Oceaneering International, Inc. · NYSE:OII
Oceaneering International — Q1 2023 Earnings Presentation
45 slides from Oceaneering International's earnings presentation, Apr 27, 2023
Slide 1: Investor Presentation 2023 First Quarter
Investor Presentation 2023 First Quarter 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements In accordance with the Safe Harbor provisions of the Private risks, contingencies and uncertainties, including, among proceedings; the risks associated with integrating businesses Securities Litigation Reform Act of 1995, Oceaneering cautions others: actors affecting the l
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: Five Operating Segments
Five 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 Mob
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* 13% 49% 34% 4% 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* $446.2M $536.2M $537.0M $31.5M $70.0M $55.0M 100% 100% 11% 10% 18% 17% 17% 20% 6% 5% 75% 13% 10% 11% 75% 8% 14% 17% Aerospace/Defense Tech 13% 16% Integrity Mgmt/Digital Sol 23% 19% 9% 22% 9% Offshore Projects Group 50% 50% Manufacture
Slide 10: Comparing Operating Results 2023 Q1 vs 2022 Q4
Comparing Operating Results* 2023 Q1 vs 2022 Q4 Primary Variance Factors for Q1 2023 compared to Q4 2022 Consolidated EBITDA declined. $55M was higher than guided as better-than-expected revenue was Consolidated Results essentially flat; with revenue increases in Mfd Products and IMDS offset by the
Slide 11: Liquidity and Cash Flow
Liquidity and Cash Flow Liquidity as of March 31, 2023 • $505 million of cash and cash equivalents • $400 million of unsecured senior notes due November 2024, nearest maturity • $215 million of unused commitments through our senior secured revolving credit agreement, available through April 2026 Cas
Slide 12: Subsea Robotics
Subsea Robotics Revenue ($ in millions) Subsea Robotics (SSR) merges our underwater robotics and automation capabilities by combining our ROV, Survey, and ROV $539 $622 Tooling businesses. Remotely Operated Vehicles (ROV) Remotely operated, tethered submersible vehicles for drilling support, offshor
Slide 13: Subsea Robotics: Revenue and Adjusted EBITDA Margin
Subsea Robotics Revenue and Adjusted EBITDA Margin* Revenue ($ in thousands) Margin SSR ROV Revenue SSR Tool/Survey SSR Adjusted EBITDA Margin 200,000 40% 35% 29% 150,000 30% 24% 100,000 20% 77% 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 Days Rate $10,000 20,000 100% ROV Days on Hire Drill Support % ROV Revenue / Day on Hire $9,176 17,500 Vessel-based % ROV Fleet Utilization % $9,000 80% 15,000 63% $8,000 12,500 60% 10,000 $7,00
Slide 15: Manufactured Products
Manufactured Products Revenue ($ 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 $600 2.00 Backlog Revenue Book-to-Bill, ttm 1.75 Mfd Products Book-to-Bill, ttm 1.27 Mfd Products ($ in Millions) $450 1.50 1.25 $300 1.00 $445.9 0.75 $150 $112.9 0.50 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 $378 project management and engineering; subsea installation and intervention; IMR (inspection, maintenance, and repair) s
Slide 18: Integrity Management & Digital Solutions
Integrity Management & Digital Solutions Revenue ($ in millions) The Integrity Management & Digital Solutions (IMDS) segment leverages software, analytics, and services that promote the safety, $241 $230 efficiency, cost effectiveness, and sustainability programs of our energy and maritime customers
Slide 19: Aerospace and Defense Technologies
Aerospace and Defense Technologies Revenue ($ 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 20: Oceaneering Outlook, FY 2023 Operating Results
Oceaneering Outlook, FY 2023 Operating Results* Forecast 2023 compared to 2022 >10% revenue increase, led by Mfd Products and SSR. Anticipate EBITDA range of $260M to $310M Consolidated Results EBITDA, largely from SSR and OPG; at the midpoint, a 23% increase over 2022 EBITDA. Anticipate full year f
Slide 21: Oceaneering Outlook, Q2 2023 Operating Results
Oceaneering Outlook, Q2 2023 Operating Results* Forecast Q2 2023 compared to Q1 2023 Significantly improved results. EBITDA in the range of $75M to $85M on Consolidated Results a low- to mid-teen percentage increase in revenue. Subsea Robotics Higher revenue and significant operating profitability i
Slide 22: Oceaneering Outlook, 2023
Oceaneering Outlook, 2023 • Year over Year • Improved revenue in SSR, MP, IMDS, and ADTech • Improved operating income and margins in SSR, MP and OPG • Improved operating income and stable margins in ADTech • Stable operating income and margins in IMDS • Consolidated Adjusted EBITDA, $260M to $310M*
Slide 23: Energy Industry Outlook 2023
Energy Industry Outlook(1) 2023 Brent forecast, average price per barrel in 2023 ~$85 Market Driver 2023 Forecasts, YoY: • Contracted Floating Rigs annual average, +8%, 137 to 148 • Tree Installations, +10%, from 293 to 323 • Tree Awards, +62%, from 188 to 305 • Subsea Equipment Spend, +7%, from $7.
Slide 24: Industrial Robotics Markets Outlook
Industrial Robotics Markets Outlook CAGRs, near term* 25% 20% 15% 10% 21.7% 5% 12.7% 0% Mobile Robotics, 2022-2030 Autonomous Forklifts,** 2019-2027 MaxMover™ CB D 2000 Robotic Counterbalance Forklift * Sources: Mobile Robotics CAGR, Statzon database; Autonomous Forklifts CAGR, Secondary Research, I
Slide 25: 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 26: 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 27: Supplemental Information
Supplemental Information 27
Slide 28: 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 29: 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 $ 145.0 $ 175.0 Depreciation & Amortization 121.0 139.
Slide 30: Operating Income Reconciliation to Adjusted 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 31: 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 December 31, 2022 Unallocated Expenses SSR MP OPG IMDS ADTech and other Total ($ in thousands) Operating Income (Loss) as reported in accordance w/ GAAP $ 43,689 $ 6,132 $
Slide 32: 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 March 31, 2022 Unallocated Expenses SSR MP OPG IMDS ADTech and other Total ($ in thousands) Operating Income (Loss) as reported in accordance w/ GAAP $ 11,552 $ 2,643 $ 66
Slide 33: 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 34: 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 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, 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 36: 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 37: Free Cash Flow, Guidance
Free Cash Flow, Guidance For 12-Month Period Ending December 31, 2023 Low Estimate High Estimate (in thousands) Net Income (loss) $ 75,000 $ 90,000 Non-cash adjustments: Depreciation and amortization 100,000 115,000 Other increases (decreases) in cash from operating activities (10,000) 30,000 Cash f
Slide 38: Capital Expenditures
Capital Expenditures $150 Forecast CapEx Aero/Defense Tech $125 Integrity Mgmt/Digital Sol Offshore Projects Grp $100 Mfd Products Subsea Robotics $75 Corporate $50 $25 $0 2020 2021 2022 2023F 38
Slide 39: 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 40: 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% 17% 19% 13% 19% 20% 20% 6% 11% 4% 7% 75% 12% 13% 75% 9% 22% 17% Aerospace/Defense Tech 16% 24% 14% Integrity Mgmt/Digital Sol 20% 7% 50% 50% 8% Offshore Projects Group 26% Manufactured
Slide 41: Subsea Robotics – ROV Fleet Location
Subsea Robotics – ROV Fleet Location 250 ROVs, March 31, 2023 100 Idle Drilling Support ROVs Vessel-based ROVs 80 ROV Count 60 36 40 17 12 12 2 20 34 21 11 23 18 17 9 6 9 5 6 9 0 3 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 March 31, 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 Subsea 7 50 25% Fugro Technip
Slide 43: Offshore Oil & Gas Activity Forecast
Offshore Oil & Gas Activity Forecast 200 400 Contracted Floating Rigs, annual average Contracted Floating Rigs Tree Installations 337 323 317 350 Subsea Tree Installations 290 293 150 300 266 250 164 173 100 148 200 133 137 125 150 50 100 2020 2021 2022 2023F 2024F 2025F Source: Rig data: IHS Markit
Slide 44: Offshore O&G Greenfield Capex by Sanction Year
Offshore O&G Greenfield Capex by Sanction Year Development Cost, Deepwater Development Cost, Shelf $175 Deepwater FIDs Shelf FIDs 200 $150 175 Development Costs, $ in Billions 150 Projects Count $125 125 $100 105 100 $75 76 75 65 $50 50 $25 25 28 30 25 $46 $35 $67 $84 $39 $0 $30 0 2020 2021 2022 202
Slide 45: Investor Relations Contact
Investor Relations Contact Mark Peterson Vice President, Corporate Development and Investor Relations 713.329.4507 InvestorRelations@oceaneering.com 45
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