Subsea 7 S.a. · OSL:SUBC
Subsea 7 — Q1 2017 Earnings Presentation
33 slides from Subsea 7's earnings presentation, Apr 27, 2017
Slide 1: Earnings Presentation First Quarter 2017
Earnings Presentation First Quarter 2017 27 April 2017 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: Q1 2017 highlights
Q1 2017 highlights FINANCIAL OPERATIONAL • Revenue $897 million • Good execution and successful • Adjusted EBITDA $268 million, project outcomes margin 30% • Vessel Utilisation • Diluted EPS $0.41 Active: 65% Total: 55% • Acquisition of Seaway Heavy • Fleet enhanced and Lifting modernised ORDER INTA
Slide 5: Project highlights
Project highlights • Good execution sustained across the project portfolio • Successful ways of working and early engagement WND phase 1 Western Isles Callater (Egypt) (UK) (UK) Persephone 3 Stampede Beatrice (Australia) (US GoM) (UK) 5
Slide 6: Subsea Integration Alliance – with OneSubsea
Subsea Integration Alliance – with OneSubsea • Mad Dog 2 project, US GoM • Integrated ways of working – Cost and schedule assurance – Risk mitigation • Swagelining technology • Dalmatian project, US GoM • Fully integrated award • Fit for purpose technology • Enhanced recovery • Reduced interface and
Slide 7: Q1 Backlog and order intake
Q1 Backlog and order intake • Backlog of $5.7 billion(1), as at 31 March 2017 • $0.6 billion new awards including: – Mad Dog 2, US Gulf of Mexico – Sole, offshore Australia Backlog by Execution Date Backlog by segment SURF and Conventional(2) 2019+ $4.1bn $1.2bn Southern and Global 2017 Projects $2.
Slide 8: Business Unit outlook
Business Unit outlook SURF and Conventional • Remaining competitive, but with the right project risk profile • Active SURF project tenders include: • Zinia (Angola) • Golfinho (Mozambique) • Liza (Guyana) • KG-DWN, block 98/2 (India) • Skarfjell (Norway) • KG-D6, R-Cluster (India) • Pil and Bue (Nor
Slide 9: Ricardo Rosa, CFO
subsed 7 Ricardo Rosa CFO
Slide 10: Income statement – key highlights
Income statement – key highlights Three months ended 31 March 2017 31 March 2016 In $ millions, unless otherwise indicated Unaudited Unaudited Revenue 897 746 Net operating income (NOI) 169 194 Income before taxes 206 211 Taxation (60) (64) Net income 146 147 Adjusted EBITDA(1) 268 284 Adjusted EBIT
Slide 11: Business Unit performance
Business Unit performance Revenue NOI Q1 2017 Q1 2017 $897m $746m $169m $194m $10m $220m $2m $15m $103m $11m $76m $641m $167m $602m $151m ($4m) 2017 2016 2017 2016 SURF & i-Tech Renewables & Conventional Services Heavy Lifting) Corporate segment: Net operating income Q1 2017 $11m (Q1 2016: $2m) 11
Slide 12: Summary of first quarter 2017 cash flow
Summary of first quarter 2017 cash flow $m 268 (10) (31) (111) (194) 301 (27) 1,872 1,676 Cash at 31 Proceeds from EBITDA Tax Paid Capex Acquisition of Decrease in Net Other Cash at 31 December 2016 Borrowings Business Operating March 2017 (net of cash Liabilities acquired) • Net cash of $1.0 billio
Slide 13: Financial guidance
Financial guidance 2017 Guidance Revenue Broadly in line with 2016 Adjusted EBITDA percentage margin Lower than 2016 Administrative expense $210 million - $230 million Net finance cost $10 million - $15 million Depreciation and Amortisation $410 million - $430 million Full year effective tax rate 28
Slide 14: Jean Cahuzac, CEO
subsed 7 Jean Cahuzac CEO
Slide 15: Strengthening our market-leading capabilities
Strengthening our market-leading capabilities • Subsea 7 results driven by early response to lower oil price • Prioritised capability, experience and expertise • Invested strategically to strengthen and differentiate our market-leading position Early Engagement Renewables Modern, Alliances Heavy Lif
Slide 16: Engaging with clients early to deliver value
Engaging with clients early to deliver value Project from client’s perspective Faster progress to approval gates = Accelerated project development Earlier reduction of project budget Assurance of uncertainty envelope delivery within FID boundaries Gate 1 Gate 2 Budget FID uncertainty KG7 enabled Tra
Slide 17: Renewables and Heavy Lifting: Renewables market drivers
Renewables and Heavy Lifting Renewables market drivers • Competitiveness of offshore wind continues to improve • First non-subsidised wind farms announced • Need for alternate power sources to replace aging generation capacity • Economies of scale and heavier lift requirements from increasing size o
Slide 18: A modern and versatile fleet of 34 vessels
A modern and versatile fleet of 34 vessels Ownership Vessels by Ownership type Vessels by Age 6 11 10 0-5 years Owned 6-11 years Chartered 12+ years 28 13 Vessels by Operational category Hook-up Heavy Lifting ROV Support Horizontal flexlay Rigid-lay / Heavy Construction Diving Support Vertical flexl
Slide 19: Positioned well for long-term performance
Positioned well for long-term performance • Industry conditions remain challenging in the near term; a gradual market recovery is anticipated • We are engaging earlier and executing well • We are investing and partnering strategically to extend and differentiate our services • Our differentiated ser
Slide 20: Q&A
subsed 7 Q&A
Slide 21: Appendix
Appendix • Our global presence • Major project progression • Adjusted EBITDA • Supplementary Income Statement • Segmental analysis • Re-presentation of 2016 • Balance Sheet summary • Cash flow summary • Our fleet 21
Slide 22: Our global presence
Our global presence • Beatrice wind farm, BOWL • Catcher, Premier • Culzean, Maersk • Callater, Apache • Aasta Hansteen, Statoil • Western Isles, Dana • Maria, Wintershall • USC & Pipelay, Shell • Mariner, Statoil • SCIRM, BP • DSVi, Various • Mad Dog 2, BP • Stampede, Hess • Coulomb Ph2, Shell • Ho
Slide 23: Major project progression
Major project progression Continuing projects >$100m between 5% and 95% complete as at 31 March 2017 excluding PLSV and Life of Field day-rate contracts West Nile Delta P1 (Egypt) Clair Ridge (UK) Announced Aasta Hansteen (Norway) size of Stampede (GOM) project SLMP (Norway) Major (Over $750m) Catch
Slide 24: 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 25: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA Net operating income to Adjusted EBITDA Three Months Ended Three Months Ended 31 March 2017 31 March 2016 For the period (in $millions) Unaudited Unaudited Net operating income 169 194 Depreciation, amortisation and mobilisation 99 90 Adjusted EBITDA 268 284 Revenue
Slide 26: Income statement – supplementary details
Income statement – supplementary details In $ millions Three months ended 31 March 17 31 March 16 Unaudited Unaudited Administrative expenses (48) (53) Share of net income of associates and joint ventures (7) 16 Depreciation and amortisation (99) (90) Net operating income 169 194 Net finance income
Slide 27: Segmental analysis
Segmental analysis For the three months ended 31 March 2017 SURF & Renewables & In $ millions (unaudited) i-Tech Services Corporate TOTAL Conventional Heavy Lifting Revenue 602 76 220 - 897 Net operating income 151 11 (4) 11 169 Finance income 5 Remeasurement gain on business 42 combination Other ga
Slide 28: Re-presented segmental results 2016
Re-presented segmental results 2016 2016 re-presented segmental results by quarter (unaudited) In $ millions Revenue 2016 Q1 Q2 Q3 Q4 Full Year SURF & Conventional 641 866 801 705 3,013 i-Tech Services 103 93 97 85 377 Renewables & Heavy Lifting 2 2 30 142 176 Corporate - - - - - Total 746 961 928 9
Slide 29: 2016 Re-presented Summary Financial Information
2016 Re-presented Summary Financial Information For the year ended 31 December 2016 (unaudited) Renewables SURF & i-Tech In $ millions & Heavy Corporate TOTAL Conventional Services Lifting Revenue 3,013.3 377.4 176.0 - 3,566.7 Operating and administrative expenses (excluding (1,936.9) (290.3) (172.5
Slide 30: Summary balance sheet
Summary balance sheet 31 Mar 31 Dec 31 Mar 31 Dec 2017 2016 2017 2016 In $ millions Unaudited Audited In $ millions Unaudited Audited Assets Equity & Liabilities Total equity 5,716 5,537 Non-current assets Non-current liabilities Goodwill 673 628 Non-current portion of borrowings 370 - Property, pla
Slide 31: Summary of first quarter 2017 cash flow
Summary of first quarter 2017 cash flow $ millions Cash and cash equivalents at 31 Dec 2016 1,676 Net cash generated from operating activities 65 Decrease of $194 million in net operating liabilities Included $111m cash outflow on acquisition of Seaway Heavy Lifting Net cash flow used in investing a
Slide 32: Our fleet as at 31 March 2017
Our fleet as at 31 March 2017 • 30 vessels in the active fleet 6 Chartered: 24 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 Rio
Slide 33: subses
subses 7