Subsea 7 S.a. · OSL:SUBC

Subsea 7 — Investor Presentation (March 2019)

69 slides from Subsea 7's investor presentation, March 2019

Slide 2: Index
Index What we do Our differentiators Our priorities Our outlook Our financials Appendix 2 © Subsea 7 - 2019 subsea7.com
Slide 3: Subsea 7 – In Summary
Subsea 7 – In Summary Our vision is to lead the way in the delivery of offshore projects and services for the energy industry. In an evolving energy sector, we create sustainable value by being the industry’s partner and employer of choice in delivering the efficient offshore solutions the world nee
Slide 5: Our market segments
Our market segments Life of Field 2018 Revenue i-Tech 7 is a progressive and $4.1 billion pioneering subsea life of field partner delivering Inspection, SURF and Conventional Repair and Maintenance solutions Subsea 7 is a global leader in to offshore energy developments. offshore energy construction
Slide 6: SURF and Conventional
SURF and Conventional SURF and Conventional • Subsea Umbilicals, Risers and flowlines (SURF) • Connecting seabed wellhead structures to surface production facilities • Over 20 year track record: safe and efficient execution on over 1,000 projects • Operating in remote and harsh environments with com
Slide 7: Recent Operational highlights
Recent Operational highlights PUPP (Nigeria) Snorre Expansion (Norway) WND Phase Two (Egypt) 17 Cranes (KSA) Brent Bypass (UK) Hornsea One Windfarm (UK) Life of Field PLSVs (Brazil) 7 © Subsea 7 - 2019 subsea7.com
Slide 8: Our PLSV activities offshore Brazil
Our PLSV activities offshore Brazil Servicing life of field and new construction needs for Petrobras in all water depths • Long-term day-rate contracts to 2021 / 2022 • Performing production maintenance and new construction activities • $0.9bn of firm backlog (at Q4) • July 2017: contract extensions
Slide 9: Life of Field
Life of Field • Leading Life of Field partner • Over 165 ROVs and a for clients throughout the oil fleet of ROV support and gas industry vessels • Over 35 year’s experience • Global business with operational bases in the UK, Brazil, the US and Australia 9 © Subsea 7 - 2019 subsea7.com
Slide 10: Life of Field: products and services
Life of Field: products and services Integrated solutions built on core products and services • ROV Intervention • Diving • Survey, Inspection & Data Management • Well simulation & sampling • Tool Management & Engineering Solutions • Pipeline Repair & Tree Installation Highly skilled and experienced
Slide 11: Life of Field track record
Life of Field track record Over 1000 successful Inspection, Over 18,000 intervention tooling Repair and Maintenance projects products designed, delivered and completed managed Over 300 successful ROV drill rig exploration hydrocarbon sampling missions support worldwide since 1976 using ROVs Global e
Slide 12: Renewables and Heavy Lifting
Renewables and Heavy Lifting 1991 SHL 2016 Beatrice 2018 SOC Joint Venture EPCI awarded acquired by established to Subsea 7 Subsea 7 2018 Comprehensive 2009 First 2013 Subsea 7 2017 SHL balance of plant Renewables increases its acquired by offering: T&I and EPCI Project for focus on SHL renewables S
Slide 13: Renewable and Heavy Lifting contract models
Renewable and Heavy Lifting contract models EPCI T&I • Transferable skills and synergies from • Heavy lifting in oil and gas sector as oil and gas well as renewables • Longer time from tender to execution • Shorter time from tender to execution • Early engagement and engineering • Lower barrier to e
Slide 14: Subsea 7's input to Renewable Energy
What we do to reduce contribution to climate change Subsea 7’s input to Renewable Energy Subsea 7 (RHL) are typically contracted to carry out: Wind Turbine 1. Design, procurement and installation Subsea 7’s Generators of foundation piles and jackets (SHL) (WTG) scope 2. Design procurement and instal
Slide 15: Large offshore wind farm projects
Large offshore wind farm projects Pre-2019 Post-2019 Gemini Borkum II Hornsea One Subsea 7: No major Guanyin ph2 Gode Wind Triton Knoll Yunlin Inch Cape 582MW 600MW 203MW 1218MW offshore EPCI wind 860MW 640MW 350MW 784MW projects for execution in 2019 • T&I work needed to maintain vessel utilisation
Slide 16: Index
Index What we do Our differentiators Our priorities Our outlook Our financials Appendix 16 © Subsea 7 - 2019 subsea7.com
Slide 17: Our Differentiators
Our Differentiators We’re different from our competition because we’re more creative, more reliable, and more focused on what our clients really need. Culture Global team with expertise, passion and commitment to deliver. Creativity Ability to innovate through technology, processes and partnerships.
Slide 22: Digitalisation
Digitalisation • Strategy in development with new VP assigned. Focus areas within i-Tech, early engagement and Pipeline Bundles • Planning software made available by Schlumberger to Subsea Integration Alliance for early engagement • i-Tech 7 and Leidos have a 5 year digitalisation partnership agreem
Slide 23: A B C
D H L E K F B A I C G A Inspection G Autonomous Vehicle B Monitoring H FPSO Hosted AIV C Data Management, Communication I Seabed Hosted AIV D Analytics, Digital Twin & Visualization J RWOCS/Hydrates/Sampling E UWILD/Moorings K Autonomous Surface Vessel F Surface Power Communication Buoy L Onshore Co
Slide 24: A modern and versatile fleet of 33 vessels
A modern and versatile fleet of 33 vessels Vessels by Ownership type Ownership Vessels by Age 0-5 years 6 Owned 10 10 6-11 years 27 13 Chartered 12+ years Vessels by Operational category Rigid-lay/Heavy Construction Diving support Life of Field Construction flexlay Renewables & Heavy Lift Hook up 0
Slide 25: 33 Vessels including 30 active vessels at end Q4'18
33 Vessels including 30 active vessels at end Q4’18 Under Construction Reel-lay Vessel to be named Seven Vega Long-term charter from a vessel-owning joint venture Stacked 25 © Subsea 7 - 2019 Chartered from a third party subsea7.com
Slide 26: Our People
Our People • 11,000 people in our workforce at end 2018, including over 1,700 engineers • We deliver projects based on our expertise and know-how • Our highly skilled and experienced workforce deliver projects safely and reliably • We recognise the importance of diversity and strive to achieve it 1%
Slide 27: Our Values
Our Values Our values define how we conduct our business Safety Performance Our goal is an incident-free workplace. We work every day, We are driven to achieve the outcomes our clients want. everywhere to make sure all our people are safe. We are trusted to achieve superior performance from every pr
Slide 28: Corporate Responsibility – Safety and Environment
Corporate Responsibility – Safety and Environment • We are committed to operating in a safe, ethical and responsible manner Clean Operations $3.1m costs Lost-time incident 5,000 saved 2019 Targets: Frequency rate (%) 3,600 - Lost-time incident 3,800 3,300 frequency rate <0.03 0.06 0.06 (target lower
Slide 29: Corporate Responsibility – Integrity, Diversity and Society
Corporate Responsibility – Integrity, Diversity and Society Gender mix company wide Over 67 community assistance Offices and facilities events delivered in 2018 in 21 countries 91 Nationalities in our workforce Offshore Female Onshore Female Gender mix Onshore Male Offshore Male leadership level Lon
Slide 30: Index
Index What we do Our differentiators Our priorities Our outlook Our financials Appendix 30 © Subsea 7 - 2019 subsea7.com
Slide 31: Strategic highlights
Strategic highlights Technology & Early Subsea Integration Fleet Renewables Engagement Alliance Management Second EHTF 4 Projects Globalisation of Average vessel project awarded awarded Seaway 7 age 10 years Numerous Integrated Upgrade of Seven supplier-led technology SOC acquisition Viking to hybri
Slide 32: Flexible Solutions
Flexible Solutions Our clients require flexible solutions: Collaboration • Comprehensive integrated Model offering with alliance partners OneSubsea being developed in to a Joint Venture. Fully Standalone Integrated SURF • Successful collaboration models with certain independent clients including Ake
Slide 33: Our Partnerships
Our Partnerships • We have a collaboration model in Recent successful completion of the Volund Infill project for partnership with certain clients to Aker BP provide cost effective solutions based on long-term relationships. • Early engagement and long-term collaborative relationships with mutual be
Slide 34: Early Engagement
Early Engagement • Significant increase in early engagement activity in all Our supplier-led studies regions • Subsea Integration Alliance and Subsea 7 provide supplier-led solutions • Xodus Group provide client-led solutions • Large greenfield FEED awards to Subsea Integration Alliance by Woodside
Slide 35: Competitive landscape for full life cycle integrated solutions
Competitive landscape for full life cycle integrated solutions EXPLORATION DOWN-HOLE / FEED SPS / EPIC LIFE OF FIELD/ DECOMISSIONING GEOPHYSICS DATA MANUFACTURE WELL SERVICES 35 © Subsea 7 - 2019 subsea7.com
Slide 36: Subsea Integration Alliance
Subsea Integration Alliance + = Enhanced production Reduced cost and risk Pore-to-shore perspective 36 © Subsea 7 - 2019 subsea7.com
Slide 37: Subsea Integration Alliance projects
2 8 70+ Projects Projects Integrated concept completed awarded studies and pre-FEEDs Completed and ongoing projects: • Murphy Dalmatian (completed) • BP Mad Dog 2 • TAQA Otter (completed) • Fieldwood Katmai • BP Manuel • ExxonMobil West Barracouta • Woodside SNE Phase 1 (FEED) • Woodside Scarborough
Slide 38: Subsea Integration Alliance Technology
Subsea Integration Alliance Technology Multibore Connector • Direct Bundle to Bundle connector, • Improves economics for longer Bundles; • Vertical configuration for multi-bore Standardised UTA spools, • Standardised • Direct Connect to Manifolds Umbilical Termination Assembly's • Increased efficien
Slide 39: Subsea 7's approach and strategy through the cycle
Subsea 7’s approach and strategy through the cycle New-build vessels: PLSVs Seven Arctic Global alliance with Seven Kestrel Cost reduction Acquisition: Acquisition: KBR/ Granherne programmes Middle East Renewables 2015/2016 Investment: Early engagement 2015 2016 2017 2018 New rigid reel-lay Creation
Slide 40: Drivers of lower costs for projects
Drivers of lower costs for projects • Earlier engagement enables better engineering, introduction of Earlier engagement integrated and full lifecycle solutions and application of new Closer collaboration technology Leaner processes Supply chain deflation • Closer collaboration with alliances and par
Slide 41: Drive business improvements to lower costs
Drive business improvements to lower costs Project A Actively adapt to industry conditions without losing focus on long term strategic priorities Initial price Concept optimsiation Angolan Content Local Competition Sourcing Sourcing, Final price reduction content and specification specifications, So
Slide 42: Priorities for cash
Priorities for cash Invest in the business Targeted acquisitions to enhance our strategic growth areas Maintain investment $507 million net cash at 31 grade profile December 2018 $1.7 billion returned to shareholders Return to shareholders in special dividends and buybacks since 2011 42 © Subsea 7 -
Slide 43: Index
Index What we do Our differentiators Our priorities Our outlook Our financials Appendix 43 © Subsea 7 - 2019 subsea7.com
Slide 44: Cyclical recovery in Oil and Gas
Cyclical recovery in Oil and Gas Re-engineered Projects Total Zinia Backlog BP Mad Dog 2 Increase Brownfield Tie-Backs Key Nexen Buzzard Vessel AKER BP Aefugl Utilisation Pricing Greenfield Construction Power SNE Phase 1 44 © Subsea 7 - 2019 subsea7.com
Slide 45: Subsea 7's Addressable Market
Subsea 7’s Addressable Market (1) Rystad August 2018 (2) Access via Alliances and Partnerships $151 billion(1) (3) Trunklines up to 46” Global Offshore E&P CAPEX Floating Platform SPS(2) Fabrication, Maintenance, Modification and Drilling Operational Expenditure Seismic $40 billion(1) $60 billion Ad
Slide 46: Evolving energy sector
Evolving energy sector In an evolving energy sector, we create sustainable value by being the industry’s partner and employer of choice in delivering the efficient offshore solutions the world needs. Past Future Increased significance of Renewables Coal Gas Continued dominance of Oil and Gas Oil 46
Slide 47: Offshore Wind Market Trends
Offshore Wind Market Trends Cumulative GW Installations Levelised Cost of Energy Trend 156 140 160 140 133 120 120 LCOE dropping LCOE (Eur/MWh) 107 100 CAGR 16% 100 30% every 5 years 80 73 80 -30% GW 60 60 48 38 40 40 Actuals CAGR 12% 20 20 Forecast 0 0 2010 2015 2020 2025 2030 2018 2019 2020 2021 2
Slide 48: Business Unit Outlook
Business Unit Outlook SURF and Conventional - Tendering activity increasing particularly in Brazil, Australia, Angola and Nigeria - Increased number of large greenfield projects awarded to market subject to sanction Renewables and Heavy Lifting - 2019 limited execution opportunities - T&I execution
Slide 49: Summary
Summary • Market award activity in offshore oil and gas has begun to recover • Subsea 7 has taken cyclical opportunities to grow and strengthen its business for the future and is positioned well for the next phase of the cycle • Subsea 7’s Values-driven strategy and strong financial position have su
Slide 50: Index
Index What we do Our differentiators Our priorities Our outlook Our financials Appendix 50 © Subsea 7 - 2019 subsea7.com
Slide 51: Backlog and order intake
Backlog and order intake Backlog of $4.9 billion, as at 31 December 2018 • $0.9 billion awarded in the fourth quarter 2021+ • Book-to-bill: $0.5bn – 0.9x in the quarter SURF and – 1.0x in the year Conventional 2020 Renewables & $4.1bn • Five announced awards: $1.5bn 2019 $2.8bn Heavy Lifting – Manue
Slide 52: Q4 and Full Year 2018 results
Q4 and Full Year 2018 results 16% 16% 75% 76% 70% 70% Unutilised Net Q4 Full Q4 Full Full RCF cash Q4 Year Year Year Q1 Q2 Q3 Q4 Q4 '18 2018 Active Total 2018 Revenue Adj. EBITDA margin Vessel Utilisation Liquidity $1.2bn $4.1 billion share Dividend repurchases Capex Special dividend Q1 Q2 Q3 Q4 Q1
Slide 53: 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 2018 2017 2018 2017 In $ millions, unless otherwise indicated Unaudited Unaudited Audited Audited Revenue 1,023 1,003 4,074 3,986 Net operating income (NOI) (1) 23 28
Slide 54: Business Unit performance
Business Unit performance Fourth Quarter Revenue Full Year Revenue $1,023m $1,003m $4,074m $3,986m $82m $664m $959m $181m $245m Renewables & Heavy $68m Lifting $67m $302m Life of Field $873m $3,164m $754m $2,725m SURF & Conventional Note: 2018 2017 2018 2017 Net operating income (NOI): Corporate seg
Slide 55: 2014 - 2018 costs overview
2014 - 2018 costs overview Maintaining cost discipline as the activity levels recover $ billion Vessels and other 7 costs(1): Including vessel 6.0bn costs, onshore facilities, IT 6 infrastructure and other 0.8 fixed overheads 5 0.4 4.2bn 3.9bn Depreciation and 4 2.0 0.8 3.4bn amortisation: excludes
Slide 56: Adjusted EBITDA progression
Adjusted EBITDA progression • 2018 guidance: Revenue broadly in line, Adjusted EBITDA percentage margin significantly lower compared to 2017 Average 32% Average 21% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2013 | 2014 | 2015 | 2016 | 2017 | 2018 56 © Subsea 7 - 2019 subsea7.
Slide 57: Our principal margin drivers
Our principal margin drivers Total vessel Number of projects Backlog value by Costs ($bn) utilisation >$300m completed year awarded 82% 72% 66% 61% 70% 2013 and 2.0 2014 earlier 1.4 2015 2016 1.0 1.0 2018 0.8 2017 0.8 0.8 0.6 0.5 0.5 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2
Slide 58: Liquidity and financial strength
Liquidity and financial strength Robust balance sheet • Net cash of $507 million Strong financial flexibility • Cash and cash equivalents of $765 million • Borrowings of $258 million • Five-year $656 million revolving credit facility undrawn As at 31 December 2018 58 © Subsea 7 - 2019 subsea7.com
Slide 59: Summary balance sheet
Summary balance sheet 31 December 31 December 31 December 31 December 2018 2017 2018 2017 In $ millions Audited Audited In $ millions Audited Audited Assets Equity & Liabilities Total equity 5,722 5,941 Non-current assets Non-current liabilities Goodwill 751 701 Non-current portion of borrowings 234
Slide 60: Summary of 2018 cash flow
Summary of 2018 cash flow $m 669 (98) (167) (238) (180) 1,109 (25) (93) (204) (8) 765 Cash at EBITDA Tax Paid Decrease in Capex Acquisition of Repayment of Share Repurchase Dividends Other Cash at 1 January 2018 Net Businesses Borrowings paid 31 Operating December Liabilities 2018 • Net cash of $507
Slide 61: Summary of year-to-date 2018 cash flow
Summary of year-to-date 2018 cash flow $ millions Cash and cash equivalents at 1 January 2018 1,109 Included an increase in net operating assets of Net cash generated from operating activities 424 $167 million Included cash outflows on SOC acquisition of $155 million including vessels, acquisition o
Slide 62: Financial guidance
Financial guidance 2019 Guidance (including IFRS 16 adjustments(1)) Revenue Slightly lower than 2018 Adjusted EBITDA Lower than 2018, double digit percentage margin Net Operating Income Positive for the Group Administrative expense $260 million - $280 million Net finance cost $10 million - $20 milli
Slide 63: IFRS 16 'Leases' guidance
IFRS 16 ‘Leases’ guidance • IFRS 16 ‘Leases’ will be effective from 1 January 2019. IFRS 16 2019 forecast impact • Requires the Group to recognise: Income Statement  a right-of-use asset for long-term leases, to be amortised straight-line over duration of the lease. Lease expense Decrease by $100m
Slide 64: Appendix
Appendix Major project progression Track record ADR Forward looking statement Contact details 64 © Subsea 7 - 2019 subsea7.com
Slide 65: Major project progression
Major project progression • Continuing projects >$100m between 5% and 95% complete as at 31 December 2018 excluding PLSV and Life of Field day-rate contracts Culzean (UK) Borkum II (Germany) Announced WND GFR (Egypt) size of project Sonamet (Angola) Hasbah (Saudi Arabia) Major Sole (Australia) (Over
Slide 66: 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 67: ADR information
ADR information ADR Ticker: SUBCY ADR type: Sponsored Level 1 ADR Listing venue: OTC CUSIP: 864323100 Ratio: 1 ADR : 1 Ordinary Share Depositary bank: Deutsche Bank Trust Company Americas ADR broker helpline: New York: +1 8662492593 London: +44 207 547 6500 Hong Kong: +852 2203 7854 e-mail: db@astfi
Slide 68: 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 69: Contact: Isabel Green, Investor Relations Director
Contact: Isabel Green, Investor Relations Director eMail: isabel.green@subsea7.com Direct Line +44 20 8210 5568 Website www.subsea7.com 69 © Subsea 7 - 2019 subsea7.com

Subsea 7 — Investor Presentation (March 2019) on 6ix

Subsea 7 — Investor Presentation (March 2019)

Slide 1: Investor Presentation

Slide 2: Index

Slide 3: Subsea 7 – In Summary

Slide 4: © Subsea 7 - 2019 subsea7.com

Slide 5: Our market segments

Slide 6: SURF and Conventional

Slide 7: Recent Operational highlights

Slide 8: Our PLSV activities offshore Brazil

Slide 9: Life of Field

Slide 10: Life of Field: products and services

Slide 11: Life of Field track record

Slide 12: Renewables and Heavy Lifting

Slide 13: Renewable and Heavy Lifting contract models

Slide 14: Subsea 7's input to Renewable Energy

Slide 15: Large offshore wind farm projects

Slide 16: Index

Slide 17: Our Differentiators

Slide 18: Riser Systems

Slide 19: © Subsea 7 - 2019 subsea7.com

Slide 20: Pipelines Bundles

Slide 21: Pipeline Bundles

Slide 22: Digitalisation

Slide 23: A B C

Slide 24: A modern and versatile fleet of 33 vessels

Slide 25: 33 Vessels including 30 active vessels at end Q4'18

Slide 26: Our People

Slide 27: Our Values

Slide 28: Corporate Responsibility – Safety and Environment

Slide 29: Corporate Responsibility – Integrity, Diversity and Society

Slide 30: Index

Slide 31: Strategic highlights

Slide 32: Flexible Solutions

Slide 33: Our Partnerships

Slide 34: Early Engagement

Slide 35: Competitive landscape for full life cycle integrated solutions

Slide 36: Subsea Integration Alliance

Slide 37: Subsea Integration Alliance projects

Slide 38: Subsea Integration Alliance Technology

Slide 39: Subsea 7's approach and strategy through the cycle

Slide 40: Drivers of lower costs for projects

Slide 41: Drive business improvements to lower costs

Slide 42: Priorities for cash

Slide 43: Index

Slide 44: Cyclical recovery in Oil and Gas

Slide 45: Subsea 7's Addressable Market

Slide 46: Evolving energy sector

Slide 47: Offshore Wind Market Trends

Slide 48: Business Unit Outlook

Slide 49: Summary

Slide 50: Index

Slide 51: Backlog and order intake

Slide 52: Q4 and Full Year 2018 results

Slide 53: Income statement – Q4 and Full Year highlights

Slide 54: Business Unit performance

Slide 55: 2014 - 2018 costs overview

Slide 56: Adjusted EBITDA progression

Slide 57: Our principal margin drivers

Slide 58: Liquidity and financial strength

Slide 59: Summary balance sheet

Slide 60: Summary of 2018 cash flow

Slide 61: Summary of year-to-date 2018 cash flow

Slide 62: Financial guidance

Slide 63: IFRS 16 'Leases' guidance

Slide 64: Appendix

Slide 65: Major project progression

Slide 66: Track record

Slide 67: ADR information

Slide 68: Forward-looking statements

Slide 69: Contact: Isabel Green, Investor Relations Director