Subsea 7 S.a. · OSL:SUBC
Subsea 7 — Q3 2019 Earnings Presentation
28 slides from Subsea 7's earnings presentation, Nov 7, 2019
Slide 1: Third Quarter 2019 Earnings Presentation
Third Quarter 2019 Earnings Presentation 7 November 2019 1 © Subsea 7 - 2019 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 2019
Third Quarter 2019 Jean Cahuzac, CEO - Highlights Ricardo Rosa, CFO - Financial performance Jean Cahuzac, CEO - Outlook - Q&A 3 © Subsea 7 - 2019 subsea7.com
Slide 4: Q3 2019 results
Q3 2019 results FINANCIAL HIGHLIGHTS OPERATIONAL HIGHLIGHTS • Revenue $951 million • Total Vessel Utilisation: 78% • Adjusted EBITDA $181 million • Low but improving levels of activity • Adjusted EBITDA margin 19% in Renewables and Heavy Lifting • Diluted EPS $0.15 • Good utilisation for the PLSVs a
Slide 5: Operational highlights
Operational highlights Alligin (UK) Burullus 9B (Egypt) Snorre (Norway) PUPP (Nigeria) To be updated Mad Dog II (GoM) Formosa 1 ph.2 (Taiwan) Life of Field PLSVs (Brazil) 5 © Subsea 7 - 2019 subsea7.com
Slide 6: PLSVs in Brazil
PLSVs in Brazil • Pipelay support vessel (PLSV) is a PLSVs Use(2) heavy construction vessel with flex- Maintenance Other lay capability also able to perform on existing flexibles 1% various construction activities over 14% the project life cycle Flexibles • Scope of work in Brazil is a mix of remova
Slide 7: Heavy Construction/Flex-lay Fleet
Heavy Construction/Flex-lay Fleet Presently in Brazil(1) Presently outside Brazil(1) Top Top Crane Crane Tension Tension Seven 100t/ Seven 550t 400t 430t Cruzeiro 400t(2) Seas 100t/ Seven Seven Rio 550t 250t 260t 400t(2) Pacific Seven 100t/ Seven 550t 1000t 600t Sun 400t(2) Arctic Seven Normand 125t
Slide 8: Backlog and order intake
Backlog and order intake Backlog of $4.9 billion, as at 30 September 2019 • $1.4 billion order intake in the third quarter • Book-to-bill: 2019 $0.9bn SURF and – 1.4x in the quarter 2021+ Conventional $1.4bn $4.0bn – 1.0x year-to-date Renewables & Heavy Lifting • Six announced awards: $0.3bn – Europ
Slide 9: Income statement – Q3 highlights
Income statement – Q3 highlights Three months ended 30 September 2019 30 September 2018 In $ millions, unless otherwise indicated Unaudited Unaudited Revenue 951 1,082 Net operating income (NOI) 59 111 Income before taxes 71 110 Taxation (28) (34) Net income 42 76 Adjusted EBITDA(1) 181 217 Adjusted
Slide 10: Income statement – supplementary details
Income statement – supplementary details Three months ended 30 September 2019 30 September 2018 In $ millions Unaudited Unaudited Administrative expenses (73) (64) Share of net (loss)/income of associates and joint ventures (3) - Depreciation, amortisation, mobilisation and impairment (122) (107) Ne
Slide 11: Business Unit performance – Third quarter
Business Unit performance – Third quarter Revenue NOI $951m $1,082m $59m $111m $152m $55m $66m $70m $17m $4m $865m $6m $826m $93m $62m $(8)m 2019 2018 2019 2018 SURF & Conventional Life of Field Renewables & Heavy Lifting Corporate segment: net operating loss Q3 2019 $2m (Q3 2018: net operating loss
Slide 12: Summary of third quarter 2019 cash flow
Summary of third quarter 2019 cash flow $m 181 (112) (21) (28) 420 (30) (25) (6) (27) 15 367 Cash at 1 July EBITDA Changes in Tax paid Capex Payment of Share Repayment of Lease Other Cash at 30 2019 operating contingent repurchases borrowing payments September assets and consideration 2019 liabiliti
Slide 13: Financial guidance
Financial guidance(1) 2019 Guidance Revenue Slightly lower than 2018 Adjusted EBITDA(2) Lower than 2018, double digit percentage margin Net Operating Income Positive for the Group Administrative expense $265 million - $275 million Net finance cost $10 million - $15 million Depreciation and Amortisat
Slide 14: Creating market-leading solutions
Creating market-leading solutions Engage early Enable with technology Digitalise and automate 14 © Subsea 7 - 2019 subsea7.com
Slide 15: Early engagement
Early engagement FEASIBILITY & EARLY CLIENT CONCEPT SELECT FEED & DESIGN APPRAISE CONCEPT ENGAGEMENT & PRE-FEED COMPETITIONS SCREENING 15 © Subsea 7 - 2019 subsea7.com
Slide 16: Total Lifecycle Solutions
Total Lifecycle Solutions 10 projects (1) (including 4 FEED-to-EPIC contracts) 7 clients 5 countries Africa, Australia, UK, Norway and US Gulf of Mexico (1) Awarded since 2015 16 © Subsea 7 - 2019 subsea7.com
Slide 17: Outlook: Key projects
Outlook: Key projects Europe • Increasingly, greenfield • SSE Seagreen (W) projects require an early Canada and USA • Vattenfall HKZ (W)* engagement approach • Equinor Bay du Nord (i) • Innogy Kaskasi II (W) • Shell Whale • IOG Blythe and Vulcan • AkerBP Aerfugl Ph2 • Vessel availability tightening
Slide 18: Summary
Summary • Gradual market recovery for offshore oil and gas activity worldwide continues • Early engineering, technology and integrated services are key enablers for greenfield awards • Renewables market continues to grow rapidly but foundation installation sector remains competitive at this stage •
Slide 19: © Subsea 7 - 2019 subsea7.com
19 © Subsea 7 - 2019 subsea7.com
Slide 20: Appendix
Appendix Major project progression Track Record Fleet Financial summaries 20 © Subsea 7 - 2019 subsea7.com
Slide 21: Major project progression
Major project progression • Continuing projects >$100m between 5% and 95% complete as at 30 September excluding PLSV and Life of Field day-rate contracts Sonamet (Angola) Oda (Norway) Announced size WDDM 9B (Egypt) of project(1) Snorre Expansion (Norway) 3PDMs (Saudi Arabia) Major Katmai (USA) (Over
Slide 22: Track Record
• Shearwater, Shell • Orman Lange, Shell • Buzzard ph. 2, Nexen • Nova, Wintershall • Penguins, Shell • IRM Services, Equinor • Pierce, Shell • Johan Castberg, Equinor • SCIRM, BP • Snorre, Equinor • DSVi, Various • Aerfugl, Aker BP • Beatrice wind farm, BOWL • Coastal Virginia Offshore Wind, Orsted
Slide 23: 35 Vessels including 32 active vessels at end Q3 '19
35 Vessels including 32 active vessels at end Q3 ‘19 Under Construction Reel-lay Vessel to be named Seven Vega Chartered from a third party Long-term charter from a vessel-owning joint venture Owned by Nigerian joint venture Stacked 23 © Subsea 7 - 2019 subsea7.com
Slide 24: Segmental analysis
Segmental analysis For the three months ended 30 September 2019 Renewables & In $ millions (unaudited) SURF & Conventional Life of Field Heavy Lifting Corporate TOTAL Revenue 826 70 55 - 951 Net operating income/(loss) 62 6 (8) (2) 59 Finance income 3 Other gains and losses 16 Finance costs (7) Inco
Slide 25: Summary balance sheet
Summary balance sheet 30 31 30 31 September December September December 2019 2018 2019 2018 In $ millions Unaudited Audited In $ millions Unaudited Audited Assets Equity & Liabilities Total equity 5,442 5,722 Non-current assets Non-current liabilities Goodwill 768 751 Non-current portion of borrowin
Slide 26: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA Net operating income to Adjusted EBITDA Three Months Ended 30 September 2019 Three Months Ended September 2018 For the period (in $millions) Unaudited Unaudited Net operating income 59 111 Depreciation, amortisation, mobilisation and impairment 122 107 Adjusted EBIT
Slide 27: Summary of cash flows for nine months ended 30 September 2019
Summary of cash flows for nine months ended 30 September 2019 $ millions Cash and cash equivalents at 1 Jan 2019 765 Included a decrease in net operating liabilities Net cash generated from operating activities 195 of $169 million Included cash outflows on capital expenditure of Net cash flow used i
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 - 2019 subsea7.com