Eneti Inc. First Quarter 2023 Earnings Presentation - April 27, 2023

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Eneti Inc. First Quarter 2023 Earnings Presentation - April 27, 2023
Eneti Inc.
First Quarter 2023 Earnings Presentation
April 27, 2023
Eneti Inc. First Quarter 2023 Earnings Presentation - April 27, 2023
This presentation includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. These
forward-looking statements reflect Eneti Inc.’s (“Eneti’s”) current views with respect to future events and financial performance. The words “believe,” “anticipate,” “intend,”
“estimate,” “forecast,” “project,” “plan,” “potential,” “may,” “should,” “expect” and similar expressions identify forward-looking statements. The forward-looking statements in this
presentation are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management’s examination of historical
operating trends, data contained in Eneti’s records and other data available from third parties. Although Eneti believes that these assumptions were reasonable when made, because
these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond Eneti’s control, Eneti cannot assure
you that it will achieve or accomplish these expectations, beliefs, projections or future financial performance.

Risks and uncertainties include, but are not limited to, the failure of counterparties to fully perform their contracts with Eneti, the strength of world economies and currencies, general
market conditions, including fluctuations in charter hire rates and vessel values, changes in demand in the WTIV markets, changes in Eneti’s operating expenses, including bunker prices,
drydocking and insurance costs, the fuel efficiency of our vessels, the market for Eneti's vessels, availability of financing and refinancing, charter counterparty performance, ability to
obtain financing and comply with covenants in such financing arrangements, changes in governmental and environmental rules and regulations or actions taken by regulatory authorities
including those that may limit the commercial useful lives of wind turbine installation vessels, potential liability from pending or future litigation, general domestic and international
political conditions, potential disruption of shipping routes due to accidents or political events, changes in demand for wind turbine installation vessels, and other important factors
described from time to time in the reports Eneti files with, or furnishes to, the Securities and Exchange Commission, or the Commission, and the New York Stock Exchange, or NYSE.
Eneti undertakes no obligation to update or revise any forward-looking statements. These forward-looking statements are not guarantees of Eneti's future performance, and actual
results and future developments may vary materially from those projected in the forward-looking statements.

Earnings before interest, taxes, depreciation and amortization (“EBITDA”), earnings before interest and taxes (“EBIT”), adjusted net income and related per share amounts, as well as
adjusted EBITDA, adjusted EBIT and TCE Revenue are non-GAAP performance measures that the Company believes provide investors with a means of evaluating and understanding how
the Company’s management evaluates the Company’s operating performance. These non-GAAP financial measures should not be considered in isolation from, as substitutes for, nor
superior to financial measures prepared in accordance with GAAP.

Unless otherwise indicated, information contained in this presentation concerning Eneti’s industry and the market in which it operates and expects to operate, including its general
expectations about its industry, market position, market opportunity and market size, is based on data from various sources including internal data and estimates as well as third party
sources widely available to the public such as independent industry publications, government publications, reports by market research firms or other published independent sources.
Internal data and estimates are based upon this information as well as information obtained from trade and business organizations and other contacts in the markets in which Eneti
operates and management’s understanding of industry conditions. This information, data and estimates involve a number of assumptions and limitations, are subject to risks and
uncertainties, and are subject to change based on various factors, including those discussed above. You are cautioned not to give undue weight to such information, data and estimates.
While Eneti believes the market and industry information included in this presentation to be generally reliable, it has not independently verified any third-party information or verified
that more recent information is not available.

Eneti Inc. First Quarter 2023 Earnings Presentation - April 27, 2023

 1. Q1-2023 Highlights

 2. Commercial & Market Update

 3. Financial Highlights

 4. Conclusion

 5. Q&A

1. Q1-2023 Highlights
Q1 2023 Highlights
                                  Q1-23 Highlights                                              Commercial Contracts & Updates

 Q1-23 Financial Results                                                               Existing Fleet

          •     Revenue: $13.8 million                                                      •   Signed a contract in NW Europe for
                                                                                                between 41 and 53 days of employment for
          •     EBITDA: -$10.3 million(1)                                                       one of its NG2500-class vessels that will
                                                                                                generate between approximately $3.3
          •     Net Income: -$17.6 million
                                                                                                million and $4.1 million of revenue in 2023
          •     Net Debt: -$57.5 million (2)
                                                                                       Signed MOU with Transocean
          •     Dividend of $0.01 per share
                                                                                            •   Signed a non-binding MOU with intention
                                                                                                to form a joint venture company that will
                                                                                                engage in offshore wind foundation
                                                                                                installation activities.

                                                                                            •   The establishment of the JV would provide
                                                                                                the conversion of up to two vessels into
                                                                                                floating offshore wind foundation
                                                                                                installation platforms

  1)   Please see the explanation of Non-GAAP Measures in Company’s earnings release
  2)   Includes $2.1 million of restricted cash
2. Commercial & Market Update
Revenue Backlog & Project Pipeline

 Realized Revenue & Backlog for 2022-2023 at Different Times                                                                        Completed & Future Projects as of April 27, 2023

($USD millions)
     Q1-22A       Q2-22A      Q3-22A      Q4-22A    Q1-23A     Firm Backlog    Option Backlog

                                                                                                    Vessel            J         F        M         A        M        J        J       A   S   O   N   D
                                                                         $312.2                     Leviathan
                                                                          $10.3                     Kraken
                                $272.3         $273.0                                               Hydra
                                 $27.3         $18.0                                   $97.3

                  $192.9                                     $112.8                    $13.8
                   $12.2                                                                            Vessel            J         F        M         A        M        J        J       A   S   O   N   D
                                                                          $46.6        $46.6
                                               $171.4                                               Scylla
                                 $222.6                                                             Leviathan
   $104.3                                                    $69.2        $69.2        $69.2
                   $180.7                                                                           Hydra

    104.3                                      $61.2         $61.2        $61.2        $61.2        Excludes contracts under discussion for 2023
                                                                                                         Firm Period
                                 $22.4         $22.4         $22.4        $22.4        $22.4           Optional Period
  As of Nov       As of Feb     As of May     As of Aug   As of Nov 2,   As of Feb   As of April
   11,2021         23,2022       12,2022       3,2022         2022        9,2023      27, 2023

        Some contracts are denominated in foreign currency and the USD being presented may therefore change. Revenue backlog excludes project costs and contracts under discussion.
Small but Critical Cost in a High Growth Industry

 Offshore Windfarm Capex



                                                               5%           4%           4%           4%            4%             4%
                                                                                                                                                 3%            2%             2%

  Turbine      Foundation      Contingency     Offshore    Development Array Cable Export Cable Export Cable    Foundation       Offshore      Onshore       Turbine      Array Cable   Construction   Other
  Supply         Supply             &         Substation      to FID   Installation   Supply     Installation   Installation    Substation    Connection   Installation     Supply         phase
                               Construction     Supply                                                                         Installation                                              insurance

     Turbine installation only accounts for ~2% of the offshore wind farm capex, yet is critical to first power

  Source: 4C Offshore April 2023
Vessel Demand to Outpace Capable Supply
 WTIV Demand vs Supply of 12MW+ Capable Vessels
 Demand (# of vessels)

  35                          Under 10 MW Demand                       10-12 MW Demand             12-14 MW Demand          15 MW+ Demand   Foundation Demand          12MW+ Supply







                2022                    2023                    2024                    2025          2026           2027            2028       2029            2030             2031

  Source: 4C Offshore April 2023
  Figures include two foundation vessels under construction and exclude Chinese projects/vessels
3. Financial Highlights
Revenue, Operating Expenses & Project Costs by Quarter
                                        Revenue & Operating Expenses                               (1)                                                                                   Revenue by Quarter (Excl Project Costs)             (1)

 ($USD millions)                                Revenue          Opex & Project Costs                                                                      ($USD millions)
                                                                                                                                                                                                                   Firm   Options
                                               $69.2                                                                                                         $50.0
  $60.0                                                                                                                                                      $40.0                                         $35.7                     $1.8
                                                                                                                                                                                                            $1.8                                   $31.3
  $40.0                                                                                                                                                      $30.0

                                                            $22.0                          $20.5                                                             $20.0
                              $18.8                                                                                       $18.9                                                                                                     $38.9
  $20.0                                                                                                      $13.8                                                                 $13.8                   $34.0
                       Q2-22                         Q3-22                          Q4-22                          Q1-23                                       $0.0
                                                                                                                                                                                   Q1-23                   Q2-23                    Q3-23          Q4-23

                       Quarterly Vessel Operating Expenses (Excl Project Costs)                                                                                                                   Estimated Project Costs by Quarter         (1)

  ($/day)                                      Q2-22         Q3-22         Q4-22        Q1-23                                                               ($USD millions)

$80,000                                                                                                                                                        $6.0
                       $59,085 $59,370
$60,000                                    $55,511                                                                                                                                                         $4.0
                                                                            $46,147                                                                            $4.0
                                                                  $36,615             $37,422
                                                                                                             $25,996 $26,394 $27,700
                                                                                                   $22,634                                                                                                                                         $1.9

                             Scylla                                   Zaratan                                   NG 2500's
                                                                                                                                                                                  Q1-23A                   Q2-23E                   Q3-23E         Q4-23E

          1) Some contracts are denominated in foreign currency and the USD being presented may therefore change. Revenue and project costs are estimates and subject to change based on project timing.

Newbuilding Program Capex & Debt Finance

                      Newbuild Capex & Expected Debt Finance                                                                                          Newbuild Capex Schedule
 ($USD millions)                                                                                                 ($USD millions)

     Contract Price    Completed Payments         Remaining Payments           Expected Debt Finance                                                             Nessie    Siren


                           $98.5                                                                                                                                                                            $195

     $654.8                                                           $436.0

                                                $556.3                                                                                                                                   $198               $195

                                                                                                                          $32                                       $32

  Contract Price   Completed Payments        Remaining NB          Expected NB          Remaining NB                     1H-23                2H-23                1H-24                2H-24               1H-25
                                               Payments        Financing at Delivery Payments Net of NB
                                                                        (1)               Financing

      1) Company has received an underwritten proposal from two institutions for a $436 million term loan facility to finance approximately 65% of the purchase cost of the Company’s two WTIV newbuilds.
First Newbuild Employment Contract & Potential EBITDA Generation

                 Contract Awarded on First Newbuild Vessel                                                                 Potential EBITDA Generation Per Newbuild Vessel (1)

 •      In December 2022, the Company signed a contract with an                                                     ($USD millions)
        undisclosed client to transport and install turbines for a project
        in the first half of 2025

            •     The contract will be performed by the Company’s first                                                                $58.0
                  newbuild vessel, to be named “Nessie”, which will be
                  delivered in the fourth quarter of 2024

            •     The engagement is expected to be between 226 and 276
                  days and generate approximately €60 million to €73
                  million of net revenue after forecasted project costs

            •     The second newbuilding vessel, to be named “Siren”, is
                  expected to delivered in the second quarter of 2025 and
                  is in discussion for its first employment contract

            •     The average contract price per newbuilding vessel is
                  $327.4 million
                                                                                                                           $220,000   $240,000        $260,000          $280,000   $300,000
                                                                                                                                                 Charter Rate ($/day)

     1) Assumes 365 days per year, $45,000 per day in vessel operating expenses and 85% utilization for revenue days.
4. Conclusion
Investment Highlights

     The Only U.S.-Listed
                                  Developed Global            Experienced
     Company Focused on
                               Platform (Europe, Asia    Management Team with
      Installing the Next
                               and U.S.) Designed for    Customer Relationships
      Generation of Wind
                                   Scale & Growth             that Matter

                                                         Limited Availability of
      Increasing Demand &        High Specification         WTIVs creates a
     Higher Rate Outlook for    Newbuilds on Order             Favorable
       Existing Asset Base     with Attractive Returns      Supply/Demand

5. Q&A
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