Sbm Offshore Nv · EURONEXT:SBMO

Sbm Offshore Nv — FY2015 Earnings Presentation

47 slides from Sbm Offshore Nv's earnings presentation, Feb 11, 2016

Slide 2: Disclaimer
Disclaimer Some of the statements contained in this presentation that are not historical facts are statements of future expectations and other forward-looking statements based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual
Slide 3: Key Messages
Key Messages Industry Outlook Directional(1) Response to Revenue Down Market 26% Conditions Solid Foundation US$245 mm Financial Brazil Provision Outlook US$2.35 bn Project Financing (1) Directional view is a non-IFRS disclosure, which assumes all lease contracts are classified as operating leases a
Slide 4: No. 1 FPSO Player Worldwide
No. 1 FPSO Player Worldwide The Company Lease Fleet 5 Regional Centers 10 FPSOs; 3 FPSOs under construction 13 Shore Bases / Operations Offices 2 FSOs 4 Site Offices 1 Semi-sub 7,020 Employees 1 MOPU Financials in US$ billion Performance FY2015 2016 Directional(1) Rev. Guidance 2.0 272 years of oper
Slide 5: Delivering the Full Product Lifecycle
Delivering the Full Product Lifecycle Engineering Procurement 50 years of industry firsts Integrated supply chain Leading edge technology Global efficiencies Local sourcing Product Life Extension Construction Leader in FPSO relocation Strategic partnerships World class after sales Unrivalled project
Slide 7: Total Overview
Total Overview (US$ Millions) Revenue Directional(1) IFRS 5,482 3,545 2,618 2,705 FY 2014 FY 2015 FY 2014 FY 2015 EBITDA Directional(1) IFRS 925 561 486 462 FY 2014 FY 2015 FY 2014 FY 2015 (1) Directional view is a non-IFRS disclosure, which assumes all lease contracts are classified as operating le
Slide 8: Compliance
Compliance Discussions with Brazilian authorities and Petrobras have progressed to the point where the Company is providing US$245 million for a possible settlement On December 17, 2015 the Brazilian Public Prosecutor’s Office made allegations regarding several people in Brazil and abroad, including
Slide 9: HSSE Results
HSSE Results Health & Safety Security  Injury Freq. 0.22  Awareness & training Threat assessments and high risk controls  Leading culture KPI’s: Mgmt. visits, training, observations Life Saving Rule campaigns Environment – Relative to production: Process Safety Management Volume Gas flared HSSE P
Slide 11: Oil Market Outlook
Oil Market Outlook Brent Crude Pricing $140 $120 $100 $80 US$ / bbl The only certainty is higher $60 level of uncertainty and greater volatility $40 $20 $0 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Brent Crude Adjust to lower commodity price environment Source: CapitalIQ, February 8, 2015. 11
Slide 12: Medium to Long-term Energy Demand
Medium to Long-term Energy Demand 20,000 104 Supply Global Liquids Supply/Demand Growth Demand (Million Tons Oil Equivalent / Year) Energy Consumption (Million bbl/d) 84 1990 2015 2035 2012 2018- 2020 2019 Liquids Coal Hydro Gas Nuclear Renewables Long-term demand growth and supply/demand rebalancin
Slide 13: Supply Turns to Ultra Deepwater & Shale
Supply Turns to Ultra Deepwater & Shale Global Liquids Production by Sources Source: Rystad Energy UCube, May 2015 Ultra deepwater driven by Brazil, GoM and West Africa 13
Slide 14: Award History
Award History Brent Crude Pricing & FPSO Awards $150 25 21 $120 20 FPSO awards are correlated 16 to oil price $90 15 US$ / bbl 12 12 11 CapEx budgets decline with 10 10 $60 10 a fall in oil price 7 7 Significant deepwater $30 5 4 resources, but projects being delayed $0 0 Brent Crude FPSO Awards Fin
Slide 15: What the Market is Telling Us
What the Market is Telling Us 14 12 10 8 Further downward 7 adjustment across all 6 segments 4 4 4 4 Another slow year in 2016 2 1 0 2015 2016E 2017E Targeted Lost / Declined Non-Targeted Targeted Won Market Estimate – Bear Case Market Estimate – Bull Case Cautious view on awards for the next two ye
Slide 16: Deflation for Deepwater Development
Deflation for Deepwater Development Result of USD Appreciation, Commodity Prices and Supplier Cost Reductions Deflation reduces project cost by an estimated 20-30% before any fundamental changes which could bring greater and sustainable savings (1) Includes Offshore Engineering, Well Services/Equipm
Slide 17: More Fundamental and Sustainable Change
More Fundamental and Sustainable Change Performance Prescriptive Based Call for Based Call for Tender Tender It pays to rely on experienced and specialized contractors 100-250 Pages 5,000 Pages Lower Cost of Integration and client- Ownership 30-50% supplier partnership relations are essential at an
Slide 18: Further Cost & Schedule Reductions
Further Cost & Schedule Reductions • Leverage contractor know-how Standardization • Fewer bespoke solutions • Generic solutions; standard topsides catalogue • Process intensification on topsides Simplification • Achieve the same functions with less • Generic hull solution; standard ready for use hul
Slide 19: The Way Forward
The Way Forward Protect the Future – Retain ability to win 2 FPSOs per year Introducing Generation 4 Generic Newbuild Topside Solutions Hull Catalog Safety Risk Increased Flexibility Faster Delivery Decreased Cost Longevity Complexity 19
Slide 20: Restructuring Update
Restructuring Update Workforce reduction of 3,200 positions in 2015 – 1,500 full-time employees and contractor staff – 1,700 construction yard positions related to winding down of projects under construction – US$55 million costs recorded during 2015 – Annualized savings of approximately US$80 milli
Slide 21: Directional Backlog
Directional(1) Backlog(2) (US$ Billions) US$ 18.9 bn (as of December 31, 2015) Lease & Operate Backlog Remaining Backlog 2.0 1.5 1.0 $18.3 bn 0.5 0.0 $0.5 bn Lease & Operate Average of 63% of L&O backlog represents operating cash flow(3) Turnkey L&O Average Portfolio Duration: 13.9 years(4) (1) Dire
Slide 22: Sources of Resilience
Sources of Resilience Economical Directional(1) Backlog Production US$18.9 billion US$7.20 average unit cost/bbl Long-term Contracts No FPSO renewal until 2022 Reliability 99%+ production uptime Technology & Efficiency Transformation initiatives (1) Directional view is a non-IFRS disclosure, which a
Slide 24: Underlying Directional Performance
Underlying Directional(1) Performance (US$ Millions) Directional(1) Revenue Directional(1) EBITDA Directional(1) EBIT 157 718 561 2,618 157 348 FY 2015 191 Reported Exceptional items Underlying Reported Exceptional items Underlying Directional(1) Revenue Directional(1) EBITDA Directional(1) EBIT 3,5
Slide 25: Turnkey P&L
Turnkey P&L (US$ Millions) Directional(1) FY 2015 FY 2014 Variance Revenue 1,512 2,487 (974) Gross Margin 447 390 57 EBIT 231 195 36 Depreciation, amortization and impairment 8 15 (7) EBITDA 239 210 29 Directional(1) Comments Projects In Turritella 45% joint venture Projects Out N’Goma FPSO and Cida
Slide 26: Lease and Operate P&L
Lease and Operate P&L (US$ Millions) Directional(1) FY 2015 FY 2014 Variance Revenue 1,105 1,059 47 Gross Margin 342 304 38 EBIT 315 274 40 Depreciation, amortization and impairment 352 261 91 EBITDA 667 535 132 Directional(1) Comments Vessels In Cidade de Ilhabela and N’Goma FPSO Vessels Out Marlim
Slide 27: Group P&L
Group P&L (US$ Millions) Directional(1) FY 2015 FY 2014 Variance Revenue 2,618 3,545 (928) Gross Margin 789 694 95 Overheads (299) (307) 7 Other operating income / (expense) (298) (186) (112) EBIT 191 201 (10) Depreciation, amortization and impairment (370) (284) (86) EBITDA 561 486 75 Net financing
Slide 28: Overheads Breakdown
Overheads Breakdown (US$ Millions) Directional(1) Expense Bridge $350 $307 $(28) $10 $(4) $299 $14 $300 $250 $200 $150 $100 $50 $0 FY 2014 General & Sales & Research & One-off Items FY 2015 Administrative Marketing Development General & Administrative Sales & Marketing Research & Development One-off
Slide 29: Group Balance Sheet
Group Balance Sheet (US$ Millions) Dec-31-15 Dec-31-14 Variance Comment Property, plant and equipment 1,686 1,923 (237) Depreciation of assets Investments in associates and Net results of JVs and redemption of finance 3,943 4,201 (258) other financial assets lease financial assets Construction contr
Slide 30: Development of Group Cash Position
Development of Group Cash Position (US$ Millions) IFRS Cash Flow Bridge $3,000 $123 $19 $13 $(711) $214 $1,855 $2,500 $(1,405) $2,000 $1,500 $1,000 $(210) $236 $(70) $452 $515 $500 $0 Cash Cash from New Loans Equity Net Other Disposal of Investments Loan Interest Dutch Cash Dec-31-14(1) Operations F
Slide 31: Group Net Debt
Group Net Debt (US$ Millions) Proportional IFRS $6,000 $5,208 $4,775 $5,000 $4,000 $3,147 $3,298 $3,000 $2,000 $1,000 $0 ($1,000) FY15 FY14 FY15 FY14 Proportional Proportional IFRS IFRS Bridge Loans Revolving Credit Other Project Finance Cash 31
Slide 32: Group Proportional Borrowings Overview
Group Proportional Borrowings Overview (US$ Millions) FY15 Borrowings(1) FY15 Undrawn Facilities + Cash FY15 FY15 $3,657 $2,155 Proportional Proportional Proportional Debt Repayment Profile(1) $500 $380 $380 $383 $400 $354 $344 $314 $300 $281 $300 $258 $200 $173 $181 $176 $95 $98 $100 $36 $0 2016 20
Slide 33: Funding
Funding Undrawn Credit Facilities + Cash = US$2.7 bn FPSO Turritella Joint Venture Cidade de Saquarema project finance: US$1.55 bn FPSO Turritella project finance: US$0.8 bn Average cost of debt: FY15 4.1% vs. FY14 4.2% 33
Slide 35: Scheduled for Delivery
Scheduled for Delivery FPSO Cidade de Maricá & FPSO Cidade de Saquarema On-site undergoing first oil readiness for acceptance testing Expected delivery in first quarter 2016 Initial charter contract of 20 years Undergoing topside module integration at the joint venture Brasa yard outside of Rio de J
Slide 36: 2016 Cash Dividend
2016 Cash Dividend Reinstatement of dividend totaling US$45 million or US$0.21 per share – 25% of the Company’s US$180 million underlying Directional(1) net income, which is exceptionally adjusted for non-recurring compliance related events – Annual General Meeting of Shareholders approval on April
Slide 37: 2016 Guidance
2016 Guidance Directional(1) Revenue guidance: At least US$2.0 billion – Turnkey: US$0.6-0.7 billion – Lease & Operate: US$1.3-1.4 billion Directional(1) EBITDA guidance: Around US$750 million Directional(1) Capital Expenditure(2) guidance for the three finance lease vessels under construction: – US
Slide 39: Directional vs IFRS: JVs During Construction
Directional vs IFRS: JVs During Construction The table below summarizes the accounting consequences under IFRS and Directional(1) of the participation by JV partners in a mature construction project, for a finance lease for a client IFRS Treatment Directional(1) Treatment Income The entire EPC is se
Slide 40: IFRS 10 & 11
IFRS 10 & 11 Lease Joint Ventures Contract SBM Share % Directional(1) IFRS Type FPSO N’Goma FPSO FL 50% Proportional Equity FPSO Saxi Batuque FL 50% Proportional Equity FPSO Mondo FL 50% Proportional Equity FPSO Cdde de Ilhabela FL 62.25% Proportional Full consolidation FPSO Cdde de Maricá FL 56% Pr
Slide 41: Group Loans & Borrowings
Group Loans & Borrowings (US$ Millions) Net Book Value as of December 31, 2015 Proportional Full Amount IFRS (Business Ownership) PROJECT FINANCE FACILITIES DRAWN FPSO Capixaba relocation $ 31 $ 31 $ 24 FPSO Espirito Santo 42 42 22 FPSO Aseng – – – FPSO Cidade de Paraty 801 801 405 MOPU Deep Panuke
Slide 42: New Revolving Credit Facility
New Revolving Credit Facility Key Characteristics Covenant Calculations Historical and Estimated Awards Amount US$1.0 billion Tangible Net Worth divided by Total 5 years + two one-year extensions Solvency Tangible Assets > 25% Tenor Ratio Door-to-door maturity of 7 years – Solvency Ratio = 32.3% vs.
Slide 43: New RCF Covenant Definitions
New RCF Covenant Definitions Key Financial Covenant Definition Solvency Ratio Tangible Net Worth(1) divided by Total Tangible Assets(2) > 25% Leverage Ratio Consolidated Net Borrowings(3) divided by Adjusted EBITDA(4) < 3.75 At the request of the Company, the leverage ratio may be replaced by the Op
Slide 44: Floating Solutions
Floating Solutions Current: Future: Focus on top-end segment Leverage core competencies FPSOs Floating LNG (FLNG) Turret moorings Semisubmersible & TLP production units Turnkey Sale or Lease & Operate Brownfields; Operating and Maintenance 44
Slide 45: Competitive Landscape
Competitive Landscape Small Conversions – Large Conversions – <60,000 bbls / day 80,000-150,000 bbls / day Newbuilds – >200,000 bbls / day 45
Slide 46: SBM Lease Portfolio
SBM Lease Portfolio L&O Portfolio Average Duration: 13.9 years(1) 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 09/30 09/32 11/14 11/26 11/29 12/14 04/22 12/22 12/27 01/16 01/22 01/31 06/23 06/28 12/24 12/28 11/26 11/31 6/13 06/33

SBM Offshore — FY2015 Earnings Presentation on 6ix

Sbm Offshore Nv — FY2015 Earnings Presentation

Slide 1: Full Year 2015 Earnings Update

Slide 2: Disclaimer

Slide 3: Key Messages

Slide 4: No. 1 FPSO Player Worldwide

Slide 5: Delivering the Full Product Lifecycle

Slide 6: FY 2015 Review

Slide 7: Total Overview

Slide 8: Compliance

Slide 9: HSSE Results

Slide 10: Macro View

Slide 11: Oil Market Outlook

Slide 12: Medium to Long-term Energy Demand

Slide 13: Supply Turns to Ultra Deepwater & Shale

Slide 14: Award History

Slide 15: What the Market is Telling Us

Slide 16: Deflation for Deepwater Development

Slide 17: More Fundamental and Sustainable Change

Slide 18: Further Cost & Schedule Reductions

Slide 19: The Way Forward

Slide 20: Restructuring Update

Slide 21: Directional Backlog

Slide 22: Sources of Resilience

Slide 23: FY 2015 Financials

Slide 24: Underlying Directional Performance

Slide 25: Turnkey P&L

Slide 26: Lease and Operate P&L

Slide 27: Group P&L

Slide 28: Overheads Breakdown

Slide 29: Group Balance Sheet

Slide 30: Development of Group Cash Position

Slide 31: Group Net Debt

Slide 32: Group Proportional Borrowings Overview

Slide 33: Funding

Slide 34: Outlook

Slide 35: Scheduled for Delivery

Slide 36: 2016 Cash Dividend

Slide 37: 2016 Guidance

Slide 38: Appendix

Slide 39: Directional vs IFRS: JVs During Construction

Slide 40: IFRS 10 & 11

Slide 41: Group Loans & Borrowings

Slide 42: New Revolving Credit Facility

Slide 43: New RCF Covenant Definitions

Slide 44: Floating Solutions

Slide 45: Competitive Landscape

Slide 46: SBM Lease Portfolio

Slide 47: © SBM Offshore 2016. All rights reserved. www.sbmoffshore.com