Subsea 7 S.a. · OSL:SUBC
Subsea 7 — Q3 2022 Earnings Presentation
29 slides from Subsea 7's earnings presentation, Nov 17, 2022
Slide 1: Third Quarter 2022 Earnings Presentation
Third Quarter 2022 Earnings Presentation 17 November 2022 1 © Subsea7 - 2022 subsea7.com
Slide 2: Forward-looking statements
Forward-looking statements This document may contain ‘forward-looking statements’ (within the meaning of the safe harbour provisions of the U.S. Private Securities Litigation Reform Act of 1995). These statements relate to our current expectations, beliefs, intentions, assumptions or strategies rega
Slide 3: Third quarter 2022 – summary
Third quarter 2022 – summary • Strong performance in Subsea and Conventional – Solid execution of major projects – Continued close-out of projects in Gulf of Mexico and Saudi Arabia • Performance in Renewables stabilised – Good progress in the final stages of Seagreen – Completion of challenging pro
Slide 4: Sustainability
Sustainability • We continue to engage and progress against our Sustainability priorities – Founding member of the Powering Net Zero Pact led by SSE – Target to achieve Net Zero by 2050 • Second vessel hybridisation – New energy-saving and storage system contracted for Seven Arctic – Estimated reduc
Slide 5: Operational highlights
Operational highlights • Sakarya 73% complete – Seven Arctic and Seven Oceanic mobilising to Türkiye with umbilicals • Sangomar 64% complete – Pipelay ongoing with Seven Vega, Seven Oceans, supported by Seven Sisters Sakarya, Türkiye Sangomar, Senegal • Bacalhau 51% complete – Fabrication ongoing, p
Slide 6: Our Vision and Values framework
Our Vision and Values framework How we Our Vision Our Values make possible To make possible These are the key areas the global delivery that differentiate of offshore energy for Subsea7: today and tomorrow. • Early engagement and system innovation • Collaboration and partnerships • Integrated servic
Slide 7: Our strategic focus
Our strategic focus How we Our Strategy make possible We create sustainable Lower carbon oil & gas continuous evolution These are the key areas value by delivering • Subsea and Conventional that differentiate the offshore energy Subsea7: transition solutions • Life of Field • Early engagement and th
Slide 8: Subsea7, SLB and Aker Solutions to create joint venture
Subsea7, SLB and Aker Solutions to create joint venture Current New from H2 2023 NewCo ownership 70% SLB 20% Aker Solutions 10% Subsea7 NewCo The transaction is subject to regulatory Subsea production systems Subsea production systems Subsea production systems approvals as well as 60% 40% other cust
Slide 9: NewCo - what will this mean for Subsea7?
NewCo - what will this mean for Subsea7? • Strengthens our long-term strategic position in Subsea and Conventional • Acquiring a 10% stake in NewCo for $306.5 million payable 2023 and 2024 – Cements Subsea7’s relationship with its partner in Subsea Integration Alliance – Strategic part-ownership of
Slide 10: Seaway7 fully funded
Seaway7 fully funded • $650 million funding plan approved ‒ $200 million rights issue ‒ $300 million RCF facility ‒ $150 million shareholder RCF facility1 • Subsea 7 S.A subscribed to 72.4% of the rights ‒ Net raise of $56 million at Group level • Seaway7 now fully funded for: ‒ Two new-build vessel
Slide 11: Solid backlog for 2022 and 2023
Solid backlog for 2022 and 2023 2022 • Q3 order intake $1.0 billion $1.1bn 2022 – New awards $0.6 billion $0.2bn 2024+ 2024+ – Escalations $0.4 billion $2.4bn $0.2bn – FX impact $(0.2) billion 2023 $3.0bn 2023 $0.2bn • YTD book-to-bill 1.1 • Group backlog $7.1 billion Subsea and Conventional Renewab
Slide 12: Third quarter 2022 – Group
Third quarter 2022 – Group Order intake Backlog $1.4bn $7.8bn • Revenue broadly flat year-on-year $7.1bn $1.0bn – Continued progress on large EPCI projects Q3 2021 Q3 2022 Q2 2022 Q3 2022 • Adjusted EBITDA margin 12.2% – Strong performance in Subsea and Revenue Conventional Adjusted EBITDA 200 180 0
Slide 13: Third quarter 2022 – Subsea and Conventional
Third quarter 2022 – Subsea and Conventional Order intake Backlog • Order intake $0.7 billion – Guyana Gas-to-Energy $1.4bn $7.0bn $6.5bn – Trell & Trine $0.7bn – Book-to-bill 0.7 – Order backlog $6.5 billion Q3 2021 Q3 2022 Q2 2022 Q3 2022 • Revenue broadly flat year-on-year • Adjusted EBITDA margi
Slide 14: Third quarter 2022 – Renewables
Third quarter 2022 – Renewables Order intake Backlog • Order intake $198 million $0.8bn – Order backlog $0.6 billion $198m $0.6bn – Pre-backlog1 over $1 billion $61m • Revenue flat year-on-year Q3 2021 Q3 2022 Q2 2022 Q3 2022 • Adjusted EBITDA margin 5.5% – 90% vessel utilisation Revenue Adjusted EB
Slide 15: Third quarter 2022 – cash flow summary
Third quarter 2022 – cash flow summary $m 533 • Cash conversion 1.4x • Free cash flow $131 million • Net debt $33 million Including lease liabilities of $204 million Cash Adjusted Working Tax Capex Financing Other Cash 1 Jul EBITDA capital 30 Sept Operating $210m Investing $(76)m Financing $(60)m Q3
Slide 16: Group financial guidance – 2022 and 2023
Group financial guidance – 2022 and 2023 2021 2022 2023 Revenue $5.0 billion Broadly in line with 2021 Higher than 2022 Administrative expense $228 million $240 – 260 million Adjusted EBITDA $521 million Broadly in line with 2021 Higher than 2022 D&A $444 million $460 – 480 million Net operating inc
Slide 17: Capital allocation framework
Capital allocation framework Subsea and Conventional Renewables 100% owned At least 51% owned Generating cash Investing for growth Well positioned with a young fleet Disciplined investment in Maintenance capex new vessels Return excess cash to Funded by Seaway7 Transitioning to an independent shareh
Slide 18: Track record of shareholder returns
Track record of shareholder returns 600 140 120 500 100 • $2.2 billion allocated to shareholder 400 returns in the last 11 years 80 300 • Commitment to a regular dividend 60 of NOK1 per share from 2021 200 • Excess cash flow to be returned 40 through share repurchases or 100 20 special dividend 0 0
Slide 19: Outlook - subsea prospects
Outlook - subsea prospects Norway UK Aker BP NOAKA (f) Equinor Marine Wave 6 Apache Solar/Corona Equinor Rosebank NEP CCS North America Türkiye Equinor Bay du Nord (i) TPAO Sakarya 2 (i) BP Tie-back projects Chevron Tie-back projects Saudi Arabia Aramco LTA South America Africa Petrobras Búzios 9 Ch
Slide 20: Outlook – offshore wind prospects
Outlook – offshore wind prospects UK Iberdrola East Anglia Three (LOE) Red Rock Inchcape SSE Seagreen 1A (PS) Vattenfall Vanguard & Boreas Europe Asia USA EnBW He Dreiht (FID) Various prospects Ørsted Revolution Iberdrola Windanker Sunrise Equinor Baltyk II Shell Mayflower Baltyk III Atlantic Shores
Slide 21: Summary
Summary • Subsea outlook – “green for go” – Gradual, durable improvement in the subsea market following a period of underinvestment, underpinned by increased focus on energy security – Tender pipeline $16 billion, up 20% year-on-year – Fully-invested for the long term with the largest, youngest flee
Slide 22: Our world
Our world 22 ©© Subsea7 Subsea7 --2022 2022 subsea7.com
Slide 23: Q&A
Q&A 23 © Subsea7 - 2022 subsea7.com
Slide 24: Appendix
Appendix • Major project progression • Q3 2022 income statement • Q3 2022 supplementary details • Fleet overview 24 © Subsea7 - 2022 subsea7.com
Slide 25: Major project progression
Major project progression • Continuing projects >$100m between 5% and 95% complete as at 30 September 2022 excluding PLSV and Life of Field day-rate contracts Blythe & Vulcan Satellite Hubs (UK) Penguins Redevelopment (UK) Vito Construction (USA) Announced Hollandse Kust (Netherlands) Yunlin (Taiwan
Slide 26: Q3 2022 – income statement summary
Q3 2022 – income statement summary Three months ended 30 September 2022 30 September 2021 In $ millions, unless otherwise indicated Unaudited Unaudited Revenue 1,404 1,451 Net operating income 53 78 Income before taxes 27 106 Taxation (27) (61) Net income - 45 Adjusted EBITDA 171 185 Adjusted EBITDA
Slide 27: Q3 2022 – supplementary details
Q3 2022 – supplementary details Three months ended 30 September 2022 30 September 2021 In $ millions Unaudited Unaudited Administrative expenses (63) (62) Depreciation, amortisation, mobilisation and impairment (117) (107) Net operating income 53 78 Net finance cost (3) (5) Other gains and losses (2
Slide 28: Fleet – vessels in the active fleet at the end of Q3 2022
Fleet – 36 vessels in the active fleet at the end of Q3 2022 Renewables and transportation vessels are operated by Seaway7 ASA Seaway Alfa Lift and Seaway Ventus are under construction and therefore excluded from the active fleet total. Maersk Connector is on long-term charter from a third party Sev
Slide 29: © Subsea7 - 2022 subsea7.com
29 © Subsea7 - 2022 subsea7.com