Helix Energy Solutions Group, Inc. · NYSE:HLX
Helix Energy Solutions — Q4 2022 Earnings Presentation
37 slides from Helix Energy Solutions's earnings presentation, Feb 21, 2023
Slide 1: Fourth Quarter 2022 Conference Call
February 21, 2023 Fourth Quarter 2022 Conference Call
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements that involve risks, uncertainties and assumptions that could cause our results to differ materially from those expressed or implied by such forward-looking statements. All statements, other than statements of historical
Slide 3: Presentation Outline
PRESENTATION OUTLINE • Executive Summary (pg. 4) • Operational Highlights by Segment (pg. 11) • Key Financial Metrics (pg. 21) • 2023 Outlook (pg. 26) • Environmental, Social and Governance (pg. 33) • Non-GAAP Reconciliations (pg. 34) • Questions and Answers 3
Slide 4: Executive Summary
Executive Summary ENERGY SOLUTIONS,
Slide 5: Helix: An Energy Transition and Sustainability Model
HELIX: AN ENERGY TRANSITION AND SUSTAINABILITY MODEL Helix’s focus since 2009 has been on the end of life of existing oil & gas reservoirs and supporting offshore wind development Helix serves three core markets: Maximizing Remaining Reserves in Existing Reservoirs • Production enhancement and probl
Slide 6: Executive Summary
EXECUTIVE SUMMARY ($ in millions, except per share amounts, unaudited) Three Months Ended Year Ended 12/31/22 12/31/21 9/30/22 12/31/22 12/31/21 Revenues $ 288 $ 169 $ 273 $ 873 $ 675 Gross profit (loss) $ 31 $ (5) $ 39 $ 51 $ 15 11% (3)% 14% 6% 2% Net income (loss)1 $ 3 $ (26) $ (19) $ (88) $ (62)
Slide 7: Executive Summary – Q4 2022 Highlights
EXECUTIVE SUMMARY – Q4 2022 HIGHLIGHTS Financial Results • Net income of $3 million, $0.02 per diluted share • Adjusted EBITDA1 of $49 million • Operating cash flows of $50 million • Free Cash Flow1 of $21 million Operations • Commenced Trident decommissioning campaign on Siem Helix I and extended P
Slide 8: Executive Summary – 2022 Full Year Highlights
EXECUTIVE SUMMARY – 2022 FULL YEAR HIGHLIGHTS Financial Results • Net loss of $88 million, $(0.58) per diluted share • Adjusted EBITDA1 of $121 million • Operating cash flows of $51 million • Free Cash Flow1 of $18 million Operations • Acquired the Alliance group of companies on July 1 for $119 mill
Slide 9: Executive Summary – Q4 2022 Segments
EXECUTIVE SUMMARY – Q4 2022 SEGMENTS Well Intervention Shallow Water Abandonment • Well Intervention vessel fleet utilization 97% • 71% Liftboat, OSV and crewboat combined • 97% in the GOM utilization • 99% in the North Sea and West Africa • 63% Diving support vessel (DSV) utilization • 92% in Brazi
Slide 10: Executive Summary – Balance Sheet
EXECUTIVE SUMMARY – BALANCE SHEET Q4 2022 • Cash and cash equivalents of $187 million (excludes $3 million of restricted cash) • Liquidity1 of $285 million • Long-term debt2 of $264 million • Net Debt3 of $75 million $200 Million Share Repurchase Authorization • Expect to align repurchases with FCF
Slide 11: Operational Highlights By Segment
Operational Highlights By Segment 11
Slide 12: Business Segment Results
BUSINESS SEGMENT RESULTS ($ in mil lions, unaudited) Three Months Ended Year Ended 12/31/22 12/31/21 9/30/22 12/31/22 12/31/21 Revenues Well Intervention $ 168 $ 119 $ 144 $ 524 $ 517 Robotics 49 41 56 192 137 Shallow Water Abandonment1 57 - 67 125 - Production Facilities 28 20 18 82 69 Intercompany
Slide 13: Well Intervention – Gulf of Mexico
WELL INTERVENTION – GULF OF MEXICO • Q5000 – 100% utilized in Q4; performed production enhancement scopes on four wells under a multi-year campaign for Shell with a customer-provided 15K IRS • Q4000 – 94% utilized in Q4; completed a two-well production enhancement scope for one customer, followed by
Slide 14: Well Intervention – North Sea and West Africa / Asia Pacific
WELL INTERVENTION – NORTH SEA AND WEST AFRICA / ASIA PACIFIC • Well Enhancer – 100% utilized in Q4; performed production enhancement operations on five wells for two customers • Seawell – 97% utilized in Q4; performed live and suspended well decommissioning operations for several customers; commence
Slide 15: Well Intervention – Brazil
WELL INTERVENTION – BRAZIL • Siem Helix 1 – 87% utilized in Q4; completed ROV work scopes for Trident Energy in November; subsequently transitioned to a two-year decommissioning campaign for the same customer and performed decommissioning scopes on three wells in the Campos basin • Siem Helix 2 – 98
Slide 16: Well Intervention – Utilization
WELL INTERVENTION – UTILIZATION 100% 100% 99% 99% 99% 99% 99% 98% 100% 93% 87% 88% 97% 90% 92% 92% 89% 88% 86% 88% 80% 83% 74% 80% 79% 70% 72% 63% 71% 63% 60% 59% 58% 50% 52% 40% 44% 40% 31% 38% 38% 30% 42% 20% 10% 9% 0% Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Gulf of
Slide 17: Robotics
ROBOTICS • Grand Canyon II (Asia Pacific) – 100% utilized in Q4 performing long-term decommissioning project offshore Thailand • Grand Canyon III (North Sea) – 100% utilized in Q4; performed renewables trenching operations for three customers and oil and gas trenching for two customers • Shelia Bord
Slide 18: Robotics Utilization
ROBOTICS UTILIZATION 499 70% 500 66% 450 450 60% 405 419 58% 400 370 376 358 50% 336 53% 350 323 332 38% 300 40% 37% 36% 43% 34% 34% 32% 35% 250 30% 236 24% 200 176 154 160 20% 165 150 119 92 84 90 90 100 72 81 10% 66 42 50 0% - Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 4Q22
Slide 19: Shallow Water Abandonment
SHALLOW WATER ABANDONMENT • Offshore – • Liftboats – ten liftboats with combined utilization of 69% in Q4 performing make safe, well abandonment, pipeline abandonment, CT, wireline, construction support, production support and dive support operations • OSVs – six OSVs and one crew boat with combined
Slide 20: Shallow Water Abandonment Utilization
SHALLOW WATER ABANDONMENT UTILIZATION The graph below presents the utilization statistics of the Helix Alliance vessels following their acquisition on July 1, 2022 100% 95% 90% 86% 80% 80% 74% 72% 71% 70% 69% 63% 60% 50% 41% 40% 30% 30% 26% 20% 10% 0% 0% Liftboats¹ OSVs and Crew Boat¹ Diving Vessels
Slide 21: Key Financial Metrics
Key Financial Metrics 21
Slide 22: Debt Instrument Profile
DEBT INSTRUMENT PROFILE Principal Payment Schedule at 12/31/22 Total funded debt1 of $271 million at 12/31/22 ($ in millions) • $30 million Convertible Senior Notes due 2023 – 4.125% $250 • $200 million Convertible Senior Notes due 2026 – 6.75% $210 • $41 million MARAD Debt – 4.93% $200 • Semi-annua
Slide 23: Debt & Liquidity Profile
DEBT & LIQUIDITY PROFILE ($ in millions) $500 $426 $380 $452 $400 $348 $305 $300 $285 $200 $279 $291 $254 $267 $187 $100 $208 $22 $0 ($100) $(161) $(143) $(58) $(75) ($200) $(229) $(305) $(264) $(350) ($300) $(406) $(496) $(440) ($400) ($500) 12/31/17 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 Cas
Slide 24: Five-Year Trend
FIVE-YEAR TREND1 ($ IN MILLIONS) $1,000 $80 $200 $150 $58 $873 $180 $132 $60 $162 $800 $40 $155 $740 $752 $734 $150 $675 $29 $20 $100 $121 Net income (loss) $22 Adjusted EBITDA2 Free Cash Flow2 $600 $0 Revenue $100 $96 ($20) $80 $400 $60 ($40) $50 $50 $200 ($60) $(62) $31 ($80) $(88) $18 $0 ($100) $
Slide 25: Revenue Dispersion
REVENUE DISPERSION ($ IN MILLIONS) By Segment1 By Geography1 By Market Strategy1 $1,000 $1,000 3% 10% 10% $800 $800 10% 8% 14% 9% 6% 10% 9% 8% 6% 6% 10% 9% 17% 19% 26% 19% $600 21% 18% $600 26% 18% 16% 19% 10% 15% 52% $400 $400 29% 28% 28% 35% 23% 74% 73% 71% 74% 58% $200 51% $200 37% 39% 42% 34% $0
Slide 26: 2023 Outlook
2023 Outlook 26
Slide 27: 2023 Outlook: Forecast
2023 OUTLOOK: FORECAST ($ in millions) 2023 2022 Outlook Actual1 Revenues $ 1,020 - 1,200 $ 873 Adjusted EBITDA2 210 - 250 121 Free Cash Flow2 110 - 150 18 Capital Additions3 50 - 70 69 Revenue Split: Well Intervention $ 640 - 690 $ 524 Robotics 190 - 230 192 Shallow Water Abandonment1 170 - 250 125
Slide 28: 2023 Outlook – Well Intervention
2023 OUTLOOK – WELL INTERVENTION • Q4000 (Gulf of Mexico) – contracted through mid-March followed by approximate 75-day dry dock; subsequent awarded work through Q3; identified opportunities and visibility for remainder of 2023 • Q5000 (Gulf of Mexico) – contracted work on Shell multi-year campaign
Slide 29: 2023 Outlook – Robotics
2023 OUTLOOK – ROBOTICS • Grand Canyon II (Asia Pacific) – continuing to perform contracted decommissioning and ROV support work offshore Thailand into Q3 with expected good utilization; expected to remain in Thailand well into 2H and should have close to full utilization for remainder of 2023 • Gra
Slide 30: 2023 Outlook – Shallow Water Abandonment
2023 OUTLOOK – SHALLOW WATER ABANDONMENT • Offshore • Liftboats - expected high utilization on eight to 10 liftboats throughout 2023 • OSVs – expected seasonality in activity, with stronger mid-year utilization and seasonal slowdown Q1 and Q4 • Energy Services • P&A Systems – expected strong utiliza
Slide 31: 2023 Outlook: Capital Additions & Balance Sheet
2023 OUTLOOK: CAPITAL ADDITIONS & BALANCE SHEET 2023 Capital additions are forecasted at approximately $50 - $70 million: • Primarily maintenance capex related to regulatory recertification costs of our vessels and systems, which are reported in operating cash flows • Approximately $14 million of ca
Slide 32: Beyond 2023
BEYOND 2023 • We plan to continue momentum on the three legs of our Energy Transition business model: production maximization, decommissioning and renewables • Expected continued strong operating and free cash flows • Maintenance capex anticipated to be approximately $50 million annually • Well Inte
Slide 33: Environmental, Social and Governance
ENVIRONMENTAL, SOCIAL AND GOVERNANCE Environmental • Our business supports the responsible transition from a carbon based economy through a three pronged strategy of maximizing remaining oil and gas reserves, abandonment and decommissioning end of life wells and applying the techniques and technolog
Slide 34: Non-GAAP Reconciliations
Non-GAAP Reconciliations 34
Slide 35: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS ($ in thousands, unaudited) Three Months Ended Year Ended 12/31/22 12/31/21 9/30/22 12/31/22 12/31/21 Adjusted EBITDA: Net income (loss) $ 2,709 $ (25,908) $ (18,763) $ (87,784) $ (61,684) Adjustments: Income tax provision (benefit) 2,529 (6,048) 6,500 12,603 (8,958) Net int
Slide 36: Non-GAAP and Other Definitions
NON-GAAP AND OTHER DEFINITIONS Non-GAAP Financial Measures We define EBITDA as earnings before income taxes, net interest expense, gains or losses on extinguishment of long-term debt, gains and losses on equity investments, net other income or expense, and depreciation and amortization expense. Non-
Slide 37: Thank you
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Helix Energy Solutions Group — Q4 2022 Earnings Presentation on 6ix