26
Earnings Presentation First Quarter 2015 20 May 2015
Earnings Presentation
First Quarter 2015 20 May 2015
Disclaimer
This presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks and
uncertainties that could cause actual results to differ. Such forward-looking information and statements are based on current
expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries
that are major markets for Siem Offshore (“SIOFF”) and its subsidiaries. These expectations, estimates and projections are
generally identifiable by statements containing words such as "expects", "believes", "estimates" or similar expressions. Important
factors that could cause actual results to differ materially from those expectations include, among others, economic and market
conditions in the geographic areas and industries that are or will be major markets for the Siem Offshore businesses, oil prices,
market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency
exchange rates and such other factors as may be discussed from time to time. Although Siem Offshore believes that its
expectations and the information in this Presentation were based upon reasonable assumptions at the time when they were
made, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in this
Presentation. Siem Offshore nor any other company within the group is making any representation or warranty, expressed or
implied, as to the accuracy, reliability or completeness of the information in the Presentation, and neither Siem Offshore , any
other company within the group nor any of their directors, officers or employees will have any liability to you or any other persons
resulting from your use of the information in the Presentation. Siem Offshore undertakes no obligation to publicly update or revise
any forward-looking information or statements in the Presentation.
There may have been changes in matters which affect Siem Offshore subsequent to the date of this presentation. Neither the
issue nor delivery of this presentation shall under any circumstance create any implication that the information contained herein is
correct as of any time subsequent to the date hereof or that the affairs of Siem Offshore has not since changed, and Siem
Offshore does not intend, and does not assume any obligation, to update or correct any information included in this presentation.
The contents of this presentation are not to be construed as legal, business, investment or tax advice. Each recipient should
consult with its own legal, business, investment and tax adviser as to legal, business, investment and tax advice. This
presentation is subject to Norwegian law, and any dispute arising in respect of this presentation is subject to the exclusive
jurisdiction of the Norwegian courts.
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• First quarter 2015 operating revenue of USD 126.0 million and operating margin of USD 38.7 million
(31%), compared to USD 94.4 million in operating revenue and USD 36.9 million (39%) in operating
margin in first quarter 2014.
• Reorganized the Company’s operations by segregating the activities into the Offshore Supply Vessels
segment and the Industrial Investments segment to bring greater focus on the separate operations.
• Contracts for four of the anchor-handling tug supply (“AHTS”) vessels with Petrobras in Brazil were not
renewed and vessels were returned to North Sea.
• Agreed a one-year contract with Petrobras for the platform supply vessel (“PSV”) “Siem Giant” with
commencement latest September 2015.
• Signed a USD 350 million loan and guarantee facility for two well-intervention vessels under
construction in Germany.
• Signed a EUR 96 million loan and guarantee facility for three dual-fuelled PSVs under construction in
Poland.
• Placed one AHTS vessel in lay-up.
• Aggregate backlog for the Offshore Supply Vessels segment and the Industrial Investments
segment is USD 1.57 billion at the end of first quarter.
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Highlights First Quarter 2015
• Agreed a 6-month contract with options for the PSV “Siem Pilot”
• Agreed sale of the PSV “Siem Sasha” to Siem Offshore Ghana International, a company owned 51%
by Siem Offshore.
• Signed a loan and guarantee facility for the AHTS vessel under construction in Poland for Secunda
Canada LP, a company owned 50% by Siem Offshore.
• Reached a new agreement with Daya Materials Berhad for the sale of the Offshore Subsea
Construction Vessel (“OSCV”) “Siem Daya 1” for USD120 million and a profit-split limited to an
additional USD10 million.
• Entered into a 5-year charter for the OSCV “Siem Marlin” commencing in September 2015 with
purchase options available after each of first 4 years and a purchase obligation at end of charter.
• The Nordsee One offshore windfarm project reached financial close. The marine installation works for
the inner array grid and cable system, previous awarded to Siem Offshore Contractors as a turnkey
supply and installation contract, are currently scheduled to commence in second quarter 2016.
• Siem Offshore Contractors awarded a turnkey supply and installation contract for the inner array grid
cable system for the Veja Mate Offshore Windfarm project. The marine installation works are
scheduled to commence in 2016.
4
Subsequent Events
Income Statement First Quarter
First quarter Twelve Months
Ended
(Amounts in USD million)
2015
Unaudited
2014
Unaudited
2014
Audited
Operating revenue 126.0 94.4 491.3
Operating expenses ( 77.1) ( 46.5) ( 250.2)
Administration expenses ( 10.2) ( 11.0) ( 47.0)
Operating margin [1] 38.7 36.9 194.1
Operating margin % 31 % 39 % 40 %
Depreciation and amortisation ( 26.8) ( 21.4) ( 96.9)
Impairment of vessels 0.0 0.0 ( 29.0)
Gain/(Loss) on sale of fixed assets (0.0) 6.7 18.7
Gain of sale of interest rate derivatives (CIRR) 0.1 0.1 0.4
Gain/(Loss) on currency derivative contracts [2] ( 36.1) 6.4 ( 3.0)
Net financial items [3] ( 0.2) ( 10.0) ( 10.9)
Profit before tax ( 24.2) 18.6 73.4
Income tax provision ( 1.4) ( 0.8) ( 2.7)
Net Profit (loss) ( 25.6) 17.8 70.7
Net profit attributable to non-controlling interest ( 0.0) 2.8 12.6
Net profit attributable to shareholders ( 25.6) 15.0 58.1
Earnings per share [4] ( 0.07) 0.04 0.15
Average number of shares outstanding [5] 387 591 389 578 387 591
[1] Operating revenue less operating expenses
[2] Revaluation of off-balance sheet currency contracts entered into in order to hedge both operating expenditures and future yard instalments in foreign currencies.
[3] Including revaluation of non-USD currency balance sheet items and mark-to-market effects on interest rate derivatives
[4] Net profit / Average number of shares outstanding (diluted)
[5] Weighted average number of shares outstanding (diluted) ('000) 5
Adjusted Net Profit
First Quarter Twelve Months
Ended
(Amounts in USD million)
2015
Unaudited
2014
Unaudited
2014
Audited
Net Profit (loss) ( 25.6) 17.8 70.7
Unrealized (profit) loss on currency derivatives 27.3 (6.5) 5.6
Unrealized (profit) loss on interest rate derivatives 0.6 0.1 0.4
Other unrealized (profit) loss on currency positions (10.2) (0.5) (30.6)
Adjusted Net Profit (loss) (7.9) 10.9 46.2
• Unrealised profit and loss from currency derivatives relates to financial instruments entered into in order to
hedge operational cash flows and future yard instalments in foreign currencies.
• Unrealised profit and loss from interest rate derivatives relates to mark-to-market valuations of financial
instruments entered into in order to manage interest rate risk.
• Other currency positions includes unrealized profit and loss from balance sheet items denominated in foreign
currencies in subsidiaries.
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• Book equity ratio of ~ 35%.
• Cash and cash equivalents of approx.
USD 90 million as of 31 March 2015.
• Net interest bearing debt as of 31 March
2015 of USD 1,074 million.
• Current cost of debt approximately 4.5%
p.a., including the effect of interest rate
derivatives.
Financial Position as of 31 March 2015
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Current Liabilities
Non-Current Liabilities
Total Equity
Other Cur. Assets
Cash & cash equivalents
Non-Current
Assets
(all in USDm)
Cash and Cash Equivalents development
• Net cash flow from operations USD 27.8 million.
• Cash flow from investing activities USD (18.0) million.
• Cash flow from financing activities USD (25.5) million.
• Net change in cash USD (15.7) million, before exchange rate differences.
• Effect of exchange rate differences USD (12.3) million.
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Scheduled Debt Maturity Profile 04.2015 - 2019
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• The graph reflects committed and assumed mortgage debt for all 8 vessels(1) under construction per end of 1Q
2015.
• Gross debt expected to peak in 2016 based on existing financing and estimated financing for vessels under
construction. The graph includes debt repayment in 2015 from the sale of “Siem Daya 1”.
• Loan to value at low ratios for balloon instalments of mortgage debt (2015 and 2017), i.e. low refinancing risk.
• Balloon instalment in 2015 of mortgage debt (6 AHTS vessels) can be postponed to 2018 subject to
long-term vessel employment.
• NOK 600 million (USD 74.2 million) of unsecured bonds with maturity in 2018.
• NOK 700 million (USD 86.5 million) of unsecured bonds with maturity in 2019.
[1] Only including wholly-owned vessels under construction.
Future Yard Instalments per end 1Q 2015
• The Company has secured mortgage debt
financing for all of its eight wholly-owned
vessels currently under construction.
• The AHTS vessel under construction for
Secunda is not included in the table.
Mortgage debt financing is also secured for
this vessel.
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Amounts in USD million
Future Yard Instalments 2015 2016 Total
OSRVs 8.1 0.0 8.1
PSVs 54.5 103.3 157.8
CLV 0.0 55.5 55.5
WIV 61.2 220.0 281.2
Total 123.8 378.8 502.6
Debt facilities 2015 2016 Total
OSRVs 4.9 0.0 4.9
PSVs 44.5 103.3 147.8
CLV 0.0 53.8 53.8
WIV 30.6 208.2 238.8
Total 80.0 365.2 445.2
• The graph reflects; i) future yard instalments for the 8 wholly-owned vessels under construction per
end of first quarter 2015, ii) committed mortgage debt (red) and iii) financing gap to be funded by
cash from operations.
• Yard instalments for shipbuilding contracts are normally paid with 20% during construction and 80%
at delivery, alternatively 10% during construction and 90% at delivery.
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Total financing gap for 9 months of 2015 and
full year 2016 of approx. USD 57 million
Future Yard Instalments and Debt Financing - For 9 months of 2015 and full year 2016
Operating Margin, Vessels in Operation and Shipbuilding Contracts
OSV Segment
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OSCV AHTS Vessels
Other
vessels
# 10
# 101)
Vessels in operation
Canadian
fleet
# 53)
1) Incl. two vessels owned by a partner
2) Incl. two 51% owned
3) 50% owned
4) Agreed sold to the charterer Daya Materials Berhad as
described in stock exchange notice in April 2015.
5) Agreed sold to a 50% owned company.
# 6
Average age of 4 years
Average age of 2 years
Other vessels # 16
Average age of 7 years
PSV (3,600 – 5,100 dwt) # 122)
Installation
support vessel
# 1
4)
OSV Segment - Currently 44 Vessels in Operation
5)
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OSV Segment - Operating Margin First Quarter
First Quarter 2015 First Quarter 2014
Amounts in USD million Operating
revenue
Operating
expenses
Operating
margin
Operating
margin %
Operating
revenue
Operating
expenses
Operating
margin
Operating
margin %
PSVs [2] 24.6 ( 10.2) 14.4 59 % 22.8 ( 11.7) 11.1 49 %
OSCVs 30.4 ( 9.0) 21.4 70 % 19.5 ( 5.8) 13.7 70 %
AHTS vessels[2] 15.5 ( 15.6) ( 0.1) n.m 42.3 ( 15.0) 27.3 65 %
Smaller Brazilian flagged vessels[1] 6.7 ( 4.2) 2.6 38 % 4.0 ( 4.3) ( 0.3) n.m
Other ( 1.5) 0.3 ( 1.2) 80 % ( 7.4) ( 7.4)
G&A ( 7.6) ( 7.6) ( 7.9) ( 7.9)
Total 75.7 ( 46.3) 29.4 39 % 81.2 ( 44.7) 36.5 45 %
[1] Smaller Brazilian flagged vessels include Oil Spill Recovery Vessels and Fast Supply and Crew Boats
[2] The PSV and the AHTS segment includes I/C revenue from contracting work for the 100% owned subsidiary “Siem Offshore Contractors” . The
offsetting IC opex is included under the Industrial Investments Segment for Submarine Power Cable activities.
OSV Segment - Comments to First Quarter
• 98% utilisation of the OSCV fleet.
• All vessels on long-term charters during the quarter.
• Three vessels operating in the North Sea/Europe.
• Two vessels operating in the US Gulf of Mexico.
• One vessel operating outside West Africa.
• 89% utilisation of the PSV fleet.
• 11 of the vessels on medium to long-term charters.
• Three PSVs are employed offshore West Africa, four offshore Brazil, three in the North Sea region
and one PSV is on a bareboat charter.
• One vessel that came off a contract in West Africa in late 2014 has been utilized as a replacement
for the PSV “Siem Hanne”, which has undergone interim scheduled dry-docking during the period.
• 59% utilisation of the AHTS fleet.
• One vessel operated on a long term contract offshore Brazil during the quarter.
• One vessel operated for Siem Offshore Contractors.
• Four AHTS vessels departed from Brazil after firm contracts expired, of which two vessels
commenced scheduled dry-docking during the quarter.
• The remaining AHTS vessels have since departure from Brazil been operating in the North Sea /
Europe spot market.
• The Company has placed one AHTS vessel in lay-up during the quarter.
• 96% utilisation for the fleet of smaller Brazilian flagged vessels.
• All 9 vessels operated on term contracts in Brazil during the quarter.
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OSV Segment - Employment for vessels in operation
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2015 2016 2017 2018
Vessel Type Ownership 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Siem Sasha 6) PSV 100 %
Sophie Siem PSV 100 %
Siem Louisa PSV 100 %
Siem Hanne PSV 100 %
Siem Carrier PSV 100 %
Siem Supplier PSV 100 %
Hugin Explorer PSV 100 %
Siem Atlas PSV 100%
Siem Giant PSV 100%
Siem Symphony PSV 100%
Siem Pilot PSV 51%
Siddis Mariner 1) PSV 51%
Siem Marlin OSCV 100%
Siem N-Sea OSCV 100%
Siem Daya 1 2) OSCV 100%
Siem Daya 2 OSCV 100%
Siem Spearfish OSCV 100%
Siem Stingray OSCV 100%
Siem Pearl AHTS 100%
Siem Emerald 4) AHTS 100%
Siem Sapphire AHTS 100%
Siem Aquamarine 3) AHTS 100%
Siem Ruby AHTS 100%
Siem Topaz AHTS 100%
Siem Diamond AHTS 100%
Siem Amethyst AHTS 100%
Siem Garnet 4) AHTS 0%
Siem Opal AHTS 0%
Siem Moxie 5) ISV 100%
Total order backlog in % and USD mill. 51% 141 36% 137 23% 95 11% 52
1) Employment for Siddis
Mariner includes firm time
charter for Siem Offshore
Contractors.
2) The backlog for Siem Daya 1
includes an assumption of
completion of sale in August
2015.
3) Siem Aquamarine currently in
in lay-up
4) Employment for Siem Garnet
and Siem Emerald includes
firm time charter for Siem
Offshore Contractors
5) The ISV Siem Moxie shall
primarily be utilized by the
subsidiary Siem Offshore
Contractors for cable
installation projects within the
offshore wind-farm segment.
6) Siem Sasha is agreed sold to
a company owned 50% by
Siem Offshore.
Contract Contract option Spot work Contract with subsidiary
Agreed sold
OSV Segment - Employment for vessels in operation (con’t)
2015 2016 2017 2018
Vessel Type Ownership 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Big Orange XVIII WSV 41 %
Burin Sea AHTS 50%
Panuke Sea PSV 50%
Trinity Sea AHTS 50%
Venture Sea AHTS 50%
Scotian Sea MPSV 50%
Total order backlog in % and USD mill. 90% 24 35% 13 18% 7 0% 0
Marati OSRV 100 %
Siem Maragogi OSRV 100%
Parnaiba FSV 100 %
Propriá FSV 100 %
Capela FSV 100 %
Siem Piatã FCV 100 %
Siem Pendotiba FCV 100%
Siem Caetes FSP 100%
Siem Carajas FSP 100%
Total order backlog in % and USD mill. 90% 20 89% 26 89% 26 73% 24
Contract Contract option Spot work
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2015
1Q 2Q 3Q 4Q
2016
1Q 2Q 3Q 4Q
2017
1Q 2Q 3Q 4Q
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OSRV, Siem Marataizes
CLV, Siem Aimery
PSV DF, Siem Pride
PSV DF, ”TBN 1”
PSV DF, ”TBN 2”
PSV DF, ”TBN 3”
WIV, Siem Helix 1
WIV, Siem Helix 2
AHTS, Avalon Sea (Note 1)
Note 1) Vessel under construction in the 50% owned entity Secunda.
OSV Segment - Vessels under Construction
• Nine vessels to be delivered next 2 years, including one vessel in Secunda
• Mortgage debt financing secured for all vessels under construction.
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2015 2016 2017 2018
Vessel Type Ownership 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Brazil, Siem Marataizes OSRV 100%
Poland, Siem Aimery CLV 100%
Poland, Siem Pride PSV 100%
Poland, ”TBN 1” PSV 100%
Poland, ”TBN 2” PSV 100%
Poland, ”TBN 3” PSV 100%
Germany, Siem Helix 1 WIV 100%
Germany, Siem Helix 2 WIV 100%
Poland, Avalon Sea (Note 1) AHTS 50%
Under Construction Contract Contract option
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• The CLV shall primarily be utilized by the subsidiary Siem Offshore Contractors for cable installation projects
within the offshore wind-farm segment.
• Total firm backlog for vessels under construction at approximately USD 775 million as of end of first quarter 2015.
Contract with subsidiary
Note 1) Vessel under construction in the 50% owned entity Secunda.
OSV Segment - Employment for Vessels under Construction
• The North Sea PSV and AHTS vessel markets continued to experience soft rates
and utilization throughout the first quarter.
• Additional vessels have entered the North Sea from other regions and as rig activity
is reduced, which places pressure on vessel utilization and fixture rates.
• Vessel owners have placed vessels in lay-up and owners are considering additional
lay-ups.
• The outlook for the OSV market is expected to remain soft for several years due to a
number of factors affecting the offshore oil and gas industry.
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OSV Segment - Market Outlook
Industrial Investment Segment Operating Margin, Investments
Industrial Investments Segment - Operating Margin First Quarter
First Quarter 2015 First Quarter 2014
Amounts in USD million Operating
revenue
Operating
expenses
Operating
margin
Operating
margin %
Operating
revenue
Operating
expenses
Operating
margin
Operating
margin %
Submarine Power Cable activities [1] 41.0 ( 37.6) 3.4 8 % 4.9 ( 3.3) 1.6 32 %
Scientific Core-Drilling 6.5 ( 3.0) 3.4 53 % 6.4 ( 2.9) 3.5 54 %
Siem WIS 0.6 ( 0.2) 0.4 0.4 0.2 0.6
Combat Management Systems 2.2 ( 2.3) ( 0.0) n.m 1.5 ( 1.6) ( 0.0) n.m
G&A ( 2.6) ( 2.6) ( 3.1) ( 3.1)
Intercompany eliminations [1] 0.0 4.6 4.6 0.0 ( 2.1) ( 2.1)
Total 50.3 ( 41.0) 9.3 18 % 13.2 ( 12.8) 0.4 3 %
[1] The OSV Segment included I/C revenue for PSV and AHTS vessels from contracting work for the 100% owned subsidiary “Siem Offshore Contractors”
The offsetting IC opex is included under the Industrial Investments Segment for Submarine Power Cable activities.
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Amrumbank West
OWF Baltic 2 OWF Nordsee One Nordsee One OWF
Project
Project phase
Vessel utilisation
Profit recognition
Awarded
Installation of 86
submarine cables
providing the inner-
array grid connecting
All cables have been
installed with cable
termination, testing and
post-lay trenching
works ongoing.
PSV “Siddis Mariner”
ISV “Siem Moxie”
AHTS “Siem Garnet”
3rd Party Vessel
The project is
scheduled to be
completed within 2Q
2015 with a positive
margin.
Mar, 2012
Consortium EPIC
contract for the 155kV
export cable system
Nordsee One
Planning, preparation
and engineering. The
project remains on track
for mechanical
completion by 3Q 2016.
Utilising the resources
within the Siem
Offshore Group
At minimum 25%
completion. No margin
will be recorded prior to
installation activities.
Project scheduled for
completion during 4Q
2016.
Dec, 2012
Installation of 86
submarine cables
providing the inner-
array grid connecting
All cables have been
installed with cable -
termination, testing and
post-lay trenching works
completed in May 2015.
PSV “Siddis Mariner”
ISV “Siem Moxie”
AHTS “Siem Garnet”
3rd Party Vessel
The project is
scheduled to be
completed during 3Q
2015 with a positive
margin.
Feb, 2013
Turnkey EPIC package
of the inner array grid
cable system for 54
wind turbine generators
Planning, preparation and
engineering expected
complete in 2Q 2015.
Offshore installation from
2Q 2016.
Utilising the resources
within the Siem
Offshore Group
At minimum 25%
completion. No margin
will be recorded prior to
installation activities in
2016. Project scheduled
for completion during 1Q
2017.
Apr, 2014 1)
[1] The project reached financial close in April 2015.
Veja Mate OWF
Turnkey EPIC package
of the inner array grid
cable system for the 67
wind turbine generators
Planning, preparation
and engineering.
Utilising the resources
within the Siem
Offshore Group
At minimum 25%
completion. No margin
will be recorded prior to
installation activities in
2016. Project scheduled
for completion during
2017.
Apr, 2015
Industrial Investments Segment - Siem Offshore Contractors; Submarine power cable activities by main projects
• The Julius project was mobilised in accordance with plan and the managed pressure drilling
(“MPD”) operation onboard the “Maersk Gallant” will commence shortly. Both the pressure
control device (“PCD”) and its crew are onboard and ready to start the operation.
• The MPD operation planned for the Gudrun project is currently under evaluation to
determine if an MPD operation is required.
• The formal call-off for the Valemon operation has been received and the current plan is to
commence this operation in November 2015.
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Industrial Investments Segment - Siem Wis
• The scientific core-drilling vessel “JOIDES Resolution” recorded operating revenues
of USD 6.5 million (2014: USD 6.4 million) and an operating margin of USD 3.4
million (2014: USD 3.5 million). The operating margin as a percentage of revenue
was 53% (2014: 54%).
• The current option period under the existing contract will expire at the end of
September 2015 and a series of 1-year option periods can be exercised by the
customer.
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2015 2016 2017 2018
Vessel Type Ownership 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Joides Resolution SPV 100 %
Total order backlog in % and USD mill. 66% 13 0% 0 0% 0 0% 0
Scientific Core Drilling Vessel
# 1
Industrial Investments Segment - Overseas Drilling Ltd. (Joides Resolution)
• Built: 1978 (Major Upgrade 2009)
• Length: 143 m Beam: 21 m
• Gross tonnage: 10,282 t
• Accommodation: 130 persons
• Max endurance: 75 days
• Drilling capacity: 2,000 meters
into the seafloor in water depths
of up to 7,000 meters
Vessel Specification
• Siem Offshore Contactors experience steady tendering activity in the offshore
windfarm market (“OWF”) with scheduled marine installation activities taking place in
2017 and 2018 and for operations and maintenance contracts to be awarded in
2015.
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Industrial Investments Segment - Market Outlook
