Slide 1: AqualisBraemar ASA 2020 Q2 results
AqualisBraemar ASA 2020 Q2 results August 27, 2020 aqualisbraemar.com
Slide 2: Highlights, Financial review, Outlook
1. Highlights David Wells CEO 2. Financial review Kim Boman 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: Q2 2020 Highlights
Q2 2020 Highlights Reported numbers1 Pro-forma combined2 • Revenues of USD 19.2 million 19.8 – In line with Q2 19 pro-forma combined revenues 19.2 19.2 – Revenue for renewables up 70% compared to Q2 19 Revenue 9.9 – Offshore activity down, as certain Q2 seasonal activity was (USDm) fast tracked in Q
Slide 5: COVID-19 business update
COVID-19 business update • Overall activity level maintained – unusual seasonality and timing shifts due to COVID-19 – 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
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: Global footprint represents unique value to clients
Global footprint represents unique value to clients 448 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 Q2 2020 8 Map shows partnerships and exclusive sub
Slide 9: Diversified across regions and services
Diversified across regions and services Business stream revenue L12M Segment revenue L12M Adjusting 11% Renewables 15% Asia Pacific 27% Renewables 15% Americas Offshore 15% 48% 75.8 75.8 USDm USDm Marine Europe 26% 17% Middle East 26% 9 Note: No adjustment for intercompany eliminations. Note: Renewa
Slide 10: Group strategy
Group strategy Renewables Offshore, Marine, Adjusting Group Key objective: Key objective: Key objective: Drive growth Improve profitability Drive capital & business efficiency Key initiatives: Key initiatives: Key initiatives: • Continued profitable organic • Leverage scale advantages • De-risk and
Slide 11: 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 12: OWC continues expansion to serve new wind markets
RENEWABLES OWC continues expansion to serve new wind markets Market trends OWC developments in 2020 • Aims to install 3.8 GW with 10 GW of new • Recruited leading Polish offshore wind expert and opening capacity awarded by 2030 Warsaw office (Q3) Poland • Launched first auction – targeting 10 GW new
Slide 13: Project: OWC awarded Mayflower Wind framework agreement
RENEWABLES Project: OWC awarded Mayflower Wind framework agreement • Mayflower Wind, the 50/50 joint venture between Shell and EDP Renewables, has awarded a framework agreement to OWC for provision of engineering support to the US wind farm development • Mayflower Wind is developing an offshore wind
Slide 14: Offshore capex and rig activity levels falling
OFFSHORE Offshore capex and rig activity levels falling 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 14 Source: IHS Markit, SB1 Markets
Slide 15: Project: Hong Kong – Cross Bay Link T&I
OFFSHORE Project: Hong Kong – Cross Bay Link T&I • The Cross Bay Link (CBL) is a proposed 1.8 km bridge that connects the Tseung Kwan O Industrial Estate with the proposed Tseung Kwan O – Lam Tin Tunnel in Hong Kong • AqualisBraemar is engaged by CRBC to provide engineering support for CBL transport
Slide 16: Project: Multiple offshore wind projects in China
OFFSHORE / RENEWABLES Project: Multiple offshore wind projects in China 2x WTIV newbuilds for Ouyang Transmission station for ZPMC • Ouyang Offshore has awarded AqualisBraemar • AqualisBraemar engaged by ZPMC to provide the construction supervision contract for two engineering support for transporta
Slide 17: Project: Cyclone damage – Australia
MARINE / OFFSHORE Project: Cyclone damage – Australia • AB Marine provided casualty services for a P&I Club following the beaching of several vessels after Cyclone Damien, including: – Pollution prevention oversight – Wreck removal tendering, planning and provision of Special Casualty Representative
Slide 18: Continued expansion into new areas
ADJUSTING Continued expansion into new areas Set for growth in Malaysia COVID-19 related claims • The central bank of Malaysia, Bank Negara • AqualisBraemar has received instructions on Malaysia, has formally sanctioned several business interruption claims AqualisBraemar to handle insurance claims i
Slide 19: Order backlog development
Order backlog development Order backlog1 Highlights Q2 2020 25 • Order backlog at USD 20.5 million, up 8% from Q1 2020 • Current focus is on supporting clients on 20 day-to-day service operations - typically call-out contracts that are only included in 15 backlog figures when reliable estimates are
Slide 20: Staff level development
Staff level development Staff level development1 Highlights Q2 2020 500 60% • Average staff levels in Q2 2020 increased, primarily driven by high 450 50% activity and recruitment in Renewables 400 350 • Subcontractor share increased from 40% previous quarter 300 – Subcontractor share significantly h
Slide 21: Highlights, Financial review, Outlook
1. Highlights David Wells CEO 2. Financial review Kim Boman CFO 3. Outlook David Wells CEO 21
Slide 22: Revenue and adjusted EBIT
Revenue and adjusted EBIT Revenue, pro-forma combined (USDm) Adj EBIT1, pro-forma combined (USDm) 24 2.4 12% 20.0 19.6 19.8 2.0 10% 20 19.2 19.2 1.8 18.8 18.0 18.0 17.4 1.6 8% 1.4 16 1.2 6% 12 0.8 0.6 4% 8 0.4 0.5 0.4 0.3 0.3 2% 4 0.0 0% -0.1 -0.2 0 -0.4 -2% 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2
Slide 23: Segment revenues and EBIT
Segment revenues and EBIT Segment revenues (USDm) Segment adjusted EBIT1 (USDm) 8.0 1.0 6.0 0.8 4.0 0.6 2.0 0.4 0.0 0.2 -2.0 0.0 -4.0 -0.2 -6.0 -0.4 2Q19 1Q20 2Q20 2Q19 1Q20 2Q20 • Quarterly slowdown in Middle East and higher revenue eliminations due to increased intercompany trading between segment
Slide 24: Income Statement
Income Statement USD thousands Consolidated income statement Q2 20 Q2 19 H1 20 H1 19 FY 19 • Revenues for Q2 2020 up 95% Revenue 19 232 9 869 39 019 18 051 54 792 from Q2 2019 Total revenue 19 232 9 869 39 019 18 051 54 792 – Growth related largely to the Staff costs (9 920) (4 119) (20 334) (7 968)
Slide 25: Cost synergy estimates raised to USD 2.8m
Cost synergy estimates raised to USD 2.8m Cost synergies ERP implementation • AqualisBraemar inherited legacy ERP and 3.0 support systems through the BTS transaction. Systems in place were outdated and not fit for 2.5 0.7 purpose 2.0 • Oracle Netsuite, the current ERP system used in former Aqualis,
Slide 26: Working capital and financial position
Working capital and financial position Highlights Q2 2020 Working capital1 (% of quarterly revenue) • Solid financial position with USD 11.0 million in cash 150% 146% 142% 140% 138% 135% • Capitalised lease of USD 1.8 million • Net working capital of USD 26.3 million, 125% down from USD 26.7 million
Slide 27: Strong underlying cash flow
Strong underlying cash flow Cash position and cash flow bridge (USDm) • Operational cash flow of USD 0.4 2.6 million in the quarter 1.6 0.6 – Net cash flow prior to dividend and 11.0 FX of USD 1.8 million -0.1 10.1 -1.5 • Cash position increased from USD 10.1m to USD 11.0m – Paid USD 1.5 million div
Slide 28: Highlights, Financial review, Outlook
1. Highlights David Wells CEO 2. Financial review Kim Boman CFO 3. Outlook David Wells CEO 28
Slide 29: Summary and outlook
Summary and outlook • Record profitability and cash flow despite challenging business environment – Expect lower activity and margins in Q3 due to seasonality and travel restrictions • Targeting 50% renewables and ESG driven services in business mix by 2025 – Focus on driving growth of renewables an
Slide 30: Appendix
Appendix 30
Slide 31: 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 32: 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% Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 1 For offshore oil & gas and offshore renewables: Bill
Slide 33: Adjustment items
Adjustment items USD thousands Adjustment items (EBITDA) Q2 18 Q3 18 Q4 18 FY 18 Q1 19 Q2 19 Q3 19 Q4 19 FY 19 Q1 20 Q2 20 Restructuring and integration costs - - - - - 48 475 5 528 48 55 Other special items (incl. share-based expenses) - - - - - - - - - 78 76 Transaction costs related to M&A - - -
Slide 34: 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 35: 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 36: APMs and Key Figures
APMs and Key Figures USD thousands Profitability measures Q2 18 Q3 18 Q4 18 FY 18 Q1 19 Q2 19 Q3 19 Q4 19 FY 19 Q1 20 Q2 20 Operating profit (loss) (EBIT) 1 032 594 860 2 684 (248) (284) (245) 444 (332) 1 279 1 577 Depreciation, amortisation and impairment 34 30 32 129 38 38 362 252 690 362 363 EBIT
Slide 37: APMs and Key Figures
APMs and Key Figures USD thousands Working capital Q2 18 Q3 18 Q4 18 FY 18 Q1 19 Q2 19 Q3 19 Q4 19 FY 19 Q1 20 Q2 20 Trade and other receivables 9 105 9 398 9 870 9 870 8 371 27 534 25 896 24 252 24 252 26 064 26 568 Contract assets 1 800 2 013 2 297 2 297 1 910 12 288 13 518 12 019 12 019 11 145 9
Slide 38: Consolidated Statement of Income
Consolidated Statement of Income USD thousands Consolidated income statement Q2 18 Q3 18 Q4 18 FY 18 Q1 19 Q2 19 Q3 19 Q4 19 FY 19 Q1 20 Q2 20 Revenue 9 595 8 603 9 828 36 185 8 182 9 869 17 957 18 785 54 792 19 787 19 232 Total revenue 9 595 8 603 9 828 36 185 8 182 9 869 17 957 18 785 54 792 19 78
Slide 39: Consolidated Statement of Financial Position
Consolidated Statement of Financial Position USD thousands Consolidated balance sheet Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 ASSETS Property, plant and equipment 180 167 141 139 520 508 559 509 475 Right-of-use assets - - - 84 2 415 2 167 2 376 2 021 1 757 Intangible assets 12 908 12
Slide 40: Consolidated Statement of Cash Flow
Consolidated Statement of Cash Flow USD thousands Consolidated cashflow statement Q2 18 Q3 18 Q4 18 FY 18 Q1 19 Q2 19 Q3 19 Q4 19 FY 19 Q1 20 Q2 20 Profit (loss) before taxes 1 427 560 1 073 2 878 (368) 11 116 144 (992) 9 900 3 000 1 394 Non-cash adjustment to reconcile profit before tax to cash flo
Slide 41: Revenues and EBIT - split per segments
Revenues and EBIT - split per segments USD thousands Revenues Q2 18 Q3 18 Q4 18 FY 18 Q1 19 Q2 19 Q3 19 Q4 19 FY 19 Q1 20 Q2 20 Middle East 5 029 3 855 4 928 17 796 4 164 4 483 5 221 6 087 19 955 7 013 5 852 Asia Pacific 1 858 1 918 1 987 7 358 1 427 1 987 5 909 5 636 14 958 5 745 6 137 Europe 909 6
Slide 42: Trade receivable & Cash and cash equivalents - split per segments
Trade receivable & Cash and cash equivalents - split per segments USD thousands Trade receivables Q2 18 Q3 18 Q4 18 FY 18 Q1 19 Q2 19 Q3 19 Q4 19 FY 19 Q1 20 Q2 20 Middle East 4 099 3 865 4 824 4 824 4 069 5 450 5 102 5 648 5 648 6 915 6 778 Asia Pacific 1 456 1 845 1 676 1 676 1 016 5 718 5 705 6 2
Slide 43: Historical revenues and adjusted EBIT, pro-forma combined
Historical revenues and adjusted EBIT, pro-forma combined USD millions Aqualis 3q17 4q17 1q18 2q18 3q18 4q18 1q19 2q19 Revenues 7.3 8.9 8.2 9.6 8.6 9.8 8.2 9.9 Adjusted EBIT 0.2 0.6 0.2 0.7 0.6 0.9 0.1 0.5 BTS 3q17 4q17 1q18 2q18 3q18 4q18 1q19 2q19 Revenues 10.2 9.8 10.2 10.4 9.4 9.8 9.2 9.4 1 Adju
Slide 44: 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 5 620 763 8.0% 4 BJØRN STRAY 3 000 000 4.3% 5 MP PENSJON PK 1 831 128 2.6% 6 SAXO BANK A/S 1 516 598 2.2% 7 LGT BANK AG 1 5
Slide 45: aqualisbraemar.com
23 AQUALIS me? BRAEMAR aqualisbraemar.com