ODIM ASA - company presentation

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1 ODIM ASA - company presentation
August 8, 2006 Carnegie Oslo ”DET ER EN GLEDE FOR MEG Å KUNNE PRESENTERE ODIM ASA ETTER AT CARNEGIE TOK TIL FORNUFT () OG STARTET ANALYSEDEKNINGEN AV ET AV OSLO BØRS’ HURTIGST VOKSENDE OLJESERVICE SELSKAP. Det faktum at det kun er et par uker frem til vi offentliggjør tall for andre kvartal legger naturlig nok klare restriksjoner på hvor oppdatert vi kan være m.h.t. det finansielle. Jeg håper jeg gjennom denne presentasjonen likevel kan gi en god oversikt over ODIM ASA.

2 Agenda What is ODIM? Highlights Q1 Goal and strategy
Carnegie Oslo What is ODIM? Highlights Q1 Goal and strategy The business model Value drivers Outlook Key investment considerations Appendix Slide 2 : August 8, 2006 : Meglerpresentasjon - Carnegie

3 About What is ODIM ASA? ODIM ASA is a fast-expanding Norwegian technology company which develops and sells advanced automated handling solutions, primarily cable handling systems and winches for use on offshore and naval vessels. ODIM is listed on Oslo Stock Exchange. The company occupies a leading position in selected market segments, such as seismic surveying and offshore supply. Through its ODIM Spectrum subsidiary in Canada, it is also solidly rooted in the defence sector. In addition to its established market segments, ODIM will be making a heavy commitment to the very promising deepwater market. Vi gjør som sist og deler denne presentasjonen i to deler: Første del er en ordinær gjennomgang av kvartalet med høydepunkter, en rask gjennomgang av markedsutviklingen, ordresituasjonen og utsikter. I del to går vi grundigere gjennom ett av ODIMs forretningsområder. Denne gangen vil Håvard Haanes ta oss gjennom det desidert største og viktigste forretningsområdet – Offshore service vessels. Slide 3 : August 8, 2006 : Meglerpresentasjon - Carnegie

4 Company structure A leading provider in selected niches
Offshore service vessels Marine Mooring & deepwater installation Main activity of ODIM since 1974 Acquisition of Spectrum in 1997 Breakthrough in Q1 2006 Seismic vessel equipment Naval systems for vessels Fibre ropes as substitutes for steel wire Supply vessel equipment Naval systems for helicopters (Energy related systems) Subsea vessel equipment ODIM delivers complete solutions based on strong in-house technological competence Slide 4 : August 8, 2006 : Meglerpresentasjon - Carnegie

5 Financials ODIM group highlights Q1
Revenues 173 per cent growth to NOK million from Q to Q1 2006 EBITDA 360 per cent growth to NOK 27.6 million from Q to Q1 2006 Margins EBITDA-margin of 14.3 per cent in Q compared to 8.5 per cent in Q1 2005 Contracts Several seismic contracts totaling approximately NOK 170 million Subsea contracts for ROV’s with a value of about NOK 23 million Breakthroughs ODIM CTCU contract with Subsea 7 ODIM ABCS contract with the Aker Brevik Yard ODIM kan i Q1 vise til en kraftig økning i omsetning, EBITDA og margin. Dette gjelder uansett hvilken periode vi velger å sammenligne med. Her er prosentvis vekst sammenlignet med tilsvarende kvartal i Dette er sterke tall i et kvartal som tidligere år ikke har vært det sterkeste kvartalet. I forhold til Q4 er økningen 51 prosent i omsetning, en økning på 160 prosent i EBITDA, mens marginen i Q4 var 8,3 prosent). Slide 5 : August 8, 2006 : Meglerpresentasjon - Carnegie

6 Financials Financial highlights Q1
Revenues per segment in NOK million *) EBITDA per segment in NOK million *) Substantial growth in sales and earnings in Offshore service vessels The business area increases share of revenues to 95 per cent No major contracts in Marine Mooring and deepwater installation goes from R&D activity to revenue contributor in 2006 Som følge av den store aktiviteten i offshore markedet utgjør forretningsområdet offshore service vessels en stadig større andel av gruppen, og OSV er nå oppe i 95 prosent. Marine ble ikke tildelt kontrakter i Q1, mens MDI gjennom gjennombruddskontrakten i feburar tar steget fra R&D virksomhet til bidragsyter på omsetning utover i 2006. *) Mooring and deepwater installation contributed with NOK 0.3 million in revenues and a negative EBITDA of NOK 1.9 million in Q1 Slide 6 : August 8, 2006 : Meglerpresentasjon - Carnegie

7 Financials Key figures - quarterly development
Revenues (NOK million) EBITDA (NOK million) EBIT (NOK million) Slide 7 : August 8, 2006 : Meglerpresentasjon - Carnegie

8 Financials Order back log and order intake
Order backlog (NOK million) Order intake (NOK million) Backlog of NOK 450 million in 2006 Rest of backlog mainly for 2007 Options for further NOK 300 million in 2007 A number of new contracts awarded in Q2 515 351 *) Mooring and deepwater installation constitutes NOK 6 million Slide 8 : August 8, 2006 : Meglerpresentasjon - Carnegie

9 Goal and strategy Provider of automated handling systems
Automated streamer handling In courtesy of ODIM ASA ODIM shall contribute to more efficient operations through unique automation technology ODIM shall contribute to careful handling of costly equipment that secures continious operations for capital intensive customers ODIMs clear differentiation strategy is based on: Experience in and knowledge of challenging operations Long term relationships with important players Focus on technology and expertise Slide 9 : August 8, 2006 : Meglerpresentasjon - Carnegie

10 Business model Success factors
New supply ship design In courtesy of Bourbon Offshore Closeness to the market Thorough knowledge to both operations and function Tight relations to the customers Technical innovation Ability to deliver on time Long term planning (3 year plans) Geographically placed in the middle of a strong international cluster within the marine business Relations Competence Recruitment Safe Anchor Handling System In courtesy of ODIM ASA Slide 11 : August 8, 2006 : Meglerpresentasjon - Carnegie

11 Offshore service vessels Seismic is the main value driver
Ramform vessel In courtesy of PGS ASA A number of 3D seismic projects launched 2006: Already fully booked 2007: Starting to fill up 2008: A number of projects already seen 2009: Too early to tell Comfortable through 2008. Still early in this cycle Seismikk er klart det viktigste segmentet for ODIM. Det er en voldsom aktivitet i dette segmentet og 2006 er for lengst fyllt opp, 2007 er i ferd med å bli det, mens vi ser allerede en rekke prosjekter for Når det gjelder 2009 er det for tidlig å si noe ennå. Konklusjonen er uansett at vi er komfortable ut Med andre ord; vi er tidlig i sykelen. ODIM innehar i dag en meget sterk markedsposisjon noe som er basert på forhold som vi har god kontroll på: Langsiktig relasjoner som i flere tilfeller går tilbake til etablering i 1977 og tette samarbeidsmodeller sørger for at ODIM er med på utviklingen av ny teknologi og nye produkter. Slide 12 : August 8, 2006 : Meglerpresentasjon - Carnegie

12 Offshore service vessels A unique position in the seismic industry
Fairlead technology In courtesy of ODIM ASA A world-leading supplier of cable handling solutions Over 30 years experience Innovative ability and highly skilled staff Technology development in close cooperation with customers Will also in future take part in development of new and more efficient systems and ”new” technologies such as: Ocean bottom seismic Seabed logging technology Portfolio enables ”one stop shopping” Slide 13 : August 8, 2006 : Meglerpresentasjon - Carnegie

13 Offshore service vessels Subsea is expected to pick up
ODIM LARS In courtesy of ODIM ASA ODIM is about to position itself Need for more powerful equipment Customers report that automated handling systems from ODIM are more efficient ODIM will become a more complete supplier of subsea systems ODIM will increase market share in this segment Innen subsea er ODIM for alvor i ferd med å posisjonere oss. Driveren her er feltutvikling på stadig dypere vann der subsea installasjoner er en naturlig del. Etter hvert som oljeindustrien beveger seg mot stadig tøffere farvann blir det behov for stadig kraftigere utstyr. Våre kunder rapporterer at ODIMs utstyr er langt mer effektivt enn andre produsenters. Vårt utstyr kan betjenes i tøffere forhold, noe som øker oppetiden, effektiviteten og dermed økonomien i prosjektene betydelig. ODIM tar sikte på å bli en mer komplett leverandør av løsninger til subsea selskapene og dere vil se at vi tar markedsandeler innen dette segmentet. Slide 14 : August 8, 2006 : Meglerpresentasjon - Carnegie

14 Offshore service vessels A broader supply product plattform
ODIM SAHS In courtesy of ODIM ASA ODIM experienced a breakthrough for the automated bulk hose connection systems (ABCS) during Q1 ODIM products set a new standard for safe deck operations on board supply vessels The Hydrakraft acquisition strengthens the position in the supply market ODIM is today in the position to develop an even more complete equipment package for supply customers Innen supply har ODIM opplevd viktige gjennombrudd for våre egenutviklede teknologier som konsentrerer seg om økt sikkerhet for mannskap om bord i supply fartøy. Kjøpet av Hydrakraft utvider porteføljen og gjør ODIM istand til å levere mer komplette utstyrspakker til supply. ODIM har som målsetting å ta markedsandeler i dette segmentet. Slide 15 : August 8, 2006 : Meglerpresentasjon - Carnegie

15 Marine Great opportunities in North America
ODIM AHC In courtesy of ODIM ASA ODIM Spectrum delivers naval detector systems primarily for use onboard navy ships and on navy helicopters Focus on homeland security is main value driver Acquisition of Brooke Ocean Technolgy in Q3 will strengthen North America operations further Broadens product portfolio Increases market access Greater scaling opportunities Slide 16 : August 8, 2006 : Meglerpresentasjon - Carnegie

16 Mooring and deepwater installation Commercial breakthrough in 2006
Fibre Rope Deployment System (FRDS) In courtesy of ODIM ASA The CTCU-contract with Subsea 7 awarded in February constitutes a commercial breakthrough for ODIM Also a technology breakthrough that opens up for a number of other discussions with both the drilling and deepwater installation industries A number of positive discussions held during Q1 ODIM is currently looking into models for further commercialization of this business area Slide 17 : August 8, 2006 : Meglerpresentasjon - Carnegie

17 Mooring & deepwater installation
Outlook Offshore service vessels Diminishing oil reserves and increasing exploration activity are expected to lead to increased seismic activity in 2006 through 2008. Subsea field development in deep waters is expected to increase demand for automated systems for ROV’s and subsea module handling. Increasing oil activity gives a stronger focus on control and safety within the supply segment. In addition the Hydrakraft acquisition makes the supply product portfolio more complete. Marine Revenues for 2006 expected to be at the same level as in Focus on organic growth and selective acquisitions. Mooring & deepwater installation Deepwater The business area is leaving the R&D phase and is entering a first stage of commercialization Slide 18 : August 8, 2006 : Meglerpresentasjon - Carnegie

18 Key investment considerations Why invest in ODIM?
Quoted on OSE on 18 November 2005 In courtesy of ODIM ASA Attractive E&P market outlook Strong order backlog Significant barriers to entry Proven track record Reliable and innovative products with a leading market position Strong and dedicated management team Slide 19 : August 8, 2006 : Meglerpresentasjon - Carnegie

19 Questions and answers

20 Appendix Profit and loss statement
(Figures in NOK million) Q1 2006 Q1 2005 2005 Revenues 193.0 70.7 347.1 Operating expenses -165.4 -64.7 -311.4 EBITDA 27.6 6.0 35.7 Amortizations and depreciations -3.2 -0.6 -2.4 EBIT 24.4 5.5 33.3 Net finance 0.6 -0.2 -3.9 Pretax profit 25.0 5.2 29.4 Taxes 7.1 -0.7 2.0 Net result 32.1 4.5 31.4 Slide 21 : August 8, 2006 : Meglerpresentasjon - Carnegie

21 Appendix Cash flow statement
(Figures in NOK million) Q1 2006 Q1 2005 Net cash flow from operational activities 42.6 4.1 Net cash flow from investing activities -38.6 -1.4 Net cash flow from financing activities -2.2 -3.0 Net change in cash 1.9 -0.3 Cash at start of period 50.8 9.6 Cash at end of period 52.7 9.3 Slide 22 : August 8, 2006 : Meglerpresentasjon - Carnegie

22 Appendix Balance sheet
(Figures in NOK million) Intangible assets 33.0 4.8 5.3 Tangible assets 33.4 10.1 26.9 Financial assets 61.3 4.6 52.1 Current assets other than cash / cash equivalents 197.0 70.3 152.9 Cash and cash equivalents 52.7 9.3 50.8 Total assets 377.4 99.1 288.0 Total equity 166.0 27.1 133.6 Interest bearing debt 40.2 36.7 42.5 Non interest bearing short term debt 171.2 35.3 111.9 Total liabilities and equity Slide 23 : August 8, 2006 : Meglerpresentasjon - Carnegie

23 Appendix Board and management
Board of directors Management Bjarte Bruheim (chairman) Jan Borø Kristin Krohn Devold Nils Are Karstad Lysø Njål Sævik Ellen Olsen Janne-Rita Korsfur (employee rep.) Arve S. Myklebust (employee rep) Jogeir Romerstrand CEO Arild Hatløy CFO Håvard Haanes MD ODIM AS Andrew Roy MD ODIM Spectrum Ltd. Per Ingeberg MD ODIM Alitec AS Allen Queen MD ODIM Houston Inc. Slide 24 : August 8, 2006 : Meglerpresentasjon - Carnegie

24 Appendix Global market presence
Dartmouth/Halifax, Canada ~ 33 employees *) Head Office in Hareid, Norway ~ 128 employees Offices Agents Pennsylvania, USA ~ 4 employees China Peterborough, Canada ~ 50 employees India Houston, US ~ 2 employees Brazil *) Acquisition of Brooke Ocean Technology (BOT) is expected to be finalized during Q3. Slide 25 : August 8, 2006 : Meglerpresentasjon - Carnegie

25 Appendix Largest shareholders (as of 7 August)
AKER INVEST II KS 23,69 % FOUR SEASONS PRIVATE EQUITY AS 7,75 % HAVILA AS 5,07 % BRUHEIM, BJARTE 5,02 % STATE STREET BANK & TRUST CO. 4,10 % SKAGEN VEKST 3,37 % RBC DEXIA INVESTOR SERVICES BANK 3,19 % STOREBRAND LIVSFORSIKRING AS 2,56 % ROME AS 2,26 % MP PENSJON 2,23 % MORGAN STANLEY & CO. INC. 2,00 % ALDEN AS 1,95 % TERRA NORDEN 1,87 % UMOE INVEST AS 1,76 % STATOILS PENSJONSKASSE 1,73 % GAMBAK 1,52 % GOLDMAN SACHS INTERNATIONAL 1,51 % TERRA SPAR 1,44 % HOLBERG NORGE V 1,28 % STATOIL FORSIKRING AS 1,08 % Slide 26 : August 8, 2006 : Meglerpresentasjon - Carnegie