Subsea 7 S.a. · OSL:SUBC
Subsea 7 — Q4 2020 Earnings Presentation
30 slides from Subsea 7's earnings presentation, Feb 25, 2021
Slide 1: Fourth Quarter and Full Year 2020 Earnings Presentation
Fourth Quarter and Full Year 2020 Earnings Presentation 25 February 2021 1 © Subsea 7 - 2021 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: Fourth Quarter and Full Year 2020
Fourth Quarter and Full Year 2020 John Evans, CEO Ricardo Rosa, CFO • Highlights • Financial performance • Outlook • Q&A 3 © Subsea 7 - 2021 subsea7.com
Slide 4: Fourth quarter 2020 results
Fourth quarter 2020 results FINANCIAL HIGHLIGHTS OPERATIONAL HIGHLIGHTS • Revenue $1,014 million • Active fleet vessel utilisation: 82% • Adjusted EBITDA $165 million • High PLSV and Life of Field utilisation • Adjusted EBITDA margin 16% • Zinia progressing on schedule ‒ After incurring net Covid-19
Slide 5: Fourth quarter operational highlights
Fourth quarter operational highlights Penguins (UK) Blythe (UK) Lapa (Brazil) Mad Dog II (GoM) Zinia (Angola) Life of Field PLSVs (Brazil) Seagreen (UK) 5 © Subsea 7 - 2021 subsea7.com
Slide 6: Year end 2020 backlog
Year end 2020 backlog Backlog of $6.2 billion, as at 31 December 2020 2023 $0.6bn • Order intake – $0.2 billion in Q4 Renewables – $4.4 billion in FY 2020 2022 $2.0bn $1.6bn 2021 SURF & • 1.3 book-to-bill in FY 2020 $4.0bn Conventional $3.8bn • Since year end Life of – SLGC $150-$300m Field $0.4bn –
Slide 7: Income statement summary - Q4 and FY 2020
Income statement summary - Q4 and FY 2020 Three months ended Twelve months ended 31 December 31 December 31 December 31 December 2020 2019 2020 2019 In $ millions, unless otherwise indicated Unaudited Unaudited Audited Audited Revenue 1,014 889 3,466 3,657 Net operating (loss)/income excluding goodw
Slide 8: Supplementary details - Q4 and FY 2020
Supplementary details - Q4 and FY 2020 Three months ended Twelve months ended 31 December 31 December 31 December 31 December 2020 2019 2020 2019 In $ millions Unaudited Unaudited Audited Audited Administrative expenses (62) (76) (241) (268) Share of net income/(loss) of associates and joint venture
Slide 9: 2015 - 2020 costs overview
2015 - 2020 costs overview Maintaining cost discipline as the activity levels recover $ billion Direct project costs: including procurement of 3.9 3.9 materials and project 3.4 3.5 3.5 related short-term lease expense 1.5 2.8 2.0 Depreciation and 1.6 1.9 amortisation(2): excludes 1.6 1.1 non-recurri
Slide 10: Business unit performance
Business unit performance Fourth Quarter Revenue Full Year Revenue $1,014m $889m $3,466m $3,657m $217m $266m $631m $59m $257m $234m Renewables & Heavy $70m $66m Lifting $3,174m $2,578m Life of Field $715m $760m SURF & Conventional 2020 2019 2020 2019 Fourth Quarter NOI (1) Full Year NOI (2) (1) Q4 2
Slide 11: Summary of 2020 cash flow
Summary of 2020 cash flow $m (183) (52) (104) (25) (9) (10) (32) Cash EBITDA(1) Tax paid Change in net Capex Lease Repayment of Interest Share Other Cash 1 Jan 2020 operating payments borrowings paid repurchases 31 Dec 2020 liabilities • Net cash (excluding lease liabilities) of $303 million at 31 D
Slide 12: Capital allocation framework
Capital allocation framework • Balanced capital allocation strategy to protect and drive growth in shareholder value • Re-investment in a disciplined manner Cash flow – Investment in technology and digitalisation from remains a priority operations – Sufficient cash to fund working capital requiremen
Slide 13: Financial guidance
Financial guidance 2021 Guidance Revenue Higher than 2020 Adjusted EBITDA Higher than 2020 Net operating income Positive Administrative expense $220 million - $240 million Net finance cost $15 million - $20 million Depreciation and amortisation $430 million - $450 million Tax charge $20 million - $3
Slide 14: Strategic focus areas
Strategic focus areas Subsea Field of the Future: Energy Transition: Systems and Delivery Proactive Participation • Early engagement and partnerships • Renewables – offshore wind • Systems innovation and enabling • Oil and gas – lower carbon products developments • Integrated SPS and SURF • Emerging
Slide 15: Oil and Gas – Lower Carbon Developments
Oil and Gas – Lower Carbon Developments Subsea 7 Carbon Estimator • Estimation of CO2e emissions associated with Subsea 7’s project delivery – Procurement: materials, equipment, products fabrication & assembly – Pipeline fabrication at Subsea 7 sites – Vessels: owned, chartered and third party • Sup
Slide 16: Renewables – offshore wind
Renewables – offshore wind • Seagreen making good progress – 18% complete at year end – Fabrication of jackets and array cables under way in the Middle East, China and Greece • In 2020, progress in Taiwan hampered by restricted access and weather – Plan agreed to recommence work on Yunlin • Seven Ph
Slide 17: Sustainability: enhanced disclosure
Sustainability: enhanced disclosure • Building a sustainable business founded on our long-established company policies • Sustainability Steering Committee formed within the Executive Committee – Engagement at every Board meeting • Good progress across our six Sustainability Priorities – Development
Slide 18: Outlook
Outlook Canada and USA Europe • Ørsted Ocean Wind, Skipjack (w) • Iberdrola East Anglia Hub (w) • Shell & EDPR Mayflower (w) • Red Rock Inch Cape (w) • SURF and Conventional • Equinor Empire (w) • EDPR Moray West (w) – Greater activity in Gulf of • Dominion Energy Coastal Virginia (w) • Shell Jackda
Slide 19: Summary: well-positioned across energy markets
Summary: well-positioned across energy markets • Resilient backlog of $6.2 billion, with $4.0 billion for execution in 2021 – Backlog growth of 20% in 2020 despite challenging conditions – Preferred contractor on a number of key greenfield subsea projects • Focused on oil and gas markets with favour
Slide 20: © Subsea 7 - 2021 subsea7.com
20 © Subsea 7 - 2021 subsea7.com
Slide 21: Appendix
Appendix Major project progression Track Record Fleet Financial summaries 21 © Subsea 7 - 2021 subsea7.com
Slide 22: Major project progression
Major project progression • Continuing projects >$100m between 5% and 95% complete as at 31 December 2020 excluding PLSV and Life of Field day-rate contracts Zinia (Angola) Nova (Norway) Arran (UK) Announced Manuel (USA) size of project 3 PDMs (Saudi Arabia) Jubilee Turret Remediation (Africa) Buzza
Slide 23: Track record
• Beatrice wind farm, BOWL • Borkum II, Trianel • Seagreen, SWEL • Shearwater, Shell • Aasta Hansteen, Statoil • Buzzard ph. 2, • Maria, Wintershall CNOOC • IRM Services, Equinor • Culzean, Maersk • Alligin, BP • IRM Services, BP • Penguins, Shell • Al-Khalij, Total • Snorre, Equinor • Hasbah, in co
Slide 24: Fleet - active vessels at end Q4 '20
Fleet - 30 active vessels at end Q4 ’20 Long-term charter from a vessel- owning joint venture Stacked Chartered from a third party Under conversion to cable lay Seven Antares and Seven Inagha are owned by Subsea 7’s Nigerian joint venture. Harvey Intervention was released on 23 January 2021 24 © Sub
Slide 25: Segmental analysis
Segmental analysis For the three months ended 31 December 2020 Renewables & In $ millions (Unaudited) SURF & Conventional Life of Field Heavy Lifting Corporate TOTAL Revenue 715 66 234 - 1,014 Net operating (loss)/income excluding (47) 10 (1) 4 (35) goodwill impairment Impairment of goodwill (13) (1
Slide 26: Segmental analysis
Segmental analysis For the year ended 31 December 2020 Renewables & In $ millions (Audited) SURF & Conventional Life of Field Heavy Lifting Corporate TOTAL Revenue 2,578 257 631 - 3,466 Net operating (loss)/income excluding (259) 13 (40) (143) (428) goodwill impairment Impairment of goodwill (591) (
Slide 27: Summary balance sheet
Summary balance sheet 31 December 31 December 31 December 31 December 2020 2019 2020 2019 In $ millions Audited Audited In $ millions Audited Audited Assets Equity & Liabilities Non-current assets Total equity 4,255 5,363 Goodwill 85 705 Non-current liabilities Property, plant and equipment 3,983 4,
Slide 28: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA Net operating income to Adjusted EBITDA Three Months Ended 31 Three Months Ended 31 Year Ended 31 Dec 2020 Year Ended 31 Dec 2019 Dec 2020 Dec 2019 For the period (in $millions) Audited Audited Unaudited Unaudited Net operating loss (62) (116) (1,034) (23) Depreciat
Slide 29: Summary of 2020 cash flows
Summary of 2020 cash flows $ millions Cash and cash equivalents at 1 January 2020 398 Net cash generated from operating activities 447 Includes net increase in operating liabilities of $192 million Includes capital expenditure of $183m and net proceeds from recognition Net cash used in investing act
Slide 30: © Subsea 7 - 2021 subsea7.com
30 © Subsea 7 - 2021 subsea7.com