Endur Asa · OSL:ENDUR
Endur Asa — Investor Presentation (February 2021)
54 slides from Endur Asa's investor presentation, Feb 9, 2021
Slide 1: Endúr ASA Company presentation
Endúr ASA Company presentation 9 February 2021
Slide 2: Important information
Important information By receiving and/or attending and reading this company presentation (the “Presentation”), each recipient agrees to be bound by the following terms, conditions and limitations: The Presentation has been prepared by Endúr ASA (the “Company”, and together with its subsidiaries, th
Slide 3: Agenda
Agenda Company overview Business segments and key demand drivers Financials Supporting materials
Slide 4: Introduction to Endúr
Introduction to Endúr Company highlights Pro forma figures 2020e • Leading full-service provider for marine infrastructure and aquaculture Revenues 1,816m solutions in Norway and Sweden with ability to win large projects within: Reported EBITDA 227m Leading provider of • Land-based aquaculture marin
Slide 5: Endúr's recent history
Endúr’s recent history Synergy realisation, deleveraging, further Acquisition of consolidation Marcon, a Announced leading marine acquisition of Artec infrastructure Aqua, to grow player in 2021 - presence within Sweden land-based Equity issue of aquaculture NOK 125m equity Acquisition of issue to p
Slide 6: Experienced management team, board and owners with extensive industrial background
Experienced management team, board and owners with extensive industrial background New executive management Board of directors Existing management in M&A targets Hans Olav Storkås Chairman: Øivind Horpestad Jeppe Raaholt – CEO BMO Entreprenør Former MD of NRC Norge AS, a total of Over 10 year built
Slide 7: Building a unique service provider within marine infrastructure and aquaculture solutions
Building a unique service provider within marine infrastructure and aquaculture solutions Offshore wind Concrete bridge 9 Full-service offering within marine infrastructure to take Infield cable large multi-disciplinary projects Water cleansing facility Land-based aquaculture Subsea power cable 9 Ta
Slide 8: Marine infrastructure and aquaculture solutions in Norway and Sweden
Marine infrastructure and aquaculture solutions in Norway and Sweden Simplified new group structure1) Geographical presence Key financials 20203) Adj. EBITDA- margin: 12.7% 1,816 Isfjorden Ålesund Energy services Artec Aqua HQ and Marine infrastructure Aquaculture Legacy2) fabrication facilities Här
Slide 9: A one stop shop with all relevant services, supported by sustainability-driven megatrends
A «one stop shop» with all relevant services, supported by sustainability-driven megatrends Rationale Targeted marine infrastructure segments • The marine infrastructure and aquaculture solutions markets remain highly fragmented - clients seeking “one stop shop”-offerings. Market winner likely to be
Slide 10: Recent acquisitions of strong stand-alone companies provide diversification
Recent acquisitions of strong stand-alone companies provide diversification Marine infrastructure Aquaculture Former Endúr, all segments BMO Entreprenør Artec Aqua Marcon Other • Acquired Q4 2020 • Agreed to acquire in Q1 2021 • Agreed to acquire Q1 2021 • Sjøsterk (acquired Q1 2018), feed barges •
Slide 11: Significant potential for top line synergies
Significant potential for top line synergies Marine infrastructure Aquaculture Company Other Exposure Sea cables/pipeline Underwater services Harbour/quays Aquaculture solutions Aquaculture services installation Artec Aqua - - - 9 9 - BMO Entreprenør 9 Potential 9 - Potential 9 Marcon 9 9 9 - - - Sj
Slide 12: Strong order backlog & risk mitigating contract structure
Strong order backlog & risk mitigating contract structure Firm contract backlog per segment Risk mitigating contract structure Aquaculture segment Total Artec Aqua - Share of cost plus contracts Installit - Share of cost plus contracts Artec Sjøsterk 688 25 1,643 2,075 85% >90% 930 72 858 2021e 2022
Slide 13: Well positioned for future profitability
Well positioned for future profitability Priorities for future profitability Revenue bridge and 2022 target1) 2020 pro forma revenues (NOKm) 2,000-2,500 1 Streamline and integrate current exposure/companies Lower range 1 816 within 184 424 reach in 2021 637 without 2 Focus on top line synergies to a
Slide 14: Sustainable solutions, enabling the green shift
Sustainable solutions, enabling the green shift 9 Committed to reducing, recycling and reusing materials to reduce consumption E Environmental 9 Strive to perform activities and operations using the most environmentally friendly equipment available 9 Focus on building sustainable solutions that last
Slide 15: Agenda
Agenda Company overview Business segments and key demand drivers Financials Supporting materials
Slide 16: Marine infrastructure is a diversified segment with large share of public customers
Marine infrastructure Aquaculture Legacy/Other Marine infrastructure is a diversified segment with large share of public customers Business segments Nearshore and underwater services Sea cables/pipeline installation Maintenance and rehabilitation • Provide technical expertise, inspections and • Engi
Slide 17: Supported by steady, strong demand drivers
Marine infrastructure Aquaculture Legacy/Other Supported by steady, strong demand drivers Market drivers Competitive position Marine infrastructure1) • Significant overhang in public investments, large • High barriers to entry with significant «know-how» catch-up proposed over the next years along t
Slide 18: Endúr the clear market leader with unique service offerings
Marine infrastructure Aquaculture Legacy/Other Endúr the clear market leader with unique service offerings Revenue Service offerings Marine infrastructure Key Market 2019 (20) Marine Marine Technical Marine Ship • Leading multi-service and multi-regional player competitors NOK ‘000 construction serv
Slide 19: Present in both the conventional and land based segment of aquaculture
Marine infrastructure Aquaculture Legacy/Other Present in both the conventional and land based segment of aquaculture Business segments Conventional (Sjøsterk) Land based (Artec Aqua) • Design & produce concrete floating structures with the main emphasis on feed barges • Turnkey solutions for land b
Slide 20: Market with strong growth and high entry barriers
Marine infrastructure Aquaculture Legacy/Other Market with strong growth and high entry barriers Market drivers Competitive position Market size – land based1) NOKm Smolt and broodstock Growout • Extensive experience from FTS-/R • Increased focus on efficiency, • Superior control of production and R
Slide 21: Endúr uniquely positioned as the leading turnkey supplier
Marine infrastructure Aquaculture Legacy/Other Endúr uniquely positioned as the leading turnkey supplier Key Revenue Turnkey Turnkey, 2) 2) 2) Market leading turnkey supplier 1) Market 2019 solution incl. process FTS FTS-R RAS Other competitors Only turnkey supplier of both solution incl. building a
Slide 22: Legacy/Other – Business segments
Marine infrastructure Aquaculture Legacy/Other Legacy/Other– Business segments Business segments Maritime Energy Headquarter / Group functions • Engine workshop with specialist expertise in high- • Following discontinuation of Endúr Industrier AS, the • Offers headquarter functions to the group comp
Slide 23: Agenda
Agenda Company overview Business segments and key demand drivers Financials Supporting materials
Slide 24: Strong financial profile
Strong financial profile • 2020 pro forma revenues of NOK 1,816m Strong 2020 • 2020 pro forma EBITDA of NOK 227m (adj. EBITDA of NOK 230m) performance for all • 2020 pro forma adj. EBITDA margin of 12.7% main group companies • With the recent acquisitions of BMO Entreprenør, Artec Aqua and Marcon, E
Slide 25: 2020 pro forma revenues and EBITDA
2020 pro forma revenues and EBITDA Revenue split by company Adj. EBITDA split by company Adj. EBITDA-margin Comments BMO Entreprenør BMO Entreprenør Marcon 24.7% Artec Aqua largest contributor to total Artec Aqua revenue 22% Artec Aqua 26% BMO Entreprenør 17.2% 28% Marcon with the highest EBITDA
Slide 26: Stable historical earnings from a diversified portfolio
Stable historical earnings from a diversified portfolio Historical revenues Historical EBITDA and EBITDA-margin Diversified projects portfolio and customer base BMO Entreprenør1) - NOKm 500 BMO Entreprenør1) - NOKm BMO – # contracts by size 479 399 19.4% 18.0% 17.0% 14.1% 7.8% 17.2% 12 363 313 313 6
Slide 27: Overview of refinancing and pro forma debt capital structure
Overview of refinancing and pro forma debt capital structure Pro forma net debt 2020 post transaction1) Comments NOKm 76 351 • Use of proceeds from the senior secured bond 60 issue partly used for a full clean-up of the 74 89 company’s balance sheet 52 • Refinance majority of “old” debt in Endúr 377
Slide 28: High cash conversion enables rapid deleveraging
High cash conversion enables rapid deleveraging Cash conversion from 2020PF EBITDA1) (normalised) Accumulated cash in a zero-growth scenario 2) Comments NOKm Based on 2020PF EBITDA • The company forecast a normalised Cash conversion of ~70% capex level (including lease payments) of c. NOK 70m per ye
Slide 29: Strong credit metrics and significant deleveraging capacity
Strong credit metrics and significant deleveraging capacity Leverage ratio – NIBD/EBITDA1) Other credit metrics Initial @ closing NIBD/EV2) 2,263 861 38% 861 3.7x NIBD EV 230 Equity ratio2) NIBD Adj. EBITDA 2,534 55% 1,403 Significant deleveraging expected through tenure of bond 3.7x BV assets Equit
Slide 30: Agenda
Agenda Company overview Business segments and key demand drivers Financials Supporting materials
Slide 31: Detailed corporate structure
Detailed corporate structure Endúr ASA Marcon Gruppen i Sverige Endúr BidCo AS Endúr Maritime AS Endúr Invest AS Installit AS AB 100% 100% 100% 100% BMO Entreprenør AS Marcon Teknik AB Endúr Aak AS Workpool AS 100% 100% Svensk Sjöentreprenad 100% 100% Offshore Power Artec Aqua AS Endúr Eiendom AS i
Slide 32: Endúr's 20 largest shareholders
Endúr’s 20 largest shareholders Shareholder overview1) Ownership of M&A targets Shareholder Mill. Shares Pct. Artec Holding AS 290.9 25.7 Bever Holding AS 84.0 7.4 Middelborg Invest AS 82.0 7.2 Former Artec owners Jörn Ryberg Holding AB 71.7 6.3 Other shareholders 26% Handeland Industri AS 61.3 5.4
Slide 33: Historical P&L – per entity and consolidated (pro forma)
Historical P&L – per entity and consolidated (pro forma) Profit and loss statement Comments ENDUR P&L GROUP - ENDUR BMO ARTEC MARCON PROFORMA NOK'000 FY2020 FY2020 FY2020 FY2020 FY2020 A Total sales of NOK 1,816m Sales A 1,815,790 B 355,992 398,672 636,643 424,483 Other operating income 30,286 13,
Slide 34: Balance sheet - per entity and consolidated (pro forma)
Balance sheet - per entity and consolidated (pro forma) Balance Sheet Comments ENDUR Balance sheet GROUP - ENDUR BMO FINANCING ARTEC MARCON PROFORMA NOK'000 31.12.2020 31.12.2020 31.12.2020 31.12.2020 31.12.2020 31.12.2020 Goodwill write down of NOK 160m in relation to wind Assets C C A down of ØP
Slide 35: ESG Checklist
ESG Checklist General Endúr companies will strive to perform activities and operations using the most environmentally friendly equipment available. As the machine park rapidly adapts to the green shift, there is a challenge keeping all companies in front of the change. Please list the industry’s t
Slide 36: ESG Checklist (cont'd)
ESG Checklist (cont’d) Environment (cont’d) Does the firm rely on any scarce resources Endúr and its companies have a vast and broad set of experience and expertise. In order to always be aligned with the right for its operations? If so, what efforts are amount of resources (both soft and hard), f
Slide 37: ESG Checklist (cont'd)
ESG Checklist (cont’d) Social Does the firm have a history of accidents? If Endúr strive to perform all its operations with a zero-accident policy. This is a tough and ambitious target to set. Some lost workday so, how have these been managed? Are incidents/accidents do unfortunately exist. Cases
Slide 38: ESG Checklist (cont'd)
ESG Checklist (cont’d) Governance (cont’d) Please state the firm’s business tax residence (i.e. where the firm pays tax) and Norway explain why that specific tax residence was chosen Are there independent members on the Yes Board of Directors? Please state if and to what extent, the company has
Slide 39: Agenda
New layout, use new pictures for every content slide (this Agenda picture is already used on front) Transaction overview Company overview Business segments and key demand drivers Financials Risk factors Supporting materials BMO Entreprenør Artec Aqua Marcon
Slide 40: A strong player within maintenance of critical marine infrastructure: Quays, dams and bridges
A strong player within maintenance of critical marine infrastructure: Quays, dams and bridges Key service offerings Business Experienced management team Track and facilities Dam and power Jeppe Raaholt – CEO M.Sc civil engineering NTNU 2015 Rehabilitation and maintenance of large Prev.pos COO Norsk
Slide 41: Acquisition rationale: BMO Entreprenør adds desired service offering at high margin earnings
Acquisition rationale: BMO Entreprenør adds desired service offering at high margin earnings Rationale Targeted marine infrastructure segments • BMO Entreprenør has delivered consistent strong returns • EBITDA around 15% over the last 5 years Sea cables/ • Steady and growing demand for BMO Entrepren
Slide 42: BMO Entreprenør - Transaction structure and financing
BMO Entreprenør - Transaction structure and financing Overview of the transaction Settlement in NOKm BMO Entreprenør Enterprise value of NOK 418m, corresponding to a purchase price of NOK 448m NOK 157m in valuation Endúr shares Settlement to BMO NOK 157m settled in Endúr shares at NOK 1.459 per
Slide 43: Agenda
Agenda Transaction overview Company overview Business segments and key demand drivers Financials Risk factors Supporting materials BMO Entreprenør Artec Aqua Marcon
Slide 44: A leading turnkey supplier for onshore aquaculture
A leading turnkey supplier for onshore aquaculture About Artec Aqua Highly skilled and motivated management team • Established in 2002 by Bjørn Finnøy, Bjørnar Experience Experience Experience Mrs. Eidsvik has 20+ Mr. Finnøy has 20+ years Mr. Flem has 20+ years Flem and Victor Fiveland – all still w
Slide 45: Turnkey onshore aquaculture supplier backed by highly skilled and experienced management
Turnkey onshore aquaculture supplier backed by highly skilled and experienced management Offerings “Best in class” project management Key financials • Turnkey supplier of onshore aquaculture solutions, can • The Artec Aqua team comprises of 40 highly skilled and 700 637 12% deliver all or parts of t
Slide 46: Combined entity is rigged to become a one stop shop for marine infrastructure projects
Combined entity is rigged to become a “one stop shop” for marine infrastructure projects Artec Aqua have significant growth opportunities Artec Aqua - Significantly increasing Endúr’s aquaculture offering • Positioned with a record high order book and sales leads pipeline in the domestic market. • E
Slide 47: Artec Aqua - Transaction structure and financing
Artec Aqua - Transaction structure and financing Overview of the transaction Transaction structure Artec Aqua Enterprise value of NOK 600m, corresponding to an equity value of NOK 690m NOK 345m in valuation Endúr shares NOK 345m in shares in Endúr ASA (50%) Settlement to Artec Aqua shareholders
Slide 48: Agenda
Agenda Transaction overview Company overview Business segments and key demand drivers Financials Risk factors Supporting materials BMO Entreprenør Artec Aqua Marcon
Slide 49: A leading Swedish multi-service marine infrastructure provider
A leading Swedish multi-service marine infrastructure provider About Marcon Highly skilled and motivated management team Headquarter • Leading Swedish company engaged in Kenneth Malin Leveau marine construction and civil engineering Jörn Ryberg Andersson activities Chairman of the Chief Financial Gr
Slide 50: A multi-service marine infrastructure provider
A multi-service marine infrastructure provider Revenue split Business areas Marine services Marine resources Dredging Technical services Ship-diving Renewable energy assets • Diving and sea work • Sound prospector – • Fairway • Sea level measurement • IWS/UWE • Jack-up vessel specifically • Marine f
Slide 51: Key financials - Well performing with a significant orderbook
Key financials - Well performing with a significant orderbook Comments Orderbook until fiscal year-end (SEKm) Key financials1) (SEKm) • Appr. 70% of revenue generated from the civil 269 engineering segment - marine construction, diving 500 30% services, bridge & quay maintenance & repair, subsea cab
Slide 52: Marcon adds desired service offering at high margin earnings
Marcon adds desired service offering at high margin earnings Rationale Targeted marine infrastructure segments • Through the acquisition of Marcon Group, Endúr realises its ambition to become the leading player within the Nordic marine infrastructure engineering and construction market Sea cables/ •
Slide 53: Marcon - Transaction structure and financing
Marcon - Transaction structure and financing Overview of the transaction Transaction structure Endúr to acquire Marcon on 100% basis Marcon valuation SEK 140m in Enterprise value of SEK 460m, corresponding to an equity value of SEK 400m Endúr shares SEK 260m in cash SEK 140m in new shares in E
Slide 54: Endúr is an Old Norse word derived from 'endurnýja'
Endúr is an Old Norse word derived from the word ‘endurnýja’ – which means to renew, to refresh, to change. But endúr also has several other meanings – not least ‘enduring’ or ‘persisting’ – and can be read as a short form of the English word endurance, which means tireless perseverance; to withstan