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Prosafe SE

Investor Presentation • Feb 10, 2014

3718_rns_2014-02-10_59d369a8-3c39-405b-83ad-3ce3fb111d5e.pdf

Investor Presentation

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10 February 2014

Q4 2013 results

Disclaimer

All statements in this presentation other than statements of historical fact are forward-looking statements, which are subject to a number of risks, uncertainties, and assumptions that are difficult to predict and are based upon assumptions as to future events that may not prove accurate. Certain such forward-looking statements can be identified by the use of forwardlooking terminology such as "believe", "may", "will", "should", "would be", "expect" or "anticipate" or similar expressions, or the negative thereof, or other variations thereof, or comparable terminology, or by discussions of strategy, plans or intentions. Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this presentation as anticipated, believed or expected. Prosafe does not intend, and does not assume any obligation to update any industry information or forward-looking statements set forth in this presentation to reflect subsequent events or circumstances.

Agenda

  • Q4 2013 in brief
  • Financial results
  • Strategic repositioning
  • Outlook

Q4 2013 in brief

  • Strong utilisation of 82 per cent
  • High order intake in the quarter
  • -Three long-term contracts in Mexico
  • -Long-term contract extension in Brazil
  • -Contract for BP ETAP in UK
  • -Contract for Swiber in Indonesia
  • -Several shorter extensions for North Sea vessels
  • Bond issue NOK 700m, 5 years, 295bps
    • At that time, the lowest margin in the Norwegian high-yield market since 2008
  • Projects and new build orders
  • -Ordered two accommodation semis from COSCO
  • -Pontoon launching Safe Boreas/Keel laying Safe Zephyrus
  • -Safe Scandinavia and Regalia to yard for refurbishment/SPS

Agenda

Q4 2013 in brief

Financial results

  • Strategic repositioning
  • Outlook

Income statement

(
U
d
i
d
f
i
i
U
S
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i
l
l
i
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t
n
a
e
g
r
e
s
n
m
o
n
u
u		 Q
4
1
3		 Q
3
1
3		 Q
4
1
2		 2
0
1
3		 2
0
1
2
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i
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e
s		 1
3
4.
8		 1
9.
4
5		 1
1
3.
1		 2
3.
5
5		 1
0.
4
5
O
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s		 (
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5
3.
4		 (
)
5
0.
8		 (
)
5
2.
6		 (
)
2
1
6.
9		 (
)
2
3
0.
3
E
B
I
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A		 8
1.
4		 1
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8.
6		 6
0.
5		 3
0
6.
6		 2
8
0.
1
D
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n		 (
1
4.
4
)		 (
1
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5.		 (
6
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5		 (
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5
7.
7
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a
n
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o		 6
7.
0		 9
0.
4		 4
5.
5		 2
4
5.
1		 2
2
2.
4
I
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e
r
e
s
n
c
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e		 0.
1		 0.
4		 1.
0		 1.
3		 1.
1
I
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4		 (
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8.
4		 (
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8.
0		 (
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3
4.
2		 (
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4
0.
9
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1		 (
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8.
5		 (
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4.
6
N
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s		 (
6.
9
)		 (
3.
4
)		 (
4.
9
)		 (
4
1.
4
)		 (
4
4.
4
)
P
f
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e
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r
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a
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s		 6
0.
1		 8
7.
0		 4
0.
6		 2
0
3.
7		 1
7
8.
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T
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s
x		 (
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0.
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1.
8		 1.
7		 (
)
4.
6		 (
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0.
5
N
f
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e
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o		 5
9.
7		 8
5.
2		 4
2.
3		 1
9
9.
1		 1
5
7
7.
S
E
P		 0.
2
5		 0.
3
6		 0.
1
9		 0.
8
5		 0.
8
0
D
i
l
d
E
P
S
t
u
e		 0.
2
5		 0.
3
6		 0.
1
9		 0.
8
5		 0.
8
0

Operating revenues

(
S
)
U
D
i
l
l
i
m
o
n		 Q
4
1
3		 Q
3
1
3		 Q
4
1
2		 2
0
1
3		 2
0
1
2
C
h
i
t
a
r
e
r
n
c
o
m
e		 1
2
0.
4		 1
4
6.
0		 9
4.
0		 4
6
9.
2		 4
2
3.
9
M
b
/
d
b
i
o
e
m
o
n
c
o
m
e		 3.
7		 0.
0		 0.
0		 9.
1		 2.
0
G
i
l
f
S
f
E
b
j
a
n
o
n
s
a
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g		 0.
0		 0.
0		 0.
0		 0.
0		 4.
8
O
h
i
t
e
r
n
c
o
m
e		 1
0.
7		 1
3.
4		 1
9.
1		 4
5.
2		 7
9.
7
T
l
t
o
a		 1
3
4.
8		 1
5
9.
4		 1
1
3.
1		 5
2
3.
5		 5
1
0.
4

Balance sheet

(
f
S
)
U
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1.
1
2.
1
3		 3
0.
0
9.
1
3		 3
1.
1
2.
1
2
G
d
i
l
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w		 2
2
6.
7		 2
2
6.
7		 2
2
6.
7
V
l
e
s
s
e
s		 9
4
6.
9		 9
2
6.
2		 8
9
6.
3
N
b
i
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d
e
w
u
s		 2
4
8.
9		 1
5
2.
5		 1
3
5.
6
O
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o
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c
r
r
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n
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s
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9		 1
6.
5		 2
1.
9
T
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c
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r
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e
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s		 1
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2
7.
4		 1
3
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1.
9		 1
2
8
0.
5
C
h
d
d
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t
a
s
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s		 1
1
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4		 1
1
8.
0		 1
0
3.
6
O
h
t
t
t
e
r
c
r
r
e
n
a
s
s
e
s
u		 7
7.
2		 1
0
2.
8		 1
0
3.
1
T
l
t
t
t
o
a
c
u
r
r
e
n
a
s
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e
s		 1
9
0.
6		 2
2
0.
8		 2
0
6.
7
T
l
t
t
o
a
a
s
s
e
s		 1
6
1
8.
0		 1
5
4
2.
7		 1
4
8
7.
2
S
h
i
l
t
a
r
e
c
a
p
a		 6
9
5.		 6
9
5.		 6
3.
9
O
h
i
t
t
e
r
e
q
u
y		 6
7
3.
8		 6
3
9.
8		 4
5
2.
4
T
l
i
t
t
o
a
e
q
u
y		 7
3
9.
7		 7
0
5.
7		 5
1
6.
3
I
f
l
l
i
b
i
l
i
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-t
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r
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s
r
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o
n
g
e
r
m
a
e
s		 2
1
5.		 4
0.
5		 6
6.
8
I
b
i
l
d
b
t
t-
-t
t
n
e
r
e
s
e
a
r
n
g
o
n
g
e
r
m
e		 7
7
9.
6		 6
9
7.
7		 7
4
5.
6
T
l
l
l
i
b
i
l
i
i
t
-t
t
o
a
o
n
g
e
r
m
a
e
s		 8
0
4.
7		 3
8.
2
7		 8
1
2.
4
O
h
i
f
l
i
b
i
l
i
i
t
t
t-
t
t
e
r
n
e
r
e
s
r
e
e
c
u
r
r
e
n
a
e
s		 7
3.
6		 6
4.
8		 9
3.
7
C
i
f
l
d
b
t
t
-t
t
r
r
e
n
p
o
r
o
n
o
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e
r
m
e
u		 0.
0		 3
4.
0		 6
4.
8
T
l
l
i
b
i
l
i
i
t
t
t
o
a
c
u
r
r
e
n
a
e
s		 3.
6
7		 9
8.
8		 1
5
8.
5
T
l
i
d
l
i
b
i
l
i
i
t
t
t
o
a
e
q
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y
a
n
a
e
s		 1
6
1
8.
0		 5
1
4
2.
7		 1
4
8
7.
2

Key figures

S
K
E
Y
F
I
G
U
R
E		 Q
4
1
3		 Q
3
1
3		 Q
4
1
2		 2
0
1
3		 2
0
1
2
O
i
i
t
p
e
r
a
n
g
m
a
r
g
n		 4
9.
7
%		 5
6.
7
%		 4
0.
2
%		 4
6.
8
%		 4
3.
6
%
E
i
i
t
t
q
r
a
o
u
y		 4
5.
7
%		 4
5.
7
%		 3
4.
7
%		 4
5.
7
%		 3
4.
7
%
R
i
t
t
e
u
r
n
o
n
e
q
u
y		 3
3.
0
%		 4
9.
9
%		 3
4.
6
%		 3
1.
%
7		 4
8.
4
%
N
i
b
i
d
b
(
U
S
D
i
l
l
i
)
t
t
t
t
e
n
e
r
e
s
e
a
r
n
g
e
m
o
n		 6
6
6.
2		 6
1
3.
7		 7
0
6.
8		 6
6
6.
2		 7
0
6.
8
(
)
N
b
f
h
1
0
0
0
u
m
e
r
o
s
a
r
e
s		 2
3
9
3
5
7		 2
3
9
3
5
7		 2
2
9
9
3
7		 2
3
9
3
5
7		 2
2
9
9
3
7
A
f
d
i
h
(
)
t
t
1
0
0
0
v
e
r
a
g
e
n
o.
o
o
u
s
a
n
n
g
s
a
r
e
s		 2
3
5
9
7
3		 2
3
5
9
7
3		 2
2
2
9
6
3		 2
3
3
8
0
6		 2
2
2
9
6
1
S
/
O
f
U
D
N
K
h
d
i
d
t
t
e
c
a
n
g
e
r
a
e
a
e
n
o
p
e
r
o
x		 6.
0
8		 6.
0
1		 5.
5
7		 6.
0
8		 5.
5
7
S
(
O
)
h
i
N
K
a
r
e
p
r
c
e		 4
6.
8
0		 4
8.
0
0		 4
3
2
7.		 4
6.
8
0		 4
3
2
7.
S
h
i
(
U
S
D
)
a
r
e
p
r
c
e		 7.
7
0		 7.
9
9		 8.
5
0		 7.
7
0		 8.
5
0
(
O
)
M
k
i
l
i
i
N
K
i
l
l
i
t
t
t
a
r
e
c
a
p
a
s
a
o
n
m
o
n		 1
1
0
4
4		 1
1
3
2
7		 1
0
8
8
1		 1
1
0
4
4		 1
0
8
8
1
M
k
i
l
i
i
(
U
S
D
i
l
l
i
)
t
t
t
a
r
e
c
a
p
a
s
a
o
n
m
o
n		 1
8
1
6		 1
8
8
5		 1
9
5
3		 1
8
1
6		 1
9
5
3

Shareholders

S
H
A
R
E
H
O
L
D
E
R
S
A
S
A
T
0
3
0
2
2
0
1
4		 N
f
h
O
o
o
s
a
r
e
s		 h
i
w
n
e
r
s
p
S
S
(
)
B
k
&
T
t
t
t
t
t
a
e
r
e
e
a
n
r
u
s
n
o
m		 3
2
3
2
3
9
7
7		 1
3.
%
7
F
l
k
d
f
d
t
t
o
e
r
g
o
n
e
y		 1
6
5
6
1
9
7
8		 7.
0
%
S
S
B
k
&
T
(
)
t
t
t
t
t
a
e
r
e
e
a
n
r
u
s
n
o
m		 1
4
9
2
4
4
4
6		 6.
3
%
P
t
a
r
e
o		 8
7
9
6
7
0
3		 3.
7
%
C
l
B
k
i
(
)
t
e
a
r
s
r
e
a
m
a
n
n
g
n
o
m		 8
6
0
4
6
1
9		 3.
6
%
S
F
L
P		 8
0
0
0
0
0
7		 3.
%
7
J
P
M
C
h
B
k
(
)
o
r
g
a
n
a
s
e
a
n
n
o
m		 6
8
1
5
4
9
2		 2.
9
%
G
S
(
)
l
d
h
o
m
a
n
a
c
s
n
o
m		 8
1
3
2
5
7
7		 2.
%
5
R
B
C
(
)
n
o
m		 5
2
6
7
3
8
2		 2.
2
%
P
i
(
)
m
c
o
n
o
m		 4
9
1
4
5
7
7		 1.
9
%
T
l
1
0
l
t
t
o
a
a
r
g
e
s		 1
1
2
4
6
3
4
4
0		 4
7.
7
%

235 973 059

Total no. of shares:

Steady growth in dividend

  • Declared an interim dividend equivalent to USD 0.16 per share
  • The shares will trade exdividend on 14 February
  • The dividend will be paid in the form of NOK 1 per share on 28 February

Interest-bearing debt portfolio

L
o
a
n		 i
C
t
t
o
m
m
m
e
n		 i
M
t
t
a
u
r
y		 i
M
a
r
g
n
l
l
d
f
l
(
)
U
S
D
1
1
0
0
i
i
i
i
i
2
0
1
1-
1
7
t
t
m
o
n
c
r
e
a
c
y		 l
l
U
S
D
7
9
1
i
i
m
o
n		 Q
3
2
0
1
7		 b
1
8
7.
5
p
s
l
l
d
f
l
(
)
S
2
0
i
i
i
i
i
2
0
1
2-
1
U
D
4
7
t
t
m
o
n
c
r
e
a
c
y		 l
l
S
2
0
i
i
U
D
4
m
o
n		 Q
2
0
1
4
7		 b
2
9
5
p
s
l
l
b
d
(
)
O
0
0
i
i
2
0
6
N
K
5
1
1-
1
m
o
n
o
n		 l
l
O
0
0
i
i
N
K
5
m
o
n		 Q
2
0
6
1
1		 b
3
0
5
p
s
l
l
b
d
(
)
i
i
N
O
K
5
0
0
2
0
1
2-
1
7
m
o
n
o
n		 l
l
i
i
N
O
K
5
0
0
m
o
n		 Q
1
2
0
1
7		 b
3
7
5
p
s
(
)
i
l
l
i
b
d
N
O
K
5
0
0
2
0
1
3-
2
0
m
o
n
o
n		 i
l
l
i
N
O
K
5
0
0
m
o
n		 Q
1
2
0
2
0		 b
3
7
5
p
s
(
)
l
l
b
d
N
O
K
7
0
0
i
i
2
0
1
3-
1
8
m
o
n
o
n		 l
l
N
O
K
7
0
0
i
i
m
o
n		 Q
4
2
0
1
8		 b
2
9
5
p
s

Agenda

  • Q4 2013 in brief
  • Financial results
  • Strategic repositioning
  • Outlook

Ambition – start of strategy process

Strategic repositioning

North Sea fleet – refit and life extension

  • Objective
    • Ensure availability of versatile vessels with safe, efficient and comfortable facilities
  • Actions
    • Refurbish vessels to achieve renewal of hull, machinery and facilities for another 20 years of operation

Scandinavia SPS and life extension

  • Aim: operate in NCS or UK waters, with 12 point mooring for 20 years (2014-2034)
  • Five year Special periodic survey (SPS) Q1 2014
  • -Including fatigue enhancement
  • Increase vessel capabilities
    • Improved station-keeping with new anchor windlasses & chain (best in class)
  • -More functional cranes
  • -Reduced probability of any longer future yard stays
  • -More earning capacity
  • Augment the health and safety of those working and living onboard
  • -Replacement of 168 wet units
  • -Refurbishment of 124 wet units
  • -Renew crew accommodation
  • -New IT infrastructure

Regalia SPS

  • Five-year special periodic survey (SPS) Q1 2014- Including fatigue enhancement
  • Increase vessel capabilities
  • -More functional cranes

  • -Gangway improvements

  • Augment the health and safety of those working and living onboard

  • -Refurbishment of some interiors

New builds compliant with Norwegian regulations

Objectives

    • Be the most cost effective and versatile vessels for year-round operations in the Norwegian waters in terms of:
  • Positioning, either through DP3 or 12 point wire-moored
  • Marine capabilities/motions and gangway uptime
  • Safe working environment – high workforce involvement
  • Accommodation facilities

Prosafe new builds aim at being the best - Norway

Thruster power (kW) Combined mooring strength (tonnes)

PoB (one person per cabins)

Air gap operation and survival mode (meters)

Safe Boreas

  • Pontoons launched 5 and 9 Nov 2013 – then docked
  • First 2 columns raised on pontoons in dock Nov 2013
  • LQ mega blocks transported from subcontractor to Jurong for outfitting
  • Cabin fabrication in Korea, first batch has arrived in Singapore
Q
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5

Safe Zephyrus

  • Keel lay – 18 November 2013
  • Good progress in block fabrication
  • Outfitting started
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Newbuilds for UK/RoW, excl. Norway

Objectives

    • Be the most versatile vessels for year-round operations in UK/RoW , excl. Norway in terms of:
  • Positioning, either DP3 or 10 point chain-moored
  • Marine capabilities/motions and gangway uptime
  • Safe working environment
  • Accommodation facilities
  • Crane capacity
    • Be cost effective in terms of both construction capex and future opex

Safe Eurus and Safe Notos

Strong capabilities

    • The most advanced and flexible vessels for worldwide operations excluding Norway
  • Low risk
    • Number 3 and 4 in a series of Gusto MSC Ocean 500 units built by Cosco
  • Ready for operations in 2016

Source: Gusto MSC

Prosafe newbuilds aim at being the best – UK/RoW

Air gap operation and survival mode (meters)

Large and versatile North Sea fleet in good condition

  • Safe Boreas – new build
  • Safe Zephyrus – new build
  • Safe Notos – new build
  • Safe Eurus – new build
  • Safe Scandinavia – life extension in 2014 (20 years)
  • Safe Caledonia – life extension in 2013 (20 years)
  • Regalia – life extension in 2009 (20 years)
  • Safe Bristolia – converted and refurbished in 2006

Capital expenditure 2013

  • Capex in line with indication of USD 130-150 million
  • In addition, Safe Eurus/Notos first yard instalments paid in December 2013
  • Total of USD 223 million in 2013
  • Major items
    • Safe Caledonia life extension completion
    • Safe Scandinavia SPS, mooring winches and life extension
  • -Regalia SPS and cranes/thrusters
  • -Safe Boreas new build
  • -Safe Zephyrus new build
  • -Safe Eurus/Notos first yard instalments

Capital expenditure 2014

  • Total capex USD 420-480 million
    • General indication of yearly average fleet capex of USD 50-60 million, excluding new builds and special projects/items
    • New builds and special projects
    • Safe Boreas new build, 80 per cent of yard cost to be paid at delivery
    • Safe Zephyrus new build, incl. owner furnished equipment
    • Safe Scandinavia life extension
    • Safe Eurus/Safe Notos new build

Agenda

  • Q4 2013 in brief
  • Financial results
  • Strategic repositioning

Outlook

Clear market leader in the high-end segment

* In addition, there are other types of vessels that from time to time will be potential competitors in certain regions

  • Supply side will double in size from 2012 to 2016
  • possible under-supply situation historically
  • positive underlying demand development seen over the past years

North Sea - robust demand

  • Good demand for hook-up work
    • Driven by exploration success, particularly in Norway
    • Prosafe already has contracts in place for Edvard Grieg (Lundin), Ivar Aasen (Det norske) and Mariner (Statoil) hook-up and commissioning projects
  • Existing infrastructure is old, particularly in UK
  • -Robust and stable MMO activity
  • High activity in recent licence rounds
  • -Bodes well for long term demand

Source: Det norske

North Sea - robust demand

  • High order intake in the North Sea in Q4 2013 and in 2013 in general
    • Good contract visibility in the North Sea
  • Demand index shows robust demand
    • Although fewer prospects and tenders now compared to Q3 2013

North Sea accommodation demand index

Q109Q209Q309Q409Q110Q210Q310Q410Q111Q211Q311Q411Q112Q212Q312Q412Q113Q213Q313Q413

Based on firm contracts, extension options, projects in thetendering phase and prospects for the next 36 months. Index based on number of days in demand. Q4 11 = 100

Source: Prosafe

North Sea dayrates (time charter)

Mexico - stable demand outlook

  • Continued stable outlook in Mexico demonstrated by recent contracts for Regency, Lancia, and Jasminia
    • Multiple years contract renewals, but slightly lower dayrates
  • Currently accommodation vessels in operation at the Cantarell field and adjacent areas
  • Longer term it is anticipated that there will also be demand from deep water areas

Gulf of Mexico dayrates (bareboat)

USD k

35

Brazil – growth market

  • Long-term requirements, mainly driven by maintenance
  • -Hook-up work can appear longer term
    • Many different types of accommodation solutions in operation/contracted in Brazil
  • All vessels required so far have gone to the Campos basin
    • Concordia, three-year contract extension from June 2014
    • Demand may evolve from other areas as well in due course
    • Santos, Espirto Santo, pre-salt

Rest of the world – interesting opportunities

  • Australia
  • -Sporadic activity although the area is evolving
  • -Several contract awards at attractive economics
  • South East Asia
  • -Dominated by low dayrate, basic barges due to benign weather conditions
  • -Some demand for semis related to mid and deep water work
    • Safe Astoria now in operation in Indonesia and from June/July 2014 in the Philippines
  • West Africa
  • -Dominated by low dayrate, basic barges due to benign weather conditions
    • Some ad-hoc demand for semis for hook-up and tie-in wor k
  • US GoM
    • Increased demand expected from deep water areas as production reaches more mature stage

Rest of world dayrates (time charter)

Consistent high fleet utilisation

  • High fleet utilisation
  • Considerable fleet size means lower risk and less volatility
  • Low counter-party risk
    • Clients are typically national oil companies, super majors and larger independents

High contract visibility

Record high contract backlog

Prosafe is well positioned

  • Well positioned to meet a potential increase in demand and competition, by having:
  • a record high order backlog
  • the largest and most versatile fleet
  • the best and longest operational and HSEQ track-record
  • the most efficient cost and financing structure

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