Subsea 7 S.a. · OSL:SUBC
Subsea 7 — Q2 2012 Earnings Presentation
23 slides from Subsea 7's earnings presentation, Aug 9, 2012
Slide 1: Earnings Presentation Second Quarter 2012
Earnings Presentation Second Quarter 2012 August 9, 2012 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,” “estimate,” “expect,” “intend,” “may,” “plan,” “forecast”, “project,” “will,” “should,” “seek,” and s
Slide 3: Delivered good Q2 2012 results
Delivered good Q2 2012 results • Good results reflect: - High activity levels in North and Norwegian Seas; albeit mitigated by - poor weather early in quarter - execution of lower margin contracts awarded in previous years - High activity levels in West Africa - Brazil impacted by scheduled dry-dock
Slide 4: Backlog
Backlog • Backlog of $8.3billion: - remains close to record level - high level of tendering creates opportunity for further growth - focused on building „quality‟ backlog Backlog progression $m 8,538 8,686 8,285 7,883 7,903 6,668 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 9-Aug-12 Page 4
Slide 5: Returns to shareholders
Returns to shareholders • $200m share buyback programme completed on 6 July - 8.6m shares acquired in aggregate (2.4% of total shares outstanding) • $200m cash dividend paid 5 July - equivalent to $0.60 per share • Veripos Inc. listed on Oslo Børs 26 July - distributed as dividend-in-kind on 1 for 1
Slide 6: Market overview
Market overview • No apparent impact from oil price volatility and macro-economic uncertainty on client activity • Strong momentum among clients to bring new reserves into production – high level of bidding activity to translate to market awards later this year • Growth opportunities in all major ma
Slide 7: Market overview
Market overview • Growth opportunities in all major markets, albeit at differing paces: • APME - Pricing conditions remain more challenging than other territories - Expect projects to come to market award later this year • Brazil - Petrobras‟s revised plans remain ambitious - Opportunities include:
Slide 8: Income statement – key highlights
Income statement – key highlights Seven Six months Three months Ended months ended ended 30.Jun.12 30.Jun.11 30.Jun.12 30.Jun.11 In $ millions, unless indicated unaudited unaudited unaudited Unaudited Revenue 1,484 1,335 2,942 2,627 Net operating income 246 210 400 304 Gain on sale of NKT Flexibles
Slide 9: Operational performance – Q2 2012
Operational performance – Q2 2012 $713m $308m $308 m $93m ($8m) ($8m) Revenue Revenue NOI NOI Revenue NOI $538m $85m $27m $308 m $147m Revenue NOI $113m $(4)m ($8m) Revenue NOI Revenue NOI Revenue NOI 9-Aug-12 Page 9
Slide 10: Income statement – other details
Income statement – other details Three Three months months ended ended 30.Jun.12 30.Jun.11 In $ millions Unaudited Unaudited Administrative expenses (77) (97) Share of results of associates and joint ventures 33 34 Net operating income 246 210 Finance costs net of investment income (6) (6) Other gai
Slide 11: Cash flow and balance sheet overview – 1H 2012
Cash flow and balance sheet overview – 1H 2012 • Cash generated from operating activities: $124m - Net increase in operating assets: $309m • Net cashflow from investing activities: $15m - capital expenditure of $338m: Seven Borealis, Seven Inagha, new-build PLSV - disposal of NKT Flexibles for net p
Slide 12: 2012 financial guidance
2012 financial guidance • We expect to deliver 2012 Adjusted EBITDA in-line with consensus expectations - JV contribution – flat year-on-year (excluding NKT Flexibles) • Capex for 2012: $750m-$800m - $450m on new vessel programme: Seven Inagha, Seven Borealis, Seven Viking, PLSV - $150m on dry-docki
Slide 13: Outlook
Outlook • We expect to deliver 2012 Adjusted EBITDA in-line with consensus • Looking further out: - NSMC: In the North and Norwegian Seas, we expect low margin contracts awarded in previous years to complete in 2012 - AFGOM: delay in market award of some large projects in Nigeria and Angola will res
Slide 14: Fleet investment programme on track
Fleet investment programme on track • Seven Borealis expected to commence operations on CLOV in Q4 • Seven Inagha joined fleet, acquired 50% stake in Normand Oceanic • Over 40 vessels - continue to enhance our fleet to drive profitable growth SURF Conventional Life-of-Field Divest / Release JVs *Ole
Slide 15: Seven Borealis
Seven Borealis 9-Aug-12 Page 15
Slide 16: Summary
Summary • Good quarterly results • 2012 Adjusted EBITDA expected to be in-line with consensus • Expectation of major contracts awarded to market in coming months • Growth opportunities visible in all markets, albeit at differing paces • Company well positioned for profitable growth: - financial stre
Slide 17: Appendix
Appendix 11-May-11 2-Nov-11 Page 17
Slide 18: Major project progression
Major project progression Continuing projects >$100m between 5% and 95% complete as at 30 June 2012 excl. long-term ship charters and Life-of-Field day-rate contracts. 0% 20% 40% 60% 80% 100% EGP3B (Nigeria) P55 Export (Brazil) Block 18 GEL (Angola) Andrew Bundle (UK) Jasmine (UK) GSNC (Brazil) MPN
Slide 19: Backlog
Backlog Backlog progression $m 8,538 8,686 8,285 7,883 7,903 6,668 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Backlog by Award Date Backlog by Execution Date Backlog by Service Capability Backlog by Segment 2010 2014+ SURF NSMC AFGoM 2012 23% 2011 25% 74% 35% 29% 31% 46% LoF <2009 10% Brazil 14% 2013 28% 2
Slide 20: Segmental analysis
Segmental analysis Three months ended Total 30.Jun.12 NSMC AFGoM APME Brazil CORP operations Unaudited In $ millions Revenue 713 538 85 147 1 1,484 Net operating 93 113 27 (4) 17 246 income/(loss) Net interest expense (6) Other gains/(losses) 263 Net income before taxation 504 Three months ended Tot
Slide 21: Adjusted EBITDA
Adjusted EBITDA • The Group calculates adjusted earnings before interest, income taxation, depreciation and amortisation („Adjusted EBITDA‟) as net income plus finance costs, other gains and losses, taxation, depreciation and amortisation and adjusted to exclude investment income and impairment char
Slide 22: Reconciliation of net operating income to Adjusted EBITDA
Reconciliation of net operating income to Adjusted EBITDA Three Months Three Months Ended Ended In $ millions (except percentages) 30.Jun.12 30.Jun.11 Net operating income 246 210 Depreciation and amortisation 85 85 Impairment/(reversal) charge (5) 12 Adjusted EBITDA 326 307 Revenue 1,484 1,335 Adju
Slide 23: seabed-to-surface
seabed-to-surface www.subsea7.com 10.01.11 9-Aug-12 Page 23