Saipem S.p.a. · MIL:SPM
Saipem — FY2023 Earnings Presentation
49 slides from Saipem's earnings presentation, Feb 29, 2024
Slide 1: FY 2023 Results and Strategy Update
FY 2023 Results and Strategy Update 29th February 2024
Slide 2: Disclaimer
Disclaimer This communication does not constitute an offer or an invitation to subscribe for or purchase any securities. Forward-looking statements contained in this presentation regarding future events and future results are based on current expectations, estimates, forecasts and projections about
Slide 3: Agenda
Agenda 1 Highlights 2 Financial review 3 Strategic update 4 Appendix FY 2023 Results and Strategy Update
Slide 4: Strong delivery in 4Q 2023
Strong delivery in 4Q 2023 3.5 B€ 286 M€ EBITDA Revenues +91% Y-o-Y, +24% Q-o-Q +20% Y-o-Y, +16% Q-o-Q 8.1% EBITDA margin 91 M€ 5.7 B€ Cash Flow Order Intake 216 M€ Net Cash position 1.6x Book-to-Bill (pre-IFRS 16) as of Dec-23 56% in Offshore E&C 1. Q-o-Q refers to the delta between 4Q 2023 and 3Q
Slide 5: Growth converting into material cash flow generation
Growth converting into material cash flow generation Revenues (B€) EBITDA (M€) Operating Cash Flow1 (M€) EBITDA margin 109 M€ total Operating Cash Flow (2022–2023) 5.6% 8.1% 3.5 370 286 2.9 3.0 2.9 2.8 2.6 230 219 2.4 91 103 74 191 39 168 1.8 142 131 (64) 102 (123) (381) 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2
Slide 6: Growth, delivery and cashflow generation in 2023
Growth, delivery and cashflow generation in 2023 Record order 18 B€ 30 B€ Order intake in 2023 Backlog intake & backlog 65% in Offshore E&C 55% in Offshore E&C Steady execution ≈ 62% legacy backlog1 ≈ 100 M€ residual further de-risking reduction cash outflow from 5 B€ as of Dec-21 expected in 2024 r
Slide 7: Two years in-a-row of over-performance
Two years in-a-row of over-performance FY 2022 FY 2023 Guidance Actual Guidance Actual Revenues > 9 B€ 10.0 B€ ✓ > 11 B€ 11.9 B€ ✓ EBITDA > 550 M€ 595 M€ ✓ ≈ 850 M€ 926 M€ ✓ Net Debt (Post-IFRS16) ≈ 300 M€ 264 M€ ✓ ≈ 500 M€ 261 M€ ✓ 7 FY 2023 Results and Strategy Update
Slide 8: Agenda: Financial review
Agenda 1 Highlights 2 Financial review 3 Strategic update 4 Appendix FY 2023 Results and Strategy Update
Slide 9: FY 2023 results (M€)
FY 2023 results (M€) Revenues Adjusted EBITDA1 Adjusted Net Result2 Operating Cash Flow3 +19% +56% 6.0% margin 7.8% 11,874 926 9,980 586 595 179 FY22 FY23 FY22 FY23 FY22 FY23 FY22 FY23 (139) (477) 1. FY 2022 EBITDA exclude non-recurring costs of 52 M€, worth 0.6 p.p. in terms of EBITDA margin. FY 20
Slide 10: FY 2023 results – Asset Based Services (M€)
FY 2023 results – Asset Based Services (M€) Asset Based Services Revenues Adjusted EBITDA1 Business Lines Included +21% +48% 8.2% margin 10.1% Offshore Offshore E&C Wind ▪ Broad-based growth across regions and clients ▪ Material improvement in EBITDA margin 6,069 614 • Higher incidence of subsea 5,0
Slide 11: FY 2023 results – Drilling Offshore (M€)
FY 2023 results – Drilling Offshore (M€) Drilling Offshore Revenues Adjusted EBITDA1 Business Lines Included +32% +73% 30.8% margin 40.5% Drilling Offshore ▪ Strong growth in Revenues and EBITDA 743 301 • Positive evolution of day-rates 565 174 • Higher utilisation rate of key vessels • Increased fl
Slide 12: FY 2023 results – Energy Carriers (M€)
FY 2023 results – Energy Carriers (M€) Energy Carriers Revenues Adjusted EBITDA1 Business Lines Included +15% 0.2% margin 0.2% Onshore Sustainable Robotics & E&C Infrastructures Industrialized Solutions 5,062 ▪ Revenue growth driven by strong execution 4,389 • Legacy projects progressing at sustaine
Slide 13: FY 2023 results (Income Statement)
FY 2023 results (Income Statement) Group – Adjusted Group – Reported Income Statement Income Statement M€ FY 2022 FY 2023 Change FY 2022 FY 2023 Change Revenue 9,980 11,874 1,894 9,980 11,874 1,894 Total costs (9,385) (10,948) (1,563) (9,437) (10,948) (1,511) EBITDA 595 926 331 543 926 383 EBITDA ma
Slide 14: Net Debt evolution in 2023
Net Debt evolution in 2023 Total Cash Flow 160 M€ Capital-light vessel strategy, net increase in lease commitments and extension of average E&C vessels lease Operating Cash Flow 586 M€ maturity from 0.8 years to (968 M€ excluding legacy projects) 1.3 years 264 Including purchase of 261 Sea Lion 7 fo
Slide 15: Debt and liquidity
Debt and liquidity Debt issuance and liability management Liquidity (M€) Gross Debt – nominal amount (M€) 31st December 2023 31st December 2023 3,079 2,417 M€ 890 M€ Debt issued in 2023 470 390 M€ SACE facility drawn ▪ Avg. tenor: 3.1 years 500 ▪ Avg. cost of debt: ≈ 4%1 500 M€ Convertible Bond issu
Slide 16: Agenda: Strategic update
Agenda 1 Highlights 2 Financial review 3 Strategic update 4 Appendix FY 2023 Results and Strategy Update
Slide 17: Major strategic developments of the last two years
Major strategic developments of the last two years Strategic Refocus Change Management Disposal of the Drilling Onshore business Strong focus on cash flow generation Commercial focus on Offshore E&C Capital allocation discipline Strengthen value proposition on Gas & Low Carbon Centralised commercial
Slide 18: A strategic plan based on five pillars
A strategic plan based on five pillars 1 Execution Excellence 5 2 Dividends One Saipem 4 3 Innovation & Operational & Energy Transition Financial Solutions Flexibility Health and Safety and Business Ethics as the bedrock of Saipem’s way of operating 18 FY 2023 Results and Strategy Update
Slide 19: Strategic pillars unpacked
Strategic pillars unpacked 1 Stronger integration of Saipem competencies Execution 30 B€ Excellence Optimise assets utilization and rejuvenate fleet Record high backlog 2 Exploit commercial and operational synergies in integrated offshore & ≈ 20% One Saipem Expected contribution of One onshore field
Slide 20: Vessel strategy: capacity, flexibility and rejuvenation
Vessel strategy: capacity, flexibility and rejuvenation Fleet details Lease additional E&C vessels to expand capacity and (Dec-23) Additional capacity… capture future opportunities …with a capital-light and flexible Capturing market momentum whilst retaining flexibility approach… 9 key E&C vessels o
Slide 21: Saipem’s solutions for transitioning away from fossil fuels
Saipem’s solutions for transitioning away from fossil fuels Mature Solutions Ready to market New developments Offshore drilling Offshore upstream CRUDE OIL Offshore decommissioning Life of Field service Subsea drones HYDRONE, FLATFISH Onshore upstream and LNG NATURAL GAS Energy Offshore fixed wind O
Slide 22: Backlog size and quality grants high visibility
Backlog size and quality grants high visibility Record high backlog Drilling Offshore ▪ ≈ 90% coverage of expected 2024 revenues Asset Based Services Energy Carriers Revenues ▪ ≈ 60% coverage of 2024-2027 revenues ▪ Coverage level to increase further in 1H 2024 7% 39% 54% ▪ > 60% of current backlog
Slide 23: Order intake built on solid assumptions and on proven track record
Order intake built on solid assumptions and on proven track record 2020-2023 order intake 50 B€ expected order intake for 2024-2027 equal to 47 B€ of which 16 B€ in Low & Zero Carbon projects Drilling Asset Based Services Energy Carriers Offshore Offshore Offshore Drilling Onshore Sustainable Roboti
Slide 24: Financial targets
Financial targets 2024 Guidance Medium-term targets Revenues 12.7 – 13.3 B€ 4-5% CAGR (2023-2027) EBITDA margin ≈ 10% ≈ 12% (in 2027) Operating Cash Flow 740 - 780 M€ ≈3 B€ (post Leases)1 (cumulated 2024-2027) Capex 440 - 480 M€ ≈1.4 B€ (cumulated 2024-2027) Distribute to shareholders ≈30-40% of Fre
Slide 25: Q&A Session
Q&A Session FY 2023 results and and 25 FY 2023 Results strategy update Strategy Update
Slide 26: Agenda: Appendix
Agenda 1 Highlights 2 Financial review 3 Strategic update 4 Appendix FY 2023 Results and Strategy Update
Slide 27: Three Reporting Segments
Reporting according to business lines and IFRS 8 Business Lines Drilling Drilling Drilling Offshore Offshore Offshore Three Reporting Segments AssetAsset Based Offshore Offshore Based Services Services E&C Wind Energy Robotics & Energy Carriers Onshore Sustainable Carriers Industrialized E&C Infrast
Slide 28: Offshore: business guidelines for 2024–2027
Offshore: business guidelines for 2024–2027 ▪ Improve operational performance to enhance value delivery from the 16 B€ backlog ▪ Ensure full fleet utilization (“zero-idleness”) also for 2026-2027 Offshore ▪ Selectively increase E&C fleet size with a capital-light model to capture further opportuniti
Slide 29: Onshore: business guidelines for 2024–2027
Onshore: business guidelines for 2024–2027 ▪ Exploit One Saipem competitive advantage in delivering large offshore/onshore full field development projects Onshore ▪ Increase further the share of de-risked project acquisition (Direct negotiations, FEED, Cost+) E&C ▪ Accelerate on energy transition so
Slide 30: Group results in 2023
Group results in 2023 Q-o-Q comparison (M€) Revenues EBITDA Net Result +7% +9% +16% +15% +5% +24% 7.4% 7.9% 7.6% 8.1% 100 3,511 3,016 286 2,765 2,582 219 230 191 40 39 0 1Q23 2Q23 3Q23 4Q23 1Q23 2Q23 3Q23 4Q23 1Q23 2Q23 3Q23 4Q23 30 FY 2023 Results and Strategy Update
Slide 31: Results by reporting lines in 2023
Results by reporting lines in 2023 Q-o-Q comparison (M€) Asset Based Services Drilling Offshore Energy Carriers Revenues EBITDA Revenues EBITDA Revenues EBITDA +22% +4% +31% +24% +6% +31% -1% -1% +17% +7% +3% +13% -6% +17% +0% margin margin margin 9.8% 10.0% 10.2% 10.3% 37.8% 40.8% 42.4% 41.1% 0.6%
Slide 32: D&A, financial expenses and taxes
D&A, financial expenses and taxes FY 2023 FY22 FY23 M€ 489 445 314 313 D&A 123 72 59 53 Drilling Offshore Energy Carriers Asset Based Services Total D&A FY 2023 M€ 167 65 4 98 Financial expenses1 Financing costs Project hedging Exchange Differences Financial expenses costs ▪ Taxes at 145 M€ in FY 20
Slide 33: Net Debt evolution in Q4 2023
Net Debt evolution in Q4 2023 Total Cash Flow 91 M€ Operating Cash Flow 370 M€ (or 418 M€ excluding legacy projects) 261 171 296 477 (125) (254) (78) 81 276 (216) (163) 47 Net Debt IFRS 16 Net Debt Adjusted Delta Working Cash outflow Capex Cash-in from Other² Net Debt IFRS 16 Net Debt 30-Sep-2023 im
Slide 34: Lease liabilities in 2023
Lease liabilities in 2023 Evolution of IFRS-16 Lease Liabilities1 in 2023 (M€) 128 (119) 176 477 (28) 320 Dec-22 Utilisation in Write offs and Extention & New Dec-23 2023 exchange renewals of contracts differences existing contracts Average weighted duration of E&C vessels leases 0.8 +59% 1.3 Years
Slide 35: Financial guarantees
Financial guarantees Stock of financial guarantees (M€) 9,000 7,995 7,898 100% 7,234 7,019 7,393 80% 5,461 Guarantees 6,000 43% 60% 34% 31% 35% 31% 27% 40% 3,000 Guarantees/ 20% backlog 0 0% Dec 2018 Dec 2019 Dec 2020 Dec 2021 Dec 2022 Dec 2023 Diversified pool of institutions providing guarantees S
Slide 36: E&C market near-term opportunities worth ≈ 52 B€
E&C market near-term1 opportunities worth ≈ 52 B€ Robust and stable project pipeline, weighed towards offshore Europe, CIS & Central Asia ≈ 3.9 B€ Asia Pacific ▪ Conventional Visibility stable at peak levels ▪ Pipelines ≈ 4.8 B€ ▪ Renewables & green Americas ▪ Conventional ≈ 4.0 B€ ▪ SURF Stable off
Slide 37: Backlog details (1/5)
Backlog details (1/5) Others 17% Related to One Saipem integrated onshore & 3% 1% offshore projects 4% 6% 37% Backlog 11% Total of 11% breakdown by project type 30 B€ Related to Low & Zero Carbon projects 31-Dec-23 13% 3% 12% Legend 4% 1% 5% Asset Based Services Energy Carriers Sealines Drilling Off
Slide 38: Backlog details (2/5)
Backlog details (2/5) Backlog by business line Backlog by geography Backlog by year of acquisition North Africa 4% Italy Energy Asset Based 5% Carriers Services Far East 6% Pre 2022 28% Middle East Americas 11% 2023 11,534 M€ 41% 46% 39% 16,285 M€ 54% Europe 11% 2022 Sub Saharan 26% 1,983 M€ Africa
Slide 39: Backlog details (3/5)
Backlog details (3/5) Backlog by customer type Backlog by energy type Others1 Drilling 10% 7% Oil Low/zero 16% carbon2 11% National Oil Companies International Oil 51% Companies & Independent Companies 39% Gas 66% 30 B€ 30 B€ 31-Dec-23 31-Dec-23 1. Those mainly refer to infrastructure projects and o
Slide 40: Backlog details (4/5)
Backlog details (4/5) Top 20 projects by backlog Clients breakdown by backlog Project 1 Project 2 Client 1 Project 3 Project 4 14% Client 2 Project 5 25% Project 6 Client 3 Project 7 Project 8 Client 4 Project 9 13% Project 10 Client 5 Project 11 Project 12 5% Project 13 Client 6 Project 14 5% Proje
Slide 41: Backlog details (5/5)
Backlog details (5/5) Backlog1 (as of 31-Dec-23): distribution by year of expected execution (M€) 11,647 9,832 782 541 4,445 5,772 3,470 194 2,551 2,665 6,420 5,821 466 2,913 954 1,131 2024 2025 2026 2027+ Asset Based Services Energy Carriers Drilling Offshore Non-consolidated Backlog By Year Of Exe
Slide 42: Backlog progressively shifting towards Offshore E&C
Backlog progressively shifting towards Offshore E&C 35.0 100% 29.8 30.0 27.6 Offshore E&C 24.0 24.1 25.4 80% 25.0 22.7 22.2 23.0 22.7 backlog grew by 9 20.0 12.5 13.5 60% 13.0 B€ in the last 2 15.3 13.3 13.1 15.0 15.3 14.3 15.4 40% years… 10.0 15.1 16.3 20% 11.0 12.4 …increasing weight 5.0 7.4 7.9 7
Slide 43: Saipem Sustainability Plan 2024-2027
Saipem Sustainability Plan 2024-2027 3 PILLARS Climate Change Mitigation & Environmental Protection People Centrality Value Creation 1. Path to Net Zero 3. Health & Safety 7. Responsible supply chain 2. Biodiversity and Pollution 4. Valuing People 8. Business ethics prevention 5. Diversity & Inclusi
Slide 44: GHG emissions (t CO2eq)
GHG emissions reduction path Baseline 2018 1.31 M tCO2e Scope 2 Scope 1 & 2 Carbon Neutrality 50% reduction by NET ZERO by 2050 by 2025 2035 GHG emissions (t CO2eq) Phase 1: Retrofit (2018-2030) Phase 2: Renewals (2030-2040) Phase 3: Renewables/CCS (2040-2050) Offsetting Residual Emissions GHG Emiss
Slide 45: Saipem ESG results by agency
Saipem ESG results by agency Saipem rating Average sector rating Scale A (6,7) BBB CCC < AAA 19.4 27.1 100 < 0 62 48 0 < 100 77 25 0 < 100 B C D<A 89.7 68.1 0 < 100 6.6 5 0 < 10 B- C- D- < A+ 1. Bloomberg rating has been calculated as an average of ESG Disclosure and ESG score ratings 45 2.
Slide 46: Drilling vessel engagement map (2023-2025)
Drilling vessel engagement map (2023-2025) 2023 2024 2025 Client Area Committed Saipem 12000 Eni, Azule Ivory Coast, Angola Ultra Deep-water and harsh environment Saipem 10000 Eni Egypt, Italy Optional period US GoM, Not marketable due to Santorini Eni in-yard maintenance Worldwide Deep Value Drille
Slide 47: Saipem owned fleet (key vessels)
Saipem owned fleet (key vessels) Offshore E&C Drilling Offshore Installation and Lifting Deep Water Semisub Sacarabeo 9 Sacarabeo 8 Saipem 3000 Saipem 7000 Subsea Field Development Deep Water Drillship Saipem 12000 Saipem 10000 Constellation Saipem FDS2 Saipem FDS Santorini Pipelayers Shallow Water
Slide 48: One Saipem – track record of integrated projects and expected pipeline
One Saipem – track record of integrated projects and expected pipeline Drilling Offshore Asset Based Services Energy Carriers Recent awards Zohr Field (2016) Egypt ✓ ✓ Baleine Field (2022) Ivory Coast ✓ ✓ ✓ Quiluma & Mabuqueiro Fields (2022) Angola ✓ ✓ Cassiopea (2022) Italy ✓ ✓ Hail and Gasha (2023
Slide 49: Saipem
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