Subsea 7 S.A. · OSL:SUBC
Subsea 7 — Q1 2018 Earnings Presentation
26 slides from Subsea 7's earnings presentation, Apr 26, 2018
Slide 1: First Quarter 2018 Earnings Presentation
First Quarter 2018 Earnings Presentation 26 April 2018 1 © Subsea 7 - 2018 subsea7.com
Slide 2: Forward-looking statements
Forward-looking statements Certain statements made in this presentation may include ‘forward-looking statements’. These statements may be identified by the use of words like ‘anticipate’, ‘believe’, ‘could’, ‘estimate’, ‘expect’, ‘forecast’, ‘intend’, ‘may’, ‘might’, ‘plan’, ‘predict’, ‘project’, ‘s
Slide 3: First Quarter 2018
First Quarter 2018 Jean Cahuzac, CEO - Highlights Ricardo Rosa, CFO - Financial performance Jean Cahuzac, CEO - Strategy and outlook - Q&A 3 © Subsea 7 - 2018 subsea7.com
Slide 4: Q1 2018 results
Q1 2018 results FINANCIAL HIGHLIGHTS OPERATIONAL HIGHLIGHTS • Revenue $809 million • Lower activity levels due to • Adjusted EBITDA $103 million seasonality and market downturn • Adjusted EBITDA margin 13% • Vessel Utilisation • Diluted loss per share $0.03 Active: 58% Total: 52% • Order backlog $5.
Slide 5: Some of our activities
Some of our activities Sole (Australia) WND Ph.2/GFR (Egypt) Mad Dog 2 (GOM) Tyra (Denmark) Beatrice (UK) Oda (Norway) i Tech Services PLSVs (Brazil) 5 © Subsea 7 - 2018 subsea7.com
Slide 6: Our backlog and order intake
Our backlog and order intake Backlog of $5.3 billion(1), as at 31 March 2018 Backlog by Execution Date Backlog by Service Capability Q1 New Awards and Escalations $829 million SURF SURF and and Conventional(2) $4.4bn 2020+ Conventional $1.2bn 2018 $4.4bn(2) Announced $2.7bn Renewables 2019 $0.5bn $1
Slide 7: Our order intake
Our order intake Number of announced projects (>$50m) Q1 2018 awards April (Q2) 4 4 • Johan Castberg, • PUPP (Nigeria) (Norway) Pipe-in- conventional 3 3 Pipe • Alligin (UK) • Nova, (Norway) Pipe-in-pipe tie-back tie-back 2 2 • i-Tech Services IRM, (Azerbaijan) 1 • 3PDMs, (Saudi Arabia) awarded thro
Slide 8: Proposed acquisition of McDermott
Proposed acquisition of McDermott Combined Global Reach Significant Value Region Subsea 7 McDermott Combined Brazil GOM / Strengthen Growth Trinidad Capabilities Prospects UK Angola Strong Balance Norway Highly Visible Sheet & Middle East Synergies Profitable Backlog Nigeria Rest Africa Australia /
Slide 9: Income statement – Q1 highlights
Income statement – Q1 highlights Three months ended 31 March 2018 31 March 2017 In $ millions, unless otherwise indicated Unaudited Unaudited Revenue 809 897 Net operating income/(loss) (NOI) (8) 169 Income/(loss) before taxes (29) 206 Taxation 12 (60) Net income/(loss) (18) 146 Adjusted EBITDA(1) 1
Slide 10: Income statement – supplementary details
Income statement – supplementary details Three months ended 31 March 2018 31 March 2017 In $ millions Unaudited Unaudited Administrative expenses (74) (48) Share of net loss of associates and joint ventures (7) (7) Depreciation and amortisation (111) (99) Net operating income/(loss) (8) 169 Net fina
Slide 11: First Quarter Business Unit performance
First Quarter Business Unit performance Revenue Net Operating Income $169m $11m $809m $897m $220m Renewables & Heavy $173m Lifting $76m $52m $151m i-Tech Services SURF & Conventional $584m $602m $(8)m $13m ($4m) ($4m) ($4m) Q1 2018 Q1 2017 Q1 2018 Q1 2017 Note: Corporate segment (not presented): net
Slide 12: Summary of first quarter 2018 cash flow
Summary of first quarter 2018 cash flow 103 (60) $m 1,109 (23) (78) (24) (20) 1,007 Cash at EBITDA Decrease in Tax Capex Acquisitions Other Cash at 1 January 2018 net operating paid 31 March 2018 liabilities • Net cash of $730 million at 31 March 2018 • $656 million of undrawn committed credit facil
Slide 13: Priorities for cash
Priorities for cash Uses of cash - post quarter end Invest in the business • $8 million share repurchases between 3 and 9 April Maintain investment • $170 million investment in SOC and grade profile two vessels completed on 10 April • Approximately $210 million special dividend approved at AGM to be
Slide 14: Financial guidance
Financial guidance 2018 Guidance Revenue (1) Broadly in line with 2017 Adjusted EBITDA percentage margin Significantly lower than 2017 Administrative expense $260 million - $280 million Net finance cost $0 million - $5 million Depreciation and Amortisation $420 million - $440 million Full year effec
Slide 15: Our capabilities and scale in offshore energy
Our capabilities and scale in offshore energy Energy Lifecycle Offshore Worldwide Technology Developments services capabilities locations enablers • Oil • Concept • Pipe-lay • Conventional • Long-distance tie-backs • Gas • Design • Construction • Deepwater • Pipeline • Renewables • Engineer • IRM •
Slide 16: Market Outlook
Market Outlook Offshore greenfield capex in approval Non-sanctioned offshore resources by Brent break-evens 250 year, by sensitivity to oil price 30 100% 100% 89% 91% 87% 90% 82% 25 78% 200 80% Cummulative percent 66% 70% 20 150 60% 54% USD Billions Billion bbl 15 50% 42% 100 35% 40% 10 30% 21% 50 2
Slide 17: Business Unit Outlook
Business Unit Outlook SURF and Conventional Large gas projects in Mozambique, Australia, Middle East and India Saudi Arabia LTA North Sea tie-backs West Africa conventional and deep water Brazil pre-salt ultra-deep Renewables and Heavy Lifting Wind farms offshore the UK, Germany, France, the Netherl
Slide 18: © Subsea 7 - 2018 subsea7.com
18 © Subsea 7 - 2018 subsea7.com
Slide 19: Appendix
Appendix Major project progression Track Record Fleet Financial summaries 19 © Subsea 7 - 2018 subsea7.com
Slide 20: Major project progression
Major project progression • Continuing projects >$100m between 5% and 95% complete as at 31 March 2018 excluding PLSV and Life of Field day-rate contracts Catcher (UK) Announced OCTP SURF (Ghana) size of project Aasta Hansteen (Norway) Major Sonamet (Angola) (Over $750m) Beatrice (UK) Very Large Cul
Slide 21: Track record: projects and clients
• Beatrice wind farm, BOWL • Aasta Hansteen, Statoil • Maria, Wintershall • Snorre, Statoil • Catcher, Premier • Aerfugl, Aker BP • Culzean, Maersk • Nova, Wintershall • Callater, Apache • Johan Castberg, Statoil • DSVi, Various • Alligin, BP • 3 PDMs, Saudi Aramco • Hasbah, Saudi Aramco • Mad Dog 2
Slide 22: 32 Vessels including 29 active vessels at end Q1 '18
32 Vessels including 29 active vessels at end Q1 ‘18 17 vessels released since May 2015 Skandi Seven (returned to owner Q3 ‘15) Seven Polaris (recycled Q4 ‘15) Havila Subsea (returned to owner Q4 ‘15) Acergy Viking (returned to owner Q4 ‘15) Skandi Skansen (returned to owner Q4 ’15) Skandi Neptune (
Slide 23: Segmental analysis
Segmental analysis For the three months ended 31 March 2018 Renewables & In $ millions (unaudited) SURF & Conventional i-Tech Services Corporate TOTAL Heavy Lifting Revenue 584 52 173 - 809 Net operating income/(loss) 13 (4) (4) (13) (8) Finance income 5 Other gains and losses (23) Finance costs (4)
Slide 24: Summary balance sheet
Summary balance sheet 31 Mar 2018 31 Dec 2017 31 Mar 2018 31 Dec 2017 Unaudited Audited Unaudited Audited In $ millions In $ millions Assets Equity & Liabilities Total equity 6,013 5,941 Non-current assets Non-current liabilities Goodwill 722 701 Non-current portion of borrowings 252 258 Property, p
Slide 25: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA Net income to Adjusted EBITDA Three Months Ended 31 March 2018 Three Months Ended 31 March 2017 For the period (in $millions) Unaudited Unaudited Net income/(loss) (18) 146 Depreciation, amortisation and mobilisation 111 99 Net remeasurement gain on business combina
Slide 26: Summary of 2018 cash flow
Summary of 2018 cash flow $ millions Cash and cash equivalents at 31 Dec 2017 1,109 Includes decrease of $60 million in net operating Net cash generated from operating activities 6 liabilities Includes expenditure on PPE of $78 million and Net cash flow used in investing activities (97) cash outflow