Saipem S.p.a. · MIL:SPM

Saipem — FY2016 Earnings Presentation

27 slides from Saipem's earnings presentation, Feb 23, 2017

1. Slide 1: Preliminary 2016 Consolidated Results

   PRELIMINARY 2016 CONSOLIDATED RESULTS 23 February 2017 Saipem. giovedì Engineering 23 febbraio 2017 Energy

2. Slide 2: Forward-Looking Statements

   Saipem. Engineering Energy FORWARD-LOOKING STATEMENTS Forward-looking statements contained in this presentation regrading future events and future results are based on current expectations, estimates, forecasts and projections about the industries in which Saipem S.p.A. (the “Company”) operates, as

3. Slide 3: Today's Presentation

   Saipem. Engineering Energy TODAY’S PRESENTATION 1 OPENING REMARKS: A YEAR OF DELIVERY 2 FY 2016 RESULTS 3 MARKET OUTLOOK & BUSINESS UPDATE 4 FIT FOR THE FUTURE & TECHNOLOGY 5 CLOSING REMARKS 3

4. Slide 4: 2016: A Year of Delivery

   Saipem. Engineering Energy 2016: A YEAR OF DELIVERY Resilient operating and commercial performance • Offshore strength underpinning yearly results • Onshore E&C breakeven achieved • Order intake of €8.3bn and Backlog at €14.2bn Net debt down at €1.45bn Solid Capital Structure in place • €3.5bn Right

5. Slide 5: FY 2016 Results

   f=! SAIPEM ENGINEERING ENERGY FY 2016 RESULTS

6. Slide 6: FY 2016 Results: YoY Comparison

   Saipem. Engineering Energy FY 2016 RESULTS YoY COMPARISON (€ mn) Revenues Adjusted EBITDA Adjusted EBIT Adjusted Net Profit 11,507 1,266 1,067 9,976 582 903 608 226 629 379 192 489 (154) (508) FY15 FY16 FY15* FY16* FY15* FY16* FY15* FY16* E&C Offshore E&C Onshore Drilling Offshore Drilling Onshore T

7. Slide 7: FY 2016 Net Profit Reported/Adjusted Bridging

   Saipem. Engineering Energy FY 2016 NET PROFIT REPORTED/ADJUSTED BRIDGING (€ bn) Net Profit 0.2 (0.2) Asset write off and impairment detail (2.1) OFFSHORE DRILLING  8 drilling rigs and inventories (2.1) 56% E&C ONSHORE 3%  2 Yards/bases 17% 9% FY16 FY16 15% Adjusted Reported E&C OFFSHORE ONSHORE DR

8. Slide 8: Arbitrations/Court Disputes and Unbilled Revenues

   Saipem. Engineering Energy ARBITRATIONS/COURT DISPUTES AND UNBILLED REVENUES (€ bn) 0.8* >0.7 >0.4 <0.3 Dec. 31, 2014 Dec. 31, 2015 Dec. 31, 2016 Dec. 31, 2016 UNBILLED REVENUES ARBITRATIONS/ COURT DISPUTES* (*) Arbitrations referring to contracts in Algeria, Australia, Canada, Russia; gross of the

9. Slide 9: FY 2016 Net Debt Evolution

   Saipem. Engineering Energy FY 2016 NET DEBT EVOLUTION (€ bn) 5.39 (3.44)* 1.95 (0.91) 0.30 0.11 1.45 Net Debt Capital Adj. Cash Flow Capex Δ Working Net Debt @Dec. 31, 2015 Increase (Adj. N.P.+ D.&A.) Capital and @Dec. 31, 2016 Others (*) Net of fees 9

10. Slide 10: Solid and Permanent Capital Structure in Place

    Saipem. Engineering Energy SOLID AND PERMANENT CAPITAL STRUCTURE IN PLACE (€ mn) Debt Maturity Profile 919 569 533 569 546 532 533 100 533 500 132 500 250 32 37 96 35 35 35 46 32 32 37 35 Beyond 2017 2018 2019 2020 2021 2022 2023 GIEK Bond Unicredit Other Debt Term Facility  Permanent capital struc

11. Slide 11: Market Outlook & Business Update

    MARKET OUTLOOK & BUSINESS UPDATE 11

12. Slide 12: Market Outlook

    MARKET OUTLOOK UNCHANGED SINCE Q3 2016  Oil price delaying E&P capex recovery post 2017  Further reduction in development costs needed to boost E&P spending 2017 scenario  Strict cash flow management by Oil Companies  Industry consolidation and alliances expected to continue  Offshore fleet und

13. Slide 13: FY 2016 Backlog

    Saipem. Engineering Energy FY 2016 BACKLOG (€ mn) 15,846 9,976 8,349 14,219 Backlog FY16 FY16 Contracts Backlog @Dec. 31, 2015 Revenues Acquisition @Dec. 31, 2016 E&C Offshore E&C Onshore Drilling Offshore Drilling Onshore 13

14. Slide 14: Backlog by Year of Execution

    Saipem. Engineering Energy BACKLOG BY YEAR OF EXECUTION (€ mn) 7,444 441 494 2,926 3,775 428 3,000 341 345 1,205 406 3,583 485 1,764 1,801 2017 2018 2019+ E&C Offshore E&C Onshore Drilling Offshore Drilling Onshore 14

15. Slide 15: E&C Opportunities

    Saipem. Engineering Energy E&C OPPORTUNITIES LEGEND  OFFSHORE  ONSHORE Americas Europe/ CIS and Central Asia  ExxonMobil Liza – subsea  Conoco CAT3 Ekofisk – fixed facilities – decommissioning  ExxonMobil Sable Decommissioning – fixed facilities  EDF Offshore Windfarms - renewables New  BP Ca

16. Slide 16: Update on Drilling: Offshore Drilling Fleet Contracts

    Saipem. Engineering Energy UPDATE ON DRILLING OFFSHORE DRILLING FLEET CONTRACTS Committed Stand-by Termination fee New Contract CLIENT LOCATION Saipem 12000 Eni Worldwide Saipem 10000 Eni Worldwide DEEP-WATER Scarabeo 9 Eni Angola Scarabeo 8 Eni North Sea Scarabeo 7 Eni Indonesia Scarabeo 6* - - Sca

17. Slide 17: 2017 Guidance

    Saipem. Engineering Energy 2017 GUIDANCE Metrics FY 2017 Revenues  c.€10bn EBITDA  c.€1bn % margin  c.10% Net profit  Higher than €200mn* CAPEX  c.€400mn Net financial position  c.€1.4bn 17 (*) Including c.€30mn provisions for redundancies

18. Slide 18: Current Flagship Projects (1/2)

    Saipem. Engineering Energy CURRENT FLAGSHIP PROJECTS (1/2) ZOHR FIELD DEVELOPMENT - ACCELERATED START UP PHASE  Client: Petrobel (JV Eni / EGPC)  Location: Mediterranean Sea, offshore Egypt  Saipem Scope: Engineering, Procurement, Construction and Installation of c.215km of No 3 Sealines (26” Gas

19. Slide 19: Current Flagship Projects (2/2)

    Saipem. Engineering Energy CURRENT FLAGSHIP PROJECTS (2/2) Saipem FDS2 Egina Deepwater URF – Nigeria  Client: Total  Scope of work: EPCI of flowlines, jumpers, gas export pipelines, umbillicals and mooring & offloading systems, maximum water depth of 1,750m  Project Value: approximately $3bn  Sa

20. Slide 20: Fit For the Future & Technology

    Saipem. Engineering Energy FIT FOR THE FUTURE & TECHNOLOGY 20

21. Slide 21: Fit For the Future on Track

    Saipem. Engineering Energy FIT FOR THE FUTURE ON TRACK 87% OVERALL COST SAVINGS ACHIEVED  Achieved 750 € mn Cumulative  Achieved 650 Cumulative EBIT Cost Savings 300 improvement €1.7bn €1.0bn through 2017 2H2015 2016 2017 ACHIEVED IN 2015 ACHIEVED IN 2016 TO BE ACHIEVED IN 2017  Resource demobili

22. Slide 22: Fit For the Future 2.0

    Saipem. Engineering Energy FIT FOR THE FUTURE 2.0 LEANER ORGANIZATION AND DECENTRALIZED MODEL  EFFECTIVENESS: LEANER ORGANIZATION, COST EFFECTIVE PROCESSES AND DECENTRALISED MODEL  FULL ACCOUNTABILITY: IMPROVING COMPETITIVENESS AND CONTROL OVER TARGETS RATIONALE  STRATEGIC OPTIONALITY: ENHANCING

23. Slide 23: Saipem Innovation Strategy

    Saipem. Engineering Energy SAIPEM INNOVATION STRATEGY 3 CORNERSTONES 1 DRIVER: HIGH VALUE PROJECTS AT LOWER COSTS Transformative Innovation Technology Intelligence • To re-design processes and spread an innovation • To scout disruptive technologies and chase new culture throughout the Company value

24. Slide 24: Closing Remarks

    f=! SAIPEM ENGINEERING ENERGY CLOSING REMARKS

25. Slide 25: Closing Remarks

    Saipem. Engineering Energy CLOSING REMARKS 2016 A YEAR OF DELIVERY: RESILIENT BUSINESS PERFORMANCE, STRONG CAPITAL STRUCTURE, DE-RISKING OF OPERATING ACTIVITY ONGOING REORGANIZATION CREATING LEANER AND FULLY ACCOUNTABLE DIVISIONS; ENHANCING COST EFFICIENCY AND STRATEGIC FLEXIBILITY OIL COMPANIES INV

26. Slide 26: Appendix

    f=! SAIPEM ENGINEERING ENERGY APPENDIX

27. Slide 27: 4Q 2016 Results

    Saipem. Engineering Energy 4Q 2016 RESULTS YoY COMPARISON (€ mn) Revenues Adjusted EBITDA Adjusted EBIT Adjusted Net Profit 3,062 257 384 2,091 183 269 136 182 95 63 103 45 54 26 4Q15 4Q16 4Q15 4Q16 4Q15 4Q16 4Q15 4Q16 E&C Offshore E&C Onshore Drilling Offshore Drilling Onshore Total EBIT 27

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