Helix Energy Solutions Group, Inc. · NYSE:HLX
Helix Energy Solutions — Q4 2023 Earnings Presentation
39 slides from Helix Energy Solutions's earnings presentation, Feb 27, 2024
Slide 1: Fourth Quarter 2023 Conference Call
February 27, 2024 Fourth Quarter 2023 Conference Call
Slide 2: Forward-Looking Statements
INTRODUCTION Forward-Looking Statements This presentation contains forward-looking statements that involve risks, uncertainties and assumptions that could cause our results to differ materially from those expressed or implied by such forward-looking statements. All statements, other than statements
Slide 3: At Helix, our purpose is to enable energy transition through
At Helix, our purpose is to enable energy transition through: Maximizing Existing Lowering Decommissioning Offshore Renewables & Reserves Costs Wind Farms Enhancing remaining production Restoring the seabed in an Transitioning our energy economy from existing oil and gas wells environmentally safe m
Slide 4: Agenda
PRESENTATION OUTLINE Agenda • Executive Summary (pg. 5) • Operational Highlights (pg. 12) • Key Financial Metrics (pg. 22) • 2024 Outlook (pg. 27) • Non-GAAP Reconciliations (pg. 35) • Questions and Answers 4 4
Slide 5: Executive Summary
ww Executive Summary ENERGY SOLUTIONS
Slide 6: Summary of Results
EXECUTIVE SUMMARY Summary of Results ($ in millions, except per share amounts, unaudited) Three Months Ended Year Ended 12/31/23 12/31/22 9/30/23 12/31/23 12/31/22 Revenues $ 335 $ 288 $ 396 $ 1,290 $ 873 Gross profit $ 49 $ 31 $ 81 $ 200 $ 51 15% 11% 20% 16% 6% Net income (loss) $ (28) $ 3 $ 16 $ (
Slide 7: Fourth Quarter 2023 Highlights
EXECUTIVE SUMMARY Fourth Quarter 2023 Highlights Financial Results • Net loss of $28 million, $(0.19) per diluted share • Net loss includes pre-tax losses of $37 million related to the repurchase of $160 million of our Convertible Senior Notes due 2026 (2026 Notes) and $11 million related to the cha
Slide 8: Full Year 2023 Highlights
EXECUTIVE SUMMARY Full Year 2023 Highlights Financial Results • Net loss of $11 million, $(0.07) per diluted share • Net loss includes pre-tax losses of $37 million related to the repurchase of $160 million of our 2026 Notes and $42 million related to the change in the value of the Alliance earnout
Slide 9: Fourth Quarter 2023 Segments
EXECUTIVE SUMMARY Fourth Quarter 2023 Segments Well Intervention Shallow Water Abandonment • Well Intervention vessel fleet utilization 95% • 76% liftboat, offshore supply vessel (OSV) and • 97% in the GOM crewboat combined utilization • 89% in the North Sea and Asia Pacific • 46% diving support ves
Slide 10: Debt Refinancing
EXECUTIVE SUMMARY Debt Refinancing 2029 Senior Notes • Issued $300 million of 9.75% Senior Notes due 2029 • Issuance Ratings: B1 (Moody’s) / BB- (Fitch) / BB- (S&P) 2026 Convertible Senior Note Repurchases • Repurchased $160 million principal amount of our 2026 Notes in December 2023 • Paid $231 mil
Slide 11: Balance Sheet
EXECUTIVE SUMMARY Balance Sheet As of December 31, 2023 • Cash and cash equivalents of $332 million • Liquidity1 of $431 million • Long-term debt2 of $362 million • Net Debt3,4 of $30 million 1 Liquidity is calculated as the sum of cash and cash equivalents and availability under Helix’s ABL facilit
Slide 12: Operational Highlights
Operational Highlights 12
Slide 13: Segment Results
OPERATIONAL HIGHLIGHTS Segment Results ($ in millions, unaudited) Three Months Ended Year Ended 12/31/23 12/31/22 9/30/23 12/31/23 12/31/22 Revenues Well Intervention $ 211 $ 168 $ 225 $ 733 $ 524 Robotics 63 49 76 258 192 1 Shallow Water Abandonment 62 57 87 275 125 Production Facilities 19 28 24 8
Slide 14: Well Intervention - Gulf of Mexico
OPERATIONAL HIGHLIGHTS Well Intervention - Gulf of Mexico • Q5000 – 96% utilized in Q4; continued multi-well production enhancement and abandonment campaign including a well utilizing our 15K IRS with one client; performed a single-well production enhancement project for Shell; finished the year com
Slide 15: Well Intervention - North Sea & Asia Pacific
OPERATIONAL HIGHLIGHTS Well Intervention - North Sea & Asia Pacific • Well Enhancer – 100% utilized in Q4; worked for two customers performing production enhancement operations on three wells followed by decommissioning operations on two wells • Seawell – 100% utilized in Q4; worked for two customer
Slide 16: Well Intervention - Brazil
OPERATIONAL HIGHLIGHTS Well Intervention - Brazil • Siem Helix 1 – 100% utilized in Q4; performed decommissioning scopes on six wells and one production enhancement scope in the Campos Basin for Trident Energy • Siem Helix 2 – 98% utilized in Q4; performed decommissioning scopes on three wells and o
Slide 17: Well Intervention Utilization
OPERATIONAL HIGHLIGHTS Well Intervention Utilization 99% 100% 100% 99% 97% 100% 97% 99% 97% 89% 97% 86% 88% 97% 97% 90% 95% 92% 88% 88% 79% 89% 80% 74% 87% 72% 82% 71% 80% 79% 70% 63% 68% 53% 60% 58% 50% 52% 40% 44% 42% 38% 38% 30% 20% 10% 0% Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2
Slide 18: Robotics
OPERATIONAL HIGHLIGHTS Robotics • Grand Canyon II (Asia Pacific) – 100% utilized in Q4; completed long-term decommissioning project offshore Thailand and finished year on ROV support project offshore Malaysia • Grand Canyon III (North Sea) – 95% utilized in Q4; completed one oil and gas trenching pr
Slide 19: Robotics Utilization
OPERATIONAL HIGHLIGHTS Robotics Utilization 70% 67% 68% 500 66% 56% 58% 506 60% 58% 419 463 435 53% 400 50% 43% Utilization 358 370 376 332 323 Days 40% 36% 295 276 300 271 38% 35% 252 30% 236 176 200 165 24% 160 156 20% 84 90 90 81 100 10% 72 66 0% - Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22
Slide 20: Shallow Water Abandonment
OPERATIONAL HIGHLIGHTS Shallow Water Abandonment Q4 activities included ongoing call-off contracts as well as continued execution of our 39-well decommissioning project in the U.S. Gulf of Mexico Shelf Offshore • Liftboats – nine liftboats with combined utilization of 80% in Q4 performing make safe,
Slide 21: Shallow Water Abandonment Utilization
OPERATIONAL HIGHLIGHTS Shallow Water Abandonment Utilization 1 Systems utilization includes six CT systems from Q3 2022 through Q3 2023 and 14 P&A systems during Q3 2022, 15 P&A systems from Q4 2022 to August 2023 and 20 P&A systems beginning September 2023 2 Liftboat utilization includes ten liftbo
Slide 22: Key Financial Metrics
Key Financial Metrics 22
Slide 23: Debt Instrument Profile
KEY FINANCIAL METRICS Debt Instrument Profile Principal Payment Schedule at 12/31/23 Total funded debt1 of $373 million at 12/31/23 ($ in millions) • $300 million Senior Notes due 2029 – 9.75%2 300 • $40 million Convertible Senior Notes due 2026 – 250 6.75%2,3 200 • $33 million MARAD Debt – 4.93% 15
Slide 24: Debt & Liquidity Profile
KEY FINANCIAL METRICS Debt & Liquidity Profile ($ in millions) $500 $426 $380 $452 $431 $400 $348 $305 $300 $285 $200 $254 $279 $291 $332 $267 $187 $100 $208 $0 $22 $(75) $(30) ($100) $(161) $(143) $(58) ($200) $(229) $(305) $(264) $(362) $(350) ($300) $(406) $(496) $(440) ($400) ($500) 12/31/17 12/
Slide 25: Five-Year Trend
KEY FINANCIAL METRICS Five-Year Trend1 ($ in millions) $1,400 $300 $300 $75 $1,290 $1,200 $58 $250 $273 $250 $50 $1,000 $25 $22 $200 $200 Net income (loss) Adjusted EBITDA2 Free Cash Flow2 $800 $873 $180 $(11) $0 $150 $150 Revenue $752 $155 $132 $134 $734 $600 $675 ($25) $121 $100 $80 $100 $400 $96
Slide 26: Revenue Dispersion
KEY FINANCIAL METRICS Revenue Dispersion ($ in millions) By Segment1 By Geography1 By Market Strategy1 Year-Ended December 31, 2023 $1,400 $1,400 2% 7% $1,200 $1,200 13% 2% 21% $1,000 $1,000 14% 8% 10% 17% 10% $800 $800 21% 3% 5% 8% 14% 6% 8% 2% 9% $600 19% 21% 10% $600 29% 19% 33% 18% 16% 28% 24% 2
Slide 27: 2024 Outlook
2024 Outlook 27
Slide 28: Forecast
2024 OUTLOOK Forecast ($ in millions) 2024 2023 Outlook Actual Revenues $ 1,200 - 1,400 $ 1,290 Adjusted EBITDA1 270 - 330 273 Free Cash Flow1,3 65 - 115 134 Capital Additions2 70 - 90 90 Revenue Split: Well Intervention $ 710 - 810 $ 733 Robotics 255 - 315 258 Shallow Water Abandonment 215 - 250 27
Slide 29: Revenue / EBITDA – Key Drivers
2024 OUTLOOK Revenue / EBITDA – Key Drivers Our current outlook is based, among other things, on the following expected key drivers: • Well Intervention • GOM – forecasted improved rates following completion of legacy 75-day commitment; Q4000 Nigeria campaign beginning 2H 2024; Q5000 concentration o
Slide 30: Capital Additions, Cash Flow & Balance Sheet
2024 OUTLOOK Capital Additions, Cash Flow & Balance Sheet 2024 Capital additions are forecasted at approximately $70 – $90 million: • Approximately $45 - $55 million for regulatory recertification costs of our vessels and systems, reported in operating cash flows • Approximately $25 - $35 million fo
Slide 31: Well Intervention
2024 OUTLOOK Well Intervention • Q4000 (Gulf of Mexico / West Africa) – contracted work • Seawell (North Sea and Europe) – contracted work in through Q1 with identified opportunities through mid year; the Mediterranean Sea into Q2; subsequent transit to UK vessel expected to transit during Q2 for co
Slide 32: Robotics
2024 OUTLOOK Robotics • Grand Canyon II (Asia Pacific) – vessel expected to • Horizon Enabler (North Sea) – vessel available in be nearly fully utilized providing ROV support work on spot market beginning mid-February until renewables project offshore Taiwan into Q3; expect commencing seasonal trenc
Slide 33: Shallow Water Abandonment
2024 OUTLOOK Shallow Water Abandonment Expected greater seasonal slowdown in Q1 and Q4 and higher utilization during in Q2 and Q3 • Offshore • Diving & Heavy Lift • Liftboats – expect utilization on five to seven • DSVs – expect utilization on all three diving liftboats during 2024 vessels during 20
Slide 34: Beyond 2024
Beyond 2024 We continue momentum on our Energy Transition business Robotics strategy: Production Maximization, Decommissioning and • Anticipate continued strong renewables trenching Renewables market and deployment of T-1400-2 jet trencher • Expected continued strong cash generation in this • Expect
Slide 35: Non-GAAP Reconciliations
Non-GAAP Reconciliations 35
Slide 36: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Non-GAAP Reconciliations Three Months Ended Year Ended ($ in thousands, unaudited) 12/31/23 12/31/22 9/30/23 12/31/23 12/31/22 Reconciliation from Net Income (Loss) to Adjusted EBITDA: Net income (loss) $ (28,333) $ 2,709 $ 15,560 $ (10,838) $ (87,784) Adjustments: Income ta
Slide 37: Non-GAAP Definitions
NON-GAAP RECONCILIATIONS Non-GAAP Definitions Non-GAAP Financial Measures We define EBITDA as earnings before income taxes, net interest expense, gains and losses on equity investments, net other income or expense, and depreciation and amortization expense. Non-cash impairment losses on goodwill and
Slide 38: Sustainability continues to drive our business strategy and decision-making
Sustainability continues to drive our business strategy and decision-making with a renewed focus on our commitment to and participation in the world’s energy transition. Through production maximization, decommissioning and renewable energy support, our services lay the foundation for this transforma
Slide 39: Thank You
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Helix Energy Solutions Group — Q4 2023 Earnings Presentation on 6ix