24
Earnings Presentation Third Quarter 2015 29 October 2015
Earnings Presentation
Third Quarter 2015 29 October 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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• Third quarter 2015 operating revenue of USD 82.0 million and operating margin of USD 24.9 million (30%),
compared to USD 153.4 million in operating revenue and USD 59.3 million (39%) in operating margin in third
quarter 2014.
• USD 100 million Rights Issue successfully completed.
• Received notice of early termination for the vessel “Siem Carrier” due to Petrobras inability to obtain operating
license for the vessel.
• Agreed with Petrobras to terminate the contracts for three smaller Brazilian flagged supply/crew vessels.
• Extended contract for the R/V “JOIDES Resolution” to Texas A&M Research Foundation (TAMRF) until 30
September 2016.
• Two AHTS vessels in lay-up at the end of the third quarter. One additional AHTS vessel will be placed into lay-up
in the fourth quarter.
• Aggregate backlog for the Offshore Support Vessels segment and the Industrial Segment is USD1.47 billion at the
end of the third quarter.
• Siem Europe S.a r.l. announced a mandatory offer to the shareholders of the Company at an offer price of NOK
1.80 per share.
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Highlights Third Quarter 2015
• Agreed a 9-month contract with 2 x 6 month options for the AHTS vessel “Siem Amethyst” to Woodside Energy
Ltd for operation in Australia.
• Agreed to extend the delivery of “Siem Daya 1” until 16 November 2015 with 30 November 2015 as cancelling
date.
• The mandatory offer to acquire the shares in the Company not already owned by Siem Europe S.a r.l. was
approved by Oslo Stock Exchange on 6 October 2015. The offer is valid until 4 November 2015 at 16:30(CET).
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Subsequent Events
Income Statement Third Quarter
Third Quarter Nine Months Ended Twelve Months
Ended
(Amounts in USD million)
2015
Unaudited
2014
Unaudited
2015
Unaudited
2014
Unaudited
2014
Audited
Operating revenue 82.0 153.4 332.4 376.2 491.3
Operating expenses ( 49.1) ( 81.6) ( 198.6) ( 205.3) ( 250.2)
Administration expenses ( 8.0) ( 12.5) ( 29.1) ( 36.5) ( 47.0)
Operating margin [1] 24.9 59.3 104.7 134.4 194.1
Operating margin % 30 % 39 % 31 % 36 % 40 %
Depreciation and amortisation ( 28.4) ( 24.6) ( 81.6) ( 69.4) ( 96.9)
Impairment of vessels - - ( 56.0) - ( 29.0)
Gain/(Loss) on sale of fixed assets 0.0 11.9 0.0 18.6 18.7
Gain of sale of interest rate derivatives (CIRR) 0.1 0.1 0.3 0.3 0.4
Gain/(Loss) on currency derivative contracts [2] 1.5 ( 6.5) ( 23.8) 3.6 ( 3.0)
Net financial items [3] ( 8.2) ( 14.3) ( 21.7) ( 31.5) ( 12.7)
Result from associated companies 0.6 0.4 0.6 1.5 1.8
Profit before tax ( 9.5) 26.2 ( 77.5) 57.4 73.4
Income tax provision ( 0.3) ( 0.9) ( 2.9) ( 2.2) ( 2.7)
Net Profit (loss) ( 9.8) 25.3 ( 80.4) 55.2 70.7
Net profit attributable to non-controlling interest ( 0.9) 6.8 ( 2.0) 10.0 12.6
Net profit attributable to shareholders ( 8.9) 18.5 ( 78.4) 45.2 58.1
Earnings per share [4] ( 0.02) 0.05 (0.19) 0.12 0.15
Average number of shares outstanding [5] 446 868 387 591 417 390 387 591 387 591
[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
Third Quarter Nine Months Ended Twelve Months
Ended
(Amounts in USD million)
2015
Unaudited
2014
Unaudited
2015
Unaudited
2014
Unaudited
2014
Audited
Net Profit (loss) ( 9.8) 25.3 (80.4) 55.2 70.7
Unrealized (profit) loss on currency derivatives (9.0) 6.0 (2.1) 0.2 5.6
Unrealized (profit) loss on interest rate derivatives 1.0 (1.0) (0.2) 0.0 0.4
Other unrealized (profit) loss on currency positions (8.0) 0.4 (14.5) (7.7) (30.6)
Adjusted Net Profit (loss) (25.8) 30.7 (97.2) 47.7 46.2
Impairment of vessels - - 56.0 - 29.0
Adjusted Net Profit (loss) before impairments (25.8) 30.7 (41.2) 47.7 75.2
• 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.
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OSV Segment - Comments to Third Quarter
• 88% utilisation of the OSCV fleet.
• Five of the vessels operated on long-term contracts during the quarter.
• Three vessels operating in the North Sea/Europe.
• Two vessels operating in the US Gulf of Mexico.
• One vessel on short-term employment before commencing a five-year term contract in the fourth
quarter 2015.
• 68% utilisation of the PSV fleet.
• Three PSVs are employed offshore Brazil.
• Three PSVs are employed in the North Sea region
• One PSV is employed offshore West Africa and one PSV is on a bareboat contract.
• Three PSVs idle in West Africa and one PSV idle in Brazil, all tendering for work.
• 56% utilisation of the AHTS fleet.
• One AHTS vessel is operating on a long-term contract in Brazil.
• One AHTS vessel was operating for Siem Offshore Contractors for most of the third quarter.
• One AHTS vessel recorded 17 days commercial off-hire related to a 5 year scheduled dry-docking.
• Two AHTS vessels are placed in lay-up and one vessel is currently steaming for Australia.
• The remaining AHTS vessels are operating in the North Sea/Europe spot market.
• 94% utilisation for the fleet of smaller Brazilian flagged vessels.
• All eight vessels operated on term contracts in Brazil during the quarter.
• Agreed cancellation of term contracts for three of the vessels.
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Operating Margin - Third Quarter
Third Quarter 2015 Third Quarter 2014
Amounts in USD million Operating
revenue
Operating
Expenses
Operating
margin
Operating
margin %
Operating
revenue
Operating
expenses
Operating
margin
Operating
margin %
PSVs [2] 16.4 ( 8.9) 7.5 46 % 29.8 ( 11.1) 18.7 63 %
OSCVs 26.3 ( 10.5) 15.8 60 % 30.1 ( 9.0) 21.1 70 %
AHTS vessels[2] 14.2 ( 10.7) 3.5 24 % 47.4 ( 23.9) 23.5 50 %
Smaller Brazilian flagged vessels[1] 5.0 ( 3.6) 1.4 28 % 4.7 ( 4.9) ( 0.2) -5%
Intercompany eliminations, other [2] ( 6.2) 5.0 (1.2) ( 6.3) 9.0 2.7
Total OSV Segment 55.8 ( 28.8) 27.0 48 % 105.7 ( 39.9) 65.8 62 %
Submarine Power Cable activities 17.2 (15.5) 1.7 10% 39.3 (36.6) 2.6 7%
Scientific Core-Drilling 6.5 (2.9) 3.6 55% 6.6 (3.2) 3.4 52%
Siem WIS 1.8 (1.4) 0.4 24% 0.2 (0.2) 0.0
Combat Management Systems 0.7 (0.5) 0.2 28% 1.5 (1.7) (0.1) -9%
Total Industrial Segment 26.2 (20.3) 5.9 23% 47.6 (41.7) 5.9 12%
G&A (8.0) (8.0) (12.5) (12.5)
Total for the Company 82.0 (57.1) 24.9 30% 153.4 (94.1) 59.3 39%
[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 Segment for Submarine Power Cable activities.
• Book equity ratio of ~ 36%.
• Cash and cash equivalents of
approx. USD 158 million as of 30
September 2015.
• Net interest bearing debt as of 30
September 2015 of USD 1,031
million.
• Current cost of debt approximately
4.3% p.a., including the effect of
interest rate derivatives.
Financial Position as of 30 September 2015
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Current Liabilities
Non-Current Liabilities
Total Equity
Other Current Assets
Cash & Cash Equivalents
Non-Current Assets
(all in USDm)
Cash and Cash Equivalents development
• Net cash flow from operations USD 36.1 million.
• Cash flow from investing activities USD (96.9) million.
• Cash flow from financing activities USD 120.6 million.
• Net change in cash USD 59.8 million, before exchange rate differences.
• Effect of exchange rate differences USD (19.5) million.
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Scheduled Debt Maturity Profile 09.2015 - 2019
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• The graph reflects committed and assumed mortgage debt for all 8 vessels(1) under construction per end of 3Q
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 instalment of mortgage debt financing in 2017, i.e. low refinancing risk.
• NOK 600 million (USD 70.6 million) of unsecured bonds with maturity in 2018.
• NOK 700 million (USD 82.3 million) of unsecured bonds with maturity in 2019.
[1] Only including wholly-owned vessels under construction.
Future Yard Instalments per end 3Q 2015
• Yard instalments for shipbuilding contracts
are normally paid with 20% during
construction and 80% at delivery.
• 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.
• Cash balance and cash from operations to
cover mismatch between future yard
instalments and committed debt facilities.
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Amounts in USD million
Future Yard Instalments 2015 2016 Total
OSRVs 2.9 0.0 2.9
PSVs 55.0 107.8 162.7
CLV 0.0 57.9 57.9
WIV 0.0 229.8 229.8
Total 57.9 395.4 453.3
Debt facilities 2015 2016 Total
OSRVs 4.9 0.0 4.9
PSVs 42.3 107.6 149.9
CLV 0.0 55.3 55.3
WIV 0.0 217.4 217.4
Total 47.2 380.3 427.5
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• Firm contract backlog for the OSV segment
of USD 1.21 bn.
• 6M 2015 – USD 55 million.
• 2016 – USD 238 million.
• 2017 onwards – USD 915 million.
• Approximately 60% backlog for vessels
covered for the fourth quarter of 2015 based
on both firm and option contracts.
• Firm contract backlog for the Industrial
Segment of USD 258 million.
• 6M 2015 – USD 22 million.
• 2016 – USD 178 million.
• 2017 onwards – USD 58 million.
Contract Backlog - Approximately USD 1.47bn of Firm Contract Backlog as of 30 September 2015.
Operating Margin, Vessels in Operation and Shipbuilding Contracts
OSV Segment
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OSCV AHTS Vessels
Other
vessels
# 75)
# 101)
Vessels in operation
Canadian
fleet
# 53)
1) Incl. two vessels owned by a partner
2) Incl. three 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 termination of three firm contracts for smaller Brazilian built vessels in 3Q 2015.
# 6
Average age of 5 years
Average age of 2 years
Other vessels # 13
Average age of 7 years
PSV (3,600 – 5,100 dwt) # 122)
Installation
support vessel
# 1
4)
OSV Segment - Currently 41 Vessels in Operation
OSV Segment - Employment for vessels in operation
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2015 2016 2017 2018
Vessel Type Ownership 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Siem Sasha PSV 51 %
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 PSV 51%
Siem Marlin OSCV 100%
Siem N-Sea OSCV 100%
Siem Daya 1 1) OSCV 100%
Siem Daya 2 OSCV 100%
Siem Spearfish OSCV 100%
Siem Stingray OSCV 100%
Siem Pearl AHTS 100%
Siem Emerald AHTS 100%
Siem Sapphire AHTS 100%
Siem Aquamarine 2) AHTS 100%
Siem Ruby AHTS 100%
Siem Topaz AHTS 100%
Siem Diamond 2) AHTS 100%
Siem Amethyst AHTS 100%
Siem Garnet AHTS 0%
Siem Opal AHTS 0%
Siem Moxie 3) ISV 100%
Total order backlog in % and USD mill. 40
45% 36% 121 24% 86 15% 51
1) The backlog for Siem Daya 1
includes an assumption of
completion of sale in November
2015.
2) Siem Aquamarine and Siem
Diamond currently placed into
lay-up
3) The ISV Siem Moxie shall
primarily be utilized by the
subsidiary Siem Offshore
Contractors for cable installation
projects within the offshore wind-
farm segment.
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 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. 8
91% 65% 22 23% 8 4% 2
Siem Maragogi OSRV 100%
Parnaiba FSV 100 %
Siem Piatã FCV 100 %
Siem Pendotiba FCV 100%
Siem Caetes FSP 100%
Total order backlog in % and USD mill. 4
100% 100% 17 100% 17 88% 16
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, including Employment
Under Construction Contract Contract option Contract with subsidiary
• Mortgage debt financing secured for all vessels under construction.
• 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 742 million as of end third quarter
2015.
7 Yrs Firm + Options
7 Yrs Firm + Options
Long term contract with Subsidiary
8 Yrs Firm + Options
5 Yrs Firm + Options
5 Yrs Firm + Options
• The North Sea spot market for AHTS vessels and PSV vessels has continued the
negative trend from the previous quarters with softening rates and decreasing
utilization.
• Vessel owners continue to put vessels into lay-up and additional lay-ups are
expected.
• We see similar trends world-wide and the outlook for the OSV market is expected to
remain challenging for several years.
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OSV Segment - Market Outlook
Industrial Segment Operating Margin, Investments
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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 contractual works
completed.
PSV “Siddis Mariner”
ISV “Siem Moxie”
AHTS “Siem Garnet”
3rd Party Vessel
Remaining margin
recorded in 3Q 2015.
Mar, 2012
Consortium EPIC
contract for the 155kV
export cable system
Nordsee One
Planning, preparation
and engineering. The
project is on track for
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.
(i.e no margin in 2015).
Dec, 2012
Installation of 86
submarine cables
providing the inner-
array grid connecting
Project scheduled to be
completed in 4Q 2015.
PSV “Siddis Mariner”
ISV “Siem Moxie”
AHTS “Siem Garnet”
3rd Party Vessel
A positive margin was
recorded in 2014 and in
first three quarters in
2015. The remaining
margin will be recorded
in 4Q 2015.
Feb, 2013
Turnkey EPIC package
of the inner array grid
cable system for 54
wind turbine generators
Planning, preparation and
engineering. Project
scheduled for completion
in 4Q 2016.
Utilising the resources
within the Siem
Offshore Group
At minimum 25%
completion. No margin
will be recorded prior to
installation activities.
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 , 73
submarine composite
cables.
Planning, preparation
and engineering. The
project is on track for
completion by 2Q 2017.
Utilising the resources
within the Siem
Offshore Group
At minimum 25%
completion. No margin
will be recorded prior to
installation activities.
Apr, 2015
Industrial Segment - Siem Offshore Contractors; Submarine power cable activities by main projects
• The Julius project that commenced late April was finalised end August after 4 months in
operation. The operation went very well and was a success for Siem WIS.
• The Managed Pressure Drilling (“MPD”) operation on Gullfaks A commenced 18th of
September and is still ongoing. The initial planned Lista/Shetland reservoir has been drilled
successfully, and Statoil have now decided to also drill the next section using the MPD
technique. Preparation and planning work is ongoing for the Valemon operation. Siem WIS
has received the call-off notice, and discussions are currently ongoing with regards to start-
up of the MPD drilling on the Valemon field.
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Industrial Segment - Siem WIS
• In the third quarter the scientific core-drilling vessel “JOIDES Resolution” recorded
operating revenues of USD 6.5 million (2014: USD 6.6 million) and an operating
margin before administration expenses of USD 3.6 million (2014: USD 3.4 million).
The operating margin as a percentage of revenue was 55% (2014: 52%).
• The client, TAMRF, holds further options to extend the charter until 30 September
2023 on an annual basis.
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2015 2016 2017 2018
Vessel Type Ownership 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Joides Resolution SPV 100 %
Total order backlog in % and USD mill. 7 75% 19 0% 0 0% 0
Scientific Core Drilling Vessel
# 1
Industrial 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 Contractors experienced an increased tendering activity for EPIC-
based contracts for both medium- and high-voltage power cables in the offshore
windfarm (“OWF”) market with scheduled marine installation activities in 2017, 2018
and 2019.
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Industrial Segment - Market Outlook
