Subsea 7 S.a. · OSL:SUBC
Subsea 7 — Q2 2017 Earnings Presentation
28 slides from Subsea 7's earnings presentation, Jul 26, 2017
Slide 1: Second Quarter 2017 Earnings Presentation
Second Quarter 2017 Earnings Presentation 26 July 2017 1 © Subsea 7 - 2017 subsea7.com
Slide 2: Forward-looking statements
Forward-looking statements Certain statements made in this presentation may include ‘forward-looking statements’. These statements may be identified by the use of words like ‘anticipate’, ‘believe’, ‘could’, ‘estimate’, ‘expect’, ‘forecast’, ‘intend’, ‘may’, ‘might’, ‘plan’, ‘predict’, ‘project’, ‘s
Slide 3: Second Quarter 2017
Second Quarter 2017 Jean Cahuzac, CEO - Highlights Ricardo Rosa, CFO - Financial performance Jean Cahuzac, CEO - Strategy and outlook - Q&A 3 © Subsea 7 - 2017 subsea7.com
Slide 4: Q2 2017 results
Q2 2017 results FINANCIAL HIGHLIGHTS OPERATIONAL HIGHLIGHTS • Revenue $1.0 billion • Good execution and successful • Adjusted EBITDA $340 million project outcomes • Adjusted EBITDA margin 33% • Vessel Utilisation • Diluted EPS $0.43 Active: 77% Total: 68% • Net cash $825 million ORDER INTAKE • Cash
Slide 5: Some of our activities
Some of our activities WND Ph.2/GFR (Egypt) Maria (Norway) Western Isles (UK) Stampede (US GoM) Beatrice (UK) Galloper substation (UK) EPRS (Australia) PLSVs (Brazil) 5 © Subsea 7 - 2017 subsea7.com
Slide 6: Backlog and order intake
Backlog and order intake Backlog of $5.7 billion(1), as at 30 June 2017 • $856 million added as a result of ECS acquisition SURF and 2019+ Conventional(2) • $141 million awarded $1.3bn 2017 $4.4bn $2.0bn in the second quarter i-Tech Services • $250 million awarded 0.3bn after quarter end for 2018 $2
Slide 7: Income statement – Q2 highlights
Income statement – Q2 highlights Three months ended 30 June 2017 30 June 2016 In $ millions, unless otherwise indicated Unaudited Unaudited Revenue 1,022 961 Net operating income (NOI) (1) 235 177 Income before taxes 206 206 Taxation (60) (69) Net income 146 136 Adjusted EBITDA(2) 340 280 Adjusted E
Slide 8: Income statement – supplementary details
Income statement – supplementary details Three months ended 30 June 17 30 June 16 In $ millions Unaudited Unaudited Administrative expenses (58) (68) Share of net (loss)/income of associates and joint ventures (11) 27 Depreciation and amortisation (105) (93) Net operating income 235 177 Net finance
Slide 9: Business Unit performance – Second quarter
Business Unit performance– Second quarter Revenue NOI $1,022m $961m $235m $177m $2m $93m $20m $325m $53m $13m $11m $83m $866m $189m $163m $614m 2017 2016 2017 2016 SURF & Conventional i-Tech Services Renewables & Heavy Lifting Corporate segment: net operating income Q2 2017 $8m (net operating loss Q
Slide 10: Provisional ECS accounting and consolidation
Provisional ECS accounting and consolidation • Consideration of $55 million for the ECS businesses: • Included $30 million cash disbursed in Q2 (net of $8 million cash acquired) • $17 million accrued consideration will be cash-settled in Q3 • $25 million debtor-in-possession financing repaid • Provi
Slide 11: Summary of second quarter 2017 cash flow
Summary of second quarter 2017 cash flow $m 340 (140) (55) (28) (30) (30) (191) 1,872 (270) 8 1,474 Cash at 31 EBITDA Repayment of Repurchase of Tax Paid Capex Acquisition of Dividends Decrease in Other Cash at 30 March 2017 Borrowings Convertible Business Paid Net Operating June 2017 Bonds (net of
Slide 12: Our priorities for capital allocation
Our priorities for capital allocation 1. Invest to grow • Acquired certain business of ECS and strengthen • Investment in vessel capability to meet demand our business • Focused investment in technology and innovation 2. Maintain an • Net cash $825 million at 30 June 2017 investment- • $342 million
Slide 13: Financial guidance
Financial guidance 2017 Guidance Revenue Higher than 2016 Adjusted EBITDA percentage margin Lower than 2016 Administrative expense $220 million - $240 million Net finance cost $5 million - $10 million Depreciation and Amortisation $410 million - $430 million Full year effective tax rate 28% - 33% Ca
Slide 14: Subsea 7’s approach and strategy through the cycle
Subsea 7’s approach and strategy through the cycle Reduce capacity, invest in capability and technology New build PLSV programme completed Second cost Seven Waves Global alliance reduction Seven Rio SHL acquisition/ formed with programme Seven Sun Renewables OneSubsea $350m savings Seven Cruzeiro di
Slide 15: Growing and strengthening our business
Growing and strengthening our business Acquired certain businesses of EMAS Chiyoda Subsea - 29 June 2017 Accelerated strategy Long-term agreement Added $856 million of 850 people Two chartered to grow in the Middle (LTA) for work with signed order backlog integrated into our vessels added to our Eas
Slide 16: Middle East – an opportunity in Conventional
Middle East – an opportunity in Conventional Long-term agreement to provide services to Saudi Aramco, in consortium with L&T, continues to 2021 Three current projects offshore Saudi Arabia - Hasbah - Four Decks - 17 Cranes Invited to tender on new awards in Saudi Arabia following the completion of t
Slide 17: Subsea market outlook
Subsea market outlook Deepwater breakeven estimates Global Subsea Tree Awards $100 50% 600 (projects coming online 2017-2025) by Award Year 500 $80 40% Percent change 400 $60 30% $/bbl 300 $40 20% 200 100 $20 10% 0 $0 0% Africa/Medit. Asia/Pacific N. Sea 2015 breakevens 2017 breakevens % Change N. A
Slide 18: Business Unit outlook
Business Unit outlook SURF and Conventional • Gradual recovery, awards to market could increase by first half 2018 • Active SURF project tenders include: - Snorre (Norway) - Golfinho (Mozambique) - Peregrino (Brazil) - Skarfjell (Norway) - Mamba (Mozambique) - KG-D6, R-Cluster (India) - Snadd (Norwa
Slide 19: © Subsea 7 - 2017 subsea7.com
19 © Subsea 7 - 2017 subsea7.com
Slide 20: Appendix
Appendix Major project progression Track Record Fleet Financial summaries 20 © Subsea 7 - 2017 subsea7.com
Slide 21: Major project progression
Major project progression • Continuing projects >$100m between 5% and 95% complete as at 30 June 2017 excluding PLSV and Life of Field day-rate contracts SLMP (Norway) Announced Clair Ridge (UK) size of Catcher (UK) project Stampede (GOM) Major Western Isles (UK) (Over $750m) Aasta Hansteen (Norway)
Slide 22: Track Record
• Beatrice wind farm, BOWL • Catcher, Premier • Martin Linge, Total • Culzean, Maersk • Aasta Hansteen, Statoil • Callater, Apache • Maria, Wintershall • Western Isles, Dana • Mariner, Statoil • Montrose, Talisman • USC & Pipelay, Shell • SCIRM, BP • Coulomb Ph2, • Al-Khalij, Total • DSVi, Various S
Slide 23: 37 Vessels including 33 active vessels
37 Vessels including 33 active vessels 10 vessels released since May 2015 Seven Polaris (Scrapped 4Q ‘15) Skandi Seven (returned to owner 3Q ‘15) Havila Subsea (returned to owner 4Q ‘15) Acergy Viking (returned to owner 4Q ‘15) Skandi Skansen (returned to owner 4Q ’15) Skandi Neptune (returned to ow
Slide 24: Segmental analysis
Segmental analysis For the three months ended 30 June 2017 Renewables & In $ millions (unaudited) SURF & Conventional i-Tech Services Heavy Lifting Corporate TOTAL Revenue 614 83 325 - 1,022 Net operating income 163 11 53 8 235 Finance income 6 Other gains and losses (27) Finance costs (7) Income be
Slide 25: Summary balance sheet
Summary balance sheet 30 June 30 June 31 Dec 2016 31 Dec 2016 2017 2017 Audited Audited In $ millions Unaudited In $ millions Unaudited Assets Equity & Liabilities Total equity 5,713 5,537 Non-current assets Non-current liabilities Goodwill 683 628 Non-current portion of borrowings 269 - Property, p
Slide 26: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA Net operating income to Adjusted EBITDA Three Months Ended 30 June 2017 Three Months Ended 30 June 2016 For the period (in $millions) Unaudited Unaudited Net operating income 235 177 Depreciation, amortisation and mobilisation 105 93 Impairment of property, plant an
Slide 27: Summary of first half 2017 cash flow
Summary of first half 2017 cash flow $ millions Cash and cash equivalents at 31 Dec 2016 1,676 Net cash generated from operating activities 97 Decrease of $464 million in net operating liabilities Included cash outflows on acquisition of Seaway Heavy Lifting, $111 million and ECS, $30 Net cash flow
Slide 28: Contact: Isabel Green, Investor Relations Director
Contact: Isabel Green, Investor Relations Director eMail: isabel.green@subsea7.com Direct Line +44 20 8210 5568 Website www.subsea7.com 28 © Subsea 7 - 2017 subsea7.com