Abl Group Asa · OSL:ABL
Abl Group Asa — AqualisBraemar LOC — Q4 2020 Earnings Presentation
54 slides from Abl Group Asa's earnings presentation, Feb 25, 2021
Slide 1: AqualisBraemar LOC ASA 2020 Q4 results
AqualisBraemar LOC ASA 2020 Q4 results 25 February 2021 ABL-GROUP.COM
Slide 2: Agenda: Highlights, Renewables, Financial review, Outlook
1. Highlights David Wells CEO 2. Renewables update Will Cleverly Managing Director – OWC 3. Financial review Dean Zuzic CFO 4. Outlook David Wells CEO © 2012-2021 AqualisBraemar LOC 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: 2020 Highlights – Another transformative year
2020 Highlights – Another transformative year • 2020 AqualisBraemar stand-alone highlights • Revenue of USD 77.0 million, up 5% from 2019 (2019: USD 73.4 million 1) • • Adjusted EBIT of USD 4.8 million (2019: USD 1.3 million) Cashflow from operating activities of USD 8.5 million (2019: USD -2.7m) +
Slide 5: Q4 2020 Highlights
Q4 2020 Highlights Reported numbers1 Pro-forma combined2 • Revenues of USD 19.6 million (Q4 19: USD 18.8 million) 35.7 • Continued strong revenue growth in Renewables (+47% vs Q4 19) 18.8 18.4 19.6 Revenue • Revenue in other segments largely in line with Q4 19, despite negative impact of COVID (USDm
Slide 6: AqualisBraemar LOC business model
AqualisBraemar LOC business model High end consultancy services to the global energy, shipping and insurance industries Core services Consultancy & Engineering Loss Prevention Loss Management 6
Slide 7: AqualisBraemar LOC business streams
AqualisBraemar LOC 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
Slide 8: The strategic vision
The strategic vision 1 2 3 Leverage our Grow through continued expansion in market leading position Consistently return capital the rapidly growing offshore within shipping, oil and gas to improve to shareholders renewables industry profitability Ambition: 50% renewables and sustainability oriented
Slide 9: Global partner, local expert
Global partner, local expert 881 Employees1 67 Office locations 39 Countries Global footprint provides clients with local expertise and swift response 1 Includes subcontractors on 100% utilisation basis. Includes LOC. Calculated as an average during Q4 2020 9 Map shows partnerships and exclusive sub
Slide 10: Diversified across sectors – Renewables continues to grow
Diversified across sectors – Renewables continues to grow Business stream revenue L12M – AqualisBraemar only Business stream revenue L12M – Including LOC1 Adjusting Adjusting 12% 7% Renewables Offshore 18% Renewables 48% 18% 77.0 139.5 Offshore USDm USDm 53% Marine 22% Marine 23% Note: No adjustment
Slide 11: Order backlog development
Order backlog development Order backlog1 Highlights Q4 2020 80 • Order backlog at USD 76.0 million, up 169% from Q3 2020 70 • Driven by consolidation of LOC, whose business model is 60 more backlog intensive than AqualisBraemar stand-alone • Backlog for AqualisBraemar stand-alone slightly down, but
Slide 12: Staff growth continues with LOC acquisition
Staff growth continues with LOC acquisition Staff level development1 Highlights Q4 2020 1 000 50% • Average staff levels slightly down in 4Q, due to seasonal lower activity in Renewables 800 40% • Staff count nearly doubled with LOC acquisition (consolidated at end of fourth quarter) 600 30% • Subco
Slide 13: Rig activity may have passed bottom, but capex muted in 2021
OFFSHORE Rig activity may have passed bottom, but capex will be muted also in 2021 E&P capex growth Rigs under contract 30% 450 400 20% 350 10% 300 0% # Units 250 -10% 200 150 -20% 100 -30% 50 -40% - Onshore Offshore Floaters Jackups 13 Source: IHS Markit, SB1 Markets
Slide 14: Project: BHP South Flank Module Transport
OFFSHORE Project: BHP South Flank Module Transport • MWS representative for AIG on the BHP South Flank iron ore mine project In 2020, AB Offshore… • Awarded / Kick off: March 2019 ...performed • Completed: December 2020 • 12 Shipments of Modules from Tianjin to Port Hedland, WA 500+ rig moves global
Slide 15: Project: Tengizchevroil (TCO) Future Growth Project
OFFSHORE Project: Tengizchevroil (TCO) Future Growth Project • In February 2021, LOC completed its role providing MWS services on the TCO Future Growth Project in Kazakhstan • TCO is a JV between Chevron (50%), ExxonMobil (25%), KazMunayGas (20%) and LukArco (5%) • From a capex and MWS perspective,
Slide 16: Project: Yacht Foundering & Salvage Operation
MARINE Project: Yacht Foundering & Salvage Operation • AqualisBraemar’s Marine and Yacht Services responded to a yacht In 2020, AB Marine… foundering in the Middle East during Q4 • Team mobilised to assess emergency response options ...received • Repair and salvage costs estimated, constructive tota
Slide 17: Project: LNG Construction Project
ADJUSTING Project: LNG Construction Project • Calgary Adjusting has been instructed on three construction losses at a In 2020, AB Adjusting… west coast Canada LNG facility • AB Adjusting is the sole nominated adjuster on the project ...received • Global LNG demand growth is currently exceeding that
Slide 18: Agenda: Renewables update
1. Highlights David Wells CEO 2. Renewables update Will Cleverly Managing Director – OWC 3. Financial review Dean Zuzic CFO 4. Outlook David Wells CEO © 2012-2021 AqualisBraemar LOC 18
Slide 19: Record offshore wind investments in 2020 as oil majors ramp up presence
RENEWABLES Record offshore wind investments in 2020 as oil majors ramp up presence Offshore wind FIDs (USDbn) Oil majors accounted for 30% of 2020 offshore wind FIDs 60 50.0 50 40 31.9 30 20 10 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 • Offshore wind FIDs in 2020 totaling USD 50 billion, up 56
Slide 20: Acquisition of East Point Geo
RENEWABLES Acquisition of East Point Geo Key highlights East Point Geo completes geoscience offering • East Point Geo is an independent geoscience consultancy providing support for major offshore and onshore engineering projects • In the last twelve months, the company’s turnover totalled approximat
Slide 21: Renewables in AqualisBraemar LOC 2021
RENEWABLES Renewables in AqualisBraemar LOC 2021 Following the merger of AqualisBraemar with LOC in December 2020, several renewable companies have joined forces resulting in: • Deeper bench of renewable experts around the world • Broader offering of technologies and services • Wider routes to marke
Slide 22: Deeper bench of renewable experts around the world
RENEWABLES Deeper bench of renewable experts around the world • Existing OWC hubs: Renewables hubs • UK Other ABL • Germany locations • Taiwan • USA • Brazil • New OWC hubs in 2020: • Korea • Japan • Poland • New renewables hubs from LOC: • France • Singapore • China • Vietnam 22
Slide 23: Broader range of technologies covered
RENEWABLES Broader range of technologies covered Fixed OWF Floating OWF Wave & Tidal Emerging Tech. Solar 23 Key: Green = new LOC / Longitude / Innosea services Blue = existing OWC services
Slide 24: Broader service offering with increased value chain coverage
RENEWABLES Broader service offering with increased value chain coverage across Planning & Design Construction Operation Decomm Owners Engineering: Turbines, Foundations, Substations, Cables Consulting and Engineering: Site Characterisation, Component Selection, Design, Installation, O&M, Decommissio
Slide 25: Wider routes to market
RENEWABLES Wider routes to market Developer Technology Offshore Insurer provider transmission EPCI 25 Key: Green = new LOC / Longitude / Innosea services Blue = existing OWC services
Slide 26: 2020 AqualisBraemar renewables snapshot
RENEWABLES 2020 AqualisBraemar renewables snapshot • Owner’s Engineer & engineering services (US): Mayflower Wind – 1.6GW project offshore Massachusetts, In 2020, OWC… developed by a JV of Shell and EDPR • Owner’s Engineer & project development services (UK): ...worked on Erebus – 96MW floating wind
Slide 27: Project: Baltic Power Offshore Wind Farm (Poland)
RENEWABLES Project: Baltic Power Offshore Wind Farm (Poland) • Baltic Power is a 1.2 GW offshore wind farm being developed by PKN Orlen and Northland Power (recently acquired 49% in the project) • OWC was appointed in Nov 2020 as technical advisor to the project • OWC will support PKN Orlen during t
Slide 28: 2020 LOC renewables snapshot – Hornsea Project One
RENEWABLES 2020 LOC renewables snapshot – Hornsea Project One • LOC has delivered marine warranty surveying (MWS) for Ørsted’s Hornsea Project One offshore substation and array cable installation packages • Located off the Yorkshire coast, the 1.2GW Hornsea One is the world’s largest offshore wind f
Slide 29: 2020 LOC renewables snapshot – Windfloat Atlantic
RENEWABLES 2020 LOC renewables snapshot – Windfloat Atlantic • LOC recently completed its role as marine warranty surveyor (MWS) on the 25MW Windfloat Atlantic floating wind project • The project included the installation of the largest turbine (8.4MW) to be mounted on a floating platform at the tim
Slide 30: Innosea at the forefront of commercial scale floating wind development
RENEWABLES Innosea at the forefront of commercial scale floating wind development • Innosea appointed to a Carbon Trust-led Floating Wind Joint Industry Project for optimising floating wind • The aim of the project is to investigate the challenge and opportunities of developing commercial scale floa
Slide 31: Agenda: Financial review
1. Highlights David Wells CEO 2. Renewables update Will Cleverly Managing Director – OWC 3. Financial review Dean Zuzic CFO 4. Outlook David Wells CEO © 2012-2021 AqualisBraemar LOC 31
Slide 32: Revenue and adjusted EBIT
Revenue and adjusted EBIT Revenue (USDm) Adj EBIT1 (USDm) BTS consolidated LOC consolidated BTS consolidated LOC consolidated from 3Q19 from 1Q21 from 3Q19 from 1Q21 40 3.0 35.7 36 2.5 32 28 +4% 2.0 1.8 24 19.8 19.2 19.6 20 18.0 18.8 18.4 1.5 1.4 1.4 16 1.0 0.9 1.0 12 9.8 9.9 8.2 0.6 8 0.5 0.4 0.5 0
Slide 33: Segment revenues and EBIT
Segment revenues and EBIT Segment revenues (USDm) Segment adjusted EBIT1 (USDm) 7.0 0.8 6.0 5.0 0.6 4.0 0.4 3.0 2.0 0.2 1.0 0.0 0.0 -1.0 -0.2 -2.0 -0.4 -3.0 -4.0 -0.6 4Q19 3Q20 4Q20 4Q19 3Q20 4Q20 • Continued strong revenue growth in Renewables (+47% vs Q4 19), but seasonal slowdown from Q3 • Revenu
Slide 34: Income Statement
Income Statement USD thousands Consolidated income statement Q4 20 Q4 19 FY 20 FY 19 • Revenues for Q4 2020 up 4% from Q4 2019 Revenue 19 565 18 785 77 015 54 792 Total revenue 19 565 18 785 77 015 54 792 • Growth driven by renewables Staff costs (10 964) (9 801) (41 495) (28 536) Other operating ex
Slide 35: Strong financial position, freeing up working capital
Strong financial position, freeing up working capital Highlights Q4 2020 Working capital1 (% of quarterly revenue) • USD 30.6 million in cash 150% 146% 142% 140% 138% 135% • Up from USD 14.1 million in Q3 2020 127% 125% • USD 15.1 million bank debt 107% • Up from zero in Q3 2020 100% • Capitalised l
Slide 36: Update on prospectus and subsequent offering
Update on prospectus and subsequent offering • On 23 November 2020, AqualisBraemar carried out a private placement of new equity and announced a subsequent offering in connection with the financing of the LOC acquisition • Approved by EGM on 14 December 2020 • The prospectus for the listing of the p
Slide 37: Proposing semi-annual dividend of NOK 0.25 per share
Proposing semi-annual dividend of NOK 0.25 per share • Paid and proposed dividends (NOK/share) • Proposing dividend of NOK 0.25 per share, corresponding to USD 2.7 million • The distribution will for tax purposes be considered a repayment of 0.25 paid-in capital • The dividend is subject to sharehol
Slide 38: Agenda: Outlook
1. Highlights David Wells CEO 2. Renewables update Will Cleverly Managing Director – OWC 3. Financial review Dean Zuzic CFO 4. Outlook David Wells CEO © 2012-2021 AqualisBraemar LOC 38
Slide 39: Summary and outlook
Summary and outlook • Continued strong cash flow in Q4 and full year 2020 despite challenging markets • Transformative acquisition of LOC doubling the size of the group with complementary services • Initial integration progressing well and likely to lead to significant cost savings already in 2021,
Slide 40: Appendix
Appendix © 2012-2021 AqualisBraemar LOC 40
Slide 41: AqualisBraemar LOC Group targets
AqualisBraemar LOC Group targets • Financial targets • Organic revenue growth of 5 percent over a business cycle • Renewable and sustainability-oriented services target at 50% of revenue in 2025 • EBITA margin of 10 percent (excluding effects from IFRS 16 Leases and items affecting comparability) ov
Slide 42: Billing ratio development
Billing ratio development Billing ratio1 – Total technical staff (including subcontractors) BTS consolidated from 3Q19 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Oct-18 Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 Oct-20 Billing ratio, Aqualis/AqualisBraemar Billing ratio, LOC Gliding 3m averag
Slide 43: Adjustment items
Adjustment items USD thousands Adjustment items (EBITDA) Q4 18 FY 18 Q1 19 Q2 19 Q3 19 Q4 19 FY 19 Q1 20 Q2 20 Q3 20 Q4 20 FY 20 Restructuring and integration costs - - - 48 475 5 528 48 55 52 30 185 Other special items (incl. share-based expenses) - - - - - - - 78 76 80 83 318 Transaction costs rel
Slide 44: General (1/2)
General (1/2) Basis of preparations Alternative Performance Measures (APMs) This presentation provides consolidated AqualisBraemar LOC discloses APMs in addition to those normally required by IFRS. APMs are meant to provide an financial highlights for the quarter of the enhanced insight into the ope
Slide 45: General (2/2)
General (2/2) Alternative Performance Measures (APMs) continued Return on equity (ROE) ROE is calculated as the adjusted profit (loss) for the period attributable to equity holders of the parent, divided by average total equity for the period. The adjusted profit (loss) is annualised for interim per
Slide 46: APMs and Key Figures
APMs and Key Figures USD thousands Profitability measures Q4 18 FY 18 Q1 19 Q2 19 Q3 19 Q4 19 FY 19 Q1 20 Q2 20 Q3 20 Q4 20 FY 20 Operating profit (loss) (EBIT) 860 2 684 (248) (284) (245) 444 (332) 1 279 1 577 506 (416) 2 946 Depreciation, amortisation and impairment 32 129 38 38 362 252 690 362 36
Slide 47: APMs and Key Figures
APMs and Key Figures USD thousands Working capital Q4 18 FY 18 Q1 19 Q2 19 Q3 19 Q4 19 FY 19 Q1 20 Q2 20 Q3 20 Q4 20 FY 20 Trade and other receivables 9 870 9 870 8 371 27 534 25 896 24 252 24 252 26 064 26 568 24 714 41 498 41 498 Contract assets 2 297 2 297 1 910 12 288 13 518 12 019 12 019 11 145
Slide 48: Consolidated Statement of Income
Consolidated Statement of Income USD thousands Consolidated income statement Q4 18 FY 18 Q1 19 Q2 19 Q3 19 Q4 19 FY 19 Q1 20 Q2 20 Q3 20 Q4 20 FY 20 Revenue 9 828 36 185 8 182 9 869 17 957 18 785 54 792 19 787 19 232 18 431 19 565 77 015 Total revenue 9 828 36 185 8 182 9 869 17 957 18 785 54 792 19
Slide 49: Consolidated Statement of Financial Position
Consolidated Statement of Financial Position USD thousands Consolidated balance sheet Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Property, plant and equipment 141 139 520 508 559 509 475 452 1 213 Right-of-use assets - 84 2 415 2 167 2 376 2 021 1 757 1 485 4 707 Intangible assets 12 864
Slide 50: Consolidated Statement of Cash Flow
Consolidated Statement of Cash Flow USD thousands Consolidated cashflow statement Q4 18 FY 18 Q1 19 Q2 19 Q3 19 Q4 19 FY 19 Q1 20 Q2 20 Q3 20 Q4 20 FY 2020 Profit (loss) before taxes 1 073 2 878 (368) 11 116 144 (992) 9 900 3 000 1 394 441 (2 328) 2 507 Non-cash adjustment to reconcile profit before
Slide 51: Revenues and EBIT - split per segments
Revenues and EBIT - split per segments USD thousands Revenues Q4 18 FY 18 Q1 19 Q2 19 Q3 19 Q4 19 FY 19 Q1 20 Q2 20 Q3 20 Q4 20 FY 20 Middle East 4 928 17 796 4 164 4 483 5 221 6 087 19 955 7 013 5 595 4 019 5 738 22 365 Asia Pacific 1 987 7 358 1 427 1 987 5 909 5 636 14 958 5 745 5 256 5 638 5 610
Slide 52: Trade receivable & Cash and cash equivalents - split per segments
Trade receivable & Cash and cash equivalents - split per segments USD thousands Trade receivables Q4 18 FY 18 Q1 19 Q2 19 Q3 19 Q4 19 FY 19 Q1 20 Q2 20 Q3 20 Q4 20 FY 20 Middle East 4 824 4 824 4 069 5 450 5 102 5 648 5 648 6 915 6 778 4 937 6 408 6 408 Asia Pacific 1 676 1 676 1 016 5 718 5 705 6 2
Slide 53: Top 20 shareholders
Top 20 shareholders # Name of shareholder No. of shares % ownership 1 GROSS MANAGEMENT AS 14 790 351 16.0% 2 BRAEMAR SHIPPING SERVICES PLC 9 640 621 10.4% 3 HOLMEN SPESIALFOND 9 240 763 10.0% 4 BJØRN STRAY 4 767 743 5.2% 5 MELESIO INVEST AS 4 441 016 4.8% 6 MP PENSJON PK 2 201 128 2.4% 7 LGT BANK AG
Slide 54: © AqualisBraemar LOC, 2021 ABL-GROUP.COM
© AqualisBraemar LOC, 2021 ABL-GROUP.COM