Slide 1: Third Quarter 2020 results
Third Quarter 2020 results Dag Skindlo Chief Executive Officer Espen Joranger Chief Financial Officer 6 November 2020 1
Slide 2: Disclaimer – forward looking statements
Q3 2020 Disclaimer – forw ard looking statements Cautionary Statement Regarding Forward-Looking Statements In addition to historical information, this presentation contains statements relating to our future business and/or results. These statements include certain projections and business trends tha
Slide 3: Q3 in brief
Q3 2020 Q3 in brief NIBD reduced by $107 million to $500 million YOY • NIBD reduced by $20 million from previous quarter EBITDA before exceptional items of 22.3 million • Activity in Argentina continue to be negatively impacted by Covid-19 Backlog addition • Four-year PD contract extension for 7 ins
Slide 4: Third quarter 2020 key financials
Q3 2020 Third quarter 2020 key financials Revenue [$m] EBITDA before exceptional items* [$m, %] 250 240 237 27.5 228 30 28.1 25.4 25.4 22.3 15,0 % 193 184 25 200 13,0 % 20 150 11,0 % 15 100 10 9,0 % 50 7,0 % 5 0 0 5,0 % Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Capex [$m] Net Inter
Slide 5: Platform Drilling, Modular Rigs & Engineering
Q3 2020 Platform Drilling, Modular Rigs & Engineering Financials Operations • Revenue down by 8% YOY • Active drilling rigs in the portfolio reduced by 2 platforms from Q2 • Additional EBITDA contribution and margin expansion • Archer Emerald commenced operations September 30th from increased Modula
Slide 6: Platform drilling contract backlog
Q3 2020 Platform drilling contract backlog Platform Drilling Field Operator 2020 2021 2022 2023 2024 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Bery l A/B Apache Strong contract backlog and capability to retain contracts; Forties A/B/C/D Apache • Secured important contract extensions for UK
Slide 7: Well Services
Q3 2020 Well Services Financials Operations • Revenues increased 4% YOY • Successful Comtrac campaign • EBITDA margin reduced compared to Q2 • First MCAP® and DASP® runs with Equinor following less runs and unfavorable product mix compared to Q2 • Continued low activity for Wireline • Capex of $1.4
Slide 8: Case study #1 – Wireline ComTrac®
Q3 2020 Case study #1 – Wireline ComTrac® ComTrac® potential revealed Energy transition The use of ComTrac® 66% reduced the number of 818 tons Archer committed to contribute to energy runs from 31* to 9, with 17 transition: considerable cost-, time- Days and emissions savings Develop technologies an
Slide 9: Land drilling
Q3 2020 Land drilling Financials Operations • Revenue increased 14% from Q2 but down 49% YOY • Increase in active drilling rigs late Q3 • EBITDA before exceptional items was $5.2 million • Number of active units up 100% from Q2 • Negative reported EBITDA of $1.2 million in the quarter • Covid-19 cas
Slide 10: Argentina Gas Incentive Plan
Q3 2020 Drilling Rig count in Argentina vs Archer Drilling Rigs Argentina Gas Incentive Plan Primary election Nationwide Sovereign 80 lockdown debt default Argentina Government unveils gas incentive plan to 70 boost production in Vaca Muerta area 60 ✓ The plan grants 85% price increase to energy 50
Slide 11: Condensed profit & loss statement
Q3 2020 Condensed profit & loss statement Condensed profit & loss YTD YTD ($ million Q3 19 Q3 20 2019 2020 Operating revenues 203.5 160.2 626.5 529.8 • Operational revenue of $160.2 million, is a Reimbursable revenue 24.2 23.3 62.4 83.7 decrease of $43.3 million or 21% YOY due to a Total Revenues 22
Slide 12: Condensed balance sheet
Q3 2020 Condensed balance sheet Condensed balance sheet $ million 30.09.19 30.06.2020 30.09.2020 Cash and cash equivalents 10.2 41.2 47.4 • Accounts receivables are reduced by $20 million Restricted cash 8.5 14.3 7.2 following improved DSO and lower activity Accounts receivables 148.6 115.4 95.2 Inv
Slide 13: Financial position
Fi n a n c i a l p o s i t i on Sufficient liquidity NIBD / EBITDA development • Generating positive cash flows 18,0 16.2 • Net interest-bearing debt further reduced 16,0 14,0 10.9 • Available liquidity of $138 million 12,0 10,0 8.1 • Agreed amendments to covenants and $20 8,0 6,0 6.2 6.3 million pr
Slide 14: Summary Q3 2020 and Financial outlook 2020
Q3 2020 Summary Q3 2020 • Secured additional PD backlog through contract extensions on a total of 14 installations • Strong cash flow generation and substantial reduction of NIBD in the quarter • Amendments to the loan facility to increase headroom and improve flexibility Financial outlook 2020 • Ac
Slide 15: Q&A
Q&A 15
Slide 16: Segment key financials
Ap p e n d i x Segment key financials Eastern Hemisphere Revenues ($m) EBITDA (%) 200 167,0 167,2 15,0 % 155,4 160,2 146,4 150 10,0 % 100 Platform drilling & 5,0 % Engineering 50 0 0,0 % Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 $m Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Well Services Revenues 155.4 167.0 167.2 160.2 146
Slide 17: Condensed profit and loss statement
Ap p e n d i x Condensed profit and loss statement (Figures in $ million) Q3 19 Q4 19 Q1 20* Q2 20* Q3 20 Operating revenues 203.5 207.1 207.6 161.9 160.2 Reimbursable revenue 24.2 32.6 29.5 30.9 23.3 Total Revenues 227.6 239.7 237.1 192.8 183.6 EBITDA before exceptional items 25.4 27.5 28.1 25.4 22
Slide 18: Condensed balance sheet
Ap p e n d i x Condensed balance sheet $ million 30.09.19 31.12.19 31.03.20* 30.06.20 30.09.20 Cash, cash equivalents & restricted cash 18.7 44.1 107.5 55.5 54.6 Accounts receivables 148.6 145.4 150.2 115.4 95.2 Inventories 52.2 53.0 52.0 51.0 53.2 Right of use assets current 1.0 0.7 - - - Other cur
Slide 19: Condensed cash flow statement – last 5 quarters
Ap p e n d i x Condensed cash flow statement – last 5 quarters (Figures in $ million) Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Operating activities (15.0) 47.0 1.6 41.3 10.9 Investing activities (14.8) (17.3) (4.5) (8.4) (0.3) Financing activities 2.4 (4.4) 75.8 (85.6) (15.4) FX effect (5.0) (0.2) (9.4) 0.6 4.