Slide 1: Second Quarter 2020 results
Second Quarter 2020 results Dag Skindlo Chief Executive Officer Espen Joranger Chief Financial Officer 14 August 2020 1
Slide 2: Disclaimer – forward looking statements
Q2 2020 Disclaimer – forward 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 that
Slide 3: Q2 in brief
Q2 2020 Q2 in brief EBITDA before exceptional items of 25.4 million • Reduced activity from Covid-19 • 2020 outlook improved Strengthened financial position • Refinancing completed in April • Available liquidity of $118 million NIBD reduced by $68 million to $520 million • Positive free cash flow •
Slide 4: Second quarter 2020 key financials
Q2 2020 Second quarter 2020 key financials Revenue [$m] EBITDA before exceptional items* [$m, %] 260 30 236 240 237 27,5 28,1 25,4 228 15,0 % 25,1 25,4 220 26 13,0 % 193 22 180 11,0 % 18 9,0 % 140 14 7,0 % 100 10 5,0 % Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Capex [$m] Net Intere
Slide 5: Covid-19 with focus on safety
Q2 2020 Covid-19 with focus on safety • All drilling rigs in Argentina stopped during lockdown and 1300 employees in suspension during Q2 – modest increase in activity from July • Platform Drilling received notification on six operating platforms to reduce operation to maintenance mode – activity ex
Slide 6: Platform Drilling, Modular Rigs & Engineering
Q2 2020 Platform Drilling, Modular Rigs & Engineering Financials Operations • EBITDA contribution from Modular Rigs more than • Archer Topaz started operations offsets reduction in Platform Drilling • Archer Emerald mobilization delayed by 3 months • EBITDA margin of 9.7% in the quarter • Platform D
Slide 7: Well Services
Q2 2020 Well Services Financials Operations • Revenues increased by 7% from last year • Record quarter for operational runs in Oiltools • EBITDA up by 37% from last year • Oiltools growth supported by increased P&A activity in Norway, but certain international regions are postponing activity due to
Slide 8: Well Services – Oiltools
Q2 2020 Well Services – Oiltools 300 100 Plugs & Plug Solutions PPS RUNS 90 WCS RUNS Well Cleaning Solutions 250 trend trend 80 200 70 60 • SPARTAN® series plugs for well suspension • Tornar® BOP Cleaning with advanced 150 • LOCK® series premium gas tight plugs vortex technology 2020YTD 40 100 • Tor
Slide 9: Eastern Hemisphere integrated services gaining momentum
Q2 2020 Eastern Hemisphere integrated services gaining momentum Revenues ($m) EBITDA (%) 180 167,0 167,2 14,0 % One Archer - delivering better wells 160,2 160 155,4 155,4 12,0 % 140 One 10,0 % Platform Drilling Oiltools 120 Archer P&A projects 100 8,0 % Integrated Operations 80 • Common strategy and
Slide 10: Challenging situation in Argentina
Q2 2020 Drilling Rig count in Argentina Challenging situation in Argentina • Covid-19 lockdown lead to 50% reduction in Primary election in Argentina Nationwide Sovereign lockdown debt default demand for crude oil in Argentina 80 • Argentina’s Government defaulted on $65 billion of its debt in May 2
Slide 11: Land drilling
Q2 2020 Land drilling Financials Operations • Revenue down 53.6% • Only Pulling Units continued working in Argentina • Break even EBITDA in the quarter • Headcount reduced by 80 employees • EBITDA before exceptional items was $7.3 million • Restarting activity in Q3; • About 70% of employees suspend
Slide 12: QES merger with KLXE
Q2 2020 QES merger with KLXE QES merged with KLXE on July 28th Strategic rationale • KLXE and QES combined their services, establishing an industry- Increased scale Cost synergies leading provider of asset-light oilfield solutions • Benefit of spreading fixed • Redundant corporate and • Archer holds
Slide 13: Condensed profit & loss statement for first half 2020
Q2 2020 Condensed profit & loss statement Condensed profit & loss statement for first half 2020 YTD June YTD June ($ million • Operational revenue of $369.5 million 2019 2020 Operating revenues 423.0 369.5 • Exceptional items of $12.7 million Reimbursable revenue 38.2 60.3 Total Revenues 461.3 429.9
Slide 14: Condensed balance sheet
Q2 2020 Condensed balance sheet end of 2019 and June 2020 Condensed balance sheet $ million 31.12.2019 30.06.2020 • Cash and cash equivalents of $41.2 million Cash and cash equivalents 31.4 41.2 • Accounts receivables are reduced by $30 million Restricted cash 12.7 14.3 following reduced DSO and low
Slide 15: Financial position
Q2 2020 Financial position Sufficient liquidity secured Debt maturity profile [$m] • Generating positive cash flows 700 Drawn Undrawn • Net interest-bearing debt reduced 600 500 77 • Available liquidity of $118 million 400 300 • Refinanced April with limited instalments 200 until maturity in 2023 10
Slide 16: Summary Q2 2020 and Financial outlook 2020
Q2 2020 Summary Q2 2020 • Solid operational results • Covid-19 with negative impact on activity • Secured additional backlog for the Modular Rigs • Strong cash flow generation and substantial reduction in NIBD • Completed refinancing with sufficient liquidity Financial outlook 2020 Improved outlook
Slide 17: Q&A
Q&A 17
Slide 18: Segment key financials
Appendix Segment key financials Eastern Hemisphere Revenues ($m) EBITDA (%) 200 167,0 167,2 15,0 % 155,4 155,4 160,2 150 10,0 % 100 Platform drilling & 5,0 % Engineering 50 0 0,0 % Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 $m Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Well Services Revenues 155.4 155.4 167.0 167.2 160.2 EBI
Slide 19: Condensed profit and loss statement
Appendix Condensed profit and loss statement (Figures in $ million) Q2 19 Q3 19 Q4 19 Q1 20* Q2 20* Operating revenues 212.8 203.5 207.1 207.6 161.9 Reimbursable revenue 22.9 24.2 32.6 29.5 30.9 Total Revenues 235.6 227.6 239.7 237.1 192.8 EBITDA before exceptional items 25.2 25.4 27.5 28.1 25.4 Sev
Slide 20: Condensed balance sheet
Appendix Condensed balance sheet $ million 30.06.19 30.09.19 31.12.19 31.03.20* 30.06.20 Cash, cash equivalents & restricted cash 51.1 18.7 44.1 107.5 55.5 Accounts receivables 148.1 148.6 145.4 150.2 115.4 Inventories 52.1 52.2 53.0 52.0 51.0 Right of use assets current 1.4 1.0 0.7 - - Other curren
Slide 21: Condensed cash flow statement – last 5 quarters
Appendix Condensed cash flow statement – last 5 quarters (Figures in $ million) Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Operating activities 18.1 (15.0) 47.0 1.6 41.3 Investing activities (5.2) (14.8) (17.3) (4.5) (8.4) Financing activities 10.0 2.4 (4.4) 75.8 (85.6) FX effect (4.1) (5.0) (0.2) (9.4) 0.6 Tota