Oceaneering International, Inc. · NYSE:OII
Oceaneering International — Q3 2023 Earnings Presentation
47 slides from Oceaneering International's earnings presentation, Oct 26, 2023
Slide 1: Investor Presentation 2023 Third Quarter
NYSE: OII Investor Presentation 2023 Third Quarter 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements In accordance with the Safe Harbor provisions of the Private hire, growth, bidding activity, outlook, performance, in, or our ability to comply with, other laws and governmental Securities Litigation Reform Act of 1995, Oceaneering opportunities, results, and financials as
Slide 3: Non-GAAP Information and Market and Industry Data
Non-GAAP Information Market and Industry Data This presentation includes several “non-GAAP” financial This presentation includes market and industry data and measures, as defined under Regulation G of the U.S. certain other statistical information based on third-party Securities Exchange Act of 1934
Slide 4: Oceaneering – Born at Sea
Oceaneering – Born at Sea Oceaneering is a market leader in engineered services and products, with nearly 60 years of experience working in underwater and harsh environments. Oceaneering is motivated to develop technology and hardware for a variety of applications designed to meet high standards for
Slide 5: Our Robotics Expertise Serves Multiple Markets
Our Robotics Expertise Serves Multiple Markets Business Segments / Applications Markets / Potential Markets Subsea Robotics and • Remotely Operated Vehicles (ROVs) • Offshore O&G, Renewables and Carbon Capture Offshore Projects Group • Autonomous Underwater Vehicles (AUVs) • Offshore O&G, Renewables
Slide 6: Sustainability at Oceaneering
Sustainability at Oceaneering Environmental We are advancing capabilities as a technology delivery company and developing technologies designed to address a myriad of challenges, including mitigating greenhouse gas emissions for customers and our own operations. Social We are leveraging Employee Res
Slide 7: Operating Segments
Operating Segments Energy Non-Energy Aerospace and Defense Subsea Robotics Manufactured Products* Technologies Offshore Projects Group Integrity Management & Digital Solutions * Manufactured Products includes the non-energy Mobility Solutions businesses: Entertainment Systems and Autonomous Mobile R
Slide 8: Active in All Phases of the Offshore Oilfield Life Cycle
Active in All Phases of the Offshore Oilfield Life Cycle Phase Exploration Development Production Decommissioning % of Oceaneering Revenue* 12% 51% 34% 3% Business Segment •ROV Services (SSR) •ROV Services (SSR) •ROV Services (SSR) •ROV Services (SSR) and Product and •Survey (SSR) •Survey (SSR) •AUV
Slide 9: Financial Overview, Quarterly
Financial Overview, Quarterly Revenue Adjusted Operating EBITDA* $559.7M $597.9M $635.2M $77.6M $74.8M $84.1M 100% 100% 15% 15% 16% 13% 11% 12% 4% 4% 3% 11% 11% 10% 75% 75% 22% 26% 27% Aerospace/Defense Tech 27% 22% 24% Integrity Mgmt/Digital Sol 12% Offshore Projects Group 50% 50% 7% 9% Manufacture
Slide 10: Comparing Operating Results 2023 Q3 vs 2023 Q2
Comparing Operating Results* 2023 Q3 vs 2023 Q2 Primary Variance Factors for Q3 2023 compared to Q2 2023 Consolidated EBITDA of $84.1M was at the upper end of our guided range and exceeded consensus estimates. Offshore activity drove operating improvements in our Subsea Robotics (or SSR) and Consoli
Slide 11: Liquidity and Cash Flow
Liquidity and Cash Flow Liquidity as of September 30, 2023 • $556 million of cash and cash equivalents Pro forma debt position*: • $500 million of unsecured senior notes due February 2028, nearest maturity • $215 million of unused commitments through our senior secured revolving credit agreement, av
Slide 12: Subsea Robotics
Subsea Robotics Revenue ($ in millions) Subsea Robotics (SSR) merges our underwater robotics and automation capabilities by combining our ROV, Survey, and ROV $539 $622 Tooling businesses. Remotely Operated Vehicles (ROV) Remotely operated, tethered submersible vehicles for drilling support, offshor
Slide 13: Subsea Robotics
Subsea Robotics Revenue and Adjusted EBITDA Margin* Revenue Margin ($ in thousands) SSR ROV Revenue SSR Tool/Survey SSR Adjusted EBITDA Margin 31% 200,000 40% 30% 31% 150,000 30% 100,000 20% 76% of SSR Revenue 50,000 10% 0 0% * For a reconciliation of this segment’s Adjusted EBITDA Margin to Operati
Slide 14: Subsea Robotics, ROV
Subsea Robotics, ROV Days on Hire, Average Revenue per Day, and Utilization Rates Average Revenue per DOH Rate Days $10,000 20,000 100% Drill Support % ROV Days on Hire $9,372 Vessel-based % ROV Revenue / Day on Hire 17,500 ROV Fleet Utilization % $9,000 80% 15,000 69% $8,000 12,500 60% 61% 10,000 $
Slide 15: Manufactured Products
Manufactured Products Revenue ($ in millions) Manufactured Products brings together our competencies and expertise around advanced technology product development, $344 $382 manufacturing, and project management to include four business units: Energy Manufactured Products $0 Distribution Systems Prod
Slide 16: Manufactured Products Backlog and Book-to-Bill
Manufactured Products* Backlog and Book-to-Bill $600 $556 2.00 Backlog Revenue Book-to-Bill, ttm 1.75 Mfd Products Book-to-Bill, ttm Mfd Products ($ in Millions) 1.41 $450 1.50 1.25 $300 1.00 0.75 $150 0.50 $122.9 0.25 $0 0.00 * Recast backlog and revenue following segment realignments. 16
Slide 17: Offshore Projects Group
Offshore Projects Group Revenue ($ in millions) Offshore Projects Group (OPG) provides a broad portfolio of integrated subsea project capabilities and solutions, including: $489 $378 project management and engineering; subsea installation and intervention; IMR (inspection, maintenance, and repair) s
Slide 18: Offshore Projects Group Vessel Assets
Offshore Projects Group Vessel assets for offshore projects Deepwater Multi-purpose Supply Vessels: Forecasted Q4 Location • Ocean Evolution Owned Gulf of Mexico • Ocean Intervention* Owned Global regions • Ocean Intervention III Spot charter West Africa • Brandon Bordelon* Leased Gulf of Mexico • H
Slide 19: Integrity Management & Digital Solutions
Integrity Management & Digital Solutions Revenue ($ in millions) The Integrity Management & Digital Solutions (IMDS) segment leverages software, analytics, and services that promote the safety, $241 $230 efficiency, cost effectiveness, and sustainability programs of our energy and maritime customers
Slide 20: Aerospace and Defense Technologies
Aerospace and Defense Technologies Revenue ($ in millions) Aerospace and Defense Technologies (ADTech) provides engineering services and related manufacturing, principally for the U.S. Department of Defense and NASA $367 $343 and their prime contractors. Defense Subsea Technologies $0 Design, build,
Slide 21: Aerospace and Defense Technologies Work Scopes
Aerospace and Defense Technologies Work scopes Vehicle Systems and Submarine Services Life Support Sea-basing Technologies Submarine Rescue and Deep Submergence Connection Systems Hyperbaric Systems * For a reconciliation of this segment’s Adjusted EBITDA Margin to Operating Income, see the Suppleme
Slide 22: Oceaneering Outlook, Q4 2023 Operating Results
Oceaneering Outlook, Q4 2023 Operating Results* Q4 2023 Forecast compared to Q3 2023 Actual EBITDA forecast to decline on relatively flat revenue. Anticipate a seasonal slowdown while still Consolidated Results expecting relatively good activity in our offshore markets. Slightly lower revenue and re
Slide 23: Oceaneering Outlook, 2023
Oceaneering Outlook, 2023 • Year over Year • Revenue improvement in all operating segments • Operating income and margin improvement in SSR, MP, and OPG • Operating income and margin decline in IMDS • Operating income improvement and margin decline in ADTech • Consolidated Adjusted EBITDA, $275M to
Slide 24: Oceaneering Outlook, 2024
Oceaneering Outlook, 2024 • Year over Year • Improved Revenue and Operating Income in all operating segments, led by gains from SSR and OPG • Consolidated Adjusted EBITDA, $330M to $380M* UniMover™ O 600 Omnidirectional Underride Robot • Free Cash Flow > 2023 Free Cash Flow • Capital Expenditures fl
Slide 25: Industrial Robotics Market Outlook
Industrial Robotics Market Outlook CAGRs, near term* 25% 20% 15% 10% 21.7% 13.8% 5% 0% Mobile Robotics, 2022-2030 Autonomous Forklifts,** 2023-2028 MaxMover™ CB D 2000 Autonomous Counterbalance Forklift * Sources: Mobile Robotics CAGR, Statzon database; Autonomous Forklifts CAGR, Secondary Research,
Slide 26: Energy Industry Outlook 2024
Energy Industry Outlook 2024(1) Brent forecast, average price per barrel in 2024 ~$95 Market Driver 2024 Forecasts, YoY: • Contracted Floating Rigs annual average, 150 to 157 • Tree Installations, from 373 to 329 • Tree Awards, from 346 to 278 • Subsea Equipment Spend, from $7.7B to $8.3B • Subsea S
Slide 27: Targeted Growth Businesses
Targeted Growth Businesses MOBILITY SOLUTIONS ENERGY TRANSITION • Autonomously transport people and goods • Accelerate robotic labor utilization safely at low cost • Innovate fit-for-function robotics • Orchestrate real-time fleet operations • Improve flow assurance • Continue to advance boundaries
Slide 28: Oceaneering Focus Areas
Oceaneering Focus Areas Operational Financial • Maintaining focus on safety, execution, and • Generating meaningful positive free cash flow quality • Remaining disciplined in our approach • Remaining responsive to customer needs in our to growth capital expenditures traditional markets • Maintaining
Slide 29: Supplemental Information
Supplemental Information 29
Slide 30: Net Income (Loss) Reconciliation to EBITDA
Net Income (Loss) Reconciliation to EBITDA Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP financial measure. Oceaneering’s management uses EBITDA because we believe that this measurement is a widely accepted financial indicator used by investors and analysts to
Slide 31: Net Income (Loss) Reconciliation to EBITDA (continued)
Net Income (Loss) Reconciliation to EBITDA (continued) For the 12-Month Period Ended Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Low Estimate High Estimate (in millions) (in millions) Net Income (Loss) $ 25.9 $ (49.3) Income (Loss)before income taxes $ 150.0 $ 160.0 Depreciation & Amortization 121.0 139.
Slide 32: Operating Income Reconciliation to Adjusted EBITDA and Adjusted Operating EBITDA
Operating Income (Loss) Reconciliation to Adjusted EBITDA and Adjusted Operating EBITDA Adjusted EBITDA excludes the effects of certain specified items, as set forth in the tables that follow. Adjusted Operating EBITDA is Adjusted EBITDA before Unallocated Expenses. We believe these are useful measu
Slide 33: Operating Income Reconciliation to Adjusted EBITDA (continued)
Operating Income (Loss) Reconciliation to Adjusted EBITDA and Adjusted Operating EBITDA (continued) For the 3-Month Period Ended Unallocated June 30, 2023 Expenses SSR MP OPG IMDS ADTech and other Total ($ in thousands) Operating Income (Loss) as reported in accordance with GAAP $ 42,227 $ 10,607 $
Slide 34: Operating Income Reconciliation to Adjusted EBITDA (continued)
Operating Income (Loss) Reconciliation to Adjusted EBITDA and Adjusted Operating EBITDA (continued) For the 3-Month Period Ended Unallocated September 30, 2022 Expenses SSR MP OPG IMDS ADTech and other Total ($ in thousands) Operating Income (Loss) as reported in accordance with GAAP $ 37,069 $ 4,28
Slide 35: Operating Income Reconciliation to Adjusted EBITDA (continued)
Operating Income (Loss) Reconciliation to Adjusted EBITDA and Adjusted Operating EBITDA (continued) For the 12-Month Period Ended December 31, 2022 Unallocated Expenses SSR MP OPG IMDS ADTech and other Total ($ in thousands) Operating Income (Loss) as reported in accordance w/ GAAP $ 118,248 $ 11,69
Slide 36: Operating Income Reconciliation to Adjusted EBITDA (continued)
Operating Income (Loss) Reconciliation to Adjusted EBITDA and Adjusted Operating EBITDA (continued) For the 12-Month Period Ended December 31, 2021 Unallocated Expenses SSR MP OPG IMDS ADTech and other Total ($ in thousands) Operating Income (Loss) as reported in accordance w/ GAAP $ 76,874 $ (15,87
Slide 37: Operating Income Reconciliation to Adjusted EBITDA (continued)
Operating Income (Loss) Reconciliation to Adjusted EBITDA and Adjusted Operating EBITDA (continued) For the 12-Month Period Ended December 31, 2020 Unallocated Expenses SSR MP OPG IMDS ADTech and other Total ($ in thousands) Operating Income (Loss) as reported in accordance w/ GAAP $ (65,817) $ (88,
Slide 38: Free Cash Flow
Free Cash Flow “Free Cash Flow” (FCF) is a non-GAAP financial measure. FCF represents cash flow provided by operating activities less organic capital expenditures (i.e., purchases of property and equipment other than those in business acquisitions). Oceaneering's management believes that this is an
Slide 39: Free Cash Flow, Guidance
Free Cash Flow, Guidance For the Year Ending December 31, 2023 Low High Estimate Estimate (in thousands) Net Income (loss) $ 75,000 $ 90,000 Non-cash adjustments: Depreciation and amortization 105,000 115,000 Other increases (decreases) in cash from operating activities 5,000 30,000 Cash flow provid
Slide 40: Capital Expenditures
Capital Expenditures in millions $125 Flat to modestly higher than 2023 CapEx $100 $75 Forecast CapEx $50 Aero/Defense Tech Integrity Mgmt/Digital Sol Offshore Projects Grp $25 Mfd Products Subsea Robotics $0 Corporate 2021 2022 2023F 2024F 40
Slide 41: Subsea Robotics – ROV Fleet Location
Subsea Robotics – ROV Fleet Location 250 ROVs, September 30, 2023 100 Drilling Support ROVs Vessel-based ROVs 80 72 ROV Count 60 51 40 40 35 23 29 20 0 Americas, excl Brazil Africa/MidEast Europe Norway Asia Pacific Brazil 41
Slide 42: Contracted Floating Rigs at Period End
Oceaneering ROV Drill Support Market Share 61% for quarter ending September 30, 2023 200 Contracted Floaters, Working 100% Contracted Floating Rigs at Period End Contracted Floaters, Not Working OII % of Contracted Floaters OII % of Floating Rigs 150 75% 61% 61% 100 50% OII 50 25% Subsea 7 Fugro Tec
Slide 43: Offshore Oil & Gas Activity Forecast
Offshore Oil & Gas Activity Forecast 200 400 Contracted Floating Rigs, annual average Contracted Floating Rigs Tree Installations 350 Subsea Tree Installations 150 300 250 157 167 100 139 150 200 133 137 150 50 100 2020 2021 2022 2023F 2024F 2025F Source: Rig data: IHS Markit World Rig Forecast, Sep
Slide 44: Offshore O&G Greenfield Capex by Sanction Year
Offshore O&G Greenfield Capex by Sanction Year $100 150 Development Cost, Deepwater Development Costs, $ in Billions Deepwater FID Projects 125 $75 Projects Count 100 100 $50 75 64 50 $25 41 30 34 26 25 $30 $49 $46 $60 $53 $67 $0 0 2020 2021 2022 2023F 2024F 2025F Source: Rystad Energy, Subsea Marke
Slide 45: Financial Overview, by Year
Financial Overview, by Year Revenue Adjusted Operating EBITDA* $1.8B $1.9B $2.1B $184.3M $210.6M $232.6M 100% 100% 19% 20% 17% 19% 13% 20% 6% 11% 4% 7% 75% 12% 13% 75% 9% 22% Aerospace/Defense Tech 17% 16% 24% 14% Integrity Mgmt/Digital Sol 20% 7% 50% 50% 8% Offshore Projects Group 26% Manufactured
Slide 46: Revenue Sources
Revenue Sources Geographic Area Services and Products Industry Segments* $1.8B $1.9B $2.1B $1.8B $1.9B $2.1B $1.8B $1.9B $2.1B 100% 20% 19% 19% 20% 17% 75% 27% 43% 47% 47% 50% 80% 81% 81% 80% 83% 73% 25% 53% 57% 53% 0% 2020 2021 2022 2020 2021 2022 2020 2021 2022 International United States Services
Slide 47: Investor Relations Contact
NYSE: OII Investor Relations Contact Mark Peterson Vice President, Corporate Development and Investor Relations 713.329.4507 InvestorRelations@oceaneering.com 47
Oceaneering International — Q3 2023 Earnings Presentation on 6ix