Saipem S.p.a. · MIL:SPM
Saipem — Investor Day (October 2021)
59 slides from Saipem's investor day presentation, Oct 28, 2021
Slide 1: Saipem Capital Markets Day
SAIPEM CAPITAL MARKETS DAY NINE MONTHS 2021 RESULTS AND NEW STRATEGIC PLAN October 28th, 2021
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
Slide 3: Today's Speakers
Today’s Speakers Francesco Caio Antonio Paccioretti Chief Executive Officer Chief Financial Officer and General Manager 2
Slide 4: Agenda
9M 2021 results Group strategic guidelines Agenda Group financial highlights Closing remarks Q&A 3
Slide 5: 9M 2021 highlights
9M 2021 highlights • 3Q adjusted EBITDA material enhancement vs 2Q (-25 M€ in 3Q vs -354 M€ in 2Q) • Continuing signs of drilling activity recovery • For the nine months revenues -6% YoY and adjusted EBITDA at -291 M€ • Business environment still conditioned by pandemic: – Delays and cost overruns a
Slide 6: 9M 2021 results
9M 2021 results YoY comparison (M€) Revenue Adjusted EBITDA 1 Adjusted net result1 9.1% margin 5.380 491 5.064 (210) (291) (862) 9M20 9M21 9M20 9M21 9M20 9M21 1. Excluding special items 5
Slide 7: 9M 2021 results
9M 2021 results P&L YoY (M€) Adjusted1 M€ 9M 20 9M 21 Var. Revenue 5,380 5,064 (316) Total costs (4,889) (5,355) (466) EBITDA 491 (291) (782) margin 9.1% n.m. D&A (457) (383) (74) Driven by the termination of contract on a leased vessel and asset impairments of 2020 EBIT 34 (674) (708) Financial exp
Slide 8: 9M 2021 net result
9M 2021 net result Reconciliation adjusted vs reported Net Result (M€) Costs from Covid-19, safety first 9M21 Health & Safety Others1 9M21 Write-down2 Cost mainly related to management of pandemic Adjusted (Covid-19) Reported and safeguarding people’s health: • Cost of personnel on stand-by (e.g. qu
Slide 9: 9M 2021 results – E&C
9M 2021 results – E&C YoY comparison (M€) E&C offshore E&C onshore1 Revenue Adjusted EBITDA Revenue Adjusted EBITDA 10.6% margin 4.4% margin 2.139 2.670 1.983 226 2.564 118 (42) (378) 9M20 9M21 9M20 9M21 9M20 9M21 9M20 9M21 • Lower volumes in Middle East, North Africa and Italy partially offset by •
Slide 10: 9M 2021 results – drilling
9M 2021 results – drilling YoY comparison (M€) Drilling offshore Drilling onshore Revenue Adjusted EBITDA Revenue Adjusted EBITDA 274 26.1% margin 27.7% 25.5% margin 21.8% 86 234 337 76 61 243 53 9M20 9M21 9M20 9M21 9M20 9M21 9M20 9M21 • Revenue increase mainly driven by Saipem 12000, Saipem 10000 a
Slide 11: 9M 2021 net debt evolution
9M 2021 net debt evolution (B€) Operating cashflow partly offset by positive working capital dynamic 0,28 1,67 0,17 0,48 0,15 1,39 1,23 0,35 0,19 0,87 (0.47) Net cash flow from operations Free cash flow Net debt IFRS 16 Net debt Adjusted Cash Delta WC Capex Others 1 Net debt IFRS 16 Net debt 31-Dec-
Slide 12: 2H 2021 outlook
2H 2021 outlook1 Residual backlog to be executed in 2021 c. 2.3 B€ Metrics 2H 2021 Drilling Revenue Drilling Onshore • c. 4.5 B€ Offshore 0.1 B€ 0.1 B€ CAPEX • c. 250 M€ Adjusted EBITDA • Confirmed back to positive E&C 2 E&C Onshore 0.9 B€ Offshore 1.2 B€ Net debt • c. 1.7 B€ 1. Outlook for 2H does
Slide 13: Agenda
9M 2021 results Group strategic guidelines Agenda Group financial highlights Closing remarks Q&A 12
Slide 14: Towards the new Saipem: what to leverage, what to change
Towards the new Saipem…what to leverage…what to change Saipem extraordinary potential is confirmed People Heritage Technologies Assets Customers Trust But, a step change is now required Risk discipline Tailored approach Simplification from commercial One Saipem by project type and streamlining to ex
Slide 15: Building a growing profitable and cash generating Saipem
Building a growing profitable and cash generating Saipem Low-carbon energy eco-system Reducing costs and de-risking portfolio The New Investment Cycle Fostering a green supply chain as an ESG leader in the core Partnering with clients in their net zero journey Accelerating Technology & Innovation 14
Slide 16: Saipem has always been the partner of choice
Saipem has always been the «partner of choice» for the most complex technology challenges of energy industry … Saipem’s cutting-edge solutions have always made the difference Blue Stream Ultra deep- Jazan Subsea Energy Pipeline water Gasification technologies Transition projects Plant 15
Slide 17: Pioneering technologies for the energy transition
…and is already pioneering technologies for the energy transition Traditional segments improvement Decarbo- nization Hydrogen and CCUS Bioproducts & Circular Economy 16
Slide 18: Need for a new business model
…but a radically new energy eco-system calls for a discontinuity.. From… …To Carbon intensive Low Carbon Energy Centralised Distributed Industry Trends Not digitised Digitised – data driven Need for a Hardware based Service oriented new business model Vessels – Int'l Logistics IP - Talents – Softwar
Slide 19: Oil companies executing different and polarized strategies
Oil Companies are executing different and polarized strategies Ensure O&G resilience Lead energy transition “Oil Co’s strategic emphasis on energy transition” • Capital efficiency • Investing & managing risk • De-carbonization • Building new capabilities • Managing portfolio • Setting the pace US IO
Slide 20: Flexible strategy and differentiated go-to-market models
The depth of structural changes in market dynamics are redefining the content and the borders of our industry Multiple emerging technologies on new energy carriers to be challenged and engineered into bankable and executable projects New players and evolving client base Growing appetite for advanced
Slide 21: Addressing the core business through a dual strategy
We need to clearly address our core business through a dual strategy… Saipem dual strategy for the energy transition Saipem DUAL STRATEGY Provider of modular and Technical Sparring Partner of scalable solutions and Energy Co’s in complex projects digitally-enabled services + Integrator of sustainabl
Slide 22: Business model around four pillars
… evolving accordingly our business model around four pillars 1 2 3 4 Asset based offer Energy Robotics, Digital Sustainable (Drilling, Vessels, carriers & Industrialized infrastructures Fabrication…) Solutions “The traditional “The Powerhouse “The offer for the “Growth engine core managed in the fo
Slide 23: Asset based offer (1/2)
1 Asset based offer (1/2) Capture growth cycle with key accounts in core geos Strategic actions Optimize mix of own / leased assets and utilization rate Gradual exit from vertically integrated fabrication model Strengthen offering through partnerships and/or alliances Reduce fleet carbon footprint E
Slide 24: Asset based offer (2/2)
1 Asset based offer (2/2) Key Figures >90% ’22-’25 revenues from top 3 geos 5 Vessels to be scrapped 3 Fabrication yards to be discontinued 85% ’25 vs. ’20 Drilling Idleness costs 50% ’25 vs. ’20 Vessels Idleness costs Comm. agreement announced today w/ Technip FMC 23
Slide 25: Asset based offer / Energy carriers
1 2 3 4 Asset based offer Energy Robotics, Digital Sustainable (Drilling, Vessels, carriers & Industrialized infrastructures Fabrication…) Solutions “The traditional “The Powerhouse “The offer for the “Growth engine core managed in the for large, complex new world” 2.0” new present” projects” 24
Slide 26: Energy carriers (1/2)
2 Energy carriers (1/2) Key Figures 300+ Refining, Pet-Chem & Fertilizer plants built by Saipem ~€100B Addressable market (LNG, Regasification, Fertilizers…) - - Pre-FEED / FEED/ concept studies already in pipeline to tackle 50+ addressable market 25
Slide 27: Energy carriers (2/2)
2 Energy carriers (2/2) Focus on backlog execution with increased discipline on cost and risk Strategic actions Shift Order Intake from volume to value Proactive marketing Accelerating new Tech innovation … Venture Capital … own patents paradigm Digitalization of processes … and plants Examples LNG
Slide 28: Robotics, Digital and Industrialized Solutions
1 2 3 4 Asset based offer Energy Robotics, Digital Sustainable (Drilling, Vessels, carriers & Industrialized infrastructures Fabrication…) Solutions “The traditional “The Powerhouse “The offer for the “Growth engine core managed in the for large, complex new world” 2.0” new present” projects” 27
Slide 29: Robotics, Digital and Industrialized solutions (1/4)
3 Robotics, Digital and Industrialized solutions (1/4) A new kind of demand Floating Wind / Green Hydrogen Small-scale CCS Plastic Recycling Concentrated Solar Plant Packages Solar Modular units for hard-to- Industrialized Power Systems (Electrolizer + Solutions Renewables) abate applications Soluti
Slide 30: Robotics, Digital and Industrialized solutions (2/4)
3 Robotics, Digital and Industrialized solutions (2/4) Develop modular, scalable, industrialized technological solutions Strategic actions Exploit digitally-enabled service platforms (e.g. subsea robots)… …to grow recurring monitoring and maintenance services Build the execution model for the new wo
Slide 31: Robotics, Digital and Industrialized solutions (3/4)
3 Robotics, Digital and Industrialized solutions (3/4) Key Figures 70+ CO2 removal plants designed and built worldwide 150+ engineers already engaged in new solutions offering €200M+ total annual existing service revenues years of experience in subsea ROV; world’s first provider of 30+ subsea drone
Slide 32: Robotics, Digital and Industrialized solutions (4/4)
3 Fare clic Digital Robotics, per modificare lo stile del and Industrialized titolo dello solutions (4/4)schema Saipem Floating Wind Offer example Digital / Robotics solutions, generating Modular and recurring revenues Industrialized streams approach Flexile Type and Flexile and scalable scalable ti
Slide 33: Sustainable infrastructures
1 2 3 4 Asset based offer Energy Robotics, Digital Sustainable (Drilling, Vessels, carriers & Industrialized infrastructures Fabrication…) Solutions “The traditional “The Powerhouse “The offer for the “Growth engine core managed in the for large, complex new world” 2.0” new present” projects” 32
Slide 34: Sustainable Infrastructures (1/2)
4 Sustainable Infrastructures (1/2) Strategic actions Exploit PNRR as a launch pad to create a solid backlog Focus on digitalized, interconnected and sustainable infrastructures Diversify from energy industry cycles Examples High Speed/High Capacity Rail Integrated, Digitized, Interconnected, Infras
Slide 35: Sustainable Infrastructures (2/2)
4 Sustainable Infrastructures (2/2) Key Figures €20B Addressable PNRR Transportation Infrastructure €6B Addressable PNRR Energy Transition €3B ’22-’25 Expected Order Intake 4 Partnerships under discussion 34
Slide 36: New Saipem strategy to capture cash generating growth
New Saipem strategy will capture ST cash generating growth, while creating value in the LT addressing the energy transition opportunities Evolutionary trajectory • Cycle driven cash generation Asset based • Active portfolio management S/MT Growth driven by cycle • CAPEX discipline • Value over volum
Slide 37: Evolutionary path toward the new Saipem
Evolutionary path toward the new Saipem: how we get there Evolutionary path toward the new Saipem Competitive cost Active business New Operating structure portfolio strategy Model Future-ready culture (D&I) ESG leadership 36
Slide 38: Saipem strategy on one page
Saipem strategy on one page 1 2 3 4 Asset based Energy Robotics, Digital and Sustainable offer carriers Industrial Solutions infrastructures • Short-term value • Value over volume & • Growth and • Long-term growth generation de-risking resilience • Differentiation • Active portfolio • Backlog execut
Slide 39: Agenda
9M 2021 results Group strategic guidelines Agenda Group financial highlights Closing remarks Q&A 38
Slide 40: From a challenging present to a resilient future
From a challenging present to a resilient future • Solid revenue growth • Cash costs reduction • Recouping pre-pandemic profitability • CAPEX plan sustained by cash generation after 2022 39
Slide 41: Current backlog provides high future revenue coverage
Revenue growth Current backlog provides high future revenue coverage… Backlog as of 30.09.21 B€ 11.1 1.1 8.8 0.1 0.4 0.3 4.5 7.9 2.3 0.1 0.1 3.6 0.9 1.2 2.1 2021 2022 2023+ E&C Offshore E&C Onshore Drilling Offshore Drilling Onshore High backlog coverage 2022-onwards Note: E&C Onshore including Floa
Slide 42: Complemented with 23 B€ of selected commercial opportunities
Revenue growth …complemented with 23 B€ of selected commercial opportunities Europe, CIS & Central Asia c. 1.5 B€ ▪ Energy transition ▪ Fixed facilities & Asia Pacific conventional ▪ Pipelines c. 1 B€ ▪ Energy transition ▪ Pipelines Americas c. 4 B€ Middle East c. 2.5 B€ ▪ Energy transition c. 2.5 B
Slide 43: Overview of cost competitiveness program
Cost reduction Overview of cost competitiveness program Net target savings1 by nature and initiatives examples Net target savings1 by year M€ Vessels planned to be scrapped 5 of which 3 already in 2022 Run-rate Assets impact c. 15% of Run-rate impact Yards planned to be closed 3 of which 2 already i
Slide 44: New CAPEX plan with expected deleverage towards 2025
CAPEX plan and cash generation Strategy enabled by new CAPEX plan with expected deleverage towards 2025 CAPEX evolution Net Debt Evolution1 B€, illustrative B€, illustrative 2.2 ~ 0.4 ~ 0.4 B€ per annum 1.7 <1 2021 2022 2023 2024 2025 2021 2022 2023 2024 2025 Capex mix shifting towards new asset-lig
Slide 45: Balance sheet and liquidity
Balance sheet and liquidity: strong liquidity and well-balanced debt structure Debt maturity profile B€ Bonds Bank and ECA Facilities 1 Well-balanced debt maturity profile 0.7 0.7 0.6 0.6 0,2 0,2 0.1 0.1 0.5 First significant maturity in 2022, 0,3 covered by existing liquidity 0,5 0,5 0,5 0,5 0,5 0,
Slide 46: Towards a resilient profitable future
Towards a resilient profitable future • Growth driven by offshore and drilling • Solid revenue growth • c.15% CAGR 21-25 • c.100 M€ net savings in 2022 • Cash costs reduction • c.300 M€ per year by 2025 (run-rate) • Close to pre-pandemic EBITDA1 from 2023 • Recouping pre-pandemic profitability • Dou
Slide 47: Agenda
9M 2021 results Group strategic guidelines Agenda Group financial highlights Closing remarks Q&A 46
Slide 48: Strategic plan delivered through a new operating model
Saipem strategic plan delivered through a new operating model Growing, Profitable, Cash Generating Industry Results • New operating model New investment cycle in the traditional core • Customers long-lasting • EBITDA Growth relationship • Strong Cash Flow • Technology portfolio generation Structural
Slide 49: Appendix
Appendix 48
Slide 50: 9M 2021 main awards
9M 2021 main awards A diversified set of awards, book to bill of c. 1x in 9M 2021 1Q 2Q 3Q Courseulles-sur-Mer NFPS EPCO additional 5 LTA contacts, Saudi Offshore W ind SoW , Qatar, Qatargas Aramco, Saudi Arabia Farm, EODC, France E&C offshore NFPS EPCL, Qatar, Agogo Early Ph.2, Angola, Qatargas eni
Slide 51: Offshore Drilling Fleet
Offshore Drilling Fleet Vessel utilization Client Area Saipem 12000 Eni Mozambique Ultra Deep-w ater and Saipem 10000 Eni Worldwide Harsh ENV . Santorini* Eni US GoM → New leased high-spec. drillship Scarabeo 9 Eni Angola Vår Energi Scarabeo 8 Norway Winthershall Deep-W . Scarabeo 5** Eni Angola * L
Slide 52: 9M 2021 Backlog
9M 2021 Backlog Well-diversified and Sizeable Backlog Current E&C backlog including non-consolidated (M€) 4% 22,400 5,064 243 4,867 247 22,203 6% 18% 1.588 274 196 1.592 2.564 1.835 518 440 4% 1.983 2.589 14.009 13.280 68% NON-OIL 78% 6.285 6.891 RENEWABLES & INFRASTRUCTURES & GREEN OTHER NON-OIL GA
Slide 53: 9M 2021 Backlog Distribution by Year
9M 2021 Backlog Distribution by Year Backlog Provides Solid Support for The Mid-term (M€) 11,147 1.062 104 8,769 421421 263 4.493 7.912 2,287 109109 875 73 3.592 2.069 1.230 2021 2022 2023+ E&C Offshore E&C Onshore1 Drilling Offshore Drilling Onshore Non-consolidated Backlog By Year Of Execution 202
Slide 54: Onshore Drilling Fleet
Onshore Drilling Fleet FLEET @ SEPTEMBER 30, 2021: 66 RIGS1 AMERICAS EMEA 30 RIGS 1 36 RIGS 1 AVERAGE UTILISATION AVERAGE UTILISATION RATE2 IN 9M21: 33% RATE2 IN 9M21: 57% vs 32% in 9M20 vs 82% in 9M20 AVERAGE UTILISATION RATE2 IN 9M21: 46% vs 59% in 9M20 1. Excluding 17 rigs stacked in Venezuela an
Slide 55: E&C Opportunities c. 23 B€
E&C Opportunities c. 23 B€ Well-diversified tendering pipeline ahead Europe, CIS & Central Asia OPPORTUNITIES BY SEGMENT c. 1.5 B€ 11% ▪ Fixed facilities & 6% 33% conventional Asia Pacific ▪ Pipelines ▪ Renewables & green c. 1 B€ ▪ Pipelines ▪ Renewables & green 50% Americas c. 4 B€ Middle East c. 2
Slide 56: 9M 2021 Results – D&A, Financial Expenses and Taxes
9M 2021 Results – D&A, Financial Expenses and Taxes (M€) D&A 457 M€ 383 234 191 9M 2020 D&A 69 96 89 51 58 52 9M 2021 Offshore Onshore E&C E&C Total Drilling Drilling Onshore 1 Offshore D&A 9M 2021 11 (14) M€ 91 88 Financial Expenses 2 Financing costs Project hedging Exchange Differences Financial e
Slide 57: Balance sheet and liquidity
Balance sheet and liquidity Strong liquidity and well-balanced debt structure DEBT Maturity Profile (M€) Billion € 9M 21 713 654 562 557 Gross Debt1 3.4 62 112 500 92 101 62 57 (Total liquidity) (2.0) 294 Net Debt (pre IFRS 16) 1.4 151 500 500 89 500 500 500 119 15 IFRS 16 0.3 24 89 15 Net Debt (pos
Slide 58: 9M 2021 Results
9M 2021 Results QoQ Trend (M€) Revenue Adjusted EBITDA 1 Adjusted Net Result1 1.864 1.582 (25) (206) (354) (551) 2Q 2021 3Q 2021 2Q 2021 3Q 2021 2Q 2021 3Q 2021 1. Not including special items 57
Slide 59: 9M 2021 Results - Divisions
9M 2021 Results - Divisions QoQ Trend (M€) E&C Offshore E&C Onshore 1 Revenue Adjusted EBITDA Revenue Adjusted EBITDA 951 margin 3.9% 938 721 28 475 (107) (279) (113) 2Q 2021 3Q 2021 2Q 2021 3Q 2021 2Q 2021 3Q 2021 2Q 2021 3Q 2021 Drilling Offshore Drilling Onshore Revenue Adjusted EBITDA Revenue Ad