Saipem S.p.a. · MIL:SPM

Saipem — Q3 2018 Earnings Presentation

27 slides from Saipem's earnings presentation, Oct 24, 2018

  1. Slide 1: Third Quarter 2018 Results Presentation

    THIRD QUARTER 2018 RESULTS PRESENTATION 24 October 2018

  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: Today's Presentation

    TODAY’S PRESENTATION 1 OPENING REMARKS 2 9 MONTHS 2018 RESULTS 3 BUSINESS UPDATE 4 GUIDANCE AND CLOSING REMARKS 3

  4. Slide 4: Opening Remarks

    OPENING REMARKS 9M 2018 Divisional Performance • Good performance in Offshore E&C • Improving margin in E&C Onshore, excludes loss reported in a project-related equity affiliate • Resilient margins in Offshore Drilling • Continued margin improvement in Onshore Drilling Reported net result affected b

  5. Slide 5: 9 Months 2018 Results

    ™=y SAIPEM ENGINEERING c= ENERGY 9 MONTHS 2018 RESULTS

  6. Slide 6: 9M 2018 Results

    9M 2018 RESULTS YoY COMPARISON (€ mn) Revenues Adjusted EBITDA Adjusted Net Result 11.6% margin 12.5% 6,873 6,057 795 760 151 17 9M17 9M18* 9M17 9M18 9M17 9M18** (*) 9M 2018 Adjusted Revenues: €6,098mn 6 (**) Loss from a project-related equity affiliate is included in Adjusted Net Result

  7. Slide 7: 9M 2018 Adjusted Results – E&C

    9M 2018 ADJUSTED RESULTS – E&C YoY COMPARISON (€ mn) E&C OFFSHORE E&C ONSHORE* Revenues EBITDA Revenues EBITDA 3,046 13.1% margin 15.0% 2,985 2.5% margin 3.1% 2,812 2,580 422 81 399 74 9M17 9M18 9M17 9M18 9M17 9M18 9M17 9M18 • Operational efficiency driving margin improvement • Lower volumes in Far

  8. Slide 8: 9M 2018 Adjusted Results – Drilling

    9M 2018 ADJUSTED RESULTS – Drilling YoY COMPARISON (€ mn) DRILLING OFFSHORE DRILLING ONSHORE Revenues EBITDA Revenues EBITDA 50.4% margin 47.0% 22.4% margin 26.8% 476 366 370 336 240 99 158 82 9M17 9M18 9M17 9M18 9M17 9M18 9M17 9M18 • Lower volumes mainly due to idleness of Semisubs • Volumes flat y

  9. Slide 9: 9M 2018 Net Result

    9M 2018 NET RESULT RECONCILIATION: €45mn ADDITIONAL SPECIAL ITEMS IN 3Q Net Result (€ mn) 17 (29) (89) Offshore (196) Drilling Assets E&C (60) Onshore Goodwill (256) (357) Legacy Provisions for Legal Cases and Asset 9M18 Redundancies Litigations Impairments 9M18 Adjusted Reported SPECIAL ITEMS 1H18

  10. Slide 10: Arbitrations/Court Disputes Unbilled Revenues Exposure

    ARBITRATIONS/COURT DISPUTES UNBILLED REVENUES EXPOSURE € bn 0.8 0.7 0.4 Dec. 31, 2016 Dec. 31, 2017 Sep. 30, 2018 • Amicable settlements and write downs allowing sharp decline of unbilled revenues associated with projects under arbitration/court dispute • 3Q amicable settlement with First Calgary Pe

  11. Slide 11: 9M 2018 Net Debt Evolution

    9M 2018 NET DEBT EVOLUTION (€ bn) Good cash flow generation confirmed also in 3Q 1.30 (0.36) 0.37* (0.04) 1.27 CONSTELLATION Net Debt Adj. Cash Flow Capex* Δ Working Net Debt @Dec. 31, 2017 (Adj. N.P.+ D&A) Capital and @Sep. 30, 2018 Others** (*) Includes full payment for Saipem Constellation acquis

  12. Slide 12: Business Update

    ™=y SAIPEM ENGINEERING c= ENERGY BUSINESS UPDATE

  13. Slide 13: Main E&C Awards - 3Q 2018

    MAIN E&C AWARDS - 3Q 2018 SGCP PIPELINES  Client: Saudi Aramco  Location: Saudi Arabia  Scope of work: procurement and construction of a system of pipelines of various diameter, with an overall length of over 700 km including flowlines (160 km approx.), trunklines (160 km approx.) and transmissio

  14. Slide 14: Main Awards - 4Q 2018 To-Date

    MAIN AWARDS - 4Q 2018 TO-DATE CLEAN FUEL PROJECT  Client: Thai Oil Public Limited Company  Location: Thailand  In consortium with Petrofac and Samsung  Scope of work: engineering, procurement, construction and start-up activities for new production units and revamping of the existing ones to inc

  15. Slide 15: 9M 2018 Backlog

    9M 2018 BACKLOG (€ mn) 12,392 6,057 6,121 12,456 855 559 699 947 2,539 3,345 5,946 2,812 2,614 6,752 4,644 4,446 Backlog 9M18 9M18 Contracts Backlog @Dec. 31, 2017 Revenues Acquisition @Sep. 30, 2018 E&C Offshore E&C Onshore* Drilling Offshore Drilling Onshore 15 (*) E&C Onshore including Floaters b

  16. Slide 16: Backlog by Year of Execution

    BACKLOG BY YEAR OF EXECUTION (€ mn) Pro-forma including 4Q awards to-date Pro-forma including 4Q awards to-date 5465 136 4902 318 310 269 3,342 2,527 2089 883 1,796 1,669 981 2018 2019 2020+ E&C Offshore E&C Onshore* Drilling Offshore Drilling Onshore 16 (*) E&C Onshore including Floaters business a

  17. Slide 17: Offshore Drilling Fleet Contracts

    OFFSHORE DRILLING FLEET CONTRACTS Committed New Contracts awarded in 3Q and 4Q to-date Optional period 2018 2019 2020 CLIENT AREA Cyprus-Morocco DEEP-WATER and Saipem 12000 TO 2022> Eni Pakistan-Mozamb. HARSH ENV. Saipem 10000 ULTRA Eni Egypt Scarabeo 9 Eni Egypt Scarabeo 8 Shell - Total - AkerBP No

  18. Slide 18: Update on Onshore Drilling Fleet

    UPDATE ON ONSHORE DRILLING FLEET ONSHORE FLEET @ SEPTEMBER 30, 2018: 84 RIGS REST OF THE WORLD 6 RIGS UTILISATION RATE 78% LATIN AMERICA 48 RIGS MIDDLE EAST 30 RIGS UTILISATION RATE 27% UTILISATION RATE 100% UTILISATION RATE 9M 2018: 66% 18

  19. Slide 19: Guidance and Closing Remarks

    GUIDANCE AND CLOSING REMARKS

  20. Slide 20: 2018 Guidance - Reminder

    2018 GUIDANCE - REMINDER Metrics FY 2018 Revenues  c. €8bn Adjusted EBITDA % margin  >10%* CAPEX  c. €500mn Net financial position  c. €1.3bn (*) Inclusive of loss from a project-related equity affiliate 20

  21. Slide 21: Closing Remarks

    CLOSING REMARKS DIVISIONAL AUTONOMY AND ACCOUNTABILITY UNDERPINNING OPERATIONAL PERFORMANCE CASH FLOW GENERATION DELIVERING FURTHER NET DEBT REDUCTION IN 3Q FULL YEAR GUIDANCE REINFORCED BY ONGOING PERFORMANCE AND RECENT AWARDS GOOD COMMERCIAL PIPELINE PROVIDING COMFORT ON FUTURE OPPORTUNITIES 21

  22. Slide 22: Appendix

    ™=y SAIPEM ENGINEERING c= ENERGY APPENDIX

  23. Slide 23: 3Q 2018 Results

    3Q 2018 RESULTS QoQ TREND (€ mn) Revenues Adjusted EBITDA Adjusted Net Result 14.0% margin 12.3% 2,259 1,883 277 269 11 (5) 2Q18* 3Q18 2Q18 3Q18 2Q18** 3Q18** (*) 2Q 2018 Adjusted Revenues: €1,924mn (**) Loss from a project-related equity affiliate is included in Adjusted Net Result 23

  24. Slide 24: 3Q 2018 Adjusted Results

    3Q 2018 ADJUSTED RESULTS QoQ TREND (€ mn) E&C OFFSHORE E&C ONSHORE* Revenues EBITDA Revenues EBITDA 16.5% margin 15.3% 3.4% margin 3.1% 1062 947 163 958 156 30 744 25 2Q18 3Q18 2Q18 3Q18 2Q18 3Q18 2Q18 3Q18 Note: EBITDA does not reflect loss from project- related equity affiliate DRILLING OFFSHORE D

  25. Slide 25: 9M 2018 Results - D&A and Financial Charges

    9M 2018 RESULTS - D&A and FINANCIAL CHARGES € mn 395 343 9M 2017 D&A 9M 2018 145150 Adjusted 91 76 99 87 60 30 (*) Floaters business Offshore Onshore E&C E&C Total included in E&C Drilling Drilling Onshore* Offshore D&A Onshore 9M 2018 123 6 € mn 38 FINANCE 79 CHARGES Net financing costs Project hed

  26. Slide 26: 9M 2018 Results – Tax Rate

    9M 2018 RESULTS – TAX RATE SHORT/MEDIUM TERM TAX RATE INCREASE DUE TO: Current market conditions and lower pre-tax profit  Limited recognition of Deferred Tax Assets  Higher incidence of witholding tax  Loss from equity accounted affiliate in 9M2018 NORMALISED TAX RATE Market Recovery  Tax rate

  27. Slide 27: Capital Structure as of September 30, 2018

    CAPITAL STRUCTURE AS OF SEPTEMBER 30, 2018 (€ mn) Debt maturity profile Bonds ECA Facilities Bank Facilities Other Debt 2,328 274 Undrawn ECA* Facilities (GIEK and Atradius) 1,000 Undrawn RCF* 600 585 560 576 494 25 25 Available Cash 60 60 76 1,055 56 139 75 and equiv.** 20 375 75 500 500 500 60 500

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