Subsea 7 S.a. · OSL:SUBC
Subsea 7 — Q2 2018 Earnings Presentation
28 slides from Subsea 7's earnings presentation, Jul 26, 2018
Slide 1: Second Quarter 2018 Earnings Presentation
Second Quarter 2018 Earnings Presentation 26 July 2018 1 © Subsea 7 - 2018 subsea7.com
Slide 2: 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 3: Second Quarter 2018
Second Quarter 2018 Jean Cahuzac, CEO - Highlights Ricardo Rosa, CFO - Financial performance Jean Cahuzac, CEO - Strategy and outlook - Q&A 3 © Subsea 7 - 2018 subsea7.com
Slide 4: Q2 2018 results
Q2 2018 results FINANCIAL HIGHLIGHTS OPERATIONAL HIGHLIGHTS • Revenue $1.2 billion • Good progress on EPIC SURF • Adjusted EBITDA $186 million and renewables projects • Adjusted EBITDA margin 16% • Active Vessel Utilisation: 80% • Diluted EPS $0.24 • Total Vessel Utilisation: 75% • Net cash $343 mil
Slide 5: Operational highlights
Operational highlights Aasta Hansteen (Norway) WND Ph.2/GFR (Egypt) Beatrice (UK) Snorre (Norway) 4 Decks (Saudi Arabia) Utgard (Norway) BP IRM (Azerbaijan) PLSVs (Brazil) 5 © Subsea 7 - 2018 subsea7.com
Slide 6: Backlog and order intake
Backlog and order intake Backlog of $5.4 billion, as at 30 June 2018 • $1.3 billion awarded in the second quarter SURF and • Book-to-bill 1.2x 2020+ Conventional $1.7bn 2018 $4.5bn • Seven announced $1.9bn awards: Renewables & Heavy Lifting – Alligin (UK) $0.3bn 2019 – PUPP (Nigeria) $1.8bn i-Tech S
Slide 7: Income statement – Q2 highlights
Income statement – Q2 highlights Three months ended 30 June 2018 30 June 2017 In $ millions, unless otherwise indicated Unaudited Unaudited Revenue 1,160 1,022 Net operating income (NOI) 74 235 Income before taxes 101 206 Taxation (27) (60) Net income 74 146 Adjusted EBITDA(1) 186 340 Adjusted EBITD
Slide 8: Income statement – supplementary details
Income statement – supplementary details Three months ended 30 June 18 30 June 17 In $ millions Unaudited Unaudited Administrative expenses (66) (58) Share of net income/(loss) of associates and joint ventures 3 (11) Depreciation, amortisation, mobilisation and impairment (112) (105) Net operating i
Slide 9: Business Unit performance– Second quarter
Business Unit performance– Second quarter Revenue NOI $1,160m $1,022m $74m $235m $257m $325m $61m $53m $11m $83m $842m $5m $163m $614m $4m $62m 2018 2017 2018 2017 SURF & Conventional i-Tech Services Renewables & Heavy Lifting Corporate segment: net operating income Q2 2018 $3m (Q2 2017: $8m) 9 © Su
Slide 10: SOC acquisition and consolidation
SOC acquisition and consolidation • Seaway Offshore Cables, previously called Siem Offshore Contractors, (SOC) was acquired by Subsea 7 on 10 April 2018 along with two associated vessels: Siem Moxie (to be renamed Seaway Moxie) and Seaway Aimery (previously named Siem Aimery) • Consolidated within t
Slide 11: Summary of second quarter 2018 cash flow
Summary of second quarter 2018 cash flow $m 186 (139) (28) 1,007 (46) (164) (204) 11 614 (9) Cash at EBITDA Decrease in Tax Capex Acquisitions Dividends paid Share Other Cash at 1 April 2018 net operating paid repurchases 30 June 2018 liabilities • Net cash of $343 million as at 30 June 2018 • Long-
Slide 12: 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 $420 million - $440 million Full year effec
Slide 13: Creating sustainable long-term value
Creating sustainable long-term value • Supporting the full field lifecycle in the changing energy sector by creating sustainable value: – Investing in our balance of plant capability in renewable energy – Developing our integrated service offering with a joint venture – Creating innovative solutions
Slide 14: Subsea 7’s approach to renewable energy
Subsea 7’s approach to renewable energy 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 r
Slide 15: Integrated solutions: adding value through the lifecycle
Integrated solutions: adding value through the lifecycle Subsea 7, together with Schlumberger, aim to… • provide clients with solutions that enhance production and improve flow assurance …through… • integrated field design and life of field services …by… • engaging earlier and developing superior te
Slide 16: Integrated solutions JV value proposition
Integrated solutions JV 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 > Optimised schedul
Slide 17: Technology focus areas
Technology focus areas Create value through innovation and technology • Continue to develop and improve our proprietary Pipeline Bundle and tie- back technologies Cross Section of a Pipeline Bundle • Continue to invest in emerging business led technologies including composite pipelines and offshore
Slide 18: 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 Renewables and Heavy Lifting - T&I tendering for near-term activity continues - Medium-term EPCI projects in Eur
Slide 19: © Subsea 7 - 2018 subsea7.com
19 © Subsea 7 - 2018 subsea7.com
Slide 20: Appendix
Appendix Major project progression Track Record Fleet Financial summaries 20 © Subsea 7 - 2018 subsea7.com
Slide 21: Major project progression
Major project progression • Continuing projects >$100m between 5% and 95% complete as at 30 June 2018 excluding PLSV and Life of Field day-rate contracts Beatrice (UK) Announced 4 Decks (Saudi Arabia) size of Culzean (UK) project Major Sonamet (Angola) (Over $750m) Borkum II (Germany) Very Large WND
Slide 22: Track record: projects and clients
• Beatrice wind farm, BOWL • Borkum II, Trianel • Martin Linge, Total • Catcher, Premier • Aasta Hansteen, Statoil • Culzean, Maersk • Maria, Wintershall • Callater, Apache • IRM Services, Equinor • Alligin, BP • Penguins, Shell • IRM Services, BP • Snorre, Equinor • SCIRM, BP • Vito, BP • DSVi, Var
Slide 23: 34 Vessels including 31 active vessels at end Q2 ‘18
34 Vessels including 31 active vessels at end Q2 ‘18 Under construction Reel-lay vessel to be named Seven Vega Long-term charter from a vessel-owning joint venture Stacked 23 © Subsea 7 - 2018 Chartered from a third party subsea7.com
Slide 24: Segmental analysis
Segmental analysis For the three months ended 30 June 2018 Renewables & In $ millions (unaudited) SURF & Conventional i-Tech Services Heavy Lifting Corporate TOTAL Revenue 842 61 257 - 1,160 Net operating income 62 4 5 3 74 Finance income 4 Other gains and losses 27 Finance costs (4) Income before t
Slide 25: Summary balance sheet
Summary balance sheet 30 June 30 June 30 June 30 June 2018 2017 2018 2017 In $ millions Unaudited Unaudited In $ millions Unaudited Unaudited Assets Equity & Liabilities Total equity 5,765 5,713 Non-current assets Non-current liabilities Goodwill 769 683 Non-current portion of borrowings 246 269 Pro
Slide 26: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA Net operating income to Adjusted EBITDA Three Months Ended 30 June 2018 Three Months Ended 30 June 2017 For the period (in $millions) Unaudited Unaudited Net operating income 74 235 Depreciation, amortisation, mobilisation and impairment 112 105 Adjusted EBITDA 186
Slide 27: Summary of first half 2018 cash flow
Summary of first half 2018 cash flow $ millions Cash and cash equivalents at 31 Dec 2017 1,109 Included a decrease in net operating liabilities Net cash generated from operating activities 48 of $199 million Included cash outflows on SOC acquisition of $164 million including vessels, acquisition of
Slide 28: 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 28 © Subsea 7 - 2018 subsea7.com