Subsea 7 S.a. · OSL:SUBC
Subsea 7 — Q1 2022 Earnings Presentation
25 slides from Subsea 7's earnings presentation, Apr 28, 2022
Slide 1: First Quarter 2022 Earnings Presentation
First Quarter 2022 Earnings Presentation 28 April 2022 1 © Subsea 7 - 2022 subsea7.com
Slide 2: Forward-looking statements
Forward-looking statements This document may contain ‘forward-looking statements’ (within the meaning of the safe harbour provisions of the U.S. Private Securities Litigation Reform Act of 1995). These statements relate to our current expectations, beliefs, intentions, assumptions or strategies rega
Slide 3: First quarter 2022 – summary
First quarter 2022 – summary • First quarter performance in line with expectations – Major projects continued to make good progress – Solid new orders in Subsea and Conventional with a book-to-bill of 1.1 – Renewables continued to deliver Seagreen and restarted operations in Taiwan • Upcycle continu
Slide 4: Sustainability
Sustainability • Our third Sustainability Report – Published in March 2022 • In 2021 we continued to engage and progress against our Sustainability priorities – Published our target to achieve Net Zero by 2050 – Established BORA Blue Ocean Research AllianceTM – Continued to focus on business ethics
Slide 5: Operational highlights
Operational highlights Good progress on large EPCI projects: • Bacalhau 41% complete – Fabrication progressing well • Sakarya 30% complete Sakarya, Turkey Bacalhau, Brazil – Two vessels mobilised offshore for preparation works • Johan Sverdrup Phase 2 92% complete – Seven Vega completed pipelay • Se
Slide 6: Russia-Ukraine conflict
Russia-Ukraine conflict • No activities directly in Russia or Ukraine UKRAINE • Providing support to approximately 200 Russian or Ukrainian members of our offshore crew ROMANIA RUSSIA • Compliant with sanctions • Security in the Black Sea BULGARIA Subsea 7 operations GEORGIA – Active operations appr
Slide 7: Managing the supply chain
Managing the supply chain • Protection in place on contracts already awarded – Back-to-back contracts, index-linked pricing and escalators – Project fuel costs hedged or passed through to clients • Tenders with preferred bidder status and future tenders – Managing raw material price inflation – New
Slide 8: Salamander floating wind update
Salamander floating wind update • Ørsted acquired an 80% stake in the Salamander joint venture – Subsea 7 and Simply Blue retain minority stakes • Stepping-stone 100 MW floating wind project off the east coast of Scotland – Providing the Scottish supply chain with early capacity development before l
Slide 9: Solid backlog for 2022 and 2023
Solid backlog for 2022 and 2023 2024+ 2022 2024+ • Order intake $1.2 billion $0.2bn $1.3bn $2.5bn – New awards $629 million 2023 2022 – Escalations $532 million $0.7bn $0.2bn – FX impact $117 million 2023 – Book-to-bill 1.0 $2.4bn • Group backlog $7.3 billion Subsea and Conventional Renewables $6.2
Slide 10: First quarter 2022 – Group
First quarter 2022 – Group Revenue Adjusted EBITDA 120 0.25 100 0.2 80 0.15 60 $1.2bn 7.2% 0.1 $1.0bn 40 20 10.2% 0.05 • Revenue up 20% year-on-year 0 $102m $86m 0 – Good progress on large EPCI Q1 2021 Q1 2022 Q1 2021 Q1 2022 projects • EBITDA margin 7.2% Order intake Backlog – Planned maintenance o
Slide 11: First quarter 2022 – Subsea and Conventional
First quarter 2022 – Subsea and Conventional Order intake Backlog • Order intake $1.0 billion $6.0bn $6.2bn $0.8bn $1.0bn – Including Zuluf, Shenandoah – Book-to-bill 1.1 – Order backlog $6.2 billion Q1 2021 Q1 2022 Q4 2021 Q1 2022 • Revenue up 23% year-on-year – High level of procurement for Revenu
Slide 12: First quarter 2022 – Renewables
First quarter 2022 – Renewables Order intake Backlog • Order intake $93 million $93m $1.2bn $1.0bn – Order backlog $1.0 billion nil • Revenue up 10% year-on-year Q1 2021 Q1 2022 Q4 2021 Q1 2022 – Good progress on Seagreen, Kaskasi and Hornsea II Revenue Adjusted EBITDA • EBITDA margin 2.0% 300 0.15
Slide 13: First quarter 2022 – cash flow summary
First quarter 2022 – cash flow summary $m 500 • Cash conversion 66% • Free cash flow $(14) million • Net debt $98 million Including lease liabilities of $219 million Cash EBITDA Working Tax Other Capex Financing Other Cash 1 Jan capital 31 Mar Operating $39m Investing $(51)m Financing $(90)m Working
Slide 14: Financial guidance
Financial guidance Subsea 7 S.A. 2021 2022 Of which, Seaway 7 ASA represents: Revenue $5.0 billion Broadly in line with 2021 • Revenues approximately $1 billion Administrative expense $228 million $240 – 260 million Adjusted EBITDA $521 million In line or better than 2021 • EBITDA margin towards 10%
Slide 15: Capital allocation framework
Capital allocation framework Subsea and Conventional Renewables 100% owned At least 51% owned Generating cash Investing for growth Well positioned with a young fleet Disciplined investment in Maintenance capex new vessels Return excess cash to Funded by Seaway 7 Transitioning to an independent share
Slide 16: Outlook - subsea prospects
Outlook - subsea prospects Norway Canada UK Aker BP NOA Fulla (f) Equinor Bay du Nord (i) plus multiple other projects Equinor Rosebank Equinor Krafla (f) NEP Teesside (ccs) plus multiple other projects Humber (ccs) Turkey Nigeria TPAO Sakarya 2 (i) USA Shell Bonga North BP tie-back projects Ghana M
Slide 17: Outlook – significant offshore wind prospects
Outlook – significant offshore wind prospects UK Iberdrola East Anglia Hub Red Rock Inch Cape EDPR Moray West SSE Seagreen 1A Vattenfall Vanguard & Boreas USA Asia Ørsted Revolution Various prospects Poland Sunrise Ocean Wind Northland Baltic Power Equinor Empire Wind Equinor Baltyk II Beacon Wind B
Slide 18: Summary – positive momentum
Summary – positive momentum Subsea and Conventional recovery underway • Tendering activity for large greenfield projects remains strong Fixed offshore wind prospects maturing • $6 billion tender pipeline Continued momentum in floating wind • Entry of Ørsted takes Salamander to the next stage Active
Slide 19: Q&A
Q&A 19 © Subsea 7 - 2022 subsea7.com
Slide 20: Appendix
Appendix • Income statement • Supplementary details 20 © Subsea 7 - 2022 subsea7.com
Slide 21: Major project progression
Major project progression • Continuing projects >$100m between 5% and 95% complete as at 31 March 2022 excluding PLSV and Life of Field day-rate contracts Mad Dog 2 (USA) Johan Sverdrup II (Norway) Penguins Redevelopment (UK) Hornsea 2 (UK) Announced 28 Jackets (Saudi Arabia) size of project Berri-Z
Slide 22: Q1 2022 – income statement summary
Q1 2022 – income statement summary Three months ended 31 March 2022 31 March 2021 In $ millions, unless otherwise indicated Unaudited Unaudited Revenue 1,194 996 Net operating loss (31) (9) (Loss)/income before taxes (28) 3 Taxation 15 (2) Net (loss)/income (12) 1 Adjusted EBITDA 86 102 Adjusted EBI
Slide 23: Q1 2022 – supplementary details
Q1 2022 – supplementary details Three months ended 31 March 2022 31 March 2021 In $ millions Unaudited Unaudited Administrative expenses (60) (56) Depreciation, amortisation, mobilisation and impairment (117) (111) Net operating loss (31) (9) Net finance cost (4) (5) Other gains and losses 7 16 (Los
Slide 24: Fleet – vessels in the active fleet at the end of Q1 2022
Fleet – 34 vessels in the active fleet at the end of Q1 2022 Renewables and transportation vessels are operated by Seaway 7 ASA Seaway Alfa Lift and Seaway Ventus are under construction and therefore excluded from the active fleet total. Maersk Connector is on long-term charter from a third party Se
Slide 25: © Subsea 7 - 2022 subsea7.com
25 © Subsea 7 - 2022 subsea7.com