Slide 1: Archer Q2 2024 results
Archer Q2 2024 results Dag Skindlo Chief Executive Officer Espen Joranger Chief Financial Officer 16 August 2024
Slide 2: Disclaimer – forward looking statements
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 are “fo
Slide 3: At a glance: Midpoint 2024 guidance
Revenue ($m) EBITDA ($m) At a glance Platform Operations Land Drilling +11% 1,169 Well Services 117 +16% 970 936 824 85 86 76 The Well Company Midpoint 2024 guidance $1.2 – 1.3bn $134 - 140m $2.5bn 2024 guided revenue 2024 guided EBITDA Contract backlog ’20 ’21 ’22 ’23 24G ’20 ’21 ’22 ’23 ’24G 50 ye
Slide 4: Continued strong 2024 outlook confirmed by solid Q2
Revenue ($m) Continued strong 2024 outlook 700 +10% 617 350 295 +5% 309 confirmed by solid Q2 600 500 562 300 250 400 200 300 150 Q2 Revenue of $309 million; up 5% YOY 525 250 265 477 200 100 Q2 EBITDA of $32.8 million, up 9% YOY 100 50 H1 EBITDA of $63.7 million, up 15% YOY 0 0 First half 23 First
Slide 5: Market outlook
Market outlook Well-positioned in segments with attractive long-term outlook Business Area Archer sentiment1 Outlook Strong growth as we expand service offering and growing P&A market • Production focused with intervention and workover services • Integrated P&A projects UK Market for Archer’s core s
Slide 6: Acquisition of ADA supports growth in Vaca Muerta, Argentina
Acquisition of ADA supports growth in Vaca Muerta, Argentina Higher investments support growth in drilling demand Archer acquires MPD service provider ▪ Large infrastructure investments ongoing from 2023 Strong strategic and operational fit ▪ New legislation for O&G investments above $200m ▪ Pan Ame
Slide 7: Archer Wind with near term project pipeline
Archer Wind with near term project pipeline Strategic rationale Supports our customers’ ambitions in the energy transition Strategic fit with Archer’s offshore capabilities Asset-light business model Cost-efficient floater solution, downselected by several developers Near-term project pipeline Proje
Slide 8: Archer becomes the majority owner of Iceland Drilling
Archer becomes the majority owner of Iceland Drilling Archer ownership in Iceland Drilling Financial impact on Archer (pro-forma) 2024E pro-forma consolidated financials Archer acquire an additional 10% for USD 2.5m worth of shares in Archer Archer 2024E revenues to Iceland Drilling has developed we
Slide 9: Platform Operations
Platform Operations Financials Revenues ($m) EBITDA ($m) +24% • Operational revenue moderately reduced, 200 15 ending at $108.0 million 151 139 142 140 150 130 10 • EBITDA of $14.8 million represents an increase of 24% compared to previous quarter and 55% 100 compared to Q2 last year, following stro
Slide 10: Well Services
Well Services Revenues ($m) EBITDA ($m) Financials 105 15 • Underlying long term growth in revenue 100 and EBITDA 14 95 90 13 • Muted quarter for Well Services, as several 86 85 83 platforms in Norway were on revision stop 12 80 and several jobs and sales slide into second 76 half of 2024 75 11 75 7
Slide 11: Land Drilling
Land Drilling Financials Revenues ($m) +24% EBITDA ($m) 9 • Revenue increased by 24% over the quarter, to 97.3 8 $97.3 million 100 88.2 7 80 80.0 78.2 78.5 • EBITDA increased by 24.4%, ending at $8.9 million 6 in the quarter on the back of strong operational 60 5 performance and incentives 40 4 • We
Slide 12: Condensed profit & loss
Condensed profit & loss ($ million Q2 2024 Q2 2023 YTD 2024 YTD 2023 • Total revenue of $309.0 million in Q2 2024 represent an increase of $14.9 million from same quarter last Operating revenues 265.4 249.8 525.5 476.7 year, driven by growth in all business areas Reimbursable revenue 43.7 45.1 91.8
Slide 13: Condensed balance sheet
$ million 30.06.2024 31.12.2023 Condensed balance sheet Cash and cash equivalents 51.6 52.1 • Cash and cash equivalents of $51.6 million, Restricted cash 6.8 3.5 decreased by $0.5 million compared to year Accounts receivables 173.6 183.8 end 2023 Inventories 70.6 75.0 Other current assets 56.0 40.4
Slide 14: $4 billion in backlog including options
$4 billion in backlog including options Grew firm order backlog by 80% during 2024 $m 4-year platform drilling contract extension for the operation of 9 installations in the North Sea for Equinor (reduction from currently 4.0 12 installations) 3.5 2-year platform drilling contract with Trident Energ
Slide 15: Financial outlook for 2024 – continued growth and reduced leverage
Financial outlook for 2024 – continued growth and reduced leverage 2024 Guidance Key financial takeaways 1,215-1,285 Figures in USD million ▪ Continued EBITDA growth of between 15% and 20% for Archer in 2024 Revenue ▪ Capex somewhat elevated above historic level to support growth and Emerald 1,169 r
Slide 16: Appendix
Appendix
Slide 17: We are Archer
We are Archer Platform Operations Well Services Land Drilling Renewables • Wide range of offshore drilling • High-end products and services • Drilling and workover services • A broad set of service lines including operations, engineering, and aimed at improving well across the entire well lifecycle
Slide 18: Midpoint 2024 guidance including pro forma impact of acquisitions
Revenue ($m) EBITDA ($m) At a glance Renewables (pro forma) Platform Operations Land Drilling Well Services 1,169 +12% 117 Midpoint 2024 guidance including pro forma impact of acquisitions +18% The Well Company 970 936 824 86 85 76 $1.2 – 1.3bn $134 - 140m $2.5bn 2024 guided revenue 2024 guided EBIT
Slide 19: Strong market outlook for Archer's P&A service
Strong market outlook for Archer’s P&A service the next 30 years Global offshore decommissioning market outlook (incl. P&A) Global offshore decom. spending set to double to 2050 Total offshore decom. spend of $240B to 2050 E&P abandonment costs 2001-2050, $bn 55 E&P abandonment costs 2024-2050, $bn
Slide 20: Geothermal energy is expected to grow materially in the decades to come
Geothermal energy is expected to grow materially in the decades to come Wells to be drilled by geography Geothermal energy spending Growth drivers of geothermal power Nr of wells drilled and completed for geothermal power Global expenditures on geothermal plants ($bn), (in thousand), Rystad Rystad E
Slide 21: Geothermal heating is expected to grow materially in the decades to come
Geothermal heating is expected to grow materially in the decades to come Geothermal heating spending globally Growth drivers of geothermal heating Global plant expenditures for geothermal district heating ($bn), Rystad Push for decarbonization Europe* APAC Rest of world Geothermal heating provides a
Slide 22: Archer's renewables ambitions
Archer’s renewables ambitions Iceland Drilling Vertikal Service Geothermal drilling Archer towards net zero Renewables & Energy Transition high temperature deep geothermal wells Offshore/onshore wind Very limited emissions outside Well P&A and decommissioning of land drilling & District heating Hydr
Slide 23: Key financials
Key financials Revenue [$m] EBITDA [$m] 350 34 Reimbursable 295 303 305 308 309 32.8 300 Operational revenue 32 30.7 30.9 30.9 250 30.0 200 30 150 28 250 248 252 260 265 100 26 50 0 24 Q2-23 Q3-23 Q4-23 Q1-24 Q2 24 Q2-23 Q3-23 Q4-23 Q1-24 Q2 24 NIBD [$m] CAPEX [$m] 24.7 25 400 395 387 391 392 386 20
Slide 24: Condensed profit and loss statement (unaudited)
Condensed profit and loss statement (unaudited) (Figures in $ million) Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Operating revenues 249.8 248.1 252.4 260.2 265.4 Reimbursable revenue 45.1 54.6 52.7 48.1 43.7 Total Revenues 294.9 302.7 305.1 308.3 309.0 EBITDA before exceptional items 31.9 32.3 33.4 32.9 32.2 To
Slide 25: Condensed balance sheet (unaudited)
Condensed balance sheet (unaudited) $ million 30.06.2023 30.09.2023 31.12.2023 31.03.2024 30.06.2024 Cash, cash equivalents & restricted cash 73.1 76.3 55.6 57.8 58.4 Accounts receivables 161.2 173.4 183.8 182.5 173.6 Inventories 68.5 71.8 75.0 72.3 70.6 Other current assets 36.4 36.8 38.7 49.1 56.0
Slide 26: Condensed cash flow statement – last 5 quarters (unaudited)
Condensed cash flow statement – last 5 quarters (unaudited) (Figures in $ million) Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Operating activities 1.7 0.2 18.7 14.3 24.4 Investing activities (10.9) 2.6 (22.7) (8.6) (23.4) Financing activities (114.8) 0.5 (19.3) (0.6) (0.5) FX effect (1.2) - 2.6 (2.9) - Total* (1