Prosafe SE — Investor Presentation 2015

Aug 21, 2015

Q2 2015 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

• Recent developments
• Financial results
• Operations/projects
• Outlook

Recent developments

• Several contract awards recently
• -Improved revenue visibility
• • Contract inflow of approx. USD 240 million so far in Q3
• Q2 utilisation of 58 per cent -Several vessels on yard stays

New build Safe Boreas successfully commenced operations in Norway

Agenda

Recent developments

Financial results

• Operations/projects
• Outlook

Income statement

( S ) U d i d f ig in U D i l l io te na u u re s m n	Q 2 1 5	Q 1 1 5	Q 2 1 4	6 M 1 5	6 M 1 4	2 0 1 4
O in t p e ra g re ve nu e s	9 2. 5	1 2 4. 2	1 3 3. 4	2 1 6. 7	2 2 5. 1	5 4 8. 7
O in t p e ra g ex p e ns e s	( ) 5 1. 0	( ) 5 1. 8	( ) 6 2. 4	( ) 1 0 2. 8	( ) 1 1 6. 0	( ) 2 3 6. 1
E B I T D A	4 1. 5	2. 4 7	1. 0 7	1 1 3. 9	1 0 9. 1	3 1 2. 6
De ia io t p re c n	( 1 8. ) 7	( 1 0 ) 7.	( 1 6. 0 )	( 3 ) 5. 7	( 3 1. 2 )	( 6 4. 3 )
O i f i t t p e r a n g p r o	2 2. 8	5 5. 4	5 5. 0	8. 2 7	9 7 7.	2 4 8. 3
In inc te t re s o m e	0. 1	0. 0	0. 0	0. 1	0. 1	0. 3
In te t e re s xp e ns e s	( 1 2. 8 )	( 1 0. 2 )	( 8. 8 )	( 2 3. 0 )	( 1 1 ) 7.	( 3 3 ) 7.
O he f in ia l i t te r a nc m s	5. 7	( 1 9 ) 5.	( 1. 2 )	( 1 0. 2 )	3. 0	( 2 0. 0 )
N f i i l i t t e n a n c a e m s	( 0 ) 7.	( 2 6. 1 )	( 1 0. 0 )	( 3 3. 1 )	( 1 4. 0 )	( 5 0 ) 7.
P f i b f t t r o e o r e a e s x	1 5. 8	2 9. 3	4 5. 0	4 5. 1	6 3. 9	1 9 1. 3
Ta xe s	( 3. 6 )	( 2. 3 )	( 2. 9 )	( 9 ) 5.	( 3. ) 5	( 1 2. ) 5
N f i t t e p r o	1 2. 2	2 0 7.	4 2. 1	3 9. 2	6 0. 4	1 8. 8 7
E P S	0. 0 5	0. 1 1	0. 1 8	0. 1 7	0. 2 6	0. 7 6
D i lu d E P S t e	0. 0 5	0. 1 1	0. 1 8	0. 1 7	0. 2 6	0. 7 6

Operating revenues

( U S D i l l io ) m n	Q 2 1 5	Q 1 1 5	Q 2 1 4	6 M 1 5	6 M 1 4	2 0 1 4
C ha in te r r c o m e	8 0. 0	1 1 1. 8	1 1 4. 7	1 9 1. 8	1 9 5. 2	4 8 1. 2
Mo b / d b inc e m o o m e	0. 8	1. 0	3. 7	1. 8	4. 8	8. 8
O he in t r c o m e	1 1. 7	1 1. 4	1 5. 0	2 3. 1	2 5. 1	5 8. 7
T l t o a	9 2. 5	1 2 4. 2	1 3 3. 4	2 1 6. 7	2 2 5. 1	5 4 8. 7

Balance sheet

( S ) U d i d f ig in U D i l l io te na re s m n u u	3 0. 0 6. 1 5	3 1. 0 3. 1 5	3 0. 0 6. 1 4	3 1. 1 2. 1 4
G dw i l l o o	2 2 6. 7	2 2 6. 7	2 2 6. 7	2 2 6. 7
Ve ls s s e	1 6 1 1. 5	1 0 9 6. 1	9 9 5. 8	1 0 2 7. 3
Ne bu i l d w s	2 1 1. 1	5 6 7. 6	2 7 5. 6	3 1 1. 8
O he t t a ts r n o n- cu rre n s s e	6. 0	6. 0	5. 1	5. 7
T l t t t o a n o n- c r r e n a s s e s u	5 5. 2 0 3	1 8 9 6. 4	5 1 0 3. 2	5 5 1 7 1.
C h d d i ts a s a n e p o s	9 4. 9	1 5 1. 4	7 7. 4	1 2 2. 4
O he t t a ts r c u rre n s s e	9 1. 5	1 0 9. 7	1 0 9. 3	1 2 2. 9
T l t t t o a c r r e n a s s e s u	1 8 6. 4	2 6 1. 1	1 8 6. 7	5. 2 4 3
T l t t o a a s s e s	2 2 4 1. 7	5 5 2 1 7.	1 6 8 9. 9	1 8 1 6. 8
S ha i l ta re c a p	6 5. 9	6 5. 9	6 5. 9	6 5. 9
O he i t ty r e q u	6 9 4. 7	6 7 9. 2	6 2 4. 7	6 8 2. 6
T l i t ty o a e q u	7 6 0. 6	5. 7 4 1	6 9 0. 6	5 7 4 8.
In fre lo l ia b i l i ie te t- -te t re s e ng rm s	5 9. 4	7 1. 6	5 3. 1	5 5. 9
In b in lo d b te t- -te t re s e a r g ng rm e	1 1 8 5. 6	1 0 9 6. 7	8 7 6. 6	8 3 0. 1
T l l l i b i l i i t -t t o a o n g e r m a e s	5. 1 2 4 0	1 1 6 8. 3	9 2 9. 7	8 8 6. 0
O he in fre l ia b i l i ie t te t- t t r re s e cu rre n s	2 0 3. 1	2 1 2. 0	6 9. 6	1 8 2. 3
C io f lo d b t p t -te t u rre n o r n o ng rm e	3 3. 0	3 2. 1	0. 0	0. 0
T l l i b i l i i t t t o a c r r e n a e s u	2 3 6. 1	2 4 4. 1	6 9. 6	1 8 2. 3
T l i d l i b i l i i t ty t o a e q a n a e s u	2 2 4 1. 7	5 5 2 1 7.	1 6 8 9. 9	1 8 1 6. 8

Key figures

S K E Y F I G U R E	Q 2 1 5	Q 1 1 5	Q 2 1 4	6 M 1 5	6 M 1 4	2 0 1 4
O in in t p e ra g m a rg	2 4. 6 %	4 4. 6 %	4 1. 2 %	3 6. 1 %	3 4. 6 %	4 5. 3 %
Eq i io ty t u ra	3 3. 9 %	3 4. 5 %	4 0. 9 %	3 3. 9 %	4 0. 9 %	4 1. 2 %
Re i tu ty rn o n e q u	6. 7 %	1 4. 5 %	2 4. 2 %	1 0. 4 %	1 6. 9 %	2 3. 9 %
Ne in b in d b ( U S D i l l io ) t te t t re s e a r g e m n	1 1 2 3. 7	9 7 7. 4	7 9 9. 2	1 1 2 3. 7	7 9 9. 2	7 0 7. 7
Nu b f s ha ( ) 1 0 0 0 m e r o re s	2 3 5 9 7 3	2 3 5 9 7 3	2 3 5 9 7 3	2 3 5 9 7 3	2 3 5 9 7 3	2 3 5 9 7 3
Av f o d in ha ( ) 1 0 0 0 ts ta e ra g e no . o u n g s re s	2 3 5 9 7 3	2 3 5 9 7 3	2 3 5 9 7 3	2 3 5 9 7 3	2 3 5 9 7 3	2 3 5 9 7 3
U S D / N O K ha d f p io d te t e ex c ng e ra a n o e r	7. 8 6	8. 0 9	6. 1 5	7. 8 6	6. 1 5	7. 4 3
S ha ic ( N O K ) re p r e	2 7. 2 0	2 2. 2 0	5 0. 6 0	2 7. 2 0	5 0. 6 0	2 3. 0 0
S ha ic ( U S D ) re p r e	3. 4 6	2. 7 4	8. 2 3	3. 4 6	8. 2 3	3. 1 0
Ma ke i l is io ( N O K i l l io ) t c ta t r a p a n m n	6 4 1 8	5 2 3 9	1 1 9 4 0	6 4 1 8	1 1 9 4 0	5 4 2 7
Ma ke i l is io ( U S D i l l io ) t c ta t r a p a n m n	8 1 7	6 4 8	1 9 4 2	8 1 7	1 9 4 2	7 3 0

Dividend

• Board of Directors has declared an interim dividend equivalent to USD 0.048 per share
• The shares will trade exdividend on 27 August
• The dividend will be paid in the form of NOK 0.40 per share on 10 September

Agenda

• Recent developments
• Financial results
• Operations/projects
• Outlook

Fleet utilisation

• Utilisation rate of 58 per cent in Q2
• Safe Bristolia, Safe Britannia, Safe Scandinavia and Safe Concordia hadyard stays in thequarter

Regalia, Safe Astoria, Safe Regency, Safe Lancia and Safe Hibernia were fully contracted during the quarter

Safe Boreas in operation

• Safe Boreas received the Acknowledgement of Compliance from PSA in May
• Safe Boreas commenced contract with Lundin Norway in mid-May
• Lundin Norway has exercised an option to extend the contract by one month to mid-December 2015
• • Lundin still has the option to extend by another month

Safe Zephyrus nearing completion

• Vessel construction and mechanical completion 99 per cent complete
• Received the SHARP award for 2015 by Singapore's "Workplace Safety & Health Council", in recognition of 8 million manhours without LTI
• Contracts in place
• • Covering initial short period for Safe Notos in the UK in Q2 16
• • Contract for Det Norske at Ivar Aasen scheduled from June 2016

First contracts in place for Safe Notos and Safe Eurus

• Projects developing as planned
• Strong capabilities
• • The most advanced and flexible vessels for worldwide operations excluding Norway
• First contract in place for Safe Eurus
• • Three year contract in Brazil, expected start-up Q1 17
• First contract in place for Safe Notos
• -Eight month contract in UK from Q2 16
• • Initial short period to be covered by Safe Zephyrus

Safe Scandinavia TSV project

• 3 years firm (+4 years of options) contract with Statoil as a Tender Support Vessel (TSV) at OsebergØst in Norway
• Arrived at Westcon yard in Norway for TSV conversion in March
• Project completion delayed –operations expected to commence in Q4 2015

Capital expenditure 2015

• Capital expenditure in 2015 is expected to increase by 5 to 10 per cent from USD 750-800 million, as stated in operational update on 29 July
• Increase due to:
• • Safe Scandinavia TSV conversion project
• -Safe Concordia SPS and upgrade
• -Safe Bristolia repair work
• Major capex items in 2015:
• • Final yard instalment for Safe Boreas and Safe Zephyrus
• -Safe Scandinavia TSV conversion
• -Safe Concordia SPS and upgrade
• • Safe Notos and Safe Eurus new build projects

Capex coming down after completion of projects

USD 50-60 million expected accross the fleet in 2017

Executed and planned capex projects

State of the art North Sea capable fleet

• 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)

Agenda

• Recent developments
• Financial results
• Operations/projects

Outlook

Difficult market conditions – Prosafe well prepared

Market outlook in brief

• Near term improved
• Challenging market medium term
• Long-term demand drivers intact – signs of improvement from 2018
• Tendering activity at decent level

Prosafe's response

• State of the art fleet
• • Upgrades and life extensions
• -New builds
• Organisation and ways of working
• -Efficient ways of working
• • Reduce costs, but maintain competence
• Work with clients to find good solutions for both parties

Leading provider of offshore accommodation vessels

• Prosafe is the leading owner and operator of accommodation semis
• -High quality and versatile fleet
• • Clients looking for operationally experienced and financially sound partners
• High growth combined with somewhat softer market might lead to consolidation opportunities
• All four Prosafe new builds have contracts in place

No. of accommodation semis by owner

Prosafe's relative competitive position improving

Prosafe has high market share in key markets

*RoW includes semis, JU, monohulls and barges

North Sea – near term improved for Prosafe

• Near term improved for Prosafe
• -Recent contract awards
• Medium term remains uncertain
• • Pressure on clients to cut spending resulting in reduced work scopes
• • Client project sanctions being deferred
• Long-term demand drivers intact
• • Demand outlook seems to be improving from 2018
• • Increased field life and aging infrastructure
• • New fields coming on stream over the next years

Three year demand index drop confirming

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

Source: Prosafe

North Sea - dayrates

Mexico – short-term uncertainty

• Pemex continues to focus on costreduction programs as a result of lower oil price
• • A number of drilling programmes have been terminated
• • Reduction of offshore workforce supporting operations and maintenance

• Short /medium term uncertainty

• • Safe Hibernia continues to be deployed on the Jasminia contract since end February
• -Jasminia remains off-hire
• Long-term outlook positive, but pressure on rates
• • Substantial amount of maintenance, refurbishment and re-fitting work in the pipeline for the coming years

Mexico - dayrates

Brazil –new three year contract awarded

• Three year contract signed with Petrobras for Safe Eurus
• Long term outlook remains positive for high end vessels
• Demand for lower-end equipment diminishing
• -Many non-semi assets underperforming
• • Recent tender only allowed DP semisubmersibles

Rest of the world - in brief

Australia

• -Prospects related to hook-up and commissioning
• • As fields are getting older, there should be potential for more maintenance and modification related work
• South East Asia
• • Prospects in mid and deep waters, mostly related to hook-up and commissioning
• US GoM
• • A number of prospects developing in the mid and deep water areas. Oil price heavily affecting decision making
• West Africa
• • A number of long term opportunities for both hook-up and commissioning projects and fabric maintenance

Rest of world, excl. NS - dayrates

Improved visibility

Offshore accommodation – a late cyclical market

• Back to «normal»: majority of prospects currently being maintenance and modification work
• • In general lead times are shorter for modification work compared to hook-up and commissioning projects

Contract backlog robust

Added considerable contract backlog the last week

Gross value of charter contracts

Summary

• Several contract awards recently and short term visibility improved
• The market remains challenging following further drop in oil price

-Medium term uncertainty

• Long term demand drivers intact
• • Demand outlook seems to improve from 2018
• Tendering activity at decent level
• Prosafe's relative competitive position improving