Slide 1: Earnings Presentation Second Quarter and Half Year 2011
Earnings Presentation Second Quarter and Half Year 2011 August 10, 2011 12:00 noon UK time
Slide 2: 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 use of words like “anticipate,
Slide 3: Highlights
Highlights • Strong financial performance for the quarter reflects increased activity levels, improved utilisation and strong operational performance on large projects in their offshore phase – Improvement in the North Sea, although impacted by margin pressure on contracts awarded in 2010 and execut
Slide 4: Key priorities
Key priorities • We remain focused on key markets with long-term, strong and sustainable growth characteristics; where we can differentiate ourselves, markets where we can achieve profitable growth Our key priorities: Safety & operational excellence Business acquisition - maintaining discipline in o
Slide 5: Key priorities: Ongoing fleet enhancement
Key priorities: Ongoing fleet enhancement Delivered H1 2011 Expected delivery H1 2012 Returned to owner post charter Divested BP 3-year LoF – US GoM STL 5-year LoF – North Sea *Oleg Strashnov delivered to the Seaway Heavy Lifting joint venture 10-Aug-11 Page 5
Slide 6: Income statement highlights
Income statement highlights Half Year Ended Three Months Seven Months Six Months Ended Ended Ended In $ millions, except Adjusted EBITDA margin, share Jun.30.11 May.31.10 Jun.30.11 Jun.30.11 and per share data Unaudited Unaudited Unaudited Unaudited Revenue from continuing operations 1,335 581 2,627
Slide 7: Operational performance – Q2 2011
Operational performance – Q2 2011 $523m $45m $614m $41m $11m $155m $151m $17m 10-Aug-11 Page 7
Slide 8: Income statement overview – Q2 2011
Income statement overview – Q2 2011 • Administrative expenses of $97 million, included $15 million of integration costs • All joint ventures performed well • Investment income of $4 million reflected interest received on cash balances • Other gains and losses were losses of $14 million due to curren
Slide 9: Cash flow and balance sheet overview – H1 2011
Cash flow and balance sheet overview – H1 2011 • Cash generation from operating activities of $95 million, partially offset by higher net working capital balances in line with increased activity; expected to reverse in ordinary course of business • Net cashflows from investing activities of $32 mill
Slide 10: 2011 – financial assumptions
2011 – financial assumptions Current assumptions: • Administrative expenses: c.$75 million per quarter for remainder of 2011, excluding integration costs but synergies starting to materialise • Integration costs: $26 million expensed in H1 ’11 ($16 million expensed in Q4 ’10) - c.$25 million per qua
Slide 11: Market overview and outlook
Market overview and outlook • High levels of tendering activities continue to underpin strong order book momentum • Conventional in West Africa: a number of major contracts expected to come to market award late 2011 and early 2012. Well positioned • SURF: – North Sea: record levels of tendering and
Slide 12: Summary
Summary • Approaching the future with confidence • Opportunities in nearly all our markets with increasing activity; albeit at different pace in different geographical areas • Market fundamentals are very good • Well positioned to deliver profitable growth – Strong balance sheet – Very healthy backl
Slide 13: Appendix
subses 7 Appendix 11-May-11 Page 13 www.subsea7.com seabed-to-su
Slide 14: Major project progression
Major project progression Continuing projects >$100m between 5% and 95% complete as at June 30, 2011 excl. long-term ship charters and Life-of-Field day-rate contracts. Block 18 GEL (Angola) PazFlor (Angola) Oso Re (Nigeria) Block 31 (Angola) EGP3B (Nigeria) CLOV (Angola) Gumusut (Malaysia) P55 Expo
Slide 15: Backlog
Backlog In $ millions as at: Jun.30.11 Mar.31.11 Jun.30.10 May.31.10 (1) Subsea 7 S.A. 7,883 6,668 - - Acergy S.A. - - - 2,251 Subsea 7 Inc - - 2,758 - (1) Backlog refers to expected future revenue under signed contracts, which are determined as likely to be performed, but excludes amounts related t
Slide 16: Segmental analysis
Segmental analysis: Three months ended Total – Jun.30.11 NSMC AFGoM APME Brazil CORP Continuing Unaudited operations In $ millions Revenue 523.4 613.6 40.9 154.9 2.6 1,335.4 Net operating 45.1 150.9 10.5 17.3 (13.9) 209.9 (loss)/income Investment income 3.5 Other losses (13.8) Finance costs (9.9) Ne
Slide 17: Segmental analysis
Segmental analysis: Seven months ended Total – Jun.30.11 NSMC AFGoM APME Brazil CORP Continuing Unaudited operations In $ millions Revenue 831.2 1,338.7 104.8 345.5 6.9 2,627.1 Net operating 37.6 268.9 12.3 21.1 (35.7) 304.2 (loss)/income Investment income 9.0 Other losses (31.1) Finance costs (22.4
Slide 18: Adjusted EBITDA
Adjusted EBITDA • The Group calculates adjusted earnings before interest, income taxation, depreciation and amortisation (‘Adjusted EBITDA’) from continuing operations as net income from continuing operations plus finance costs, other gains and losses, taxation, depreciation and amortisation and adj
Slide 19: Reconciliation of net operating income to Adjusted EBITDA
Reconciliation of net operating income to Adjusted EBITDA Three Months Ended Three Months Ended Jun.30.11 May.31.10 Total Total In $ millions (except percentages) Continuing Discontinued Continuing Discontinued operations operations Net operating income 209.9 - 209.9 93.7 6.5 100.2 Depreciation and
Slide 20: Reconciliation of net income to Adjusted EBITDA
Reconciliation of net income to Adjusted EBITDA Three Months Ended Three Months Ended Jun.30.11 May.31.10 Total Total In $ millions (except percentages) Continuing Discontinued Continuing Discontinued operations operations Net income 126.1 - 126.1 62.8 4.5 67.3 Depreciation and amortisation 84.9 - 8
Slide 21: seabed-to-surface
seabed-to-surface www.subsea7.com 10.01.11 Page 21