Sbm Offshore Nv · EURONEXT:SBMO

Sbm Offshore Nv — H1 2014 Earnings Presentation

44 slides from Sbm Offshore Nv's earnings presentation, Aug 6, 2014

  1. Slide 1: 1H 2014 Presentation

    1H 2014 Presentation 6 August 2014 © SBM Offshore 2014. All rights reserved. www.sbmoffshore.com

  2. Slide 2: Disclaimer

    Disclaimer Some of the statements contained in this presentation that are not historical facts are statements of future expectations and other forward-looking statements based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual

  3. Slide 3: 1H 2014 in Review

    1H 2014 in Review 99% IFRS 0.06 Directional(1) Fleet Revenue Revenue LTIFR US$1,729 mn Uptime Up 29% N’Goma Kikeh US$1.85 bn Floating brownfield lifting project completed financing Solutions extension delivered US$21.5 bn US$240 mn IFRS 10 & 11 Brazil Directional(1) settlement Backlog provision IR -

  4. Slide 4: No.1 FPSO Player Worldwide

    No.1 FPSO Player Worldwide The Company Lease Fleet 5 Execution Centres 10 FPSOs; 4 FPSOs under construction 10 Operational Shore Bases 2 FSOs 5 Representative Offices 1 Semi Sub 10,983 Employees 1 MOPU Financials in US$ billion Performance 1H2014 2014 Directional(1) Guidance 3.3 251 years of operati

  5. Slide 5: Delivering the Full Product Lifecycle

    Delivering the Full Product Lifecycle Engineering Procurement 50 years of industry firsts Integrated supply chain Leading edge technology Global efficiencies Local sourcing Product Life Extension Construction Leader in FPSO relocation Strategic partnerships World class after sales Unrivalled project

  6. Slide 6: Agenda

    Agenda 1H 2014 Review Macro View 1H 2014 Financials Outlook 6

  7. Slide 7: Total Overview

    Total Overview (US$ millions) Lease & Operate Turnkey Other Revenue Directional(1) IFRS 2,797 2,164 1,729 1,634 2,275 1,744 1,208 1,146 521 488 522 419 1H 2014 1H 2013(2) 1H 2014 1H 2013(2) EBIT Directional(1) IFRS 201 316 74 -41 107 -8 265 139 177 171 -164 -170 -288 -287 -22 -22 1H 2014 1H 2013(2)

  8. Slide 8: Compliance

    Compliance • Findings of internal investigation published April 2, 2014 • Progress achieved in dialogue with relevant authorities • Provision of US$240 million taken in 1H14 financial statements • More information on progress of the investigation will be reported in due course IR - 06/08/2014 8

  9. Slide 9: HSSE Results

    HSSE Results • Two fatalities regrettably occurred HSSE Results in 1H14 0.6 • Recordable injury and lost time injury frequency improved by 35% 0.5 and 40% compared to 2013 Injury Frequency • Potentially severe incident 0.4 frequency reduced by 80% since 2011 0.3 • Offshore GHG emissions reduced 0.2

  10. Slide 10: Agenda

    Agenda 1H 2014 Review Macro View 1H 2014 Financials Outlook 10

  11. Slide 11: Enduring Appeal of Deepwater

    Enduring Appeal of Deepwater The Next Phase of the Cycle Deepwater Project Costs Marine • Three key supply growth buckets Transportation 5%  U.S. Shale Oil  Plateau by 2020 FPSO  Iraq  Outlook uncertain 12%  Deepwater  Secular growth story • Deepwater is the most important growth area Subsea –

  12. Slide 12: What's Changed?

    What’s Changed? 2000-2012 2013 & Beyond Rapid growth in the Deepwater frontier Experience from past (complex) projects Technology & local capabilities stretched to Improved upfront project scoping / more the limit; poorly developed supply chain front-end engineering; avoid re-scoping Tight offshore

  13. Slide 13: FPSO Awards

    FPSO Awards Historical and Estimated Awards 2014-2015 Commentary 16 Market Estimates • 10-14 awards per year 14 13 12 12 12 SBM’s View 10 • 12 awards in 2014 and 13 awards in 2015 10 – 5 awarded through 1H 2014 8 7 • 20 awards remaining through the end of 2015, 6 – 14 have begun the tender phase 4 o

  14. Slide 14: Pre-Award Activity

    Pre-Award Activity 16 15 Ex: Carryover of 2 14 projects from 2010 13(1) to 2011 (across all project types) 12 10 10 10 8 7 6 4 2 0 2011 2012 2013 2014E 2015E Turret ITT FPU FEED/ITT Petrobras ITT Previous Year Carryover Apart from Petrobras tenders, generally all FEED/ITT work is (partially) compens

  15. Slide 15: Agenda

    Agenda 1H 2014 Review Macro View 1H 2014 Financials Outlook 15

  16. Slide 16: IFRS 10 & 11 – Impact Assessment

    IFRS 10 & 11 – Impact Assessment (US$ billions) Production Units Financial Consolidation Brazil Old 8 9 Angola 22 Units Rest of the World Old Out In New 5 Brazil New 6 Angola 15 Units 9 Proportional N’Kossa II Saxi Batuque Yetagun Cdde Ilhabela Either 100% or Rest of the World Consolidation 0% Mondo

  17. Slide 17: IFRS 10 & 11 – Directional Changes

    IFRS 10 & 11 – Directional Changes (US$ billions) Production Units Financial Consolidation Brazil Out Old 8 9 Angola 22 Units Rest of the World Old New 5 Brazil New 8 9 Angola 22 Mostly Units 20% Capixaba Proportional Rest of the World Proportional No Changes 40% Aseng Consolidation Consolidation 5

  18. Slide 18: Underlying Directional Performance

    Underlying Directional(1) Performance (US$ millions) Directional(1) Revenue Directional(1) Gross Margin Directional(1) EBIT 1,729 352 15 337 225 184 1H 2014 -41 Reported Exceptional items Underlying Reported Exceptional items Underlying Directional(1) Revenue Directional(1) Gross Margin Directional(

  19. Slide 19: Turnkey P&L

    Turnkey P&L (US$ millions) Directional(1) 1H 2014 1H 2013* Variance Revenue 1,208 1,146 62 Gross Margin 199 245 (46) EBIT 107 177 (70) Depreciation, amortisation and impairment 7 7 – EBITDA 114 184 (70) * Restated for comparison purposes Directional(1) Comments Projects In Cidade de Maricá and Cidad

  20. Slide 20: Lease & Operate P&L

    Lease & Operate P&L (US$ millions) Directional(1) 1H 2014 1H 2013* Variance Revenue 521 488 33 Gross Margin 152 (153) 305 EBIT 139 (164) 303 Depreciation, amortisation and impairment 129 140 (11) EBITDA 268 (24) 292 * Restated for comparison purposes Directional(1) Comments Vessels In Cidade de Para

  21. Slide 21: Group P&L

    Group P&L (US$ millions) Directional(1) 1H 2014 1H 2013* Variance Revenue 1,729 1,634 95 Gross Margin 352 92 260 Overheads (153) (100) (53) Other operating income (240) – (240) EBIT (41) (8) (33) Depreciation, amortisation and impairment 139 147 (8) EBITDA 98 139 (41) Net financing costs (47) (42) (

  22. Slide 22: Overheads Breakdown

    Overheads Breakdown (US$ millions) Expense Bridge $175 $15 $153 $150 $37 $125 $100 $100 $75 $50 $25 $0 1H 2013 One-off Items Incl. Underlying Variation 1H 2014 Improvement Programmes(1) Increase mostly driven by non-recurring events IR - 06/08/2014 (1) Odyssey 24 transformation programme; investment

  23. Slide 23: Group Balance Sheet

    Group Balance Sheet (US$ millions) 30-Jun-14 31-Dec-13(1) Variance Comment Property, plant and equipment 2,013 2,055 (41) Modest capex compared to depreciation Investments in associates and other Redemption of Aseng and Cidade de 2,483 2,635 (152) financial assets Paraty Construction contracts 3,903

  24. Slide 24: Development of Group Cash Position

    Development of Group Cash Position (US$ millions) Cash Flow Bridge $2,500 $84 -$1,430 $118 $4 $1,260 $30 $2,000 $1,500 $1,000 $554 -$602 $500 $208 -$72 $154 $0 Cash Cash from New Loans Equity Investment Other Real Estate Investments Loan Interest Cash 31-Dec-13 Operations Funding Funding Disposal OL

  25. Slide 25: Group Loans & Borrowings

    Group Loans & Borrowings (US$ millions) 1H14 vs. FY13 Debt Summary Comparison $6,000 $5,000 $4,456 $4,000 $3,608 $3,180 $3,000 $2,632 $2,000 $1,000 $0 1H14 1H14 FY13 FY13 IFRS Proportional IFRS Proportional Bridge Loans Revolving Credit Other Project Finance IR - 06/08/2014 25

  26. Slide 26: Directional Backlog

    Directional(1) Backlog (US$ billions) US$ 21.5 bn (as of June 30, 2014) 1H14 Revenue Lease & Operate Backlog Remaining Backlog 1.5 1.0 0.5 0.0 $19.4 bn 2016 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 Turnkey Backlog 1H14 Revenue

  27. Slide 27: Funding

    Funding • Undrawn Credit Facilities + Cash = US$1,093 mn • Deep Panuke: US$400 mn bridge to USPP • Cidade de Maricá project finance: US$1.45 bn • Average cost of debt: 1H14 4.2% vs. FY13 5.3% IR - 06/08/2014 27

  28. Slide 28: Financial Ratios

    Financial Ratios (US$ millions) 30-Jun-14 31-Dec-13(1) Change Comment Bridge loan for Cidade de Maricá, Cidade Debt 4,456 3,608 24% de Saquarema and Deep Panuke Cash 154 208 -26% Separate slide Increased debt load for projects under Net Debt 4,302 3,400 27% construction Total Equity 2,917 2,887 1% 1

  29. Slide 29: Agenda

    Agenda 1H 2014 Review Macro View 1H 2014 Financials Outlook 29

  30. Slide 30: Scheduled for Delivery

    Scheduled for Delivery • Vessel arrived at offshore site in Angola • Lifting campaign completed at Paenal • Delivery expected in 3Q14 FPSO N’Goma (12 year L&O contract) • Topside integration continues at Brasa yard • Delivery expected in 2H14 Cidade de Ilhabela (20 year L&O contract) IR - 06/08/2014

  31. Slide 31: Project Overview

    Project Overview Project 2011 2012 2013 2014 2015 2016 POC Type(1) 30/06/14 Percentage of Completion FPSO N’Goma FL <25% FPSO Cidade de Ilhabela FL 25%<50% Turret Quad 204 T Turret Prelude FLNG T 50%<75% Turret Ichthys T >75% FPSO Cidade de Maricá FL FPSO Cidade de Saquarema FL 100% FPSO Turritella

  32. Slide 32: Floating Solutions

    Floating Solutions Current: Focus on top-end segment • FPSOs • Turret Moorings • Turnkey Sale or Lease & Operate Future: Leverage core competencies • Floating LNG (FLNG) • Semisubmersible & TLP production units IR - 06/08/2014 32

  33. Slide 33: 2014 Guidance

    2014 Guidance • Directional(1) Revenue guidance confidently reiterated: US$3.3 billion  Turnkey: US$2.3 billion  Lease & Operate: US$1.0 billion • As the market develops, the Company will adapt accordingly  Demand-driven management of fixed cost structure  Further develop core competencies to po

  34. Slide 34: Appendix

    Appendix © SBM Offshore 2014. All rights reserved. www.sbmoffshore.com

  35. Slide 35: IFRS 10 & 11 – JV Accounting

    IFRS 10 & 11 – JV Accounting • IFRS 10 & 11 consolidation standards for joint ventures (JVs) introduced January 1, 2014 • Ends proportional accounting of JVs  Full consolidation of fully controlled JVs (mostly Brazilian FPSOs)  Equity accounting of jointly controlled JVs (mostly Angolan FPSOs) • I

  36. Slide 36: IFRS 10 & 11 – Directional Impact

    IFRS 10 & 11 – Directional(1) Impact • New IFRS 10 & 11 eliminates the revenue SBM generates in the project phase from its JV partners in investees fully consolidated (Brazil) • Consequently, Directional(1) reporting from 2014 onwards will not only classify all leases as operating leases but:  Will

  37. Slide 37: IFRS 10 & 11

    IFRS 10 & 11 Lease New Old Joint Ventures Contract SBM Share % New IFRS Old IFRS Directional(1) Directional(1) Type FPSO N’Goma FL 50% Proportional Proportional Equity Proportional FPSO Saxi Batuque FL 50% Proportional Proportional Equity Proportional FPSO Mondo FL 50% Proportional Proportional Equi

  38. Slide 38: Group Loans & Borrowings

    Group Loans & Borrowings (US$ millions) Net Book Value as of 30 June 2014 Full Amount IFRS Proportional (Business Ownership) PROJECT FINANCE FACILITIES DRAWN FPSO Capixaba relocation $ 119 $ 119 $ 95 FPSO Kikeh 33 – 16 FPSO Espirito Santo 136 136 69 FPSO Aseng 172 172 103 FPSO Cidade de Paraty 923 9

  39. Slide 39: Project Direction – Context

    Project Direction – Context • SBM Offshore seeking to provide analysts and investors with clarity on business performance above and beyond statutory IFRS disclosure • SBM Offshore’s business model combines turnkey sales, construction and lease and operate projects, making it a challenge to model • I

  40. Slide 40: Operating Lease vs Finance Lease

    Operating Lease vs Finance Lease IR - 06/08/2014 40

  41. Slide 41: Operating Lease vs Finance Lease

    Operating Lease vs Finance Lease IR - 06/08/2014 41

  42. Slide 42: Directional – The Way Forward

    Directional(1) – The Way Forward • Turnkey segment becomes a pure construction business. Revenue and Gross Margin consist of:  Direct sales contracts (FPSO OSX 2, Turrets for Prelude, Quad 204 and Ichthys)  Sales to JV partners (FPSO Cidade de Ilhabela, FPSO N’Goma, FPSO Cidade de Maricá and Saqua

  43. Slide 43: SBM Lease Fleet Portfolio

    SBM Lease Fleet Portfolio L&O Portfolio Average Duration: 14.7 years(1) Initial Lease Period Confirmed Extension Contractual Extension Option IR - 06/08/2014 (1) Assumes the exercise of all lease extensions.

  44. Slide 44: © SBM Offshore 2014. All rights reserved. www.sbmoffshore.com © SBM Offshore 2014. All rights

    © SBM Offshore 2014. All rights reserved. www.sbmoffshore.com © SBM Offshore 2014. All rights reserved. www.sbmoffshore.com

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