Subsea 7 S.A. · OSL:SUBC
Subsea 7 — Q1 2020 Earnings Presentation
26 slides from Subsea 7's earnings presentation, Apr 30, 2020
Slide 1: First Quarter 2020 Earnings Presentation
First Quarter 2020 Earnings Presentation 30 April 2020 1 © Subsea 7 - 2020 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: Dual shock: Covid-19 and oil price
Dual shock: Covid-19 and oil price Covid-19 begins to impact global operations Started the year with a and oil demand backlog of $5.2bn and Brent falls from net cash of $164m(1) ~$70/b to ~$20/b Start of 2020 February March Now Covid-19 begins to Impact on Subsea 7: impact Chinese and 1. Covid-19 im
Slide 4: Covid-19: immediate impact
Covid-19: immediate impact • Protecting the health of our workforce while continuing to deliver clients’ projects – Workforce of ~12,000 operating in 27 countries • Executing projects safely through the crisis – New safeguards for crew on vessels • Travel restrictions, quarantine and extended rotati
Slide 5: Oil price impact
Oil price impact • Backlog security – Risk to contracts awarded in 2019 and earlier is considered low – Some deferral of SURF and Conventional awards made in 2020 • Barossa – nine month delay; FID now expected Q2 2021 • Sangomar, King’s Quay, Anchor – currently progressing with some re-profiling of
Slide 6: Swift and decisive action: costs and liquidity
Swift and decisive action: costs and liquidity • Focus on cash preservation and maintaining balance sheet strength – Steps being taken to reduce the cost base, commensurate with expected workload – Liquidity remains strong and sources of liquidity have been diversified • Operating cost reductions to
Slide 7: Swift and decisive action: strengthened access to liquidity
Swift and decisive action: strengthened access to liquidity Diversified access • Diversified access to liquidity to liquidity – Increasing resilience to market downturn 31 March 2020 • Cash and equivalents of $340 million – Cash preservation measures in place $740m $656m • Established a Euro Commerc
Slide 8: Strategy: unchanged
Strategy: unchanged Subsea Field of the Future: Energy transition: system and delivery proactive participation • Early engagement and partnerships • Oil and gas: energy of our operations and investment in technology to support • System innovation and enabling the market growth of low carbon energy P
Slide 9: First quarter 2020 results
First quarter 2020 results FINANCIAL HIGHLIGHTS OPERATIONAL HIGHLIGHTS • Revenue $751 million • Active vessel utilisation 63% • Adjusted EBITDA $68 million • High utilisation of PLSV fleet • Adjusted EBITDA margin 9% • Low Conventional and diving activity • Covid-19 impact approximately • Key global
Slide 10: First quarter 2020 backlog
First quarter 2020 backlog Backlog of $5.6 billion, as at 31 March 2020 • $1.5 billion awarded in Q1 • Book-to-bill: 2022+ – 2.0x in the quarter $0.9bn SURF and Conventional • Four awards announced in $4.6bn Q1: 2020 $2.7bn Renewables & – Sangomar (Senegal) 2021 Heavy Lifting $2.0bn $0.5bn – Bacalha
Slide 11: First quarter 2020 business unit performance
First quarter 2020 business unit performance Revenue Net Operating Income/(Loss) ($49m) ($10m) $4m $751m $859m ($3m) ($9m) Renewables & Heavy $53m Lifting $60m ($27m) Life of Field $62m $63m SURF & Conventional ($1m) $747m ($12m) $625m Q1 2020 Q1 2019 Q1 2020 Q1 2019 11 © Subsea 7 - 2020 subsea7.com
Slide 12: Summary of first quarter 2020 cash flow
Summary of first quarter 2020 cash flow $m 68 19 (93) (1) (9) 398 20 (27) (6) (9) (10) (11) 340 Cash at EBITDA Tax paid Net increase in Capex Proceeds from Lease Repayment of Share Dividends Other Cash at 1 January 2020 operating assets related payments borrowings repurchases paid to NCIs 31 liabili
Slide 13: Financial guidance
Financial guidance • 2020 guidance withdrawn on 1 April 2020 • Visibility on influencing factors too low to give meaningful guidance – Covid-19: longevity and impact unknown – Oil price: full demand impact of Covid-19 unknown – Outlook for oil industry capital spending is uncertain – Renewables rema
Slide 14: Summary: resilient in uncertain times
Summary: resilient in uncertain times • Experienced partner for clients navigating a challenging operational environment • Solid financial position with strong liquidity • Proven ability to re-shape the business in response to the change in outlook • Robust strategy supporting Subsea Field of the Fu
Slide 15: © Subsea 7 - 2020 subsea7.com
15 © Subsea 7 - 2020 subsea7.com
Slide 16: Appendix
Appendix Major project progression Track Record Fleet Financial summaries 16 © Subsea 7 - 2020 subsea7.com
Slide 17: Major project progression
Major project progression • Continuing projects >$100m between 5% and 95% complete as at 31 March 2020 excluding PLSV and Life of Field day-rate contracts Sonamet (Angola) Snorre Expansion (Norway) Announced 3PDMs (Saudi Arabia) size of Nova (Norway) project Ærfugl (Norway) Major Buzzard Phase 2 (UK
Slide 18: Track record
• Beatrice wind farm, BOWL • Borkum II, Trianel • Triton Knoll, Innogy • Shearwater, Shell • Aasta Hansteen, Statoil • Buzzard ph. 2, Nexen • Maria, Wintershall • Culzean, Maersk • IRM Services, Equinor • Alligin, BP • IRM Services, BP • Penguins, Shell • Snorre, Equinor • Al-Khalij, Total • SCIRM,
Slide 19: Fleet: 34 vessels including 32 active at end of Q1 2020
34 Vessels including 32 active vessels at the end of Q1 2020 Under Construction Reel-lay Vessel to be named Seven Vega Chartered from a third party Long-term charter from a vessel-owning joint venture Owned by Nigerian joint venture Stacked Note: Seven Mar was removed from the list as the vessel is
Slide 20: Income statement – Q1 highlights
Income statement – Q1 highlights Three months ended 31 March 2020 31 March 2019 In $ millions, unless otherwise indicated Unaudited Unaudited Revenue 751 859 Net operating loss (NOI) (49) (10) Loss before taxes (33) (29) Taxation (4) 10 Net loss (38) (19) Adjusted EBITDA 68 111 Adjusted EBITDA margi
Slide 21: Income statement – supplementary details
Income statement – supplementary details Three months ended 31 March 2020 31 March 2019 Unaudited Unaudited In $ millions Administrative expenses (63) (58) Depreciation and amortisation (117) (121) Net operating loss (49) (10) Net finance cost (4) (2) Other gains and losses 20 (17) Loss before taxes
Slide 22: Segmental analysis
Segmental analysis For the three months ended 31 March 2020 Renewables & In $ millions (Unaudited) SURF & Conventional Life of Field Heavy Lifting Corporate TOTAL Revenue 625 63 62 - 751 Net operating loss (27) (1) (12) (9) (49) Finance income 2 Other gains and losses 20 Finance costs (6) Loss befor
Slide 23: Summary balance sheet
Summary balance sheet 31 Mar 2020 31 Dec 2019 31 Mar 2020 31 Dec 2019 Unaudited Audited Unaudited Audited In $ millions In $ millions Assets Equity & Liabilities Total equity 5,253 5,363 Non-current assets Non-current liabilities Goodwill 678 705 Non-current portion of borrowings 203 209 Property, p
Slide 24: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA Net operating loss to Adjusted EBITDA Three Months Ended 31 March 2020 Three Months Ended 31 March 2019 For the period (in $millions) Unaudited Unaudited Net operating loss (49) (10) Depreciation, amortisation and mobilisation 117 121 Adjusted EBITDA 68 111 Revenue
Slide 25: Summary of first quarter 2020 cash flows
Summary of first quarter 2020 cash flows $ millions Cash and cash equivalents at 1 January 2020 398 Net cash generated from operating activities 82 Includes a net increase in operating liabilities of $19 million Net cash flow used in investing activities (73) Includes capital expenditure of $93m Net
Slide 26: Contact: Katherine Tonks, Investor Relations Director
Contact: Katherine Tonks, Investor Relations Director email: [email protected] Direct Line +44 20 8210 5568 Website www.subsea7.com 26 © Subsea 7 - 2020 subsea7.com