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2014 City Global Powerpoint Presentation

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2014 City Global Powerpoint Presentation 2014 Citi Global Energy & Utilities Conference Boston – 14 May 2014 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’, ‘scheduled’, ‘seek’, ‘should’, ‘will’, and similar expressions. The forward-looking statements reflect our current views and are subject to risks, uncertainties and assumptions. The principal risks and uncertainties which could impact the Group and the factors which could affect the actual results are described but not limited to those in the ‘Risk Management’ section in the Group’s Annual Report and Consolidated Financial Statements for the year ended 31 December 2013. These factors, and others which are discussed in our public announcements, are among those that may cause actual and future results and trends to differ materially from our forward-looking statements: actions by regulatory authorities or other third parties; our ability to recover costs on significant projects; the general economic conditions and competition in the markets and businesses in which we operate; our relationship with significant clients; the outcome of legal and administrative proceedings or governmental enquiries; uncertainties inherent in operating internationally; the timely delivery of vessels on order and the timely completion of vessel conversion programmes; the impact of laws and regulations; and operating hazards, including spills and environmental damage. Many of these factors are beyond our ability to control or predict. Other unknown or unpredictable factors could also have material adverse effects on our future results. Given these factors, you should not place undue reliance on the forward-looking statements. Page 2 Subsea 7 assets and resources Page 3 Core business segments Engineering, construction, Services over the life of a installation and field’s production, including procurement of Subsea inspection, repair and Umbilicals, Risers and maintenance. Flowlines. Subsea 7 performs this Subsea 7 targets this work in Europe, Africa, Gulf segment globally. of Mexico and Australia and will target specific SURF Life-of-Field countries. Fabrication and installation Addition of modules on new of fixed platforms platforms and refurbishment (topsides and jackets) and of topsides of an existing their associated pipelines platform or FPSO. in non-harsh environments. Subsea 7 has traditionally only targeted this segment in Subsea 7 targets this Africa. segment in Africa. Entry into Mexico considered for positioning for deep water. Conventional Hook Up Page 4 Complementary business segments SHL JV i-Tech Seaway Heavy Lifting: ROV and Engineering, construction, intervention installation and tooling support procurement of offshore services - onboard turbines and cables for semis, drill ships, wind farms. jackups, platforms, FPSOs, anchor ROV and Western Europe only Renewables handling tugs and (at this stage). FSVs. Intervention Subsea 7 targets this work globally. Decommissioning Heavy Lift Page 5 Competitors in SURF and Life-of-Field Global leaders in Subsea 7 Technip Saipem EPIC alliance Deepwater EMAS-AMC McDermott Heerema Allseas Petrofac Regional/ players Kencana DOF Bibby Fugro Cecon Ceona Swiber Sea Trucks Sea Ocean eering Ocean Ocean InstallerOcean Sapura Local Players Page 6 Competitive advantage in SURF is multi-faceted CHALLENGES DEGREE Access to capital Medium Vessels Medium (high in ultra deep water) Technology High (in deep water, harsh environment) Engineering and project High management processes Market positioning High Knowhow, people, track record High Local content (Africa) High Challenges remain high for large or technology-rich SURF projects Page 7 Subsea 7’s technology leadership Technology Category Specific Technology Types Steel Deep water and harsh Hybrid Riser Submerged Composite Catenary environment solutions Towers buoys Materials Risers Rigid Pipe Flexible Pipe Subsea Vessels Technology Technology Heavy Lift Electrically Composite Flowlines Bundles Heated Pipe-in-pipe Materials Pipelines Improved Coatings & Field Coatings and Joints Field Joints Welding High Corrosion Welding & Materials Technology & Strength resistant Efficiency Materials Materials Sensor Life of Field AIV Technology Subsea 7 technology and know-how covers the entire range of activities Page 8 Addressing clients’ needs in a capex-constrained environment Helping to reduce the cost of our clients’ projects • Early engagement to define optimal technical and cost-effective options • Technology-driven solutions • Focus on “fit-for-purpose” engineering without compromising risk profile • Integrated project teams of Subsea 7 and client personnel • Optimised commercial and risk-sharing model Page 9 Quality backlog - good spread by geography and contract mix Backlog progression ($ billions) 11.8 11.8 11.6 10.2 10.4 9.1 8.7 8.3 8.1 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Backlog by Award Date Backlog by Execution Date Backlog by Territory AFGOM 2012 2015 24% 14% 2014 26% NSC 2013 33% ≤2011 42% 54% Brazil 28% 2016+ 38% 32% 2014 4% APME 5% Page 10 Fleet investments to meet growth objectives: vessels under construction Ship Vessel Type Rationale Operational Seven Waves Under 5-year contract with 2nd Quarter 2014 Petrobras Pipelay Support Vessel (commencing operations (PLSV) for Petrobras mid May) Seven Sun Under 5-year contracts 4th Quarter 2015 Seven Rio with Petrobras 2nd Quarter 2016 Seven Cruzeiro 4th Quarter 2016 (PLSVs 2, 3 & 4) Seven Kestrel Fleet replacement 4th Quarter 2015 investment for growing Diving Support Vessel market (DSV) Seven Arctic Strategic investment; 1st Quarter 2016 enabling for seabed Heavy Construction compression/separation/ Vessel (HCV) production module 900T crane installation Page 11 Capital expenditure for on-going vessel new-build programme1 $ millions 161 Total = $1.9 billion (E) 600 557 410 190 Up to 31 Dec 2013 2014 E² 2015 E 2016 E Forecast Actual spend to date Notes: 1 Includes four PLSVs being constructed for long-term contracts with Petrobras (including the Seven Waves), and construction of the Seven Arctic and the Seven Kestrel. Amounts include an estimate for interest which will be capitalised during construction. 2 The guidance for total capex for 2014 is $900 million - $1.0 billion, including operating capex and other equipment/facilities. E = estimated Page 12 Company financial performance history CONSOLIDATED 13% 7,000.0 12% 9% 10% 6,500.0 6,000.0 $6,297m $6,297m 0% 5,500.0 $5,477m Revenue 5,000.0 -10% NOI 4,500.0 Adj EBITDA -20% NOI % 4,000.0 3,500.0 -30% 3,000.0 2,500.0 -40% 2,000.0 -50% 1,500.0 $1,139m $1,003m $981m 1,000.0 $808m $641m -60% $573m 500.0 0.0 -70% 2011 (1) 2012 2013 (1) 2011 is based on 13 months results Page 13 Territory financial performance history AFGOM NSC 3,500.0 16% 3,500.0 20% 3,450.0 3,400.0 3,350.0 13% 3,300.0 20% 3,250.0 19% 3,200.0 3,150.0 3,100.0 9% 3,000.0 20% 3,050.0 3,000.0 2,950.0 10% 16% 2,900.0 2,850.0 2,800.0 2,750.0 2,700.0 2,650.0 2,600.0 2,500.0 2,550.0 2,500.0 2,450.0 2,400.0 $2,838m 2,350.0 0% 2,300.0 2,250.0 $2,543m $2,454m 2,200.0 2,150.0 $2,514m 2,100.0 2,000.0 10% 2,050.0 2,000.0 1,950.0 1,900.0 1,850.0 $2,182m 1,800.0 1,750.0 -10% 1,700.0 $2,054m 1,650.0 1,600.0 1,500.0 1,550.0 1,500.0 1,450.0 1,400.0 1,350.0 1,300.0 1,250.0 1,200.0 -20% 1,150.0 1,100.0 1,000.0 0% 1,050.0 1,000.0 950.0 900.0 850.0 800.0 750.0 700.0 $490m 650.0 600.0 $428m $402m -30% 500.0 550.0 500.0 450.0 $364m $395m 400.0 350.0 300.0 250.0 200.0 $179m 150.0 100.0 0.0 -10% 50.0 0.0 -40% 2011 (1) 2012 2013 2011 (1) 2012 2013 APME Brazil 600.0 17% 17% 20% $987m 550.0 $814m 500.0 $498m 450.0 10% $686m 400.0 10% 600.0 350.0 300.0 $278m 250.0 200.0 $181m 0% 150.0 100.0 $23m ($25m) ($318m) 100.0 $86m $46m 50.0 $18m 0.0 -10% 2011 (1) 2012 2013 2011 (1) 2012 2013 (400.0) Revenue NOI (1) 2011 is based on 13 months results NOI % Page 14 Guará-Lula NE project update • Good operational progress in late 2013 / early 2014 • All “new technology/technically difficult” steps have been completed at least once • Three submerged buoys (BSRs) installed; fourth (and final) BSR expected to be installed in Q2 • Riser installation on-going – Eight of 27 risers installed to date • Oil is being produced from the first installed BSR • The Seven Polaris and the Aker Wayfarer expected to be de- mobilised from the project in Q2 2014 • Project expected to be completed late 2014 Page 15 Brazil: PLSVs – foundation for the future Vessel Contract/Renewal Duration (years) Approximate Start Total Contract Value¹ (US$m) Normand Seven Q4 13 4.8 (to Q3 2018) 400 Kommandor 3000 Q2 13 5.0 (to Q2 2018) 350 Seven Phoenix Q3 13 5.0 (to Q3 2018) 450 Seven Condor Q3 14 3.4 (to Q1 2018) 275 Seven Mar Q4 13 3.0 (to Q4 2016) 290 Q3 13 1.6 (to Q1 2015) 250 Seven Seas Q2 14 5.0 (to Q2 2019) 500 Seven Waves Seven Sun, Rio and Cruzeiro Q4 15 – Q4 16 5.0 1,600 ¹Values are per the date of respective award and represent approximate gross revenue Page 16 Market overview Tendering activity is high; however, the timing of some large contract awards remains uncertain • SURF: strong tendering activity in the North Sea, Africa, Gulf of Mexico and Asia • Life-of-Field: strong demand, particularly in the UK sector of the North Sea • Conventional: the activity of IOCs in West Africa is expected to grow in spite of the current lull Page 17 2014 outlook AFGOM • Africa • SURF: high tendering
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