Subsea 7 S.a. · OSL:SUBC
Subsea 7 — Q1 2014 Earnings Presentation
37 slides from Subsea 7's earnings presentation, Apr 30, 2014
Slide 1: Earnings Presentation First Quarter 2014
Earnings Presentation First Quarter 2014 30 April 2014 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: Q1 2014 summary
Q1 2014 summary HIGHLIGHTS FINANCIAL OPERATIONAL ORDER IN-TAKE • Improved • Revenue • Global vessel • Strong order financial result increased 14% utilisation of 79%, backlog at $11.6 from prior year from prior year up from prior year billion at quarter first quarter first quarter first quarter end •
Slide 4: Quality backlog - good spread by geography and contract mix
Quality backlog - good spread by geography and contract mix Backlog progression ($ billions) 11.8 11.8 11.6 10.2 10.4 9.1 8.7 8.3 8.1 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Backlog by Award Date Backlog by Execution Date Backlog by Territory 2012 AFGOM 2015 14% NSC 24% 2014 26% 2013 3
Slide 5: Income statement – key highlights
Income statement – key highlights Three months ended 31 Mar 14 31 Mar 13 In $ millions, unless otherwise indicated Revenue 1,668 1,467 Net operating income (NOI) 166 154 Income before taxes 173 158 Taxation (36) (26) Net income 137 132 Adjusted EBITDA1 264 241 Adjusted EBITDA margin 15.8% 16.4% Dilu
Slide 6: Territory performance – Q1 2014
Territory performance – Q1 2014 AFGOM Brazil $669m $231m $77m $19m Revenue NOI Revenue NOI APME NSC $558m $205m $73m $11m Revenue NOI Revenue NOI Note: excludes contribution from Corporate segment Page 6
Slide 7: Income statement – supplementary details
Income statement – supplementary details Three months ended In $ millions 31 Mar 14 31 Mar 13 Administrative expenses (81) (76) Share of net income of associates and joint ventures 16 16 Net operating income 166 154 Finance costs net of finance income (1) (18) Other gains and losses 8 21 Income befo
Slide 8: Overview of Q1 2014 cash flow
Overview of Q1 2014 cash flow $ millions Cash and cash equivalents at 31 Dec 2013 650 Includes decrease in net operating Net cash generated from operating activities 257 assets of $70m Includes capital expenditure of $288m Net cash flow used in investing activities (271) mainly on new vessel constru
Slide 9: Summary balance sheet
Summary balance sheet 31 Mar 31 Dec 31 Mar 31 Dec In $ millions 2014 2013 In $ millions 2014 2013 Assets Equity & Liabilities Non-current assets Total equity 6,728 6,612 Goodwill 2,609 2,585 Non-current liabilities Property, plant and equipment 4,291 4,098 Non-current portion of borrowings 640 636 O
Slide 10: 2014 financial guidance
2014 financial guidance No change to previously communicated guidance (repeated below), other than lower expected effective tax rate • Group revenue expected to increase from 2013 level • Adjusted EBITDA expected to increase moderately from that achieved in 2013 after adding back the $355 million fu
Slide 11: Capital expenditure for on-going vessel new-build programme
Capital expenditure for on-going vessel new-build programme1 $ millions 161 Total = $1.9 billion (E) 600 557 410 190 Up to 31 Dec 2013 2014 E 2015 E 2016 E Forecast Actual spend to date Note: 1 Includes four PLSVs being constructed for long-term contracts with Petrobras (including the Seven Waves),
Slide 12: Fleet investments to meet growth objectives: Vessels under construction
Fleet investments to meet growth objectives: Vessels under construction Ship Vessel Type Rationale Operational Seven Waves Under 5-year contract with 2nd Quarter 2014 Petrobras Pipelay Support Vessel (PLSV) Seven Sun Under 5-year contracts 4th Quarter 2015 Seven Rio with Petrobras 2nd Quarter 2016 S
Slide 13: Market overview
Market overview Tendering activity is high; however, the timing of some large contract awards remains uncertain • SURF: strong tendering activity in the North Sea, Africa, Gulf of Mexico and Asia • Life-of-Field: strong demand, particularly in the UK sector of the North Sea • Conventional: the activ
Slide 14: 2014 outlook
2014 outlook AFGOM • Africa • SURF: high tendering activity in West and East Africa; timing of large project market awards remains uncertain • Conventional: lack of short-term visibility on timing of IOCs’ activity growth in Nigeria • Gulf of Mexico • High tendering activity for small and medium-siz
Slide 15: 2014 outlook
2014 outlook Brazil • Guará-Lula NE project: good operational progress thus far in 2014 • All four buoys to be fully installed by end of Q2 • Riser installation and other offshore operations to be completed by late Q4 • The Seven Waves (PLSV) five-year contract to commence in Q2 • Territory financia
Slide 16: 2014 outlook
2014 outlook NSC • SURF: • High level of tendering activity; timing of large project market awards remains somewhat uncertain • Our technology remains a key differentiator: strong interest from operators for our Bundle solution • Deployment of the Seven Oceans and the Skandi Acergy outside the North
Slide 17: Addressing our clients’ needs
Addressing our clients’ needs Helping to reduce the cost of our clients’ projects • Early engagement to define optimal technical and cost-effective options • Technology-driven solutions • Focus on “fit-for-purpose” engineering without compromising risk profile • Integrated project teams of Subsea 7
Slide 18: Summary
Summary • Good start to 2014, with increased revenue, Adjusted EBITDA, net income and EPS in Q1 compared to the prior year first quarter • Strong order backlog of $11.6 billion at end of first quarter • Brazil turnaround on track, supported by the renewal of existing PLSV contracts, deployment of th
Slide 19: Appendix
subses 7 Appendix www.subsea7.com seabed-to-surface
Slide 20: Major project progression
Major project progression Continuing projects >$100m between 5% and 95% complete as at 31 March 2014 excl. PLSVs and Life-of-Field day-rate contracts Line 60 (Mexico) CLOV (Angola) West Franklin (UK) Laggan Tormore UK) G1-GS15 (India) Brazil Block 31 GES (Angola) Guara Lula NE (Brazil) Africa, Gulf
Slide 21: Segmental analysis
Segmental analysis For the three months ended 31 March 2014 In $ millions AFGOM APME BRAZIL NSC CORP TOTAL Revenue 669 205 231 558 5 1,668 Net operating income/(loss) from ops 77 11 19 73 (14) 166 Finance income 4 Other gains and losses 8 Finance costs (5) Income before taxes 173 For the three month
Slide 22: 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 23: 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 2014 31 Mar 2013 Net operating income 166 154 Depreciation, amortisation and mobilisation 97 88 Impairment 1 (1) Adjusted EBITDA 264 241 Revenue 1,668
Slide 24: 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 the history of Subsea 7 – 20 subsea structures and foundations (up to circa 1,000Te
Slide 25: CLOV Block 17 - Angola
CLOV Block 17 - Angola • Technology-rich SURF project • High local content with Sonamet fabrication facility • Successful deployment of the 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
Slide 26: Aasta Hansteen gas field - Norway
Aasta Hansteen gas field - Norway • Technology-rich SURF project • 1,200m water depth, deepest in North Sea • 300km off northern Norway, harsh environment • First SCRs (x4) in the Norwegian Sea, manufactured at Vigra spoolbase • First installation of BUTTING Bubi® mechanically lined pipe by reeling
Slide 27: Our operational facilities
Our operational facilities Spoolbases Fabrication 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 the 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 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: Vessel Divestments from 2011 to the end of Q1 2014
Vessel Divestments from 2011 to the end of Q1 2014 Rigid Pipelay / Construction: Jun 2011 Sep 2011 Jan 2013 DSV: Construction / Horizontal Flex-lay: Jan 2013 Aug 2013 LOF / Light Construction: Aug 2011 Feb 2013 Page 35
Slide 36: Terminated Long Term Vessel Charters from 2011 to the end of Q1 2014
Terminated Long Term Vessel Charters from 2011 to the end of Q1 2014 DSV: May 2011 LOF / Light Construction: Dec 2012 Jan 2014 Jan 2014 Mar 2014 Page 36
Slide 37: Page 37
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