Sbm Offshore Nv · EURONEXT:SBMO
Sbm Offshore Nv — Q1 2017 Earnings Presentation
35 slides from Sbm Offshore Nv's earnings presentation, May 10, 2017
Slide 1: First Quarter 2017 Trading Update
First Quarter 2017 Trading Update May 10, 2017 © SBM Offshore 2017. All rights reserved. www.sbmoffshore.com
Slide 2: Disclaimer
Disclaimer The companies in which SBM Offshore N.V. directly and indirectly owns investments are separate legal entities. In this presentation “SBM Offshore” and “SBM” are sometimes used for convenience where references are made to SBM Offshore N.V. and its subsidiaries in general. These expressions
Slide 3: Leading FPSO Player Worldwide
Leading FPSO Player Worldwide The Company Performance Headquartered in The Netherlands c. 300 years of cumulative operational experience 5 Regional Centers 99.0% total historical uptime 10 Operational Shore Bases 1.6 MM bopd throughput capacity/day Lease & Operate Fleet Financials (US$ billion) 14 F
Slide 4: Key Messages
Key Messages Shareholder Industry Returns Outlook 34 FPSOs Strategic Delivered Positioning to Date Performance Client in line with Engagement Guidance 4
Slide 5: 1Q 2017 Review
1Q 2017 Review Macro View Company Positioning Outlook © SBM Offshore 2017. All rights reserved. www.sbmoffshore.com
Slide 6: Total Overview
Total Overview (US$ millions) Directional Revenue Proportional Net Debt 442 5,000 420 4,000 3,000 3,128 3,060 2,000 1,000 0 1Q16 1Q17 -1,000 FY16 1Q17 Revolving Credit Other Project Finance Cash -2,000 Proportional Borrowings(1) Undrawn Facilities + Cash 1Q17 1Q17 $3,902 $1,842 Proportional Proporti
Slide 7: HSSE
HSSE Health & Safety Committed to HSSE 1.2 Total Recordable Injury Frequency Rate (per 200k man- hours) 1 Strengthening safety 0.8 culture 0.6 0.4 0.2 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 Oil Majors1Benchmark SBM Offshore Lowering emissions Environment Environmental performance per product
Slide 8: Compliance
Compliance January 24, July 15, 2016 July 16, 2016 October 6, 2016 October 9, 2016 2016 Settlement with Brazilian After two years of Brazilian Fifth SBM Offshore remains Prosecutor’s office regarding negotiations, the Leniency Agreement is Chamber confirms decision committed to engage with all accus
Slide 9: Macro View
1Q 2017 Review Macro View Company Positioning Outlook © SBM Offshore 2017. All rights reserved. www.sbmoffshore.com
Slide 10: Oil Industry Investment
Oil Industry Investment 250 200 150 Billion US$ 100 Capex bottoming out in 2016 50 0 2012 2013 2014 2015 2016 e2017 e2018 e2019 Oil Majors Capex 600 500 But slow ramp-up expected 400 2005-2016 Average 300 200 100 Gradual 0 2012 2013 2014 2015 2016 e2017 e2018 e2019 Global Subsea Tree Awards recovery
Slide 11: New Reality
New Reality Lowered project costs Break-even price per barrel of oil Johan Castberg Cost savings, smaller outlay Vito Libra Break-even prices decreased by ~30 to ~60 % Mad Dog 2 Liza US$30 US$90 Improving economics Source: Various media quotes, company presentations, Upstream Online © SBM Offshore 2
Slide 12: Overall Market
Overall Market 25 20 Rock bottom in 2016 15 10 Gradual recovery from 2017 5 6 5 2 2 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 e2017 e2018 SBM Offshore Awards FPSO Awards FPSO Awards Bear Case FPSO Awards Bull Case Cautiously optimistic outlook Source: EMA FPS Report – 1Q-2017 © S
Slide 13: Concentrated Industry Experience
Concentrated Industry Experience 300 Cumulative FPSO Operating Experience (Yrs) 250 SBM Offshore 200 Unique track record in EPC, 150 FPSO delivery and operations 100 3 600 kboepd 2 600 50 kboepd 1 200 kboepd 0 1 6 11 16 21 26 31 36 41 Total number FPSOs built (Lease and EPC) = Industry peers, bubble
Slide 14: Changing FPSO Landscape
Changing FPSO Landscape 30 Number of lease contractors with operating FPSO* 25 20 15 Number of FPSO contractors 26 8 23 decreased since 2009 10 14 16 5 10 0 2003 2006 2009 2012 2016 Active lease contractors Non-active lease contractors *joint ventures included Stable Lease market share Proportion of
Slide 15: Project Delivery
Project Delivery SBM Offshore delivered 10 out of 16 FPSOs * closest to schedule On-time delivery difficult * * * * ..but key in Upstream economics Non-SBM Offshore Contractors * 11 month delay results in * ~US$600 million lower * project NPV1 Experience matters N=50 -5 5 15 25 35 Generation 3 FPSO
Slide 16: Company Positioning
1Q 2017 Review Macro View Company Positioning Outlook © SBM Offshore 2017. All rights reserved. www.sbmoffshore.com
Slide 17: Floating Solution Strategy
Floating Solution Strategy Optimize Our Current Business Transform Deepwater Projects Innovate Floating at Large © SBM Offshore 2017. All rights reserved. www.sbmoffshore.com 17
Slide 18: Optimize for the Future
Optimize for the Future 12,000 800 Staff levels Cost savings on employee benefits (SBM staff excluding contractors) 10,000 700 Δ= -54% 8,000 Δ = US$ -280 mln 600 6,000 500 4,000 2,000 400 - 300 2013 2014 2015 2016 2014 2015 2016 2017E Permanent Contractors yard Cost Savings SBM Offshore delivered it
Slide 19: FAST4WARD Progress
FAST4WARD Progress Hull design approval LIGHTER Ready for award Advanced negotiations with Hull & Accommodation top tier Asian yards Design approval Pre-FEED FEED Detailed design Early EPC activity Today Topsides catalogue Game-changing SBM standards Enhanced design Early EPC activity program © SBM
Slide 20: Energy Mix Outlook
Energy Mix Outlook Change in total primary energy demand 2000 1990-2015 2015-2040 Oil remains leading 1500 Mtoe 1000 Gas gains market share 500 0 Coal Oil Gas Renew. 1 Coal Oil Gas Renew. 1 Renewables strong growth Oil share in energy mix 2015 2035 Gas main transition fuel 1 Includes nuclear energy
Slide 21: Gas & Floating Wind
Gas & Floating Wind Delivering products and equipment in Upstream Gas since 2005 Leveraging experience to deploy new technologies © SBM Offshore 2017. All rights reserved. www.sbmoffshore.com 21
Slide 22: Outlook
1Q 2017 Review Macro View Company Positioning Outlook © SBM Offshore 2017. All rights reserved. www.sbmoffshore.com
Slide 23: Backlog and Debt Repayment
Backlog and Debt Repayment As of December 31, 2016 (US$ billions) Directional Backlog(1) US$ 17.1 bn Average of 63% of L&O backlog represents operating cash flow 1.8 L&O Average Portfolio Duration: 13.0 years(2) 1.6 17.0 1.4 1.2 1 0.8 0.6 0.4 0.2 0.1 0 2017 2019 2021 2023 2025 2027 2029 2031 2033 20
Slide 24: Cash Dividend
Cash Dividend Payment of dividend of US$0.23 per share – Approved at Annual General Meeting of Shareholders on April 13, 2017 – Paid in Euros using an exchange rate of 1.0655, which equates to €0.2159 per ordinary share – The dividend is payable on May 12, 2017 to all shareholders of record as at Ap
Slide 25: 2017 Guidance
2017 Guidance 2017 Directional Revenue guidance around US$1.7 billion – Turnkey around US$0.2 billion – Lease & Operate around US$1.5 billion 2017 Directional EBITDA guidance around US$750 million © SBM Offshore 2017. All rights reserved. www.sbmoffshore.com 25
Slide 26: Appendix
Appendix © SBM Offshore 2017. All rights reserved. www.sbmoffshore.com
Slide 27: IFRS Revenue and Net Debt
IFRS Revenue and Net Debt (US$ millions) IFRS Revenue 507 435 1Q 16 1Q 17 IFRS Net Debt 7,000 6,000 5,000 4,000 3,000 5,216 5,084 2,000 1,000 0 (1,000) FY16 1Q 17 © SBM Offshore 2017. All rights reserved. www.sbmoffshore.com 27
Slide 28: Cash Flow Model and Allocation
Cash Flow Model and Allocation Lease & Operate Cash Generation Cash Flow After Debt Funds: - Dividends - Growth Long Term Debt at Project Level: - Model is project finance plus up to c.50% equity sell down - Capacity for 2 FPSO awards p.a. Turnkey Cash Generation - RCF provides bridge financing Disc
Slide 29: IFRS 10 & 11
IFRS 10 & 11 Lease Joint Ventures Contract SBM Share % Directional(1) IFRS Type FPSO N’Goma FPSO FL 50% Proportional Equity FPSO Saxi Batuque FL 50% Proportional Equity FPSO Mondo FL 50% Proportional Equity FPSO Cdde de Ilhabela FL 62.25% Proportional Full consolidation FPSO Cdde de Maricá FL 56% Pr
Slide 30: Group Loans & Borrowings
Group Loans & Borrowings (US$ millions) Net Book Value as of March 31, 2017 Proportional Full Amount IFRS (Business Ownership) PROJECT FINANCE FACILITIES DRAWN FPSO Cidade de Paraty $ 691 $ 691 $ 349 MOPU Deep Panuke 324 324 324 FPSO Cidade de Anchieta 390 390 390 FPSO Cidade de Ilhabela 980 980 610
Slide 31: Revolving Credit Facility
Revolving Credit Facility Key Characteristics Covenant Calculations Historical and Estimated Awards Amount US$1.0 billion Tangible Net Worth divided by Total 6 years + one-year extension Solvency Tangible Assets Tenor Ratio Min 1H16 FY16 Door-to-door maturity of 7 years 25% 32.7% 32.4% Accordion SBM
Slide 32: Revised RCF Covenant Definitions
Revised RCF Covenant Definitions Key Financial Covenant Definition Solvency Ratio Tangible Net Worth(1) divided by Total Tangible Assets(2) > 25% Leverage Ratio Consolidated Net Borrowings(3) divided by Adjusted EBITDA(4) – <3.75x at June 30, 2016 – <4.25x at December 31, 2016 – <4.50x at June 30, 2
Slide 33: SBM Lease and Operate Portfolio
SBM Lease and Operate Portfolio As of December 31, 2016 (US$ billions) L&O Portfolio Average Duration: 13.0 years(1) Vessel Name Field Name Client Country 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
Slide 34: Liquids Cost Curve
Liquids Cost Curve 1 100 Weighted average break-even price Oil sands Other onshore Shale/tight oil Brent Equivalent Breakeven Price $US/bbl 0.8 80 Deep water competitive Offshore shelf 63 66 0.6 60 52 50 49 0.4 40 43 32 43 Development costs decreased across the board OFFSHORE 50 Producing DEEP WATER
Slide 35: © SBM Offshore 2017. All rights reserved. www.sbmoffshore.com
© SBM Offshore 2017. All rights reserved. www.sbmoffshore.com