Oceaneering International, Inc. · NYSE:OII
Oceaneering International — Q2 2023 Earnings Presentation
46 slides from Oceaneering International's earnings presentation, Jul 27, 2023
Slide 1: Investor Presentation 2023 Second Quarter
Investor Presentation 2023 Second Quarter 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements In accordance with the Safe Harbor provisions of the Private improving, seasonal, strong, supportive, robust, meaningful, obtain raw materials and parts on a timely basis and, in some Securities Litigation Reform Act of 1995, Oceaneering cautions significant or healthy. Al
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* $524.0M $537.0M $597.9M $53.5M $55.0M $74.8M 100% 100% 15% 12% 10% 11% 16% 17% 5% 5% 4% 12% 11% 11% 14% 75% 75% 22% 29% Aerospace/Defense Tech 22% 19% 22% 16% Integrity Mgmt/Digital Sol 12% Offshore Projects Group 50% 50% 2% Manufactur
Slide 10: Comparing Operating Results 2023 Q2 vs 2023 Q1
Comparing Operating Results* 2023 Q2 vs 2023 Q1 Primary Variance Factors for Q2 2023 compared to Q1 2023 Consolidated EBITDA of $74.8 million was a significant improvement, but just slightly outside the guidance provided at the beginning of the quarter, primarily due to negative impacts from higher
Slide 11: Liquidity and Cash Flow
Liquidity and Cash Flow Liquidity as of June 30, 2023 • $504 million of cash and cash equivalents • $400 million of unsecured senior notes due November 2024, nearest maturity • $215 million of unused commitments through our senior secured revolving credit agreement, available through April 2026 Cash
Slide 12: Subsea Robotics
Subsea Robotics Revenue ($ in millions) Subsea Robotics (SSR) merges our underwater robotics and automation capabilities by combining our ROV, Survey, and ROV $539 $622 Tooling businesses. Remotely Operated Vehicles (ROV) Remotely operated, tethered submersible vehicles for drilling support, offshor
Slide 13: Subsea Robotics
Subsea Robotics Revenue and Adjusted EBITDA Margin* Revenue ($ in thousands) Margin SSR ROV Revenue SSR Tool/Survey SSR Adjusted EBITDA Margin 200,000 40% 30% 29% 28% 150,000 30% 100,000 20% 78% 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 $9,077 17,500 Vessel-based % ROV Fleet Utilization % $9,000 80% 15,000 70% $8,000 12,500 60% 10,000 61% $
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: Mfd Products Book-to-Bill, ttm
Manufactured Products* Backlog and Book-to-Bill $600 2.00 Backlog Revenue Book-to-Bill, ttm 1.75 Mfd Products Book-to-Bill, ttm Mfd Products ($ in Millions) $450 1.19 1.50 1.25 $300 1.00 $418 0.75 $150 0.50 $124.9 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 $378 project management and engineering; subsea installation and intervention; IMR (inspection, maintenance, and repair) s
Slide 18: Offshore Projects Group
Offshore Projects Group Vessel assets for offshore projects Deepwater Multi-purpose Supply Vessels: Anticipated Q3 Location • Ocean Evolution* Owned Gulf of Mexico • Ocean Intervention* Owned Global regions • Ocean Intervention III Spot charter West Africa • Brandon Bordelon* Leased Gulf of Mexico •
Slide 19: Integrity Management & Digital Solutions
Integrity Management & Digital Solutions Revenue ($ in millions) The Integrity Management & Digital Solutions (IMDS) segment leverages software, analytics, and services that promote the safety, $241 $230 efficiency, cost effectiveness, and sustainability programs of our energy and maritime customers
Slide 20: Aerospace and Defense Technologies
Aerospace and Defense Technologies Revenue ($ 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 21: Oceaneering Outlook, FY 2023 Operating Results
Oceaneering Outlook, FY 2023 Operating Results* Forecast 2023 compared to 2022 Forecast EBITDA range of $275M to $310M; at the midpoint, a 26% increase over 2022 EBITDA, led by Consolidated Results SSR and OPG. Anticipate full year free cash flow range of $90M to $130M. Significantly improve operati
Slide 22: Oceaneering Outlook, Q3 2023 Operating Results
Oceaneering Outlook, Q3 2023 Operating Results* Q3 2023 Forecast compared to Q2 2023 Actual Improved results. EBITDA in the range of $75M to $85M on a high-single-digit Consolidated Results percentage increase in revenue. Subsea Robotics Higher revenue and operating results on continuing robust offs
Slide 23: Oceaneering Outlook, 2023
Oceaneering Outlook, 2023 • Year over Year • Revenue Improvement in all operating segments • Operating income and margin improvement, SSR, MP, and OPG • Improved operating income and stable margins in ADTech • Operating income and margin flat, IMDS • Consolidated Adjusted EBITDA, $275M to $310M* • F
Slide 24: Energy Industry Outlook 2023
Energy Industry Outlook(1) 2023 Brent forecast, average price per barrel in 2023 ~$83 Market Driver 2023 Forecasts, YoY: • Contracted Floating Rigs annual average, +9%, 137 to 150 • Tree Installations, +40%, from 262 to 373 • Tree Awards, +50%, from 231 to 346 • Subsea Equipment Spend, +10%, from $6
Slide 25: Industrial Robotics Markets Outlook
Industrial Robotics Markets Outlook CAGRs, near term* 25% 20% 15% 10% 21.7% 13.8% 5% 0% Mobile Robotics, 2022-2030 Autonomous Forklifts,** 2023-2028 MaxMover™ CB D 2000 Autonomous Counterbalance Forklift * Sources: Mobile Robotics CAGR, Statzon database; Autonomous Forklifts CAGR, Secondary Research
Slide 26: 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 27: 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 28: Supplemental Information
Supplemental Information 28
Slide 29: 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 30: 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 31: Operating Income Reconciliation to Adjusted EBITDA and Adjusted Operating 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 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 Unallocated March 31, 2023 Expenses SSR MP OPG IMDS ADTech and other Total ($ in thousands) Operating Income (Loss) as reported in accordance w/ GAAP $ 33,654 $ 11,280 $ 5
Slide 33: 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 Unallocated June 30, 2022 Expenses and SSR MP OPG IMDS ADTech other Total ($ in thousands) Operating Income (Loss) as reported in accordance with GAAP $ 25,938 $ (1,365) $
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, 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 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, 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 36: 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 37: 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 38: Free Cash Flow, Guidance
Free Cash Flow, Guidance For the Year Ending December 31, 2023 Low Estimate High Estimate (in thousands) Net Income (loss) $ 75,000 $ 90,000 Non-cash adjustments: Depreciation and amortization 110,000 115,000 Other increases (decreases) in cash from operating activities (5,000) 35,000 Cash flow prov
Slide 39: Capital Expenditures
Capital Expenditures $125 Forecast CapEx Aero/Defense Tech $100 Integrity Mgmt/Digital Sol Offshore Projects Grp Mfd Products $75 Subsea Robotics Corporate $50 $25 $0 2020 2021 2022 2023F 39
Slide 40: 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 41: 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% 19% 20% 17% 19% 13% 20% 6% 11% 4% 7% 75% 12% 13% 75% 9% 22% Aerospace/Defense Tech 17% 16% 24% 14% Integrity Mgmt/Digital Sol 20% 7% 50% 50% 8% Offshore Projects Group 26% Manufactured
Slide 42: Subsea Robotics – ROV Fleet Location
Subsea Robotics – ROV Fleet Location 250 ROVs, June 30, 2023 Drilling Support ROVs 100 Vessel-based ROVs 80 78 ROV Count 60 44 36 39 40 26 27 20 0 Americas, excl Brazil Africa/MidEast Europe Norway Asia Pacific Brazil 42
Slide 43: Contracted Floating Rigs at Period End
Oceaneering ROV Drill Support Market Share 62% for quarter ending June 30, 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% 62% 62% 100 50% OII 50 25% Subsea 7 Fugro TechnipF
Slide 44: Offshore Oil & Gas Activity Forecast
Offshore Oil & Gas Activity Forecast 200 400 Contracted Floating Rigs, annual average Contracted Floating Rigs Tree Installations 350 Subsea Tree Installations 150 300 250 161 165 100 150 200 133 137 125 150 50 100 2020 2021 2022 2023F 2024F 2025F Source: Rig data: IHS Markit World Rig Forecast, Jul
Slide 45: Offshore O&G Greenfield Capex by Sanction Year
Offshore O&G Greenfield Capex by Sanction Year Development Cost, Deepwater Development Cost, Shelf $150 200 Deepwater FID Projects Shelf FID Projects 175 $125 Development Costs, $ in Billions 150 Projects Count $100 125 $75 100 100 78 75 $50 26 51 50 $25 28 31 25 $30 $46 $39 $69 $70 $44 $0 0 2020 20
Slide 46: Investor Relations Contact
Investor Relations Contact Mark Peterson Vice President, Corporate Development and Investor Relations 713.329.4507 InvestorRelations@oceaneering.com 46
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