Reach Subsea

Quarterly Report • Aug 27, 2024

Find out more at reachsubsea.com

Q2 2024 Q2 2024

Everything within Reach

Quarterly Consolidated Report

Sustainable access to ocean space

Jostein Alendal, CEO | Birgitte Wendelbo Johansen, CFO | 27 August 2024

Disclaimer

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Reach Subsea confirming steady progress

A strong 2Q in terms of operations and results, market improvements, and progress towards strategic goals.

Underlying financial performance in line with last year for 2Q, and well ahead of last year for 6M. Dividend of NOK 0.36 per share distributed in the quarter.

Key milestones achieved for Reach Remote with successful sea launch and award of landmark technology qualification contract with Equinor.

Strong outlook as evidenced by order backlog and outstanding tender value more than doubling year-over-year.

NOK 623 million Revenue Q2 2024

NOK 121 million EBIT Q2 2024

NOK 1 600 million Order backlog

NOK 11 billion Tender volume

Vessel capacity for long-term growth

Owned vessels	VESSELS Viking Reach Reach Remote 1 & 2 Reach Remote 3 & 4	TYPE Survey, IMR, Light Construction Unmanned and Robotics Unmanned and Robotics	2024	2025
Chartered vessels	Deep Cygnus Go Electra Olympic Triton Havila Subsea Olympic Taurus Offshore Surveyor Northern Maria Agalas newbuild	Construction Survey, IMR, Light Construction IMR, Light Construction Survey, IMR, Light Construction IMR, Light Construction Survey Survey, IMR IMR, Light Construction
Project charter	Olympic Delta	Survey, IMR, Light Construction			Charter fix

Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024

Continued strong order backlog

*Does not include options and expected call- off Outstanding tender volume NOK 11 billion (NOK 5 billion) extensions under frame agreements Whole fleet now equipped for more value-added services, supporting further growth

Our services seeing persistant advancement

IMR & CONSTRUCTION

• Heavy construction and decommissioning
• Specialized inspection, maintenance and repair

SURVEY

• Seabed mapping
• Pipeline inspection survey

MONITORING

• Hydrocarbon production
• CCS projects Environmental monitoring

Dedicated to utilizing the latest technology and robotization

Dragonet ROV UXO surveys

The Reach Dragonet gradiometer system was successfully launched in Q1/Q2 this year.

It has since delivered high-precision magnetic anomaly detection with low noise, enhanced by integrated HD cameras for real-time visual correlation. The modular, skid-based design ensures easy deployment and adaptability to various work scopes including geophysical sensors. There are several versions (width) of the system to provide versatile operations where the wide 9 meter frame is typically used for UXO surveys,

gWatch Remote

Reach's world-leading gWatch technology goes remote for unmanned operations.

Reach's gWatch is used for reservoir modelling by regular measuring of changes in gravity throughout the lifetime of the reservoir and was commercialized in 2013. It is currently used on all large gas / oil & gas / condensate fields in Norway and is rapidly reaching other parts of the world. The technology is undergoing a development project to reduce footprint and improve robustness and operational efficiency to prepare for remote operations with our fleet of Reach Remote vessels in Q4 2024.

Reach Horizon

Reach develops an internal platform for command & control of remote systems as well as supervising data acquisition.

Recent years hardware development enables possibility to operate a wide range of systems remotely. A key success factor is to manage all these systems under one umbrella which is why Reach is focusing on the Reach Horizon to broaden and improve our Remote Services.

Reach Subsea is a leader in technology development and application of innovative methods for our IMR, survey, and monitoring services in the offshore industry. The company has a highly skilled and interdisciplinary team of scientists and engineers with expertise and excellence in physics, geoscience, modeling, data analysis, sensors, instrument design, communication, and software development.

Orca 1 &2 in the longest-running operation record for DRIX globally

Reach Subsea DRIX (Orca 1 and Orca 2)

The DRIX is 8 meter long remotely controlled / autonomous survey vehicle designed for high quality hydrographic surveys in shallow waters. The vehicle is equipped with high performance subsea equipment and communication systems for over the horizon control and operations.

Key features include

• Length: 7.7 meters
• Draft: 2 meters
• Beam: 0.82 meters
• MBES: EM2040

Q2 highlights

• In Q2 Reach Subsea took delivery of our second Drix unit named Orca 2 and immediately mobilised the vehicle for the hydrographic mapping project ongoing in Saudi Arabia.
• The operation of two Drix units (Orca 1 and Orca 2) from the same operation team has led to even more efficient operations and the two units has now exceeded 60.000 line km of surveys.
• With the operation of the Drix units Reach Subsea has further developed our remote survey capability and put Reach Subsea in the front of the ongoing technology shift towards un-crewed environmental friendly operations.

Remote vessels transitioning from conceptto operational validation

Reach Remote 1 & 2

Setting new standards, Reach Remote introduces Norway's pioneering fleet of uncrewed 24-meter surface vessels (USVs), featuring hull-mounted survey sensors and a Work Class Electric ROV.

Scheduled for deployment in 2024 under the Norwegian Flag, these vessels are poised to revolutionize offshore subsea operations, aligning with sustainability initiatives. Reach Remote offers secure, eco-friendly, and cost-effective solutions for global subsea inspection, survey, and intervention services. This ground breaking project integrates Uncrewed Surface Vessels (USVs) with Remotely Operated Vehicles (ROVs), paving the way for advancements in remote maritime technologies and marking a significant milestone in global maritime operations.

Key features include

• Length: 23.9 meters
• Optimized for low energy consumption
• Electric Work Class ROV onboard
• Hull-mounted survey sensors
• Endurance of 30 days
• No personnel onboard

Q2 highlights

• Successfully launched Reach Remote 1 USV and conducted a series of successful tests throughout the second quarter.
• Held a successful client day, generating high interest and engagement, including visit onbaord the Vessel in Brevik and in the Massterly Remote Operation Centre in Horten.
• Entered into an agreement with Equinor to conduct technology qualification program for the Reach Remote USVs. To be executed directly after delivery, estimated autumn 2024.
• Reach Remote 2, following its sealaunch, is steadily progressing and catching up with Reach Remote 1.

2nd Quarter 2024

Reach Subsea | First Quarter Consolidated Report 2024

Financials

Q2 2024 Highlights

-

• Strong Q2 quarter leveraged by global operations

• Q2 revenue at NOK 623 million

• Order backlog remaining strong at NOK 1.6 billion

NOK 623 million (NOK 607 million*)

• Pre-tax profit

NOK 111 million (NOK 81 million*)

Cash and cash equivalents NOK 222 million (NOK 129 million)

Cash positive position; net interest-bearing debt, excl IFRS 16 leases negative NOK 128 million (negative NOK 120 million)

NOK 121 million (NOK 119 million*)

*Excluding a 29,8 MNOK one-off effect from sale of one ROV in Q2-2023.

Revenue and profits raised to record levels

Rolling 12-month Revenue (MNOK) Rolling 12-month EBIT and Pre-tax profit (MNOK)

Revenue increased 163 percent* last 24 months

*Excluding a 29,8 MNOK one-off effect from sale of one ROV in Q2-2023.

Q2 2024 Key developments

Revenue mix by sector Revenue mix by segment

Revenue increased 163 percent* last 24 months

Renewables and others

• 3 percent revenue increase for the quarter driven by
  • Increased number of project days
  • Higher pricing
  • Integrated, full service scope
• Solid growth in both oil & gas sector and renewables

Revenue mix by geography

Solutions

*Excluding a 29,8 MNOK one-off effect from sale of one ROV in Q2-2023.

Positioned for growth

• Strong liquidity and equity positions
• Well-positioned for remaining investments in Reach Remote and mobilizations and equipment for the coming year

Solid financial position (MNOK)

Progress on ESG targets

Zero work-related injuries (LTI)

Environment		Social		Governance
Increase activity within non –Oil & Gas segment	CO2 footprint below NSA relevant emission targets	Lost time incidents (LTI) 0%	Zero work-related injuries (LTI)	cyber security courses
Ongoing	Achieved	Achieved	Achieved	Ongoing
Zero major spills of hazardous materials to the sea	Successfully bring two first USVs to market in 2024	Maintain turnover below 8%	10 apprentices and trainees participating yearly in trainee program
Achieved	Ongoing	Achieved		Ongoing

90% completion of Code of Conduct and Anti-bribery courses

Ongoing

Implement and gain 90% completion of Sustainability course

Ongoing

90% completion of cyber security awareness training courses

2nd Quarter 2024

Reach Subsea | First Quarter Consolidated Report 2024

Summary

2nd Quarter 2024

Positioned for continued growth and value creation, globally

Singapore

Haugesund, Bergen, Oslo

Aberdeen

Trinidad & Tobago

Rio

Perth