCV
newbuild contract
• Mar: Chartered Skandi
Hawk
• Feb: Signed OSCV
newbuild contract
• Feb: Chartered Harvey
Deep-Sea
• Mar: Sale of Geobay
• Jun: Delivery of Skandi
Bergen
• Aug: Signed newbuild
contracts for 4 x PLSVs
• Nov: Chartered
Normand Reach
• Global ISO recertification
• Jan: Delivered Skandi
Bergen to new owners
• Mar: Chartered Ross
Candies
• Mar: Chartered Chloe
Candies
• Oct: Entered into
agreement to sell Skandi
Skolten
DOF Subsea
10
New high-end fleet
Year of delivery DOF Subsea fleet
9,00
8,00
Before 2000
4%
2000 - 2006
21 %
Newbuild
18 %
7,00
6,00
5,00
4,00
3,00
2007 - 2013
57 %
2,00
1,00
Average fleet age
Value adjusted
•
Majority of the fleet delivered after 2007
•
Industry leading value adjusted average fleet age of approx. 5.9 years
•
High-end vessels capable of a wide scope of world wide operations
DOF Subsea
11
Business management
•
Global business management system accredited by DNV to:
•
Business Management System
ISO 9001: 2008
•
Health and Safety System
OHSAS 18001:2007
•
Environmental Management System
ISO 14001:2004
•
Global recertification by DNV December 2013
2009
DOF Subsea
12
HSEQ key statistcs
•
Substantial HSE-improvement since 2005
•
Substantial increase in activity level measured by total man-hours
DOF Subsea HSEQ-statistics
12
5 000 000
10
4 000 000
3 500 000
8
3 000 000
6
2 500 000
2 000 000
Man-hours
Frequence: Incident / 1 000 000 man-hour
4 500 000
4
1 500 000
1 000 000
2
500 000
0
0
2005
2006
2007
2008
2009
LTI
DOF Subsea
2010
TR
2011
2012
2013
2014
Man-hours
13
Projects
DOF Subsea
DOF Subsea – Life-of-field services
•
DOF Subsea offers integrated subsea solutions across life-of-field
•
Field development
•
Production phase
•
Field abandonment / decommissioning
DOF Subsea
15
DOF Subsea – Projects
Operating income by segment
•
DOF Subsea has built a global presence
over the last 9 years
7 000
6 000
•
DOF Subsea has developed the project
business gradually
5 000
4 000
•
Increased project activity driving growth
3 000
•
Project business going forward
•
Hire more engineers
•
Gradually increase the complexity
of work done (Step by Step)
•
Build a larger project back-log
•
Mix between owned and chartered
in vessels
2 000
1 000
0
Subsea projects
Chartering of vessels
Total
2012
3 776
1 472
5 248
Chartering of vessels
2013
4 971
1 609
6 580
Subsea projects
YTD2014
3 881
1 516
5 398
Total
* According to internal Management reporting
DOF Subsea
16
DOF Subsea North America
Status 2009
Survey specialized region without dedicated vessels
Status today
2 main Business Activities
Current staff
Offshore staff
Vessel in operation
ROVs
Houston facility
Satellite office
DOF Subsea
Subsea / S&P ( 85 / 15% revenue allocation)
202 (149 US / 53 CA)
121 (68 Subsea / 53 S&P)
4 (3 Jones Act Compliant)
7 (6 Work class, 1 Obs)
105 office space
St. John’s, Newfoundland ( 8+3 Staff)
17
Contract status
DOF Subsea
Contract coverage
35
30
NOK billion
25
20
15
10
5
Firm
Option
2014Q3
16
16
2014
16
16
2015
13
16
2016
11
15
2017
9
14
2018
7
13
2019
6
12
2020
5
11
* Figures on a year-end basis
•
DOF Subsea Group has solid cash flow visibility over the next 3-5 years
•
By September 2014 the total back-log (incl. options) was approx. NOK 33 billion
•
Firm contracts counts for approx. NOK 16 billion
•
Options counts for approx. NOK 16 billion
DOF Subsea
19
Financials
DOF Subsea
Condensed profit & loss (IFRS 11)
•
Operating income was NOK 1 815 million in Q3 2014, up from NOK 1 732 million in Q3 2013.
•
EBITDA (excl. gain on sale of assets) was NOK 496 million in Q3 2014, down from NOK 553 million in Q3 2013.
•
EBIT (excl. gain on sale of assets) was NOK 343 million in Q3 2014, down from NOK 370 million in Q3 2013.
* The financial numbers are presented according to IFRS 11. See DOF Subsea financial report Q3 2014 note 1 and 2 for details.
DOF Subsea
21
Condensed balance sheet (IFRS 11)
•
From year end 2013 non-current assets has decreased to NOK 14 913 million from NOK 15 076 million
•
From year end 2013 total receivables has increased to NOK 1 832 million from NOK 1 537 million
•
From year end 2013 cash and cash equivalents has decreased to NOK 986 million from NOK 1 752 million
•
Total liabilities as per 30th September 2014 was NOK 11 838 million
•
The net interest bearing debt as per 30th September 2014 was NOK 9 248 million
•
The book equity was NOK 5 938 million giving a ratio of 33.4 % to total assets as per 30th September 2014
•
The value adjusted equity was NOK 9 012 million giving a ratio of 42.8 % as per 30th September 2014
DOF Subsea
22
Quarterly performance (excl. asset sales)
2 500
Operating income
EBITDA
40%
EBITDA margin
35%
2 000
NOK million
30%
25%
1 500
22.3 %
CAGR
20%
1 000
15%
10%
500
18.3 %
CAGR
5%
-
0%
Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014
NOK million
Operating income
EBITDA
EBITDA margin
Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014
851
1 080
900
1 028
1 152
1 246
1 223
1 384
1 354
1 288
1 225
1 679
1 804
1 871
1 530
1 963
1 904
282
320
241
325
370
406
411
470
489
417
329
471
595
550
502
543
553
33.2%
29.7%
26.8%
31.6%
32.1%
32.6%
33.6%
34.0%
36.1%
32.4%
26.9%
28.1%
33.0%
29.4%
32.8%
27.7%
29.0%
Current assets
Non-current assets
3 192
13 325
3 366
14 179
2 829
14 520
3 003
15 089
2 938
16 178
2 923
16 305
2 782
16 455
2 962
16 230
2 704
16 056
2 612
16 012
3 077
16 043
3 319
16 344
3 119
16 330
3 470
16 340
3 247
16 012
3 252
16 151
2 998
16 215
Total assets
16 517
17 545
17 349
18 092
19 117
19 228
19 238
19 192
18 760
18 624
19 120
19 663
19 450
19 810
19 258
19 403
19 213
2 942
9 109
4 466
2 167
10 154
5 224
2 311
9 946
5 091
2 458
10 542
5 092
2 640
11 694
4 782
2 637
11 759
4 832
2 543
11 723
4 970
2 495
11 735
4 963
2 260
11 439
5 061
1 989
11 534
5 102
2 000
12 051
5 069
2 805
11 862
4 996
2 808
11 474
5 167
3 167
11 427
5 216
3 470
10 126
5 662
3 741
9 701
5 962
3 607
9 668
5 938
Current liabilities
Non-current liabilities
Equity
* According to internal Management reporting
DOF Subsea
23
Key credit metrics
Interest Coverage (EBIT / Interest cost)
2,50
NIBD/EBITDA
12,00
10,00
2,00
8,00
1,50
6,00
1,00
4,00
0,50
2,00
-
2009
2010
2011
2012
2013
Last 4 Qs
2009
NIBD/Total assets
2010
2011
2012
2013 Last 4 Qs
Debt/Total assets
1,00
1,00
0,90
0,90
0,80
0,80
0,70
0,70
0,60
0,60
0,50
0,50
0,40
0,40
0,30
0,30
0,20
0,20
0,10
0,10
-
2009
2010
2011
2012
2013
Last 4 Qs
2009
2010
2011
2012
2013
Last 4 Qs
* According to internal Management reporting
DOF Subsea
24
Stable asset values over the last years
Market value development
900
800
NOK million
700
600
500
400
300
200
2002
•
•
2003
2004
2005
Skandi Seven
2006
2007
2008
2009
Ocean Protector
Geoholm
2010
2011
2012
Skandi Patagonia
2013
2014
Fair market values of the DOF Subsea fleet have been stable recent years.
* As per 30th September 2014
DOF Subsea
25
Debt maturity profile
Debt maturity profile DOF Subsea AS level, 2014E – 2018E
2 500
DOFSUB06
- NOK 700 million
- Maturity Oct 2015
- Net NOK 700 million
2 000
1 500
DOFSUB05
- NOK 750 million
- Maturity April 2016
- Net NOK 750 million
1 000
DOFSUB07
- NOK 1 300 million
- Maturity May 2018
500
2014E
2015E
2016E
Bond Loan
2017E
Bank Debt
2018E
2019E
After
Balloons
•
The figures reflects amortization and balloon payments on debt drawn as per 30th September 2014.
•
Debt maturity profile excludes approx. NOK 0.5 billion in payments to Eksportfinans which is serviced by a corresponding
amount of restricted cash.
•
* As per 30th September 2014
DOF Subsea
26
Asset coverage
•
Combined market value of DOF Subsea’s fleet is NOK 16 billion
•
Vessel level gearing on the existing fleet is estimated to 46 % at year end 2014, decreasing to 39 % at year end 2015
•
Provides a significant equity cushion on top of the existing vessel financing
•
Significant gearing reduction on the existing fleet in the years to come
Gearing forecast – summary
Total assets (NOK billion)
100 %
90 %
80 %
54%
70 %
61%
64%
66%
70%
Market value
Vessels
16.1
Other equipment (a)
1.5
Total assets
17.6
60 %
50 %
•
Note: vessel values as per 30th September 2014
40 %
30 %
46%
20 %
39%
36%
(a) Includes ROVs, AUV, diving systems and other equipment
34%
30%
10 %
0%
2014E
2015E
Loan to value
•
2016E
2017E
2018E
Market Value Cushion
The figures reflects amortization and balloon payments on debt drawn as per 30th September 2014, including newbuilds to
be delivered assuming standard DOF Subsea leverage. Bonds not included.
DOF Subsea
27
Improved credit metrics going forward
Value added
services provide
increased
earnings
potential
New, high-end
fleet provides
safe collateral
Robust liquidity
buffer
Diversified bluechip customers
reduce
counterparty risk
Extremely strong
back-log
provides stable
earnings
Spare leveraging
capacity on
existing fleet
Improved
credit metrics
going forward
Strong bank and
investor
relationships
provide access
to credit
Mixed subsea market
DOF Subsea
28
Outlook
DOF Subsea
Mixed fundamentals for subsea activity
•
Demand
•
Volatile oil price
•
Increased cost focus by oil companies
•
Uncertain offshore E&P spending in the
short term
•
Uncertainty in project timing
•
Increased share of deep water spending
•
Increased infrastructure spending
•
Growth expected in Brazil and Gulf of
Mexico
•
Increased focus on newer, larger and more
technologically advanced vessels and
engineering capabilities
•
DOF Subsea owns the world’s most
sophisticated fleet and has a global project
organization
DOF Subsea
30
Mixed fundamentals for subsea activity
•
Supply
•
Fleet of subsea vessels increasing
•
Improving supply of engineering
capabilities
Increasing
supply
Reduced
demand
Mixed
market
conditions
DOF Subsea
31
DOF Subsea is well positioned
Reduced
E&P
spending
Lower oil
price
Mixed rig
activity and
delayed field
development
Mixed IRM
activity
globally
Increased
supply of
subsea
vessels
Improved
access to
qualified
personnel
Mixed
subsea
market –
pressure on
margins
Number of
niche subsea
players
DOF Subsea has mitigated the increased market risk through a global footprint, a diversified
portfolio of clients, strengthened balance sheet and a strong back-log of NOK 33 billion
DOF Subsea
32
Thank you!
Disclaimer
This presentation by DOF Subsea AS (“DOF Subsea” or the “Company”) is designed to provide a high level overview of aspects of the
operations of DOF Subsea and the DOF Subsea group.
The material set out in the presentation is current as at 30th September 2014.
This presentation contains forward looking statements relating to operations of DOF Subsea and the DOF Subsea Group that are based
on management’s own current expectations, estimates and projections about matters relevant to DOF Subsea‘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 outcomes, 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 DOF Subsea or
the DOF Subsea 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, 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
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.
DOF Subsea
34

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