Subsea 7 S.a. · OSL:SUBC
Subsea 7 — Q3 2018 Earnings Presentation
25 slides from Subsea 7's earnings presentation, Nov 8, 2018
Slide 1: Third Quarter 2018 Earnings Presentation
Third Quarter 2018 Earnings Presentation 8 November 2018 1 © Subsea 7 - 2018 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: Third Quarter 2018
Third Quarter 2018 Jean Cahuzac, CEO - Highlights Ricardo Rosa, CFO - Financial performance Jean Cahuzac, CEO - Strategy and outlook - Q&A 3 © Subsea 7 - 2018 subsea7.com
Slide 4: Q3 2018 results
Q3 2018 results FINANCIAL HIGHLIGHTS OPERATIONAL HIGHLIGHTS • Revenue $1.1 billion • Good progress on EPIC SURF • Adjusted EBITDA $217 million • Active Vessel Utilisation: 89% • Adjusted EBITDA margin 20% • Total Vessel Utilisation: 85% • Diluted EPS $0.23 • Operating cash generated $190 million • N
Slide 5: Operational highlights
Operational highlights Cooper Sole (Australia) WND Ph.2/GFR (Egypt) Borkum II (Germany) Hasbah (KSA) PUPP (Nigeria) Aerfugl (Norway) i-Tech Services PLSVs (Brazil) 5 © Subsea 7 - 2018 subsea7.com
Slide 6: Backlog and order intake
Backlog and order intake Backlog of $5.1 billion, as at 30 September 2018 • $0.8 billion awarded in the third quarter 2018 • Book-to-bill: SURF and $1.0bn Conventional – 0.7x in the quarter 2020+ $4.3bn $1.9bn – 1.0x year-to-date Renewables & Heavy Lifting $0.3bn • Four announced 2019 awards: $2.2bn
Slide 7: Income statement – Q3 highlights
Income statement – Q3 highlights Three months ended 30 September 2018 30 September 2017 In $ millions, unless otherwise indicated Unaudited Unaudited Revenue 1,082 1,063 Net operating income (NOI) 111 149 Income before taxes 110 123 Taxation (34) (12) Net income 76 111 Adjusted EBITDA(1) 217 250 Adj
Slide 8: Business Unit performance – Third quarter
Business Unit performance – Third quarter Revenue NOI $1,082m $1,063m $111m $149m $152m $232m $66m $76m $45m $17m $6m $4m $865m $755m $93m $103m 2018 2017 2018 2017 SURF & Conventional i-Tech Services Renewables & Heavy Lifting Corporate segment: net operating loss Q3 2018 $3m (Q3 2017: net operatin
Slide 9: Summary of third quarter 2018 cash flow
Summary of third quarter 2018 cash flow $m 217 (8) (20) (74) 3 732 614 Cash at EBITDA Changes in operating Tax Capex Other Cash at 1 July 2018 assets and liabilities paid 30 September 2018 • Net cash of $468 million as at 30 September 2018 • Long-term ECA borrowing facility of $264 million at 30 Sep
Slide 10: Initial IFRS 16 'Leases' guidance
Initial IFRS 16 ‘Leases’ guidance • IFRS 16 ‘Leases’ will be effective from 1 January 2019. IFRS 16 2019 forecast impact • Requires the Group to recognise: Income Statement Lease expense Decrease by $100m - $110m a right-of-use asset for long-term leases, to be amortised straight-line over duratio
Slide 11: Financial guidance
Financial guidance(1) 2018 Guidance Revenue Broadly in line with 2017 Adjusted EBITDA percentage margin Significantly lower than 2017 Administrative expense $260 million - $280 million Net finance cost $0 million - $5 million Depreciation and Amortisation $430 million - $440 million Full year effect
Slide 12: Large offshore wind farm projects
Large offshore wind farm projects Pre-2019 Post-2019 Subsea 7: No major Gode Wind Gemini Borkum II Hornsea One Triton Knoll Yunlin Guanyin ph2 Inch Cape 582MW 600MW 203MW 1218MW offshore EPCI wind 860MW 640MW 350MW 784MW projects for execution in 2019 • T&I work needed to maintain vessel utilisation
Slide 13: Offshore Wind Market Trends
Offshore Wind Market Trends Cumulative GW Installations 156 Levelised Cost of Energy Trend 160 140 133 140 120 120 LCOE dropping LCOE (Eur/MWh) 107 100 100 30% every 5 years CAGR 16% 80 73 GW 80 -30% 60 60 48 38 40 40 Actuals 20 CAGR 12% 20 Forecast 0 0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2
Slide 14: Business Unit Outlook
Business Unit Outlook SURF and Conventional - Tendering activity increasing but pricing not yet improving near term - Improved visibility on timing of awards for large greenfield projects, with some projects already awarded to market Renewables and Heavy Lifting - T&I tendering for near-term activit
Slide 15: © Subsea 7 - 2018 subsea7.com
15 © Subsea 7 - 2018 subsea7.com
Slide 16: Appendix
Appendix Major project progression Track Record Fleet Financial summaries 16 © Subsea 7 - 2018 subsea7.com
Slide 17: Major project progression
Major project progression • Continuing projects >$100m between 5% and 95% complete as at 30 September 2018 excluding PLSV and Life of Field day-rate contracts Culzean (UK) Announced WND Ph.2 (Egypt) size of Sonamet (Angola) project Borkum II (Germany) Major Hasbah (Saudi Arabia) (Over $750m) Sole (A
Slide 18: Track Record
• Beatrice wind farm, BOWL • Borkum II, Trianel • Triton Knoll, Innogy • Martin Linge, Total • Buzzard ph. 2, Nexen • Aasta Hansteen, Statoil • Catcher, Premier • Maria, Wintershall • Culzean, Maersk • IRM Services, Equinor • Alligin, BP • Penguins, Shell • IRM Services, BP • Snorre, Equinor • Al-Kh
Slide 19: 34 Vessels including 32 active vessels at end Q3 '18
34 Vessels including 32 active vessels at end Q3 ‘18 Under Construction Reel-lay Vessel to be named Seven Vega Long-term charter from a vessel-owning joint venture Stacked 19 © Subsea 7 - 2018 Chartered from a third party subsea7.com
Slide 20: Income statement – supplementary details
Income statement – supplementary details Three months ended 30 September 18 30 September 17 In $ millions Unaudited Unaudited Administrative expenses (64) (64) Share of net income/(loss) of associates and joint ventures - (13) Depreciation, amortisation, mobilisation and impairment (107) (101) Net o
Slide 21: Segmental analysis
Segmental analysis For the three months ended 30 September 2018 Renewables & In $ millions (unaudited) SURF & Conventional i-Tech Services Heavy Lifting Corporate TOTAL Revenue 865 66 152 - 1,082 Net operating income/(loss) 93 4 17 (3) 111 Finance income 4 Other gains and losses (2) Finance costs (3
Slide 22: Summary balance sheet
Summary balance sheet 30 September 31 December 30 September 31 December 2018 2017 2018 2017 In $ millions Unaudited Audited In $ millions Unaudited Audited Assets Equity & Liabilities Total equity 5,826 5,941 Non-current assets Non-current liabilities Goodwill 767 701 Non-current portion of borrowin
Slide 23: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA Net operating income to Adjusted EBITDA Three Months Ended 30 Sept. 2018 Three Months Ended 30 Sept. 2017 For the period (in $millions) Unaudited Unaudited Net operating income 111 149 Depreciation, amortisation, mobilisation and impairment 107 101 Adjusted EBITDA 2
Slide 24: Summary of year-to-date 2018 cash flow
Summary of year-to-date 2018 cash flow $ millions Cash and cash equivalents at 31 Dec 2017 1,109 Included an increase in net operating assets of Net cash generated from operating activities 238 $183 million Included cash outflows on SOC acquisition of $156 million including vessels, acquisition of N
Slide 25: 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 25 © Subsea 7 - 2018 subsea7.com