Subsea 7 S.a. · OSL:SUBC
Subsea 7 — Investor Presentation (September 2012)
76 slides from Subsea 7's investor presentation, Sep 12, 2012
Slide 1: Subsea 7
SUBSEA 7 September 2012
Slide 2: Safety is one of our core values
Safety is one of our core values Subsea 7 is committed to an incident-free workplace, everyday, everywhere. Our performance depends on our ability to continually improve the quality of the services we provide to our clients, while protecting people and minimising the impact on the environment. We wi
Slide 3: Global Rolling LTIF/TRCFR – August 2012
Global Rolling LTIF/TRCFR – August 2012 12-Sep-12 Page 3
Slide 4: A global leader
A global leader Subsea 7 S.A. is a seabed-to-surface engineering, construction and services contractor to the offshore energy industry worldwide. We provide integrated services and have a proven track record in delivering complex projects in harsh and challenging environments. We achieve this by: •
Slide 5: Our Vision
Our Vision To be acknowledged by our clients, our people, and our shareholders, as the leading strategic partner in seabed-to-surface engineering, construction and services. 12-Sep-12 Page 5
Slide 6: A global leader
A global leader • The capability and resources to address the worldwide growth in size and complexity of subsea projects • Full spectrum of seabed-to-surface services – SURF, Life-of-Field, Conventional and emerging markets such as Renewables 12-Sep-12 Page 6
Slide 7: Able to deliver a step-change in service for clients
Able to deliver a step-change in service for clients • A trusted partner with capability and resources to provide expert engineering and technical solutions • Our local teams develop and nurture close relationships with local partners and suppliers • Flexibility to respond quickly and sensitively to
Slide 8: A global leader
A global leader 12-Sep-12 Page 8
Slide 9: Able to deliver a step-change in service for clients
Able to deliver a step-change in service for clients • Versatile vessel and ROV fleet is ideally suited to meet the requirements of deep and ultra-deepwater projects • Our financial strength will allow us to invest in our people and the assets and technology necessary to execute complex projects • J
Slide 10: Our Values
Our Values • Our shared Core Values describe what is most important to us as we conduct our business. The way we behave - with each other, our people, clients and suppliers - must reflect those values. If we are not consistent in the way we behave then our values remain statements of intent. 12-Sep-
Slide 11: Our core values: Safety
Our core values Safety • We are committed to an incident- free workplace, every day, everywhere. We continue to minimise the impact of our activities on the environment. 12-Sep-12 Page 11
Slide 12: Our core values: Integrity
Our core values Integrity • We apply the highest ethical standards to everything we do. We believe that by treating our clients, people and suppliers fairly and with respect we will earn their trust and build sustainable success together. 12-Sep-12 Page 12
Slide 13: Our core values: Innovation
Our core values Innovation • We constantly strive to improve the efficiency of our business by investing in the development of our people and through innovation in technology, operations, and processes. 12-Sep-12 Page 13
Slide 14: Our core values: Performance
Our core values Performance • We are predictable and reliable in our performance. We always strive for excellence in everything we do in order to achieve superior business results. 12-Sep-12 Page 14
Slide 15: Our core values: Collaboration
Our core values Collaboration • We are locally sensitive and globally aware. Our people work together, leveraging our global know-how and capabilities to build sustainable local businesses. 12-Sep-12 Page 15
Slide 16: Client relationships are key
Client relationships are key The ability to forge and sustain effective strategic partnerships with our global client base remains the backbone of our business. 12-Sep-12 Page 16
Slide 17: Supply Chain Management is core to our business
Supply Chain Management is core to our business • We develop a collaborative culture with our suppliers in order to maximise their expertise and resources • We gain efficiencies, improve communications and reduce operating cost by developing Global Supply Chain Networks. • We provide performance fee
Slide 18: Our operating principles
Our operating principles • Projects are core to our business • Engineering is at the heart of our projects • People are central to our success • We make long-term investments in our people, assets, and know- how • We operate in a consistent manner on a worldwide basis 12-Sep-12 Page 18
Slide 19: Our capabilities
A global leader in Our capabilities seabed-to-surface engineering, construction and services. 12-Sep-12 Page 19
Slide 20: Subsea, Umbilical, Riser and Flowlines (SURF) systems
Subsea, Umbilical, Riser and Flowlines (SURF) systems We are experts in: • Design • Fabrication • Installation • Commissioning SURF systems are the most significant proportion of our business and our largest growth market. 12-Sep-12 Page 20
Slide 21: Life-of-Field
Life-of-Field We deliver a full suite of services which can be tailored to suit client requirements. • Integrity management • Inspection, Maintenance & Repair • Remote intervention • Integrity assurance • Incremental CAPEX 12-Sep-12 Page 21
Slide 22: Conventional Services
Conventional Services Conventional services include: • Fixed platform design, fabrication and installation • Hook-up • Platform upgrade and refurbishment • Shallow water pipelay • Decommissioning and abandonment. 12-Sep-12 Page 22
Slide 23: New areas of operation - Renewables
New areas of operation - Renewables • Our proven subsea expertise and capabilities, together with strong safety and risk management processes, are fully transferable to support this emerging market. • A developing installation market (already $1.5bn per year in Europe) that is forecast to increase c
Slide 24: Where we operate
Subsea 7 operates internationally as one group – Where we operate locally sensitive and globally aware 12-Sep-12 Page 24
Slide 25: Where we operate
Where we operate We believe in strong local, integrated teams, leveraging our global know-how and resources. 12-Sep-12 Page 25
Slide 26: Our Assets
One of the world’s most versatile fleets of more than 40 vessels Extensive infrastructure of Our Assets pipeline spoolbases, fabrication and operations support yards A fleet of over 175 ROVs 12-Sep-12 Page 26
Slide 27: Rigid pipelay/heavy lift assets
Rigid pipelay/heavy lift assets 12-Sep-12 Page 27
Slide 28: Construction/vertical flexlay assets
Construction/vertical flexlay assets 12-Sep-12 Page 28
Slide 29: Construction/flexlay (horizontal) assets
Construction/flexlay (horizontal) assets 12-Sep-12 Page 29
Slide 30: LCV/LOF
subsea LCV/LOF Chloe C Grant Candi
Slide 31: Diving assets
Diving assets 12-Sep-12 Page 31
Slide 32: Construction/Other assets
Construction/Other assets *Seven Inagha is a Jack-Up Accommodation & Crane Barge for fixed platform conventional activities 12-Sep-12 Page 32
Slide 33: Our ROV fleet
Our ROV* fleet Work Class ROVs Observation Class ROVs *including i-Tech ROVs, a division of Subsea 7 12-Sep-12 Page 33
Slide 34: Our operational facilities
Our operational facilities Spoolbases Fabrication Yards 12-Sep-12 Page 34
Slide 35: Our project experience
Our project Projects are core to our business experience 12-Sep-12 Page 35
Slide 36: Projects are core to our business
Projects are core to our business • Successful project management is one of our core competencies • It takes years of practical experience, know-how and dedication to safely deliver the toughest and most complex of offshore projects on schedule, on budget, to agreed standards, time after time • Our
Slide 37: Our project experience - examples of recent and current projects
Our project experience - examples of recent and current projects Africa & Gulf of Mexico Brazil Addax Okwori & Antan Chevron Frade BP Block 18 Petrobras P-55 Export Lines BP Block 31 PSVM Petrobras PRA-1 BP Greater Plutonio Shell BC-10 BP Thunder Horse Petrobras Guará-Lula NE Chevron Tombua Landana,
Slide 38: Our technical expertise
Our technical Engineering is at the heart of expertise our projects 12-Sep-12 Page 38
Slide 39: A global first-class engineering team
A global first-class engineering team • Our global engineering team comprises over 2,000 professionals • Supported by our Communities of Excellence • Key areas include: - Design engineering of permanent works - Installation engineering, including the design of temporary works and procedures - Projec
Slide 40: Current technology projects
Current technology projects • High performance Pipe-in-Pipe • Mechanical Lined Pipe • High Strength Steel • Riser Towers • Autonomous Inspection Vehicle • Web-based multi-user Graphical Information System • Fibre rope deployment • Joint Industry Projects 12-Sep-12 Page 40
Slide 41: Our People
Our People People are central to our success 12-Sep-12 Page 41
Slide 42: Executive Management team
Executive Management team Chief Executive Officer Jean Cahuzac Chief Financial Chief Operating Executive Vice Executive Vice General Officer Officer President President Human Counsel Commercial Resources Ricardo Rosa John Evans Steve Wisely Keith Tipson Nathalie Louys 12-Sep-12 Page 42
Slide 43: Global Management team
Global Management team • Our Global Management Team supports our Executive Management Team and is involved in the day-to-day running of our business. • It comprises senior representation from key areas of our business and may be flexible in its membership: – Senior Vice Presidents for our territorie
Slide 44: People are central to our success
People are central to our success Subsea 7 is a business driven by the passion and knowledge of our people. • Talented • High-performing • Solution-focused • Multi-national • Integrated global teams • Recognised experts in their fields. 12-Sep-12 Page 44
Slide 45: Investing in our people
Investing in our people Location Headcount • A diverse international workforce Offshore Global 6,680 of around 14,000 UK 2,330 • Over 70 nationalities Norway 1,230 • Local presence France 985 Brazil 945 • Local focus Angola 615 • Developing careers Nigeria 450 United States 260 • Developing the futu
Slide 46: Locally sensitive and globally aware
Locally sensitive We are committed to developing and globally the local capabilities of the aware countries we work in 12-Sep-12 Page 46
Slide 47: Locally focussed
Locally focussed • We are committed to developing the local capabilities of the countries we work in • In excess of 70 nationalities deployed internationally • We have a wide range of leadership, technical, engineering development and mentoring programmes. 12-Sep-12 Page 47
Slide 48: Local content
Local content • For over 40 years, we have continuously invested in Nigeria with our fabrication yard in Warri and offices in Lagos, including our engineering JV, Global Oceon Engineers • Development of two operational facilities in Angola over the last 15 years • Continuous development of operation
Slide 49: Community programmes
Community programmes • Malaria Control Programme, West Africa • Samusocial International, Angola • Provision of over 16,500 wheelchairs, Angola • Future Island Community Project, Brazil • Projeto Esperança, Brazil • Vessel welfare funds • Local charity fundraising events & activities • School & coll
Slide 50: Our business divisions
Our business i-Tech - ROV & intervention divisions tooling services 12-Sep-12 Page 50
Slide 51: i-Tech - ROV and intervention tooling services
• A leading provider of ROV and intervention tooling services to the global exploration and production market • Worldwide client support delivered through local operational facilities • Track record of delivering subsea service and performance • Significant investment in the design and build of the
Slide 52: Our strategic partners
Subsea 7 operates a number of Our strategic successful joint ventures with partners strategic partners around the world. 12-Sep-12 Page 52
Slide 53: NigerStar 7
• NigerStar 7 is a joint venture that brings together the engineering, installation and project management expertise of Globestar (the subsidiary of Subsea 7 in Nigeria), with the fabrication capacity and capability of Nigerdock (a subsidiary of Nigeria’s Jagal). • Based in Lagos, NigerStar 7 is ded
Slide 54: Global Oceon Engineers Nigeria Limited
Global Oceon Engineers Nigeria Limited (Oceon) is a joint venture partnership, based in Nigeria between Petrolog Group and Subsea 7 This forms a multi-disciplinary engineering design company that offers comprehensive engineering services from definition engineering through to construction support. 1
Slide 55: SapuraAcergy
In partnership with Sapura Crest Petroleum of Malaysia, we jointly own and operate the Sapura 3000, a heavy lift pipelay and derrick vessel in the Asia Pacific region www.sapuraacergy.com. Sapura 3000 Sapura 3000 12-Sep-12 Page 55
Slide 56: Seaway Heavy Lifting
• We jointly own this well- established offshore contractor • Seaway Heavy Lifting (SHL) operates two heavy lift ships: – Stanislav Yudin, a 2,500t heavy lift vessel fully equipped for the installation and removal of major offshore structures – Oleg Strashnov, this a new build 5,000t heavy lift vess
Slide 57: Sonamet
Sonamet In partnership with Sonangol and Wapo International we own Sonamet, which produces high- quality fabrications for oil companies operating both shallow and deep water projects off the coast of Angola. 12-Sep-12 Page 57
Slide 58: Financial performance – Second Quarter 2012
Financial Second Quarter 2012 performance 12-Sep-12 Page 58
Slide 59: Delivered good Q2 2012 results
Delivered good Q2 2012 results Good results reflect: • High activity levels in North and Norwegian Seas; albeit mitigated by – poor weather early in quarter – execution of lower margin contracts awarded in previous years • High activity levels in West Africa • Brazil impacted by scheduled dry-dockin
Slide 60: Backlog
Backlog • Backlog of $8.3billion: – remains close to record level – high level of tendering creates opportunity for further growth – focused on building ‘quality’ backlog Backlog progression $m 8,538 8,686 8,285 7,883 7,903 6,668 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 12-Sep-12 Page 60
Slide 61: Returns to shareholders
Returns to shareholders • $200m share buyback programme completed on 6 July – 8.6m shares acquired in aggregate (2.4% of total shares outstanding) • $200m cash dividend paid 5 July – equivalent to $0.60 per share • Veripos Inc. listed on Oslo Børs 26 July – distributed as dividend-in-kind on 1 for 1
Slide 62: Market overview
Market overview • No apparent impact from oil price volatility and macro-economic uncertainty on client activity • Strong momentum among clients to bring new reserves into production – high level of bidding activity to translate to market awards later this year • Growth opportunities in all major ma
Slide 63: Market overview
Market overview • Growth opportunities in all major markets, albeit at differing paces: – APME • Pricing conditions remain more challenging than other territories • Expect projects to come to market award later this year – Brazil • Petrobras’s revised plans remain ambitious • Opportunities include:
Slide 64: Income statement – key highlights
Income statement – key highlights Seven Six months Three months Ended months ended ended 30.Jun.12 30.Jun.11 30.Jun.12 30.Jun.11 In $ millions, unless indicated unaudited unaudited unaudited Unaudited Revenue 1,484 1,335 2,942 2,627 Net operating income 246 210 400 304 Gain on sale of NKT Flexibles
Slide 65: Operational performance – Q2 2012
Operational performance – Q2 2012 $713m $308m $308 m $93m ($8m) ($8m) Revenue Revenue NOI NOI Revenue NOI $538m $85m $27m $308 m $147m Revenue NOI $113m $(4)m ($8m) Revenue NOI Revenue NOI Revenue NOI 12-Sep-12 Page 65
Slide 66: Income statement – other details
Income statement – other details Three Three months months ended ended 30.Jun.12 30.Jun.11 In $ millions Unaudited Unaudited Administrative expenses (77) (97) Share of results of associates and joint ventures 33 34 Net operating income 246 210 Finance costs net of investment income (6) (6) Other gai
Slide 67: Cash flow and balance sheet overview – 1H 2012
Cash flow and balance sheet overview – 1H 2012 • Cash generated from operating activities: $124m - Net increase in operating assets: $309m • Net cashflow from investing activities: $15m - capital expenditure of $338m: Seven Borealis, Seven Inagha, new-build PLSV - disposal of NKT Flexibles for net p
Slide 68: 2012 financial guidance
2012 financial guidance • We expect to deliver 2012 Adjusted EBITDA in-line with consensus expectations - JV contribution – flat year-on-year (excluding NKT Flexibles) • Capex for 2012: $750m-$800m - $450m on new vessel programme: Seven Inagha, Seven Borealis, Seven Viking, PLSV - $150m on dry-docki
Slide 69: Outlook
Outlook • We expect to deliver 2012 Adjusted EBITDA in-line with consensus • Looking further out: - NSMC: In the North and Norwegian Seas, we expect low margin contracts awarded in previous years to complete in 2012 - AFGOM: delay in market award of some large projects in Nigeria and Angola will res
Slide 70: Fleet investment programme on track
Fleet investment programme on track • Seven Borealis expected to commence operations on CLOV in Q4 • Seven Inagha joined fleet, acquired 50% stake in Normand Oceanic • Over 40 vessels - continue to enhance our fleet to drive profitable growth SURF Conventional Life-of-Field Divest / Release JVs *Ole
Slide 71: Seven Borealis
Seven Borealis 12-Sep-12 Page 71
Slide 72: Summary
Summary • Good quarterly results • 2012 Adjusted EBITDA expected to be in-line with consensus • Expectation of major contracts awarded to market in coming months • Growth opportunities visible in all markets, albeit at differing paces • Company well positioned for profitable growth: - financial stre
Slide 73: Major project progression
Major project progression Continuing projects >$100m between 5% and 95% complete as at 30 June 2012 excl. long-term ship charters and Life-of-Field day-rate contracts. 0% 20% 40% 60% 80% 100% EGP3B (Nigeria) P55 Export (Brazil) Block 18 GEL (Angola) Andrew Bundle (UK) Jasmine (UK) GSNC (Brazil) MPN
Slide 74: Backlog
Backlog Backlog progression $m 8,538 8,686 8,285 7,883 7,903 6,668 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Backlog by Award Date Backlog by Execution Date Backlog by Service Capability Backlog by Segment 2010 2014+ SURF NSMC AFGoM 2012 23% 2011 25% 31% 74% 35% 29% 46% LoF <2009 10% Brazil 14% 2013 28% 2
Slide 75: seabed-to-surface
seabed-to-surface www.subsea7.com 12-Sep-12 Page 75
Slide 76: Powerpoint Modules
Assets - Vessels - Operational facilities Projects Powerpoint Technology Modules Life-of-Field (Modules available on 7Online from the communications site, under info centre) 12-Sep-12 Page 76