Subsea 7 S.a. · OSL:SUBC
Subsea 7 — Q3 2013 Earnings Presentation
38 slides from Subsea 7's earnings presentation, Nov 18, 2013
Slide 1: Earnings Presentation Third Quarter
Earnings Presentation Third Quarter November 18, 2013 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’, ‘estimate’, ‘expect’, ‘intend’, ‘may’, ‘plan’, ‘forecast’, ‘project’, ‘will’, ‘should’, ‘seek’ and si
Slide 3: Solid Q3 2013 results
Solid Q3 2013 results HIGHLIGHTS FINANCIAL OPERATIONAL ORDER IN-TAKE • Strong project • 23% Adjusted • Global vessel • Record $11.8bn execution drove EBITDA margin utilisation of 86% backlog performance in • NSC revenue • Seven Borealis • Awards NSC, AFGOM and impacted by transferred from announced
Slide 4: Focused on building quality backlog
Focused on building quality backlog Backlog progression ($ millions) 11,800 10,222 10,421 9,086 8,538 8,686 8,285 8,088 7,883 7,903 6,668 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Backlog by Award Date Backlog by Execution Date Backlog by Segment 2012 2013 AFGOM 2011 2015+ 25
Slide 5: Market overview
Market overview • Continuing postponement of some project awards around the world for various reasons • Growth opportunities in all major markets, albeit at differing paces • We remain positive about medium and long-term market prospects NSC AFGOM BRAZIL APME • Good levels of • West Africa: • Demand
Slide 6: Income statement – key highlights
Income statement – key highlights In $ millions, unless otherwise indicated Three months ended Nine months ended 30 Sept 13 30 Sept 12 30 Sept 13 30 Sept 12 Revenue 1,564 1,744 4,711 4,686 Net operating income 269 228 464 628 Gain on sale of NKT Flexibles - 23 - 244 Income before taxes 219 248 397 8
Slide 7: Territory performance – Q3 2013
Territory performance – Q3 2013 NSC $670m $111m APME Revenue NOI Brazil $73m $30m AFGOM Revenue NOI $583m $233m $10m Revenue NOI $94m Revenue NOI Note: excludes contribution from Corporate segment Page 7
Slide 8: Income statement – supplementary details
Income statement – supplementary details In $ millions, unless otherwise indicated Three months ended Nine months ended 30 Sept 13 30 Sept 12 30 Sept 13 30 Sept 12 Administrative expenses (74) (98) (215) (267) Share of net income of associates 49 12 127 43 and joint ventures Net operating income 269
Slide 9: Overview of nine months 2013 cash flow
Overview of nine months 2013 cash flow $ millions Cash and cash equivalents at 31 Dec 2012 1,288 Net cash generated from operating Includes decrease in net operating 677 activities assets of $284m Includes capital expenditure of $539m Net cashflow used in investing activities (511) mainly on fleet e
Slide 10: 2013 financial guidance
2013 financial guidance • We are on track to deliver full year Adjusted EBITDA in line with consensus expectations • Other net income related guidance – administrative expenses: $310-320 million (previously $330-350 million) – share of net income of associates and JVs: $110-120 million (previously $
Slide 11: Initial thoughts on 2014
Initial thoughts on 2014 • Tendering level remains good in the North Sea but has moderated elsewhere, and delays in project awards remain a feature of the industry NSC • Seven Oceans and Skandi Acergy expected to be deployed outside North Sea • More competitors, but key differentiators continue to p
Slide 12: New-build vessels
New-build vessels Pipelay Support Vessels - Dive Support Vessel - Seven Heavy Construction Vessel Seven Waves, PLSV 2, 3 and 4 Kestrel • Delivery 2014-16 • Delivery 2015 • Delivery 2016 • 550t top tension • 18-man twin bell • 600t heave VLS saturation diving compensated crane system • 4000t underdec
Slide 13: Summary
Summary • Results in NSC, AFGOM and APME driven by strong project execution • Guará-Lula NE full-life project loss previously announced remains appropriate • On track to deliver full year Adjusted EBITDA in line with consensus expectations • Record backlog approaching $12bn • Fundamentals of our bus
Slide 14: Appendix
subses 7 Appendix www.subsea7.com seabed-to-surface
Slide 15: Major project progression
Major project progression Continuing projects >$100m between 5% and 95% complete as at 30 Sept 2013 excl. long-term ship charters and Life-of-Field day-rate contracts. Gumusut* (Malaysia) Terra Nova (Canada) Laggan Tormore (North Sea) West Franklin (North Sea) Brazil CLOV (Angola) Line 60 (Mexico) A
Slide 16: Segmental analysis
Segmental analysis For the three months ended 30 Sept 2013 In $ millions, Unaudited AFGOM APME BRAZIL NSC CORP TOTAL Revenue 582.6 73.2 232.5 669.8 5.7 1,563.8 Net operating income/(loss) from ops 93.5 30.2 10.4 111.1 24.0 269.2 Finance income 4.7 Other gains and losses (38.0) Finance costs (16.8) I
Slide 17: 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 18: 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) 30 Sept 2013 Unaudited 30 Sept 2012 Unaudited Net operating income 269.2 228.2 Depreciation, amortisation and mobilisation 87.5 84.0 Impairment/(impairment re
Slide 19: Where we operate
subses Where we operate Corporate/support office o Territory office e Spoolbase/fabrication/ operational support yard | Asia Pacific North Sea | & Middle East (APME) & Canada (NSC)
Slide 20: A full range of subsea services
A full range of subsea services Page 20
Slide 21: Aasta Hansteen Gas Field - Norway
Aasta Hansteen Gas Field - Norway • Technology-rich SURF project • 1200m water depth, deepest in North Sea • 300 km off northern Norway, harsh environment • 1st SCRs (x4) in the Norwegian Sea, manufactured at Vigra spoolbase • 1st installation of BUTTING Bubi® mechanically lined pipe by reeling in t
Slide 22: Gorgon Heavy lift and Umbilicals - Australia
Gorgon Heavy lift 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 Subsea 7’s history – 20 subsea structures and foundations (up to circa 1000T), 15 h
Slide 23: 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 24: Technology focus
Technology focus Technology Category Specific Technology Types Steel Deep water and harsh Hybrid Riser Submerged Composite Catenary environment solutions Towers buoys Materials Risers Rigid Pipe Flexible Pipe Subsea Vessels Technology Technology Heavy Lift Electrically Composite Flowlines Bundles He
Slide 25: Technology focus - towed bundles
Technology focus - towed bundles Brief Application Partners Description Towed integrated Mainly North Numerous assembly of Sea subsea technology flowlines and production companies service systems tie partnering us lines/control backs. Towed with this cables etc. from our solution contained within fa
Slide 26: Technology focus - Hybrid riser tower (HRT)
Technology focus - Hybrid riser tower (HRT) Total CLOV Prospect (1200msw) (2000msw) Brief Application Partners 1440T Description Tower The HRT is Numerous key assembly of applicable to technology multiple most future companies risers; deepwater support us manufactured developments with this 650m ons
Slide 27: Technology focus - Buoy supported riser (BSR)
Technology focus - Buoy supported riser (BSR) Brief Application Partners Description A submerged The BSR is Numerous buoy anchored being installed technology to the seabed on Guará-Lula companies NE project in partnering us Brazil with this Steel Catenary solution Risers laid between seabed and buoy
Slide 28: Technology focus - High-performance pipe-in-pipe
Technology focus - High-performance pipe-in-pipe Brief Application Partners Description A pipe-in-pipe Subsea ITP - exclusive system pipelines agreement providing high which require thermal high thermal insulation for insulation subsea oil and such as long gas distance transportation. tie–backs Util
Slide 29: Technology focus - Reel-lay of mechanically lined pipe (BuBi)
Technology focus - Reel-lay of mechanically lined pipe (BuBi) BuBi Pipe Brief Application Partners Description Use of BuBi® World’s first BUTTING - Mechanically award on a exclusive Lined Pipe Petrobras Pre- agreement offers Salt project significant (Guará-Lula), savings ongoing Simulated compared w
Slide 30: Technology focus - Autonomous inspection vehicle (AIV)
Technology focus - Autonomous inspection vehicle (AIV) Brief Application Partners Description A game changing Can be Seebyte inspection deployed from technology system FPSO comprising an (avoiding the autonomous need for a vehicle without a separate tether (which support enhances vessel), or manoeuv
Slide 31: Operational facilities
Operational facilities Spoolbases Fabrication Yards Page 31
Slide 32: Rigid pipelay/Heavy lift assets
Rigid pipelay/Heavy lift assets *** * Operated by Seaway Heavy Lifting under JV ** Operated by SapuraAcergy under JV *** Under construction Page 32
Slide 33: Construction/Vertical flexlay assets
Construction/Vertical flexlay assets *** *** *** *** *** Under construction Page 33
Slide 34: Construction/Horizontal flexlay assets
Construction/Horizontal flexlay assets Page 34
Slide 35: Light construction/Life of field assets
Light construction/Life of field assets Note: Seven Sisters renamed Simar Esperança Page 35
Slide 36: Diving assets
Diving assets *** *** Under construction Note: Acergy Osprey renamed Seven Osprey, Seven Havila renamed Seven Falcon Page 36
Slide 37: Other assets
Other assets Conventional Over 175 ROVs Trenching Page 37
Slide 38: Page 38
seabed-to-surface www.subsea7.com