Subsea 7 S.A. · OSL:SUBC

Subsea 7 — Investor Presentation (December 2018)

69 slides from Subsea 7's investor presentation, December 2018

Slide 2: Index
Index What we do Our differentiators Our priorities Our outlook Our financials Appendix 2 © Subsea 7 - 2018 subsea7.com
Slide 3: Subsea 7 – In Summary
Subsea 7 – In Summary Our vision is to be acknowledged by our clients, our people and our shareholders as the leading strategic partner in seabed-to-surface engineering, construction and services. Subsea 7 provides cost-effective technical solutions enabling the delivery of complex projects in all w
Slide 5: Our market segments
Our market segments 2017 Revenue $4.0 billion i-Tech Services Leading Life of Field partner for SURF and Conventional clients throughout the oil and Delivering subsea systems gas industry that connect seabed wellhead $2.7bn structures to surface (69%) production facilities $0.3bn (7 %) $1.0bn (24%)
Slide 6: SURF and Conventional
SURF and Conventional SURF and Conventional • Subsea Umbilicals, Risers and flowlines (SURF) • Connecting seabed wellhead structures to surface production facilities • Over 20 year track record: safe and efficient execution on over 1,000 projects • Operating in remote and harsh environments with com
Slide 7: SURF and Conventional – some of our activities
SURF and Conventional – some of our activities PUPP (Nigeria) WND Ph.2/GFR (Egypt) Snorre (Norway) Pipeline Bundles fabrication 4 Decks (Saudi Arabia) Hasbah (KSA) Swagelining fabrication PLSVs (Brazil) 7 © Subsea 7 - 2018 subsea7.com
Slide 8: Our PLSV activities offshore Brazil
Our PLSV activities offshore Brazil Servicing life of field and new construction needs for Petrobras in all water depths • Long-term day-rate contracts to 2021 / 2022 • Performing production maintenance and new construction activities • $0.95bn of firm backlog (at Q3) • July 2017: contract extension
Slide 9: i-Tech Services
i-Tech Services • Leading Life of Field partner • Over 165 ROVs and a for clients throughout the oil fleet of ROV support and gas industry vessels • Over 35 year’s experience • Global business with operational bases in the UK, Brazil, the US and Australia 9 © Subsea 7 - 2018 subsea7.com
Slide 10: i-Tech Services: products and services
i-Tech Services: products and services Integrated solutions built on core products and services • ROV Intervention • Diving • Survey, Inspection & Data Management • Well simulation & sampling • Tool Management & Engineering Solutions • Pipeline Repair & Tree Installation Highly skilled and experienc
Slide 11: i-Tech Services track record
i-Tech Services track record Over 1000 successful Inspection, Over 18,000 intervention tooling Repair and Maintenance projects products designed, delivered and completed managed Over 300 successful ROV drill rig exploration hydrocarbon sampling missions support worldwide since 1976 using ROVs Global
Slide 12: Renewables and Heavy Lifting
Renewables and Heavy Lifting 1991 SHL 2016 Beatrice 2018 SOC Joint Venture EPCI awarded acquired by established to Subsea 7 Subsea 7 2018 Comprehensive 2009 First 2013 Subsea 7 2017 SHL balance of plant Renewables increases its acquired by offering: T&I and EPCI Project for focus on SHL renewables S
Slide 13: Renewable and Heavy Lifting contract models
Renewable and Heavy Lifting contract models EPCI T&I • Transferable skills and synergies from • Heavy lifting in oil and gas sector as oil and gas well as renewables • Longer time from tender to execution • Shorter time from tender to execution • Early engagement and engineering • Lower barrier to e
Slide 14: What we do to reduce contribution to climate change
What we do to reduce contribution to climate change Subsea 7’s input to Renewable Energy Subsea 7 (RHL) are typically contracted to carry out: Wind Turbine 1. Design, procurement and installation Subsea 7’s Generators of foundation piles and jackets (SHL) (WTG) scope 2. Design procurement and instal
Slide 15: Large offshore wind farm projects
Large offshore wind farm projects Pre-2019 Post-2019 Gemini Borkum II Hornsea One Subsea 7: No major Guanyin ph2 Gode Wind Triton Knoll Yunlin Inch Cape 582MW 600MW 203MW 1218MW offshore EPCI wind 860MW 640MW 350MW 784MW projects for execution in 2019 • T&I work needed to maintain vessel utilisation
Slide 16: Index
Index What we do Our differentiators Our priorities Our outlook Our financials Appendix 16 © Subsea 7 - 2018 subsea7.com
Slide 17: Our shared Core Values
Our shared Core Values What is most important to us as we conduct our business. Safety Performance We are committed to an incident-free workplace We are predictable and reliable in our every day, everywhere. We continue to minimise performance. We always strive for the impact of our activities on th
Slide 18: Our value proposition
Our value proposition Experience Creating value for our Clients through strong long-term relationships and excellent execution Expertise Creating value for our Shareholders by investing for the future while maintaining Scale a strong financial position Creating value for our People with Reliability
Slide 19: Competitive landscape for full life cycle integrated solutions
Competitive landscape for full life cycle integrated solutions EXPLORATION DOWN-HOLE / FEED SPS / EPIC LIFE OF FIELD/ DECOMISSIONING GEOPHYSICS DATA MANUFACTURE WELL SERVICES 19 © Subsea 7 - 2018 subsea7.com
Slide 20: Our People
Our People • We deliver projects based on our expertise and know-how 10,500 people in our workforce at end 2017 • Our highly skilled and experienced workforce deliver projects safely and reliably 4,400 6,100 Onshore people Offshore people 20 © Subsea 7 - 2018 subsea7.com
Slide 25: Life of field monitoring and autonomous systems
D H L E K F B A I C G A Inspection G Autonomous Vehicle B Monitoring H FPSO Hosted AIV C Data Management, Communication I Seabed Hosted AIV D Analytics, Digital Twin & Visualization J RWOCS/Hydrates/Sampling E UWILD/Moorings K Autonomous Surface Vessel F Surface Power Communication Buoy L Onshore Co
Slide 26: A modern and versatile fleet of 34 vessels
A modern and versatile fleet of 34 vessels Vessels by Ownership type Ownership Vessels by Age 8 0-5 years 6 Owned 10 6-11 years 28 16 Chartered 12+ years Vessels by Operational category Hook-up Renewables & Heavy Lifting Horizontal flexlay Life of Field support Diving Support Rigid-lay / Heavy Const
Slide 27: 34 Vessels including 32 active vessels at end Q3 '18
34 Vessels including 32 active vessels at end Q3 ‘18 Under Construction Reel-lay Vessel to be named Seven Vega Long-term charter from a vessel-owning joint venture Stacked Chartered from a third party 27 © Subsea 7 - 2018 subsea7.com
Slide 28: Index
Index What we do Our differentiators Our priorities Our outlook Our financials Appendix 28 © Subsea 7 - 2018 subsea7.com
Slide 29: Subsea 7's approach and strategy through the cycle
Subsea 7’s approach and strategy through the cycle New-build vessels: PLSVs Seven Arctic Global alliance with Seven Kestrel Cost reduction Acquisition: Acquisition: KBR/ Granherne programmes Middle East Renewables 2015/2016 Investment: Early engagement 2015 2016 2017 2018 New rigid reel-lay Creation
Slide 30: Flexible Solutions
Flexible Solutions Our clients require flexible solutions: Collaboration • Comprehensive integrated Model offering with alliance partners OneSubsea being developed in to a Joint Venture. Fully Standalone Integrated SURF • Successful collaboration models with certain independent clients including Ake
Slide 31: Strengthened early engagement capability
Strengthened early engagement capability • FEED is a critical part of the life cycle in creating Cumulative offshore FEED awards for E&P value. Clients engaged earlier benefit from 40 optimised solutions 35 2017 • Significant increase in number of supplier led 30 FEEDs leading onto project awards 25
Slide 32: Our Partnerships
Our Partnerships • We have a collaboration model in Recent successful completion of the Volund Infill project for partnership with certain clients to Aker BP provide cost effective solutions based on long-term relationships. • Early engagement and long-term collaborative relationships with mutual be
Slide 33: Subsea Integration Alliance
Subsea Integration Alliance + = Enhanced production Reduced cost and risk Pore-to-shore perspective 33 © Subsea 7 - 2018 subsea7.com
Slide 34: Integrated full field lifecycle joint venture
Integrated full field lifecycle joint venture Integrated optimized Improved EPIC economics: Integrated technologies to design of the entire lower cost, reduced risk and extend tieback distance and subsea facility shorter schedule improve recovery Reduced Total Cost of Ownership CapEx Phase OpEx Phas
Slide 35: Integrated solutions: joint venture value proposition
Integrated solutions: joint venture value proposition Integrated Projects Life of Field Technology > Supplier led solutions > Lower Operating Expenditure > Improved Recovery > Reduced Costs > Asset Integrity Assurance > Standardisation > Reduced Risk > Enhanced Production > Subsea Processing > Optim
Slide 36: Drivers of lower costs for projects
Drivers of lower costs for projects • Earlier engagement enables better engineering, introduction of Earlier engagement integrated and full lifecycle solutions and application of new Closer collaboration technology Leaner processes Supply chain deflation • Closer collaboration with alliances and par
Slide 37: Drive business improvements to lower costs
Drive business improvements to lower costs Project A Actively adapt to industry conditions without losing focus on long term strategic priorities Initial price Concept optimsiation Angolan Content Local Competition Sourcing Sourcing, Final price reduction content and specification specifications, So
Slide 38: Adjusted EBITDA progression
Adjusted EBITDA progression • 2018 guidance: Revenue broadly in line, Adjusted EBITDA percentage margin significantly lower compared to 2017 Average 32% Average 21% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2013 | 2014 | 2015 | 2016 | 2017 | 2018 38 © Subsea 7 - 2018 subsea7.
Slide 39: Our principal margin drivers
Our principal margin drivers Total vessel Number of projects Backlog value by Costs ($bn) utilisation >$300m completed year awarded 82% 72% 66% 61% 2013 and 2.0 2018 earlier 2014 1.4 2015 1.0 0.8 2016 0.8 0.8 0.6 0.5 2017 2014 2015 2016 2017 2014 2015 2016 2017 2014 2015 2016 2017 Reduction in offsh
Slide 40: Priorities for cash
Priorities for cash Invest in the business Targeted acquisitions to enhance our strategic growth areas Maintain investment $468 million net cash at 30 grade profile September 2018 $1.7 billion returned to shareholders Return to shareholders in special dividends and buybacks since 2011 40 © Subsea 7
Slide 41: Index
Index What we do Our differentiators Our priorities Our outlook Our financials Appendix 41 © Subsea 7 - 2018 subsea7.com
Slide 42: Cyclical recovery in Oil and Gas
Cyclical recovery in Oil and Gas Re-engineered Projects Total Zinia Backlog BP Mad Dog 2 Increase Brownfield Tie-Backs Key Nexen Buzzard Vessel AKER BP Aefugl Utilisation Pricing Greenfield Construction Power Tenders in progress 42 © Subsea 7 - 2018 subsea7.com
Slide 43: Subsea 7's Addressable Market
Subsea 7’s Addressable Market (1) Rystad August 2018 (2) Access via Alliances and Partnerships $151 billion(1) (3) Trunklines up to 46” Global Offshore E&P CAPEX Floating Platform SPS(2) Fabrication, Maintenance, Modification and Drilling Operational Expenditure Seismic $40 billion(1) $60 billion Ad
Slide 44: Evolving energy sector
Evolving energy sector In an evolving energy sector, we create sustainable value by being the industry’s partner and employer of choice in delivering the efficient offshore solutions the world needs. Past Future Increased significance of Renewables Coal Gas Continued dominance of Oil and Gas Oil 44
Slide 45: Offshore Wind Market Trends
Offshore Wind Market Trends Cumulative GW Installations Levelised Cost of Energy Trend 156 140 160 140 133 120 120 LCOE dropping LCOE (Eur/MWh) 107 100 CAGR 16% 100 30% every 5 years 80 73 80 -30% GW 60 60 48 38 40 40 Actuals CAGR 12% 20 20 Forecast 0 0 2010 2015 2020 2025 2030 2018 2019 2020 2021 2
Slide 46: Business Unit Outlook
Business Unit Outlook SURF and Conventional - Tendering activity increasing but pricing not yet improving near term - Improved visibility on timing of awards for large greenfield projects, with some projects already awarded to market Renewables and Heavy Lifting - T&I tendering for near-term activit
Slide 47: Summary
Summary • Market award activity in offshore oil and gas has begun to recover • Subsea 7 has taken cyclical opportunities to grow and strengthen its business for the future and is positioned well for the next phase of the cycle • Subsea 7’s Values-driven strategy and strong financial position have su
Slide 48: Index
Index What we do Our differentiators Our priorities Our outlook Our financials Appendix 48 © Subsea 7 - 2018 subsea7.com
Slide 49: Q3 2018 results
Q3 2018 results FINANCIAL HIGHLIGHTS OPERATIONAL HIGHLIGHTS • Revenue $1.1 billion • Good progress on EPIC SURF • Adjusted EBITDA $217 million • Active Vessel Utilisation: 89% • Adjusted EBITDA margin 20% • Total Vessel Utilisation: 85% • Diluted EPS $0.23 • Operating cash generated $190 million • N
Slide 50: Income statement – Q3 highlights
Income statement – Q3 highlights Three months ended 30 September 2018 30 September 2017 In $ millions, unless otherwise indicated Unaudited Unaudited Revenue 1,082 1,063 Net operating income (NOI) 111 149 Income before taxes 110 123 Taxation (34) (12) Net income 76 111 Adjusted EBITDA(1) 217 250 Adj
Slide 51: Income statement – supplementary details
Income statement – supplementary details Three months ended 30 September 18 30 September 17 In $ millions Unaudited Unaudited Administrative expenses (64) (64) Share of net income/(loss) of associates and joint ventures - (13) Depreciation, amortisation, mobilisation and impairment (107) (101) Net o
Slide 52: Business Unit performance – Third quarter
Business Unit performance – Third quarter Revenue NOI $1,082m $1,063m $111m $149m $152m $232m $66m $76m $45m $17m $6m $4m $865m $755m $93m $103m 2018 2017 2018 2017 SURF & Conventional i-Tech Services Renewables & Heavy Lifting Corporate segment: net operating loss Q3 2018 $3m (Q3 2017: net operatin
Slide 53: Segmental analysis
Segmental analysis For the three months ended 30 September 2018 Renewables & In $ millions (unaudited) SURF & Conventional i-Tech Services Heavy Lifting Corporate TOTAL Revenue 865 66 152 - 1,082 Net operating income/(loss) 93 4 17 (3) 111 Finance income 4 Other gains and losses (2) Finance costs (3
Slide 54: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA Net operating income to Adjusted EBITDA Three Months Ended 30 Sept. 2018 Three Months Ended 30 Sept. 2017 For the period (in $millions) Unaudited Unaudited Net operating income 111 149 Depreciation, amortisation, mobilisation and impairment 107 101 Adjusted EBITDA 2
Slide 55: 2017 costs overview
2017 costs overview $1.5 billion cost savings on vessel and workforce since 2014: 50% reduction $ bn Vessels and other costs(2): Including 7 6.0bn vessel costs, onshore facilities, IT 6 infrastructure and other fixed overheads 0.8 5 0.4 4.2bn Depreciation and amortisation: excludes non-recurring imp
Slide 56: Liquidity and financial strength
Liquidity and financial strength Robust balance sheet • Net cash of $468 million Strong financial flexibility • Cash and cash equivalents of $732 million • Borrowings of $264 million • Five-year $656 million revolving credit facility undrawn As at 30 September 2018 56 © Subsea 7 - 2018 subsea7.com
Slide 57: Summary balance sheet
Summary balance sheet 30 September 31 December 30 September 31 December 2018 2017 2018 2017 In $ millions Unaudited Audited In $ millions Unaudited Audited Assets Equity & Liabilities Total equity 5,826 5,941 Non-current assets Non-current liabilities Goodwill 767 701 Non-current portion of borrowin
Slide 58: Summary of third quarter 2018 cash flow
Summary of third quarter 2018 cash flow $m 217 (8) (20) (74) 3 732 614 Cash at EBITDA Changes in operating assets Tax Capex Other Cash at 1 July 2018 and liabilities paid 30 September 2018 • Net cash of $468 million as at 30 September 2018 • Long-term ECA borrowing facility of $264 million at 30 Sep
Slide 59: Summary of year-to-date 2018 cash flow
Summary of year-to-date 2018 cash flow $ millions Cash and cash equivalents at 31 Dec 2017 1,109 Included an increase in net operating assets of Net cash generated from operating activities 238 $183 million Included cash outflows on SOC acquisition of $156 million including vessels, acquisition of N
Slide 60: Financial guidance
Financial guidance 2018 Guidance (1) Revenue Broadly in line with 2017 Adjusted EBITDA percentage margin Significantly lower than 2017 Administrative expense $260 million - $280 million Net finance cost $0 million - $5 million Depreciation and Amortisation $430 million - $440 million Full year effec
Slide 61: Initial IFRS 16 'Leases' guidance
Initial IFRS 16 ‘Leases’ guidance • IFRS 16 ‘Leases’ will be effective from 1 January 2019. IFRS 16 2019 forecast impact • Requires the Group to recognise: Income Statement Lease expense Decrease by $100m - $110m  a right-of-use asset for long-term leases, to be amortised straight-line over duratio
Slide 62: Backlog and order intake
Backlog and order intake Backlog of $5.1 billion, as at 30 September 2018 • $0.8 billion awarded in the third quarter • Book-to-bill: 2018 SURF and $1.0bn Conventional – 0.7x in the quarter 2020+ $4.3bn – 1.0x year-to-date $1.9bn Renewables & Heavy Lifting • Four announced $0.3bn 2019 awards: $2.2bn
Slide 63: Appendix
Appendix Major project progression Corporate responsibility ADR Forward looking statement Contact details 63 © Subsea 7 - 2018 subsea7.com
Slide 64: Major project progression
Major project progression • Continuing projects >$100m between 5% and 95% complete as at 30 September 2018 excluding PLSV and Life of Field day-rate contracts Culzean (UK) Announced WND Ph.2 (Egypt) size of project Sonamet (Angola) Borkum II (Germany) Major Hasbah (Saudi Arabia) (Over $750m) Sole (A
Slide 65: Major projects and clients
• Beatrice wind farm, BOWL • Borkum II, Trianel • Triton Knoll, Innogy • Martin Linge, Total • Buzzard ph. 2, Nexen • Aasta Hansteen, Statoil • Catcher, Premier • Maria, Wintershall • Culzean, Maersk • IRM Services, Equinor • Alligin, BP • Penguins, Shell • IRM Services, BP • Snorre, Equinor • Al-Kh
Slide 66: Corporate Responsibility
Corporate Responsibility • At Subsea 7 we are committed to operating in a safe, ethical and responsible manner Number of employees Lost-time incident Clean Operations completing compliance Frequency rate (%) & ethics e-learning 5,000 3,544 3,699 0.06 0.06 3,800 0.05 3,300 1,750 2015 2016 2017 2015 2
Slide 67: ADR information
ADR information ADR Ticker: SUBCY ADR type: Sponsored Level 1 ADR Listing venue: OTC CUSIP: 864323100 Ratio: 1 ADR : 1 Ordinary Share Depositary bank: Deutsche Bank Trust Company Americas ADR broker helpline: New York: +1 8662492593 London: +44 207 547 6500 Hong Kong: +852 2203 7854 e-mail: db@astfi
Slide 68: Forward-looking statements
Forward-looking statements Certain statements made in this presentation may include ‘forward-looking statements’. These statements may be identified by the use of words like ‘anticipate’, ‘believe’, ‘could’, ‘estimate’, ‘expect’, ‘forecast’, ‘intend’, ‘may’, ‘might’, ‘plan’, ‘predict’, ‘project’, ‘s
Slide 69: Contact: Isabel Green, Investor Relations Director
Contact: Isabel Green, Investor Relations Director eMail: isabel.green@subsea7.com Direct Line +44 20 8210 5568 Website www.subsea7.com 69 © Subsea 7 - 2018 subsea7.com

Subsea 7 — Investor Presentation (December 2018) on 6ix

Subsea 7 — Investor Presentation (December 2018)

Slide 1: Investor Presentation December 2018

Slide 2: Index

Slide 3: Subsea 7 – In Summary

Slide 4: © Subsea 7 - 2018 subsea7.com

Slide 5: Our market segments

Slide 6: SURF and Conventional

Slide 7: SURF and Conventional – some of our activities

Slide 8: Our PLSV activities offshore Brazil

Slide 9: i-Tech Services

Slide 10: i-Tech Services: products and services

Slide 11: i-Tech Services track record

Slide 12: Renewables and Heavy Lifting

Slide 13: Renewable and Heavy Lifting contract models

Slide 14: What we do to reduce contribution to climate change

Slide 15: Large offshore wind farm projects

Slide 16: Index

Slide 17: Our shared Core Values

Slide 18: Our value proposition

Slide 19: Competitive landscape for full life cycle integrated solutions

Slide 20: Our People

Slide 21: Riser Systems

Slide 22: © Subsea 7 - 2018 subsea7.com

Slide 23: Pipelines Bundles

Slide 24: Pipeline Bundles

Slide 25: Life of field monitoring and autonomous systems

Slide 26: A modern and versatile fleet of 34 vessels

Slide 27: 34 Vessels including 32 active vessels at end Q3 '18

Slide 28: Index

Slide 29: Subsea 7's approach and strategy through the cycle

Slide 30: Flexible Solutions

Slide 31: Strengthened early engagement capability

Slide 32: Our Partnerships

Slide 33: Subsea Integration Alliance

Slide 34: Integrated full field lifecycle joint venture

Slide 35: Integrated solutions: joint venture value proposition

Slide 36: Drivers of lower costs for projects

Slide 37: Drive business improvements to lower costs

Slide 38: Adjusted EBITDA progression

Slide 39: Our principal margin drivers

Slide 40: Priorities for cash

Slide 41: Index

Slide 42: Cyclical recovery in Oil and Gas

Slide 43: Subsea 7's Addressable Market

Slide 44: Evolving energy sector

Slide 45: Offshore Wind Market Trends

Slide 46: Business Unit Outlook

Slide 47: Summary

Slide 48: Index

Slide 49: Q3 2018 results

Slide 50: Income statement – Q3 highlights

Slide 51: Income statement – supplementary details

Slide 52: Business Unit performance – Third quarter

Slide 53: Segmental analysis

Slide 54: Reconciliation of Adjusted EBITDA

Slide 55: 2017 costs overview

Slide 56: Liquidity and financial strength

Slide 57: Summary balance sheet

Slide 58: Summary of third quarter 2018 cash flow

Slide 59: Summary of year-to-date 2018 cash flow

Slide 60: Financial guidance

Slide 61: Initial IFRS 16 'Leases' guidance

Slide 62: Backlog and order intake

Slide 63: Appendix

Slide 64: Major project progression

Slide 65: Major projects and clients

Slide 66: Corporate Responsibility

Slide 67: ADR information

Slide 68: Forward-looking statements

Slide 69: Contact: Isabel Green, Investor Relations Director