Earnings Presentation First Quarter 2013 - Siem Offshore Joides Resolution SPV 100 % Total order...

Earnings Presentation

First Quarter 2013 CEO – Terje Sorensen

6 May 2013

Subsequent Events

• A new share buy-back program implemented with effect from 3 May 2013.

• Awarded contract for one PSV vessel, the “Siem Carrier”, for a firm period of four

years to Petrobras in Brazil, with charterer’s option for an additional 4x1 year.

• Order of Cable Lay Vessel (“CLV”) scheduled for delivery in April 2015.

• Extended firm contract for the MRSV “Siem Marlin” by one year.

• Agreed new loan facility of NOK 1.8 billion for the long term debt financing of four

OSCVs.

2

Highlights 2013

First Quarter

• Sale and delivery of the MRSV “Seven Sisters”.

• Awarded a contract by EnBW to Siem Offshore Contractors.

• Issued NOK 600 million of unsecured bonds with maturity in January 2018.

Income Statement First Quarter

First Quarter

Twelve

Months

Ended

Amounts in USD million

2013

Unaudited

2012

Unaudited

2012

Audited

Operating revenue 79.8 90.9 368.2

Operating expenses ( 49.2) ( 51.1) ( 210.8)

Administration expenses ( 11.5) ( 10.5) ( 47.1)

Operating margin [1] 19.1 29.3 110.3

Operating margin % 24 % 32 % 30 %

Depreciation and amortisation ( 18.5) ( 21.1) ( 82.7)

Gain/(Loss) on sale of assets 28.4 15.6 14.1

Gain/(Loss) FX contracts [2] ( 1.8) 3.9 12.5

Net financial items [3] ( 7.4) ( 2.3) ( 34.8)

Profit before tax 19.8 25.3 19.4

Income tax provision ( 1.0) ( 1.2) ( 4.0)

Net Profit 18.8 24.1 15.4

Attributable to non-controlling interest ( 1.2) ( 1.1) ( 1.9)

Attributable to shareholders of the Company 20.0 25.2 17.3

Earnings per share [4] 0.05 0.06 0.04

Average number of shares outstanding [5] 392,311 395,952 395,665

[1] Operating revenue less operating expenses

[2] Revaluation of off-balance sheet currency contracts entered into in order to hedge both operating expenditures and future yard instalments in foreign

currencies.

[3] Including revaluation of non-USD currency balance sheet items

[4] Net profit / Average number of shares outstanding (diluted)

[5] Weighted average number of shares outstanding (diluted) ('000)

Comments to First Quarter Income Statement

• 100% utilization of the MRSV fleet. • All vessels on long-term charters.

• 78% utilization of the PSV fleet. • 7 of 11 vessels on long-term charters.

• One vessel operated in the North Sea spot market during the quarter.

• Three vessels operated on short-term contracts of the coast of West Africa.

• 77% utilization of the AHTS fleet. • One vessel in lay up during the quarter, commenced operations primo April.

• 5 vessels on long-term charters in Brazil.

• 87% utilization for the fleet of other Brazilian vessels. • 10 of 11 vessels on long-term charters.

• One vessel idle during the quarter.

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Operating Margin

Operating Margin First Quarter

Q1 2013 Q1 2012

Amounts in

USD million

Operating

revenue

Operating

expenses

Operating

margin

Operating

margin %

Operating

revenue

Operating

expenses

Operating

margin

Operating

margin %

PSVs 20.5 (14.1) 6.3 31 % 24.2 ( 13.2) 11.0 46 %

MRSVs 8.2 (2.9) 5.3 64 % 14.3 ( 6.4) 7.9 55 %

AHTS vessels 25.6 (16.1) 9.5 37 % 30.9 ( 16.6) 14.3 46 %

Brazilian built vessels 7.5 (5.0) 2.6 34 % 7.7 ( 5.3) 2.4 31 %

Cable installation 4.8 (4.4) 0.3 7 % 1.7 ( 3.5) ( 1.8)

Scientific core drilling 10.1 (4.6) 5.5 55 % 10.1 ( 5.1) 5.0 50 %

CMS 2.1 (2.0) 0.1 4 % 1.4 ( 1.2) 0.2 14 %

Siem WIS 0.1 0.0 0.1 0.0 0.1 0.1

Other 0.9 0.0 0.9 0.6 0 0.6

G&A 0.0 (11.5) ( 11.5) 0.0 ( 10.5) ( 10.5)

Total 79.8 ( 60.7) 19.1 24 % 90.9 ( 61.7) 29.2 32 %

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• Preparations for the Amrumbank West Offshore Wind Farm project well underway.

Offshore phase in 1H 2014.

• Awarded two contracts during first quarter 2013 within the renewable energy market

• Joint contract with J-Power Systems Corporation (“JPS”) for the Innogy Nordsee 1

Offshore Wind Farm Project.

• Baltic 2 Offshore Wind Farm project by EnBW Baltic 2 GmbH.

• Total backlog to be executed next 24 months at approx. USD 180 million of which

30% in 2013.

• Continue to tender for other projects within the Offshore Wind Farm market

• Expanding resource base to support the business area by investments in vessels

and personnel

• Infield Support Vessel (“ISV”) under construction to be delivered in 1Q 2014.

• Placed an order for one Cable Lay Vessel (“CLV”) scheduled for delivery in 2Q 2015.

Siem Offshore Contractors - Submarine power cable activities

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Siem WIS

• Siem WIS is preparing for the Gullfaks operation, which is now planned to

commence in third quarter 2013.

• Siem WIS is also in discussions for other projects for utilisation of the pressure

control device (“PCD”).

8

Financial Position and Cash Flow

Statement of Financial Position

31 March

2013

Unaudited

31 March

2012

Unaudited

31December

2012

Audited

Intangible assets 35.4 36.8 36.3

Vessels under construction 120.9 83.3 108.4

Vessels, equipment and other capitalized project costs 1,249.4 1,436.3 1,272.3

CIRR loan deposits 50.8 59.4 53.2

Investment in associates and other long-term

receivables 11.1 13.3 11.3

Debtors, prepayments and other current assets 80.3 100.7 149.9

Cash and cash equivalents 226.1 124.6 107.1

Total Assets 1,774.1 1,854.4 1,738.5

Total Equity 797.3 796.7 786.5

Borrowings falling due after 1 year 753.5 807.1 714.7

CIRR loan 50.8 59.4 53.2

Other non-current liabilities 24.4 32.1 24.3

Borrowings falling due within 1 year 76.9 82.1 82.3

Trade creditors and other current liabilities 71.4 77.0 77.5

Total Liabilities 976.9 1,057.8 951.9

Total Equity and Liabilities 1,774.1 1,854.4 1,738.5


• Current cost of debt approximately 4.6% p.a.

• Net interest bearing debt of USD 604 million.

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The Company purchased

6,560,363 shares to an

average price of NOK 7.74 per

share under the buy-back

program that expired 3 May

2013. All such shares will be

cancelled.

A new share buy-back program

for maximum 15 million shares

was implemented with effect

from 3 May 2013. The program

will expire at AGM 2014.

Consolidated Statements of Cash Flows

Cash flow from operations

31.03.2013

Unaudited

31.03.2012

Unaudited

31.12.2012

Audited

Profit before taxes, excluding interest 25.4 34.5 47.9

Interest paid (7.7) (5.9) (36.7)

Depreciation and amortization 18.5 21.1 82.7

Change in short-term receivable and payables 11.8 (2.8) 22.7

Taxes paid in the period (2.8) (3.3) (13.9)

Loss (gain) on sale of assets (28.3) (15.5) (13.7)

Other changes (2.6) (4.8) (18.6)

Net cash flow from operations 14.3 23.2 70.5

Cash flow from investing activities

Investments in fixed assets (15.0) (13.1) (53.4)

Proceeds from sale of fixed assets 84.2 34.2 87.6

Other investment activities 1.1 (0.1) 5.1

Cash flow from investing activities 70.4 21.1 39.4

Cash flow from financing activities

Buyback of own shares (4.6) 0.0 (2.7)

Proceeds from bank overdraft 0.2 0.0 2.6

Proceeds from issue of new equity 0.0 1.4 3.5

Proceeds from raising of new long-term borrowing 109.7 3.1 8.8

Repayment of long-term borrowing (66.3) (56.6) (161.8)

Cash flow from financing activities 39.0 (52.2) (149.8)

Effect of exchange rate differences (4.6) (4.1) 10.3

Net change in cash 119.1 (12.0) (29.6)

Cash at bank start of period 107.1 136.6 136.6

Cash at bank end of period 226.1 124.6 107.1

Future Yard Instalments


Future Yard Instalments Q2-2013 Q3-2013 Q4-2013 2014 Total

ISV 2.3 2.3 0.0 36.6 41.2

OSCVs 2.9 85.0 92.5 184.1 364.4

OSRVs 5.2 4.8 0.0 0.0 10.0

PSVs 59.5 0.0 3.1 104.6 167.3

Total 69.9 92.0 95.6 325.3 582.8

Debt facilities Q2-2013 Q3-2013 Q4-2013 2014 Total

ISV 0.0 0.0 0.0 0.0 0.0

OSCVs 0.0 74.1 70.4 140.4 284.9

OSRVs 3.7 4.3 4.3 0.0 12.4

PSVs 56.3 0.0 0.0 98.5 154.9

Total 60.1 78.4 74.7 239.0 452.2

• The Company has secured debt-financing for all vessels under construction in Brazil and

for the four OSCVs under construction in Norway.

• Bank financing for the PSV and ISV under construction in Norway is well progressed.

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Debt Maturity Profile 2013 (9M) - 2018

13

• No major bullet maturities on bank loans

before 2015, limiting refinancing risk

• Scheduled balloon payment (re-financing) of

6 AHTS vessels in 2015 can be postponed

to 2018 subject to profile of vessel

employment.

• NOK 600 million (USD 102.9 million) of

unsecured bonds with maturity in 2018.

• Included debt financing of 4 x OSCV with an

average leverage of 70%.

• Main assumptions for vessels under construction

• Includes all 11 vessels under construction

• Average of 65% leverage

• 5 Year term

• 12 Year repayment profile

Vessels in Operation and Shipbuilding Contracts

Employment and Deliveries

Fleet overview - 36 vessels in operation and 11 vessels under construction

1) Incl. two vessels owned by a partner

PSV (3,300 – 4,700 dwt)

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# 11

# 2

OSCV AHTS

Core Drilling Vessel

# 1

# 11

Smaller Brazilian vessels Well stimulation vessel

# 1

# 101)

Vessels in operation Vessels under construction (Delivery 2013, 2014 & 2015)

# 2

OSRV OSCV

# 4

PSVs

# 3

ISV

# 1

CLV

# 1

Employment – Vessels in operation

2013 2014 2015 2016

Vessel Type Ownership 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

Siem Sasha PSV 100 %

Siem Sophie PSV 100 %

Siem Louisa PSV 100 %

Siem Hanne PSV 100 %

Siddis Skipper PSV 51 %

Siem Carrier PSV 100 %

Siem Supplier PSV 100 %

Hugin Explorer PSV 100 %

Siem Sailor PSV 51 %

Siem Pilot PSV 51%

Siddis Mariner PSV 51%

Siem Marlin OSCV 100%

Adams Vision OSCV 100%

Siem Pearl AHTS 100%

Siem Emerald AHTS 100%

Siem Sapphire AHTS 100%

Siem Aquamarine AHTS 100%

Siem Ruby AHTS 100%

Siem Topaz AHTS 100%

Siem Diamond AHTS 100%

Siem Amethyst AHTS 100%

Siem Garnet AHTS 0%

Siem Opal AHTS 0%

Total order backlog in % and USD mill. 59% 147 39% 142 19% 64 12% 34

Contract Contract option Spot work

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Employment – Vessels in operation (cont.)

2013 2014 2015 2016


Big Orange XVIII WSV 41 %

Joides Resolution SPV 100 %


Marati OSRV 100 %

Marabá OSRV 100 %

Parnaiba FSV 100 %

Propriá FSV 100 %

Paracaru FSV 100 %

Capela FSV 100 %

Parati FSV 100 %

Siem Piatã FCV 100 %

Siem Pendotiba FCV 100%

Siem Caetes FSP 100%

Siem Carajas FSP 100%


Contract Contract option Spot work

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Employment – Vessels under construction

2013 2014 2015 2016


Brazil, Siem Maragogi OSRV 100 %

Brazil, Siem Marataizes OSRV 100 %

Brazil Siem Atlas PSV 100 %

Brazil Siem Giant PSV 100 %

Norway, Siem Daya 1 OSCV 100%

Norway, Siem Barracuda OSCV 100%

Norway, Siem Spearfish OSCV 100%

Norway, Siem Stingray OSCV 100%

Norway, Siem Moxie ISV 100%

Norway, Siem Symphony PSV 100%

Poland, ”TBN” CLV* 100

Under Construction Contract

Contract USD 94 million



Contract option


18 18

*) Siem Offshore has entered into a shipbuilding-contract end of April for construction of a

dynamically positioned Cable Lay Vessel (”CLV”).

• The ISV and the CLV shall primarily be utilized by the subsidiary Siem Offshore Contractors for project

execution within offshore windfarm cable installation projects.

Market Outlook

Market Outlook Summary

• Current and near term North Sea market for AHTS vessels and PSVs:

• Temporary periods of improved spot market fixture rates and utilization for PSVs and AHTS vessels.

• Continued market imbalance between supply and demand for both PSVs and AHTS vessels.

• The number of AHTS > 15k bhp in the North Sea has gradually decreased from year end 2011, but

a relative large share of the fleet is still operating in the spot market (~40 vessels).

• North Sea term demand for large PSVs flat Y/Y, with lower production support activity offset by

higher drilling support activity.

• Activity and number of working rigs expected to increase based on firm contracts for new rigs

entering the North Sea.

• Long term Global demand for OSCVs:

• Based on an increasing number of subsea wells and installations the activity level is expected to be

high.

• Long-term North Sea demand for AHTS vessels and PSVs:

• Increased exploration, field development and number of fields on stream is expected to lead to

further demand for both high-end AHTS vessels and PSVs.

• Long-term Global demand for AHTS vessels and PSVs:

• Favorable outlook in Brazil based on firm contracts for Rigs, FPSOs and subsea projects.

• Increasing demand in US GoM, West Africa and Oceania, especially on drilling support.

• Prospects for harsh and/or remote areas (Barents Sea, Canada, US Alaska, Brazil).

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Global Rig and FPSO Market

© Siem Offshore, ODS Petrodata

• Total # UDW Drilling rigs currently working at 119, up from 99 twelve months ago (-12M).

• Total # North Sea Floater Rigs currently working at 39, up from 36 twelve months ago (-12M).

• Total # Floater Rigs currently working in Brazil at 75, up from 73 twelve months ago (-12M).

• Total # FPSOs currently working/under construction at 196, up from around 178 twelve months

ago (-12M).

• New demand added from FSRU/FLNG units.

• Continue to see increased activity going forward for both Drilling, FPSO and Subsea.

Global Drilling Market Global FPSO market

* = Ultra Deep Water (UDW)

Under Construction

Working

21


• Global Term Demand utilization AHTS > 15k bhp

currently approximately 75%.

• Around 90% excluding the North Sea.

• Global term demand has increased Y/Y, mainly due

to increased demand for drilling support in Brazil /

South America and Canada East.

• Partly offset by reduced activity in global

production support, with both the North Sea and

Brazil down Y/Y.

• Global Term Demand utilization PSV > 3,000 dwt

currently at approximately 88%.

• Term demand growth Y/Y driven by increased

drilling support activity in all major regions.

• Especially US GoM (+40%), Brazil (+30%) and

the North Sea (+30%).

• Increased production support is driving growth in

West Africa.

• Still approximately 200 vessels planned

for delivery by end of first half 2014.

Global AHTS and PSV Market - Increased drilling support activity Y/Y, especially for PSVs

22 * Utilization = Term Demand / Total Active Fleet

North Sea AHTS and PSV Fleet

• The number of AHTS > 15k bhp in the North Sea

has gradually decreased from year end 2011.

• During 1Q13 / 4Q12 several vessels mobilized for

other regions.

• Close to 40 high-end AHTS >15 bhp vessels are

operating in the North Sea spot market.

• Lower term demand for production support than 12

months ago.

• Another 5-7 AHTS>15K bhp vessels under

construction could enter the region next 18 months.

• Number of PSV> 3,000 dwt working in the North

Sea at approximately 210 vessels.

• North Sea term demand for PSV > 3,000 dwt flat

year-on-year

• Reduced term demand for production and

construction support offset by increased

demand for drilling support (+30%).

• The number of vessels operating in the spot

market more than doubled year-on-year.

• Another 25+ vessels to be delivered

from Norwegian yards next 18 months.


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• The number of semis and drillships working in the

North Sea at 39 units, an increase of 4 units Y/Y.

• Number of floaters in the North Sea expected to

increase >40 in 2013 based on firm contracts.

• Including new entries in the Barents Sea

• More than 10 new floaters expected to enter the

North Sea in the period 2013 -16.

• The number of jack-ups working in the North Sea is

currently at 36 units.

• A reduction of 4 units from 1Q13 mainly due to

yard activity and re-location of rigs.

• The number of working jack-ups expected to

increase > 40 in 2013 based on firm contracts.

• Close to 10 jack-ups under construction set to

enter the North Sea in the period 2013-2015

based on firm contracts.


Demand: North Sea Rigs working - New rigs ready to enter the North Sea

+5 rigs y/y +4 rigs y/y

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• The Global Fleet of ROV/MSV/DSV Offshore

Construction Vessels >120m DP2+ has grown by

around 25 vessels from 2007 to YE 2012 to around

40 vessels (excluding Pipelay/Derrick Pipelay).

• Several new vessels ordered in 2012 and 2013, with

a majority to be delivered during 2014 and H1 2015.

• Fleet will grow with minimum 50% the next 3 years

based on the current firm vessel orders at yards.

• Global number of X-mas Tree installations as a

leading indicator to this vessel segment will more

than double (IHS Petrodata) by year end 2015.

• Increasing number of X-mas Trees installed is

expected to create a growing market for IMR

services.

• Balanced supply/demand characteristics for the

period 2013 to 2015.

Offshore Construction Vessel (OCV) market

Global Fleet ROV/MSV/DSV vessels > 120m Global X-mas Tree installations

+ 50 -110%

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Earnings Presentation First Quarter 2013 - Siem Offshore Joides Resolution SPV 100 % Total order...

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