Slide 1: General Presentation
General Presentation May 2014 FY2013 Presentation, February 2014 © SBM Offshore 2013. All rights reserved. www.sbmoffshore.com IR - 09/05/2014
Slide 2: Disclaimer
Disclaimer Some of the statements contained in Should one or more of these risks or this presentation that are not historical uncertainties materialize, or should facts are statements of future underlying assumptions prove expectations and other forward- incorrect, actual results may vary looking st
Slide 3: Agenda
Agenda Who we are, where we are Macro View Strategy 3
Slide 4: No.1 FPSO Player Worldwide
No.1 FPSO Player Worldwide The Company Lease Fleet 5 Execution Centres 14 FPSOs 10 Operational Shore Bases 2 FSOs 5 Representative Offices 1 Semi Sub 9,936 Employees 2 MOPU Financials in US$ billion Performance YE2013 2014 Directional1 Guidance 3.3 167 years of FPSO operation 4 99% Uptime Directiona
Slide 5: Delivering the Full Product Lifecycle
Delivering the Full Product Lifecycle Engineering Procurement 50 years of industry firsts Integrated supply chain Leading edge technology Global efficiencies Local sourcing Product Life Extension Construction Leader in FPSO relocation Strategic partnerships World class after sales Unrivalled project
Slide 6: Ticking all the Boxes
Ticking all the Boxes We provide great TECHNICAL solutions We provide LOCAL solutions We provide FINANCIAL solutions IR - 09/05/2014 6
Slide 7: Q1 2014 in Context
Q1 2014 in Context FY13 9,936 US$400 mln 99% employees Fleet Uptime 0.4 project as of LTIFR financing FY13 Cidade de Kikeh Directional¹ Ilhabela 1st brownfield Revenue US$782 mln module integration FPSO³ extension project completed delivered Deep US$244 mln US$21.7bn IFRS YTD Panuke Total Order Dire
Slide 8: Q1 2014 Key Figures
Q1 2014 Key Figures (in millions of US$) IR - 09/05/2014 *Restated for comparison purposes ¹Directional view is a non-IFRS disclosure, which treats all leases as operating leases and consolidates the vessel joint ventures proportionally. 8
Slide 9: Directional Backlog
Directional1 Backlog (in billions of US$) US$ 23.0 bn (as of December 31, 2013) Lease & Operate Backlog: Directional¹ vs IFRS 2.0 Directional IFRS 1.5 1.0 0.5 20.1 bn 0.0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2016 Turnkey Backlo
Slide 10: Core Projects on Track
Core Projects on Track (ol) operating lease (fl) finance lease (t) turnkey Completed/On Hire In Progress/On Schedule IR - 09/05/2014 10
Slide 11: Prestigious Awards
Prestigious Awards • Two Generation 3 (3G) FPSOs awarded in one bid • Accelerated award process • Delivery expected end 2015 and early 2016 Cdde Maricá & Cdde Saquarema • World’s deepest disconnectable FPSO; 2,900 meters in GoM • Cutting edge technology • Delivery expected first half of 2016 FPSO St
Slide 12: Higher Standards
Higher Standards Team Energy Seamless handover of Paraty between project and operations. Process 30% faster than before Success Cdde Paraty (20 year L&O contract) OSX-2 & Paraty delivered on time, on budget Ambition More than 65% Brazilian local content for FPSO Paraty; built in 34 months OSX-2 (Tur
Slide 13: Deep Panuke
Deep Panuke • Legal claims settled; proceedings dismissed • US$400 million project financing • Platform formally on hire In production H2 2013 Source: Encana Corporation IR - 09/05/2014 IR - 09/05/2014 December 2013 13
Slide 14: Compliance
Compliance • Findings of internal investigation published April 2, 2014 • Remain in active dialogue with relevant authorities: Openbaar Ministerie - Dutch public prosecutor U.S. Department of Justice • At this time, the Company is still not in a position to estimate the ultimate consequences, fi
Slide 15: 2014 Guidance
2014 Guidance • Guidance based on Directional1 Reporting • Conservative 2014 award assumptions • Directional1 Revenue guidance: US$3.3 billion Turnkey: US$2.3 billion Lease & Operate: US$1.0 billion IR - 09/05/2014 ¹Directional view is a non-IFRS disclosure, which treats all leases as operating
Slide 16: Dividend Policy
Dividend Policy • Management Board intends to propose new dividend policy: Based on positive FCF in the payment year Derived from Directional1 net income Target payout ratio of 25% - 35% To be discussed at a future AGM • Negative FCF in 2014/2015 due to investments in 3G projects, which begi
Slide 17: Agenda
Agenda Who we are, where we are Macro view Strategy 17
Slide 18: The Award Cycle
The Award Cycle Last six years 50% of elephant Project sanction delays increasing discoveries have been in deep/ultra along with water depth/complexity deepwater… Source: Goldman Sachs; ExxonMobil; Douglas Westwood FPS report 2013-2017 Recent deepwater elephant discoveries likely to experience incre
Slide 19: E&P Spending
E&P Spending Deepwater trends remain intact Source: Morgan Stanley January 2014 IR - 09/05/2014 19
Slide 20: Competitive Landscape
Competitive Landscape FPSO market 2010-2014 YTD Awards 7 6 5 Awards won 4 3 2 1 0 0 50,000 100,000 150,000 Average production capacity (bbl/d) Engineering complexity IR - 09/05/2014 20
Slide 21: FPSO Awards
FPSO Awards IR - 09/05/2014 21
Slide 22: Agenda
Agenda Who we are, where we are Macro view Strategy 22
Slide 23: 2014 Message
2014 Message The Company has focused its product line on core FPSO products and associated FPSO services: • FPSO full life cycle • Mooring technology: FPSO Turret Mooring Systems Offshore installation • New products: FLNG FPSO Semis Heavy to Light Gas to Liquids (GTL) IR - 09/05/2014 2
Slide 24: Investing in our Future
Investing in our Future • Lease fleet maintenance programme • Transformation Programme - Odyssey 24 • Investments in Technology IR - 09/05/2014 IR - 09/05/2014 January 2014 24
Slide 25: Technology - Focus Areas
Technology - Focus Areas Large Turret Semi, TLP and Simpler FPSOs FLNG Moorings Risers • Process • High capacity • Twin Hull • Enabling wider intensification small diameter development use of SCR & internal turret Composite Risers • Equipment • LNG topsides standardisation • Larger external advances
Slide 26: Divestment Update
Divestment Update • Disposal of last Monaco building progressing • DSCV SBM Installer actively being marketed • FPSO Falcon and VLCC Alba held for sale IR - 09/05/2014 IR - 09/05/2014 July 2013 26
Slide 27: Appendix
Appendix © SBM Offshore 2013. All rights reserved. www.sbmoffshore.com
Slide 28: IFRS 10 & 11 - JV Accounting
IFRS 10 & 11 - JV Accounting • IFRS 10 & 11 consolidation standards for joint ventures (JVs) introduced January 1, 2014 • Ends proportional accounting of JVs full consolidation of fully controlled JVs (mostly Brazilian FPSOs) equity accounting of jointly controlled JVs (mostly Angolan FPSOs) • I
Slide 29: IFRS 10 & 11 - Directional Impact
IFRS 10 & 11 - Directional1 Impact • New IFRS 10 & 11 eliminates the revenue SBM generates in the project phase from its JV partners in investees fully consolidated (Brazil) • This grossly understates the operating cash flow during construction, and invalidates the ‘close to cash’ principles of Dire
Slide 30: IFRS 10 & 11
IFRS 10 & 11 Lease New Old Joint Ventures Contract SBM share % New IFRS Old IFRS Directional1 Directional1 Type FPSO N’Goma FL 50% Proportional Proportional Equity Proportional FPSO Saxi FL 50% Proportional Proportional Equity Proportional FPSO Mondo FL 50% Proportional Proportional Equity Proportio
Slide 31: Project Direction - Context
Project Direction - Context • SBM Offshore seeking to provide analysts and investors with clarity on business performance above and beyond statutory IFRS disclosure • SBM Offshore’s business model combines turnkey sales, construction and lease and operate projects, making it a challenge to model • I
Slide 32: Operating Lease vs Finance Lease
Operating Lease vs Finance Lease IR - 09/05/2014 32
Slide 33: Operating Lease vs Finance Lease
Operating Lease vs Finance Lease IR - 09/05/2014 33
Slide 34: Directional - The Way Forward
Directional1 - The Way Forward • Turnkey segment becomes a pure construction business. Revenue and Gross Margin consist of: Direct sales contracts (FPSO OSX 2, Turrets for Prelude, Quad 204 and Ichthys) Sales to JV partners (FPSO Cdde de Ilhabela, FPSO N’Goma, FPSO Cdde de Maricá and Saquarema)
Slide 35: SBM Lease Fleet Portfolio
SBM Lease Fleet Portfolio L&O Portfolio Average Duration: 14.5 years Initial Lease Period Confirmed extension Contractual extension option IR - 09/05/2014 35