Subsea 7 S.a. · OSL:SUBC
Subsea 7 — Acergy — Q3 2010 Earnings Presentation
29 slides from Subsea 7's earnings presentation, Oct 13, 2010
Slide 1: Earnings Presentation Third Quarter Ended August 31, 2010
Exhibit 99.2 EARNINGS PRESENTATION THIRD QUARTER ENDED AUGUST 31, 2010 OCTOBER 13, 2010 3:00 PM UK TIME seabed-to-surface
Slide 2: Forward-Looking Statements
Forward-Looking Statements Forward-Looking Statements: Certain statements made in this announcement may include “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the US Securities Exchange Act of 1934. These statements may be identified by the us
Slide 3: Highlights
Highlights Strong quarterly performance: Continuing operations: Revenue of $495 million Adjusted EBITDA (a) of $124 million Adjusted EBITDA (a) margin of 24.9% Net income of $59 million Diluted EPS of $0.24 Performance reflects: Timing of operations on projects Strong execution of contracts signed p
Slide 4: Updated Guidance for fiscal year 2010
Updated Guidance for fiscal year 2010 Consistently strong results throughout 2010 Confident of our ability to continue to control costs and deliver very good operational performance Updated guidance for fiscal year 2010: On track to meet 2010 revenue expectations 2010 Adjusted EBITDA margin for cont
Slide 5: Medium-term fundamentals remain strong
Medium-term fundamentals remain strong The oil price continues to build confidence in the industry and underpins momentum in our sector SURF environment is improving: First of the large SURF contracts awarded, including CLOV to Acergy Continue to see strong tendering activity worldwide and good grow
Slide 6: North Sea activity visibility remains somewhat limited
North Sea activity visibility remains somewhat limited Significant increase in tendering, especially in the UK Projects remain slow to come to award in Norway Pricing environment for shorter-term work remains competitive Project awards in 2010 expected to create margin headwind in 2011 seabed-to-sur
Slide 7: Conventional and hook-up activity remains strong
Conventional and hook-up activity remains strong Conventional and hook-up activity in West Africa expected to remain strong in short and medium-term Acergy’s substantial local presence remains a competitive strength Supports continuity of activity and maintains good level of backlog Further activity
Slide 8: Acergy in 2011
Acergy in 2011 Maintain a disciplined approach to costs, risk and pricing – building quality backlog and executing strongly 2011 – a year of transition: Good level of activity anticipated Prior year delays in project awards and competitive market for shorter- term work could see some impact on overa
Slide 9: Well positioned to capture future growth opportunities
Well positioned to capture future growth opportunities In a more challenging market we have achieved our key objective as we remained focused on: Execution: Performed strongly and delivered excellent execution for clients in safe and efficient manner Building large projects backlog: At the right pri
Slide 10: Conclusion
Conclusion Very please with the progress we have made We are today where we want and need to be We have world-class engineering, project management and the right fleet of assets to support our clients ambitions in all regions and all water depths Our long-term strategy remains focused on global SURF
Slide 11: Financial highlights
Financial highlights Three-Months Ended Nine-Months Ended In $ millions, except share and per share data Aug 31, Aug 31, Aug 31, Aug 31, 2010 2009 2010 2009 Unaudited Unaudited Unaudited Unaudited Continuing operations: Revenue 495.1 558.3 1,651.8 1,586.9 (a) Adjusted EBITDA 123.5 110.0 380.1 325.0
Slide 12: Regional performance – Northern Europe and Canada
Regional performance – continuing operations Territory 1 - Acergy Northern Europe and Canada Quarter ended Aug.31 Nine months ended Aug.31 $m $m 485 217 166 378 27 34 20 31 Revenue Net operating income Revenue Net operating income Q310 Q309 Q310 Q309 Third Quarter 2010: As expected, lower activity l
Slide 13: Regional performance – Asia and Middle East
Regional performance – continuing operations Territory 1 - Acergy Asia and Middle East Quarter ended Aug.31 Nine months ended Aug.31 $m $m 173 43 144 82 20 5 27 (0.1) Revenue Net operating Revenue Net operating income income/(loss) Q310 Q309 Q310 Q309 Third Quarter 2010: Lower anticipated activity l
Slide 14: Regional performance – Africa and Mediterranean
Regional performance – continuing operations Territory 2 - Acergy Africa and Mediterranean Quarter ended Aug.31 Nine months ended Aug.31 $m $m 262 244 920 680 217 43 27 106 Revenue Net operating income Revenue Net operating income Q310 Q309 Q310 Q309 Third Quarter 2010: Good operational progress on
Slide 15: Regional performance – North America and Mexico
Regional performance – continuing operations Territory 2 - Acergy North America and Mexico Quarter ended Aug.31 Nine months ended Aug.31 $m $m 47 13 11 17 4 12 (0.4) (9) Revenue Net operating (loss) Revenue Net operating (loss) / income / income Q310 Q309 Q310 Q309 Third Quarter 2010: Lower activity
Slide 16: Regional performance – South America
Regional performance – continuing operations Territory 2 - Acergy South America Quarter ended Aug.31 Nine months ended Aug.31 $m $m 46 225 39 161 7 24 (4) 5 Revenue Net operating (loss) Revenue Net operating income / income Q310 Q309 Q310 Q309 Third Quarter 2010: Activity reflects the ships on long-
Slide 17: Regional performance – Corporate
Regional performance – continuing operations Corporate Quarter ended Aug.31 Nine months ended Aug.31 $m $m Revenue Net operating 6 (loss) / income 5 4 24 2 8 6 (31) Revenue Net operating income Q310 Q309 Q310 Q309 Third Quarter 2010: Strong contribution from SHL and a positive albeit lower contribut
Slide 18: Cashflow highlights
Cashflow highlights In $ millions Three-Months Ended Nine-Months Ended Aug 31, 2010 Aug 31, 2010 Unaudited Unaudited Net income – total operations 64.4 189.3 Depreciation and amortisation and Impairment 34.8 96.9 Non cash items 27.6 (25.9) Tax paid (11.9) (55.5) Changes in working capital (0.6) (139
Slide 19: Balance sheet highlights
Balance sheet highlights In $ millions as at Aug 31, November Aug 31, 2010 30, 2009 2009 Unaudited Audited (1) Unaudited Property, plant and equipment 1,202.3 821.8 845.4 Interest in associates and joint ventures 194.4 190.3 175.1 Trade and other receivables 367.4 297.9 304.7 Assets held for sale 24
Slide 20: Acergy and Subsea 7 Combination
Acergy and Subsea 7 Combination Proposed combination will create a global leader in seabed-to- surface engineering and construction Positive feedback from shareholders, clients and our people On track with plans: Combination EGM – November 9, 2010 Fillings submitted to relevant competition authoriti
Slide 21: Appendices
Appendices seabed-to-surface October 13, 2010 slide 21
Slide 22: Major project progression
Major project progression Continuing Projects >$100m, between 5% and 95% complete as at August 31, 2010 - excl. long-term ship charters Moho Bilondo (Congo) EPC4A (Nigeria) PazFlor (Angola) ALNG (Angola) Block 17/18 (Angola) Oso (Nigeria) Deep Panuke (Canada) Gumusut (Malaysia) 0% 20% 40% 60% 80% 10
Slide 23: Backlog analysis – continuing operations
Backlog analysis – continuing operations In $ millions as at: Aug.31.10 May.31.10 Aug.31.09 (1) Backlog 3,496 2,251 2,628 (2) Pre-Backlog 214 205 42 (1) Backlog excludes amounts related to discontinued operations as of Aug.31.10: $14 million, May.31.10: $15 million, Aug.31.09: $72 million (2) Pre-ba
Slide 24: Segmental analysis – continuing operations
Segmental analysis – continuing operations For the three months Territory 1 Territory 2 ended August 31, 2010 Total – Acergy Acergy Acergy Acergy Acergy Acergy continuing NEC AME AFMED NAMEX SAM Corporate operations In $ millions Revenue 165.9 4.7 262.0 10.9 45.8 5.8 495.1 Net operating (loss) / inc
Slide 25: Segmental analysis – continuing operations
Segmental analysis – continuing operations For the nine months Territory 1 Territory 2 Total – ended August 31, 2010 Acergy Acergy Acergy Acergy Acergy Acergy continuing Corporate NEC AME AFMED NAMEX SAM operations In $ millions Revenue 377.6 173.4 919.8 11.8 161.0 8.2 1,651.8 Net operating (loss) /
Slide 26: Discontinued operations performance
Discontinued operations performance Quarter ended Aug.31 Nine months ended Aug.31 $m $m 36 85 46 8 8 21 5 11 Revenue Net operating income Revenue Net operating income Q310 Q309 Q310 Q309 Positive contribution from the Mexilhao Trunkline Project seabed-to-surface October 13, 2010 slide 26
Slide 27: Adjusted EBITDA
Adjusted EBITDA (a) Adjusted EBITDA: The Group calculates Adjusted EBITDA from continuing operations (adjusted earnings before interest, income taxation, depreciation and amortisation) as net income from continuing operations plus finance costs, other gains and losses, taxation, depreciation and amo
Slide 28: Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA Three-Months Ended Three-Months Ended Aug 31, 2010 Aug 31, 2009 Total Total In $ millions (except percentages) Continuing Discontinued Continuing Discontinued operations operations Net income 58.9 5.5 64.4 64.7 2.0 66.7 Depreciation and amortisation 27
Slide 29: Reconciliation of Net Operating Income to Adjusted EBITDA
Reconciliation of Net Operating Income to Adjusted EBITDA Three-Months Ended Three-Months Ended Aug.31, 2010 Aug 31, 2009 Total Total In $ millions (except percentages) Continuing Discontinued Continuing Discontinued operations operations Net operating income 88.7 7.5 96.2 76.9 4.5 81.4 Depreciation