Saipem S.p.a. · MIL:SPM

Saipem — FY2019 Earnings Presentation

49 slides from Saipem's earnings presentation, Feb 26, 2020

  1. Slide 1: Full Year 2019 Results Presentation

    FULL YEAR 2019 RESULTS PRESENTATION 26 FEBRUARY 2020

  2. Slide 2: Forward-Looking Statements

    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 well as the beliefs and ass

  3. Slide 3: Table of Content

    TABLE OF CONTENT  01 OPENING REMARKS  02 DELIVERING OUR STRATEGY  03 FY 2019 RESULTS  04 FOCUS ON DIVISIONS  05 GUIDANCE AND CLOSING REMARKS  06 APPENDIX |3

  4. Slide 4: Opening Remarks

    OPENING REMARKS

  5. Slide 5: Opening Remarks: A Very Good Year

    OPENING REMARKS A VERY GOOD YEAR: OPERATIONAL EXCELLENCE, RECORD ORDER INTAKE AND DELEVERAGING  FY 2019 targets achieved, driven by operational results: • E&C Offshore: good operational performance • E&C Onshore: turnaround on track • Drilling: volume increase, margins still adjusting to current en

  6. Slide 6: Delivering Our Strategy

    DELIVERING OUR STRATEGY

  7. Slide 7: Market Outlook

    MARKET OUTLOOK 2019 LONG-TERM 2020E MARKET EVOLUTION SCENARIO MARKET OUTLOOK Primary energy supply mix evolution Hydro &  E&C market: others  Opportunities in Middle East Wind & offshore solar  Selected initiatives in deepwater, especially in Africa Gas  LNG awards expected to continue Coal Oil

  8. Slide 8: Strategy Delivery

    STRATEGY DELIVERY ON TRACK FOR A NEW SAIPEM BUSINESS PORTFOLIO REFOCUS  DIVISIONALIZATION COMPLETED IN 2018  SOLID & RENEWED MANAGEMENT TEAM  DIVERSIFYING OFFER FOR THE  STRATEGIC OPTIONS FOR DRILLING TECHNOLOGY & INNOVATION DE-RISKING THE BUSINESS MODEL  ENHANCED INNOVATION CULTURE AND BUDGET

  9. Slide 9: Renewables: Pivotal in the Energy Transition

    PIVOTAL IN THE ENERGY TRANSITION LEADING TODAY, READY FOR TOMORROW FY19 E&C BACKLOG: 68% NON-OIL*  LEADERSHIP IN GAS VALUE-CHAIN:  LIQUEFLEXTM GAS • LNG  HYDROGEN 68% SMALL SCALE LNG • REGAS 32% • GAS MONETISATION • PIPELINES RENEWABLES NON-OIL OIL  NEW FLOATING  EMERGING RENEWABLES  OFFSHORE

  10. Slide 10: Driven by Sustainability: ESG Is at the Core

    DRIVEN BY SUSTAINABILITY ESG IS AT THE CORE ESG: A TOP PRIORITY FOR CEO AND BOARD OF DIRECTORS INCLUDED IN KEY SUSTAINABILITY STOCK INDICES  Active engagement with stakeholders on material issues to set priorities  Monitoring system to track and report sustainability performance  Targets on susta

  11. Slide 11: FY 2019 Results

    FY 2019 RESULTS

  12. Slide 12: FY 2019 Results

    FY 2019 RESULTS YoY COMPARISON (€ mn) Revenues Adjusted EBITDA* Adjusted Net Result* 9,099 11.7% margin 11.7% - pre IFRS 16 8,526 13.4% - IFRS 16 1,226 161 1,002 165 1,065 179 25 FY18 FY19 FY18 FY19 (14) FY18 FY19 IFRS 16 Impact |12 * Excluding special items, details in slide 15

  13. Slide 13: FY 2019 Results – E&C

    FY 2019 RESULTS – E&C YoY COMPARISON (€ mn) E&C OFFSHORE E&C ONSHORE* Revenues Adjusted EBITDA Revenues Adjusted EBITDA 13.6% margin 13.9% pre IFRS 16 3.1% margin 4.5% pre IFRS 16 3,852 3,841 16.8% IFRS 16 4,165 5.4% IFRS 16 3,708 645 523 112 227 38 533 118 189 FY18 FY19 FY18 FY19 FY18 FY19 FY18 FY1

  14. Slide 14: FY 2019 Results – Drilling

    FY 2019 RESULTS – DRILLING YoY COMPARISON (€ mn) DRILLING OFFSHORE DRILLING ONSHORE Revenues Adjusted EBITDA Revenues Adjusted EBITDA 555 48.6% margin 39.6% pre IFRS 16 26.9% margin 22.9% pre IFRS 16 40.7% IFRS 16 23.8% IFRS 16 538 465 501 226 226 6 135 128 220 5 123 FY18 FY19 FY18 FY19 FY18 FY19 FY

  15. Slide 15: FY 2019 Net Result

    FY 2019 NET RESULT RECONCILIATION ADJUSTED-REPORTED Net Result (€ mn) (14) (48) (22) 179 165 (25) (58) 70 12 12 FY19 IFRS 16 FY19 Provisions for 2Q Write-down* Net impact from legal FY19 Impairment FY19 Adjusted Impact Adjusted redundancies proceedings** Pre-impairment Reported pre IFRS16 post IFRS1

  16. Slide 16: FY 2019 Net Debt Evolution

    FY 2019 NET DEBT EVOLUTION (€ bn) SOUND CASH GENERATION, LEADING TO NET DEBT/EBITDA* AT BELOW 0.5x 1.71 0.55 1.16 (0.65) 0.61 1.08 (0.38) 0.34 0.47 Net debt FY18 Net debt Cash flow Others includ. Capex Net debt FY19 Net debt Dec. 31, 2018 IFRS 16 Dec. 31, 2018 (N.P.+ D&A) Δ working Dec. 31, 2019 IFR

  17. Slide 17: Significant Deleveraging

    SIGNIFICANT DELEVERAGING PRE-IFRS 16 (€ bn) POST CAPITAL INCREASE 1.5 1.2 c.1.0 >(0.2) <0.8 (0.15) LEVERAGE <0.7 1.1x (0.1) RATIO* (0.1) 0.5 FAVOURABLE PHASING LEVERAGE <0.5x RATIO* Net debt Net debt Net debt Additional Updated Capex plan 4Q cash Working Net debt Net debt Dec.31, Dec.31, guidance ca

  18. Slide 18: Capital Structure as of December 31, 2019

    CAPITAL STRUCTURE AS OF DECEMBER 31, 2019 LIQUIDITY AND MATURITY PROFILE (€ mn) Bonds ECA Facilities Bank Facilities Other Debt 2,833 REINVESTING IN THE €500mn BOND BUSINESS REDEEMED*** WITH 1,000 AVAILABLE CASH Undrawn RCF* 669 654 638 562 GROSS DEBT 63 REDUCTION 63 38 1,833 360 106 91 100 62 Avail

  19. Slide 19: Focus on Divisions

    FOCUS ON DIVISIONS

  20. Slide 20: 2019 E&C Offshore Main Awards

    2019 E&C OFFSHORE MAIN AWARDS A DIVERSIFIED SET OF AWARDS, SUPPORTING BOOK TO BILL >1x IN FY 2019 1Q 2Q 3Q 4Q PAYARA SUBSEA DEVELOPMENT  Client: ExxonMobil  Location: Guyana TORTUE MARINE CIVIL WORKS  Scope of work: EPCI of a large subsea production BP – MAURITANIA/SENEGAL facility, including sub

  21. Slide 21: E&C Offshore Strategy

    E&C OFFSHORE STRATEGY LEADING GLOBAL SOLUTION PROVIDER FROM EARLY ENGAGEMENT TO END OF ASSET LIFE PRODUCTS SUBSEA SERVICES CONVENTIONAL WIND LIFE OF FIELD LATE LIFE MGMT PIPELINES DECOMMISSIONING MMO* CORE “GREEN” SOLUTIONS CONSOLIDATE THROUGH INNOVATION EVOLUTION |21 * Maintenance, Modifications an

  22. Slide 22: 2019 E&C Onshore Main Awards

    2019 E&C ONSHORE MAIN AWARDS RECORD-HIGH SET OF AWARDS, BOOK TO BILL AT 2.6x IN FY 2019 1Q 2Q 3Q 4Q MOSCOW REFINERY JSC GAZPROMNEFT - RUSSIA SERBIA PIPELINE IDC - SERBIA ROVUMA BASIN AREA 1 LNG TOTAL - MOZAMBIQUE BERRI - PKG-01 SAUDI ARAMCO - SAUDI ARABIA MARJAN - PKG-10 SAUDI ARAMCO - SAUDI ARABIA

  23. Slide 23: E&C Onshore Strategy

    E&C ONSHORE STRATEGY THE PARTNER OF CHOICE FOR THE LOW-CARBON ENERGY TRANSITION - STRATEGY LNG & REGAS FOCUS NEW GEOGRAPHIES EPC DIGITAL PLATFORMS CONSOLIDATE IN SUSTAINABLE HYBRID DOWNSTREAM SOLUTIONS CLIENT COLLABORATIVE PLATFFORMS GROWTH IN GAS TECH-DRIVEN MONETISATION PARTNERSHIPS & M&A IVERSIFY

  24. Slide 24: Leading Contractor in LNG

    LEADING CONTRACTOR IN LNG MAJOR LNG FOCUS ONGOING PROJECTS ON MOZAMBIQUE Tangguh Expansion (T3) for BP, Indonesia Rovuma Basin Area 1 LNG for Total, Mozambique  Brownfield environment and remote area  Saipem as leader of the Italy-based JV with direct  EPC project fully executed locally responsib

  25. Slide 25: XSight Strategy

    XSIGHT STRATEGY RE-DESIGNING AND DISRUPTING TRADITIONAL PROCESSES EARLY ENGAGEMENT REVENUES & ORDER INTAKE FOCUS ON TECHNOLOGICAL THROUGH PREMIUM DOUBLE-DIGIT GROWTH DISRUPTIVE SOLUTIONS SERVICES INNOVATION TO ENHANCE TIER-ONE CLIENTS EPC INTEGRATED MODEL ENERGY TRANSITION & RECOGNITION DIGITAL ENGI

  26. Slide 26: 2019 Drilling Main Awards

    2019 DRILLING MAIN AWARDS FLEET UTILIZATION AND VISIBILITY SIGNIFICANTLY IMPROVED YOY 1Q 2Q 3Q Q4 ONSHORE NEW CONTRACTS IN MIDDLE EAST AND OTHER COUNTRIES ONSHORE CONTRACTS IN SAUDI ARABIA, BOLIVIA AND OTHER  New contract and extension of 19 land-rigs with EXTENSIONS power between 1,500 and 2,000 H

  27. Slide 27: Offshore Drilling Fleet

    OFFSHORE DRILLING FLEET CLIENT AREA DEEP-WATER and Saipem 12000 TO 2022> Eni Pakistan-Mozamb. HARSH ENV. Saipem 10000 Eni Egypt ULTRA Scarabeo 9 Eni - GSP Egypt-Romania Vår Ener. - Repsol- Scarabeo 8 Norway Wintershall *ENGAGEMENT FOR WATER Scarabeo 7 Eni Indonesia DEEP- PRODUCTION Scarabeo 5* TO 20

  28. Slide 28: Onshore Drilling Fleet

    ONSHORE DRILLING FLEET ONSHORE FLEET @ DECEMBER 31, 2019: 82 RIGS REST OF THE WORLD 5 RIGS UTILISATION RATE 100% LATIN AMERICA 46 RIGS MIDDLE EAST 31 RIGS UTILISATION RATE 32% UTILISATION RATE 96% UTILISATION RATE IN FY 2019: 68% |28

  29. Slide 29: Offshore Drilling Strategy

    OFFSHORE DRILLING STRATEGY FIRST TIER CONTRACTOR PROVIDING FLEXIBILITY AND INNOVATION COST BASE ENLARGING OPTIMISATION CLIENT BASE REASSESSING DIGITAL SEGMENTS ASSET ASSET LIGHT MANAGEMENT STRATEGY HYBRID RIG OPTIONALITY RESILIENT READY OPPORTUNISTIC APPROACH POTENTIAL PARTNERSHIP |29 Energy transit

  30. Slide 30: Onshore Drilling Strategy

    ONSHORE DRILLING STRATEGY EFFICIENT AND RELIABLE INTERNATIONAL CONTRACTOR AGILE MIDDLE EAST AGILE ORGANIZATION CONSOLIDATION ORGANIZATION TECHNOLOGY & SELECTIVE IN DIGITAL LATAM REPLACEMENT OF ASSET LOW EFFICIENCY NEW COUNTRIES OPTIMISATION GENERATORS TARGETING NEW COST DISCIPLINE SEGMENTS RESILIENT

  31. Slide 31: FY 2019 Backlog

    FY 2019 BACKLOG (€ mn) 17,633 21,153 1,737 1,798 576 737 CURRENT E&C BACKLOG INCLUDING NON-CONSOLIDATED: 12,619 9,099 10,849 68% NON-OIL 599 538 13,007 716 555 4,165 68% 6,323 32% 3,841 4,471 4,981 5,611 NON-OIL OIL Backlog FY19 FY19 Contract Backlog @Dec. 31, 2018 Revenues Acquisitions @Dec. 31, 20

  32. Slide 32: FY 2019 Backlog by Year of Execution

    FY 2019 BACKLOG BY YEAR OF EXECUTION (€ mn) 7,532 7,674 427 995 410 5,947 185 376 142 3,796 3,622 5,589 2,899 1,807 905 2020 2021 2022+ E&C Offshore E&C Onshore* Drilling Offshore Drilling Onshore NON-CONSOLIDATED BACKLOG BY YEAR OF EXECUTION 2020 2021 2022+ € mn 815 1,197 1,613 |32 * E&C Onshore in

  33. Slide 33: 2020 Main Awards Year-to-Date

    2020 MAIN AWARDS YEAR-TO-DATE GOOD START OF THE YEAR FOR E&C OFFSHORE CABAÇA AND AGOGO EARLY PHASE 1 ALEN PIPELINE  Client: Eni  Client: Noble Energy  Location: Angola  Location: Equatorial Guinea  Scope of work: EPCI of risers, production flowlines,  Scope of work: T&I of a 70 km gas pipeline

  34. Slide 34: E&C Opportunities

    E&C OPPORTUNITIES GOOD VISIBILITY ON NEAR-TERM INITIATIVES CONFIRMED Europe/CIS & Central Asia Offshore Fixed facilities Renewables & green €1.0bn Subsea Europe/CIS & Central Asia Onshore Americas Offshore Downstream €0.9bn Pipelines €1.1bn Subsea Africa Offshore Middle East Offshore Americas Onshor

  35. Slide 35: Guidance and Closing Remarks

    GUIDANCE AND CLOSING REMARKS

  36. Slide 36: A Very Good Year: 2019 Targets Achieved

    A VERY GOOD YEAR: 2019 TARGETS ACHIEVED PRE-IFRS 16 FY 2019 FY 2019 Metrics guidance actual Revenues  c. €9bn  €9.1bn Adjusted EBITDA % margin  >10%  11.7% CAPEX  c. €450mn  €336mn Net debt*  <€0.8bn  €0.5bn * Excluding lease liabilities (IFRS 16) |36

  37. Slide 37: 2020 Guidance

    2020 GUIDANCE Metrics FY 2020 Revenues  c. €10bn Adjusted EBITDA (post-IFRS16)  > €1.1bn CAPEX  c. €600mn Net debt (pre-IFRS16)  < €0.7bn |37

  38. Slide 38: Closing Remarks

    CLOSING REMARKS GOOD PROGRESS ON OUR LONG-TERM STRATEGY SIGNIFICANT DELEVERAGING DIVIDEND PROPOSAL TO AGM RECORD BACKLOG A KEY PARTNER IN THE ENERGY TRANSITION |38

  39. Slide 39: Appendix

    APPENDIX

  40. Slide 40: E&C Offshore Strategy - Focus

    E&C OFFSHORE STRATEGY - FOCUS LEADING GLOBAL SOLUTION PROVIDER FROM EARLY ENGAGEMENT TO END OF ASSET LIFE DIGITAL CAPABILITIES PROJECT/PRODUCT DIGITAL TWIN VESSELS ROBOTICS SUBSEA PROCESSING YARDS WIND PRODUCTS WELDING MARKET ENABLERS TECHNOLOGY & INNOVATION |40 Energy transition

  41. Slide 41: E&C Offshore Strategy - Technology

    E&C OFFSHORE STRATEGY - TECHNOLOGY LEADING GLOBAL SOLUTION PROVIDER FROM EARLY ENGAGEMENT TO END OF ASSET LIFE CORE MARKETS “GREEN” SOLUTIONS SURF Welding, FJC*, Offshore Plant and Subsea Factory Life of Field Technologies NDT** Renewables Technologies Technologies  RISER AND FLOWLINES  PRODUCTION

  42. Slide 42: E&C Onshore Strategy - Focus

    E&C ONSHORE STRATEGY - FOCUS THE PARTNER OF CHOICE FOR THE LOW-CARBON ENERGY TRANSITION BLUE & GREEN RENEWABLES AND HYDROGEN BIOTECH E-FUELS HYDROGEN CARBON NEUTRAL: GREEN • DESIGN PETROCHEMICALS • ASSET OPERATIONS CCUS* • SUPPLY CHAIN GREEN AMMONIA HYBRID SOLUTIONS DECARBONISE OUR OPERATIONS FOCUS

  43. Slide 43: Offshore Drilling Strategy - Focus

    OFFSHORE DRILLING STRATEGY - FOCUS FIRST TIER CONTRACTOR PROVIDING FLEXIBILITY AND INNOVATION NEW CAPACITY REINFORCE CLIENT RIG AVAILABILITY RELATIONSHIP RENTAL BASIS FLEET REJUVENATION COMPETITIVE CONDITIONS REGIONAL MARKET DIVERSIFICATION PURCHASE OPTION ACTIONS ASSET LIGHT STRATEGY |43

  44. Slide 44: Onshore Drilling Strategy - Focus

    ONSHORE DRILLING STRATEGY - FOCUS EFFICIENT AND RELIABLE INTERNATIONAL CONTRACTOR AUTOMATION ENERGY ASSESSMENT PERFORMANCE MONITORING SYSTEMS GHG EMISSION SAVING DIGITAL PLAN TRANSFORMATION PREDICTIVE POWER BALANCE MAINTEINACE MONITORING SYSTEMS WALKING RIG HIGH EFFICIENCY ASSET GENERATORS STANDARDI

  45. Slide 45: 4Q 2019 Results

    4Q 2019 RESULTS QoQ TREND (€ mn) Revenues Adjusted EBITDA* Adjusted Net Income* margin 11.4% Pre IFRS16 11.7% 2,351 13.1% IFRS 16 13.7% 2,229 327 293 47 39 74 254 280 31 79 35 (4) (5) 3Q19 4Q19 3Q19 4Q19 3Q19 4Q19 IFRS 16 impact |45 * Not including special items

  46. Slide 46: 4Q 2019 Results - Divisions

    4Q 2019 RESULTS - DIVISIONS QoQ TREND (pre IFRS 16 - € mn) E&C OFFSHORE E&C ONSHORE* Revenues Adjusted EBITDA Revenues Adjusted EBITDA 13.5% margin 14.5% 1,191 4.4% margin 4.4% 998 135 124 974 853 54 43 3Q19 4Q19 3Q19 4Q19 3Q19 4Q19 3Q19 4Q19 DRILLING OFFSHORE DRILLING ONSHORE Revenues Adjusted EBIT

  47. Slide 47: Derisked Working Capital

    DERISKED WORKING CAPITAL UNBILLED REVENUES LINKED TO LEGAL DISPUTES € mn c.800 - Dec. 31, 2016 Dec. 31, 2019 |47

  48. Slide 48: FY 2019 Results – D&A, Finance Charges and Tax Rate

    FY 2019 RESULTS – D&A, FINANCE CHARGES AND TAX RATE 617 468 FY 2018 D&A € mn FY 2019 307 D&A 205 468 pre IFRS16 FY 2019 106 103 117 124 83 IFRS 16 impact 40 207 97 119 45 Offshore Onshore E&C E&C Total Drilling Drilling Onshore* Offshore D&A FY 2019 26 210 € mn 74 184 110 FINANCE CHARGES Financing c

  49. Slide 49: IFRS 16 Impact

    IFRS 16 IMPACT RECONCILIATION FY 2019 €mn 4Q 2019 FY 2020E €mn €mn pre IFRS 16 IFRS 16 IMPACT IFRS 16 IMPACT IMPACT Adjusted EBITDA 1,065 1,226 161 327 47 c.170 Depreciation 468 617 149 167 45 Financial Charges 184 210 26 56 7 Adjusted Net Income 179 165 14 74 5 Net Debt 472 1082 610 c.560 |49

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