Odfjell Drilling Ltd. · OSL:ODL
Odfjell Drilling — Q4 2019 Earnings Presentation
25 slides from Odfjell Drilling's earnings presentation, February 2020
Slide 1: Q4 2019 Presentation
Q4 2019 Presentation
Slide 2: Contents
Contents • Introduction to ODL • Highlights and material events • Segment reporting • Financial information • Summary Page 2
Slide 3: Introduction
Introduction Key Financials Q4 2019 $ 221 Mill $ 170 Mill Revenue Cash Odfjell Drilling is a listed international drilling, well $ 93 Mill 3.8x EBITDA Leverage ratio (adj) service and engineering company with 2,500 employees and operations in more than 20 countries. $ 2,300 Mill 40 % Backlog Equity
Slide 4: Strategic focus and financial priorities
Strategic focus and financial priorities Strategic focus Financial priorities Be the preferred harsh environment driller Maintain sufficient financial strength and sound leverage ratio Frontrunner in the green shift Continue to develop as a strong service provider Value-adding growth Healthy order b
Slide 5: Q4 19 - key summary
Q4 19 - key summary - Aker BP exercised first optional year on Deepsea Nordkapp - Equinor confirmed more work for Deepsea Atlantic - ConocoPhillips awarded 5 year platform drilling contract on the Greater Ekofisk Area - Improved earnings from Well Services - Improved rig utilization and increased le
Slide 6: Highlights and material events in/after Q4 2019
Highlights and material events in/after Q4 2019 Deepsea Yantai commenced contract with Neptune Energy • Deepsea Yantai commenced, on 31 October 2019, its contract with Neptune Energy on the Norwegian Continental Shelf. The contract is currently for 8 firm wells after Neptune Energy recently exercise
Slide 7: Highlights and material events in/after Q4 2019 cont.
Highlights and material events in/after Q4 2019 cont. Aker BP exercised first optional year on Deepsea Nordkapp • Aker BP exercised, on 18 December 2019, the first 12 months option for Deepsea Nordkapp under the contract entered into between the parties in April 2018. The first 12 month option shall
Slide 8: Mobile Offshore Drilling Units (MODU) - Continued strong operations
Mobile Offshore drilling Units (MODU) - Continued strong operations Q4 2019 Financial Utilization Financial Utilization1 Q4 19 Q4 18 FY 19 FY 18 Deepsea Stavanger 99,2 % 97,7 % 98,7 % 98,7 % Deepsea Atlantic 97,1 % 96,9 % 97,8 % 98,4 % Deepsea Bergen 91,3 % 98,0 % 97,3 % 98,2 % Deepsea Aberdeen 96,0
Slide 9: MODU - Contract status and day rates
Mobile Offshore drilling Units (MODU) - Contract status and day rates Day rate Drilling unit Year built Location /operator (KUSD/day)* Deepsea Bergen Norway 1983 180 (3G, MW, HE) MOL Deepsea Atlantic Norway 2009 296/339 (6G, UDW, HE) Equinor Deepsea Stavanger Norway/ South Africa 2010 279/438 (6G, U
Slide 10: The journey towards zero emission drilling
The journey towards zero emission drilling Positive business case: R&D: KPI’s Government Funding: Green Fuels Procedures Demo2000 & NOx Fund Carbon Training Client Contract: Capture Fuel Incentives Shore Power Green shift - Simply good business Page 10
Slide 11: Platform Drilling and Technology - Portfolio secured by medium to long-term contracts
Platform Drilling and Technology - Portfolio secured by medium to long-term contracts Customers Platforms Location Heidrun Norway Johan Sverdrup Norway Mariner (1) UK Brage Norway Greater Ekofisk Field (2) Norway 3 UK Platforms (3) UK 4 UK Platforms (4) UK Bruce UK 2019 2020 2021 2022 2023 2024 2025
Slide 12: Well Services - Pricing pressure offset by cost efficiency measures
Well Services - Pricing pressure offset by cost efficiency measures Product lines Tubular Running Services Casing While Drilling Well Intervention Services Drill Tool Rental Services • Conventional and remote- • Casing While Drilling • Wellbore clean-up tools and • Drilling tools rentals including o
Slide 13: Earnings visibility through USD 2.3 billion order backlog
Earnings visibility through USD 2.3 billion order backlog Total revenue backlog per year1 Firm Options Firm contracts USD 1.3 billion Priced options USD 1.0 billion 1 000 Total backlog USD 2.3 billion 800 703 671 5 600 472 74 400 324 665 667 145 187 200 398 148 179 - 40 38 2020 2021 2022 2023 After
Slide 14: Industry leading Corporate Credit profile
Industry leading Corporate Credit profile Free Cash Flow yield1 26% 10% 2% 1% -6% -43% -62% -133% ODL Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Net Debt / EBITDA2 38,4x 24,7x 21,0x 10,9x 7,8x 5,5x 2,7x 3,7x Peer 1 ODL Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Sources: Fearnley Securities, Com
Slide 15: Market outlook
Market outlook General • Successful efficiency programs carried out by E&P and service industry • Uncertain world economy outlook => Increasing E&P activity, but pace dependent on overall world economy MODU • Still significant oversupply in the global rig market • Harsh environment markets are close
Slide 16: Financial information
Financial information Page 16
Slide 17: Group summary financials
Group summary financials Condensed consolidated income statement P&L - (USD million) Q4 19 Q4 18 FY 19 FY 18 Operating revenue 221 168 823 698 Other gains/losses 1 1 1 2 Personnel expenses -90 -62 -328 -304 Other operating expenses -38 -39 -164 -138 EBITDA 93 68 332 259 Depreciation -51 -40 -185 -16
Slide 18: Segment reporting - MODU financials
Segment reporting - MODU financials MODU Key Financials (USD million) Condensed P&L - (USD million) Q4 19 Q4 18 FY 19 FY 18 Revenues 599 Operating revenue 160 119 599 476 EBITDA 80 60 291 226 476 Depreciation and impairments -43 -33 -153 -133 EBIT 37 27 138 94 Book value rigs 2 157 1 855 2 157 1 855
Slide 19: Segment reporting - Drilling & Technology financials
Segment reporting - Drilling & Technology financials Drilling & Technology Key Financials (USD million) Condensed P&L - (USD million) Q4 19 Q4 18 FY 19 FY 18 Revenues 147 145 Operating revenue 38 37 147 145 EBITDA 6 5 17 14 Depreciation and impairments -0 -0 -0 -0 EBIT 6 5 17 13 EBITDA-margin 14,5 %
Slide 20: Segment reporting - Well Services financials
Segment reporting - Well Services financials Well Services Key Financials (USD million) Condensed P&L - (USD million) Q4 19 Q4 18 FY 19 FY 18 Revenues 111 107 Operating revenue 31 25 111 107 EBITDA 11 6 31 26 Depreciation and impairments -5 -6 -22 -24 EBIT 5 -0 9 2 Book value of equipment 74 71 74 7
Slide 21: Group - Eliminations & Reconciliation
Group - Eliminations & Reconciliation Group – Eliminations & Reconciliation (USD million) Q4 19 Q4 18 FY 19 FY 18 Elimination internal operating revenue -8 -13 -34 -29 Corporate overhead EBITDA -6 -3 -16 -7 Corporate overhead EBIT -6 -4 -19 -11 IFRS adjustm ents and reconciliations (USD million) Q4
Slide 22: Summary statement of financial position
Summary statement of financial position Group statement of financial position Assets (USDm) 31.12.19 31.12.18 Equity and liabilities (USDm) 31.12.19 31.12.18 Deferred tax asset 1 1 Total paid-in capital 565 565 Intangible assets 30 30 Other equity 497 459 Property, plant and equipment 2 281 1 928 To
Slide 23: Summary statement of cash flow
Summary statement of cash flow Group statement of cash flow Cash Flow - (USDm) Q4 19 Q4 18 FY 19 FY 18 Profit before income tax 11 21 44 31 Adjustment for provisions and other non-cash elements 76 44 282 212 Change in working capital 11 50 -47 44 Cash from operations 98 115 279 288 Interest paid -22
Slide 24: Summary Q4 2019
Summary Q4 2019 MODU: - Attractive harsh environment assets, strong backlog and healthy outlook - We believe supply will remain tight due to limited investment apetite Drilling & Technology: - Continued strong financial performance supported by strong backlog Well Services: - Turning point has passe
Slide 25: CEO Odfjell Drilling AS Simen Lieungh
CEO Odfjell Drilling AS Simen Lieungh CFO Odfjell Drilling AS Atle Sæbø VP Corporate Finance & IR Eirik Knudsen, [email protected] +47 934 59 173 Next event: Q1 2020 results tentatively scheduled to be published 13 May 2020 For more information see: www.odfjelldrilling.com