Odfjell Technology Ltd. · OSL:OTL
Odfjell Technology — Investor Presentation (March 2022)
46 slides from Odfjell Technology's investor presentation, March 2022
Slide 1: Odfjell Technology Investor Presentation
Odfjell Technology Investor Presentation March 2022 Page 1
Slide 2: Disclaimer
Disclaimer This presentation (the “Presentation”) has been prepared by Odfjell Technology Ltd (the “Company”) for information purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein. Please note that no representation or warr
Slide 3: Presenting team
Presenting team Simen Lieungh Jone Torstensen Eirik Knudsen CEO CFO VP Corporate Finance & IR Odfjell Technology Odfjell Technology Odfjell Drilling Page 3
Slide 4: Agenda
Agenda Company overview Business area overview Strategy Market Financial Organisation Appendix Page 4
Slide 5: Odfjell Drilling to spin off and list Odfjell Technology Ltd. on the Oslo Stock Exchange
Odfjell Drilling to spin off and list Odfjell Technology Ltd. on the Oslo Stock Exchange Simplified business structure Overview of the Spin Off ▪ Odfjell Drilling Ltd. intends to spin off the Well Services and Energy (Drilling Operations and Odfjell Partners Ltd. Other Shareholders Engineering) segm
Slide 6: At a glance
At a glance Key financials1 USD 343 million USD 46 million 2021 revenue Cash per Q4’21(pro-forma adjusted) International technology and engineering company delivering USD 45 million 2.5x specialist services, equipment and competence across the offshore 2021 EBITDA NIBD / 2021 EBITDA energy value cha
Slide 7: Utilising heritage and specialist competence to service the changing energy market
Utilising heritage and specialist competence to service the changing energy market Serving major energy Green ventures: Project management, engineering and part ownership in Odfjell Oceanwind Engineering and administration clients globally hubs in key selected regions Well services: World-class supp
Slide 8: Key investment highlights
Key investment highlights Long-lasting and industry-leading offshore and energy service and equipment provider ▪ Integrated contractor delivering specialist services, equipment and competence across the offshore energy value chain Specialist provider of mission-critical life ▪ Large international fo
Slide 9: Provider of mission-critical services, equipment and competence since 1973
Provider of mission-critical services, equipment and competence since 1973 Global expansion and The beginning Building capacity Energy transition acceleration diversification 1973 – 1990 1990 – 2010 2010 – 2020 2020 – ▪ Engineering cooperation with Aker ▪ UK operations and office ▪ Expanded offering
Slide 10: Offering specialist services, equipment and competences within main segments
Offering specialist services, equipment and competences within main segments… Well Services Drilling Operations Engineering Green Ventures ▪ Provides a wide range of market- ▪ Provision of crew for drilling and ▪ Specialist competence in: ▪ Strong strategic commitment to leading products and service
Slide 11: Covering key client focus areas across the oil & gas life of field
…covering key client focus areas across the oil & gas life of field Oil & gas - life of field New markets High relevance Exploration & Late life production & Greenhouse gas Asset integrity Future service areas production abandonment reduction ▪ Production and infield ▪ Project and engineering for ▪
Slide 12: Agenda
Agenda Company overview Business area overview Strategy Market Financial Organisation Appendix Page 12
Slide 13: Odfjell Technology – Well Services
Well Services Drilling Operations Engineering Odfjell Oceanwind Odfjell Technology – Well Services World-class supplier of technologically advanced and integrated services and equipment Overview Service offerings ▪ Started with drill tool rental in the mid-70s and tubular Revenue per region Q4‘21 ru
Slide 14: Odfjell Technology – Well Services
Well Services Drilling Operations Engineering Odfjell Oceanwind Odfjell Technology – Well Services Well Services stands out from the competition in terms of its reputation for quality and safety Well Services competitive position Main competitors Select regional dynamics Tubular Rental Company Well
Slide 15: Odfjell Technology – Well Services
Well Services Drilling Operations Engineering Odfjell Oceanwind Odfjell Technology – Well Services Business model based on supplying equipment and services to operators, rig owners and other service companies Well Services business model Well Services sales process ▪ Equipment rental charges account
Slide 16: Odfjell Technology – Drilling Operations
Well Services Drilling Operations Engineering Odfjell Oceanwind Odfjell Technology – Drilling Operations Leading platform drilling contractor with significant backlog in the North Sea Overview Breakdown of operations No. of platforms with operations Client Location Platform Duration ▪ Provider of in
Slide 17: Odfjell Technology – Drilling Operations
Well Services Drilling Operations Engineering Odfjell Oceanwind Odfjell Technology – Drilling Operations Drilling Operations hold a strong position in a concentrated market Drilling Operations competitive position Platform drilling services market share1 Main competitors 2% 19% 50% 29% Comments ▪ Tw
Slide 18: Odfjell Technology – Drilling Operations
Well Services Drilling Operations Engineering Odfjell Oceanwind Odfjell Technology – Drilling Operations Leading QHSE and ESG performance gives basis for several attractive opportunities Drilling Operations sales process Contracts generally consist of a fixed period followed by one or Selected oppor
Slide 19: Odfjell Technology – Engineering
Well Services Drilling Operations Engineering Odfjell Oceanwind Odfjell Technology – Engineering Recognised specialist engineering competence with 50+ years of experience Overview Service offerings ▪ First engineering job on Aker H-3 semi submersible drilling rig in 1969/1970 ▪ Offices in Norway and
Slide 20: Odfjell Technology – Engineering
Well Services Drilling Operations Engineering Odfjell Oceanwind Odfjell Technology – Engineering Increasingly integrated across segments leading to more high margin add-on sales Engineering sales process Main revenue sources Sales priorities Project contracts Special Period Odfjell Internal and Add-
Slide 21: Odfjell Technology – Engineering
Well Services Drilling Operations Engineering Odfjell Oceanwind Odfjell Technology – Engineering Engineering’s position protected by integration of best-in-class services Engineering competitive position Competitive position Main competitors Highly specialised engineering services within maritime dr
Slide 22: Odfjell Oceanwind
Well Services Drilling Operations Engineering Odfjell Oceanwind Odfjell Oceanwind The first inorganic step towards the offshore wind market Introduction to Odfjell Oceanwind Key highlights Odfjell Drilling + Sway 50 years of owning and operating floating assets + 20 years of inventing and designing
Slide 23: Agenda
Agenda Company overview Business area overview Strategy Market Financial Organisation Appendix Page 23
Slide 24: Key strategic priorities going forward
Key strategic priorities going forward Operational focus Capital allocation ESG / Green Ventures ▪ Increase market share, order backlog ▪ Maintain strong balance sheet securing ▪ Utilise oil & gas heritage and specialist and delivery of new products and flexibility through the cycles and for compete
Slide 25: Strong focus on operational excellence with consistently high QHSE performance
Strong focus on operational excellence with consistently high QHSE performance Serious about safety Excellent customer Safe and efficient ISO 9001/14001 Minimal NPT3 World-class specialist ratings operations and services Certified globally competence Consistently strong HSE Trust and relationships R
Slide 26: Building on ODL's most recent ESG score of A-
Building on ODL’s most recent ESG score of A-1 ▪ The Governance Group2 issues the ESG 100 Oslo Stock Exchange report annually ▪ The report is an ESG analysis of the 100 largest companies on the Oslo Stock Exchange ▪ To achieve an A rating means that a company has: ‒ «Very good reporting in accordanc
Slide 27: Agenda
Agenda Company overview Business area overview Strategy Market Financial Organisation Appendix Page 28
Slide 28: Long-lasting relationships with leading energy companies in key markets and regions
Long-lasting relationships with leading energy companies in key markets and regions Customer overview1 Key highlights Stable customer base provides resiliency and consistent sales 14% 3% 12% Significant degree of repeat business through long-term contracts 4% 200 17% Revenue Revenue per Strong relat
Slide 29: Significant long-term business opportunities from emerging energy markets
Significant long-term business opportunities from emerging energy markets Plug & abandonment (P&A) Carbon capture, utilisation and storage ▪ Decommissioning of oil & gas infrastructure, including P&A, expected to ▪ Solid growth outlook for carbon capture, utilisation and storage, of which the grow f
Slide 30: Favourable underlying drivers and market outlook
Favourable underlying drivers and market outlook Key market trends Current OTL position Strong OTL commitment to ESG High oil price environment and expected Attractively positioned in key regions and markets increased E&P spending ESG score of A- by the Maximising well potential, increased oil Lead
Slide 31: Oil & gas demand expected to remain strong with E&P spending projected to increase
Oil & gas demand expected to remain strong in the foreseeable future with E&P spending projected to continue its increase Favourable conditions Swift oil recovery expected following COVID-19 Global investments into oil & gas expected to continue Global oil demand forecast by scenario (mmboed1) Globa
Slide 32: Strong activity in all of OTL's business segments with significant long-term opportunities
Strong activity in all of OTL’s business segments with significant long-term business opportunities from emerging energy markets Well Services - Continued high activity on the NCS and UKCS Drilling Operations - Continued high spending on platform drilling services ▪ Wells become more complex and Num
Slide 33: Significant content requirements and logistical expertise creating high barriers to entry
Significant content requirements and logistical expertise creating high barriers to entry Key content requirements for a complete and integrated service and equipment provider Scale and logistics Business opportunities and operational efficiencies dependent on both size and excellent systems for log
Slide 34: Agenda
Agenda Company overview Business area overview Strategy Market Financial Organisation Appendix Page 35
Slide 35: Odfjell Technology has delivered stable through-the-cycle performance
Odfjell Technology1 has delivered stable through-the-cycle performance Quarterly revenues (USD million) Annual EBITDA (USD million) Revenues Brent oil price EBITDA NIBD2/ (USDm) (USD) (USDm) EBITDA 100 110 100 3,5x 90 100 90 3,0x 80 90 80 80 70 2,5x 70 70 60 60 60 50 2,0x 50 50 40 1,5x 40 40 30 30 1
Slide 36: EBITDA and cash flow set to increase in the next few years
EBITDA and cash flow set to increase in the next few years Illustrative pro-forma EBITDA and cash flow bridge (USD million) Comments Mooring business: 61 ▪ Established rental agreement between 2 ODL (MODU) and OTL effective 1 October 4 2021, for the rental of chain and anchors 11 51 4 ▪ USD 24.5 mil
Slide 37: Strong balance sheet with pro-forma 2021 leverage of 2.2x
Strong balance sheet with pro-forma 2021 leverage of 2.2x Pro-forma capital structure (USD million)1 Comments ▪ The recent bond issue together with the super-senior RCF and lease liabilities are 161 the only interest-bearing debt outstanding 11 at time of the Spin Off ▪ The SSRCF will be fully drawn
Slide 38: Agenda
Agenda Company overview Business area overview Strategy Market Financial Organisation Appendix Page 39
Slide 39: Highly experienced and reputable management team
Highly experienced and reputable management team Selected management executives Board of directors ▪ Chair of the Board of Odfjell Drilling since 2013 ▪ Appointed CEO of Odfjell Drilling AS in 2010 Helene Odfjell ▪ Master of Business Administration from the Norwegian School of Simen Lieungh ▪ Master
Slide 40: Competent and diverse teams drive innovation and excellence
Competent and diverse teams drive innovation and excellence Constantly search for, invest in and retain people of highest quality to meet future competence and capacity needs Specialised engineers supporting all business areas 1,800 9.3 years 31 Full-time employees Average tenure with the Nationalit
Slide 41: Key investment highlights
Key investment highlights Long-lasting and industry-leading offshore and energy service and equipment provider Specialist provider of mission-critical life of field services and equipment Strong and attractive market fundamentals Well positioned in markets with high entry barriers Resilient financia
Slide 42: Agenda
Agenda Company overview Business area overview Strategy Market Financial Organisation Appendix Page 43
Slide 43: Adjusted balance sheet
Adjusted balance sheet Adjusted balance sheet Comments Dec'21 Dec’21 Dec'21 Dec’21 ▪ As part of the Spin Off, several pro-forma Assets (USD million) (Predecessor) (Adjusted)1 Equity and liabilities (USD million) (Predecessor) (Adjusted)1 adjustments to the predecessor balance Share capital -0.0 0.0
Slide 44: OTL predecessor consolidated financial statements
OTL predecessor consolidated financial statements Income statement (USD million) 2021 2020 2019 2018 Cash flow statement (USD million) 2021 2020 2019 2018 Operating revenue 343 273 273 270 Cash flows from operating activities: Other gains and losses 1 1 3 2 Profit / (loss) before tax 12 15 22 10 Per
Slide 45: Tax and National Insurance Contributions update
Tax and National Insurance Contributions update ▪ An OTL group subsidiary, Odfjell Drilling (UK) Ltd (“OD UK”), is subject to challenges by HM Revenue and Customs (“HMRC”) on the historical National application of National Insurance Contributions (“NICs”) (Norwegian: arbeidsgiveravgift) to workers o
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