Quarterly presentation Q2 2016

DOF Subsea Group

DOF Subsea Group

DOF Subsea Group – in brief • Fleet

• One of the largest subsea vessel owners in the world

• Owns and operates a fleet of 21 vessels, plus 4 newbuilds on order

• In addition, 2 chartered-in vessels as of 30th June 2016

• Normand Reach redelivered in July 2016

• The market value of owned vessels in operation is about NOK 16 billion, with a value

adjusted age of approx. 6.0 years

• Operates 63 ROVs and 4 ROVs on order

• Global organization

• Head office in Bergen

• Regional offices in Australia, Singapore, Norway, UK, Angola, US, Canada and

Brazil

• Total of 1 590 employees

• Subsea employees: 1 590

• Of which engineers and subsea project staff: 940

3

Asia Pacific Atlantic Brazil North America

355 653 344 238

DOF Subsea Group – in brief

4

Key figures

Back-log firm

Back-log incl. options

NOK 21 billion

NOK 39 billion

Market value of fleet NOK 16 billion

Condensed figures 5 last quarters

* According to internal Management reporting

0%

5%

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30%

35%

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500

1 000

1 500

2 000

2 500

Q2 2013 Q2 2014 Q2 2015 Q2 2016

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Q2 last four years

Operating revenue EBITDA EBITDA margin

Recent events

• Fleet

• First of 4 PLSVs, Skandi Açu, on-hire with Petrobras from 13th of August

• Redelivered Normand Reach

• Contracts

• Shell Australia awarded DOF Subsea an IMR contract in Asia Pacific for 5 years firm plus 2 x 2

years options

• Several ROV and diving contracts awarded Skandi Achiever in the North Sea and North America

region, securing utilization until end of October 2016

• Several contracts awarded in Asia Pacific, securing utilization of Skandi Hercules and Skandi

Singapore

• Petrobras has extended the RSV contract for Geograph for 18 months

• Petrobras awarded Skandi Vitoria a contract, securing utilization of the vessel until end of 2016

• Petrobras awarded Skandi Niteroi a contract for 8 months firm plus 8 months option

• Finance

• Repaid outstanding amount of DOFSUB05 at maturity in April

• Refinancing of Skandi Hercules

• Drawdown of 2nd tranche on Skandi Acu at final delivery in April 2016

5

Skandi Açu

• First of 4 PLSVs in joint venture with Technip on-hire with Petrobras

from 13th of August

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Skandi Açu

Build 2016

Design VARD 3 05

Type Subsea / PLSV

LOA 146.0 m

Breadth 30.0 m

Draught 8.5 m

DWT 10 800t

Accommodation 120 persons

TLS tower 650t

Shell Prelude 5-year IMR contract

• Shell Australia awarded DOF Subsea a 5 year + 2 x 2 year options for fulltime

Underwater Services and Multi-Purpose Supply Vessel (MPSV) Services to the

Prelude FLNG facility, offshore Australia.

• Combination of vessel expertise, subsea operations track-record and shared safety,

environmental and local-content objectives made DOF Subsea competitive.

• Established local presence and organizational expertise - combination of Australian

and Norwegian teams

• Client opted for an integrated solution with one supplier

• Differentiated offering from DOF resulted in contract award

7

Integrated work scope:

• Vessel charter

• Project Management and Engineering

• IMR program services

• Subsea inspection/intervention services

• Survey Services

• Data Management / Reporting services

• ROV and tooling services

• Asset management

• Platform Supply services

• Non-planned maintenance

• Emergency response

Client and location:

Shell Australia is part of The Shell Group, a global

group of energy and petrochemical companies. Shell’s

world-leading FLNG technology is to be deployed at the

Prelude FLNG facility – it is the largest floating facility

ever built, it will produce, liquefy, store and transfer

LNG at sea. The facility will be located 475 kilometres

north-north east of Broome, in Western Australia.

DOF Subsea Group overview

8

2005

Established 21 216

NOK million

total assets

Modern

high-end fleet

and equipment

21

owned subsea

vessels

4

vessels

on order

1

vessels

on charter

63 ROVs,

4 ROVs

on order

First Reserve

Corporation (49%)

1 590 highly-skilled

employees

DOF Subsea

DOF Subsea Holding (100%)

DOF ASA (51%)

9

Our global footprint

ATLANTIC

NORTH AMERICA

BRAZIL ASIA PACIFIC

Macaé

Rio de Janeiro

Buenos

Aires

Houston

St John’s

Aberdeen

Bergen

Luanda

Singapore

Manila

Melbourne

Jakarta

Brunei Kuala Lumpur

Darwin

Perth

344 9

653 7

238 3

355 3

DOF Subsea timeline

10

DOF Subsea fleet evolution

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2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

18 000

0

4

8

12

16

20

24

28

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

NO

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illio

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Num

ber

of opera

ted v

essels

Owned vessels Chartered vessels MV of owned fleet (r.a.)

MV of fleet

2005 - 2010

Fleet: From 11 to 21 vessels • DOF Subsea was established in 2005

• DOF Subsea was listed on the Oslo Stock Exchange in 2005, and taken private by DOF and FRC in 2008

• Established a global footprint, present in all major offshore oil & gas regions

• Built a global organization through organic growth and acquisitions

• Developed global Business Management System, and achieved global ISO certification

• JV with Technip

• Expanded the fleet by taking delivery of 10 newbuilds

2011

Fleet: 24 vessels • Feb: Delivery of

Skandi Niteroi

• May: Sale of Geosounder

• Jun: Acquisition Skandi Constructor

• Jul: Delivery of Skandi Skansen

• Sep: Delivery of Skandi Singapore

2012

Fleet: 25 vessels • Mar: Sale of OSCV

newbuild

• Mar: Signed OSCV newbuild contract

• Mar: Chartered Skandi Hawk

2013

Fleet: 26 vessels • Feb: Signed OSCV

newbuild contract

• Feb: Chartered Harvey Deep-Sea

• Mar: Sale of Geobay

• Jun: Delivery of Skandi Bergen

• Aug: Signed newbuild contracts for 4 x PLSVs

• Nov: Chartered Normand Reach

• Global ISO recertification

2014

Fleet: 28 vessels • Jan: Delivered

Skandi Bergen to new owners

• Mar: Chartered Ross Candies

• Mar: Chartered Chloe Candies

• Nov: Delivered Skandi Skolten to new owners

DOF Subsea employees

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2 000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Nu

mb

er

of e

mp

loye

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Employees

2015

Fleet: 24 vessels • Feb: Delivered

Skandi Aker to new owners

• Mar: Delivery of Skandi Africa

• May: Acquired Skandi Hawk

• June: Sale of Skandi Arctic

• Nov: Sale of Skandi Inspector

* As per 31st March 2016

2016

Fleet: 22 vessels • Jan: Delivered

Skandi Protector to new owners

• Apr: Delivery of Skandi Açu

• July: Third party vessel Normand Reach redelivered

Modern high-end fleet

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• Majority of the fleet delivered from 2007 and onwards

• Modern fleet with a value adjusted average fleet age of approx. 6.0 years

• High-end vessels, capable of a wide scope of worldwide operations

Skandi Africa, Ship of the Year 2015

Skandi Acu, PLSV built 2016

Business management

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• Global business management system accredited by DNV to:

• Business Management System ISO 9001:2015

• Health and Safety System OHSAS 18001:2007

• Environmental Management System ISO 14001:2015

• Sustainability reporting according to Global Reporting Initiative G4 implemented

• Achieved Carbon Disclosure Project reporting result of 99B (report for 2014)

• IMCA International Contractor membership

• ISO recertification by DNV GL achieved during Q2 2016

2009

HSEQ key statistics

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• Substantial HSE-improvement since 2005

• Substantial increase in activity level measured by total man-hours

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6 000 000

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2,0

4,0

6,0

8,0

10,0

12,0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

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urs

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uen

ce:

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den

t /

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00

00

0 m

an-h

ou

r

DOF Subsea HSEQ-statistics

LTI TR Man-hours

Q22014

Q22015

Q22016

Subsea projects 1 390 1 327 1 227

Chartering of vessels 574 634 433

Total 1 963 1 962 1 660

0

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Chartering of vessels Subsea projects

DOF Subsea – Projects • DOF Subsea has built a global

presence over the last 10 years

• DOF Subsea has developed the

project/IMR business gradually

• Increased project activity and

complexity driving growth

• IMR focused operations

• Project business going forward

• Gradually increase the

complexity of work done

• Build a larger project

back-log with focus on

IMR

• Mix between owned and

chartered-in vessels

14

* According to internal Management reporting

Operating income by segment

2013 2014 2015

Subsea projects 4 971 5 187 4 810

Chartering of vessels 1 609 2 236 2 442

Total 6 580 7 422 7 252

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Chartering of vessels Subsea projects

Contract coverage

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• By end of June 2016, the total back-log (incl. options) was approx. NOK 39 billion

• Firm contracts count for approx. NOK 21 billion

• Options count for approx. NOK 18 billion

* Figures based on remaining back-log from beginning of July 2016

2016 2017 2018 2019 2020 2021 2022 2023

Firm 21 19 16 13 10 7 6 4

Option 18 18 18 17 16 16 15 14

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Financials

Condensed profit & loss (IFRS 11)

• Operating income was NOK 1 623 million in Q2 2016, down from NOK 1 865 million in Q2 2015

• EBITDA (excl. gain on sale of assets) was NOK 485 million in Q2 2016, down from NOK 514 million in Q2 2015

• EBIT (excl. gain on sale of assets) was NOK 216 million in Q2 2016, down from NOK 325 million in Q2 2015

17

Condensed balance sheet (IFRS 11)

• From year-end 2015, non-current assets have increased to NOK 15 610 million from NOK 15 417 million

• From year-end 2015, total receivables have increased to NOK 1 623 million from NOK 1 560 million

• From year-end 2015, cash and cash equivalents have decreased to NOK 1 085 million from NOK 1 464 million

• Total liabilities as per 30th June 2016 were NOK 11 988 million

• The net interest bearing debt as per 30th June 2016 was NOK 9 286 million

• The book equity was NOK 6 330 million, giving a book equity ratio of 34.6 % to total assets as per 30th June 2016

18

Quarterly performance (excl. asset sales)

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* According to internal Management reporting

0%

5%

10%

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40%

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500

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Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016

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Operating income EBITDA EBITDA margin

NOK million Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016

Operating income 1 384 1 354 1 288 1 225 1 679 1 804 1 871 1 530 1 963 1 904 2 025 1 656 1 962 1 991 1 642 1 406 1 660

EBITDA 470 489 417 329 471 595 550 502 543 552 502 458 515 553 516 456 510

EBITDA margin 34,0% 36,1% 32,4% 26,9% 28,1% 33,0% 29,4% 32,8% 27,7% 29,0% 24,8% 27,7% 26,2% 27,8% 31,4% 32,4% 30,7%

Current assets 2 962 2 704 2 612 3 077 3 319 3 119 3 470 3 247 3 252 2 998 4 223 3 414 3 414 3 674 3 752 2 900 3 010

Non-current assets 16 230 16 056 16 012 16 043 16 344 16 330 16 340 16 012 16 151 16 215 15 796 16 726 16 578 16 447 16 818 17 652 18 206

Total assets 19 192 18 760 18 624 19 120 19 663 19 450 19 810 19 258 19 403 19 213 20 019 20 140 19 992 20 121 20 570 20 552 21 216

Current liabilities 2 495 2 260 1 989 2 000 2 805 2 808 3 167 3 470 3 741 3 607 4 505 4 139 4 577 4 492 3 650 2 991 3 022

Non-current liabilities 11 735 11 439 11 534 12 051 11 862 11 474 11 427 10 126 9 701 9 668 9 402 9 924 9 009 9 988 11 228 11 482 11 864

Equity 4 963 5 061 5 102 5 069 4 996 5 167 5 216 5 662 5 962 5 938 6 112 6 077 6 405 5 641 5 692 6 078 6 330

Total equity and liablilites 19 192 18 760 18 625 19 120 19 663 19 449 19 810 19 258 19 404 19 213 20 019 20 140 19 991 20 121 20 570 20 551 21 216

Debt maturity profile

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Bond Loan - DOFSUB07

- NOK 1 300 million

- Maturity May 2018

• The figures reflect amortization and balloon payments on outstanding debt

Debt maturity profile, 2016E – 2021E

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2016E 2017E 2018E 2019E 2020E 2021E Thereafter

NO

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Bond Loan Bank Debt Balloons

Risk mitigating factors

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Risk mitigating

factors

Global presence provide access to more market opportunities

High back-log provides stable

earnings

Diversified blue-chip customers

reduce counterpart risk

Value added services provide

increased earnings potential

Modern, high-end fleet

provides safe collateral

Strong bank and investor

relationships provide access

to credit

Spare leveraging capacity on existing fleet

Sale of vessels confirms values

Weaker subsea market

Outlook

Challenging fundamentals for subsea activity

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• Demand

• Volatile oil price

• Continued cost focus by oil companies

• Reduced offshore E&P spending

• Uncertain project timing

• Counterpart risk

• Increased focus on price, technologically

advanced and flexible vessels and

engineering capabilities

• DOF Subsea owns the world’s most

sophisticated fleet and has a global

organization

Challenging fundamentals for subsea activity

24

• Supply

• Over-supply of vessels

• Several vessels in lay-up

• Number of subsea contractors to be reduced

Weaker market

conditions

Reduced demand

Over-

supply

Challenging fundamentals for subsea activity

25

Weak subsea

market and pressure

on margins

Lower IMR activity globally

Lower rig activity and

delayed field development

Reduced E&P

spending

Volatile oil price

Number of niche

subsea players

Improved access to qualified

personnel

Over-supply of subsea vessels

DOF Subsea has mitigated the weaker fundamentals through a global footprint, a diversified

portfolio of clients, strengthened balance sheet and a back-log of NOK 39 billion

Thank you!