Saipem S.p.a. · MIL:SPM

Saipem — Q3 2016 Earnings Presentation

30 slides from Saipem's earnings presentation, Oct 25, 2016

  1. Slide 1: Third Quarter 2016 Results and Strategy Update

    THIRD QUARTER 2016 RESULTS AND STRATEGY UPDATE 25 October 2016 Saipem. martedì Engineering 25 ottobre 2016 Energy

  2. Slide 2: Forward-Looking Statements

    Saipem. Engineering Energy FORWARD-LOOKING STATEMENTS Forward-looking statements contained in this presentation regrading future events and future results are based on current expectations, estimates, forecasts and projections about the industries in which Saipem S.p.A. (the “Company”) operates, as

  3. Slide 3: Today's Presentation

    Saipem. Engineering Energy TODAY’S PRESENTATION 1 OPENING REMARKS 2 STRATEGY UPDATE 3 9 MONTHS 2016 RESULTS 4 2017 GUIDANCE AND CLOSING REMARKS 3

  4. Slide 4: Opening Remarks

    Saipem. Engineering Energy OPENING REMARKS  Strategy update: decisive response to delayed market recovery • Organisational transformation: • Enhancing effectiveness, efficiency and business accountability • Creation of a new high value engineering services division • Asset base rationalisation and

  5. Slide 5: Strategy Update

    fo ™ SAIPEM ENGINEERING ENERGY STRATEGY UPDATE ENGINEERING

  6. Slide 6: Market Outlook

    Saipem. Engineering Energy MARKET OUTLOOK  Oil price delaying E&P capex recovery post 2017  Further reduction in development costs needed to boost E&P spending 2017 scenario  Strict cash flow management by Oil Companies  Industry consolidation and alliances expected to continue  Offshore fleet

  7. Slide 7: Strategy Update: Decisive Response to Delayed Market Recovery

    Saipem. Engineering Energy STRATEGY UPDATE DECISIVE RESPONSE TO DELAYED MARKET RECOVERY Saipem’s Strategic pillars ACTIONS  FIT FOR THE FUTURE 2.0 1 Business portfolio refocus • NEW BUSINESS MODEL IMPLEMENTATION • 2015 COST OPTIMISATION PROGRAMME €1.7BN PROCEEDING AS SCHEDULED 2 De-risking the busi

  8. Slide 8: Key Principles of Organisational Shift

    Saipem. Engineering Energy FIT FOR THE FUTURE 2.0 NEW BUSINESS MODEL - RATIONALE KEY PRINCIPLES OF ORGANISATIONAL SHIFT MARKET ENVIRONMENT  Leaner Corporate Organization Unprecedented E&P capex EFFECTIVENESS  Tailored processes to each business reduction  Agile decision making INDUSTRY CHALLENGES

  9. Slide 9: Fit for the Future 2.0: Leaner Organization and Decentralized Model

    Saipem. Engineering Energy FIT FOR THE FUTURE 2.0 LEANER ORGANIZATION AND DECENTRALIZED MODEL Saipem Saipem Saipem Offshore Saipem Saipem Offshore Saipem Onshore Engineering Drilling Onshore Drilling High-Value Services 5 Divisions / Legal Entities OLD NEW  Business Units focused on operations with

  10. Slide 10: High Value Engineering Services Business

    Saipem. Engineering Energy HIGH VALUE ENGINEERING SERVICES BUSINESS ADDING VALUE FOR CLIENTS FROM EARLY PHASES OF PROJECT DEVELOPMENT RATIONALE COMPETITIVE ADVANTAGES SYNERGIES WITH CURRENT BUSINESS  Enter a new market to:  Expertise covering the entire  Improving commercial Oil&Gas value chain e

  11. Slide 11: Fit for the Future: 2015 Cost Saving Programme on Track

    Saipem. Engineering Energy FIT FOR THE FUTURE 2015 COST SAVING PROGRAMME ON TRACK € mn ON TRACK  750 650 Cumulative Cumulative Achieved EBIT Cost Savings 300 improvement €1.7bn €1.0bn over the plan 2H2015 2016 2017  36% of the planned initiatives completed, the balance in line with targets  Overa

  12. Slide 12: Asset Base Rationalisation

    Saipem. Engineering Energy ASSET BASE RATIONALISATION Right-sizing offshore and drilling fleet  Write off of 2 old generation jackups, 1 semisub and 1 E&C offshore vessel Fleet  Impairment of 5 offshore drilling semisubs and on our floating production units due to lower expected dayrates  Onshore

  13. Slide 13: Technological Innovation

    Saipem. Engineering Energy TECHNOLOGICAL INNOVATION INNOVATION LEADERSHIP TO DRIVE GROWTH “INNOVATION FACTORY” FIELD OF ACTIVITIES SURF, SUBSEA PIPELINE OFFSHORE  New materials, Welding and Laying new techniques  Competitive advantage: bringing ideas into reality by  Subsea Efficient Solutions ad

  14. Slide 14: Selected Developments

    Saipem. Engineering Energy SELECTED DEVELOPMENTS INNOVATIVE SUBSEA AND LNG SOLUTIONS TO ENHANCE COMPETITIVENESS INNOVATIVE SOLUTIONS OPTIMIZING EXISTING / NEW INFRASTRUCTURES HEATED PIPE-IN-PIPE ACTIVE LOCAL HEATING  New tie-back solutions for longer distances and larger diameters SPRINGS®  SPRING

  15. Slide 15: 9M 2016 Backlog

    Saipem. Engineering Energy 9M 2016 BACKLOG (€ mn) 15,846 7,885 6,627 14,588 Backlog 9M16 9M16 Contracts Backlog @Dec. 31, 2015 Revenues Acquisition @Sept. 30, 2016 E&C Offshore E&C Onshore Drilling Offshore Drilling Onshore 15

  16. Slide 16: Backlog by Year of Execution

    Saipem. Engineering Energy BACKLOG BY YEAR OF EXECUTION (€ mn) 6,710 6,028 1,850 2016 2017 2018+ E&C Offshore E&C Onshore Drilling Offshore Drilling Onshore 16

  17. Slide 17: E&C Opportunities

    Saipem. Engineering Energy LEGEND  OFFSHORE E&C OPPORTUNITIES  ONSHORE Americas Europe/ CIS and Central Asia  ExxonMobil Liza – subsea  Nord stream 2 – offshore pipelines  Sable Decommissioning – fixed facilities  BP Miller Decommissioning – fixed facilities  Kinder Morgan – onshore pipelines

  18. Slide 18: Update on Drilling

    Saipem. Engineering Energy UPDATE ON DRILLING OFFSHORE DRILLING FLEET CONTRACTS Committed Stand-by Termination fee CLIENT LOCATION Saipem 12000 Eni Worldwide Saipem 10000 Eni Worldwide DEEP-WATER Scarabeo 9 Eni Angola Scarabeo 8 Eni North Sea Scarabeo 7 Eni Indonesia Scarabeo 6 - - Scarabeo 5 Statoi

  19. Slide 19: 9 Months 2016 Results

    Fem SAIPEM ENGINEERING ENERGY 9 MONTHS 2016 RESULTS ENGINEERING

  20. Slide 20: 9M 2016 Results

    Saipem. Engineering Energy 9M 2016 RESULTS YoY COMPARISON (€ mn) Revenues Adjusted EBITDA Adjusted EBIT Adjusted Net Profit 8,445 7,885 997 810 720 479 200 224 310 498 73 299 (336) (562) 9M15 9M16 9M15* 9M16* 9M15* 9M16* 9M15* 9M16* E&C Offshore E&C Onshore Drilling Offshore Drilling Onshore Total *

  21. Slide 21: 9M 2016 Net Profit Reported/Adjusted Bridging

    Saipem. Engineering Energy 9M 2016 NET PROFIT REPORTED/ADJUSTED BRIDGING (€ bn) Net Profit 0.2 (0.1) (2.0) (1.9) 9M16 9M16 Adjusted Reported Receivables Assets write off and Write-off impairment 21

  22. Slide 22: Preliminary Asset Write Off and Impairment

    Saipem. Engineering Energy PRELIMINARY ASSET WRITE OFF AND IMPAIRMENT Total* c.€ 2 bn OFFSHORE DRILLING  8 drilling rigs and inventories  Other assets 55% 5% E&C ONSHORE 10% 20% ONSHORE DRILLING  2 Yards / bases 10%  Drilling rigs and inventories in Latin America  Other equipment E&C OFFSHORE 

  23. Slide 23: 9M 2016 Net Debt Evolution

    Saipem. Engineering Energy 9M 2016 NET DEBT EVOLUTION (€ bn) 5.39 (3.47)* 1.95 (0.72) 0.30 1.67 0.17 Net Debt Capital Adj. Cash Flow Capex Δ Working Net Debt @Dec. 31, 2015 Increase (Adj. N.P.+ D.&A.) Capital and @Sept. 30, 2016 Others * Net of fees 23

  24. Slide 24: Strengthened Debt Profile

    Saipem. Engineering Energy STRENGTHENED DEBT PROFILE Overall €1bn Inaugural Bonds completed  €500mn 4.5y bond - fixed annual coupon 3.0%  €500mn 7y bond - fixed annual coupon 3.75%  Proceeds reducing bridge to bond to €400mn  Listed on the Euro MTF of the Luxembourg Stock Exchange Debt Maturity

  25. Slide 25: 2017 Guidance and Closing Remarks

    2017 GUIDANCE AND CLOSING REMARKS 25

  26. Slide 26: 2017 Guidance

    Saipem. Engineering Energy 2017 GUIDANCE Metrics FY 2017 Revenues  c.€10bn EBITDA  c.€1bn % margin  c.10% Net profit  Higher than €200mn* CAPEX  c.€400mn Net financial position  Below €1.4bn * After c.€30mn of restructuring costs 26 (update on final figure in February)

  27. Slide 27: Closing Remarks

    Saipem. Engineering Energy CLOSING REMARKS ROBUST 2016 OPERATIONAL PERFORMANCE AND STRENGTHENED FINANCIAL PROFILE DECISIVE RESPONSE TO DELAYED MARKET RECOVERY LEANER, MORE FOCUSED ORGANISATION TO ENHANCE STRATEGIC FLEXIBILITY, PREPARING FOR MARKET UPTURN 2017 GUIDANCE SUPPORTED BY BACKLOG COVERAGE 2

  28. Slide 28: Appendix

    fo ™ SAIPEM ENGINEERING ENERGY APPENDIX ENGINEERING

  29. Slide 29: 2016 Guidance

    Saipem. Engineering Energy 2016 GUIDANCE Metrics FY 2016 Revenues  c.€10.5bn EBITDA Adjusted  c.€ 1.3bn* % margin  c.12%* EBIT Adjusted  c.€600mn* ** % margin  c.5.5%* Net profit Adjusted  c.€250mn* ** CAPEX  Below €400mn Net financial position  c.€1.5bn * Adjusted for special items 29 ** Af

  30. Slide 30: 3Q 2016 Results

    Saipem. Engineering Energy 3Q 2016 RESULTS YoY COMPARISON (€ mn) Revenues Adjusted EBITDA Adjusted EBIT Adjusted Net Profit 3,072 321 328 2,610 272 233 122 136 155 143 63 81 60 47 3Q15 3Q16 3Q15 3Q16* 3Q15 3Q16* 3Q15 3Q16* E&C Offshore E&C Onshore Drilling Offshore Drilling Onshore Total EBIT 30 * 3

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