Abl Group Asa · OSL:ABL
Abl Group Asa — AqualisBraemar — Q3 2020 Earnings Presentation
46 slides from Abl Group Asa's earnings presentation, Oct 29, 2020
Slide 1: AqualisBraemar ASA 2020 Q3 results
AqualisBraemar ASA 2020 Q3 results October 29, 2020 aqualisbraemar.com
Slide 2: Highlights, Financial review, Outlook
1. Highlights David Wells CEO 2. Financial review Dean Zuzic CFO 3. Outlook David Wells CEO 2
Slide 3: 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 4: Q3 2020 Highlights
Q3 2020 Highlights • Revenues of USD 18.4 million (Q3 19: USD 18.0m) 19.2 – Normal seasonal weakness in Q3 compounded by COVID 18.4 – Record growth for renewables: Up 105% from Q3 19 Revenue 18.0 (USDm) • EBIT of USD 0.5 million (Q3 19: USD -0.2m) – Adjusted EBIT of USD 0.6 million (Q3 19: USD 0.3m)
Slide 5: COVID-19 business update
COVID-19 business update • Overall activity level maintained, despite regional impacts – Positives • Through our extensive global footprint we have largely been able to support clients at locations where others have been unable to access • Overall activity level largely maintained • Lowered activity
Slide 6: AqualisBraemar business model
AqualisBraemar business model High end consultancy services to the global energy, shipping and insurance industries Core services Project consulting Accident prevention Incident management 6
Slide 7: 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 8: The strategic vision
The strategic vision 1 2 3 Grow through continued Leverage our #1 expansion in the rapidly market leading position Consistently return capital growing offshore renewables within shipping, oil and gas to to shareholders industry improve profitability Ambition: 50% renewables and ESG driven services i
Slide 9: Global footprint represents unique value to clients
Global footprint represents unique value to clients 465 Employees1 51 Offices 33 Countries Global footprint provides clients with local expertise and swift response 1 Includes subcontractors on 100% utilisation basis. Calculated as an average during Q3 2020 9 Map shows partnerships and exclusive sub
Slide 10: Diversified across regions and services
Diversified across regions and services Business stream revenue L12M Segment revenue L12M Adjusting Americas 10% 15% Asia Pacific 27% Renewables 17% Offshore 48% Europe 17% 76.2 76.2 USDm USDm Marine Middle East Renewables 24% 25% 17% 10 Note: No adjustment for intercompany eliminations. Note: Renew
Slide 11: On track for 2025 target of 50% renewables
On track for 2025 target of 50% renewables Renewables revenues Comments 5 000 25% • On track to fulfil 2025 ambition of 50% 4 500 renewables and ESG driven services in 4 000 20% business mix 3 500 • Renewables revenues up 105% in Q3 3 000 15% 2020 vs Q3 2019 2 500 – 21% share of group revenues in Q3
Slide 12: Offshore wind with record investment decisions in 2020
RENEWABLES Offshore wind with record investment decisions in 2020 Offshore wind FIDs (USDbn) Market share, Top 3 developers2 40 35.0 71% 35 31.9 30 55% 54% 52% 48% 49% 25 20 34% 33% 15 10 5 0 2012 2013 2014 2015 2016 2017 2018 2019 H1 2013 2014 2015 2016 2017 2018 2019 2020 2020 • Project final inve
Slide 13: New OWC offices off to a flying start
RENEWABLES New OWC offices off to a flying start • OWC opened three new offices so far in 2020: Japan, Korea and Poland • Despite COVID, and ahead of expectations, all three offices are now bringing in substantial new local revenue • In Poland we are working as Owner’s Engineer and Technical Advisor
Slide 14: Targeting renewables rush to ports and harbours
RENEWABLES Targeting renewables rush to ports and harbours • Combining resources from the AB Marine ports and harbours team with OWC, AqualisBraemar is targeting opportunities in new port developments driven by the expansive growth in offshore renewable energy • The recent UK announcement to invest
Slide 15: Offshore capex expected to fall; rig activity may be stabilising
OFFSHORE Offshore capex expected to fall; rig activity may be stabilising E&P capex growth Rigs under contract 30% 450 400 20% 350 10% 300 0% 250 # Units 200 -10% 150 -20% 100 -30% 50 -40% - Onshore Offshore Floaters Jackups 15 Source: IHS Markit, SB1 Markets
Slide 16: Project: Rigs-to-reef decommissioning in Thailand
OFFSHORE Project: Rigs-to-reef decommissioning in Thailand • In Q2/Q3 2020 AqualisBraemar acted as MWS for Sapura Energy for decommissioning of 7 Chevron jackets in Gulf of Thailand • After removal and transport, the jackets were toppled and converted to artificial reefs, making Gulf of Thailand the
Slide 17: Project: North Sea Decommissioning Projects
OFFSHORE Project: North Sea Decomissioning Projects • AqualisBraemar have continued to provide Client Offshore Representatives for the SNS decommissioning campaign being undertaken by Chrysaor • This campaign was undertaken by the Bokalift1 and Gulliver HLVs • Part of this years campaign is the remo
Slide 18: Project: Transporting the last D-Day landing craft
MARINE Project: Transporting the last D-Day landing craft • AqualisBraemar’s London and Aberdeen offices provided MWS for the transportation of the LCT 7074 from restoration in Portsmouth to Southsea Beach • LCT 7074 is the last surviving landing craft from the D-Day landings, having delivered 10 ta
Slide 19: Selected projects
ADJUSTING Selected projects Project: Jack-up failure Project: Wood Pellet Storage Silo • In Q1 2020 H&M Insurers instructed AB • In Q3 2020, one of fifteen recently Adjusting to investigate a loss involving the commissioned silos failed and released some parting of a jack up’s pedestal crane, while
Slide 20: Order backlog development
Order backlog development Order backlog1 Highlights Q3 2020 30 • Order backlog at USD 28.3 million, up 38% from Q2 2020 – Driven by multiple project awards in 25 Renewables and Offshore – Several major project awards in early Q4 not 20 included in Q3 backlog • The main part of our revenue is derived
Slide 21: Staff growth continues with increasing cost base flexibility
Staff growth continues with increasing cost base flexibility Staff level development1 Highlights Q3 2020 500 50% • Average staff levels increased, primarily 450 driven by high activity and recruitment in 400 40% Renewables 350 • Subcontractor share increased from 300 30% previous quarter 250 – Subco
Slide 22: Financial review
1. Highlights David Wells CEO 2. Financial review Dean Zuzic CFO 3. Outlook David Wells CEO 22
Slide 23: Revenue and adjusted EBIT
Revenue and adjusted EBIT Revenue, pro-forma combined (USDm) Adj EBIT1, pro-forma combined (USDm) 24 2.4 12% 19.6 19.8 2.0 10% 20 19.2 19.2 1.8 18.8 18.4 18.0 18.0 17.4 1.6 8% 1.4 16 1.2 6% 12 0.8 0.6 0.6 4% 8 0.4 0.5 0.4 0.3 2% 4 0.0 0% -0.1 -0.2 0 -0.4 -2% 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3
Slide 24: Segment revenues and EBIT
Segment revenues and EBIT Segment revenues (USDm) Segment adjusted EBIT1 (USDm) 7.0 0.8 6.0 0.6 5.0 0.4 4.0 3.0 0.2 2.0 0.0 1.0 -0.2 0.0 -0.4 -1.0 -2.0 -0.6 -3.0 -0.8 3Q19 2Q20 3Q20 3Q19 2Q20 3Q20 • Continued strong revenue growth in Renewables (+105% vs Q3 19) • Seasonal low activity in Middle East
Slide 25: Income Statement
Income Statement USD thousands Consolidated income statement Q3 20 Q3 19 YTD 20 YTD 19 FY 19 • Revenues for Q3 2020 up 3% Revenue 18 431 17 957 57 450 36 008 54 792 from Q3 2019 Total revenue 18 431 17 957 57 450 36 008 54 792 – Growth driven by renewables Staff costs (10 198) (10 767) (30 532) (18
Slide 26: Further cost synergies realised, ERP rollout complete
Further cost synergies realised, ERP rollout complete Cost synergies (annual run rate) ERP rollout completed • AqualisBraemar inherited legacy ERP and 3 support systems through the BTS transaction. 0.4 Systems in place were outdated and not fit for 2.5 purpose 2 • Oracle Netsuite, the current ERP sy
Slide 27: Strong financial position, freeing up working capital
Strong financial position, freeing up working capital Highlights Q3 2020 Working capital1 (% of quarterly revenue) • USD 14.1 million in cash – Up from USD 11.0 million in Q2 2020 150% 146% 142% 140% 138% 135% • No financial debt 127% – Capitalised lease of USD 1.5 million 125% • Net working capital
Slide 28: Record cash flow driven by freeing up working capital
Record cash flow driven by freeing up working capital Cash position and cash flow bridge (USDm) 0.2 2.5 14.1 • Operational cash flow of USD -0.4 3.4 million in the quarter • Cash position increased from USD 11.0m to USD 14.1m 0.9 11.0 – Strong positive contribution from working capital release – “Ot
Slide 29: Resolved and declared dividend of NOK 0.2 per share
Resolved and declared dividend of NOK 0.2 per share • Declared dividend of NOK 0.2 per share, corresponding to approx. USD 1.5 million – In light of the strong cash flow generated by the company over the last two quarters, the Board has decided that it will pay out a dividend of NOK 0.2 per share –
Slide 30: Outlook
1. Highlights David Wells CEO 2. Financial review Dean Zuzic CFO 3. Outlook David Wells CEO 30
Slide 31: Summary and outlook
Summary and outlook • Record cash flow in seasonal weak quarter – Expect improved activity and margins in Q4 • Record growth in renewables, increasing share of business mix – Targeting 50% renewables and ESG driven services by 2025 • Mixed market outlook – Rapid growth and increasing globalisation i
Slide 32: Appendix
Appendix 32
Slide 33: AqualisBraemar Group targets
AqualisBraemar Group targets • Financial targets – Organic revenue growth of 5 percent over a business cycle – Renewable and ESG driven business target at 50% of revenue in 2025 – EBITA margin of 10 percent (excluding effects from IFRS 16 Leases and items affecting comparability) over a business cyc
Slide 34: Billing ratio development
Billing ratio development Billing ratio1 – Total technical staff (including subcontractors) Billing ratio Gliding 3m average billing ratio 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 1 For offshore oil & gas and offshore renewables: Bill
Slide 35: Adjustment items
Adjustment items USD thousands Adjustment items (EBITDA) Q3 18 Q4 18 FY 18 Q1 19 Q2 19 Q3 19 Q4 19 FY 19 Q1 20 Q2 20 Q3 20 Restructuring and integration costs - - - - 48 475 5 528 48 55 52 Other special items (incl. share-based expenses) - - - - - - - - 78 76 80 Transaction costs related to M&A - -
Slide 36: General (1/2)
General (1/2) Basis of preparations Alternative Performance Measures (APMs) This presentation provides consolidated AqualisBraemar discloses APMs in addition to those normally required by IFRS. APMs are meant to provide an enhanced financial highlights for the quarter of the insight into the operati
Slide 37: General (2/2)
General (2/2) Alternative Performance Measures (APMs) continued AqualisBraemar discloses APMs in addition to those normally required by IFRS. APMs are meant to provide an enhanced insight into the operations, financing and future prospects of the company. Certain items may not be indicative of the o
Slide 38: APMs and Key Figures
APMs and Key Figures USD thousands Profitability measures Q3 18 Q4 18 FY 18 Q1 19 Q2 19 Q3 19 Q4 19 FY 19 Q1 20 Q2 20 Q3 20 Operating profit (loss) (EBIT) 594 860 2 684 (248) (284) (245) 444 (332) 1 279 1 577 506 Depreciation, amortisation and impairment 30 32 129 38 38 362 252 690 362 363 392 EBITD
Slide 39: APMs and Key Figures
APMs and Key Figures USD thousands Working capital Q3 18 Q4 18 FY 18 Q1 19 Q2 19 Q3 19 Q4 19 FY 19 Q1 20 Q2 20 Q3 20 Trade and other receivables 9 398 9 870 9 870 8 371 27 534 25 896 24 252 24 252 26 064 26 568 24 714 Contract assets 2 013 2 297 2 297 1 910 12 288 13 518 12 019 12 019 11 145 9 264 9
Slide 40: Consolidated Statement of Income
Consolidated Statement of Income USD thousands Consolidated income statement Q3 18 Q4 18 FY 18 Q1 19 Q2 19 Q3 19 Q4 19 FY 19 Q1 20 Q2 20 Q3 20 Revenue 8 603 9 828 36 185 8 182 9 869 17 957 18 785 54 792 19 787 19 232 18 431 Total revenue 8 603 9 828 36 185 8 182 9 869 17 957 18 785 54 792 19 787 19
Slide 41: Consolidated Statement of Financial Position
Consolidated Statement of Financial Position USD thousands Consolidated balance sheet Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 ASSETS Non-current assets Property, plant and equipment 167 141 139 520 508 559 509 475 452 Right-of-use assets - - 84 2 415 2 167 2 376 2 021 1 757 1 485 Intan
Slide 42: Consolidated Statement of Cash Flow
Consolidated Statement of Cash Flow USD thousands Consolidated cashflow statement Q3 18 Q4 18 FY 18 Q1 19 Q2 19 Q3 19 Q4 19 FY 19 Q1 20 Q2 20 Q3 20 Profit (loss) before taxes 560 1 073 2 878 (368) 11 116 144 (992) 9 900 3 000 1 394 441 Non-cash adjustment to reconcile profit before tax to cash flow:
Slide 43: Revenues and EBIT - split per segments
Revenues and EBIT - split per segments USD thousands Revenues Q3 18 Q4 18 FY 18 Q1 19 Q2 19 Q3 19 Q4 19 FY 19 Q1 20 Q2 20 Q3 20 Middle East 3 855 4 928 17 796 4 164 4 483 5 221 6 087 19 955 7 013 5 595 4 019 Asia Pacific 1 918 1 987 7 358 1 427 1 987 5 909 5 636 14 958 5 745 5 256 5 638 Europe 614 6
Slide 44: Trade receivable & Cash and cash equivalents - split per segments
Trade receivable & Cash and cash equivalents - split per segments USD thousands Trade receivables Q3 18 Q4 18 FY 18 Q1 19 Q2 19 Q3 19 Q4 19 FY 19 Q1 20 Q2 20 Q3 20 Middle East 3 865 4 824 4 824 4 069 5 450 5 102 5 648 5 648 6 915 6 778 4 937 Asia Pacific 1 845 1 676 1 676 1 016 5 718 5 705 6 207 6 2
Slide 45: Top 20 shareholders
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 SAXO BANK A/S 1 4
Slide 46: aqualisbraemar.com
23 AQUALIS me? BRAEMAR aqualisbraemar.com