Oceaneering International, Inc. · NYSE:OII
Oceaneering International — Q4 2023 Earnings Presentation
47 slides from Oceaneering International's earnings presentation, Feb 23, 2024
Slide 1: Investor Presentation Fourth Quarter 2023
Investor Presentation 2023 Fourth Quarter NYSE: OII 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements In accordance with the Safe Harbor provisions of the Private opportunities and future financials, including as increasing, ability to comply with, other laws and governmental Securities Litigation Reform Act of 1995, Oceaneering favorable, positive, encouraging, improving,
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 60 years of experience working in underwater and harsh environments. Oceaneering is driven to develop technology and hardware for a variety of applications designed to meet high standards for safety an
Slide 5: Oceaneering Robotics Expertise Serves Multiple Markets
Oceaneering 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, Re
Slide 6: Operating Segments
Operating Segments Energy Non-Energy Aerospace and Subsea Robotics Manufactured Products* Defense Technologies Offshore Projects Group Integrity Management & Digital Solutions * Manufactured Products includes the non-energy Mobility Solutions businesses: Entertainment Systems and Autonomous Mobile R
Slide 7: 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* 11% 51% 32% 6% Market Drivers and FIDs and FIDs and Subsea Tree Customer Opex Budgets Field Abandonments Key Market Indicators Working Floating Rigs Installatio
Slide 8: Subsea Robotics
Subsea Robotics Subsea Robotics (SSR) merges our underwater robotics and automation capabilities by combining our ROV, Survey, and ROV Tooling businesses. Revenue ($ in millions) Remotely Operated Vehicles (ROV) $754 $754 Remotely operated, tethered submersible vehicles for drilling support, offshor
Slide 9: Manufactured Products
Manufactured Products Manufactured Products brings together our competencies and expertise around advanced technology product development, manufacturing, and project management to include four business units: Energy Manufactured Products Distribution Systems Revenue Production Control Umbilicals sup
Slide 10: Offshore Projects Group
Revenue ($ in millions) Offshore Projects Group $489 $546 Offshore Projects Group (OPG) provides a broad portfolio of integrated subsea project capabilities and solutions, including: $0 project management and engineering; subsea installation and 2022 2023 2024F intervention; IMR (inspection, mainten
Slide 11: Integrity Management & Digital Solutions
Integrity Management & Digital Solutions The Integrity Management & Digital Solutions (IMDS) segment leverages software, analytics, and services that promote the safety, efficiency, cost effectiveness, and sustainability programs of our energy and maritime customers. Integrity Management Revenue ($
Slide 12: Aerospace and Defense Technologies
Aerospace and Defense Technologies Aerospace and Defense Technologies (ADTech) provides engineering services and related manufacturing, principally for the U.S. Department of Defense and NASA and their prime contractors. Defense Subsea Technologies Design, build, and operate unique maritime and spec
Slide 13: Results, Overview by Quarter
Results,* Overview by Quarter Subsea Robotics Manufactured Products Offshore Projects Group Integrity Mgmt/Digital Sol Aerospace/Defense Tech 2023 Q4, Revenue $654.6M 30% 20% 25% 10% 15% 2023 Q4, Adj Op EBITDA $75.1M 58% 8% 20% 4% 10% 2023 Q3, Revenue $635.2M 31% 19% 24% 10% 16% 2023 Q3, Adj Op EBIT
Slide 14: Results, Comparing 2023 Q4 vs 2023 Q3
Results,* Comparing 2023 Q4 vs 2023 Q3 Primary Variance Factors for Q4 2023 compared to Q3 2023 Revenue of $655M was 3% higher than Q3. Revenue increases in SSR, Mfd Products and OPG more than offset revenue decrease in ADTech and relatively flat revenue in IMDS. Operating Consolidated Results incom
Slide 15: Results, Overview by Year
Results,* Overview by Year Subsea Robotics Manufactured Products Offshore Projects Group Integrity Mgmt/Digital Sol Aerospace/Defense Tech 2023 Revenue, $2.4B 31% 20% 23% 10% 16% 2023 Adj Op EBITDA, $289.0M 53% 11% 21% 4% 11% 0 2022 Revenue, $2.1B 30% 18% 24% 11% 17% 2022 Adj Op EBITDA, $232.6M 52%
Slide 16: Results, Comparing FY 2023 vs FY 2022
Results,* Comparing FY 2023 vs FY 2022 Primary Variance Factors for 2023 compared to 2022 Revenue increased 17% to $2.4B from $2.1B in 2022 with each operating segment achieving double-digit percentage increases. Operating income of $181M and adjusted EBITDA of $289M Consolidated Results improved, w
Slide 17: Results, Liquidity and Cash Flow
Results, Liquidity and Cash Flow Liquidity as of December 31, 2023 • $462M of cash and cash equivalents • $215M of unused commitments through our senior secured revolving credit agreement, available through April 2027 • $500M of unsecured senior notes due February 2028, nearest maturity Cash flow: f
Slide 18: Outlook, Operating Results 2024 Q1F vs 2023 Q4
Outlook, Operating Results* 2024 Q1F vs 2023 Q4 Q1 2024 Forecast compared to Q4 2023 Actual Substantial revenue decline due to lower offshore activity. Consolidated Results EBITDA is forecasted to be in the range of $50M to $60M. Subsea Robotics Lower revenue and operating results due to typical sea
Slide 19: Outlook, Operating Results FY 2024F
Outlook, Operating Results* FY 2024F 2024 Forecast compared to 2023 Actual Revenue to grow by more than 5%, with increases in each operating segment, except for OPG, based on year-end 2023 backlog, expected increase in backlog conversion, anticipated 2024 Consolidated Results order intake, and curre
Slide 20: Outlook, Liquidity and Cash Flow, 2024
Outlook, Liquidity and Cash Flow, 2024 Liquidity at December 31, 2024 • Cash and cash equivalents > December 31, 2023 • $215M unused commitment through senior secured revolving credit agreement, available through April 2027 • $500M of unsecured senior notes due February 2028, nearest maturity Cash f
Slide 21: Outlook, Energy Industry, 2024
Outlook, Energy Industry, 2024(1) Brent forecast, average price per barrel in 2024 ~$82 Market Driver 2024 Forecasts, YoY: • Contracted Floating Rigs annual average, Flat • Tree Installations, from 370 to 339 • Tree Awards, from 285 to 288 • Subsea Equipment Spend, from $7.8B to $7.9B • Subsea Servi
Slide 22: Outlook, Industrial Robotics Market
Outlook, Industrial Robotics Market Our 2024 growth outlook is reinforced by growing market demand for OII mobile robotic forklifts and underride vehicles CAGRs, near term* 25% 20% 21.7% 15% 10% 13.8% UniMover™ O 600 Omnidirectional Underride Robot 5% 0% Mobile Robotics, Autonomous 2022-2030 Forklif
Slide 23: 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 24: Targeted Organizational Focus
Targeted Organizational Focus Operational Financial • Maintaining focus on safety, execution, and • Generating meaningful free cash flow quality • Remaining disciplined in our approach • Remaining responsive to customer needs to growth capital expenditures in our traditional markets • Maintaining fi
Slide 25: 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 26: Appendix
Appendix 26
Slide 27: Subsea Robotics: ROV Fleet Location
Subsea Robotics ROV Fleet Location - 250 ROVs, December 31, 2023 100 Drilling Support ROVs Vessel-based ROVs 80 71 ROV Count 60 53 40 37 36 24 29 20 0 Americas, excl Brazil Africa/MidEast Europe Norway Asia Pacific Brazil 27
Slide 28: ROV Drill Support Market Share
Subsea Robotics ROV Drill Support Market Share - 61% for quarter ending December 31, 2023 200 100% Contracted Floaters, Working Contracted Floating Rigs at Period End Contracted Floaters, Not Working 3% OII % of Contracted Floaters 8% 61% OII % of Floating Rigs 150 75% 14% 100 61% 50% OII 50 25% Sub
Slide 29: Subsea Robotics Revenue and Adjusted EBITDA Margin
Subsea Robotics Revenue and Adjusted EBITDA Margin* $225,000 40% SSR ROV Revenue 35% 31% 32% $200,000 SSR Tool/Survey $175,000 SSR Adjusted EBITDA Margin 30% Revenue (in thousands) $150,000 $125,000 Margin 20% $100,000 76% of SSR Revenue $75,000 $50,000 10% $25,000 $0 0% 2022 Q1 2022 Q2 2022 Q3 2022
Slide 30: Days on Hire, Revenue per Day, and Utilization Rates
Subsea Robotics Days on Hire, Average Revenue per Day, and Utilization Rates Average Revenue Days Rate per DOH on Hire $10,000 20,000 100% Drill Support % ROV Days on Hire ROV Revenue / Day on Hire Vessel-based % ROV Fleet Utilization % $9,618 17,500 $9,000 80% 68% 15,000 $8,000 60% 63% 12,500 $7,00
Slide 31: Manufactured Products Backlog and Book-to-Bill
Manufactured Products Backlog and Book-to-Bill $650 2.00 Backlog Revenue $622 Mfd Products Book-to-Bill, ttm $520 Book-to-Bill, ttm 1.60 Mfd Products ($ in millions) $390 1.31 1.20 $260 0.80 $130 0.40 $133.0 $0 0.00 2022 Q1 2022 Q2 2022 Q3 2022 Q4 2023 Q1 2023 Q2 2023 Q3 2023 Q4 31
Slide 32: Manufactured Products Facilities
Manufactured Products Manufacturing sites for design, engineering, fabrication, manufacturing, and assembly, include state-of-the-art testing facilities, for design qualification and verification. Manufacturing Facilities Grayloc® Products Facilities Houston, Texas USA Houston, Texas USA Panama City
Slide 33: Offshore Projects Group Vessel Assets
Offshore Projects Group Vessel assets for offshore projects Forecasted Q1 Location Deepwater Multi-purpose Supply Vessels: Ocean Evolution* Owned Gulf of Mexico Ocean Intervention* Owned Global Regions Ocean Intervention III Spot charter West Africa Brandon Bordelon* Chartered Gulf of Mexico Harvey
Slide 34: Aerospace and Defense Technologies Work Scopes
Aerospace and Defense Technologies Work scopes* Vehicle Systems and Submarine Services Life Support Sea-basing Technologies Submarine Rescue and Deep Submergence Connection Systems Hyperbaric Systems *slides. including, but not limited to 34 34
Slide 35: Revenue Sources, Year over Year
Revenue Sources, Year over Year Geographic Area Services and Products Industry Segments* $1.9B $2.1B $2.4B $1.9B $2.1B $2.4B $1.9B $2.1B $2.4B 100% 17% 16% 20% 19% 21% 20% 75% 43% 42% 47% 50% 80% 81% 79% 80% 83% 84% 57% 53% 58% 25% 0% 2021 2022 2023 2021 2022 2023 2021 2022 2023 International United
Slide 36: Liquidity – Cash from Operations, Capex, Net Debt
Liquidity – Cash from Operations, Capex, Net Debt* Net Debt in millions in millions $300 $500 $445.7 $426.3 Cash Flow, Operations Capex $250 $348.0 Net Debt $400 $200 $300 Axis Title $150 $161.9 $200 $131.3 $250.0 $210.0 $100 $100 $38.4 $157.6 $136.6 $120.9 $50 $225.3 ($92.0) $0 $36.6 $178.0 $147.7
Slide 37: Offshore O&G Energy Drivers
Offshore O&G Energy Drivers Greenfield Sanction Activity Offshore O&G Activity Forecast $100 150 200 400 Development Spend, Deepwater Tree Awards Contracted Floating Rigs, annual average Deepwater FID Projects Tree Installations Subsea Tree Awards and Installations 123 125 Contracted Floating Rigs 3
Slide 38: Supplemental Information
Supplemental Information 38
Slide 39: 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 40: Net Income (Loss) Reconciliation to EBITDA (continued)
Net Income (Loss) Reconciliation to EBITDA (continued) Low Estimate High Estimate For the 12-Month Period Ended Dec 31, 2023 Dec 31, 2022 Dec 31, 2024 (in millions) (in millions) Net Income (Loss) $ 97.4 $ 25.9 Income(Loss) before income taxes $ 206.0 $ 242.0 Depreciation & Amortization 105.0 121.0
Slide 41: 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 42: 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 September 30, 2023 Expenses SSR MP OPG IMDS ADTech and other Total ($ in thousands) Operating Income (Loss) as reported in accordance with GAAP $ 47,818 $ 8,22
Slide 43: 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 December 31, 2022 Expenses SSR MP OPG IMDS ADTech and other Total ($ in thousands) Operating Income (Loss) as reported in accordance w/ GAAP $ 43,689 $ 6,132 $
Slide 44: 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 Unallocated December 31, 2023 Expenses and SSR MP OPG IMDS ADTech other Total ($ in thousands) Operating Income (Loss) as reported in accordance with GAAP $ 174,293 $ 35,
Slide 45: 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 Unallocated December 31, 2022 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 46: 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 47: Investor Relations Contact
NYSE: OII Investor Relations Contact Hilary Frisbie Senior Director, Investor Relations 713.329.4755 Mark Peterson Vice President, Corporate Development and Investor Relations 713.329.4507 InvestorRelations@oceaneering.com 47
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