SEA ODYSSEY AQUISITION Presentation to the GL Strategic Mergers and Aquisition Committee.

SEA ODYSSEY AQUISITION

Presentation to the GL Strategic Mergers and Aquisition Committee

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/CustomersI

Strong growth FCST for AUV over 60%

Military & research AUVs to total 89%

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%

P+LVII

Strong Overall Revenue growth: 17% per annumVII

Product Revenue growthVII

AUV Sales 8% p.a.AUV Lease 83% p.a.Instrument Sales 32% p.a.

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

Thank You