Subsea 7 S.a. · OSL:SUBC
Subsea 7 — Q1 2011 Earnings Presentation
18 slides from Subsea 7's earnings presentation, May 11, 2011
Slide 1: Earnings Presentation First Quarter 2011
Earnings Presentation First Quarter 2011 May 11, 2011 12:00 noon UK time
Slide 2: Forward-looking statements
Forward-looking statements • Certain statements made in this presentation may include “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the US Securities Exchange Act of 1934. These statements may be identified by the use of words like “anticipat
Slide 3: Highlights
Highlights • Combination between Acergy S.A. and Subsea 7 Inc. completed • Merger integration progressing on track • Good operational performance across the enlarged Group’s project portfolio • Lower margins in the quarter due to low project activity in Asia Pacific, short-term margin pressure in th
Slide 4: Consistent strategy and priorities
Consistent strategy and priorities • We remain focused on key markets with long-term, strong and sustainable growth characteristics; markets where we can differentiate ourselves, markets were we can achieve profitable growth Our key priorities: Safety & operational excellence Business acquisition -
Slide 5: Income statement highlights
Income statement highlights 2011 2010 Period Three Months Ended Ended Subsea 7 S.A. Acergy S.A. Subsea 7 Inc. In $ millions, except Adjusted EBITDA margin, share and per Mar.31.11 Feb.28.10 Mar.31.10 share data Unaudited Unaudited Unaudited Revenue from continuing operations 1,291.7 575.8 452.9 Net
Slide 6: Highlights: Net operating income bridge
Highlights: Net operating income bridge NSCM $179.4m • Lower vessels utilisation • Lower margins on projects awarded in 2010 AFGoM $78.6m ($85.1m) • Nigerian elections led to localised disruptions leading to some delayed mobilisations APME • Lack of current projects • Q1 ‘10 benefited from high offs
Slide 7: Operational performance – Q1 2011
Operational performance – Q1 2011 $ 308m $308m $ 3 0 8 m ($ 8m) ($8m) Revenue ( $ 8 m) NOI Reven ue NOI Revenue NOI $ 725m $ 64m $308m $ 2m $ 191m $ 118m Revenue NOI Revenue NOI ($8m) $ 4m Revenue Revenue NOI NOI 11-May-11 Page 7
Slide 8: Income statement overview
Income statement overview • Administrative expenses of $111 million, included $11 million of integration costs and December month • Joint ventures performed well • Other gains and losses were losses of $17 million due to weakening USD vs EUR, NOK, GBP • Finance costs reflected interest on convertibl
Slide 9: Cash flow and balance sheet overview
Cash flow and balance sheet overview • Good cash generation from operating activities • Capex in line with expectations: Seven Havila delivered; Seven Borealis – on track • Expected capex (excluding Seven Havila joint venture) for 2011 of c.$550m • Prepared for redemption of June 2011 convertible no
Slide 10: 2011 – financial assumptions
2011 – financial assumptions Current assumptions: • Administrative expenses: c.$75 million per quarter for remainder of 2011, excluding integration costs but synergies starting to materialise • Integration costs: $11 million expensed in Q1 ‘11 ($16 million expensed in Q4 ’10) - c.$25 million per qua
Slide 11: Market overview and outlook
Market overview and outlook • Continued robust oil price and high levels of tendering activities underpins strong order book momentum • North Sea: record levels of tendering and increasing activity; signs of an improving pricing environment; well placed to benefit from opportunities • West Africa: a
Slide 12: Appendices
Appendices 11-May-11 Page 12
Slide 13: Major project progression
Major project progression Continuing projects >$100m between 5% and 95% complete as at March 31, 2011 excl. long-term ship charters and Life-of-Field day-rate contracts. Block 17/18 (Angola) ALNG (Angola) Block 18 GEL (Angola) PazFlor (Angola) Oso Re (Nigeria) Block 31 (Angola) EGP3B (Nigeria) Gumus
Slide 14: Backlog
Backlog In $ millions as at: Mar.31.11 Dec.31.10 Nov.30.10 Mar.31.10 Feb.28.10 (1) Subsea 7 S.A. 6,668 - - - - Acergy S.A. - - 3,552 - 2,469 Subsea 7 Inc - 2,800 - 2,551 - (1) Backlog refers to expected future revenue under signed contracts, which are determined as likely to be performed, but exclud
Slide 15: Segmental analysis
Segmental analysis: Period ended Total – March 31, 2011 NSMC AFGoM APME Brazil CORP Continuing Unaudited operations In $ millions Revenue 307.8 725.1 63.9 190.6 4.3 1,291.7 Net operating (7.5) 118.0 1.8 3.8 (21.8) 94.3 (loss)/income Investment income 5.5 Other gains and losses (17.3) Finance costs (
Slide 16: Adjusted EBITDA
Adjusted EBITDA • The Group calculates adjusted earnings before interest, income taxation, depreciation and amortisation (‘Adjusted EBITDA’) from continuing operations as net income from continuing operations plus finance costs, other gains and losses, taxation, depreciation and amortisation and adj
Slide 17: Reconciliation of net income and net operating income to Adjusted EBITDA
Reconciliation of net income and net operating income to Adjusted EBITDA Period Ended Three Months Ended Reconciliation to net income: Mar.31.11 Feb.28.10 Total Total In $ millions (except percentages) Continuing Discontinued Continuing Discontinued operations operations Net income 45.2 - 45.2 52.6
Slide 18: seabed-to-surface
seabed-to-surface www.subsea7.com 10.01.11 Page 18