Economic Performance and Value Creation

Oil & Gas Sector

Performance Analysis of a Sample of Listed Oil & Gas Companies

August 2019 Sydney - Level 2, 35 Clarence Street Sydney NSW 2000 Perth - Level 3, London House 216 St Georges Terrace Perth, WA 6000

+61 2 8004 9907 [email protected] www.mainsheet.com.au

Mainsheet Capital is a corporate strategy and corporate advisory firm that specialises in working across engineering, construction, mining, oil & gas, utilities, transport and industrial services sectors.

• Mainsheet Capital routinely conducts a review of the performance of companies across the engineering, construction, infrastructure management, mining services and O&G services sectors to identify and understand the prevailing competitive and value creation dynamics. • Within these sectors there are companies with a wide array of different sizes, capabilities and business models. • It can be challenging to select the best context within which to analyse performance of this range businesses, however, we have conducted analysis of performance by: ‒ Company ‒ Sector ‒ Business model ‒ Capability ‒ Technical domain ‒ Size (number of employees and revenues) ‒ Asset intensity • This document sets out the analysis we have conducted in relation to a sample of listed O&G companies. Analysis of engineering, construction, infrastructure management and mining services companies and sectors is available on Mainsheet Capital’s website: https://www.mainsheet.com.au/economic-performance-and-value-creation-analysis/

COMMERCIAL IN CONFIDENCE Page 1 © Copyright. Mainsheet Capital Introduction

Mainsheet Capital is experienced in assisting companies to position themselves to maximise their growth potential and value creating performance by addressing issues such as those outlined below.

Have you got clear and fact-based strategic plan to guide your direction and key decisions?

Have you got all of the operational and technical capabilities to match new customer needs?

Have you got the right geographic and sector footprint?

Do you have the optimal business size and shape?

Have you got the right capital structure and asset base to achieve your goals?

Should you be considering mergers or acquisitions in order to best achieve your goals?

Do you have a formal growth and long term value creation/exit strategy for the business?

Mainsheet has a demonstrable track record of assisting companies to successfully address the key strategic, operational, financial and transactional issues and opportunities they face.

COMMERCIAL IN CONFIDENCE Page 2 © Copyright. Mainsheet Capital 3yr Average Capital Employed vs. 3yr Average Excess Returns

3yr Average Capital Employed vs. 3yr Average Excess Returns FY16 – FY18 ($m, %) 10.0% Monadelphous CIMIC Maire Tecnimont 5.0% Petrofac

Chiyoda Corporation Valmec 0.0% Civmec Quanta - 5,000 10,000 15,000 20,000 25,000 KBR John Wood Group Saunders Aker Saipem Halliburton -5.0% Transocean McDermott International Diamond Offshore Schlumberger Decmil Fugro Ensco -10.0% Noble Corporation Calfrac Well Services Precision Drilling Nabors Industries

3yr Average Excess Returns Excess Average 3yr China Oilfield Services -15.0% MMA Offshore Weatherford International

Neptune Marine Services -20.0%

-25.0% 3yr Average Capital Employed ($m)

Note: Three Year Average include FY16-FY18 data Source: Capital IQ, Company Websites

COMMERCIAL IN CONFIDENCE © Copyright. Mainsheet Capital Page 3 3yr Average Assets per Employee vs. 3yr Average Excess Return vs. Revenue

3yr Average Assets per Employee vs. 3yr Average Excess Return vs. Revenue FY16 – FY18 ($, %) 20.0%

15.0%

CIMIC 10.0% Monadelphous Petrofac Maire Tecnimont 5.0% Halliburton Chiyoda Corporation Quanta Civmec KBR Schlumberger 0.0% - 200,000 400,000 600,000 800,000Aker 1,000,000 1,200,000 1,400,000 John Wood Group Valmec Saipem -5.0% Diamond Offshore, Ensco McDermott International Transocean, Noble Corp

3yr Average Excess Returns Excess Average 3yr Fugro Calfrac Well Services Saunders Decmil -10.0% China Oilfield Services Nabors Industries MMA Offshore -15.0% Weatherford International Precision Drilling Neptune Marine Services

-20.0% 3yr Average Assets per Employee

Note: Three Year Average include FY16-FY18 data, size of bubble denotes comparative revenue Source: Capital IQ, Company Websites

COMMERCIAL IN CONFIDENCE © Copyright. Mainsheet Capital Page 4 3yr Average Assets per Employee vs. Average Revenue per Employee

3yr Average Assets per Employee vs. 3yr Average Revenue per Employee FY16 – FY18 ($, $) 1,000,000

900,000 Maire Tecnimont 800,000 Diamond Offshore, Ensco Petrofac Transocean, Noble Corp 700,000 Decmil

600,000 CIMIC 500,000 Valmec Halliburton Schlumberger Calfrac Well Services Saipem Aker 400,000 Quanta Neptune Marine Services Civmec Weatherford International 300,000 Fugro Precision Drilling Monadelphous KBR 3yr Average Revenue per Employee ($) Employee per Revenue Average 3yr 200,000 Saunders McDermott International Nabors Industries John Wood Group 100,000 MMA Offshore

- - 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 1,000,000 3yr Average Assets per Employee ($)

Note: Three Year Average include FY16-FY18 data Source: Capital IQ, Company Websites

COMMERCIAL IN CONFIDENCE © Copyright. Mainsheet Capital Page 5 3yr Average Assets per Employee vs. Number of Employees

3yr Average Assets per Employee vs. Number of Employees FY16 – FY18 ($, units) 50,000

45,000

Quanta 40,000

35,000 McDermott International Saipem

30,000 CIMIC Weatherford International KBR 25,000 Aker 20,000

Number of Employees of Number Nabors Industries 15,000 Petrofac Fugro 10,000 MMA Offshore Precision Drilling Maire Tecnimont Neptune Marine Services Calfrac Well Services Diamond Offshore, Ensco 5,000 Monadelphous Transocean, Noble Corp Civmec Saunders Valmec Decmil - - 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 1,000,000

3yr Average Assets per Employee ($)

Note: Three Year Average include FY16-FY18 data Source: Capital IQ, Company Websites

COMMERCIAL IN CONFIDENCE © Copyright. Mainsheet Capital Page 6 3yr Average Revenue per Employee vs. 3yr Average Excess Returns

3yr Average Revenue per Employee vs. 3yr Average Excess Returns FY16 – FY18 ($, %) 20.0%

15.0%

10.0% Monadelphous CIMIC Maire Tecnimont 5.0% Petrofac

0.0% Quanta Civmec Valmec - 100,000 200,000 KBR 300,000 400,000 500,000 600,000 John Wood Group Saunders Schlumberger -5.0% Halliburton Aker Decmil, Ensco, Transocean McDermott International Diamond Offshore, Noble 3yr Average Excess Returns Excess Average 3yr Saipem Fugro -10.0% Calfrac Well Services Precision Drilling

MMA Offshore China Oilfield Services -15.0% Nabors Industries

Weatherford International Neptune Marine Services -20.0% 3yr Average Revenue per Employee ($)

Note: Three Year Average include FY16-FY18 data Source: Capital IQ, Company Websites

COMMERCIAL IN CONFIDENCE © Copyright. Mainsheet Capital Page 7 3yr Average Assets per Employee

3yr Average Assets per Employee FY16 – FY18 ($) 8,000,000

7,000,000

6,000,000

5,000,000

4,000,000

3,000,000

2,000,000

3yr Average Assets per Employee ($) Employee per Assets Average 3yr 1,000,000

Note: Three Year Average include FY16-FY18 data Source: Capital IQ, Company Websites

COMMERCIAL IN CONFIDENCE © Copyright. Mainsheet Capital Page 8 3yr Average WACC

3yr Average WACC FY16 – FY18 ($) 16.0%

14.0%

12.0%

10.0%

8.0%

6.0% 3yr Average WACC Average 3yr 4.0%

2.0%

0.0%

Note: Three Year Average include FY16-FY18 data Source: Capital IQ, Company Websites

COMMERCIAL IN CONFIDENCE © Copyright. Mainsheet Capital Page 9 Summary Data

Average Average Capital Average Average Average Average Assets Company Average EBIT Number of Average WACC Revenue per Employed per Last FY D/E Average D/E Location Revenue (3yr, Economic Profit Excess Return per Employee Name (3yr AUD$mm) Employees (3yr) Employee (3yr, Employee (3yr, Ratio Ratio (3yr) AUD$mm) (3yr AUD$mm) (3yr) (3yr) AUD$mm) AUD$mm)

Schlumberger United States 41,329 3,810 100,000 -4,466 8.3% -5.4% 413,286 999,995 828,353 48.7% 48.3%

Halliburton United States 27,471 2,451 60,000 -984 8.5% -3.1% 457,844 590,641 531,280 109.6% 123.9%

Saipem Italy 14,109 493 31,942 -714 8.7% -5.7% 441,706 617,553 393,233 73.1% 70.2%

CIMIC Australia 12,984 912 26,109 262 8.8% 5.8% 497,316 367,457 174,458 22.4% 28.2%

Quanta United States 12,850 621 39,200 -129 8.3% -2.1% 327,806 218,870 158,722 30.7% 19.7%

Petrofac Jersey 9,115 704 11,500 216 7.7% 4.6% 792,598 849,744 408,272 107.7% 181.3%

John Wood United Kingdom 8,938 321 59,700 -397 7.8% -4.6% 149,708 211,159 143,083 63.7% 54.9% Group

Weatherford Switzerland 7,799 -907 26,500 -2,212 13.5% -18.5% 294,286 495,052 449,981 - - International

Aker Norway 7,515 463 19,444 -589 9.2% -5.7% 386,485 839,771 535,229 70.2% 107.2%

Chiyoda Japan 6,809 73 4,989 -54 6.5% -2.8% 1,364,774 1,114,805 380,154 6.3% 6.0% Corporation

KBR United States 6,071 285 25,000 -133 8.5% -3.6% 242,833 235,071 146,149 73.4% 69.3%

McDermott United States 5,660 290 31,900 -208 10.0% -5.1% 177,427 229,630 127,007 332.1% 136.4% International

Ausdrill Australia 802 60 7,502 -54 9.0% -5.1% 106,914 164,645 141,326 52.2% 59.9%

Civeo United States 567 -74 2,200 -189 11.8% -15.8% 257,706 571,729 543,141 70.3% 68.8%

Note: Three Year Average include FY16-FY18 data Source: Capital IQ, Company Websites

COMMERCIAL IN CONFIDENCE © Copyright. Mainsheet Capital Page 10 Summary Data

Maire Italy 4,936 252 6,140 64 8.2% 4.4% 803,834 856,092 235,898 185.9% 232.9% Tecnimont

Transocean Switzerland 4,528 821 5,900 -2,601 10.0% -8.1% 767,508 5,778,959 5,472,251 76.1% 62.5%

China Oilfield China 3,665 -138 14,274 -1,924 13.2% -13.7% 256,726 1,074,330 981,084 80.5% 86.0% Services

Nabors Bermuda 3,567 -294 15,000 -1,445 12.7% -14.5% 237,818 738,249 666,047 113.7% 117.3% Industries

Ensco United Kingdom 2,873 382 4,400 -2,003 12.5% -10.9% 652,918 4,431,773 4,188,648 61.9% 60.1%

Fugro Netherlands 2,525 -3 9,744 -265 10.5% -10.6% 259,121 316,471 255,601 104.3% 83.4%

Noble United Kingdom 2,039 249 2,000 -1,653 13.3% -12.1% 1,019,328 7,130,822 6,812,368 83.3% 72.8% Corporation

Diamond United States 1,824 217 2,300 -712 10.0% -8.5% 792,893 3,677,839 3,621,858 55.1% 54.3% Offshore

Calfrac Well Canada 1,554 1 3,900 -186 11.8% -11.8% 398,452 455,487 405,726 192.7% 189.4% Services

Monadelphous Australia 1,452 88 5,378 27 8.7% 6.8% 269,962 126,932 74,217 5.3% 4.6%

Precision Canada 1,328 -81 5,471 -582 13.2% -14.5% 242,740 743,715 731,205 109.5% 100.8% Drilling

Civmec Australia 485 20 1,700 -5 8.5% -2.3% 285,412 200,958 129,076 57.8% 37.7%

Decmil Australia 306 1 463 -21 8.7% -8.4% 661,207 650,174 530,464 0.4% 1.5%

MMA Offshore Australia 279 -22 6,000 -132 13.8% -15.7% 46,496 131,497 140,110 79.7% 88.0%

Neptune Marine Australia 89 -8 325 -12 8.8% -19.2% 274,934 213,361 196,063 0.8% 0.8% Services

Valmec Australia 76 2 165 -1 8.7% -2.7% 458,382 263,996 168,731 30.7% 48.3%

Saunders Australia 54 1 212 -1 8.5% -5.8% 256,291 147,280 98,346 1.8% 4.8%

Mitchell Australia 49 -3 350 -6 10.5% -18.2% 139,022 130,450 91,159 94.8% 95.8% Services

Note: Three Year Average include FY16-FY18 data Source: Capital IQ, Company Websites

COMMERCIAL IN CONFIDENCE © Copyright. Mainsheet Capital Page 11 ISO Value Creation Chart – Aker

ISO Value Creation Chart EP Levels 15% $2,000 $1,800 $1,600 10% $1,400 $1,200 $1,000 5% $800

$600 WACC)

- $400 $200 0% -$200 2017 -$400 2013 2014 -$600 2015 -5% 2016 -$800 2010 2011 -$1,000 2009 -$1,200

Excess Return (ROCE Return Excess -$1,400 -10% 2012 -$1,600 -$1,800 -$2,000 -15% 0.0 2,000.0 4,000.0 6,000.0 8,000.0 10,000.0 12,000.0 14,000.0 Avg. Capital Employed ($m)

Source: Capital IQ

COMMERCIAL IN CONFIDENCE © Copyright. Mainsheet Capital Page 12 ISO Value Creation Chart – Calfrac Well Services

ISO Value Creation Chart EP Levels 30%

20% $1,000 $900 2011 $800 $700 $600 10% $500 $400

WACC) $300 - 2010 2012 $200 2014 $100 0% 2018 2013 -$100 2009 -$200 2017 -$300 -$400 -10% -$500 -$600 -$700 -$800 2015 -$900 Excess Return (ROCE Return Excess -20% 2016 -$1,000

-30% 0.0 500.0 1,000.0 1,500.0 2,000.0 2,500.0 3,000.0 3,500.0 4,000.0 4,500.0 5,000.0 Avg. Capital Employed ($m)

Source: Capital IQ

COMMERCIAL IN CONFIDENCE © Copyright. Mainsheet Capital Page 13 ISO Value Creation Chart – China Oilfield Services

ISO Value Creation Chart EP Levels 20% $4,000 $3,500 15% $3,000 $2,500 10% $2,000 $1,500

5% $1,000

WACC) - 2009 $500 2010 0% 2013 2014 2011 2012 -$500

-5% 2015 -$1,000 -$1,500 2017 -10% -$2,000 2018

Excess Return (ROCE Return Excess -$2,500 -15% 2016 -$3,000 -$3,500 -20% -$4,000 0.0 2,000.0 4,000.0 6,000.0 8,000.0 10,000.0 12,000.0 14,000.0 16,000.0 18,000.0 20,000.0 Avg. Capital Employed ($m)

Source: Capital IQ

COMMERCIAL IN CONFIDENCE © Copyright. Mainsheet Capital Page 14 ISO Value Creation Chart – Chiyoda Corporation

ISO Value Creation Chart EP Levels 10% $500 $450 8% $400 $350 6% $300 $250 4% $200 2013 $150

WACC) 2% 2012 $100 - 2014 $50 0% 2016 2011 20172015 -$50 -2% 2009 -$100 -$150 -4% -$200 2010 -$250 2018

-6% -$300 Excess Return (ROCE Return Excess -$350 -8% -$400 -$450 -10% -$500 0.0 500.0 1,000.0 1,500.0 2,000.0 2,500.0 3,000.0 3,500.0 4,000.0 4,500.0 5,000.0 Avg. Capital Employed ($m)

Source: Capital IQ

COMMERCIAL IN CONFIDENCE © Copyright. Mainsheet Capital Page 15 ISO Value Creation Chart – CIMIC

ISO Value Creation Chart EP Levels 15%

2018

10% 2011 $1,000 $900 2017 $800 $700 $600 5% $500 $400 WACC) 2010 $300 - $200 2016 2015 2013 $100 0% 2009 2012 -$100 -$200 -$300 -$400 -5% -$500 -$600 -$700 -$800 2014 -$900 Excess Return (ROCE Return Excess -10% -$1,000

-15% 0.0 1,000.0 2,000.0 3,000.0 4,000.0 5,000.0 6,000.0 7,000.0 8,000.0 9,000.0 10,000.0 Avg. Capital Employed ($m)

Source: Capital IQ

COMMERCIAL IN CONFIDENCE © Copyright. Mainsheet Capital Page 16 ISO Value Creation Chart – Civmec

ISO Value Creation Chart EP 2012 Levels 30%

2013 20% $100 $90 $80 $70 2014 $60 10% $50 2015 $40 WACC) $30 - $20 2016 2018 $10 0% 2017 -$10 -$20 -$30 -$40 -10% -$50 -$60 -$70 -$80 -$90 Excess Return (ROCE Return Excess -20% -$100

-30% 0.0 50.0 100.0 150.0 200.0 250.0 300.0 350.0 400.0 450.0 500.0 Avg. Capital Employed ($m)

Source: Capital IQ

COMMERCIAL IN CONFIDENCE © Copyright. Mainsheet Capital Page 17 ISO Value Creation Chart – Decmil

ISO Value Creation Chart EP Levels 15% 2010 2012

2011 10% $100 2009 $90 20132014 $80 $70 $60 5% $50 2015 $40 WACC) $30 - $20 $10 0% -$10 -$20 -$30 -$40 -5% -$50 2018 2016 -$60 -$70 -$80 2017 -$90 Excess Return (ROCE Return Excess -10% -$100

-15% 0.0 100.0 200.0 300.0 400.0 500.0 600.0 700.0 800.0 900.0 1,000.0 Avg. Capital Employed ($m)

Source: Capital IQ

COMMERCIAL IN CONFIDENCE © Copyright. Mainsheet Capital Page 18 ISO Value Creation Chart – Diamond Offshore

ISO Value Creation Chart EP Levels 15% 2009 $2,000 $1,800 $1,600 10% $1,400 2010 $1,200 $1,000 5% 2011 $800

$600 WACC)

- $400 2012 $200 0% 2013 -$200 2014 2015 -$400 2016 -$600 -5% 2017 -$800 -$1,000 -$1,200

Excess Return (ROCE Return Excess -$1,400 -10% -$1,600 2018 -$1,800 -$2,000 -15% 0.0 2,000.0 4,000.0 6,000.0 8,000.0 10,000.0 12,000.0 14,000.0 Avg. Capital Employed ($m)

Source: Capital IQ

COMMERCIAL IN CONFIDENCE © Copyright. Mainsheet Capital Page 19 ISO Value Creation Chart – Ensco

ISO Value Creation Chart EP Levels 20% $4,000 $3,500 15% $3,000 $2,500 10% $2,000 $1,500 5% $1,000

WACC) 2009 - $500 2010 20132014 0% 2012 2015 2011 2016 -$500 -5% -$1,000 -$1,500 -10% -$2,000 2017 Excess Return (ROCE Return Excess 2018 -$2,500 -15% -$3,000 -$3,500 -20% -$4,000 0.0 2,000.0 4,000.0 6,000.0 8,000.0 10,000.0 12,000.0 14,000.0 16,000.0 18,000.0 20,000.0 Avg. Capital Employed ($m)

Source: Capital IQ

COMMERCIAL IN CONFIDENCE © Copyright. Mainsheet Capital Page 20 ISO Value Creation Chart – Fugro

ISO Value Creation Chart EP Levels 20% $1,000 $900 $800 15% $700 $600 10% $500 2009 $400 $300 5% 2010 WACC) $200 - 2011 2012 $100 0% 2013 -$100 2015 2014 -$200 -5% -$300 2016 2018 -$400 -10% 2017 -$500

-$600 Excess Return (ROCE Return Excess -$700 -15% -$800 -$900 -20% -$1,000 0.0 500.0 1,000.0 1,500.0 2,000.0 2,500.0 3,000.0 3,500.0 4,000.0 4,500.0 5,000.0 Avg. Capital Employed ($m)

Source: Capital IQ

COMMERCIAL IN CONFIDENCE © Copyright. Mainsheet Capital Page 21 ISO Value Creation Chart – Halliburton

ISO Value Creation Chart EP Levels 10% $5,000 $4,500 2011 8% $4,000 $3,500 6% $3,000 2010 2012 2014 $2,500 4% $2,000 2013 $1,500

WACC) 2% 2018 $1,000

- 2009 $500 0% -$500 -2% 2017 -$1,000 2015 -$1,500 -4% -$2,000 -$2,500 -6% -$3,000

Excess Return (ROCE Return Excess 2016 -$3,500 -8% -$4,000 -$4,500 -10% -$5,000 0.0 5,000.0 10,000.0 15,000.0 20,000.0 25,000.0 30,000.0 35,000.0 40,000.0 45,000.0 50,000.0 Avg. Capital Employed ($m)

Source: Capital IQ

COMMERCIAL IN CONFIDENCE © Copyright. Mainsheet Capital Page 22 ISO Value Creation Chart – KBR

ISO Value Creation Chart EP Levels 15%

10% $500 $450 $400 $350 $300 5% $250 2010 2009 $200 WACC) $150 - $100 2011 $50 0% 2018 2012 -$50 2015 -$100 2016 2017 -$150 -$200 -5% 2013 -$250 -$300 -$350 -$400 -$450 Excess Return (ROCE Return Excess -10% -$500

2014

-15% 0.0 500.0 1,000.0 1,500.0 2,000.0 2,500.0 3,000.0 3,500.0 4,000.0 4,500.0 5,000.0 Avg. Capital Employed ($m)

Source: Capital IQ

COMMERCIAL IN CONFIDENCE © Copyright. Mainsheet Capital Page 23 ISO Value Creation Chart – Maire Tecnimont

ISO Value Creation Chart EP Levels 50%

40%

30% $500 $450 20% $400 $350 $300 $250 WACC) 10% 2016 2017 $200 - 201420152009 2018 $150 2010 $100 $50 0% 2013 -$50 -$100 -$150 -10% -$200 -$250 -$300 2012 -$350 -20% -$400 -$450 -$500

-30% Excess Return (ROCE Return Excess 2011 -40%

-50% 0.0 200.0 400.0 600.0 800.0 1,000.0 1,200.0 1,400.0 1,600.0 1,800.0 2,000.0 Avg. Capital Employed ($m)

Source: Capital IQ

COMMERCIAL IN CONFIDENCE © Copyright. Mainsheet Capital Page 24 ISO Value Creation Chart – McDermott International

ISO Value Creation Chart EP Levels 25%

20% $2,000 $1,800 $1,600 15% $1,400 $1,200 10% $1,000 $800 $600 WACC) 5% - 20112012 2010 $400 2017 $200 2009 0% 2016 2015 -$200 -$400 -5% -$600 -$800 -10% 2014 2018 -$1,000 -$1,200 -$1,400 -15% Excess Return (ROCE (ROCE Return Excess -$1,600 2013 -$1,800 -20% -$2,000

-25% 0.0 1,000.0 2,000.0 3,000.0 4,000.0 5,000.0 6,000.0 7,000.0 8,000.0 9,000.0 10,000.0 Avg. Capital Employed ($m)

Source: Capital IQ

COMMERCIAL IN CONFIDENCE © Copyright. Mainsheet Capital Page 25 ISO Value Creation Chart – MMA Offshore

ISO Value Creation Chart EP Levels 20% $400 $350 15% $300 $250 10% $200 $150

5% 2012 $100 WACC) 2013

- 2010 2009 2011 $50

0% 2014 2015 -$50 -5% -$100 -$150 -10% -$200

Excess Return (ROCE Return Excess 2018 2016 -$250 -15% 2017 -$300 -$350 -20% -$400 0.0 200.0 400.0 600.0 800.0 1,000.0 1,200.0 1,400.0 1,600.0 1,800.0 2,000.0 Avg. Capital Employed ($m)

Source: Capital IQ

ISO Value Creation Chart EP Levels 50% $500 2009 2010 $450 40% 2012 2013 $400 2011 $350 30% 2014 $300 $250 20% 2015 $200 $150 20162018

WACC) 10% 2017 $100 - $50 0% -$50 -10% -$100 -$150 -20% -$200 -$250

-30% -$300 Excess Return (ROCE Return Excess -$350 -40% -$400 -$450 -50% -$500 0.0 100.0 200.0 300.0 400.0 500.0 600.0 700.0 800.0 900.0 1,000.0 Avg. Capital Employed ($m)

Source: Capital IQ

ISO Value Creation Chart EP Levels 15% $2,000 $1,800 $1,600 10% $1,400 $1,200 $1,000 5% $800

$600 WACC)

- $400 $200 0% 2012 20112010 -$200 20142009 -$400 2013 -$600 -5% -$800 -$1,000 2015 -$1,200

Excess Return (ROCE Return Excess -$1,400 -10% -$1,600 2016 -$1,800 2017 -$2,000 2018 -15% 0.0 2,000.0 4,000.0 6,000.0 8,000.0 10,000.0 12,000.0 14,000.0 Avg. Capital Employed ($m)

Source: Capital IQ

ISO Value Creation Chart EP Levels 30%

20% $100 $90 $80 $70 $60 10% $50 $40

WACC) 2009 $30 - $20 $10 0% 20142015 -$10 2013 -$20 2012 2010 -$30 2016 -$40 -10% -$50 -$60 2011 -$70 2017 -$80 -$90 Excess Return (ROCE Return Excess -20% -$100

2018

-30% 0.0 50.0 100.0 150.0 200.0 250.0 300.0 350.0 400.0 450.0 500.0 Avg. Capital Employed ($m)

Source: Capital IQ

ISO Value Creation Chart EP Levels 20% $4,000 $3,500 15% $3,000 2009 $2,500 10% $2,000 $1,500

5% $1,000 WACC) - $500 2010 2015 0% 2014 2016 -$500 2011 2012 2013 -5% -$1,000 -$1,500 -10% -$2,000

Excess Return (ROCE Return Excess -$2,500 2018 2017 -15% -$3,000 -$3,500 -20% -$4,000 0.0 2,000.0 4,000.0 6,000.0 8,000.0 10,000.0 12,000.0 14,000.0 16,000.0 18,000.0 20,000.0 Avg. Capital Employed ($m)

Source: Capital IQ

ISO Value Creation Chart EP Levels 50% $5,000 $4,500 40% 2011 $4,000 2010 $3,500 30% $3,000 2009 2012 $2,500 20% $2,000 2013 $1,500 2018 WACC) 10% 2017 $1,000 - 2014 2016 $500 0% 2015 -$500 -10% -$1,000 -$1,500 -20% -$2,000 -$2,500

-30% -$3,000 Excess Return (ROCE Return Excess -$3,500 -40% -$4,000 -$4,500 -50% -$5,000 0.0 1,000.0 2,000.0 3,000.0 4,000.0 5,000.0 6,000.0 7,000.0 8,000.0 9,000.0 10,000.0 Avg. Capital Employed ($m)

Source: Capital IQ

ISO Value Creation Chart EP Levels 20% $2,000 $1,800 $1,600 15% $1,400 $1,200 10% $1,000 $800 $600 5%

WACC) $400 - $200 0% 2011 20102013 2009 -$200 2012 2014 -$400 -5% -$600 -$800 -10% -$1,000 2018 -$1,200 Excess Return (ROCE Return Excess 2016 2017 2015 -$1,400 -15% -$1,600 -$1,800 -20% -$2,000 0.0 1,000.0 2,000.0 3,000.0 4,000.0 5,000.0 6,000.0 7,000.0 8,000.0 9,000.0 10,000.0 Avg. Capital Employed ($m)

Source: Capital IQ

ISO Value Creation Chart EP Levels 10% $1,000 $900 8% $800 $700 6% $600 $500 4% $400 $300

WACC) 2% $200 - 2018 $100 0% 2012 -$100 2013 2017 -2% 20162014 -$200 20102009 -$300 -4% 2015 -$400 2011 -$500

-6% -$600 Excess Return (ROCE Return Excess -$700 -8% -$800 -$900 -10% -$1,000 0.0 1,000.0 2,000.0 3,000.0 4,000.0 5,000.0 6,000.0 7,000.0 8,000.0 9,000.0 10,000.0 Avg. Capital Employed ($m)

Source: Capital IQ

ISO Value Creation Chart EP Levels 20% $4,000 $3,500 15% $3,000 $2,500 10% $2,000 $1,500 5% $1,000 WACC) 2010 2009 - $500 2011 0% 2012 2018 2014 -$500 2017 -5% 2016 -$1,000 2013 -$1,500 -10% -$2,000

Excess Return (ROCE Return Excess 2015 -$2,500 -15% -$3,000 -$3,500 -20% -$4,000 0.0 2,000.0 4,000.0 6,000.0 8,000.0 10,000.0 12,000.0 14,000.0 16,000.0 18,000.0 20,000.0 Avg. Capital Employed ($m)

Source: Capital IQ

ISO Value Creation Chart EP Levels 30% 2014

2013 20% $10 2012 $9 2015 $8 2010 $7 2009 $6 10% $5 2016 $4

WACC) $3 - $2 2011 $1 0% -$1 2017 -$2 -$3 -$4 -10% -$5 -$6 2018 -$7 -$8 -$9 Excess Return (ROCE Return Excess -20% -$10

-30% 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0 Avg. Capital Employed ($m)

Source: Capital IQ

ISO Value Creation Chart EP Levels 10% $10,000 $9,000 8% $8,000 $7,000 6% $6,000 $5,000 4% $4,000 $3,000

WACC) 2% 2009 2012 2014 $2,000 - 2013 2010 2011 $1,000 0% -$1,000 -2% 2015 -$2,000 -$3,000 2018 -4% -$4,000 20172016 -$5,000

-6% -$6,000 Excess Return (ROCE Return Excess -$7,000 -8% -$8,000 -$9,000 -10% -$10,000 0.0 10,000.0 20,000.0 30,000.0 40,000.0 50,000.0 60,000.0 70,000.0 80,000.0 90,000.0 100,000.0 Avg. Capital Employed ($m)

Source: Capital IQ

ISO Value Creation Chart EP Levels 15%

10% $5,000 $4,500 $4,000 $3,500 2009 $3,000 5% $2,500 $2,000

WACC) $1,500 - $1,000 2014 2010 $500 0% 201220132015 -$500 -$1,000 2011 2016 -$1,500 -$2,000 -5% -$2,500 -$3,000 2017 -$3,500 -$4,000 -$4,500 Excess Return (ROCE Return Excess -10% 2018 -$5,000

-15% 0.0 5,000.0 10,000.0 15,000.0 20,000.0 25,000.0 30,000.0 35,000.0 40,000.0 45,000.0 50,000.0 Avg. Capital Employed ($m)

Source: Capital IQ

ISO Value Creation Chart EP Levels 30%

20% $10 $9 $8 $7 $6 10% $5

2014 $4 WACC)

- $3 $2 2017 $1 0% 2018 2016 -$1 -$2 -$3 -$4 -10% 2015 -$5 -$6

Excess Return (ROCE (ROCE Return Excess -$7 -$8 -$9 -20% -$10

-30% 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0 Avg. Capital Employed ($m)

Source: Capital IQ

ISO Value Creation Chart EP Levels 25% $7,000 20% $6,000 $5,000 15% $4,000 10% $3,000 $2,000

WACC) 5% - $1,000 2011 0% 20102012 20142009 2013 -$1,000 -5% -$2,000 -10% -$3,000 2018 2015 -$4,000

-15% Excess Return (ROCE Return Excess 2016 -$5,000 -20% 2017 -$6,000 -$7,000 -25% 0.0 5,000.0 10,000.0 15,000.0 20,000.0 25,000.0 30,000.0 Avg. Capital Employed ($m)

Source: Capital IQ

ISO Value Creation Chart EP Levels 10%

8% $1,000 6% 2009 $900 $800 $700 4% $600 $500 2012 $400

WACC) 2% 2014 $300 - 2011 2010 2013 $200 $100 0% -$100 2015 -$200 -2% 2016 -$300 -$400 -$500 -4% 2018 -$600 2017 -$700 -$800 -6% -$900 Excess Return (ROCE Return Excess -$1,000 -8%

-10% 0.0 2,000.0 4,000.0 6,000.0 8,000.0 10,000.0 12,000.0 14,000.0 Avg. Capital Employed ($m)

Source: Capital IQ

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