Slide 1: Earnings Presentation First Quarter 2012
Earnings Presentation First Quarter 2012 May 11, 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 Q1 2012 results - in line with expectations
Delivered good Q1 2012 results - in line with expectations • Good results reflect: - High activity levels in North and Norwegian Seas; higher than typical for first quarter reflecting improving market environment and work delayed from H2 2011 due to adverse weather conditions - Good activity levels
Slide 4: Market overview
Market overview • Strong momentum among clients to bring new reserves into production • Continue to see growth opportunities in all major markets, albeit at differing paces: - North and Norwegian Seas: Strong activity levels – higher than typical for first quarter; high levels of tendering driving s
Slide 5: Market overview cont'd
Market overview cont’d - Gulf of Mexico: increased activity for subsea projects expected with contract awards to the market in late 2012 and execution late 2013 and 2014 - Asia Pacific: market remains very competitive; further gas-driven SURF contracts offshore Australia, expected to come to market
Slide 6: Income statement highlights
Income statement highlights Three Period1 Months Ended Ended 31.Mar.12 31.Mar.11 In $ millions, except Adjusted EBITDA margin, share and per share data Unaudited Unaudited Revenue 1,458 1,292 Net operating income 153 94 Income before taxes 147 70 Taxation (54) (25) Net income 93 45 Adjusted EBITDA 2
Slide 7: Operational performance – Q1 2012
Operational performance – Q1 2012 $578m $308m $308 m $78m ($8m) ($8m) Revenue Revenue NOI NOI Revenue NOI $528m $86m $3m $308 m $261m Revenue NOI $94m $7m ($8m) Revenue NOI Revenue Revenue NOI NOI 11-May-12 Page 7
Slide 8: Income statement highlights cont'd
Income statement highlights cont’d Three Period1 Months Ended Ended 31.Mar.12 31.Mar.11 In $ millions Unaudited Unaudited Administrative expenses (91) (110) Share of net income of associates and joint ventures (3) 17 Net operating income 153 94 Finance income 3 6 Other losses (2) (17) Finance costs
Slide 9: Cash flow overview – Q1 2012
Cash flow overview – Q1 2012 • Cash generation from operating activities of $173 million • Net cashflows used in investing activities of $127 million reflects capital expenditure of $137 million in line with expectations: Seven Borealis and the new-build PLSV • Net cashflows used in financing activi
Slide 10: Financial assumptions - 2012
Financial assumptions - 2012 • Expect to deliver increased revenue and Adjusted EBITDA in 2012 • Joint Venture contribution – 2012 lower than 2011 • Administrative expenses: c.$80 - 85 million per quarter (excluding integration) • Final integration costs: Q1: $12 million; c.$20 million remaining • N
Slide 11: 2012 expectations
2012 expectations • Expect to deliver revenue and Adjusted EBITDA for twelve months of 2012 ahead of thirteen month period ended 31 December 2011 • Expect increased activity and profitability in NSMC to offset lower activity and profitability in AFGoM • Joint Venture contribution in 2012 expected to
Slide 12: Summary
Summary • Robust oil price and strong tendering activity underpins good order book momentum • Our clients have ambitious investment plans and remain committed to bringing new reserves into production • Continue to see opportunities in all markets; albeit at differing paces • Remain focused on buildi
Slide 13: Appendix
Appendix 11-May-11 2-Nov-11 Page 13
Slide 14: Major project progression
Major project progression Continuing projects >$100m between 5% and 95% complete as at 31 March 2012 excl. long-term ship charters and Life-of-Field day-rate contracts. Block 18 GEL (Angola) Oso Re (Nigeria) EGP3B (Nigeria) Block 31 (Angola) CLOV (Angola) Gumusut (Malaysia) P55 Export (Brazil) GSNC
Slide 15: Backlog
Backlog In $ millions as at: 31.Mar.12 31.Dec.11 31.Mar.11 (1) Subsea 7 S.A. 8,686 8,538 6,668 (1) Backlog refers to expected future revenue under signed contracts, which are determined as likely to be performed Backlog by Award Date Backlog by Execution Date Backlog by Service Capability Backlog by
Slide 16: Segmental analysis
Segmental analysis: Three months ended Total 31.Mar.12 NSMC AFGoM APME Brazil CORP operations Unaudited In $ millions Revenue 578.2 528.1 85.6 261.2 4.9 1,458.0 Net operating 77.6 93.8 2.8 6.6 (27.6) 153.2 income/(loss) Investment income 3.3 Other losses (2.2) Finance costs (7.5) Net income before t
Slide 17: 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 18: Reconciliation of net operating income to Adjusted EBITDA
Reconciliation of net operating income to Adjusted EBITDA Three Months Period Ended Ended In $ millions (except percentages) 31.Mar.12 31.Mar.11 Net operating income 153.2 94.3 Depreciation and amortisation 77.6 91.2 Impairment/(reversal) charge (5.9) 4.0 Adjusted EBITDA 224.9 189.5 Revenue 1,458.0
Slide 19: seabed-to-surface
seabed-to-surface www.subsea7.com 10.01.11 Page 19