Subsea 7 S.a. · OSL:SUBC
Subsea 7 — Q1 2013 Earnings Presentation
33 slides from Subsea 7's earnings presentation, May 16, 2013
Slide 1: Earnings Presentation First Quarter 2013
Earnings Presentation First Quarter 2013 May 16, 2013 12:00 noon UK time
Slide 2: Forward-looking statements
Forward-looking statements Certain statements made in this announcement may include ‘forward-looking statements’. These statements may be identified by the use of words like ‘anticipate’, ‘believe’, ‘estimate’, ‘expect’, ‘intend’, ‘may’, ‘plan’, ‘forecast’, ‘project’, ‘will’, ‘should’, ‘seek’ and si
Slide 3: Delivered solid Q1 2013 results
Delivered solid Q1 2013 results • Results reflect: - Good performance in North and Norwegian Seas - strong project execution - commercial settlement with customer - partly mitigated by lower vessel utilisation (67% in Q1 2013 vs 82% in Q1 2012) due to return to normal seasonality and planned dry-doc
Slide 4: Focused on building quality backlog
Focused on building quality backlog Backlog progression ($ million) Backlog by Award Date Backlog by Execution Date Backlog by Service Capability Backlog by Segment 2011 25% 2015+ NSC 26% SURF 44% 75% 2012 2013 AFGOM <2010 39% 25% 33% 27% LoF 2014 13% 2013 35% Brazil 23% APME 17% i-Tech 6% 5% Conven
Slide 5: Strong order flow in Q1 2013
Strong order flow in Q1 2O13 - Western Isles contract for Dana Petroleum - $300 million - Mexico contract for Pemex - $140 million - Ehra North contract for Exxon – value not disclosed - Oseberg Delta contract for Statoil - $160 million - Montrose contract for Talisman - $285 million - Aasta Hanstee
Slide 6: Market overview
Market overview • No apparent impact from oil price volatility on clients’ plans • Tendering activity remains high • Some industry projects around the world have been postponed for various reasons • We remain positive about medium-term and long-term market prospects Page 6
Slide 7: Market overview
Market overview • Growth opportunities in all major markets, albeit at differing paces: • NSC - North and Norwegian Seas: strong levels of tendering, EPIC model gaining traction • AFGOM - West Africa: some long awaited projects sanctioned, uncertainty on timing of further market awards - Gulf of Mex
Slide 8: Income statement – key highlights
Income statement – key highlights Three months ended 31.Mar.13 31.Mar.12 In $ millions, unless otherwise indicated Unaudited Unaudited Revenue 1,467 1,458 Net operating income 154 153 Net income before taxes 158 147 Taxation (26) (54) Net income 132 93 Adjusted EBITDA 1 241 225 Adjusted EBITDA margi
Slide 9: Territory performance – Q1 2013
Territory performance – Q1 2013 $596m $85m Revenue NOI $529m $123m $15m $86m Revenue NOI $217m Revenue NOI $(22)m Revenue NOI Note: excludes contribution from Corporate segment Page 9
Slide 10: Income statement – supplementary details
Income statement – supplementary details Three Three months months ended ended 31.Mar.13 31.Mar.12 In $ millions Unaudited Unaudited Administrative expenses (76) (92) Share of results of associates and joint ventures 16 (3) Net operating income 154 153 Finance costs net of finance income (18) (4) Ot
Slide 11: Overview of Q1 2013 cash flow
Overview of Q1 2013 cash flow • Net cash generated from operating activities: $402m - decrease in net operating assets: $237m • Net cashflow used in investing activities: $167m - capital expenditure of $183m: Simar Esperança, Seven Waves • Net cashflow used in financing activities: $283m - repayment
Slide 12: 2013 financial guidance
2013 financial guidance • We expect both revenue and Adjusted EBITDA to show some progress - rate of progress tempered by: - delays in project awards and project postponements - vessel utilisation in the North Sea more in line with historical levels • Other net income related guidance - administrati
Slide 13: 2013 outlook by Territory
2013 outlook by Territory • NSC: we expect levels of tendering to remain high with improved pricing, however - we expect the benefits of improved pricing to be somewhat mitigated by lower vessel utilisation: - return to more normal seasonal vessel utilisation - backlog was built in late 2012/early 2
Slide 14: 2013 outlook by Territory (continued)
2013 outlook by Territory (continued) • APME: we expect a gradual improvement in activity with - SapuraAcergy JV active in the offshore phase of Gumusut in Malaysia - both Gorgon projects in Australia moving into offshore phase • Brazil: – Guará-Lula NE project has entered the critical offshore phas
Slide 15: Fleet upgrade programme since Jan 2011
Fleet upgrade programme since Jan 2011 • Seven Waves joining fleet in 2014, new DSV joining fleet in 2015, new HCV joining fleet in 2016 • Acergy Legend and Acergy Orion disposed of in Q1 2013 SURF Life-of-Field Conventional Vessels divested/released Hook up Renewables * Owned by SHL JV Page 15
Slide 16: Subsea 7 technology focus
Subsea 7 technology focus Technology Category Specific Technology Types Deep water and Hybrid Steel Submerged Composite harsh environment Riser buoys Catenary Materials Towers Risers solutions Flexible Rigid Pipe Subsea Vessels Technology Pipe Heavy Lift Technology Electrically Composite Flowlines B
Slide 17: Reel lay of Mechanically Lined Pipe (BuBi)
Reel lay of Mechanically Lined Pipe (BuBi) BuBi Pipe • Use of BuBi Mechanically Lined Pipe Brief offers significant savings compared with Description Corrosion Resistant Alloy (CRA) • World’s first award on a Petrobras Pre- Application Salt project (Guará-Lula NE), imminent awards with other clients
Slide 18: Buoy Supported Riser (BSR)
Buoy Supported Riser (BSR) • A submerged buoy anchored to the seabed Brief • Steel Catenary Risers laid between seabed Description and buoy and flexible jumpers laid between buoy and FPSO • The BSR is being installed on Guará-Lula Application NE project in Brazil • Numerous technology companies Part
Slide 19: Summary
Summary • Good quarterly results • 2013 guidance re-iterated • Record backlog above $10bn • Growth opportunities visible in all markets • Some industry projects delayed or postponed • We believe we are well positioned for the future with: - our engineering and project management skills - our large f
Slide 20: Appendix
- Major project progression - Segmental analysis - Reconciliations Appendix - Global footprint - Operational facilities - Fleet overview Page 20
Slide 21: Major project progression
Major project progression Continuing projects >$100m between 5% and 95% complete as at 31 March 2013 excl. long-term ship charters and Life-of-Field day-rate contracts. * joint venture activity Page 21
Slide 22: Segmental analysis
Segmental analysis For the three months ended 31 March 2013 (in $ millions, Unaudited) AFGOM APME BRAZIL NSC CORP Total Revenue 528.9 123.4 216.8 595.7 2.3 1,467.1 Net operating income/(loss) from operations 86.0 14.5 (21.6) 84.8 (9.5) 154.2 Investment income from bank deposits 7.1 Other gains and l
Slide 23: Adjusted EBITDA
Adjusted EBITDA • Adjusted earnings before interest, taxation, depreciation and amortisation (‘Adjusted EBITDA’) is a non-IFRS measure that represents net income before additional specific items that are considered to impact the comparison of the Group’s performance either year-on-year or with other
Slide 24: Reconciliation of net operating income to Adjusted EBITDA
Reconciliation of net operating income to Adjusted EBITDA Three Months Three Months Ended Ended 2013 2012 31 Mar 31 Mar For the period (in $ millions) Unaudited Unaudited Net operating income 154.2 153.2 Depreciation, amortisation and mobilisation 87.4 77.6 Reversal of impairments (0.8) (5.9) Adjust
Slide 25: Where we operate
© Corporate/support office O Office @ Spoolbase/fabrication/operational yard Africa, Gulf of Mexico & Mediterranean Bi Asia Pacific & Middle East i Brazil I North Sea & Canada Houston oO (@ Portisabel q fe) 5 Gultag de! Carmen War Oe. Pon Harcourt 9 Por Gon ‘Pointe Noire ‘eo ance Lotito subses
Slide 26: Operational facilities
Operational facilities Spoolbases Fabrication Yards Page 26
Slide 27: Rigid pipelay/Heavy lift assets
Rigid pipelay/Heavy lift assets Page 27
Slide 28: Construction/Vertical flexlay assets
Construction/Vertical flexlay assets Page 28
Slide 29: Construction/Horizontal flexlay assets
Construction/Horizontal flexlay assets Page 29
Slide 30: Light construction/Life of field assets
Light construction/Life of field assets Note: Seven Sisters renamed Simar Esperança Page 30
Slide 31: Diving assets
Diving assets Note: Acergy Osprey renamed Seven Osprey, Seven Havila renamed Seven Falcon Page 31
Slide 32: Other assets
Other assets Conventional Over 150 ROVs Trenching Page 32
Slide 33: seabed-to-surface
seabed-to-surface www.subsea7.com Page 33 Page 33 10.01.11