Subsea 7 S.a. · OSL:SUBC
Subsea 7 — Q3 2016 Earnings Presentation
31 slides from Subsea 7's earnings presentation, Nov 10, 2016
Slide 1: Earnings Presentation Third Quarter 2016
Earnings Presentation Third Quarter 2016 10 November 2016 12:00 noon UK time 1
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
subsed 7 Jean Cahuzac CEO
Slide 4: Q3 2016 highlights
Q3 2016 highlights FINANCIAL OPERATIONAL • Revenue $928m • Good execution and successful • Adjusted EBITDA $289m project outcomes margin 31.2% • Vessel Utilisation • Diluted EPS $0.44 Active: 91% Total: 75% • Net cash $943m • New-build PLSV, Seven Sun, commenced operations ORDER INTAKE OUTLOOK • Ind
Slide 5: Operational highlights
Operational highlights • Good execution sustained across the project portfolio • Successful application of market leading technology Aasta Hansteen Catcher (Norway) (UK) TEN Maria Martin Linge WND Ph. 1 (Ghana) (Norway) (Norway) (Egypt) 5
Slide 6: Q3 Backlog and order intake
Q3 Backlog and order intake • Backlog of $6.2 billion(1), as at 30 September 2016 • Low order intake with no announced awards in the third quarter Backlog by Execution Date Backlog by segment 2016 SURF and $0.9bn Conventional(2) 2018+ (15%) $4.3bn $2.3bn (70%) (37%) Southern i-Tech and Global Servic
Slide 7: Ricardo Rosa, CFO
subsed 7 Ricardo Rosa CFO
Slide 8: Income statement – key highlights
Income statement – key highlights Three months ended 30 September 16 30 September 15 In $ millions, unless otherwise indicated Unaudited Unaudited Revenue 928 1,200 Net operating income (NOI) 195 214 Income before taxes 186 241 Taxation (37) (96) Net income 149 145 Adjusted EBITDA(1) 289 351 Adjuste
Slide 9: Business Unit performance
Business Unit performance Revenue NOI Q3 2016 Q3 2016 $928m $1,200m $195m $214m $20m $12m $111m $19m $30m $97m $253m $204m $801m $1,068m $(28)m $(51)m 2016 2015 2016 2015 SURF & i-Tech Corporate Conventional Services (includes Renewables and Heavy Lift) Corporate Net Operating loss included: • Restr
Slide 10: Our Adjusted EBITDA margin performance
Our Adjusted EBITDA margin performance Historical performance Operating expenses Adjusted EBITDA margin 32% $6.0bn 26% $4.2bn 21% 2016 2017 18% 18% expected expected 16% annualised additional savings annualised $550m savings $350m 2014 2015 Vessels and other costs 2011 2012 2013 2014 2015 YTD 2017e
Slide 11: Summary of year to date 2016 cash flow
Summary of year to date 2016 cash flow $ millions Cash and cash equivalents at 31 Dec 2015 947 Decrease of $12 million in net Net cash generated from operating activities 713 operating liabilities Included capital expenditure of Net cash flow used in investing activities (186) $276 million mainly on
Slide 12: New-build vessels programme
New-build vessels programme Seven Waves Seven Rio Seven Sun Seven Cruzeiro Seven Arctic Seven Kestrel Operational Operational Operational Scheduled Scheduled Scheduled 2014 2015 Q4 2016 H1 2017 H1 2017 H1 2017 Capital expenditure ($ millions) Estimated total spend: $1.9bn Forecast Actual spend to da
Slide 13: Financial guidance
Financial guidance 2016 Guidance Revenue Significantly lower than 2015 Adjusted EBITDA percentage margin Higher than 2015 Administrative expense $240 million - $250 million Net finance income Up to $10 million Depreciation and Amortisation $380 million - $400 million Full year effective tax rate 28%
Slide 14: Jean Cahuzac, CEO
subsed 7 Jean Cahuzac CEO
Slide 15: A leading strategic partner in offshore energy
A leading strategic partner Subsea 7 A leading strategic partner in offshore energy • Executing complex projects in challenging environments • Working collaboratively to deliver superior results • Providing cost-effective technical solutions • Engaging early to identify cost reductions and Subsea In
Slide 16: Developing cost-effective technology
Developing cost-effective technology • Subsea 7 has enhanced and expanded its technology portfolio with the acquisition of Swagelining • Swagelining is a market leader in polymer lining, a cost-effective corrosion resistance technology for pipes 16
Slide 17: Working collaboratively: Subsea Integration Alliance
Working collaboratively: Subsea Integration Alliance • Subsea Integration Alliance: Subsea 7 and OneSubsea unite to deliver integrated subsea oil and gas projects world-wide • 8 paid engineering studies 30 client engagements • Growing client interest worldwide; tendering for project awards on an int
Slide 18: Working collaboratively: Our Partnerships
Working collaboratively: Our Partnerships • New partnership with Aker BP: – innovative contractual model – offshore Norway – integrated partnership basis – three way risk/reward agreement • Partnerships are an extension of our collaborative approach to client engagement • Engage early and develop lo
Slide 19: Market outlook
Market outlook $ Brent oil price • Industry conditions are still 140 challenging at present 120 100 • Oil price has improved over 80 the last nine months and 60 there is evidence that supply 40 and demand are becoming 20 more balanced 0 2013 2014 2015 2016 • Sustainable savings are $ billion 10 Subs
Slide 20: Business Unit outlook
Business Unit outlook SURF and Conventional • Remaining competitive, but with the right project risk profile • Active SURF project tenders include: • Mad Dog 2 (US GoM) • Fortuna (Equatorial Guinea) • Platina (Angola) • Golfinho (Mozambique) • KG-D6, R-Cluster (India) • KG-DWN, block 98/2 (India) •
Slide 21: Q&A
subsed 7 Q&A
Slide 22: Appendix
Appendix • Our global presence • Major project progression • Our fleet • Adjusted EBITDA • Segmental analysis • Supplementary Income Statement • Balance Sheet summary 22
Slide 23: Our global presence
Our global presence • Beatrice wind farm, BOWL • Catcher, Premier • Culzean, Maersk • Callater, Apache • Martin Linge, Total • Western Isles, Dana • Aasta Hansteen, Statoil • Montrose, Talisman • Maria, Wintershall • USC & Pipelay, Shell • Mariner, Statoil • SCIRM, BP • DSVi, Various • Stampede, Hes
Slide 24: Major project progression
Major project progression Continuing projects >$100m between 5% and 95% complete as at 30 September 2016 excluding PLSV and Life of Field day-rate contracts Lianzi Topside (Angola) Mariner (UK/Norway) Announced Clair Ridge (UK) size of Persephone Ph 2 (Australia) project Aasta Hansteen (Norway) Majo
Slide 25: Our fleet as at 30 September 2016
Our fleet as at 30 September 2016 • 29 vessels in the active fleet 7 Chartered: 22 Owned: Rockwater 2 Seven Antares Skandi Acergy Seven Borealis Seven Atlantic Seven Waves Grant Candies Seven Oceans Seven Falcon Seven Pacific Normand Subsea Seven Condor Seven Osprey Seven Phoenix Siem Stingray Seven
Slide 26: 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 period-on-period or with o
Slide 27: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA Net operating income to Adjusted EBITDA Three Months Ended Three Months Ended 30 September 2016 30 September 2015 For the period (in $millions) Net operating income 195 214 Depreciation, amortisation and mobilisation 94 100 Impairment of property, plant and equipmen
Slide 28: Segmental analysis
Segmental analysis For the three months ended 30 September 2016 In $ millions (unaudited) SURF & Conventional i-Tech Services Corporate TOTAL Revenue 801 97 30 928 Net operating income 204 19 (28) 195 Finance income 1 Other gains and losses (8) Finance costs (2) Income before taxes 186 For the three
Slide 29: Income statement – supplementary details
Income statement – supplementary details In $ millions Three months ended 30 September 16 30 September 15 Unaudited Unaudited Administrative expenses (63) (89) Share of net income of associates and joint ventures 11 33 Depreciation and amortisation 94 100 Impairment of property, plant and equipment
Slide 30: Summary balance sheet
Summary balance sheet 30 Sep 31 Dec 30 Sep 31 Dec 2016 2015 2016 2015 In $ millions Unaudited Audited In $ millions Unaudited Audited Assets Equity & Liabilities Non-current assets Total equity 5,634 5,346 Goodwill 731 767 Non-current liabilities Property, plant and equipment 4,432 4,559 Non-current
Slide 31: subses
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