Saipem S.p.a. · MIL:SPM
Saipem — H1 2017 Earnings Presentation
29 slides from Saipem's earnings presentation, Jul 25, 2017
Slide 1: First Half 2017 Results Presentation
FIRST HALF 2017 RESULTS PRESENTATION 25 July 2017
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS Forward-looking statements contained in this presentation regrading future events and future results are based on current expectations, estimates, forecasts and projections about the industries in which Saipem S.p.A. (the “Company”) operates, as well as the beliefs and ass
Slide 3: Today's Presentation
TODAY’S PRESENTATION 1 OPENING REMARKS 2 1H 2017 RESULTS 3 BUSINESS UPDATE 4 FIT FOR THE FUTURE 5 CLOSING REMARKS AND GUIDANCE 3
Slide 4: Opening Remarks
OPENING REMARKS 1H 2017 Operating Results • Robust performance of the Offshore E&C Division • Onshore E&C Division margin improvement on track • Drilling Offshore margin resilient during 1H despite declining activity Special items on Reported Results Net Debt at €1.5bn benefiting from good cash gene
Slide 5: New Organisational Structure Fully in Place
NEW ORGANISATIONAL STRUCTURE FULLY IN PLACE C O R P O R A T E INTERNAL BOD AUDIT CORPORATE CEO FUNCTIONS D I V I S I O N S E&C ONSHORE E&C OFFSHORE OFFSHORE ONSHORE HIGH VALUE DRILLING DRILLING SERVICES G. CASELLI S. PORCARI M. TONINELLI F. RACHELI M. PIASERE LEANER, COST EFFECTIVE AND HIGHLY ACCOUN
Slide 6: 1H 2017 Results
fo ™ SAIPEM ENGINEERING ENERGY 1H 2017 RESULTS r= SAIPEM ENGINEERING a | ENERGY
Slide 7: 1H 2017 Results: YoY Comparison
1H 2017 RESULTS YoY COMPARISON (€ mn) Revenues Adjusted EBITDA Adjusted Net Profit 5,275 290 487 4,590 247 669 323 83 1,433 524 1,662 54 237 531 157 338 49 140 2,534 92 2,020 318 276 1H16 1H17 1H16 1H17 1H16 1H17 E&C Offshore E&C Onshore Drilling Offshore Drilling Onshore Floaters* (*) Floaters busi
Slide 8: 1H 2017 Net Result
1H 2017 NET RESULT RECONCILIATION (€ mn) Net Result 92 (26) (79) (97) (110) 1H17 Net provisions for Settlement of tax Assets 1H17 Adjusted redundancies disputes write-downs Reported SPECIAL ITEMS 8
Slide 9: 1H 2017 Net Debt Evolution
1H 2017 NET DEBT EVOLUTION (€ bn) Good Operating Cash Flow generation underpins year-end Net Debt guidance 1H Net Debt down from €1.6bn at 1Q 1.45 0.34 1.50 (0.36) 0.15 (0.08) Net Debt Adj. Cash Flow Capex Δ Working Non-recurring Net Debt @Dec. 31, 2016 (Adj. N.P.+ D.&A.) Capital and items* @June 30
Slide 10: Capital Structure as of June 30, 2017
CAPITAL STRUCTURE AS OF JUNE 30, 2017 (€ mn) Solid Debt Maturity Profile and Liquidity Position 3,878 Term Loan Bonds ECA Facilities Bank Facilities Other Debt 511 Undrawn ECA Facilities (GIEK and Atradius) 1,500 Undrawn RCF 754 548 534 534 1,867 Cash and equiv. 455 404 350 2 48 34 34 85 35 50 37 37
Slide 11: Capital Structure Projected as of End of July 2017
CAPITAL STRUCTURE PROJECTED AS OF END OF JULY 2017 (€ mn) Further improvement of Debt Maturity Profile and Liquidity Position Term Loan Bonds ECA Facilities Bank Facilities Other Debt 3,353 286 Undrawn ECA Facilities (GIEK and Atradius) 1,500 Undrawn RCF 605 575 560 560 1,567 Cash and equiv. 75 60 6
Slide 12: Business Update
fo ™ SAIPEM ENGINEERING ENERGY BUSINESS UPDATE r= SAIPEM ENGINEERING a | ENERGY
Slide 13: 1H 2017 Backlog
1H 2017 BACKLOG (€ mn) 14,219 4,590 2,088 11,717 Backlog 1H17 1H17 Contracts Backlog @Dec. 31, 2016 Revenues Acquisition @June 30, 2017 E&C Offshore E&C Onshore Drilling Offshore Drilling Onshore Floaters* 13 (*) Floaters business reported separately, Dec. 31, 2016 restated accordingly
Slide 14: Backlog by Year of Execution
BACKLOG BY YEAR OF EXECUTION (€ mn) 4,622 441 3,777 409 228 276 3,318 1,422 344 1,281 486 529 480 388 920 1,870 1,604 1,039 2017 2018 2019+ E&C Offshore E&C Onshore Drilling Offshore Drilling Onshore Floaters* 14 (*) Floaters business reported separately
Slide 15: Main Awards 2Q 2017 - Drilling
MAIN AWARDS 2Q 2017 - DRILLING SAIPEM 12000 Scope of work: — Execution of drilling services for 6 wells offshore Mozambique (Coral) Terms: 15 months (firm period) plus options for additional 45 months — Execution of drilling services offshore Cyprus Terms: 2 wells Conditions: firm period daily r
Slide 16: Main Awards 2Q 2017 – E&C
MAIN AWARDS 2Q 2017 – E&C LIZA SURF Client: ExxonMobil Saipem FDS2 Location: offshore Guyana in 1,800m water depth Scope of work: — EPCI of flowlines, risers and associated structures and jumpers — T&I of umbilicals, manifold and associated foundations for the production and water / gas inject
Slide 17: Near Term E&C Opportunities
NEAR TERM E&C OPPORTUNITIES Subsea Fixed Facilities • Eni Zohr Ramp-up Phase - Egypt • Saudi Aramco LTA Developments – • Eni West Hub - Angola Saudi Arabia Upstream-Midstream Downstream • ADCO BAB Integrated Facilities – Abu • DUQM Refinery Program – Oman Dhabi • OTTCO Ras Markaz Crude Oil Park • KO
Slide 18: E&C Opportunities
E&C OPPORTUNITIES OFFSHORE LEGEND ONSHORE Americas Europe/ CIS and Central Asia BP Cassia Compression – fixed facilities (post 2017) BP Shah Deniz IMR – inspection, maintenance & repair Petrobras Libra Development – subsea (post 2017) New EDF Courseulles Offshore Windfarm – renewables
Slide 19: Update on Drilling: Offshore Drilling Fleet Contracts
UPDATE ON DRILLING OFFSHORE DRILLING FLEET CONTRACTS Committed Stand-by Termination fee New Contract Optional period CLIENT LOCATION Saipem 12000 TO 2022> Cyprus-Portugal- Eni Mozambique Saipem 10000 Eni Egypt DEEP-WATER Scarabeo 9 JV Eni-Partner Black Sea Scarabeo 8 Eni North Sea Scarabeo 7 Eni Ind
Slide 20: Fit For the Future
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Slide 21: Fit For the Future: Cost Savings Program Almost Completed
FIT FOR THE FUTURE COST SAVINGS PROGRAM ALMOST COMPLETED AS OF JUNE 30.06.2017 € mn 750 650 Cumulative Cumulative EBIT Cost Savings 300 improvement €1.7bn €1.0bn through 2017 2H2015 2016 2017 Achieved in 2015 Achieved in 2016 Within Q3 2017 EFFICIENCY TARGETS FULLY IN PLACE BY 3Q 21
Slide 22: FFF2.0 – New Organization in Place
FFF2.0 – NEW ORGANIZATION IN PLACE Few slim support functions (e.g.: Admin., Finance, Legal, Strategies, M&A, IR, Innovation …) CORPORATE Steering and Control towards all Divisional Staff Functions 5 DIVISIONS ACCOUNTABLE WORLDWIDE ONSHORE OFFSHORE HIGH VALUE ONSHORE E&C OFFSHORE E&C DRILLING DR
Slide 23: FFF2.0 – Redundancies and Additional Savings
FFF2.0 – REDUNDANCIES AND ADDITIONAL SAVINGS €110mn OF IDENTIFIED SAVINGS WITH ADDITIONAL EFFICIENCIES POTENTIAL REDUNDANCIES: €100mn annual savings Yearly Saving*: c.€20mn c.€100mn Yearly Provisions*: c.€60mn c.€50mn RUN RATE REDUNDANCIES: c.1,150 REDUNDANCIES TOTAL COST: Cumulative >1,100 c.€190mn
Slide 24: Closing Remarks and Guidance
CLOSING REMARKS AND GUIDANCE 24
Slide 25: 2017 Guidance
2017 GUIDANCE Metrics FY 2017 Revenues c.€9.5bn EBITDA c.€1bn % margin > 10% Net Profit Adjusted c.€200mn * CAPEX < €400mn Net financial position c.€1.4bn (*) Excl. Special Items: net provisions for redundancies, tax disputes settlement, asset write downs 25
Slide 26: Closing Remarks
CLOSING REMARKS SOLID OPERATIONAL PERFORMANCE; CAPITAL STRUCTURE STRENGTHENED FURTHER HEALTHY CASH FLOW GENERATION AND NET DEBT REDUCTION IN Q2 NEW DIVISIONAL ORGANISATION IN PLACE, ADDITIONAL SAVINGS IDENTIFIED GOOD VISIBILITY ON SIGNIFICANT NEAR TERM AWARDS 26
Slide 27: Appendix
fo ™ SAIPEM ENGINEERING ENERGY APPENDIX r= SAIPEM ENGINEERING a | ENERGY
Slide 28: 2Q 2017 Results: QoQ Trend
2Q 2017 RESULTS QoQ TREND (€ mn) Revenues Adjusted EBITDA Adjusted Net Profit 2,263 2,327 124 123 268 162 161 256 23 775 887 31 81 76 25 227 111 24 54 1,045 171 38 975 105 -32 1Q17 2Q17 1Q17 2Q17 1Q17 2Q17 E&C Offshore E&C Onshore Drilling Offshore Drilling Onshore Floaters* (*) Floaters business re
Slide 29: 2Q 2017 Result Reconciliation
2Q 2017 RESULT RECONCILIATION (€ mn) Net Result 38 (19) (79) (97) (157) 2Q17 Net provisions for Settlement of tax Assets 2Q17 Adjusted redundancies disputes write-downs Reported SPECIAL ITEMS 29