Abl Group Asa · OSL:ABL
Abl Group Asa — AqualisBraemar — Merger or Acquisition (November 2020)
27 slides from Abl Group Asa's merger presentation, November 2020
Slide 1: Creating a leading offshore energy and marine consultancy
+ Creating a leading offshore energy and marine consultancy Combining AqualisBraemar and London Offshore Consultants November 2020 aqualisbraemar.com
Slide 2: Disclaimer
Disclaimer ▪ This Presentation has been produced by AqualisBraemar ASA (the “Company” or “Aqualis ”) solely for use at the presentation to investors and other stake holders and may not be reproduced or redistributed, in whole or in part, to any other person. This presentation is strictly confidentia
Slide 3: The strategic vision
The strategic vision 1 2 3 Grow through continued Leverage leading position expansion in the rapidly Consistently return capital within shipping and oil & gas to growing offshore renewables to shareholders improve profitability industry Ambition: 50% renewables and sustainability-oriented services i
Slide 4: AqualisBraemar to acquire LOC Group
AqualisBraemar to acquire LOC Group Achieving the long-term plan to consolidate the ✓ offshore energy and marine consulting space LOC Group is highly complementary ✓ Broader service offering and increased scale, ✓ a stronger partner for clients + Estimated USD 3.5m annual cost synergies ✓ ✓ Enables
Slide 5: Creating a leading complementary business
Creating a leading complementary business Combining two highly complementary marine consultancies (1) Combined group LTM Revenue 76m 63m 139m (USDm) LTM EBITDA 5.7m 6.8m 12.5m + (USDm) 3Q20 Backlog ~28m ~54m ~83m (USDm) Employees(2) 465 416 881 (#) Note: 5 LTM as of 3Q20 (Sep-20). EBITDA adjusted fo
Slide 6: Transaction overview
Transaction overview • Enterprise value of approx. USD 19 million Sources & uses (USDm) – USD 20.2 million cash consideration – 2 million conditional warrants for AB shares (to sellers) Existing AB cash 5 Cash consideration 20 • 1 million if share price above NOK 7.5 in 18 months New bank debt 15 Re
Slide 7: AqualisBraemar – geared for further growth
AqualisBraemar – geared for further growth Company description Overview Two Mainleading brands business within streams andcore operations revenue split2 • AqualisBraemar offers independent consultancy services to the offshore Renewables Offshore Marine Adjusting energy, shipping and insurance indust
Slide 8: LOC – ready for a new voyage
LOC – ready for a new voyage Overview Main business streams and revenue split2 • LOC provides consultancy and engineering services to the offshore Renewables Offshore Shipping renewables, oil & gas and shipping sectors through four brands: − London Offshore Consultants − Longitude: Independent engin
Slide 9: Strengthened global presence by combining with LOC
Strengthened global presence by combining with LOC Global footprint provides clients with local expertise and swift response 881(1) Employees AB office locations 85 LOC office Office locations locations Common locations(2) 39 Countries (1) Includes subcontractors on 100% basis 9 (2) Common locations
Slide 10: LOC geographical strongholds are highly complementary
LOC geographical strongholds are highly complementary Combined group 14% 18% 22% 28% 37% YTD Revenue 49% 23% 10% 17% by region 35% 19% 28% Europe APAC ME/Africa Americas Europe APAC ME/Africa Americas Europe APAC ME/Africa Americas 10% 21% 29% YTD Revenue 24% 47% by business 52% 18% 60% stream 18% 1
Slide 11: Robust pro forma financial profile
Robust pro forma financial profile Combined group 139 139 70 76 73 76 66 66 63 137 Revenue 60 136 (USDm) 2017 2018 2019 3Q20 LTM 2017 2018 2019 3Q20 LTM 2017 2018 2019 3Q20 LTM 6.8 12.5 5.7 4.6 4.6 8.3 3.7 6.3 EBITDA 3.1 4.9 1.8 1.7 (USDm) 2017 2018 2019 3Q20 LTM 2017 2018 2019 3Q20 LTM 2017 2018 20
Slide 12: Simplified pro-forma combined cash and debt position
Simplified pro-forma combined cash and debt position USDm 40 35 30 -12 15 25 15 20 -20 15 15 24 10 14 -3 15 5 - AB Q3 2020 cash LOC Sep 30 Cash Transaction costs fees Equity issue New debt facility Refinance LOC Combined cash Combined balance 2020 cash consideration & &contingencies expenses debt ba
Slide 13: Significant value creation potential from integration of LOC
Significant value creation potential from integration of LOC SG&A optimization Facility redundancy Cost Annual run-rate cost synergies of: Synergies $3.5 million Utilization optimization Capital efficiency Increased market share Revenue Revenue synergies provide further Synergies upside longer term
Slide 14: Value creation: synergies & integration
Value creation: synergies & integration Aqualis + BTS - Synergy performance AB + LOC - Estimated cost synergies 3.8% 5 4.0% 5 4.0% 3.2% 4 4 3.5 3.0% 3.0% 2.8 3 3 2.4 1.5% 2.0% 2.5% 2.0% 2 2 1.1 1.0% 1.0% 1 1 0 0.0% 0 0.0% Initial target Current run rate Current target Initial target (within 2.5 year
Slide 15: The combination will benefit all stakeholders
The combination will benefit all stakeholders + Customers Employees Shareholders ✓ New capabilities and broader suit of ✓ Better career prospects at a larger, ✓ Realization of synergies to create services offered global and more diversified company shareholder value committed to energy transition ✓
Slide 16: AqualisBraemar to acquire LOC Group
AqualisBraemar to acquire LOC Group Achieving the long-term plan to consolidate the ✓ offshore energy and marine consulting space LOC Group is highly complementary ✓ Broader service offering and increased scale, ✓ a stronger partner for clients + Estimated USD 3.5m annual cost synergies ✓ ✓ Enables
Slide 17: Appendix
Appendix 17
Slide 18: Shares and outstanding options
Shares and outstanding options (million shares) Issued count Effective count (1) Exercise price (NOK) Vesting date Key vesting/exercise conditions Outstanding shares 70.4 70.4 Private placement - New shares 22.1 22.1 Outstanding shares post issue 92.5 92.5 Braemar warrants 6.5 1.0 0.10 Apr-21 Group
Slide 19: New bank facilities with Nordea – Key terms
New bank facilities with Nordea – Key terms Term Loan Revolving Credit Facility Amount USD 10 million USD 5 million Tenor 3 years 3+1+1 years Amortisation 3 years n/a Interest margin (drawn) 320 bps 320 bps Covenants LTM EBITDA1 > USD 7 million NIBD < 0 19 (1) EBITDA includes carve-out for certain o
Slide 20: Freeing up WC through improved order-to-cash processes
Freeing up WC through improved order-to-cash processes 200 200 160 160 120 2014-’18 avg DSO: 109 120 2014-’20 avg DSO: 109 180 80 166 80 128 123 125 121 110 109 115 94 101 96 90 92 40 40 0 - 2014 2015 2016 2017 2018 2019 9m20 2014 2015 2016 2017 2018 2019 9m20 Jump in days of sales DSO outstanding f
Slide 21: Offshore wind with record investment decisions in 2020
Offshore wind with record investment decisions in 2020 Offshore wind FIDs (USDbn) Market share, Top 3 developers2 40 35.0 35 71% 31.9 30 55% 54% 25 52% 48% 49% 20 33% 34% 15 10 5 0 2012 2013 2014 2015 2016 2017 2018 2019 H1 2020 2013 2014 2015 2016 2017 2018 2019 2020 • Project final investment deci
Slide 22: AqualisBraemar business streams
AqualisBraemar business streams Renewables Offshore Marine Adjusting Independent engineering Engineering and Worldwide emergency Loss adjusting and dispute and consultancy services to consultancy services to the incident response and resolution to the onshore offshore wind industry offshore oil and
Slide 23: LOC business streams
LOC business streams Loss prevention Loss management Consulting & Engineering ▪ LOC provides independent third-party ▪ When marine assets or cargo are damaged ▪ LOC uses its expertise in Loss Prevention review and approval of the planning, design at sea, LOC’s emergency response for to support EPC c
Slide 24: Experienced management team to lead combined company
Experienced management team to lead combined company David Wells Dean Zuzic Reuben Segal RV Ahilan Chief Executive Officer Chief Financial Officer Chief Operating Officer Chief Energy Transition Officer • More than 35 years of experience • More than 30 years of finance • More than 25 years of experi
Slide 25: LOC history
LOC history 1985 1998 2004 Oct 2013 April 2018 LOC established its first overseas Formation of LOC Bridgepoint Development Dr R.V. Ahilan is office in Houston (USA) following London Marine management Capital acquired a appointed CEO by the opening of Stavanger Group buy-out minority stake in LOC (No
Slide 26: AqualisBraemar – Top 20 shareholders
AqualisBraemar – Top 20 shareholders # Name of shareholder No. of shares % ownership 1 BRAEMAR SHIPPING SERVICES PLC 19 240 621 27.3% 2 GROSS MANAGEMENT AS 10 024 777 14.2% 3 HOLMEN SPESIALFOND 6 840 763 9.7% 4 BJØRN STRAY 3 000 000 4.3% 5 MP PENSJON PK 1 771 128 2.5% 6 LGT BANK AG 1 502 923 2.1% 7
Slide 27: aqualisbraemar.com
23 AQUALIS me? BRAEMAR aqualisbraemar.com
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