Pareto Conference- Company Presentation – September 2016
Transcript of Pareto Conference- Company Presentation – September 2016
2016 Pareto Oil & Offshore Conference – 14 Sep 2015 – Oslo, Norway Bart Heijermans - CEO
Forward-Looking Statements
This presentation contains certain statements that may be deemed to be “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A
of the Securities Act and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. All
statements, other than statements of historical facts, are forward-looking statements. These include
statements that address activities, events or developments that the Company expects, projects,
believes or anticipates will or may occur in the future, general industry conditions, future results of
the Company’s operations, capital expenditures, asset sales, expansion and growth opportunities,
financing activities, debt repayment and other such matters. These forward-looking statements
generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,”
“strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will
likely result,” and similar expressions. Although the Company believes that its expectations stated
in this presentation are based on reasonable assumptions, actual results may differ materially from
those expressed or implied in the forward-looking statements. The forward-looking statements are
subject to a number of known and unknown risks and uncertainties, including the performance of
contracts by suppliers and customers; delays, costs and difficulties related to customer projects;
actions by governmental and regulatory authorities; operating hazards and delays; employee
management issues; local, national and worldwide economic conditions; uncertainties inherent in
the exploration for and development of oil and gas; complexities of global political and economic
developments; volatility of oil and gas prices and other risks. Each forward-looking statement
speaks only as of the date of this presentation, and the Company undertakes no obligation to
publicly update or revise any forward-looking statement.
Weathering the prolonged oil downturn
www.deepoceangroup.com 1
Weathering the prolonged oil downturn
www.deepoceangroup.com 2
Brief introduction to DeepOcean – a subsea services company
Survey &
Seabed Mapping
Seabed
Intervention
Subsea
Installation IMR Decommissioning
Service lines
A leading provider of integrated subsea services for oil
& gas, renewables and interconnector customers
A market leader in diverless subsea IMR in the Greater
North Sea
One of the most active independent cable installation
and burial contractors in renewable industry
Focus on solving our customers’ problems
Recognized global brand for relentless customer focus
and operational excellence having operated in the
sector since the 1990s
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Owned: 6
Chartered:12
40 ROVs
2 AUVs
5 ploughs
7 jet trenchers
4 mechanical cutters
Human Resources ROVs / AUVs Trenchers & Ploughs Vessels
~1,000 employees
~100 full time agency
personnel /
contractors
11 offices in 7
countries
Other Assets
Module handling
systems (3 off)
Geotechnical rig
Excavators / dredgers
Mattress frames
ROV tooling
Ownership
Private company
Financial investors
Largest owner ~16%
of shares
Financials
2015 revenue of $411
million(1)
2015 Adj. EBITDA of
$39 million(1)
2015 Loss of $69.3
million
Net debt of $40 million
at 31 Dec 2015
Brazil
Ghana
Netherlands
Norway
Mexico
UAE
UK
Current Operations
Company factsheet
Notes: (1) Continued operations
www.deepoceangroup.com
Confidential – Not for Public Dissemination
Operational vessels and offices
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Arbol Grande
Edda Flora Edda Fauna Deep Vision Maersk Connector
Volantis
Maersk Recorder
Office locations
Long term ROV operations on:
North Sea Giant (North Sea Shipping)
Normand Ferking (Solstad)
CBO Isabella (CBO)
Bourbon Astenix (Bourbon)
Atlantic Challenger
Note: Exclude cold stacked vessels Deep Endeavour, Deep Wave, Deep Investigator and Walker1
Rem Ocean
Havila Phoenix
Chartered
Owned
Rem Forza
Go Pegasus
Deep Helder
www.deepoceangroup.com 4
Edda Freya
Dina Star
ROV Ops Trencher Ops
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The Good, the Bad and the Ugly
www.deepoceangroup.com
Strong order intake year over year
Several offshore renewables and interconnect projects contracts and new Tullow Ghana contract
Contract margins are under pressure
Previously weaker contractors and ship owners emerge from restructurings with significantly lower cost
bases
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Backlog up but margins under pressure
3.0x
3.5x
2.5x
2.0x
1.5x
1.0x
0.5x
0.0x
900
700
600
500
400
300
200
100
0
800
Q1
539
2.0x
YE15
474
1.7x
Q3
411
0.8x
Q2
431
0.8x
Q1
456
0.7x
YE14
477
0.4x
384
547
0.4x
Q2
672
0.6x
Q1
738
1.9x
YE13
625
0.7x
Q3
666
0.8x
Q2
703
0.4x
Q1
815
3.1x
YE12
574
2.4x
Q3
0.6x
Backlog
(USDm)
Q2 Q3
437
0.6x
Q1
487
1.7x
Y-o-Y growth: 14%
Q2
510
0.6x
49%
~ 50% of backlog is renewable and interconnector contracts
www.deepoceangroup.com
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Still securing many contracts but high fixed cost base depresses EBITDA
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20
40
60
80
100
120800
700
600
500
400
300
200
100
0
$/bbl $m
2016FC 2015
411
53
2014
632
2013
609
2012
513
2011
513
Avg. oil price Revenue
Revenue development 2011-2016FC Approx. 50% of 2015 revenue decline was
caused by NOK weakening against USD
Danger of being squeezed between lower
revenue and high fixed cost of which charter
expense is a large component
Vessel charter cost to be reduced
drastically to bring in line with current market
rates and structure
Three owned vessels laid-up and three
chartered vessels to be released in 2016
Headcount reductions from ~1,500 to ~1,000 in
two years and SGA down 40%
~86% of employees have agreed to a
voluntary compensation reduction of 5.5%,
a sign of a strong company culture
www.deepoceangroup.com
Need to restructure charter contracts or vessels will be returned to owners
?
?
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Successful start in Ghana Largest fleet of cable lay and trenchers
IMR, survey and installation services
Framework Agreements in GNS
Offshore Renewables and Interconnectors Projects Africa
Business Foundations
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IMR, Survey and installation services
Operations in Mexico
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Laser Survey
Core services for oil & gas customers
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Pipeline Inspection
Installation of flexible risers
XMAS Tree Installation
Hydrate Remediation Decommissioning
Reduced demand at lower prices
www.deepoceangroup.com 10
Innovation - Superior ROV
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0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
200%
Visual PI Acoustic PI ROV gridsurvey
ROV routesurvey
Large stable vehicle with optimal placement of
sensors and latest generation survey
instrumentation (MBEs, INS, lasers, video and
still cameras)
Acoustic survey speed of up to 6 knots
Higher productivity resulting in lower cost for customer
Productivity improvement
compared with 2014-15 Average
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www.deepoceangroup.com 11
Well positioned for offshore cables with installation vessels and
world’s largest trencher fleet
Picking the right tool for the job
T3200 UT1
5 off
Pipeline
Cable
7 Off
ROV
Track
Ploughs Jet trenchers Mechanical
4 Off
ROV
Track
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Maersk Connector
117 km of cable being spooled onto the 7000 te. carrousel
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Western
Link
Walney
Race
Bank
Bligh
Bank
Nemo
Value of DeepOcean’s contracts in
excess of $350 million
Large number of DeepOcean’s
assets have been deployed
6 vessels
6 trenching tools
ROVs / Carrousels
Renewable and Interconnector Projects in execution phase
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www.deepoceangroup.com
Rem Forza operational in Ghana since February 2015
3 year IMR Contract with Dina Star since March 2016
ROV Support contract on Bourbon Astenix PSV
Frogging with Rem Forza (18244 trips)
Installation of trees, jumpers, flying leads, manifolds
IMR works
Survey (incl. subsea laser)
Engineering Support
More than 50 Ghanaians are involved in our operations
Ghana Operations – Started in February 2015
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Safety of all employees and other stakeholders
Restructuring charter contracts
Operational excellence
Finding and contracting new work
Collecting payments
Innovation
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Our focus
Join the discussion on LinkedIn:
www.linkedin.com/company/deepocean More than 30,000 followers
Follow DeepOcean Group on Twitter
@deepoceangroup
www.deepoceangroup.com
http://www.youtube.com/deepoceanonline
Q&A
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