Slide 1: FY 2014 Presentation
FY 2014 Presentation February 4, 2015 © SBM Offshore 2014. All rights reserved. www.sbmoffshore.com
Slide 2: Disclaimer
Disclaimer Some of the statements contained in this presentation that are not historical facts are statements of future expectations and other forward-looking statements based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual
Slide 3: FY 2014 in Review
FY 2014 in Review 99% IFRS 0.05 Directional(1) Fleet Revenue Revenue Reorganisation LTIFR US$3.5 bn Uptime Up 20% US$1.0 bn N’Goma US$1.9 bn Floating Cidade de Revolving FPSO project Ihabela delivered financing Solutions delivered Credit Facility US$21.8 bn Thunder IFRS 10 Developments US$240 mn in
Slide 4: No.1 FPSO Player Worldwide
No.1 FPSO Player Worldwide The Company Lease Fleet 5 Regional Centres 11 FPSOs; 3 FPSOs under construction 13 Shores Bases / Operations Offices 2 FSOs 4 Site Offices 1 Semi-sub 10,215 Employees 1 MOPU Financials in US$ billion Performance FY2014 2015 Directional(1) Guidance 2.2 257 years of operatio
Slide 5: Delivering the Full Product Lifecycle
Delivering the Full Product Lifecycle Engineering Procurement 50 years of industry firsts Integrated supply chain Leading edge technology Global efficiencies Local sourcing Product Life Extension Construction Leader in FPSO relocation Strategic partnerships World class after sales Unrivalled project
Slide 6: Agenda
Agenda FY 2014 Review Macro View FY 2014 Financials Outlook 6
Slide 7: Total Overview
Total Overview (US$ millions) Lease & Operate Turnkey Other Revenue Directional(1) IFRS 5,482 4,584 20% 3,373 3,545 5% 4,471 3,648 2,367 2,487 1,006 1,059 935 1,011 FY 2013(2) FY 2014 FY 2013(2) FY 2014 EBIT Directional(1) IFRS 726 286% 647 201 188 63 219% 195 288 375 347 274 -204 -268 -167 -268 -21
Slide 8: Compliance
Compliance • SBM Offshore has reached a US$240 million out-of-court settlement agreement with the Dutch Public Prosecutor’s Office (Openbaar Ministerie) on November 12, 2014 – US Department of Justice declined prosecution and has closed its inquiry into the matter • Investigation of the Openbaar Min
Slide 9: HSSE Results
HSSE Results • Regrettably, two fatalities occurred in HSSE Results 1H14 • Recordable injury and lost time injury 0.6 frequency improved by 45% and 66%, respectively, compared to 2013 0.5 • Number of incidents with high potential Injury Frequency 0.4 to harm people reduced by 20% compared to 2013 an
Slide 10: Agenda
Agenda FY 2014 Review Macro View FY 2014 Financials Outlook 10
Slide 11: What We're Seeing
What We’re Seeing CapEx Cutbacks in 2015 Enduring Appeal of Deepwater • Brent crude price fallen 47% to • Three key supply growth buckets US$59 from June 30, 2014 to U.S. Shale Oil February 3, 2015 Iraq • Capital discipline continues, now Deepwater paired with significant CapEx decline • Deepw
Slide 12: What the Market Is Telling Us
What the Market Is Telling Us Historical and Estimated Awards 2015-2016 Commentary 14 • 2014 final awards down by 2 from 12 previous estimate 12 10 10 10 • Downward adjustment of 2015 Estimated 10 Awards by 7 across all segments 8 • Based on initial assessment of client 7 6 budget cuts and situation
Slide 13: What Clients Are Saying
What Clients Are Saying Investments aren’t based upon today’s Need to price The situation conserve cash is developing Underwriting CapEx will be more cut in 2015 conservatively • We’re listening and here to collaborate with you to find cost- efficient technical and financial solutions • We’re a reli
Slide 14: Sources of Resilience
Sources of Resilience • Contractually secured, near record US$21.8 billion Backlog • Not price or production volume(1) sensitive • Released 1,200 positions to optimise cost base Capacity Adaptations • As the market further develops, SBM Offshore will adapt accordingly • Odyssey24, fleet maintenance,
Slide 15: Directional Backlog
Directional(1) Backlog (US$ billions) US$ 21.8 bn (as of December 31, 2014) Remaining Backlog Lease & Operate Backlog 2.0 1.5 1.0 0.5 0.0 $20.6 bn 2016 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 Turnkey Backlog Remaining Backlog 1.0
Slide 16: Agenda
Agenda FY 2014 Review Macro View FY 2014 Financials Outlook 16
Slide 17: Underlying Directional Performance
Underlying Directional(1) Performance (US$ millions) Directional(1) Revenue Directional(1) EBITDA Directional(1) EBIT 3,545 157 643 486 236 437 FY 2014 201 Reported Exceptional items Underlying Reported Exceptional items Underlying Directional(1) Revenue Directional(1) EBITDA Directional(1) EBIT 248
Slide 18: Turnkey P&L
Turnkey P&L (US$ millions) Directional(1) FY 2014 FY 2013* Variance Revenue 2,487 2,367 120 Gross Margin 390 435 (45) EBIT 195 288 (93) Depreciation, amortisation and impairment 15 15 – EBITDA 210 303 (93) * Restated for comparison purposes Directional(1) Comments Projects In Cidade de Maricá, Cidad
Slide 19: Lease & Operate P&L
Lease & Operate P&L (US$ millions) Directional(1) FY 2014 FY 2013* Variance Revenue 1,059 1,006 53 Gross Margin 304 (181) 485 EBIT 274 (204) 478 Depreciation, amortisation and impairment 261 440 (179) EBITDA 535 236 299 * Restated for comparison purposes Directional(1) Comments Vessels In Cidade de
Slide 20: Group P&L
Group P&L (US$ millions) Directional(1) FY 2014 FY 2013* Variance Revenue 3,545 3,373 172 Gross Margin 694 254 440 Overheads (307) (218) (89) Other operating income (186) 28 (214) EBIT 201 63 138 Depreciation, amortisation and impairment 284 457 (172) EBITDA 486 520 (34) Net financing costs / loan i
Slide 21: Overheads Breakdown
Overheads Breakdown (US$ millions) Directional(1) Expense Bridge $350 $39 $307 $300 $50 $250 $218 $200 $150 $100 $50 $0 FY 2013 One-off Items Incl. Underlying Variation FY 2014 Improvement Programmes(2) Increase mostly driven by non-recurring events (1) Directional view is a non-IFRS disclosure, whi
Slide 22: Group Balance Sheet
Group Balance Sheet (US$ millions) 31-Dec-14 31-Dec-13(1) Variance Comment Additional capex offset by depreciation and Property, plant and equipment 1,923 2,058 (135) reversal of impairment Investments in associates and Redemption of Aseng and Cidade de Paraty; 4,288 2,859 1,429 other financial asse
Slide 23: Development of Group Cash Position
Development of Group Cash Position (US$ millions) IFRS Cash Flow Bridge $4,000 $296 $(2,336) $101 $17 $3,500 $91 $2,178 $3,000 $2,500 $2,000 $(878) $1,500 $922 $1,000 $(147) $452 $500 $208 $0 Cash Cash from New Loans Equity Investment Other Disposal of Investments Loan Interest Cash 31-Dec-13 Operat
Slide 24: Group Net Debt
Group Net Debt (US$ millions) FY14 vs. FY13 Net Debt Summary Comparison $6,000 $4,775 $5,000 $4,000 $3,298 $3,400 $3,000 $2,432 $2,000 $1,000 $0 -$1,000 FY14 FY14 FY13 FY13 IFRS Proportional IFRS Proportional Bridge Loans Revolving Credit Other Project Finance Cash IR - 04/02/2015 24
Slide 25: Funding
Funding • Undrawn Credit Facilities + Cash = US$1,987 mn • Deep Panuke: US$450 mn US Private Placement • Cidade de Maricá project finance: US$1.45 bn • Revolving Credit Facility Renewal: US$1.0 bn • Average cost of debt: FY14 4.2% vs. FY13 5.3% IR - 04/02/2015 25
Slide 26: New Revolving Credit Facility Overview
New Revolving Credit Facility Overview Key and Historical Characteristics Estimated Awards Covenant Calculations Amount • US$1.0 billion • Tangible Net Worth divided by Total Solvency Tangible Assets > 25% Tenor • 5 years + two one-year extensions Ratio • Door-to-door maturity of 7 years – Solvency
Slide 27: Agenda
Agenda FY 2014 Review Macro View FY 2014 Financials Outlook 27
Slide 28: Project Overview
Project Overview Project 2011 2012 2013 2014 2015 2016 POC Type(1) 31/12/14 Percentage of Completion FPSO N’Goma FPSO FL <25% FPSO Cidade de Ilhabela FL 25%<50% Turret Quad 204 T Turret Prelude FLNG T 50%<75% Turret Ichthys T >75% FPSO Cidade de Maricá FL FPSO Cidade de Saquarema FL 100% FPSO Turrit
Slide 29: Transformation Programme
Transformation Programme Project Scope Goals & Investor Returns • Focus on step changes in design, execution, project and supply chain management • Aim to reduce project costs by at least 5% through improved project, supply chain and materials management • Costs associated with research and developm
Slide 30: Strategic Initiatives
Strategic Initiatives Restructuring Reorganisation • In light of market conditions and in order • From January 2015, Regional Centres will to optimise the cost base, the Company now be dedicated to a specific product announced a restructuring on December line 11, 2014 – Heighten specialisation – Red
Slide 31: Dividend Policy
Dividend Policy • The Company will not pay a dividend over 2014 • The Management Board intends to propose a change to the dividend policy at the Annual General Meeting in April 2015: Based on sufficient positive free cash flow in the payment year Derived from Directional(1) net income Payout r
Slide 32: 2015 Guidance
2015 Guidance • Directional(1) Revenue guidance: At least US$2.2 billion Turnkey: US$1.0 billion Lease & Operate: US$1.2 billion • Proportional Net Debt guidance: Less than US$3.5 billion IR - 04/02/2015 (1) Directional view is a non-IFRS disclosure, which assumes all lease contracts are classif
Slide 33: Floating Solutions
Floating Solutions Current: Focus on top-end segment • FPSOs • Turret Moorings • Turnkey Sale or Lease & Operate Future: Leverage core competencies • Floating LNG (FLNG) • Semisubmersible & TLP production units IR - 04/02/2015 33
Slide 34: Appendix
Appendix © SBM Offshore 2014. All rights reserved. www.sbmoffshore.com
Slide 35: Investor Relations Survey Results
Investor Relations Survey Results • The Company received feedback from analysts and investors – 32 total responses, 20 from analysts • Constructive responses, allowing for a quantitative analysis of areas for improvement • The results included: – Directional(1) reporting has been well received – 70%
Slide 36: Competitive Landscape
Competitive Landscape Small Conversions – Large Conversions – <60,000 bbls / day 80,000-150,000 bbls / day Newbuilds – >200,000 bbls / day IR - 04/02/2015 36
Slide 37: IFRS 10 & 11 – JV Accounting
IFRS 10 & 11 – JV Accounting • IFRS 10 & 11 consolidation standards for joint ventures (JVs) introduced January 1, 2014 • Ends proportional accounting of JVs Full consolidation of fully controlled JVs (mostly Brazilian FPSOs) Equity accounting of jointly controlled JVs (mostly Angolan FPSOs) • I
Slide 38: IFRS 10 & 11 – Directional Impact
IFRS 10 & 11 – Directional(1) Impact • New IFRS 10 & 11 eliminates the revenue SBM generates in the project phase from its JV partners in investees fully consolidated (Brazil) • Consequently, Directional(1) reporting from 2014 onwards will not only classify all leases as operating leases but: Will
Slide 39: IFRS 10 & 11
IFRS 10 & 11 Lease New Old Joint Ventures Contract SBM Share % New IFRS Old IFRS Directional(1) Directional(1) Type N’Goma FPSO FL 50% Proportional Proportional Equity Proportional FPSO Saxi Batuque FL 50% Proportional Proportional Equity Proportional FPSO Mondo FL 50% Proportional Proportional Equi
Slide 40: Group Loans & Borrowings
Group Loans & Borrowings (US$ millions) Net Book Value as of December 31, 2014 Proportional Full Amount IFRS (Business Ownership) PROJECT FINANCE FACILITIES DRAWN FPSO Capixaba relocation $ 90 $ 90 $ 72 FPSO Espirito Santo 105 105 54 FPSO Aseng 121 121 72 FPSO Cidade de Paraty 883 883 446 MOPU Deep
Slide 41: New RCF Covenant Definitions
New RCF Covenant Definitions Key Financial Covenant Definition Solvency Ratio • Tangible Net Worth(1) divided by Total Tangible Assets(2) > 25% Leverage Ratio • Consolidated Net Borrowings(3) divided by Adjusted EBITDA(4) < 3.75 • At the request of the Company, the leverage ratio may be replaced by
Slide 42: SBM Lease Fleet Portfolio
SBM Lease Fleet Portfolio L&O Portfolio Average Duration: 14.7 years(1) Vessel Name Field Name Client Country 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 LEASE
Slide 43: © SBM Offshore 2014. All rights reserved. www.sbmoffshore.com © SBM Offshore 2014. All rights
© SBM Offshore 2014. All rights reserved. www.sbmoffshore.com © SBM Offshore 2014. All rights reserved. www.sbmoffshore.com