Business
Archer : Q1 2026 Presentation
Archer : Q1 2026
About this update from Archer Limited
Archer Q1 2026 Results 19 May 2026 $1.2bn '25 Revenue $167m '25 EBITDA $4bn Land Drilling Well Services Renewable Services Platform Operations Our products & services YE '25 backlog 1 50+ years Operational experience 40 Locations globally ~3,500 Global personnel 2 1 Including options 2 Per 31.3.2026 3 Q1 Highlights - another strong quarter Q1 revenue of $278 million, down 7% YoY (up 15% when excluding divested Q1 Revenue ($m) Q1 EBITDA ($m) -7% 299 278 0% 300 37 37 40 workover business) Q1 EBITDA of $37.2 million, in line with same quarter last year (up 12% when excluding divested workover business) EBITDA margin of 13.4%, up from 12.5% same quarter last year Distribution to shareholders of $6.4 million in Q1 (NOK 0.62/share) Closed transaction to sell workover business in south of Argentina Awarded two integrated P&A contracts with Equinor, and a 3-year contract 200 100 0 Q1-25 Q1-26 30 20 10 0 Q1-25 Q1-26 extension for wireline services with ConocoPhilips Norway Q1 Revenue ($m) Q1 EBITDA ($m) Excluding divested workover business Excluding divested workover business Subsequent events Two contract extensions with Equinor for Wireline and Oiltools Awarded integrated geothermal drilling contract in Nevis Approved $6.6 million distribution to be paid to shareholders in Q2 (NOK 0.62/share) 300 40 +15% 269 234 +12% 36 32 30 200 20 100 10 0 Q1-25 Q1-26 0 Q1-25 Q1-26 4 Archer's EBITDA remains resilient Robust historical EBITDA Strong Q1 EBITDA relative to peers 1 Margin 167 149 131 109 95 82 87 94 13% 14% 13% 14% 65 12% 12% 12% 10% 8% EBITDA Q1 YoY (Q1 '26 vs. Q1 '25) -10% Peers 0% Actual / reported EBITDA Q1 YoY (Q1 '26 vs. Q1 '25) -10% Peers Excluding divested workover business 2 +12% EBITDA '17 '18 '19 '20 '21 '22 '23 '24 '25 '26G 1 Peers: average reported adj. EBITDA of Halliburton, Weatherford, Baker Hughes OFSE segment, SLB, Expro, OTL. 5 2 Both peers and Archer are not adjusted for acquired businesses since Q1 last year. Excluding Archer's acquisition of Premium, the YoY growth would be around +9%. Source: Public company reports Distribution of $6.6 million to shareholders in Q2 (~9% yield) Q2 cash distribution Archer with industry leading direct yield Shareholder program yields in industry 1 Payout per share: NOK 0.62 per share Total distribution: Approx. $6.6 million Payment date : May 27, 2026 ~9% Share buybacks Dividends and cash distribution ~4% 2 ~4% ~3% ~3% ~2% ~2% ~2% Frequency: Quarterly LTM distribution : Approx. $24.5 million Q2 distribution marks the fifth consecutive quarter of Archer's shareholder distribution program Archer Peer 1 Peer 3 Peer 7 Peer 2 Peer 4 Peer 5 Peer 6 1 Per 08.05.26 . Peer sample include Odfjell Technology, SLB, Halliburton, Weatherford, H&P, Baker Hughes, Expro. 2 Peer 1: Currently paused dividends for two consecutive quarters. Yield quoted in graph reflects the quarterly dividends expected in 2026 (two in total). 6 Outlook for Archer backed by backlog of $3.4bn Revenue backlog implies ~$550m of EBITDA 1 ~$420m contract value added to firm backlog YTD Backlog ($bn) ~1.3 Q1 contract additions Q2 contract additions ~0.3 ~0.9 ~0.8 ~0.7 Q1 revenue, not part of backlog Integrated subsea P&A for Equinor 3-year contract for well engineering and P&A operations of 30 subsea wells (NCS) Integrated P&A services for Equinor Engineering, project mgmt. CT, wireline and downhole P&A technology (with SLB), in the GoA Wireline services for ConocoPhillips 2-year service extension for platform based well intervention (NCS) Wireline services for Equinor 3-year service extension for wireline & intervention services (NCS) P&A and fishing services for Equinor 2-year extension of frame agreement for P&A solutions, fishing & mechanical isolation services (NCS) Geothermal drilling contract on Nevis Island, Caribbean Integrated geothermal drilling services (Iceland Drilling) '26 '27 '28 Thereafter Revenue YTD Firm backlog Contract awards YTD Option 1 Based on backlog and projected EBITDA margin per division Key takeaways Multi-year contracts strengthening backlog visibility Continued build-out of P&A backlog, reinforcing our position as a leading provider of integrated P&A services Strong activity across wireline and intervention supporting near-term earnings visibility 7 Reiterate our financial guidance for 2026 2026 financial estimates 1 Key takeaways EBITDA ($m) Single-digit growth Capital expenditures 6-7% of revenue '26E EBITDA by segments Well Services Platform Operations Land Drilling Renewable Services '25 '26G ~5% 6-7% ~5% 15-20% 45-50% ~30% '25 '26G Single-digit growth expected for 2026 EBITDA, despite the sale of the workover business in the south of Argentina 167 We expect 2-4 percentage points improvement in EBITDA margin from a more favourable revenue mix EBITDA in second half of '26 is expected to be 10-20% higher than the first half, due to timing of project starts Stronger first half from increased activity and better product mix, and delayed start-up of certain projects in second half, impacting H2 EBITDA Capex estimated to be 6-7% of revenue, from growth investments serving new contract awards Over the last 3 years, Archer's capex has been 5-6% of revenue 2 Maintenance capex expected to remain stable at around 3% of revenue, in line with the historic average last 3 years 2 1 All figures assume stable USD/NOK and GBP/USD. The discontinued workover business in the south of Argentina is included in reported 2025 financials 2 Using IFRS financials, and excluding the workover business in the south of Argentina 8 Financials Total revenue of $107.1 million represents an increase of 1% compared to Q1 2025 EBITDA of $14.2 million is stable from previous quarter, while it is an increase of $1.3 million compared to the same quarter last year EBITDA margin of 13% in the quarter Operations Brazil workforce reduction of ~200 personnel following cessation of Peregrino drilling and maintenance contract after transfer from Equinor to PRIO Increased drilling activity across Norway operations 9 UK mobilization and recruitment initiated for upcoming activity growth Platform Operations Revenues ($m) EBITDA ($m) 180 160 25 140 120 100 80 60 40 20 0 +1% 133 20 120 105 106 115 107 15 10 5 0 Q4-24 Q1-25 Q2-25 Q3-25 Q4-25 Q1-26 Operational revenue EBITDA (right axis) Platform Drilling contracted rigs [# of rigs] 40 35 30 25 20 15 10 5 0 31 31 31 31 31 29 1 1 1 1 1 1 10 Q4-24 Q1-25 Q2-25 Q3-25 Q4-25 Q1-26 Maintenance mode rigs Active P&A units Active drilling rigs 11 11 11 12 11 Financials Seasonal strong quarter as revenue was reported at $83.0 million; 22% higher than Q1 2025 EBITDA of $16.2 million represents a 13% increase compared to same period last year. Higher EBITDA from P&A projects Norway and product sales in US EBITDA margin of 19.5% in the quarter Operations Strong activity across Norwegian operations and increased backlog Q1-25 Q2-25 Q3-25 Q4-25 Q1-26 Awarded contract extensions for wireline and and intervention services for both ConocoPhillips and Equinor, as well as a contract extension with Equinor for P&A, fishing and isolation services 10 Continued strengthening of market position and long-term visibility across Norway well services operations Well Services Revenues ($m) EBITDA ($m) 100 +22% 20 91 18 90 16 83 14 80 12 73 71 70 68 10 8 60 6 4 50 2 40 0 Revenue EBITDA Financials Revenue in the quarter of $48.4 million is down 24% from previous quarter, driven by sale of workover business in the south Adjusted for the divested workover business EBITDA is up by ~50% from the same quarter last year Strong EBITDA margin of 18.2% in the quarter Operations Drilling activity increased in the quarter by one additional rig in Vaca Muerta Workover business sold 11 Preparation ongoing for mobilization of two high spec rigs from the US. The rigs will start operation late Q2 or early Q3 Land Drilling Revenues ($m) 1 120 103 100 EBITDA ($m) 1 12 -24% 10 80 73 8 63 64 60 48 6 40 4 20 2 0 0 Q1-25 Revenue Q2-25 Q3-25 Q4-25 Q1-26 EBITDA (right axis) Number of active Archer rigs 1 50 43 41 40 32 30 30 Workover 30 business sold 20 10 9 10 9 0 Q4-24 Q1-25 7 Q2-25 6 Q3-25 7 Q4-25 8 Q1-26 Workover & Pulling units Drilling rigs 1 Historic figures include sold workover business Financials Revenue in the quarter of $39.8 million is $1.0 million higher than previous quarter Soft EBITDA in the quarter of $0.9 million as two Iceland Drilling rigs are in transit from Philippines to Iceland Operations Iceland Drilling secured and important contract for Nevis Wind and offshore services in Vertikal faced certain delays in Q1 with strong demand expected for Q2 and Q3 12 Fabrication of floating substructure for Total is delayed and will likely be finalized in early Q3 2026 Renewable Services EBITDA ($m) Revenues ($m) 40 +3% 39 40 10 35 34 30 8 23 6 20 16 4 10 2 0 0 Q4-24 Revenue Q1-25 Q2-25 Q3-25 Q4-25 Q1-26 EBITDA (right axis) Condensed profit & loss Total revenue of $278.4 million in Q1 2026, down $20.8 million. However, adjusted for sale of workover business in DLS South, underlying business increased by $35 million, driven by increased Well Services activity. EBITDA before exceptionals was $41.1 million, with a margin 14.8%, down from 15.1% last year Exceptional items of $3.9 million in the quarter mainly relates to down manning in Brazil EBITDA of $37.2 million is in-line with last year, however underlying up 12% adjusted for the sale of the workover business in DLS South in Argentina Q1 2026 EBIT of $16.0 million Profit of $3.6 million Adjusted net income of $6.7 million $ million Q1 2026 Q1 2025 Revenues 278.4 299.1 EBITDA before exceptional items 41.1 45.3 EBITDA margin before exceptional items 14.8% 15.1% Exceptional items (3.9) (7.8) EBITDA 37.2 37.5 EBITDA margin 13.4% 12.5% Depreciation, amortization and impairments (20.1) (19.0) Gain/(loss) on sale of business and assets (1.0) - EBIT 16.0 18.5 Net interest expense (13.0) (37.5) Share of results in associated companies 0.1 - Other financial items 0.7 (13.7) Profit (loss) before income taxes 3.9 (32.7) Income tax benefit (expense) (0.3) 4.8 Profit (loss) 3.6 (28.0) Attributable to non-controlling interests (0.4) 0.6 Net adjustments 2.7 33.2 Adjusted net profit (loss)** 6.7 5.2 * Q1 2025 figures includes workover business (DLS South) divested during Q1 2026 13 **adjusted for impairments, exceptional items, gain on bargain purchase, MtM of financial assets, amortization of prepaid debt fees, make-whole, FX, timing of taxes and transaction cost $ million 31.03.2026 31.12.2025 Condensed balance sheet The main change in the balance sheet is the reduction of assets held for sale $28.9 million, related to closing the sale of the work over business in Argentina Available liquidity of $61 million and net interest-bearing debt (NIBD) $469 million. o Increase in NIBD in Q1 2026 explained by bi-annual interest payment, removal of Norwegian tax guarantee (skattetrekksgaranti) and build up of working capital as activity increases and in Archer Wind related to project changes and discussions on approval of variation orders with client for the offshore wind project Non-controlling interest is related to Archers 60% ownership in Iceland Drilling and 65% ownership in Vertikal Service. Equity of $179.8 million Property, plant and equipment 332.3 324.9 Right of use assets 57.7 57.6 Goodwill 199.5 196.2 Intangible assets 33.9 32.5 Investment in associates and JVs 4.2 4.0 Deferred tax asset 35.2 34.9 Other non-current assets 19.9 25.3 9 Assets held for sale - 28.9 Cash and cash equivalents 29.7 40.6 Trade receivables 188.1 187.8 Inventories 71.1 71.9 Other current assets 58.5 50.2 Total assets 1,030.3 1,054.9 Long-term interest-bearing debt 422.8 430.1 Lease liabilities (non-current) 49.7 48.9 Deferred tax 0.2 0.3 Other noncurrent liabilities 8.2 6.6 Liabilities - assets held of sale - 28.4 Current portion of interest-bearing debt 72.0 37.8 Lease liabilities (current) 10.3 10.5 Trade payables 100.6 92.8 Income tax 5.6 7.6 Other current liabilities 160.9 192.3 Shareholder's equity 179.8 179.0 Non-controlling interest 20.2 20.7 14 Total liabilities and shareholders' equity 1,030.3 1,054.9 Archer's capital allocation strategy Shareholder returns M&A Capex Balance sheet Shareholder returns Regular and sustainable shareholder return program, with quarterly cash distributions Target to increase distributions over time, in line with the growth in earnings Selective accretive bolt-on acquisitions Disciplined strategy, with selective accretive M&A Targeting synergetic and cash generating bolt-on acquisitions with high financial returns (30-50%) Capex maintained at moderate levels Targeting total capex of 5-6% of revenue over time Focus on growth investments with high financial returns (30-50%) Self-funded capex program in Argentina Strong balance sheet and healthy debt levels Target a long-term leverage ratio of 1.5-2.0x Maintain solid liquidity at all times Aim to reduce overall cost of capital in the long-term 15 Attention : This is an excerpt of the original content. 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