Sbm Offshore Nv · EURONEXT:SBMO

Sbm Offshore Nv — H1 2019 Earnings Presentation

46 slides from Sbm Offshore Nv's earnings presentation, Aug 8, 2019

  1. Slide 1: Half Year 2019 Earnings Update

    Half Year 2019 Earnings Update August 8, 2019

  2. Slide 2: Disclaimer

    Disclaimer The companies in which SBM Offshore N.V. directly and indirectly owns investments are separate legal entities. In this presentation “SBM Offshore” and “SBM” are sometimes used for convenience where references are made to SBM Offshore N.V. and its subsidiaries in general. These expressions

  3. Slide 3: Company strategy at work

    Company strategy at work +US$ 6.3bn US$ 272m Backlog1 addition 2 Fast4Ward® shareholder returns awards Innovating for Disciplined execution Positive market the future throughout the cycle outlook (1) Reflects a pro-forma view of the Company’s Directional backlog; for further details on the key-assum

  4. Slide 4: License to operate

    License to operate Safety 6th Annual LIFE DAY Total Recordable Injury Frequency Rate1 1.20 1.00 0.80 0.60 0.40 0.20 0.00 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 1H 2019 2 Oil Majors Benchmark SBM Offshore (1) Per 200k man-hours (2) Includes Shell, BP, Total, Chevron, Woodside, ExxonMo

  5. Slide 5: Sustainable initiatives

    Sustainable initiatives Selected 2019 SDGs Human Rights CO2 Challenge Seawater Intake Riser Renewable Power © SBM Offshore. All rights reserved. www.sbmoffshore.com 5

  6. Slide 6: The Market / SBM Offshore's Strategy / 1H 2019 Financials / Outlook

    The Market SBM O ffsh o re’s Strateg y 1H 2019 Financials Outlook

  7. Slide 7: SBM Offshore's market growing

    SBM Offshore’s market growing “Continuing demand growth combined with limited market capacity” “Recovery visible within area of large-size FPSOs” “Market recovery is accelerating” “Market outlook “Management expects shows signs of cycle “Industry witnessing market to continue to “Recovery expected t

  8. Slide 8: FPSO Market – prospects funnel 2019-2021

    FPSO Market – prospects funnel 2019-2021 ~ 35 prospects > 25 potential awards ~ 9 projects within target market 1H 2019: 7 FPSO awards Disciplined in bidding and execution: 2 awarded to SBM Offshore 2+ FPSO project wins per year Source: Company websites, various media sources, Rystad Energy © SBM Of

  9. Slide 9: Prospective award areas 2019-2021

    Prospective award areas 2019-2021 2 1 2 1 1 3 1 3 4 2 2 12 4 2 2019 FPSO awards to date 1 Prospective FPSO award area Source: Company websites, various media sources, Rystad Energy Prospective Turret award area © SBM Offshore. All rights reserved. www.sbmoffshore.com 9

  10. Slide 10: Total FPSO market awards

    Total FPSO market awards SBM Offshore capacity for 2+ FPSO projects wins per year 16 14 12 10 8 6 4 5 2 3 3 2 0 1 2011 2012 2013 2014 2015 2016 2017 2018 e2019 e2020 e2021 SBM Offshore awards 2019 awarded FPSO awards Sources: Company websites, various media sources, Rystad Energy © SBM Offshore. All

  11. Slide 11: What the industry says about Deepwater

    What the industry says about Deepwater 60 50 “Our portfolio of deepwater opportunities is key to long-term growth plans.” “We will continue prioritizing our activities in deep waters” 40 World-Class deepwater “We have a leading global deepwater business and have an exciting funnel of reservoirs 30 c

  12. Slide 12: Premium for experienced contractors

    Premium for experienced contractors Major FPSOs under construction by active contractors 8 7 6 5 4 3 2 1 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 1H 2019 SBM Offshore excluded from Petrobras tenders SBM Offshore Non-SBM Offshore Significant capacity booked Source: Company presentations, variou

  13. Slide 13: Disciplined: flexible capacity and growth

    Disciplined: flexible capacity and growth Workforce capacity Standardization SBM Offshore global resource pool Enabling growth with greater reliability Joint venture with Indian based Nauvata Increasing productivity and flexibility © SBM Offshore. All rights reserved. www.sbmoffshore.com 13

  14. Slide 14: Cash returns to shareholders

    Cash returns to shareholders Total cash to shareholders / average market capitalization (2016 to 1H 2019) 18% 10% 9% 8% Oil Services (sample) 6% Average 4% 3% 2% 1 SBM Offshore Integrated and Subsea Other Oil Services Seismic FPSO OSV Offshore Drilling (n=7) (n=7) (n=8) (n=4) (n=5) (n=7) (1) Excludi

  15. Slide 15: SBM Offshore's Strategy

    The Market SBM O ffsh o re’s Strateg y 1H 2019 Financials Outlook

  16. Slide 16: Our Strategy

    Our Strategy Best in class Change our ways The energy transition of working © SBM Offshore. All rights reserved. www.sbmoffshore.com 16

  17. Slide 17: Optimize

    Optimize Projects update Operational performance Completion FPSO Liza Destiny Fleet uptime >75% Castberg Turret 50% <75% 99% 99% 99% 97% 98% 98% 99% FPSO Liza Unity 25% <50% FPSO Mero 2 <25% 2013 2014 2015 2016 2017 2018 1H 2019 2020 2021 2022 2019 • 3 new-build Fast4Ward ® hulls under construction

  18. Slide 18: FPSO Liza Destiny sailing to Guyana

    FPSO Liza Destiny sailing to Guyana © SBM Offshore. All rights reserved. www.sbmoffshore.com 18

  19. Slide 19: Transform | Fast4Ward, the reality

    Transform | Fast4Ward®, the reality 1st Fast4Ward® hull getting ready 2 out of 3 hulls allocated to sanctioned projects © SBM Offshore. All rights reserved. www.sbmoffshore.com 19

  20. Slide 20: Transform | FPSO evolution to date

    Transform | FPSO evolution to date License to Operate 2014 – FPSO G3 2006 – FPSO G2 1997 – FPSO G1 © SBM Offshore. All rights reserved. www.sbmoffshore.com 20

  21. Slide 21: Digital Solutions

    Digital Solutions OIPOC The Engineer 4.0 & Connected Operator Digital Twin The Unmanned FPSO © SBM Offshore. All rights reserved. www.sbmoffshore.com 21

  22. Slide 22: Innovating for the future

    Innovating for the future Floating Offshore Wind Wave Energy Converter First investment in 2009 Floating Offshore Wind Market Outlook – Investment decision taken 1st offshore prototype, Installed Capacity1 launch in 2021 12,000 Estimates 9,000 range2 US$20 million gross investment committed coming M

  23. Slide 23: 1H 2019 Financials

    The Market SBM O ffsh o re’s Strateg y 1H 2019 Financials Outlook

  24. Slide 24: Directional overview

    Directional overview 1 Revenue (US$ millions) EBITDA (US$ millions) 965 808 647 399 Underlying 414 1H 2018 1H 2019 1H 2018 1H 2019 Pro-forma backlog (US$ billions) Net debt (US$ billions) 20.1 14.8 2.4 3.0 FY 2018 1H 2019 FY 2018 1H 2019 (1) Directional view, presented under IFRS8 Segment reporting,

  25. Slide 25: Financial performance per segment

    Financial performance per segment Directional, US$ millions Lease and Operate Turnkey Revenue Underlying EBITDA Revenue Underlying EBITDA 654 646 319 427 425 154 17 5 1H 2018 1H 2019 1H 2018 1H 2019 1H 2018 1H 2019 1H 2018 1H 2019 “Other” EBITDA 1H 2019 US$(30) million vs 1H 2018 US$(30) million © S

  26. Slide 26: 1H 2019 Sources and uses of cash

    1H 2019 Sources and uses of cash Directional, US$ millions Underlying Cash from Operations (pre-tax, working capital, Fast4ward) RCF drawdown Other Cash December 2018 657 Sources of cash 348 426 23 Cash variation1 (436) Cash June 2019 220 Uses of cash (197) (82) (75) (165) (323) (197) (181) (13) Deb

  27. Slide 27: Funding growth

    Funding growth Directional, US$ millions Efficient financing model Undrawn facilities + cash FPSO value cost margin 1H 2019 574 220 720 >US$1,500 Project debt Equity Undrawn RCF Directional net cash Undrawn project facilities Directional borrowings and lease liabilities 178 426 Non-recourse project

  28. Slide 28: Debt correlated to backlog

    Debt correlated to backlog Directional, US$ millions 21,800 18,900 20,100 17,100 16,800 14,800 Pro-forma Backlog 3,298 3,147 3,128 2,687 2,165 2,850 Net debt (excluding IFRS 16) 2014 2015 2016 2017 2018 1H 2019 Net debt/ Backlog ratio 15% 17% 18% 16% 15% 14% • Debt directly related to individual pro

  29. Slide 29: Pro-forma Backlog and borrowings repayment

    Pro-forma Backlog and borrowings repayment Directional, US$ billions4 US$20.1bn 1.0 TK 2.1 BOT Pro-forma Directional L&O and BOT backlog1 Turnkey backlog 3.0 2019 0.3 2020 0.4 2.5 Average of >63% of L&O backlog (excl. BOT) represents operating cash flow. 2021 1.1 2.0 17.0 L&O average portfolio durat

  30. Slide 30: Pro-forma cash flow visibility

    Pro-forma cash flow visibility Directional, US$ billions L&O + BOT Pro-forma total cash flow1 from L&O and BOT (from operational assets) Backlog 2.5 2.50 2.1 BOT 2.0 2.00 1.5 1.50 17.0 L&O 1.0 1.00 0.5 0.50 Average L&O net cash p.a. until 2036 (excl. BOT) - - 2019 2020 2021 2022 2023 2024 2025 2026

  31. Slide 31: Outlook

    The Market SBM O ffsh o re’s Strateg y 1H 2019 Financials Outlook

  32. Slide 32: Outlook and guidance

    Outlook and guidance • Continued positive outlook for the Company • As a result of growth in Turnkey, the Company’s 2019 Directional revenue guidance is increased to “above US$2.0 billion” from “around US$2.0 billion”, of which: • US$1.3 billion from Lease and Operate • Above US$700 million from Tur

  33. Slide 33: Appendix

    Appendix 33

  34. Slide 34: Lease and Operate P&L

    Lease and Operate P&L Directional, US$ millions 1H 2018 1H 2019 Variance Revenue 654 646 (8) Gross Margin 218 201 (17) EBIT 208 191 (17) Depreciation, amortization and impairment (219) (234) (15) EBITDA 427 425 (2) Underlying EBITDA 427 425 (2) Comments Vessels In - Vessels Out Turritella, Yetagun,

  35. Slide 35: Turnkey P&L

    Turnkey P&L Directional, US$ millions 1H 2018 1H 2019 Variance Revenue 154 319 165 Gross Margin 51 40 (11) EBIT 238 (7) (245) Depreciation, amortization and impairment (12) (12) - EBITDA 250 5 (245) Underlying EBITDA 17 5 (12) Comments Ongoing Projects Castberg turret mooring system, Liuhua, multipl

  36. Slide 36: Group P&L

    Group P&L Directional, US$ millions 1H 2018 1H 2019 Variance Revenue 808 965 157 Gross Margin 268 241 (27) Overheads (87) (96) (9) Other operating income / (expense) 232 5 (227) Net impairment gain / (loss) - 1 1 EBIT 414 151 (263) Depreciation, amortization and impairment (233) (248) (15) EBITDA 64

  37. Slide 37: P&L: underlying items 1H 2018/1H 2019

    P&L: underlying items 1H 2018/1H 2019 Directional, US$ millions Directional underlying items 1H 2018 1H 2019 Impact P&L Segment Total underlying items 233 - Turritella gain on disposal 217 - EBITDA Turnkey YME insurance claim 16 - EBITDA Turnkey Subtotal EBITDA impact 233 - Subtotal other impact - -

  38. Slide 38: 1H 2019 Sources and uses of cash

    1H 2019 Sources and uses of cash Directional, US$ millions L&O 425 Turnkey 5 Other (30) Underlying EBITDA 399 Deferred income (51) Underlying Cash from Operations (pre-tax, working capital, Fast4ward) RCF drawdown Other Cash December 2018 657 Sources of cash 348 426 23 Cash variation1 (436) Cash Jun

  39. Slide 39: Cash flow statement

    Cash flow statement Directional, US$ millions 1H 2019 EBITDA 399 Addition/(release) provision and non-cash items 15 Changes in operating assets and liabilities (293)1 Yme proceeds shared with Repsol (181) Income taxes paid (13) Net cash flows from (used in) operating activities (73) Capital expendit

  40. Slide 40: Balance Sheet

    Balance Sheet Directional, US$ millions Dec-31-18 Jun-30-19 Variance Comment Property, plant & equipment and 4,799 5,044 245 FPSO Liza Destiny, Liza Unity and Mero 2 Intangibles Investment in associates and other 366 341 (25) Funding loan to JVs decrease financial assets Construction contracts 43 61

  41. Slide 41: Loans and borrowings

    Loans and borrowings Directional, US$ millions Net book value as of June 30, 2019 Full Amount IFRS Directional PROJECT FINANCE FACILITIES DRAWN FPSO Cidade de Paraty 474 474 239 MOPU Deep Panuke 170 170 170 FPSO Cidade de Anchieta 324 324 324 FPSO Cidade de Ilhabela 736 736 458 FPSO N’Goma FPSO 212

  42. Slide 42: Lease qualification and consolidation methods

    Lease qualification and consolidation methods IFRS 10 & 11 Joint Ventures Lease Contract Type SBM Share % Directional IFRS FPSO N’Goma FL 50% Proportional Equity FPSO Saxi Batuque FL 50% Proportional Equity FPSO Mondo FL 50% Proportional Equity FPSO Cidade de Ilhabela FL 62.25% Proportional Full con

  43. Slide 43: Group net debt and borrowings

    Group net debt and borrowings Directional, US$ millions Net debt 3,500 1H 2019 Directional borrowings and lease liabilities 3,028 2,000 178 2,353 426 500 -1,000 FY 2018 1H 2019 Lease liabilities RCF Other Project finance Cash Average cost of debt 2,643 4.9% 4.9% Non-recourse project debt RCF Lease l

  44. Slide 44: RCF Covenants

    RCF Covenants Key financial Target 1H19 Definition covenant Solvency ratio > 25% ✔ 36.6% Tangible net worth1 divided by total tangible assets2 Interest cover ratio > 4.0 ✔ 5.6 Underlying EBITDA3 divided by net interest payable4 Represents maximum theoretical lending capacity, Lease backlog cover rat

  45. Slide 45: Lease and Operate portfolio

    Lease and Operate portfolio L&O portfolio average lease duration 10.1 years1 Vessel Name Field Name Client Country 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043

  46. Slide 46: © SBM Offshore. All rights reserved. www.sbmoffshore.com

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

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