Subsea 7 S.a. · OSL:SUBC
Subsea 7 — Q3 2012 Earnings Presentation
22 slides from Subsea 7's earnings presentation, Nov 19, 2012
Slide 1: Earnings Presentation Third Quarter 2012
Earnings Presentation Third Quarter 2012 November 19, 2012 12:00 noon UK time
Slide 2: Forward-looking statements
Forward-looking statements Certain statements made in this announcement may include “forward-looking statements”. These statements may be identified by the use of words like “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “forecast”, “project,” “will,” “should,” “seek,” and s
Slide 3: Delivered good Q3 2012 results
Delivered good Q3 2012 results • Good results reflect: - Record vessel utilisation at 88% - High activity levels in North and Norwegian Seas; albeit mitigated by - execution of lower margin contracts awarded in previous years - High level of offshore activity in West Africa - good progress on all pr
Slide 4: Backlog
Backlog • Backlog of $8.1billion: - high level of tendering creates opportunity for further growth - we remain focused on building ‘quality’ backlog - nearly $1.3bn of announced new contracts so far in Q4 Backlog progression $m 19-Nov- Page 4 12
Slide 5: Market overview
Market overview • No apparent impact from macro-economic uncertainty on client activity • Strong momentum among clients to bring new reserves into production – project delays are a feature, but we expect high level of bidding activity to translate to market awards later this year and in 2013 • Mediu
Slide 6: Market overview
Market overview • Growth opportunities in all major markets, albeit at differing paces: • APME - pricing conditions remain more challenging than in other territories - expect projects to come to market award in early 2013 • Brazil - Petrobras’ revised plans remain ambitious - opportunities include:
Slide 7: Income statement – key highlights
Income statement – key highlights Ten Nine months Three months Ended months ended ended 30.Sep.12 30.Sep.11 30.Sep.12 30.Sep.11 In $ millions, unless indicated unaudited unaudited unaudited Unaudited Revenue 1,744 1,432 4,686 4,059 Net operating income 228 200 628 504 Gain on sale of NKT Flexibles 2
Slide 8: Operational performance – Q3 2012
Operational performance – Q3 2012 $847m $105m Revenue NOI $506m $52m $(2)m Revenue NOI $338m $125m $1m Revenue NOI Revenue NOI 19-Nov- Page 8 12
Slide 9: Income statement – other details
Income statement – other details Three Three months months ended ended 30.Sep.12 30.Sep.11 In $ millions Unaudited Unaudited Administrative expenses (98) (95) Share of results of associates and joint ventures 12 52 Net operating income 228 200 Finance costs net of investment income (7) (4) Other gai
Slide 10: Cash flow and balance sheet overview – YTD 2012
Cash flow and balance sheet overview – YTD 2012 • Cash generated from operating activities: $320m - increase in net operating assets: $381m • Net cashflow used in investing activities: $145m - capital expenditure of $460m: Seven Borealis, Seven Inagha, Seven Waves - net proceeds on disposal of NKT F
Slide 11: 2012 financial guidance
2012 financial guidance • We expect to deliver 2012 Adjusted EBITDA in-line with consensus expectations • Other financial guidance - administrative expenses: circa $360m (excluding integration costs) - integration costs: circa $30m - financing costs (net): circa $30m - depreciation and amortisation
Slide 12: Initial thoughts on 2013
Initial thoughts on 2013 • We remain positive about medium and long term market prospects but we expect that the outlook in 2013 will be tempered by: – delays in project awards in 2012, which has deferred execution of some projects post 2013 – some of the supply chain bottlenecks affecting the indus
Slide 13: Initial thoughts on 2013 – by territory
Initial thoughts on 2013 – by territory • NSC: levels of tendering remain high with improved pricing, however: – some backlog acquired late in 2012, such that associated offshore activity will largely be in 2014 and beyond – Q1 2012 benefited from unusually high vessel utilisation – a number of clie
Slide 14: Fleet upgrade programme since Jan 2011
Fleet upgrade programme since Jan 2011 • Seven Borealis will be operational on CLOV before year end • Introducing our new Brazilian PLSV – Seven Waves SURF Conventional Life-of-Field Divest / Release Renewables * Owned by SHL JV 19-Nov- Page 14 12
Slide 15: Summary
Summary • Good quarterly results • 2012 Adjusted EBITDA expected to be in-line with consensus • Contract award momentum building in Q4, expectation of major contracts awarded to market in coming months • Growth opportunities visible in all markets, albeit at differing paces • Company well positioned
Slide 16: Appendix
Appendix 11-May-11 2-Nov-11 Page 16
Slide 17: Major project progression
Major project progression Continuing projects >$100m between 5% and 95% complete as at 30 Sept 2012 excl. long-term ship charters and Life-of-Field day-rate contracts. * joint venture activity 19-Nov- Page 17 12
Slide 18: Backlog
Backlog Backlog progression $m Backlog by Award Date Backlog by Execution Date Backlog by Service Capability Backlog by Segment 2012 2011 19% SURF AFGoM 2010 42% 2014+ 75% NSC 35% 21% 34% 33% LoF <2009 9% 2013 Brazil 12% 2012 47% 25% 24% APME Other 7% 8% Conventional 9% 19-Nov- Page 18 12
Slide 19: Segmental analysis
Segmental analysis For the three months ended 30 September 2012 Total continuing (in $ millions) AFGoM APME BRAZIL NSC CORP operations Revenue 505.7 51.9 337.7 847.4 0.9 1,743.6 Net operating income/(loss) from operations 125.1 (1.8) 1.3 105.0 (1.4) 228.2 Investment income from bank deposits 2.4 Oth
Slide 20: Adjusted EBITDA
Adjusted EBITDA • The Group calculates adjusted earnings before interest, income taxation, depreciation and amortisation („Adjusted EBITDA‟) as net income plus finance costs, other gains and losses, taxation, depreciation and amortisation and adjusted to exclude investment income and impairment char
Slide 21: Reconciliation of net operating income to Adjusted EBITDA
Reconciliation of net operating income to Adjusted EBITDA Three Months Three Months Nine Months Ten Months Ended Ended Ended Ended 2012 2011 2012 2011 30 Sep 30 Sep 30 Sep 30 Sep For the period (in $ millions) Unaudited Unaudited Unaudited Unaudited Net operating income 228.2 199.6 627.8 503.8 Depre
Slide 22: seabed-to-surface
seabed-to-surface www.subsea7.com 19-Nov- 10.01.11 Page 22 12