Endur Asa · OSL:ENDUR
Endur Asa — Debt Investor Presentation (November 2019)
44 slides from Endur Asa's debt investor presentation, Nov 20, 2019
Slide 1: Investor Presentation – NOK 100 million Senior Secured Bond Issue
Investor Presentation 20 November 2019 NOK 100 million Senior Secured Bond Issue
Slide 2: Important Information
Important Information General Information About this Presentation This presentation and any appendices hereto (the "Investor Presentation" or the “Presentation”) has been produced by Endúr ASA, a Norwegian public limited liability company Neither the Company nor the Manager or any of their represent
Slide 3: Summary of Risk Factors
Summary of Risk Factors SUMMARY OF RISK FACTORS Financial risks An investment in the Bonds involves a high level of risk. Several factors could cause the actual results, performance or achievements of the Company to be materially different • Cash flow and liquidity. The Group is exposed to various r
Slide 4: Agenda
I. Transaction Summary II. Who we are and what we do III. Finance IV. Market Outlook & Growth Strategy V. Appendix Change is a Constant 4
Slide 5: Credit Highlights
Credit Highlights • Endúr ASA (OSE: ENDUR, c. NOK 285m Mcap) was established through a reversed merger in February 2019 when several maritime segments was brought together to form a diversified service platform out of Western Norway Leading diversified • The company has successfully established oper
Slide 6: Summary of Key Terms
Summary of Key Terms Issuer: Endúr ASA Each of Endúr Maritime AS, Endúr Invest AS, Endúr Sjøsterk AS, Endúr AAK AS, Endúr Energy Solutions AS, Endúr Industrier AS, Endúr PMAE AS, Endúr Technology AS and any other Material Guarantors: Group Companies. Obligors: The Issuer and the Guarantors Initial L
Slide 7: Legal Structure
Legal Structure NOK 100m Senior Secured Endúr ASA bond to be issued MARITIME SERVICE Endúr Maritime AS Endúr Invest AS AQUACULTURE Endúr Eiendom Endúr Energy Endúr Sjøsterk AS Endúr AAK AS ENERGY & INDUSTRY AS* Solutions AS Endúr PMAE Endúr Industrier AS Guarantors: Each of Endúr Maritime AS, Endúr
Slide 8: Transaction Summary
Transaction Summary 3yr NOK 100m Secured Bond to refinance existing debt and fund strategic acquisition Transaction Overview Sources NOKm New Bond 100 Endúr ASA is contemplating the issuance of NOK 100m senior secured bond issue with net proceeds used towards; Uses I. Refinancing of existing debt Re
Slide 9: Security Package
Security Package More than NOK 200m of hard assets 3q19 Pro-forma Total Assets - Reconciliation Hard Assets 450 250 400 50 100 13 200 NOKm 350 300 136 58 150 250 30 200 378 74 327 100 150 100 211 50 41 50 6 0 - 20 Total Assets Bond Debt Pro-forma Net Net Hard Assets Hard Assets Bond 3q19 Repayment T
Slide 10: Financial Summary
Financial Summary Very healthy pro forma metrics – 2.6x Leverage on 2019E EBITDA Revenues Guiding EBITDA Guiding 3q19 Pro-forma Net IBD Revenues EBITDA Net IBD 800 70 2.6x Net IBD/ EBITDA 300 700 60 Post Caltec acquisition 250 600 50 58 40 200 500 124 128E 30 NOKm 58 NOKm NOKm 400 3E 150 716 20 120
Slide 11: Agenda
I. Transaction Summary II. Who we are and what we do III. Finance IV. Market Outlook & Growth Strategy V. Appendix Change is a Constant 11
Slide 12: Management
Management Hans Petter Eikeland (CEO) Nils Hoff (COO) Hans Petter Eikeland (1959) was appointed chairman for Endúr ASA as Nils Hoff has extensive experience across a wide range of businesses. He from 14 November 2017 after serving as CEO since August 2015. was appointed as CFO of Endúr ASA on 1 July
Slide 13: History
History Transformation with a firm plan for growth and diversification 2015 2016 2017 2018 2019 New management and new Acquisition of Acquisition of Merger of Endúr Current business strategy targeting turnover of AAK Energy Sjøsterk II AS, Fabricom AS, forecast 2020: NOK NOK 1 billion in 2020 and 10
Slide 14: From shipyard to industrial holding company
From shipyard to industrial holding company Endúr ASA Energy Maritime Aquaculture Endúr Energy Solutions AS Shipyards Endúr Maritime AS Endúr Sjøsterk AS Endúr Industries AS Endúr AAK AS 100% 30% 30% 40% Historic revenue Revenues per segment YTD 2019 Change is a Constant 14
Slide 15: Video link
https://vimeo.com/353981595/05534c6881 Change is a Constant 15
Slide 16: Maritime
Maritime One stop shop provider of ship maintenance, service and engines About Recent • Engine workshop with specialist expertise in • Awarded a NOK 750m (incl. Options) high-speed diesel engines framework contract by the Norwegian Armed Forces Logistics Organization (FLO) • Inspection, service, rep
Slide 17: Aquaculture
Aquaculture The leading supplier of fully integrated concrete feed barges About Recent • Leading supplier of fully integrated concrete • Awarded a NOK 50m contract with one of feed barges for the aquaculture industry in the largest listed fish farmers in Norway for Norway. the construction of two tu
Slide 18: Energy
Energy The Flexible EPCI – decreasing cost and time to production About Recent • 30 years of EPCI and MMO work experience on • Utilizing in-house core competence in order to complex oil and gas installations both onshore provide customers quality solutions with and offshore. Staff of highly skilled
Slide 19: Current Frame Agreements
Current Frame Agreements New contracts highlight close relationship with blue chip counterparties 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Total Contract value (excl. Endúr company Segment Client Type of work Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q
Slide 20: Backlog
Backlog Transformational period reflected in substantially increased backlog Revenue backlog excl. options, NOKm Revenue Backlog Split 1,000 900 800 700 600 500 400 300 200 100 - Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Maritime Aquaculture Energy Total revenue backlog (incl. options)
Slide 21: Agenda
I. Transaction Summary II. Who we are and what we do III. Finance IV. Market Outlook & Growth Strategy V. Appendix Change is a Constant 21
Slide 22: P&L
P&L P&L PR O PR O PR O PR O PR O ACT ACT ACT FC FC FC ENDUR ASA NOKm Q1 2018 Q2 2018 Q3 2018 Q4 2018 FY 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 FY 2019 FY 2020 2018 - Proforma Revenues 97 91 90 140 418 149 141 107 128 525 716 Cost of goods sold (32) (30) (24) (77) (163) (70) (63) (45) (55) (233) 2019 Y
Slide 23: Balance Sheet
Balance Sheet TOTAL CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION GROUP ELIMINATIONS AQUACULTURE MARITIME ENERGY OTHER SEGMENTS NOK'000000 YTD Q3 2019 YTD Q3 2019 YTD Q3 2019 YTD Q3 2019 YTD Q3 2019 YTD Q3 2019 YTD Q3 2019 ASSETS Deferred tax asset 20 - 20 - - - 20 Intangible assets and goo
Slide 24: Cash Flow
Cash Flow CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS ACTUAL ACTUAL ACTUAL NOK'000000 Q1 2019 Q2 2019 Q3 2019 CASHFLOW FROM OPERATING ACTIVITIES Profit/loss for the period 3 4 (0) Adjustments for: Tax expense / Tax income 1 0 0 Depreciation, amortisation, impairment 3 4 4 Items classified as inve
Slide 25: Agenda
I. Transaction Summary II. Who we are and what we do III. Finance IV. Market Outlook & Growth Strategy V. Appendix Change is a Constant 25
Slide 26: Maritime – The Norwegian Armed Forces
Maritime The Norwegian Armed Forces Extensive expertise related to ship technical maintenance and implementation of complex maritime projects on the various vessels of the Armed Forces Comprehensive history of service and maintenance on various engine installations used by the Armed Forces in both t
Slide 27: Maritime – One Stop Shop Ship Maintenance and Service
Maritime One Stop Shop – Ship Maintenance and Service FACILITIES ONE STOP SHOP The main facilities for Maritime services • Ship maintenance and service with are located at Laksevåg in Bergen and expertise in: hull, welding, structure, include pipes, electrical, automation, hydraulics • a dry dock wi
Slide 28: Maritime – One Stop Shop Engines
Maritime One Stop Shop – Engines • Engine workshop with specialist expertise in high-speed diesel engines • Engine test center for condition assessment and test driving • Sales and service representative for Marine Jet Power AB • The assignments are carried out at the customer’s location or at Endúr
Slide 29: Maritime – Strategically located in Norway's shipping center
Maritime Strategically located in Norway's shipping center The Norwegian Maritime Industry PAX Fishing vessels Well boats • According to Menon Economics the total value creation from the maritime industry in Norway is close to NOK 190 billion and the industry employees approx. 100,000, hereunder mak
Slide 30: Aquaculture – Integrated concrete feed barges
Aquaculture A leading supplier of fully integrated concrete feed barges for the aquaculture industry Delivering an integrated feed solution to the fish farming industry Concrete feed barges • Sjøsterk delivers core infrastructure to the growing aquaculture industry as it continues its: • Expansion t
Slide 31: Aquaculture – Proven business concept
Aquaculture Proven business concept with rapidly growing position among Norwegian fish farmers Facilities Selected references • Centrally located at the industry area Stamneset in Bergen Sør, 10 minutes from Bergen Lufthavn • Dry-dock with size 22m x 90m, with parallel capacity for production of up
Slide 32: Aquaculture – Feed barges needed per salmon production
Aquaculture Roughly one feed barge is needed per 2,000 ton of salmon production Feed Barges in Norway Feed Barges RoW Why concrete? • In 2018 c. 1.3bn tons of Atlantic salmon were • Scotland: At present there are over 200 sewater • New environments – new requirements: The produced in Norway, creatin
Slide 33: Energy – The Flexible EPCI
Energy The Flexible EPCI – decreasing cost and time to production Energy Solutions Industries AAK • 30 years of EPC and MMO work experience • Fabrication of piping, steel construction • Rope access technique for O&G, wind on complex oil and gas installations both and modules/skids in Stavanger farms
Slide 34: Energy – Wind park maintenance market
Energy Key player in rapidly growing market for maintenance of wind parks Turbines Installed per year (Norway landbased) Warranty Period 3-5yr 300 Customers: Services: 250 • Siemens Gamesa • Modifications • Vestas • Retrofit equipment 200 Wind Project timeline • Surface treatment 150 • Reparation &
Slide 35: Energy – Projects & Frame Agreements
Energy Projects & Frame Agreements Snøhvit/Melkøya EXXON Goliat Hammerfest • MOM Contract Slagentangen refinery ENI Harstad • Engineering services Goliat Norne Heidrun • Modification compressor solutions Goliat EQUINOR Sandnessjøen Trondheim/ • Demolition Mongstad – FEED, Project Management and Demo
Slide 36: Energy – From MMO provider to full EPCIC
Energy From Maintenance, Modification and Operations (MMO) provider to full EPCIC Improving fundamentals Three key areas for Endúr within oil & gas • EY forecast a total engineering fabrication and installation revenue growth of • Engineering & Resources 3% in 2018 and 6% in 2019. According to EY’s
Slide 37: Energy – Caltec Acquisition
Energy – Caltec Acquisition World leading niche player within fluid flow technology Caltec - Overview Caltec – Technology and Benefits Commercial benefits to Endúr and Clients • Caltec is a technology company providing • Surface Jet Pump (SJP) • Opportunity to offer Turn-Key solutions from concept p
Slide 38: Energy – Focus on Data and Technology driven solutions
Energy Focus on Data and Technology driven solutions EES will focus on developing solutions… …by implementing several initiatives • Well hook-up, • Acquisition of Caltec Production Solutions Limited to increase EPCI capabilities/deliveries within • Enhanced Oil Recovery (EOR) • Enhanced oil recovery
Slide 39: Energy – Enhanced Oil Recovery strategy
Energy Successful Enhanced Oil Recovery strategy (EOR) is key for E&P companies Norwegian Continental Shelf Outlook EOR (million barrels/d) • A cost focused service and modification shelf • Caltec™ by Endùr • 300 wells to be drilled before 2040 • Own IP/IPR • License ownership in constant change. Ne
Slide 40: Agenda
I. Transaction Summary II. Who we are and what we do III. Finance IV. Market Outlook & Growth Strategy V. Appendix Change is a Constant 40
Slide 41: Board of Directors / Governance
Board of Directors / Governance Board of Directors Corporate Governance Chairman Rune Skarveland (f 1972) …Corporate Governance structure is based on the Norwegian Code of Practice for Corporate Governance (the “Code”), issued by the Norwegian Corporate Governance Board Member Bente Stangeland (f 19
Slide 42: Share- and shareholder information
Share- and shareholder information Holding 2.50 Shareholder Comment % Ownership (# of shares) Controlled by Chairman Handeland Industri AS 59,325,000 27.90 (Skarveland family) 2.00 Artemes Group AS MD, Endúr Energy Solutions (34%) 37,572,500 17.67 Brian Chang Holdings Limited 28,918,110 13.60 Contro
Slide 43: Appendix – Risk Factors
APPENDIX RISK FACTORS An investment in the Bonds involves a high degree of financial risk. Potential investors should carefully consider all information in this Presentation, including the risks described below, before deciding to make an investment in the Bonds. If the risks materialise, individual
Slide 44: Appendix – Market risks
APPENDIX 1.2 Market risks 1.2.1 Market volatility The Group's results of operations could be negatively affected by demand for, and potential oversupply of, the products and services delivered by the Group, which again is affected by activity in the relevant industries, including the maritime, aquac