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Subsea Innovations Vision
We will be the most advanced, innovative, reliable and trusted partner to our clients
Delivering leading edge subsea technology solutions-pioneering to the greatest depths and beyond...
…We go deeper!
MARKET SUMMARY
• Oil and Gas Deepwater market is expected to grow strongly, CAPEX over the next 5 years: 209 Bn$
• AUV Market is expected to triple over the next decade
• Commercial sector is expected to grow over-proportionally with 20% CAGR, total GOI in 2015 attainable by Sea Odyssey: 260 M$
• There will be 221 additional units needed by 2011-2015.
Subsea:
450 staff in China, Japan, New Zealand, India, Philippines, Thailand, Malaysia, SouthKorea, Pakistan, Australia.Offshore operations in deeper waters.
New markets:
Segment: • AUV expansion, deepwater applications (15% => 35% mkt share by 2015),
commercial segment focus• subsea instrumentation technology (Sonar Tech Pty)• market expansion into deepwater applications (Ranger 45) – strategic fit
Business opportunties VII
Geography: • UAE (ADNOC), Qatar, Scandinavia plus expansion of client base in Australia and
China (Sonar Tech)
New customers: • Large global O&G owners, operators of submersible fleets: Shell, ConocoPhilips,
Chevron, PetroChina (synergy as Subsea is already there), Southern Cross (AP region), ADNOC, Qatar Petroleum.
• Access to customers in the instrumentation technology segment in Scandinavia, China, Australia (Sonar Tech Pty)
• Opportunity to use inventories of both Sea Odyssey and Sonar Tech Pty within Subsea customer base
Business opportunties VII
Access to New technology / know-how: • AUVs, technology adaptable for commercial and non-commercial applications.• unique thruster system for AUV (Sea Odyssey)• cutting edge Software Defined Sonar technology (Sonar Tech Pty), • Design & Manufacturing of subsea instrumentation technology for monitoring the
condition and response to risers, pipelines, structures (Sonar Tech Pty)• leading position in underwater communication technology (SDS), highly efficient
underwater video transmission
Business opportunties VII
We will create extra value by...
• utilizing the Subsea existing customer base and organizational infrastructure• maximize x-selling opportunities• further building our market position as the most advanced and leading provider of
technological solutions for the subsea segment• AUV good fit and extension of Subsea´s product portfolio• Exploiting synergies in R&D, Manufacturing and support functions, savings 20%. • Financial debt restructuring, possible savings of 30%
Product ProfitabilityVII
Conclusions;-Strong overall revenue growth-AUV Sales growth stagnant, but good margin-AUV Leasing strong growth and good margin-Instrument sales strong growth, but low margin
Possible approaches; -Address AUV production bottleneck-Push AUV Leasing-License Instrument manufacturing
Caution:VII
Developing risk
AUV Maintenance costs are the difference between profit growth and decline Needs to be addressed by contract structure
Overall Profitability:VII
Current Market Share 15% = $22.4MTherefore current market = $150MAssumed market growth 20% p.a.
Human Capital
Organization Overview Company Culture People
- Establishment of Integrated Leadership - Use of existing human resources - Use of existing international network - Establishment of strong worldwide infrastructure
Aquisition P
erspectivesS
trengths and Weaknesses
- Establisment of Cross Functional Dialogue - Build common VMV Policy - Improve Communication
- Incentive Scheme - Teams Structuring - Training and Education
- Fragmented - No International Orientation - Enthusiastic - Incordinated - Inert, not change oriented - Talented - Not Structured ( Lack of integrated Leadership ) - Not Team Alligned- Weak Operational Management - Lack of common perception
SWOT Sea Odyssey
Strength:
1, enviable one of the leaders in AUV commercial market
2, advanced and deployable technology
3, system is adaptable for both commercial and non-
commercial applications
4, IPR for AUV and underwater instrumentation
Weakness:
1, insufficient manufacturing capacity
2, failed to keep up with the growing demand for its AUV
3, little has been done since its acquisition to integrate
and re-align the Sonar Tech business
Opportunity:
1, a strong & growing market for AUV
2, future value for AUV technology being evident in
applications of oil & gas, ocean research and naval
market
Threat:
1, losing orders and market share to its competitors in
the rapidly-growing and highly-lucrative global AUV
leasing market
2, restraints of slow economic growth
3, credit tightness
4, specialist workforce shortages
5, maintenance cost increasing
RecommendationVII
.
Objective is 35% Market Share by 2015
35% of $259M ~ $90M
Assuming current profitability of 11.6% …
2015 EBITDA potentially $10.5M
Plus upside of synergies and cost savings
But 7 to 10 times current EBITDA is $18.2 to 26M
We hereby ask for permission to bid up to: $26M