Subsea 7 S.a. · OSL:SUBC
Subsea 7 — Q4 2019 Earnings Presentation
32 slides from Subsea 7's earnings presentation, Feb 26, 2020
Slide 1: Fourth Quarter and Full Year 2019 Earnings Presentation
Fourth Quarter and Full Year 2019 Earnings Presentation 26 February 2020 1 © Subsea 7 - 2020 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: New management team
New management team 3 © Subsea 7 - 2020 subsea7.com
Slide 4: Q4 and full year 2019 results
Q4 and full year 2019 results Unutilised Cash Q4 Full Q4 Full Full RCF Q4 Year Year Year 2019 Revenue Adj. EBITDA margin Vessel Utilisation Liquidity $1.1bn $3.7 billion Special dividend Share repurchases 2019 NOI (1) Backlog at 31 Dec 2019 2019 Order Intake $304m returned to $77m $5.2 billion $3.9
Slide 5: Backlog and Q4 order intake
Backlog and Q4 order intake Backlog of $5.2 billion, as at 31 December 2019 • $1.1 billion awarded in Q4 • Book-to-bill: – 1.2x in the quarter SURF and – 1.1x in the year Conventional $4.1bn • Eight awards announced in Q4: – Cable installation (Taiwan) – Pierce (UK) – Formosa 2 (Taiwan) – Ormen Lang
Slide 6: Q4 operational highlights
Q4 operational highlights Burullus 9B (Egypt) Enbridge Vito Export (GoM) Zinia (Angola) PRP6 (Brunei) Arran (UK) Yunlin (Taiwan) Life of Field PLSVs (Brazil) 6 © Subsea 7 - 2020 subsea7.com
Slide 7: 2019 sustainability progress
2019 sustainability progress Integrity Performance Safety Collaboration Sustainability Innovation 2019 Sustainability Report 7 © Subsea 7 - 2020 subsea7.com
Slide 8: Income statement – Q4 and full year highlights
Income statement – Q4 and full year highlights Three months ended Twelve months ended 31 December 31 December 31 December 31 December 2019 2018 2019 2018 In $ millions, unless otherwise indicated Unaudited Unaudited Audited Audited Revenue 889 1,023 3,657 4,074 Net operating (loss)/income excluding
Slide 9: Income statement – supplementary details
Income statement – supplementary details Three months ended Twelve months ended 31 December 31 December 31 December 31 December 2019 2018 2019 2018 In $ millions Unaudited Unaudited Audited Audited Administrative expenses (76) (82) (268) (286) Share of net income/(loss) of associates and joint ventu
Slide 10: Business unit performance
Business unit performance Renewables & Heavy Lifting Life of Field SURF & Conventional Note: Net operating income (NOI): Corporate segment (not presented) Q4 2019 net operating loss $18m (Q4: 2018 net operating loss $11m). Full Year 2019 net operating loss $24m (2018: net operating loss $23m) Alloca
Slide 11: 2014 - 2019 costs overview
2014 - 2019 costs overview Maintaining cost discipline as the activity levels recover $ billion Vessels and other costs(1): Including vessel 6.0bn costs, onshore facilities, IT infrastructure and other fixed overheads 4.2bn Depreciation and 3.9bn 3.6bn amortisation: excludes 3.4bn non-recurring impa
Slide 12: Summary of 2019 cash flow
Summary of 2019 cash flow $m • Net cash (excluding IFRS 16 ‘Leases’ liabilities) of $164 million at 31 December 2019 12 © Subsea 7 - 2020 subsea7.com
Slide 13: Investment priorities
Investment priorities Uses of cash in 2019 • Investment in early engagement and digitalisation: Invest in the business – Xodus and 4Subsea • Investment in oil and gas Subsea Field of Maintain investment the Future: grade profile – New-build reel-lay vessel Seven Vega • $304 million returned to share
Slide 14: Financial guidance
Financial guidance 2020 Guidance Revenue Higher than 2019 Adjusted EBITDA Higher than 2019 Administrative expenses $260 million - $280 million Net finance cost $10 million - $15 million Depreciation and Amortisation $500 million - $520 million Full year effective tax rate 30% - 32% Capital expenditu
Slide 15: Strategic focus areas
Strategic focus areas Subsea Field of the Future: Energy transition: system and delivery proactive participation • Early engagement and partnerships • Oil and gas: energy of our operations and investment in technology to support • System innovation and enabling the market growth of low carbon energy
Slide 16: Strategic focus areas
Strategic focus areas Subsea Field of the Future: Energy transition: system and delivery proactive participation • Early engagement and partnerships • Oil and gas: energy efficiency of our operations and investment in technology • System innovation and enabling to support the market growth of low Pr
Slide 17: Subsea Field of the Future - integration
Subsea Field of the Future - integration • Confirmed as leading supplier of integrated solutions with greenfield FEED and EPCI awards for projects in Africa, Brazil and Australia. 2019 Greenfield 2019 Greenfield Awards(1) Market Share 25% 25% 43% Non-integrated 57% Integrated 50% Subsea Integration
Slide 18: Subsea Field of the Future - greenfield success
Subsea Field of the Future - greenfield success Mad Dog Phase 2 Sangomar Bacalhau Scarborough - Location: US GoM - Location: Senegal - Location: Brazil - Location: Australia - Value: > $300m - Value: > $750m - Value: > $750m - Value: to be (subject to FID) confirmed after FID - Status: offshore - St
Slide 19: Strategic focus areas
Strategic focus areas Subsea Field of the Future: Energy transition: system and delivery proactive participation • Early engagement and partnerships • Oil and gas: energy efficiency of our operations and investment in technology • System innovation and enabling to support the market growth of low Pr
Slide 20: Energy transition – our renewables strategy
Energy transition – our renewables strategy • Support our clients with flexible, cost-effective solutions as the evolving offshore wind market transitions to a reduced or zero subsidy environment. • Utilise our international experience and existing global organisation to support our clients in expan
Slide 21: Outlook: key projects
Outlook: key projects • Gradual increase in tendering Canada and USA Europe • Equinor Bay du Nord (i) • SSE Seagreen (W) activity confirmed during • Shell Whale • Vattenfall HKZ (W)* 2019 • Murphy Kings Quay • Innogy Kaskasi II (W)* • Chevron Anchor • IOG Blythe and Vulcan * • Estimated value of cur
Slide 22: © Subsea 7 - 2020 subsea7.com
22 © Subsea 7 - 2020 subsea7.com
Slide 23: Appendix
Appendix Major project progression Track Record Fleet Financial summaries 23 © Subsea 7 - 2020 subsea7.com
Slide 24: Major project progression
Major project progression • Continuing projects >$100m between 5% and 95% complete as at 31 December 2019 excluding PLSV and Life of Field day-rate contracts Announced size of project Major (Over $750m) Very Large ($500-$750m) Large ($300-$500m) Substantial ($150-$300m) Sizeable ($50-$150m) 24 © Sub
Slide 25: Track record
• Beatrice wind farm, BOWL • Borkum II, Trianel • Triton Knoll, Innogy • Shearwater, Shell • Aasta Hansteen, Statoil • Buzzard ph. 2, Nexen • Maria, Wintershall • Culzean, Maersk • IRM Services, Equinor • Alligin, BP • IRM Services, BP • Penguins, Shell • Snorre, Equinor • Al-Khalij, Total • SCIRM,
Slide 26: 35 Vessels including 32 active vessels at end Q4 ‘19
35 Vessels including 32 active vessels at end Q4 ‘19 Under Construction Reel-lay Vessel to be named Seven Vega Chartered from a third party Long-term charter from a vessel-owning joint venture Owned by Nigerian joint venture Stacked Due to be recycled in 2020 26 © Subsea 7 - 2020 subsea7.com
Slide 27: Segmental analysis
Segmental analysis For the three months ended 31 December 2019 Renewables & In $ millions (unaudited) SURF & Conventional Life of Field Heavy Lifting Corporate TOTAL Revenue 760 70 59 - 889 Net operating income/(loss) excluding goodwill 33 (3) (29) (18) (16) impairment Impairment of goodwill - - (10
Slide 28: Segmental analysis
Segmental analysis For the year ended 31 December 2019 Renewables & In $ millions (Audited) SURF & Conventional Life of Field Heavy Lifting Corporate TOTAL Revenue 3,174 266 217 - 3,657 Net operating income/(loss) excluding goodwill 160 (3) (56) (24) 77 impairment Impairment of goodwill - - (100) -
Slide 29: Summary balance sheet
Summary balance sheet 31 December 31 December 31 December 31 December 2019 2018 2019 2018 In $ millions Audited Audited In $ millions Audited Audited Assets Equity & Liabilities Total equity 5,363 5,722 Non-current assets Non-current liabilities Goodwill 705 751 Non-current portion of borrowings 209
Slide 30: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA Net income/(loss) to Adjusted EBITDA Three Months Ended Three Months Ended 31 Year Ended 31 Dec Year Ended 31 Dec 31 Dec. 2019 Dec. 2018 2019 2018 For the period (in $millions) Unaudited Unaudited Audited Audited Net (loss)/income (129) 32 (82) 165 Depreciation, amo
Slide 31: Summary of 2019 cash flows
Summary of 2019 cash flows $ millions Cash and cash equivalents at 1 January 2019 765 Included a net decrease in operating liabilities Net cash generated from operating activities 357 of $145 million. Included capital expenditure of $258m, Net cash flow used in investing activities (274) investments
Slide 32: Contact: Katherine Tonks, Investor Relations Director
Contact: Katherine Tonks, Investor Relations Director email: katherine.tonks@subsea7.com Direct Line +44 20 8210 5568 Website www.subsea7.com 32 © Subsea 7 - 2020 subsea7.com