Slide 1: AqualisBraemar ASA 2020 Q1 results
AqualisBraemar ASA 2020 Q1 results May 28, 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: Q1 2020 Highlights
Q1 2020 Highlights Reported numbers1 Pro-forma combined2 • Revenues of USD 19.8 million 19.8 – Up 14% vs Q1 19 pro-forma combined revenues 17.4 18.8 – Revenue for renewables up 57% compared to Q1 19 Revenue 8.2 • Operating profit (EBIT) of USD 1.3 million (USDm) – Adjusted EBIT of USD 1.4 million (7
Slide 5: COVID-19 business update
COVID-19 business update • No significant group-wide impact on AqualisBraemar’s activity level to date – Positives • Through our extensive global footprint we have been able to support clients at locations where others have been unable to access • Some COVID-19 driven work secured, including: – Prov
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 431 Employees1 49 Locations 32 Countries Global footprint provides clients with local expertise and swift response 8 1 Includes subcontractors on 100% utilisation basis. Calculated as an average during Q1 2020 Map shows partnerships and exclusive s
Slide 9: Diversified across regions and services
Diversified across regions and services Business stream revenue L12M Segment revenue L12M Adjusting Renewables 11% 14% Asia Pacific Renewables 28% Americas 14% 15% Offshore 50% 75.8 75.8 USDm USDm Marine Europe 25% 16% Middle East 27% 9 Note: Proforma combined figures for 2q19. No adjustment for int
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: Global growth in offshore wind brings new developers
RENEWABLES Global growth in offshore wind brings new developers Project pipeline (GW) – Ex China1 Market share, Top 3 developers2 20 71% 18 16 55% 54% 14 52% 48% 49% 12 10 34% 33% 8 6 4 2 0 2013 2015 2017 2019 2021 2023 2025 2013 2014 2015 2016 2017 2018 2019 2020 Europe Asia ex China North America
Slide 12: Project: OWC to support Erebus floating wind farm
RENEWABLES Project: OWC to support Erebus floating wind farm • OWC contracted to support Total and SBE’s 96 MW floating wind project “Erebus” offshore Wales – Erebus will be installed at 70 meters water depth using Principle Power’s WindFloat technology • The contract is for a term of approximately
Slide 13: New office in Tokyo, Japan
RENEWABLES New office in Tokyo, Japan • OWC has opened a dedicated offshore wind office in Tokyo to service this ambitious offshore wind market – Japan has nearly 15 GW of offshore wind projects were in the EIA pipeline as of January 20201 – While OWC has won and delivered work in Japan out of exist
Slide 14: Offshore capex falling, rig activity level likely to follow
OFFSHORE Offshore capex falling, rig activity level likely to follow 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: Petronas FLNG – Station keeping operations
OFFSHORE Project: Petronas FLNG 2 – Station keeping operations • AqualisBraemar was appointed to manage station keeping operations during mooring hook-up of the Petronas FLNG 2 offshore Malaysia • The vessel sailed from Geoje SHI Shipyard on 18th Feb 2020, and arrived 3rd March at the ETA Rotan-1 fi
Slide 16: Project: Floating solar power plant in Thailand
OFFSHORE / RENEWABLES Project: Floating solar power plant in Thailand • AqualisBraemar was contracted by the Electricity Generating Authority of Thailand (EGAT) to provide technical consultancy for a floating solar hybrid pilot power plant project in Sirindhorn Dam, Thailand – The scope of work cons
Slide 17: Project: Damage to YY-A platform offshore Indonesia
ADJUSTING / OFFSHORE Project: Damage to YY-A platform offshore Indonesia • In Q3 2019, Pertamina Hulu Energi’s YY-A platform, recently installed offshore Indonesia, was undermined and damaged by adjacent drilling operations • After the accident, AB Adjusting performed services related to the relief
Slide 18: New office in Moscow, Russia
ADJUSTING New office in Moscow, Russia • AqualisBraemar has opened its first office in Russia, to further enhance our service offering in the Russian energy, marine and loss adjusting market – The Moscow office will initially focus on loss adjusting services – Significant volume of work secured prio
Slide 19: Project: TDD on Global Marine Group transaction
MARINE Project: TDD on Global Marine Group transaction • AqualisBraemar provided technical due diligence (TDD) to J.F. Lehman & Company on acquisition of Global Marine Group – Global Marine is a leading provider of subsea cable maintenance and installation services to the offshore wind, telecom and
Slide 20: Order backlog development
Order backlog development Order backlog1 Highlights Q1 2020 20 • Order backlog at USD 19.2 million, up 37% from Q4 2019 driven by the floating 18 offshore wind Erebus contract 16 • Current focus is on supporting clients on 14 day-to-day service operations - typically 12 call-out contracts that are o
Slide 21: Staff level development
Staff level development Staff level development1 Highlights Q1 2020 • Average staff levels in Q1 2020 500 60% increased, due to higher activity driving 450 use of subcontractors 50% 400 • Subcontractor share increased from 350 40% previous quarter 300 – Subcontractor share significantly higher in 25
Slide 22: 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 1 For offshore oil & gas and offshore renewables: Billing rat
Slide 23: Highlights, Financial review, Outlook
1. Highlights David Wells CEO 2. Financial review Kim Boman CFO 3. Outlook David Wells CEO 23
Slide 24: Revenue and adjusted EBIT
Revenue and adjusted EBIT Revenue, pro-forma combined (USDm) Adj EBIT1, as reported (USDm) 1.5 1.4 10% 24 1.2 8% 0.9 6% 20.0 19.6 19.8 20 19.2 18.8 0.6 4% 18.3 18.0 18.0 17.4 0.3 2% 16 0.0 0% 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 Adjusted EBIT (left axis) Adjusted EBIT margin (%) 12 Adj EBIT1
Slide 25: Segment revenues and EBIT
Segment revenues and EBIT Segment revenues (USDm) Segment adjusted EBIT1 (USDm) 8.0 1.0 6.0 0.8 0.6 4.0 0.4 2.0 0.2 0.0 0.0 -2.0 -0.2 -4.0 -0.4 1Q19 4Q19 1Q20 1Q19 4Q19 1Q20 • Quarterly improvement in revenue and EBIT primarily driven by Europe and Middle East • 57% revenue growth for renewables vs
Slide 26: Income Statement
Income Statement USD thousands Consolidated income statement Q1 20 Q1 19 FY 19 • Revenues for Q1 2020 up 142% Revenues 19,787 8,182 54,792 from Q1 2019 Total revenues 19,787 8,182 54,792 – Growth related largely to the acquisition of BTS Payroll and payroll related expenses (10,414) (3,849) (28,536)
Slide 27: Phase in of cost synergies progressing
Phase in of cost synergies progressing Cost synergies ERP implementation • AqualisBraemar inherited legacy ERP and 3.0 support systems through the BTS transaction. Systems were outdated and not fit for purpose 2.5 0.5 • Netsuite, the current ERP system used in 2.0 former Aqualis, is enhanced / custo
Slide 28: Cash flow and financial position
Cash flow and financial position Highlights Q1 2020 Working capital1 (% of quarterly revenue) • Solid financial position with USD 10.1 million in cash 150% 146% 142% 140% • Capitalized lease of USD 2.0 million 138% • Operational cash flow of USD -0.2 million 125% in the quarter – Negative impact fro
Slide 29: Dividend proposal of NOK 0.2 per share for 1H20 upheld
Dividend proposal of NOK 0.2 per share for 1H20 upheld • Proposing dividend of NOK 0.2 per share, corresponding to approx. USD 1.4 million – During the initial AqualisBraemar integration phase, the company has maintained a larger liquidity buffer than normal. As the integration is on track and progr
Slide 30: 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 31: Highlights, Financial review, Outlook
1. Highlights David Wells CEO 2. Financial review Kim Boman CFO 3. Outlook David Wells CEO 31
Slide 32: Summary and outlook
Summary and outlook • Strong Q1 performance despite challenging business environment – Continued positive development in early Q2, but tail risk remains high • Targeting 50% renewables and ESG driven services in business mix by 2025 – Focus on continued profitability improvements in mature core busi
Slide 33: Appendix
Appendix 33
Slide 34: Adjustment items
Adjustment items USD thousands Adjustment items (EBITDA) FY 17 Q1 18 Q2 18 Q3 18 Q4 18 FY 18 Q1 19 Q2 19 Q3 19 Q4 19 FY 19 Q1 20 Restructuring and integration costs - - - - - - - 48 475 5 528 48 Other special items (incl. share-based expenses) - - - - - - - - - - - 78 Transaction costs related to ac
Slide 35: General
General 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 operations, f
Slide 36: APMs and Key Figures
APMs and Key Figures USD thousands Profitability measures FY 17 Q1 18 Q2 18 Q3 18 Q4 18 FY 18 Q1 19 Q2 19 Q3 19 Q4 19 FY 19 Q1 20 Operating profit (loss) (EBIT) (5 628) 197 1 032 594 860 2 684 (248) (284) (245) 444 (332) 1 279 Depreciation, amortisation and impairment 4 061 33 34 30 32 129 38 38 362
Slide 37: APMs and Key Figures
APMs and Key Figures USD thousands Working capital FY 17 Q1 18 Q2 18 Q3 18 Q4 18 FY 18 Q1 19 Q2 19 Q3 19 Q4 19 FY 19 Q1 20 Trade and other receivables 9 517 9 127 9 105 9 398 9 870 9 870 8 371 27 534 25 896 24 252 24 252 26 064 Contract assets 1 402 2 201 1 800 2 013 2 297 2 297 1 910 12 288 13 518
Slide 38: Consolidated Statement of Income
Consolidated Statement of Income USD thousands Consolidated income statement FY 17 Q1 18 Q2 18 Q3 18 Q4 18 FY 18 Q1 19 Q2 19 Q3 19 Q4 19 FY 19 Q1 20 Revenue 31 134 8 159 9 595 8 603 9 828 36 185 8 182 9 869 17 957 18 785 54 792 19 787 Total revenue 31 134 8 159 9 595 8 603 9 828 36 185 8 182 9 869 1
Slide 39: Consolidated Statement of Financial Position
Consolidated Statement of Financial Position USD thousands Consolidated balance sheet Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 ASSETS Property, plant and equipment 160 153 180 167 141 139 520 508 559 509 Right-of-use assets - - - - - 84 2 415 2 167 2 376 2 021 Intangible assets 13
Slide 40: Consolidated Statement of Cash Flow
Consolidated Statement of Cash Flow USD thousands Consolidated cashflow statement FY 17 Q1 18 Q2 18 Q3 18 Q4 18 FY 18 Q1 19 Q2 19 Q3 19 Q4 19 FY 19 Q1 20 Profit (loss) before taxes (6 333) (182) 1 427 560 1 073 2 878 (368) 11 116 144 (992) 9 900 3 000 Non-cash adjustment to reconcile profit before t
Slide 41: Revenues and EBIT - split per segments
Revenues and EBIT - split per segments USD thousands Revenues FY 17 Q1 18 Q2 18 Q3 18 Q4 18 FY 18 Q1 19 Q2 19 Q3 19 Q4 19 FY 19 Q1 20 Middle East 12 505 3 984 5 029 3 855 4 928 17 796 4 164 4 483 5 221 6 087 19 955 7 013 Asia Pacific 7 764 1 595 1 858 1 918 1 987 7 358 1 427 1 987 5 909 5 636 14 958
Slide 42: Trade receivable & Cash and cash equivalents - split per segments
Trade receivable & Cash and cash equivalents - split per segments USD thousands Trade receivables FY 17 Q1 18 Q2 18 Q3 18 Q4 18 FY 18 Q1 19 Q2 19 Q3 19 Q4 19 FY 19 Q1 20 Middle East 3 400 3 413 4 099 3 865 4 824 4 824 4 069 5 450 5 102 5 668 5 668 6 915 Asia Pacific 1 897 1 271 1 456 1 845 1 676 1 6
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 3 801 279 5.4% 4 BJØRN STRAY 3 000 000 4.3% 5 MP PENSJON PK 1 831 128 2.6% 6 SAXO BANK A/S 1 538 279 2.2% 7 LGT BANK AG 1 5
Slide 45: aqualisbraemar.com
23 AQUALIS me? BRAEMAR aqualisbraemar.com