Prosafe SE — Investor Presentation 2017

May 11, 2017

11 May 2017

Q1 2017 results and market update

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 forward-looking 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

Highlights

• Plan the work Work the plan
• Financial results and guidance
• Status and outlook
• Summary

Highlights

• Awarded important long-term contract for Safe Zephyrus at Johan Sverdrup field in Norway
• Good operating performance
• Focus on safety and compliance
• Utilisation of 40 per cent in the quarter
• Safe Concordia still on contract in Brazil, with potential for a short extension
• Options exercised for Safe Boreas and Safe Zephyrus
• Delivering on cost and capex reductions. Focus on continuous improvement remains
• Looking for optionality and value creation potential from financing terms, price and timing of delivery of COSCO new builds
• Safe Regency in process of being sold for scrap to protect cash and to increase competitiveness of the fleet

Awarded Johan Sverdrup contract

• Important contract for the company to win
• Will provide longevity of operations for the Safe Zephyrus and generate firm cash flow in a soft market
• The award is anticipated to position Safe Zephyrus well for any additional work for the Johan Sverdrup development
• Contract value between MUSD 51 and MUSD 53 depending on alternative and includes mobilisation, demobilisation and fuel consumption
• The combination of building order book and longevity with the retained optionality from other vessels in the fleet represents a balanced situation for Prosafe

Agenda

• Highlights
• Plan the work - Work the plan
• Financial results and guidance
• Status and outlook
• Summary

Plan the work - Work the plan

Rebuilding of Prosafe

• Reorganisation and substantial cost cuts
• Capex reduction and liquidity preservation
• Optimising lay-up, stacking and reactivation
• Fleet high-grading and industry restructuring
• Commercial strategy adapted to circumstances
• Positioning the Safe Scandinavia towards and beyond summer 2018
• China vessels: Pursuing optionality and value creation
• Target to strengthen the position as global leader in offshore accommodation

Lead the industry restructuring

Contributing to replacement and rebalancing

TSV Safe Scandinavia

• Firm contract with Statoil till summer 2018 at Oseberg on the NCS
• Strong operational and technical performance
• Drilling program well ahead of plan
• Focus on positioning the Safe Scandinavia towards and beyond 2018

New builds – dialogue with COSCO

• Negotiations with COSCO regarding Nova, Vega and Eurus ongoing
• Looking for optionality and value creation potential from financing terms, price and timing of delivery
• Solid downside protection in cancellation rights with approx. USD 60 million secured by a refund guarantee from Bank of China

Agenda

• Highlights
• Plan the work Work the plan
• Financial results and guidance
• Status and outlook
• Summary

Income statement

(Unaudited figures in USD million)	Q1 17	Q4 16	Q1 16	2016
Operating revenues	75.7	125.8	103.0	474.0
Operating expenses	(44.9)	(47.8)	(57.7)	(220.8)
EBITDA	30.8	78.0	45.3	253.2
Depreciation	(33.4)	(34.1)	(23.4)	(115.7)
Impairment	0.0	(84.7)	0.0	(84.7)
Operating profit/(loss)	(2.6)	(40.8)	21.9	52.8
Interest income	0.1	0.1	0.0	0.3
Interest expenses	(18.6)	(18.4)	(19.9)	(85.6)
Other financial items	3.6	33.7	(0.4)	222.2
Net financial items	(14.9)	15.4	(20.3)	136.9
Profit/(Loss) before taxes	(17.5)	(25.4)	1.6	189.7
Taxes	(1.6)	(7.3)	(3.4)	(17.1)
Net profit/(loss)	(19.1)	(32.7)	(1.8)	172.6
EPS	(0.27)	(0.51)	(1.00)	8.36
Diluted EPS	(0.22)	(0.47)	(1.00)	8.10

Balance sheet

(Unaudited figures in USD million)	31.03.17	31.12.16	31.03.16
Goodwill	226.7	226.7	226.7
Vessels	1 997.8	2 029.3	1 581.6
New builds	123.3	122.2	635.3
Other non-current assets	13.9	13.9	4.7
Total non-current assets	2 361.7	2 392.1	2 448.3
Cash and deposits	250.6	205.7	71.0
Other current assets	43.5	89.1	111.5
Total current assets	294.1	294.8	182.5
Total assets	2 655.8	2 686.9	2 630.8
Share capital	7.9	7.9	72.1
Other equity	1 106.3	1 121.6	610.4
Total equity	1 114.2	1 129.5	682.5
Interest-free long-term liabilities	61.1	62.2	90.8
Interest-bearing long-term debt	1 336.3	1 342.9	1 554.9
Total long-term liabilities	1 397.4	1 405.1	1 645.7
Other interest-free current liabilities	96.3	104.4	135.8
Current portion of long-term debt	47.9	47.9	166.8
Total current liabilities	144.2	152.3	302.6
Total equity and liabilities	2 655.8	2 686.9	2 630.8

Update on cost and capex

	2011-2015 annual average levels	Initial target levels	Run rate (May 2017)
Offshore opex1)	USD 180m	USD 140 – 150m	USD 130 – 140m
Onshore opex	USD 40m	USD 28-30m (-25-30%)	USD 22m (-45%)
Annual fleet capex2)	USD 60m	USD 20-30m	USD 10-15m
Headcount reduction (in %)		35-40% onshore	Ca. 50% onshore. Offshore pending vessel activity – 20-35%

1) Will to some extent be affected by activity level

2) Excluding new-builds and conversions, updated from Q2 presentation

Update on vessel's cost per day

CPD in operation being reduced by an average of ca. 30% since 2014

Opex (CPD k/d)* (figures in USD)	NCS/UK	NCS (TSV)	UKCS	Brazil
	DP	Moored	Moored	DP
2014	75-80/60-65	100-105	50-55	60-65
2017e	60-65/40-45	85-90	30-35	40-45
% reduction	19%/32%	15%	38%	32%

* Excl. fuel cost, any additional crew and project related costs

Stacking CPD (k/d) (figures in USD)	High-spec vessels 1) (cold/warm)	Low-spec vessels 1) (cold/warm)
August 2016 estimate	15-30	5-10
From Q3 2017	10-20	5-10

1) Will depend on location and duration and cold/warm/hot stack

Protecting the runway

• Good cash flow generation
• Reduced cost and capex
• Cash neutral at EBITDA of approx. USD 100 million1)

1) 2017 is, however, impacted by USD 30 million repayment of sellers credit to Jurong in June. On the RCF, MUSD 30 was prepaid in Q4 2016 and utilised for a bank guarantee (BG). If and when this BG is deleted, the company will have MUSD 30 available under the RCF to draw.

EBITDA and capex guidance

Current guidance
2017 EBITDA	Ca. MUSD 120+ 1)
Capex per year	2) MUSD 10-15

1) May vary with currency movements 2) Incl. SPS for the Safe Caledonia

Agenda

• Highlights
• Plan the work Work the plan
• Financial results and guidance
• Status and outlook
• Summary

Increased firm contract visibility beyond 2017

Order book

Firm order book at end Q1 2017 of approx. MUSD 450

Firm contracts

Moderate capex fall in 2017 and an increase in 2018

Global E&P capex change y-o-y (USDm)*

* Capex changes 2014e-2017e shown in the chart are Swedbank Research estimates based on a wide range (40-50) of oil companies.

• Expecting moderate fall in 2017, after two years of sharp decline
• Note that a modest drop in 2017 spending may imply a small uptick in activity
• And an increase in capex expected in 2018

Source: Swedbank

General MMO indicators

• Oil and gas fields in the North Sea on stream longer than initially planned for
• Current market remains predominantly hook-up and commissioning work
• Anticipated that life extension, upgrade, modification and maintenance (MMO) will come back stronger down the road

Prospects and tendering

• Number of prospects and tenders increased compared to the previous three years
• Generally slow decision making but early contact. Activity level moving sideways
• Indicating an anticipated gradual improvement from 2018/2019

Tenders and Prospects - outlook is three years

Number of tenders (number of projects/potential contracts) and number of potential projects with above 50% probability of going to an accommodation tender in the next three years. Source: Prosafe

Agenda

• Highlights
• Plan the work Work the plan
• Financial results and guidance
• Status and outlook

Summary

Summary

• Good operating performance 40% utilisation in the quarter
• Safety focus zero mindset no compromise
• Awarded Johan Sverdrup contract for Zephyrus with firm revenue in 2018 and 2019
• Focus on positioning the Safe Scandinavia towards and beyond summer 2018
• Market remains generally soft. Current activity predominantly hook-up and commissioning work. Market improvement requires the MMO market to improve
• Delivering on cost and capex reductions. Focus on continuous improvement remains
• Negotiations ongoing with COSCO for optionality and maximum value creation potential
• Regency in process of being sold for scrap to protect cash and to increase competitiveness of the fleet. 5th vessel sold for scrap since Q2 2016
• Aim to continue to be active in industry restructuring

Appendix

Operating revenue and expenses

(USD million)	Q1 17	Q4 16	Q1 16	2016
Charter income	66.3	95.8	56.2	375.5
Mob/demob income	1.1	17.5	13.9	34.0
Other income	8.3	12.5	32.9	64.5
Total	75.7	125.8	103.0	474.0