ABL Group — Investor Presentation 2019

Aug 29, 2019

Management presentation - Business streams Sparebank 1 Markets August 29, 2019

aqualisbraemar.com

Introduction

The track record of the Aqualis founding team

• Revenues (GBPm / USDm)

Relations to insurance industry key for AqualisBraemar

AqualisBraemar's role

Managing insurance loss events

• Adjusting of losses
• Marine surveys

Insurance approvals

• Rig moves
• Complex offshore transportation
• Offshore renewables

AqualisBraemar can act as the conducting and/or the approving party

• Servicing all needs in value chain

• What do we do and our clients

(1): Based on internal figures and management's best estimate

• The offshore wind experience we bring

30 GW >55 projects

10 GW

6 GW

Of projects We have worked on projects world wide since 2011

Consultancy & TDD

Consultancy & TDD for a

We have undertaken

number of projects

21 GW

14 GW

Geotech & engineering

We have experience of soil conditions world wide. We also optimise, reduce costs and reduce uncertainty of substructure concepts

Subsea cables

We design & evaluate risks of cable routes, determine or evaluate installation methodologies & advise on O&M & repair issues

Project management

We have realised full projects & support developers during preconstruction & construction

3 GW

Offshore substations

We can advise on specification, siting, procurement & construction of offshore & onshore transmission assets

Offshore renewables market

• Offshore wind market growing at a rapid pace

Cumulative capacity (MW)¹ Project pipeline (MW) – Ex China¹

Offshore renewables market

• Moving from Europe base to become a global industry

Projects commenced, 2000-2015 (GW) Projects commenced, 2016-2025 (GW)

Offshore renewables market

• More wind farm developers and owners entering market

Installed capacity by owner Market share, Top developers¹

• Project Management Services (Taiwan)

The project:

• Confidential Taiwan Offshore Wind project
• c400 MW project
• Jacket-foundation project in a highly seismic area

Client: Confidential

OWC Scope:

• We are embedded into the project team 18 roles including: EPC Director, Foundation Package Manager, Site Conditions Manager, Geotechnical Engineers, Risk Manager, Interface Manager, Transportation and Installation Team, GIS Engineer, Permitting/Environmental Support
• We are using its experience across Europe to advise the Client, help set up controls to understand risk, and reduce CAPEX/DEVEX
• Site Investigation (managed by OWC) completed in 2018
• Design/Certification process ongoing, as well as contract negotiation
• OWC brings deep OW experience, local regulatory knowledge and APAC supply chain knowledge (via AqualisBraemar, group company)

• Technical Due Dilligence (Taiwan)

The Project:

• Confidential Taiwan Offshore Wind
• c650 MW project
• Bid stake in the project is 49%

Client: Confidential

OWC Scope:

• Project Development & Construction
• O&M
• EY/Production
• Financial model inputs

OWC Approach:

• OWC put together an international expert team (utilising experts from their London, Hamburg and Taipei offices) for a shortened BO phase including local OWC Taiwan consenting/PPA experts
• Adjusted the scope to include scenario modelling for contingency sizing estimating/challenging due to risks identified

- Engineering & Project Management Consultancy (UK)

The project:

• SPR's East Anglia ONE project
• 102 X 7- MW WTGs (714 MW project)
• Round 3 project, part of the 7.2 GW East Anglia Zone

OWC Scope:

• Involved deeply with engineering & project management since 2013 (& ongoing) including the following assignments & roles:
• Geotechnical & Structural Engineering (optimised & saved many £m DEVEX)
• Cable route design
• Management of the onshore & offshore transmission package
• Construction Readiness Evaluation prior to offshore works
• Led the development of the O&M readiness workstream
• Met mast decommissioning
• PMC roles in the project include: Senior Foundation Project Manager, Fabrication Manager & Inspectors (Coating & Welding), Onshore Sub-Station Supply & Installation Manager, Offshore Installation Manager, Onshore Electrical Site Manager, Environmental Advisor, HDD Construction Manager, Export Cable Installation Rep, onshore route administrators, Risk Manager

Client: Iberdrola are a Spanish public multinational electric utility company covering four continents.

ScottishPower Renewables (SPR) is their UK utility, which develops and operates onshore & offshore wind projects in the UK.

OWC have worked with SPR/Iberdrola since its founding in 2011.

- Key financials OWC

Unaudited pro forma figures

USD'000	2014	2015	2016	2017	2018	LTM
Revenue	2 211 ,	2 432 ,	2 823 ,	4 426 ,	6 081 ,	8 144 ,
EBITDA	294	111	72	459	240	867
1) Net working capital("NWC")	416	243	555	1 435 ,	1 913 ,	1 491 ,
Unbilled (days) revenue	47	18	30	26	77	57
(days) Receivables outstanding	60	26	58	71	42	36
2) NWC / Revenue (%)	19%	10%	20%	32%	31%	18%

LTM analysis is based on June 2019.

(1) Net working capital includes trade receivables and other current assets, trade payables, current tax payable and other current liabilities :

(2) Net working capital 30th June / Revenues last 12 months

- The Marine surveyors' role in the casualty process

Marine Casualty process

Casualty	Instruction	Survey	Report	Repairs	Settlement
• Vessel suffers casualty • Owners typically notify their Insurance broker or P&I Club	• Brokers notify Insurers • Underwriters or P&I Club instruct a surveyor	• Surveyor attends the vessel • Conducts their investigation based on the nature of loss and the basis of instruction	• Preliminary report sent to the instructing party • Advice offered on repair / salvage options	• Owner undertakes repairs - informs surveyor • Surveyors attend to witness repairs and assess costs	• Surveyors writes a full report on completion of repairs, reviews invoices & provides comments or further advice as required.
Machinery damage	Groundings	Fires and explosions	Collisions / Allisions	Heavy weather	Capsize / sinking

• Worldwide technical expertise in marine and energy casualties

Services provided Comments

% of revenues last 12 months (1)

• Services offered worldwide by experienced marine engineers, master mariners + naval architects and scientists
• Strong market position within Hull & Machinery ("H&M") which represent the largest share of services provided

(1): Based on internal figures and management's best estimate

(2) Protection & Indemnity

• Our customers

% of revenues last 12 months (instructing party) (1) % of instruction by vessel type last 12 months (1)

Client mix Vessels services

(1): Based on internal figures and management's best estimate

• Key market / macro drivers to observe

Global fleet development Comments

• The global shipping fleet has been in continuous growth since the 1980s
• Relatively stable growth last 5 years
• Short term: Tanker fleet growth trending up, bulkers stable, containership growth trending down

• Key market / macro drivers to observe

Passenger fleet Superyachts

• 7,652 internationally registered passenger ships over 500GT
• Including 1,962 cruise and 3,045 ferries

• 6.5% of world fleet (data from 2017)

• 5,500 superyachts worldwide over 30m in length

• World fleet still growing, especially the larger yachts

Business stream Marine -CARNIVAL VISTA (H&M Project)

• CARNIVAL VISTA suffered Azipod damage and required removal from service and drydocking to conduct repairs.
• Our marine team attended and assisted owners in repair planning. (Our offshore team was involved in the MWS)

ME Tankers (H&M War Risk Projects)

• Several recent tanker attacks in the Middle East
• Instructions received from War Risk H&M and P&I underwriters
• Scope of work included provision of an SCR (Special Casualty Representative), salvage experts, advice on repairs and recycling options including relocation tows

• Key trends in our market

• Total losses continue to decline

• Serious losses continue to increase
• Insurance market hardening premium rates increasing
• Consolidation in insurance market
• Deductibles no longer increasing but have done so prior to hardening market
• World fleet growth at 3% down from 9% in 2010 but still in positive growth
• Passenger, LNG and yacht fleets increasing at a higher growth rate
• World trade volume issues and laid up vessels
• Introduction of IMO 2020 legislations
• Low oil price leading to increased movement of goods

- Key financials Marine

Unaudited figures
GBP '000 (proforma)	2014/15	2015/16	2016/17	2017/18	2018/19	LTM
Revenue	12 866 ,	13 774 ,	14 569 ,	14 254 ,	14 276 ,	14 928 ,
(adjusted) EBITDA	769	599	(872)	531	(101)	456
1) capital("NWC") Net working	147 5 ,	6 953 ,	6 210 ,	366 5 ,	6 665 ,	183 7 ,
Unbilled (days) revenue	52	61	65	68	73	80
Receivables outstanding (days)	102	117	100	79	91	87
2) NWC (%) Revenue vs	40%	50%	43%	38%	47%	48%

Historic figures are based on proforma adjusted results for the calendar year ending 28 February. LTM analysis is based on June 2019.

(1) Net working capital includes trade receivables and other current assets, trade payables, current tax payable and other current liabilities :

(2) Net working capital 30th June / Revenues last 12 months

- Worldwide technical expertise in marine and energy casualties

• AqualisBraemar's adjusting service specialises in the investigation and resolution of insurance claims and commercial disputes.
• Key Services
  • Loss Adjusting
  • Expert Witness
  • Dispute resolution
  • Risk Assessment
• Nature of Incidents
  • Property Damage
  • Control of Well
  • Construction All Risk
  • Liability
  • Pollution
  • Business Interruption / Loss of Hire

Services Sectors covered

• Nature of claims

Services provided Comments

• (1): Based on internal figures and management's best estimate

• (2): «Construction all risk»

• Global diversified business revenue evenly split across all regions

• Onshore and offshore property damage («PD») represent the main service provided

• Our customers

(1): Based on internal figures and management's best estimate

• Key market / macro drivers to observe

Upstream vs Downstream losses

Source - Willis Energy Loss database, August 2019 Note: 2019 figures are too early to be meaningful

• Large Refinery Fire (Canada)

• 350k bbls/day synthetic crude oil

• Leak of Naptha, vapour release
• Resulting fire and explosion
• Acting as loss adjuster

- Offshore Pipeline Construction (GoM)

• Severe weather, loss of vessel position. Unplanned abandonment of Pipeline. Failure of Pipe Recovery Tool
• 685 km natural gas pipeline, offshore GoM

• Acting as loss adjuster. Complex cause investigation

• Pollution Liability (Canada)

• ~225 m³ of oil spilled into river

• Multiple stakeholders impacted
• Peak work force of ~1100 people during recovery efforts
• Acting as loss adjuster

- Key financials

Unaudited figures
(proforma) GBP '000	2014/15	2015/16	2016/17	2017/18	2018/19	LTM
Revenue	9 041 ,	9 473 ,	10 410 ,	9 599 ,	9 572 ,	8 894 ,
(adjusted) EBITDA	1 279 ,	938	782	770	99	(280)
1) Net working capital("NWC")	6 858 ,	8 029 ,	6 880 ,	6 504 ,	5 206 ,	5 386 ,
Unbilled (days) revenue	181	150	114	124	100	116
Receivables outstanding (days)	106	162	138	114	111	140
2) Revenue NWC (%) vs	76%	85%	66%	68%	54%	61%

Historic figures are based on proforma adjusted results for the calendar year ending 28 February. LTM analysis is based on June 2019.

(1) Net working capital includes trade receivables and other current assets, trade payables, current tax payable and other current liabilities :

(2) Net working capital 30th June / Revenues last 12 months

- Services offering cover lifecycle of offshore assets

Marine project / asset lifecycle

	Engineering / Project initiation design phase	Project Construction procurement	Hook-up and commissioning	Asset De management commissioning
e s r e o c h vi s r Off e s	Engineering (niche Construction yard focus): supervision: Basic / conceptual design / Site attendance on behalf of FEED owners, shipyards, financial institutions, 3rd parties Modifications and upgrades of drilling rigs / FPSOs / FSOs / Conversions, upgrades & New lift-boats builds Transportation & installation Due diligence / compliancy; analysis financial community focus		Marine operations: Transport and installation services; "moving of offshore assets" Rig moving Float-overs Site attendance & procedure management	Inspection & approvals: Marine warranty services Mooring analyses Condition and suitability surveys / audits DP inspections and audits Jack-up site assessments

Key competencies cover both offshore opex and capex cycles

- Offshore Service Offerings

Segment mainly driven by E&P investments (capex) Segment mainly driven by E&P operations (opex)

• Regional revenue split

(1): Based on internal figures and management's best estimate

• Service and client split

Service split Client split

(1): Based on internal figures and management's best estimate

Offshore Market

• Key market drivers (E&P Spending)

Key statistics driving the oil and gas markets:

• E&P spending is flat for the past 3 years and is less than half from its peak between 2013 and 2014 and significantly lower than the previous 10 years prior to the peak period.
• Only 235 subsea trees sanctioned in 2018 which is a increase from 175 in 2017.
• 2012-2013 had a combined total of over 1,000 subsea trees. Require over 700 tree annually to meet future capacity.
• Based on lead times, offshore activity takes place 2-3 years after a project is sanctioned.
• Based on present projects sanctioned in recent years, we should hope to see a pick up in activity post 2020.

Offshore market

• A small upward trend in offshore activity

Since the start of 2019 we have started to see a increase in rig activity, with increased utilisation and moderate increases in day rates. Contracting has also start to pick up, thus confirming the previous expectaion of increses production and E&P spending.

As AqualisBraemar operates in both CAPEX and OPEX related projects, this should start to filter through in day to day activity in marine operations as well as increased requirements for Marine Warranty Services.

Business Stream Offshore - Bahrain LNG Terminal Project

– Multi faceted loadout / marine installation operation completed

• Loadout of the 7200 MT topside took place in Thailand onto a smaller installation "Giant 5" barge
• Barge and topside piggy backed onto a large self propelled dry transportation HLV
• Topside and installation barge discharged offshore Bahrain
• Topside installed by floatover within shallower water terminal area
• Installation of the jacket, fabricated in South Korea, was engineered and managed by Aqualis in May 2018

Business Stream Offshore - Dry Transportation – FPSO P-67 Transportation China to Brazil

• MWS for the dry transportation of FPSO P-67 from China to Brasil and inshore mooring at Rio de Janeiro.
• Largest ever cargo transported by a Heavy Transport Vessel at 80,000 MT and 288m length

Business Stream Offshore - Project Construction Supervision – Construction Supervision of WTIV OuYang 1 and 2

▪ Aqualis completed the construction supervision of Ouyang Offshore's new-build self-elevating wind turbine installation vessel, OuYang 1, at Dayang Offshore Equipment yard in Jiangsu, China.

▪ Construction supervision for Ouyang Offshore's second wind turbine installation vessel, OuYang 2, is ongoing and is expected to be delivered in Q1 2020.

Business Stream Offshore - Rig Moving Services – Market leader in offshore rig moving activities

• AqualisBraemar are the market leader in jack up rig moving services for both towmaster attendance and Marine Warranty on over half the world's active fleet.
• Cients include ONGC, Seadrill, Shelf Drilling, UMW, Noble Drilling, PV, Jindal, Aban, Saudi Aramco, Borr Drilling, COSL and others.

- Key financials

Unaudited proforma figures
----------------------------	--	--

OFFSHORE (AQUALIS + BRAEMAR)
USD '000	2014	2015	2016	2017	2018	LTM
Revenue	56 589	56 531	39 328	35 608	38 207	36 648
(adjusted figures BTS) EBITDA	7 357	1 834	(5 882)	1 580	619	(1 195)
1) Net working capital("NWC")	7 492	10 582	7 434	9 279	10 376	10 772
Unbilled revenue (days)	24	26	24	23	21	33
Receivables outstanding (days)	71	77	75	96	98	98
2) Revenue vs NWC (%)	13 %	19 %	19 %	26 %	27 %	29 %

(1) Net working capital includes trade receivables and other current assets, trade payables, current tax payable and other current liabilities :

(2) Net working capital 30th June / Revenues last 12 months