Subsea 7 S.a. · OSL:SUBC
Subsea 7 — Q1 2015 Earnings Presentation
36 slides from Subsea 7's earnings presentation, Apr 29, 2015
Slide 1: Earnings Presentation First Quarter 2015
Earnings Presentation First Quarter 2015 29 April 2015 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’, ‘could’, ‘estimate’, ‘expect’, ‘forecast’, ‘intend’, ‘may’, ‘might’, ‘plan’, ‘predict’, ‘project’, ‘s
Slide 3: Jean Cahuzac, CEO
subses 7 Jean Cahuzac, CEO www.subsea7.com seabed-to-surface
Slide 4: Q1 2015 highlights
Q1 2015 highlights FINANCIAL OPERATIONAL ORDER IN-TAKE OUTLOOK • First quarter • Global vessel • Order backlog • Challenging revenue $1.2bn utilisation of declined to business 68% $7.6bn environment • Adjusted persists EBITDA of • Good progress • Adverse foreign $281m on projects, exchange impact •
Slide 5: Business Unit performance overview
Business Unit performance overview Northern Hemisphere Southern Hemisphere and Life of Field and Global Projects • Substantially completed the • Significant progress on several Knarr project offshore Norway projects, some of which are nearing completion • Life of Field activity lower as clients spen
Slide 6: Q1 Backlog and order in-take
Q1 Backlog and order in-take • Backlog of $7.6 billion as at 31 March 2015 • Includes $0.4bn adverse foreign exchange impact during the first quarter • $1.0 billion of new awards and project escalations Backlog by Execution Date Backlog by Service Capability Backlog by Hemisphere SURF (1) Northern 2
Slide 7: Ricardo Rosa, CFO
subses 7 Ricardo Rosa, CFO www.subsea7.com seabed-to-surface
Slide 8: Income statement – key highlights
Income statement – key highlights In $ millions, unless otherwise indicated. Three months ended 31 Mar 15 31 Mar 14(1) Unaudited Unaudited Revenue 1,181 1,668 Net operating income (NOI) 176 160 Income before taxes 211 168 Taxation (60) (36) Net income 151 131 Adjusted EBITDA 281 264 Adjusted EBITDA
Slide 9: Income statement – supplementary details
Income statement – supplementary details In $ millions, unless otherwise indicated Three months ended 31 Mar 15 31 Mar 14 (1) Unaudited Unaudited Administrative expenses (70) (81) Share of net income of associates and joint ventures 15 16 Net operating income 176 160 Net finance income/(costs) 2 (1)
Slide 10: Business Unit performance – Q1 2015
Business Unit performance – Q1 2015 Northern Hemisphere and Life of Field Southern Hemisphere and Global Projects Revenue Revenue $996m $666m $617m $562m Q1 15 Q1 14 Q1 15 Q1 14 Northern Hemisphere and Life of Field Southern Hemisphere and Global Projects NOI NOI $152m $118m $48m $24m Q1 15 Q1 14 Q1
Slide 11: Summary of Q1 2015 cash flow
Summary of Q1 2015 cash flow $ millions Cash and cash equivalents at 31 Dec 2014 573 Includes decrease in net operating Net cash used in operating activities (78) liabilities of $347m Includes capital expenditure of Net cash flow used in investing activities (178) $198m mainly on new vessel construc
Slide 12: Capital expenditure for vessel new-build programme
Capital expenditure for vessel new-build programme(1) # vessels under construction at 6 5 4 0 year end 139 $ millions 557 544 561 Forecast Actual spend to date 170 Upto 31 Dec 2013 2014 2015 E 2016 E (1) Comprises four PLSVs being constructed for long-term contracts with Petrobras (including Seven W
Slide 13: Financial guidance for 2015
Financial guidance for 2015 • 2015 guidance is unchanged: • Group Revenue expected to decrease significantly from record level in 2014 • Adjusted EBITDA margin expected to decrease compared to 2014 • Other net income related guidance: – Administrative expenses: $280-300 million – Net finance costs:
Slide 14: Jean Cahuzac, CEO
subses 7 Jean Cahuzac, CEO www.subsea7.com seabed-to-surface
Slide 15: Market outlook
Market outlook • Environment remains challenging with reduced spending by clients driven by the lower oil price • Award activity remains subdued, but some large project awards to the market still expected in 2015 • Reduced market activity has impacted project margin, particularly on small to medium
Slide 16: Reducing our costs
Reducing our costs • Reducing capacity, retaining capability – Acted early having seen signs of slowdown in late 2013 – Headcount reduced from 14,000 to 13,000 in 2014 – Up to 10 vessels identified for potential release (chartered vessels) or deactivation/disposal (owned vessels) • Good progress on
Slide 17: 2015 Business Unit outlook
2015 Business Unit outlook Northern Hemisphere and Life of Field • Mature field development in North Sea significantly impacted by the low oil price • Limited number of project market awards expected in 2015, particularly offshore Norway • Seasonal improvement in Life of Field activity expected in t
Slide 18: Summary
Summary • Solid start to 2015 helped by phasing of projects, good execution and cost discipline • Tendering activity continues but timing of new awards remains highly uncertain • Cost reduction measures progressing as planned, while maintaining core strengths and competiveness • Subsea 7 is well pla
Slide 19: Q & A
subses 7 www.subsea7.com seabed-to-surface
Slide 20: Appendix
subses 7 Appendix www.subsea7.com seabed-to-surface
Slide 21: Main projects in portfolio 2015-2016
Main projects in portfolio 2015-2016 • Catcher, Premier • Aasta Hansteen, Statoil • Clair Ridge, BP • Martin Linge, Total • Montrose, Talisman • Knarr, BG International • Western Isles, Dana • LOF, Statoil • Mariner, Statoil • Hebron OLS , ExxonMobil • Heidelberg, Anadarko • LOF, BP • Stampede, Hess
Slide 22: Major project progression
Major project progression Continuing projects >$100m between 5% and 95% complete as at 31 March 2015 excluding PLSV and Life of Field day-rate contracts Gorgon HLTI (Australia) Guará-Lula NE (Brazil) Heidelberg (GOM) Enochdhu (Norway) Southern Clair Ridge (UK) Hemisphere OFON 2 (Nigeria) Lianzi Surf
Slide 23: 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 24: Segmental analysis
Segmental analysis For the three months ended 31 March 2015 Northern Southern In $ millions (unaudited) Hemisphere and Hemisphere and Corporate TOTAL LOF GP Revenue 562.0 617.1 2.2 1,181.3 Net operating income 47.9 118.2 10.2 176.3 Finance income 3.4 Other gains and losses 32.6 Finance costs (1.2) I
Slide 25: 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) 31 Mar 2015 31 Mar 2014(1) Net operating income 176.3 160.4 Depreciation, amortisation and mobilisation 102.0 103.4 Impairment of property plant and equipment
Slide 26: Summary balance sheet
Summary balance sheet 31 Mar 31 Dec 31 Mar 31 Dec 2015 2014 2015 2014 In $ millions Unaudited Audited In $ millions Unaudited Audited Assets Equity & Liabilities Non-current assets Total equity 5,550 5,562 Goodwill 1,289 1,322 Non-current liabilities Property, plant and equipment 4,576 4,565 Non-cur
Slide 27: Assets
One of the world’s most versatile fleets Assets Onshore infrastructure of pipeline spoolbases, fabrication and operations support yards Page 27
Slide 28: Rigid pipelay/heavy lift assets
Rigid pipelay/heavy lift assets (1) (1) (1) (1) Owned and operated by a joint venture Page 28
Slide 29: Diving Support Vessels
Diving Support Vessels (1) (1) Formerly Seven Havila Page 29
Slide 30: Construction/vertical flex-lay assets
Construction/vertical flex-lay assets (1) (1) (2) (1) (1) Long-term charter (2) Long-term charter from a vessel-owning joint venture Page 30
Slide 31: Construction/horizontal flex-lay assets
Construction/horizontal flex-lay assets (1) (2) (2) (1) Formerly Seven Sisters (2) Long-term charter Page 31
Slide 32: Life of Field/Light Construction Vessels
Life of Field/Light Construction Vessels (1) (2) (2) (2) (3) (2) 2 (1) Long-term charter from a vessel-owning joint venture (2) Long-term charter (3) Call-out contract Page 32
Slide 33: Other assets
Other assets Jack-up vessel Trenching vessel (1) … and over 175 ROVs (1) Long-term charter Page 33
Slide 34: Under construction
Under construction Construction/vertical Flex-lay Vessels Diving Support Vessel Page 34
Slide 35: Our operational facilities
Our operational facilities Page 35
Slide 36: Page 36
seabed-to-surface www.subsea7.com