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Investor PresentationSeptember 2017
2ADES INTERNATIONAL HOLDING | Investor Presentation
Investment Case
Cycle-Proof Business Model
Highly Experienced
Management Team
Favourable Industry
Fundamentals
Solid Growth Plans
Lean Cost Structure
Impeccable HSE Record
Strong O&G Competitor in
the Region
3ADES INTERNATIONAL HOLDING | Investor Presentation
25 Years 2012
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42 Years 2012 20 Years 2017 10 Years 2016
Highly Experienced Management Team
• Senior Vice President, Invensys Operations Management (Now Schneider Electric)• Senior Vice President, Global Delivery• Director, Global Engineering Excellence Centers• Ph.D. Systems Engineering and Control, Case Western Reserve University, USA • M.Sc. Electrical Engineering and Control, Faculty of Engineering, Cairo University,
Egypt• B.Sc. Electrical Engineering, Faculty of Engineering, Cairo University, Egypt
Years of Experience Year Joined ADES
Mohamed KhalilVP Operations
Ahmed El-KhatibChief Financial Officer
Omar SalehChief Strategy Officer
Dr. Mohamed FaroukChief Executive Officer
• CEO, Power Bridge Resources Group LTD
• Senior Commercial Manager Africa, Dow Chemical Company
• Commissioning Lead Projects Engineer, BG Group plc
• MBA from Stanford University, USA
• Business Development Director for Middle East, BP
• Head of Global Projects Organisation, BP
• MSc in Computer Science, Howard University, USA
• MBA from the American University in Cairo, Egypt
• Branch Manager, Northern Offshore Drilling Company
• Middle Manpower & Workforce Planning Manager, Transocean
• B.Sc. in Mechanical Engineering from Cairo University, Egypt
4ADES INTERNATIONAL HOLDING | Investor Presentation
ADES at a Glance
Group Overview Geographical Footprint
USD 88 MNH1 2017 Revenues▲46% YoY
USD45 MNH1 2017 EBITDA(1)
▲43% YoY
51%H1 2017 EBITDA (1) Margin
90%+Av. Fleet Utilization
Since 2012
0.45Incident Rate
Since Inception
>1,200Workforce
Note (1): Adjusted EBITDA - operating profit for the year before depreciation and amortization, foreign exchange (gain)/loss, provision for impairment of accounts receivable, provisions and impairment of assets under constructionNote(2): Pre-qualifications in Kuwait and UAE are currently in progress
Leading MENA-based O&G Service Provider
ADES International Holding (“ADES” or the “Group”) is a leading oil & gasdrilling and production services provider in the Middle East and North Africa(“MENA”) that focuses on creating value for E&P players in the region
The Group’s constantly evolving portfolio of services primarily includesoffshore and onshore contract drilling or workover and production services
Differentiated Low-Cost Business Model
ADES specializes in acquiring and refurbishing legacy ‘fit for purpose’ offshoreassets which (among other cost-saving measures) enable the Group to offercompetitive rates to its clients
Backed by a highly capable in-house refurbishment and maintenance team,the Group benefits from a highly-skilled, low-cost, largely Egyptian workforce
Customer-Centric Approach
As a service company, the Group’s business revolves around providing tailoredsolutions and superior service to its clients characterised by its commitment toglobal industry standards and ever-expanding services & solutions
Algeria2 onshore drilling rigs
Egypt7 offshore drilling rigs1 MOPU
KSA3 offshore drilling rigs
AlgeriaEgypt
KSA
KSA EgyptUAE AlgeriaMexico Kuwait India
Pre-qualifications (2)
The Group operates in largely pre-selected markets with natural barriers to entry with a focus on low risk, non-harsh shallow water environments
Iraq
Group Highlights (H1 2017)
5ADES INTERNATIONAL HOLDING | Investor Presentation
Offshore jack-up barge used to provide offshore support
services to GUPCO
Accommodation, catering and equipment rental to its
offshore rig clients
Mobile offshore platform equipped with production
and process facilities in conjunction with an FSO (used as a storage unit)
Offshore & onshore drilling & workover services leased
at operating day ratesDescription
Location
Onshore Offshore
KSA EgyptAlgeria Egypt Egypt KSA Egypt
ADES Services
Drilling & Workover MOPU Jack-up Barge & Projects
Other Services
Note(1): Excludes Headquarters employees
877 120 50 n/aEmployees(1)
Revenue Contribution in 1H2017
77.2% 14.6% 6.2% 2.0%
6ADES INTERNATIONAL HOLDING | Investor Presentation
Ramped up asset base, expanded geographically
Perfected business model of securing legacy assets and operating with low cost structure
Offshore penetration
Early formation
Corporate Strategy Evolution
1997 - 2003 2004 - 2010 2011 2012 2013 2014 2015 2016 2017+
Scale up operations and introduce new offerings in existing markets, expand geographically
1 2 3 4 6 11
USD 10 MN
USD 134 MN13.4x Revenue Growth
Onshore Drilling & Workover
Jack-up Barge
ROV
Offshore Drilling & Workover
Projects
MOPU
Denotes continuing services Denotes discontinued services
Denotes number of Chartered Rigs
7ADES INTERNATIONAL HOLDING | Investor Presentation
Lean Cost Structure
Optimized Cost Structure Across all Operating Environments
Allowing the Group to operate its fleet within some of the lowest production cost offshore oil fields
Onshore Shallow Water Deep Water Ultra Deep Water
Onshore Rigs Jack-up Rigs(Up to 400ft)
Comprehensive Market IntelligenceGained from the Group’s robust relationships with multiple stakeholders including rig owners, brokers, regulators and banks, consistently seeking opportunities for assets
Streamlined Decision-making ProcessAbility to swiftly act on opportunities allowing the Group to outpace competition in any auction process and achieve attractive pricing for legacy rigs in good condition
In-house Technical CapabilitiesThe Group manages the refurbishment and maintenance jobs in-house as opposed to appointing third party service providers to perform a standard turn-key project
1 2 3
Semi-submersible Rigs(<10,000ft) Drill ships
(>10,000ft)
Admarine II Asset Acquired 2004 34%
Admarine III Asset Acquired 2012 22%
Admarine IV Asset Acquired 2013 16%
Admarine V Asset Acquired 2013 22%
Admarine I Asset Acquired 2014 52%
Admarine VI Asset Acquired 2015 29%
Admarine 8 Asset Acquired 2015 23%
Admarine 88 Asset Acquired 2016 18%
Admarine 261, 262, 266 Asset Acquired 2016 29%
Acquisition of Legacy Offshore AssetsAcquisitions & associated refurbishment cost c. 20-50% of the price of similar new rigs
% of Ref. Price(1)
Note(1): Reference prices for Admarine I,II,III,IV,V and VI as of July 2015, Admarine 8 as of November 2015, Admarine 88 as of December 2015 and Admarine 261,262 and 266 as of August 2016
CORE NON-CORE
8ADES INTERNATIONAL HOLDING | Investor Presentation
Health, Safety and Environmental Responsibilities
HSE Overview HSE Incident Statistics
2016 - Date
Total Working hours (‘000) 2,307
Recordable injury rate (200,000 man-hours) 0.45
IADC worldwide RECRD incident rate up to date 0.58
• As an oil and gas service provider, ADES is committed to complying with occupational health, safety and environmental care standards as a sign of its commitment to excellent quality service
• The HSE Management System provides ongoing identification, prioritization and control of any risk that may arise. This system establishes a continuous improvement process for the implementation of the HSE policy, leadership expectations and core values
• The system has five distinctive interrelated elements:
Improve Plan
Perform
Measure
Act
Environmental Responsibilities
Consistent internal
policies and procedures review to
ensure effectiveness
Elimination of potential incidents through
management controls and
risk assessments
Reduction of materials
consumption to limit waste
generation
Procedure and input
adjustments with the aim of
minimizing environmental
impact
Developed and implemented
an Environmental Management System to be
followed by all employees
1 2 3 4 5
The Waste Management program ensures that ADES complies with international and local regulations and that standard waste management practices are implemented. Periodical internal audits are performed to monitor the correct implementation of waste management procedures
9ADES INTERNATIONAL HOLDING | Investor Presentation
IOCs
NOCs
Independents
ABS
ISO Certification
Company Pre-Qualifications
Memberships
Strong O&G Competitor in the Region
ADES’s diverse client relationships have been forged by seeking pre-qualification status to
provide drilling and workover services well before a contract is secure, thereby creating a significant
barrier to entry.
Solid Track RecordRanked #3 Offshore Jack-Up Driller in MENA (1)
High Profile Client BaseComprising a diverse range oil companies
World Class QualificationsAdhering to Global best practice
Note (1): By number of rigs; Note / Source: Clarkson's Research
4
4
4
5
6
6
7
9
10
11
11
11
15
18
43Wells Drilled
ABS Class Certificate
The Group’s operational drilling
offshore fleet is either ABS certified or
currently pending recertification [2]
ISO 9001:2008 Certification
ISO 29001:2012 Certification
>90%Fleet utilization vs. market average of 67%
Note (2): Only three rigs are pending recertification
10ADES INTERNATIONAL HOLDING | Investor Presentation
The region is characterized by low extraction costs, non harsh environments and the pre-dominance of drilling intensive legacy fields
Favourable Industry Fundamentals
Project Breakeven Price Ranges
0
10
20
30
40
50
60
70
80
90
100
110
120
Canada TarSands
Barents Sea AngolaDeepwater
Australia US Tight Oil NigeriaDeepwater
North Sea Brazil Pre-Salt UAE Egypt Egypt Saudi Arabia UAE Kuwait Saudi Arabia
Onshore
Offshore
USD/bbl Range
NB: Breakeven prices can vary widely within areas, countries and even basins depending on factors of geology, geography and industry regulations
CORE MARKETS2017YTD Average Brent Price: USD 55/bbl
11ADES INTERNATIONAL HOLDING | Investor Presentation
Pre-Qualification Program
\
Country Client
ENI
Kuwait Oil Company
Kuwait Oil Company (KOC)
Abu Dhabi National Oil Company (ADNOC)
Abu Dhabi Marine Operating Co (ADMA)
Zakum Development Company (ZADCO)
Bunduq Oil Producing Company
Benefits of Pre-qualification
Strategy
• As part of the Company’s strategy to continuously expand its operations and build relationships with potential clients, it is always seeking to pre-qualify with key operators in current and target markets
• The pre-qualification status with Saudi Aramco in June 2015 – a process that lasted nearly 18 months, was instrumental in ADES being able to effectively compete and finalize the acquisition of the 3 offshore rigs from Hercules in November 2016 that were contracted to Saudi Aramco and allowed ADES to expand into the Saudi Arabian market
Prequalification in Progress
Current Qualified Status
Ensures ADES is invited to future tenders
Enhances ability to diversify revenue
stream and reduce client concentration
Enables ADES to implement asset-light model to expand into
deep water opportunities and
potentially, high spec rigs
Country Client / Potential Client Completion Date
SONATRACH June 2014
Halliburton September 2016
Saudi Aramco June 2015
Oil & Natural Gas Co (ONGC) Feb. 2016
MDOC November 2014
Pemex Apr. 2016
Neutral Zone h Al Khafji Joint Operations (KJO) March 2017
Schlumberger July 2017
12ADES INTERNATIONAL HOLDING | Investor Presentation
Growth Pipeline
EGYPT EGYPT ALGERIA
Drilling Rig
ADM 8 (1) ADM 88 ADES 1 Shipyards
Type • Offshore Drilling Jack-up • Offshore Drilling Jack-up • Onshore Drilling Rig• Newbuild Jack-up Drilling Rigs
(including high-specs)
Current Status • Currently owned by ADES and has a firm commitment starting H1 2018
• No major CAPEX expected prior to deployment
• Currently owned by ADES and has a firm commitment starting H12018
• No major CAPEX expected prior to deployment
• Currently owned by ADES and has a firm commitment starting H12018
• Awaiting results of ongoing tenders in Algeria
• Signed term sheets with leading South East Asian shipyards 2017
• ADES retains exclusive rights to market the drillship in Egypt
Expected Start Date • H1 2018 • H1 2018 • H1 2018 • TBD
Expected Tenor • 6 months (+3 optional) • 3 months (+3 optional) • 2 years • 3 years (purchase option)
Asset-Light Model
13ADES INTERNATIONAL HOLDING | Investor Presentation
Key Financial Highlights
H1 2017 Financial Highlights
Revenue
USD88 MN
Net profit
USD22 MN
EBITDA
USD45 MN
▲46% YoY
▲43% YoY
Backlog
USD430 MN
EBITDA MARGIN
51%
▲19% YoY
NP MARGIN
25%
Revenue • Driven by high utilization of the Group’s employed rigs,
including the full impact of new rigs in the KSA and Algeria and the full six-month impact of introducing MOPU services
Normalised net profit • Excludes the one-time USD 4.6 million IPO expense in
1H2017
EBITDA• Growth in EBITDA related to:
− Growth of the business− Deployment of new rigs− Maintaining Group’s margins on the back of
stringent cost-saving measures− Devaluation of EGP component of administrative
costs
14ADES INTERNATIONAL HOLDING | Investor Presentation
Key Takeaways
Maximise utilization of existing rig fleet through:• Delivery of existing backlog – though contract
extension and delivery of the backlog• Growing backlog – though participation in tenders
around the MEA Region incl (Egypt, KSA, Kuwait, Iraq, Algeria)
• Entry into new markets through Asset Light Model • Agreements with shipyards for high spec rigs
(total of eight)• Partnerships with leading rig companies for
deepwater drilling (6th Gen)
Key Success Pillars
ADES business model achieved tremendous growth and market leadership in offshore rig market over the last 10 yrs including the recent downturn in O&G sector, such success is founded on:
Strong track record of delivering safety, operational, and
financial performance
Strong Balance Sheet Lean Cost Structure Smart Acquisitions Strong and capable team
Well Positioned for Further Growth
• Access to cash through the successfully executed IPO, in addition to leveraging the balance sheet through further debt will enable the company to execute further acquisitions
• A number of transactions are being evaluated with a focus on growing shareholder value
Organic Inorganic
15ADES INTERNATIONAL HOLDING | Investor Presentation
APPENDIX
16ADES INTERNATIONAL HOLDING | Investor Presentation
Income Statement
Note (1) & (2) : Does not include depreciation expense; Note (3): Adjusted EBITDA means operating profit for the year before depreciation and amortization, foreign exchange (gain)/loss, provision for impairment of accounts receivable, provisions for other claims and impairment of assets under construction; Note (4): Includes provisions, impairment of trade receivables, impairment of assets under construction, loss on disposal of property and equipment, non recurring income (/expense) and other income; Note (5): Net Profit for the year before non-recurring income (H12017: USD 4.6 million IPO expense)
USD ('000) 2014 2015 2016 1H 2016 1H 2017 YoY Growth (1H '16-'17)
Revenue 75,172 101,039 134,116 60,351 87,846 46%
Cost of Revenue (1) (32,373) (41,938) (44,976) (20,597) (32,568)
Gross Profit 42,798 59,101 89,140 39,754 55,278 39%
Margin 56.9% 58.5% 66.5% 65.9% 62.9%
G&A (2) (9,539) (16,634) (18,296) (8,193) (10,244)
Adjusted EBITDA (3) 33,259 42,467 70,844 31,562 45,034 43%
Margin 44.2% 42.0% 52.8% 52.3% 51.3%
Depreciation (6,752) (10,457) (18,460) (7,888) (14,290)
EBIT 26,507 32,010 52,384 23,674 30,744 30%
Margin 35.30% 31.70% 39.10% 39.23% 35.00%
Interest (2,403) (4,414) (9,428) (3,879) (8,281)
FX Gain / (Loss) (575) (28) 3,402 1,003 136
Other (4) (300) (3,164) (5,061) (2,074) (5,955)
EBT 23,229 24,403 41,297 18,724 16,644 -11%
Margin 30.9% 24.2% 30.8% 31.0% 18.9%
Investment Income - 1,225 - - -
Taxes - - (3,284) (295) 687
Net Profit 23,229 25,628 38,013 18,429 17,331 -6%
Margin 30.9% 25.4% 28.3% 30.5% 19.7%
Normalised Net Profit(5) 23,229 25,628 37,919 18,429 21,894 19%
Margin 30.9% 25.4% 28.3% 30.5% 24.9%
17ADES INTERNATIONAL HOLDING | Investor Presentation
USD (‘000) Dec-2014 Dec-2015 Dec-2016 Jun-2017
Cash and Cash Equivalents 13,656 25,350 5,193 163,480 Accounts Receivable 17,601 16,841 50,789 71,316Other Receivables 7,806 10,084 10,101 18,684Accrued Revenue - 713 17,587 11,135Dividend Receivable & Advance Payments - 4,140 4,464 6,425Inventory 4,844 7,167 17,777 19,079Due from Related Parties 1,736 199 277 371.83Total Current Assets 45,643 64,495 106,188 290,491
Net Fixed Assets 98,364 184,954 290,661 287,619Investments & Intangible Assets 31 1,974 1,965 1,961Total Non-Current Assets 98,396 186,928 292,627 289,579
Total Assets 144,038 251,423 398,815 580,070
Bank Overdraft 13,277 5,442 15,449 20,624CPLTD 15,846 - 30,356 35,911Account Payables 11,771 14,229 27,916 29,641Accrued Expenses & Other Credit Balances 3,591 3,370 16,092 14,816Provisions 14 1,514 2,934 1,877Due to Related Parties 141 1,885 4,082 6,862Dividend Payable 457 10,602 7,149 7,028Total Current Liabilities 45,096 37,040 103,977 116,760
Long Term Debt 25,114 130,767 189,930 172,543Total Non-Current Liabilities 25,114 130,767 189,930 172,543
Paid-up Capital - - 1,000 42,203Additional Paid in Capital - - 30,900 158,224Merger reserve (1) 32,000 32,000 (6,521) (6,521)Retained Earnings 40,100 48,617 75,048 92,379Legal Reserves 1,728 2,999 4,481 4,481Total Shareholders Equity 73,829 83,616 104,908 290,767
Total Shareholders Equity and Liabilities 144,038 251,423 398,815 580,070
Balance Sheet
Note (1): Represents the difference between consolidation paid under the reorganization plan and nominal value of acquired shares
18ADES INTERNATIONAL HOLDING | Investor Presentation
Group Fleet
Fleet Type Date of Acquisition Year of Manufacture Max. Working Water Depth (ft)
Egypt
Admarine I MOPU 2014 1982 150
Admarine II Jack-up barge 2004 1983 150
Admarine III Jack-up rig 2012 1974 250
Admarine IV Jack-up rig 2013 1976 307
Admarine V Jack-up rig 2013 1981 250
Admarine VI Jack-up rig 2015 1976 250
Admarine 88 Jack-up rig 2016 1974 350
Admarine VIII Jack-up rig 2015 1981 300
Saudi Arabia
Admarine 261 Jack-up rig 2016 1979 250
Admarine 262 Jack-up rig 1982 250
Admarine 266 Jack-up rig 1979 250
Algeria
Ades 2 Onshore drilling 2015 2016 n/a
Ades 3 Onshore drilling 2016 2016 n/a
Ades 1 Onshore drilling Q1 2017 2007 n/a
19ADES INTERNATIONAL HOLDING | Investor Presentation
20 Years 2009 33 Years 2016 12 Years 2015 25 Years 2016 16 Years 2015 31 Years 2013 8 Years 2016
42 Years 2012 36 Years 2013 20 Years 2017 10 Years 2016 22 Years 2009 26 Years 2014 10 Years 2006
Highly Experienced Management Team
Dr. Farouk has been the driving force behind ADES’s cycle-proof strategy and its regional expansion
Dr. Mohamed FaroukChief Executive Officer
25 Years
2012
• Ph.D. Systems Engineering and Control, Case Western Reserve University, USA
• M.Sc. Electrical Engineering and Control, Faculty of Engineering, Cairo University, Egypt
• B.Sc. Electrical Engineering, Faculty of Engineering, Cairo University, Egypt
• Senior Vice President, Invensys Operations Management (Now Schneider Electric)
• Senior Vice President, Global Delivery• Director, Global Engineering Excellence
Centers
Years of Experience Year Joined ADES
Mohamed KhalilVP Operations
Shoukry El SayedVP Supply Chain
Ahmed El-KhatibChief Financial Officer
Omar SalehChief Strategy Officer
Ahmed MohyClient Care Director
Aly MakhloufInternational Markets
Director
Gamal Mohamed Ahmed
HR Director
Amr WafiqHSE Director
Ahmed SaafanMOPU Director
Morcos WilliamLegal Director
Ayman RagaiChief Information Officer
Mohamed SaadMaintenance Director
Mahmoud HabashiInternal Audit & Quality
Manager
Hussein BadawyInvestor Relations Officer
20ADES INTERNATIONAL HOLDING | Investor Presentation
Middle East O&G Industry Overview
Key Market Characteristics
Active Jack-Up Deployment & Utilization
The Middle East is the leading oil-producing region globally with almost 50% of the world’s proven reserves. The sector constitutes a significant share of GDP and is a major source of FDI
34%
20%
20%
9%
9%8% Middle East
North America
Europe & Eurasia
S. & Cent. America
Asia Pacific
Africa
48%
19%
13%
9%
8%3%Middle East
S. & Cent. America
North America
Europe & Eurasia
Africa
Asia Pacific
Distribution of Proven Reserves
Distribution of Oil Production
Source: BP Statistical Review - 2017 Source: BP Statistical Review - 2017
25%
64%
53%
55%
54%
68%
-100%
-80%
-60%
-40%
-20%
0%
20%
40%
60% – Jack-Up Utilization
Source: Clarksons Research; Wood Mackenzie
The Middle East is the only region to witness rig growth since 2008 and enjoys the highest Jack-Up utilization rate
N. America
Asia Pacific
W. Africa
N.W. Europe
S. America
Middle EastRig Growth (‘08-Present)
21ADES INTERNATIONAL HOLDING | Investor Presentation
Environmental Responsibilities
HSE Overview
ADES Waste Management Program
The Waste Management program ensures that ADES complies with
international and local regulations and that standard waste management
practices are implemented
The Group ensures its facilities are in compliance with local and international
regulations.
Periodical internal audits are performed to monitor the correct
implementation of waste management procedures
Procedures are continuously improved upon with the aim minimizing
environmental & social impacts
Consistent internal policies and procedures review to
ensure effectiveness
Elimination of potential incidents through
management controls and risk assessments
Reduction of materials consumption to limit waste
generation
Procedure and input adjustments with the aim
of minimizing environmental impact
Developed and implemented an Environmental
Management System to be followed by all employees
1 2 3 4 5
22ADES INTERNATIONAL HOLDING | Investor Presentation
Corporate Social Responsibility Initiatives
Medical The program provides medical equipment
& supplies to hospitals, operations funding, free monthly check-ups and tests
Program Achievements 2016
46 medical operations
65 monthly medical check-ups with treatments
Education & Entertainment This program mainly focuses on literacy
combat programs, school supplies and other educational activities and exhibitions
Program Achievements 2016
300 school bags with utilities
200 child school fees
Food Supply The program provides food supplies and meals for
orphans as well as monthly meat supply and distribution in impoverished areas
Ramadan food packages
Program Achievements 2016
5,000 Ramadan boxes delivered
275,500 people served for Iftar
350 monthly meals provided
Meat distributed to over 9,000 people per month
Social Endeavours The program aids people through different social
solidarity activities such as monthly aids, school and rent fees, clothes exhibitions and houses restorations
23ADES INTERNATIONAL HOLDING | Investor Presentation
Thank You