Subsea 7 S.a. · OSL:SUBC
Subsea 7 — Q4 2013 Earnings Presentation
35 slides from Subsea 7's earnings presentation, Mar 5, 2014
Slide 1: Earnings Presentation Fourth Quarter and Full Year 2013
Earnings Presentation Fourth Quarter and Full Year 2013 5 March 2014 12:00 noon UK time
Slide 2: Forward-looking statements
Forward-looking statements Certain statements made in this announcement 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: Q4 2013 summary
Q4 2013 summary HIGHLIGHTS FINANCIAL OPERATIONAL ORDER IN-TAKE • Underlying • 15% Adjusted • Global vessel • Record $11.8bn results in line EBITDA margin, utilisation of backlog with including further 80% maintained, of expectations full-life loss • New vessel which over 80% • Good project provision
Slide 4: Quality backlog - good spread by geography and contract mix
Quality backlog - good spread by geography and contract mix Backlog progression ($ billions) 11.8 11.8 10.2 10.4 9.1 8.5 8.7 8.3 8.1 7.9 7.9 6.7 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Backlog by Award Date Backlog by Execution Date Backlog by Territory 2012 AFGOM 201
Slide 5: Operational highlights
Operational highlights AFGOM APME BRAZIL NSC • CLOV progressed AOM • Gorgon Heavy Lift • Guará-Lula NE • Life-of-Field well; successful and Tie-ins project achieved activities installation of two prepared for its key milestones, continued for hybrid riser offshore phase including Shell, BP, Total to
Slide 6: Vessels under construction
Vessels under construction Ship Principal Details Mission Equipment Operational Seven Waves 550t Tiltable Lay System 2nd Quarter 2014 149.5m x 29.9m x 13m 400t Crane Accommodation for 120 2 x Work class ROV Service Speed 13 knots 1,500t Carousel DP* II 2,500t Carousel Long Term Petrobras Contract PL
Slide 7: Income statement – key highlights
Income statement – key highlights In $ millions, unless otherwise indicated Three months ended Twelve months ended 31 Dec 13 31 Dec 12 31 Dec 13 31 Dec 12 Revenue 1,586 1,611 6,297 6,297 Net operating income (NOI) 109 180 573 808 Gain on sale of NKT Flexibles - - - 244 Income before taxes 114 171 51
Slide 8: Territory performance – Q4 2013
Territory performance – Q4 2013 AFGOM Brazil $673m $206m $89m Revenue NOI Revenue NOI ($13m) APME NSC $544m $160m $63m $9m Revenue NOI Revenue NOI Note: excludes contribution from Corporate segment Page 8
Slide 9: Territory performance – full year 2013
Territory performance – full year 2013 AFGOM Brazil $2,454m $814m $402m Revenue NOI ($318m) Revenue NOI APME NSC $2,514m $498m $395m $86m Revenue NOI Revenue NOI Note: excludes contribution from Corporate segment Page 9
Slide 10: Income statement – supplementary details
Income statement – supplementary details Three months ended Twelve months ended In $ millions 31 Dec 13 31 Dec 12 31 Dec 13 31 Dec 12 Administrative expenses (81) (106) (296) (373) Share of net income of associates 1 44 127 86 and joint ventures Net operating income 109 180 573 808 Finance costs net
Slide 11: Overview of 2013 cash flow
Overview of 2013 cash flow $ millions Cash and cash equivalents at 31 Dec 2012 1,288 Net cash generated from operating Includes decrease in net operating 981 activities assets of $330m Includes capital expenditure of $739m Net cash used in investing activities (679) mainly on vessel construction pro
Slide 12: Summary balance sheet
Summary balance sheet 31 Dec 31 Dec 31 Dec 31 Dec In $ millions 2013 2012 In $ millions 2013 2012 Assets Equity & Liabilities Non-current assets Total Equity 6,612 6,368 Goodwill 2,585 2,575 Non-current liabilities Property, plant and equipment 4,098 3,748 Non-current portion of borrowings 636 1,041
Slide 13: 2014 financial guidance
2014 financial guidance • Group revenue expected to increase from 2013 level • Adjusted EBITDA expected to increase moderately from that achieved in 2013 after adding back the $355 million full life loss provision recognised on the Guará-Lula NE project • Capex: $900 million - $1.0 billion, comprisi
Slide 14: 2014 financial guidance (continued)
2014 financial guidance (continued) • Contribution from Seaway Heavy Lifting joint venture expected to decline, due to a multi-month in-shipyard life extension of the Stanislav Yudin; SapuraAcergy’s contribution also expected to decline from record high level in 2013 • Share repurchase programme con
Slide 15: Vessel new build programme: realised and projected capex
Vessel new build programme: realised and projected capex1 $millions 557 570 600 Total (E) - $1.9 billion 190 Up to 31 Dec 2013 2014 E 2015 E 2016 E 2 Notes: 1 Comprises four PLSVs being constructed for long-term contracts with Petrobras (including Seven Waves), and construction of the Seven Arctic a
Slide 16: Market overview and outlook
Market overview and outlook Delays in project awards remain a feature of the industry, driven by clients’ capex constraints AFGOM • Timing of future market awards uncertain but SURF tendering activity is good in West and East Africa • Short-term softening in West Africa for Conventional services • U
Slide 17: Market overview and outlook (continued)
Market overview and outlook (continued) Brazil • Benefits of PLSV renewals to be fully reflected from H2 2014 onwards NSC • Continuing strong demand for Life-of-Field work and our Bundle offering • Market awards for some large SURF projects currently delayed in the UK and Norwegian sectors • Seven O
Slide 18: Summary
Summary • 2013 was another year of good performance for Subsea 7, marred by one challenging project • Q4 2013 saw solid results despite the additional $49 million full-life loss provision on Guará-Lula NE project • Order intake expected to slow in the first half of 2014 • Vessel construction program
Slide 19: Appendix
subses 7 Appendix www.subsea7.com seabed-to-surface
Slide 20: Major project progression
Major project progression Continuing projects >$100m between 5% and 95% complete as at 31 Dec 2013 excl. long-term PLSV contracts and Life-of-Field day-rate contracts Line 60 (Mexico) West Franklin (North Sea) Laggan Tormore (North Sea) CLOV (Angola) G1 (APME) Africa, Gulf of Guará-Lula NE (Brazil)
Slide 21: Segmental analysis
Segmental analysis For the three months ended 31 Dec 2013 In $ millions, Unaudited AFGOM APME BRAZIL NSC CORP TOTAL Revenue 672.9 159.7 205.7 543.8 3.6 1,585.7 Net operating income/(loss) from ops 89.3 8.5 (12.7) 63.3 (39.0) 109.4 Finance income 3.5 Other gains and losses 13.6 Finance costs (12.7) I
Slide 22: Adjusted EBITDA
Adjusted EBITDA • Adjusted earnings before interest, taxation, depreciation and amortisation (‘Adjusted EBITDA’) is a non-IFRS measure that represents net income before additional specific items that are considered to impact the comparison of the Group’s performance either year-on-year or with other
Slide 23: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA Net operating income to Adjusted EBITDA Three Months Ended Three Months Ended For the period (in $millions) 31 Dec 2013 Unaudited 31 Dec 2012 Unaudited Net operating income 109 180 Depreciation, amortisation and mobilisation 97 87 Impairment 36 3 Adjusted EBITDA 242
Slide 24: Gorgon Heavy Lift and Tie-ins, and Umbilicals - Australia
Gorgon Heavy Lift and Tie-ins, and Umbilicals - Australia • Located 130km off the northwest coast of Western Australia • The Gorgon project is one of the world's largest natural gas projects • Heaviest and deepest subsea lifts in the history of Subsea 7 – 20 subsea structures and foundations (up to
Slide 25: CLOV Block 17 - Angola
CLOV Block 17 - Angola • Technology-rich SURF project • High local content with Sonamet fabrication facility • Successful deployment of Seven Borealis to install – 40km of pipe-in-pipe production, 60km of water injection, 32km of gas export, and 37 spools and 15 jumpers • Two Hybrid Riser Towers and
Slide 26: Aasta Hansteen gas field - Norway
Aasta Hansteen gas field - Norway • Technology-rich SURF project • 1200m water depth, deepest in North Sea • 300km off northern Norway, harsh environment • First SCRs (x4) in the Norwegian Sea, manufactured at Vigra spool base • First installation of BUTTING Bubi® mechanically lined pipe by reeling
Slide 27: Operational facilities
Operational facilities Spoolbases Fabrication Yards Page 27
Slide 28: Rigid pipelay/heavy lift assets
Rigid pipelay/heavy lift assets Page 28
Slide 29: Diving Support Vessels
Diving Support Vessels Page 29
Slide 30: Construction/vertical flex-lay assets
Construction/vertical flex-lay assets Page 30
Slide 31: Construction/horizontal flex-lay assets
Construction/horizontal flex-lay assets Page 31
Slide 32: Light construction/Life-of-Field assets
Light construction/Life-of-Field assets Page 32
Slide 33: Other assets
subsese 7 Other assets Jack-up vessel Trenching vessel Skandi Skansen**** Seven Inagha Work class ROVs uv a Drilling rig ROVs * Owned and operated by a joint venture *“* Formerly the Seven Havila wee Long-term charter from a vessel-owning joint venture ™ Formerly the Seven Sisters » Long-term charte
Slide 34: Under construction
Under construction 2 3 4 Page 34
Slide 35: Page 35
seabed-to-surface www.subsea7.com