Investor Presentation - November 2019 - Subsea 7
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Investor Presentation
November 2019
1 © Subsea 7 - 2019 subsea7.com
Index
What we do
Our differentiators
Our priorities
Our outlook
Our financials
Appendix
2 © Subsea 7 - 2019 subsea7.com
Forward-looking statements
Certain statements made in this presentation 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 2018. 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; 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.
3 © Subsea 7 - 2019 subsea7.com
Subsea 7
Our Vision
Our Values
To lead the way in the delivery of offshore What makes us who we are
projects and services for the energy
industry. Safety
Values
Our Strategy
In an evolving energy sector, we create
Integrity
sustainable value by being the industry’s
partner and employer of choice in delivering Sustainability
Safety
the efficient offshore solutions the world
Integrity
needs. Performance
Sustainability
Our Stakeholders Performance
Collaboration
We seek to create sustainable value for Collaboration
our
clients, our people, our shareholders andInnovation
society in everything we do.
Innovation
4 © Subsea 7 - 2019 subsea7.com
Corporate Responsibility
• We are committed to operating in a safe, ethical and responsible manner
Lost-time incident Clean Operations $3.1m
Frequency rate (%) costs 2019 Targets:
saved
5,000 - LTI
Our market segments
Life of Field 2018 Revenue
i-Tech 7 is a progressive and $4.1 billion
pioneering subsea life of field partner
delivering Inspection, Repair and SURF and Conventional
Maintenance solutions to offshore
Subsea 7 is a global leader in
energy developments.
offshore energy construction
projects, operating in all water
depths and conditions.
$0.2bn
(6 %) $3.2bn
(78%)
$0.7bn
(16%)
Renewables and Heavy Lifting
Seaway 7 is a highly capable and experienced partner for the
delivery of offshore wind farm projects, specialist heavy lifting
and cable-lay services.
6 © Subsea 7 - 2019 subsea7.com
7 7 © Subsea 7 - 2019 subsea7.com
Recent Operational highlights
Alligin (UK) Burullus 9B (Egypt) Snorre (Norway) PUPP (Nigeria)
To be
updated
Mad Dog II (GoM) Formosa 1 ph.2 (Taiwan) Life of Field PLSVs (Brazil)
8 © Subsea 7 - 2019 subsea7.com
SURF and Conventional SURF and Conventional • Subsea Umbilicals, Risers and flowlines (SURF) • Connecting seabed wellhead structures to surface production facilities • Over 20 year track record: safe and efficient execution on over 1,000 projects • Operating in remote and harsh environments with complex challenges and risks 9 © Subsea 7 - 2019 subsea7.com
PLSVs in Brazil
• Pipelay support vessel (PLSV) is a
PLSVs Use(2)
heavy construction vessel with flex-lay Other
capability also able to perform various Maintenance on
existing flexibles
1%
14%
construction activities over the project
life cycle
• Scope of work in Brazil is a mix of Flexibles
removal
4%
installation of new flexibles as well as
replacement and maintenance of
existing flexibles
• All 4 of Subsea 7’s PLSVs are ranked
in the top 6 vessels of Petrobras’ fleet
for the last 12 months(1) New flexibles in
pre-salt region
64%
(1) Petrobras updates a rank of all PLSVs in the fleet on a monthly basis New flexibles in post-salt
region
which is based on vessel performance against pre-established targets. 17%
Information provided is from July 2019 report.
(2) Utilisation of Subsea 7 PLSV fleet year to date
10 © Subsea 7 - 2019 subsea7.comHeavy Construction/Flex-lay Fleet
Presently in Brazil Presently outside Brazil
Top Top
Crane Crane
Tension Tension
Seven 100t/ Seven
550t 400t 430t
Cruzeiro 400t(1) Seas
Seven 100t/ Seven
550t 250t 260t
Rio 400t(1) Pacific
Seven 100t/ Seven
550t 1000t 600t
Sun 400t(1) Arctic
Seven Normand 125t/
400t 550t 400t
Waves Oceanic 325t
Skandi
400t 150t
Acergy (2)
(1) Capacity of current crane installed is 100t but vessel is built to hold a 400t crane
(2) Chartered vessel
11 © Subsea 7 - 2019 subsea7.comLife of Field
• Leading Life of Field partner • Over 165 ROVs and a
for clients throughout the oil fleet of ROV support
and gas industry vessels
• Over 35 year’s experience • Global business with
operational bases in the
UK, Brazil, the US and
Australia
12 © Subsea 7 - 2019 subsea7.comLife of Field: products and services
Life of Field solutions built on core
products and services
• ROV Intervention
• Diving
• Survey, Inspection & Data Management
• Well simulation & sampling
• Tool Management & Engineering
Solutions
• Pipeline Repair & Tree Installation
Highly skilled and experienced people
Innovative technologies
13 © Subsea 7 - 2019 subsea7.comLife of Field track record
Over 1000 successful Inspection, Over 18,000 intervention tooling
Repair and Maintenance projects products designed, delivered and
completed managed
Over 300 successful ROV drill rig exploration
hydrocarbon sampling missions support worldwide since 1976
using ROVs
Global experience, world-class technology and assets
14 © Subsea 7 - 2019 subsea7.comRenewables and Heavy Lifting
1991 SHL 2016 Beatrice 2018 SOC
Joint Venture EPCI awarded acquired by
established to Subsea 7 Subsea 7 2018 Comprehensive
2009 First 2013 Subsea 7
2017 SHL balance of plant
Renewables increases its
acquired by offering: T&I and EPCI
Project for focus on
SHL renewables Subsea 7
10 years experience in renewable energy
16%(1) 1000 2 4
forecast for experienced EPCI specialist
CAGR in personnel projects offshore
renewables complete vessels
15 (1) Source: BloombergNEF, January 2018, © Subsea 7 - 2019 subsea7.com
forecast to 2030 worldwide excluding ChinaSubsea 7’s Renewable energy focus
Subsea 7 is typically contracted to carry
out, under its Seaway 7 brand:
Wind Turbine 1. Design, procurement and installation
Subsea 7’s
Generators of foundation piles and jackets (SHL)
(WTG) scope
2. Design procurement and installation
of Inner Array Cables (SOC)
Offshore
Substation 3. Installation of the Offshore
Substation and its foundations (SHL)
Export
Cable
WTG Subsea 7 does not currently carry out
Foundations
(Jacket) installation or procurement of:
Inner Array Cables 1. Wind Turbine Generators
2. Export Cables
WTG
Foundation
Piles
16 © Subsea 7 - 2019 subsea7.comIndex
What we do
Our differentiators
Our priorities
Our outlook
Our financials
Appendix
17 © Subsea 7 - 2019 subsea7.comOur Differentiators
We’re different from our competition because we’re more creative,
more reliable, and more focused on what our clients really need.
Culture Global team with expertise, passion and
commitment to deliver.
Creativity Ability to innovate through technology,
processes and partnerships.
Relationships Working and learning together to achieve
success for all.
Reliability Trusted partner in delivering projects.
Solutions Client-focused mindset to create the right
solution.
18 © Subsea 7 - 2019 subsea7.comCreating market-leading solutions
Engage early Enable with technology Digitalise and automate
19 © Subsea 7 - 2019 subsea7.comEarly engagement
FEASIBILITY & CONCEPT CONCEPT SELECT & PRE- FEED & DESIGN
EARLY CLIENT ENGAGEMENT APPRAISE
SCREENING FEED COMPETITIONS
20 © Subsea 7 - 2019 subsea7.comTotal Lifecycle Solutions
10 projects (1)
(including 4 FEED-to-EPIC contracts)
7 clients
5 countries
Africa, Australia, UK, Norway
and US Gulf of Mexico
(1) Awarded since 2015
21 © Subsea 7 - 2019 subsea7.comRelationships with clients and partners
• Comprehensive integrated
Fully
offering with Subsea
Integrated
Integration Alliance partner
OneSubsea, Schlumberger
• Unique integrated client
partnership model with Aker
BP
• Successful partnership models
with certain independent
clients including Premier, Independent
Aker BP
Chrysaor and Spirit Energy Clients
Partnership
Partnership
22 © Subsea 7 - 2019 subsea7.comPower of partnerships: AkerBP story
Delivering significant cost improvements (1)
-36%
-13%
-23%
Volund infill Boa infill Kameleon infill South
Plan Actual
(1) Cost improvements related to the subsea scope of the projects.
Source: AkerBP
23 © Subsea 7 - 2019 subsea7.comPower of partnerships: AkerBP story
Ærfugl phase 1 and 2 projects:
EHTF solution for a long distance tie back
Early adoption of proprietary leading-edge
• Partnership formed in 2015 following cost-saving technology
a competitive tender process
Volund Infill project (completed):
• Underpinned by a frame agreement Two well tie-in completed 25% faster
with value of approximately NOK 2 Delivered 9 months sooner
billion
Valhall Flank West and Flank North
• Unique three way collaboration: Aker projects:
BP, Aker Solutions and Subsea 7, Tie-back with umbilical and riser
with all parties sharing risks and installation
rewards
Skogul project:
• One integrated team creating the Long distance tie back with pipe-in-pipe
most efficient and effective solutions technology
together
24 © Subsea 7 - 2019 subsea7.comDrivers of lower costs for projects
• Earlier engagement enables better engineering, introduction of Earlier engagement
integrated and full lifecycle solutions and application of new Closer collaboration
technology Leaner processes
Supply chain deflation
• Closer collaboration with alliances and partnerships reduces risk
Scope reduction
and shortens project duration
Lower margin
• Leaner processes reduce project management and engineering
hours
• Supply chain deflation gives lower procurement costs
Lower project
• Scope reduction eliminates over-engineering and reflects a more cost
modular development approach
• Lower margins accepted on projects to protect utilisation and
retain capability
25 © Subsea 7 - 2019 subsea7.comDrive business improvements to lower costs
Project A
Actively adapt to industry
conditions without losing focus on
long term strategic priorities
Initial price Concept optimsiation Angolan Content
Local Competition Sourcing
Sourcing, Final price
reduction
content and specification
specifications, SoW
reduction negociations, …
Project B
Base Case
Initial price Field Architecture Scope/Spec change Others STIA
Final price
Project C
Enable projects to progress
in a lower oil price environment
Initial price Field Scope/Specs Others Local ContentSPS interface Optimised Scope Final Price
Architecture price transfer
26 © Subsea 7 - 2019 subsea7.comOur People
• 11,000 people in our workforce at end 2018, including over 1,700 engineers
• We deliver projects based on our expertise and know-how
• Our highly skilled and experienced workforce deliver projects safely and reliably
• We recognise the importance of diversity and strive to achieve it
1%
Nationality mix
14%
12%
17% 54%
46%
33%
23%
Europe Americas Offshore Female Onshore Female
Asia Pacific Other Onshore Male Offshore Male
27 © Subsea 7 - 2019 subsea7.comA modern and versatile fleet of 35 vessels
Vessels by Ownership type
Ownership Vessels by Age
0-5 years
6 Owned
10 10
6-11 years
28 14
Chartered 12+ years
Vessels by Operational category
Rigid-lay/Heavy Construction
Diving support
Life of Field
Construction flexlay
Renewables & Heavy Lift
Hook up
0 2 4 6 8 10 12 14
28 © Subsea 7 - 2019 subsea7.com35 Vessels including 32 active vessels at end Q3 ‘19
Under Construction Reel-lay Vessel to be named Seven Chartered from a third party
Vega Owned by Nigerian joint venture
Long-term charter from a vessel-owning joint venture
Stacked
29 © Subsea 7 - 2019 subsea7.comIndex
What we do
Our differentiators
Our priorities
Our outlook
Our financials
Appendix
30 © Subsea 7 - 2019 subsea7.comPriorities for cash
Uses of cash since 2011
• 12 vessels added
Invest in the business • 6 businesses acquired
• Average 18 new patent applications per year
Maintain investment • Strong liquidity
• Net debt to EBITDA ratio within investment
grade profile grade parameters
5 share repurchase programmes completed
Return to shareholders 6 dividends paid over 8 years
$1.9bn returned in total
31 © Subsea 7 - 2019 subsea7.comSubsea 7’s approach and strategy through the cycle
New-build vessels:
PLSV Seven Arctic
DSV Seven Kestrel
Global alliance with
KBR/ Granherne Cost reduction Subsea Integration
programmes Alliance:
2015/2016 Acquisition:
Middle East Investment: Early Re-branding
engagement
2015 2016 2017 2018 2019
New rigid reel-lay
Creation of i-Tech
Acquisition: vessel ordered
Services Business
technology
Unit
Investment:
Acquisition: Digitalisation
Renewables
Acquisition:
Renewables
Global alliance with
OneSubsea
32 © Subsea 7 - 2019 subsea7.comIndex
What we do
Our differentiators
Our priorities
Our outlook
Our financials
Appendix
33 © Subsea 7 - 2019 subsea7.comA recovering market
• Early engagement and integrated solutions have
reduced the cost of projects for the operator
Market
awards
increase
• 2017: Tendering and engineering increased
Key Vessel
• 2018: Brownfield awards increased Utilisation
• 2019: First phase of greenfield awards
Pricing
Power
• 2020/2021: Offshore campaigns increase
34 © Subsea 7 - 2019 subsea7.comThe outlook for offshore oil and gas projects is improving
Subsea Equipment Subsea Services SURF
24
18
+13%
20
15
+17% +9%
12 16
+8% -7%
9 -7% 9 12
+15%
+3%
-1% 8
6 6
3 3 4
0 0 0
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Forecast Forecast Forecast
Wellheads, Trees, Templates and Manifolds, Control Flow Assurance, IMR, ROV Services, Subsea Testing, Pipeline Systems, Risers, Subsea Installation,
Systems, Other Subsea Tools Tool Pool, Other Subsea Services Umbilicals
Outlook based on total market subsea CAPEX estimate (revenue-based)
Source: Rystad March 2019
35 © Subsea 7 - 2019 subsea7.comOutlook: Key projects
Europe
• Increasingly, greenfield • SSE Seagreen (W)
projects require an early Canada and USA • Vattenfall HKZ (W)*
engagement approach • Equinor Bay du Nord (i) • Innogy Kaskasi II (W)
• Shell Whale • IOG Blythe and Vulcan
• AkerBP Aerfugl Ph2
• Vessel availability tightening • Shell Ormen Lange Ph3 (i)*
for SURF and Conventional
projects Africa
• Woodside SNE 1 (i)* Middle East & Asia
• Renewables continue to grow • Shell Bonga SW (i) • WPD Guanyin (W)
• Aker Energy Pecan (i) • ADNOC Hail Ghasha
around the globe • ENI Rovuma
• BP PAJ (i)
• Increased competition for
foundations installation Brazil
projects as SURF contractors • Equinor Carcará (i)
Australia
• Total Lapa SW (i)
enter the renewables market • Petrobras Buzios V
• Woodside Scarborough (i)*
• Woodside Julimar*
• Petrobras Mero 2
• ConocoPhillips Barossa
Guyana
• Woodside Browse (i)
• ExxonMobil Hammerhead
* FEED already awarded with EPIC to follow pending FID
(i) Integrated SURF + SPS
36 (W) Offshore windfarm project © Subsea 7 - 2019 subsea7.comOffshore wind farms
• Double-digit structural growth trend
Cumulative GW Installations
140
• Increasing global footprint outside
Europe
120
• Seaway 7 has over 10 years’ experience
100
in wind farms installations
80
CAGR 16%
• Four specialist Seaway 7 vessels
GW
including heavy lift and cable-lay
60
40 capability
CAGR 12%
20
• Delivering EPIC and T&I solutions for our
0 clients
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Europe Rest of World • Capable of working at all depths /
Source: BNEF July 2018 floating wind farm opportunity longer-
term
37 © Subsea 7 - 2019 subsea7.comOutlook: Brownfield projects, Conventional and Life of Field
• Economical at lower oil prices
• Fast track execution by clients to maintain
production with tie-back and field enhancements
• Subsea 7 differentiated by
– proprietary flowline technology
– partnership contract model
• Shift towards independent clients in the North Sea
as fields change ownership
• High volume of Conventional market activity in
Middle East offers opportunities for growth
38 © Subsea 7 - 2019 subsea7.comSummary
• Gradual market recovery for offshore oil and
gas activity worldwide continues
• Early engineering, technology and integrated
services are key enablers for greenfield awards
• Renewables market continues to grow rapidly
but foundation installation sector remains
competitive at this stage
• Subsea 7 is well positioned across all focus
areas to navigate next phase of our business
with increasing focus on energy transition and
the application of new technologies
39 © Subsea 7 - 2019 subsea7.comIndex
What we do
Our differentiators
Our priorities
Our outlook
Our financials
Appendix
40 © Subsea 7 - 2019 subsea7.comBacklog and order intake
Backlog of $4.9 billion, as at 30 September 2019
• $1.4 billion order intake in
the third quarter
• Book-to-bill:
2019
SURF and
– 1.4x in the quarter
$0.9bn
2021+
$1.4bn
Conventional – 1.0x year-to-date
$4.0bn
Renewables & • Six announced awards:
Heavy Lifting
$0.3bn – Europipe II (Norway)
2020
Life of Field
– Hornsea Two (UK)
$2.6bn
$0.6bn – Lapa NE (Brazil)
– Marjan 2 (Middle East)
– ACE (Azerbaijan)
– 28 Jackets (Middle East)
Order backlog includes:
- $0.7 billion relating to long-term contracts for PLSVs in Brazil
- approximately $80 million adverse foreign exchange movement in the third quarter
41 © Subsea 7 - 2019 subsea7.comBusiness Unit performance – Third quarter
Revenue NOI
$951m $1,082m $59m $111m
$152m
$55m
$66m
$70m
$16m
$4m
$6m
$826m $865m
$93m
$62m
$(8)m
2019 2018 2019 2018
SURF & Conventional Life of Field Renewables & Heavy Lifting
Corporate segment: net operating loss Q3 2019 $2m (Q3 2018: net operating loss $3m)
42 © Subsea 7 - 2019 subsea7.comIncome statement – Q3 highlights
Three months ended
30 September 2019 30 September 2018
In $ millions, unless otherwise indicated Unaudited Unaudited
Revenue 951 1,082
Net operating income (NOI) 59 111
Income before taxes 71 110
Taxation (28) (34)
Net income 42 76
Adjusted EBITDA(1) 181 217
Adjusted EBITDA margin 19% 20%
Diluted earnings per share $ 0.15 0.23
Weighted average number of shares (millions) 299 328
(1) Adjusted EBITDA defined in Appendix
43 © Subsea 7 - 2019 subsea7.comIncome statement – supplementary details
Three months ended
30 September 19 30 September 18
In $ millions Unaudited Unaudited
Administrative expenses (73) (64)
Share of net (loss)/income of associates and joint ventures (3) -
Depreciation, amortisation, mobilisation and impairment (122) (107)
Net operating income 59 111
Net finance (cost)/income (4) 1
Other gains and losses 16 (2)
Income before taxes 71 110
Taxation (28) (34)
Net income 42 76
Net income attributable to:
Shareholders of the parent company 44 76
Non-controlling interests (2) -
44 © Subsea 7 - 2019 subsea7.com2014 - 2018 costs overview
Maintaining cost discipline as the activity levels recover
$ billion
Vessels and other
7 costs(1): Including vessel
6.0bn costs, onshore facilities, IT
6
infrastructure and other
0.8
fixed overheads
5 0.4
4.2bn
3.9bn Depreciation and
4
2.0 0.8
3.4bn amortisation: excludes
3.0bn 0.5
non-recurring impairment
0.4 0.4
3 0.5 charges
0.6 0.4 1.0
1.4 0.4 People(2): Offshore and
2 0.8
1.0
onshore personnel
2.8
1 2.0 Procurement of materials
1.6 1.7
1.0 and other direct project
0 costs
2014 2015 2016 2017 2018
(1) Includes impairment charges related to property, plant & equipment and intangibles
(2) Includes restructuring charges in 2015 and 2016
45 © Subsea 7 - 2019 subsea7.comAdjusted EBITDA progression
• 2019 EBITDA guidance for lower than 2018 in absolute terms but to remain double-digit
percentage margin
• Gradual margin recovery expected as market activity increases
Average 32%
Average 21%
Average 17%
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019
46 © Subsea 7 - 2019 subsea7.comOur principal margin drivers
Total vessel Number of projects Backlog value by Costs ($bn)
utilisation >$300m completed year awarded
82%
72%
66% 61% 70% 2013
and 2.0
earlier 2014
1.4
2015
2016 1.0 1.0
2018 0.8
2017 0.8 0.8 0.6 0.5 0.5
2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018
Reduction in offshore Fewer large projects Lower margin projects Continued cost
activity levels in the final stages of signed in the discipline
completion downturn
People costs
Vessel and other costs
Definitions on slide 12
47 © Subsea 7 - 2019 subsea7.comReconciliation of Adjusted EBITDA
Net operating income to Adjusted EBITDA
Three Months Ended 30 September 2019 Three Months Ended September 2018
For the period (in $millions) Unaudited Unaudited
Net operating income 59 111
Depreciation, amortisation, mobilisation and impairment 122 107
Adjusted EBITDA 181 217
Revenue 951 1,082
Adjusted EBITDA % 19% 20%
Net income to Adjusted EBITDA
Three Months Ended 30 September 2019 Three Months Ended 30 September 2018
For the period (in $millions) Unaudited Unaudited
Net income 42 76
Depreciation, amortisation, mobilisation and impairment 122 107
Finance income (3) (4)
Other gains and losses (16) 2
Finance costs 7 3
Taxation 28 34
Adjusted EBITDA 181 217
Revenue 951 1,082
Adjusted EBITDA % 19% 20%
48 © Subsea 7 - 2019 subsea7.comSummary balance sheet
30 30 30 30
September September September September
2019 2018 2019 2018
In $ millions Unaudited Unaudited In $ millions Unaudited Unaudited
Assets Equity & Liabilities
Total equity 5,442 5,826
Non-current assets
Non-current liabilities
Goodwill 768 767
Non-current portion of borrowings 215 240
Property, plant and equipment 4,484 4,662
Non-current lease liabilities 273 -
Right-of-use asset 352 -
Other non-current liabilities 153 260
Other non-current assets 123 171
Total non-current liabilities 641 500
Total non-current assets 5,727 5,600
Current liabilities
Current assets
Trade and other liabilities 943 1,065
Trade and other receivables 713 632
Current portion of borrowings 25 25
Construction contracts - assets 430 568
Current lease liabilities 95 -
Other accrued income and prepaid
193 226 Construction contracts – liabilities 147 143
expenses
Cash and cash equivalents 367 732 Deferred revenue 27 7
Other current assets 49 56 Other current liabilities 159 248
Total current assets 1,752 2,214 Total current liabilities 1,396 1,488
Total assets 7,479 7,814 Total liabilities 2,037 1,988
Total equity & liabilities 7,479 7,814
49 © Subsea 7 - 2019 subsea7.comSummary of cash flows for nine months ended 30 September 2019
$ millions
Cash and cash equivalents at 1 Jan 2019 765
Included a decrease in net operating liabilities of
Net cash generated from operating activities 195 $169 million
Included cash outflows on capital expenditure of
Net cash flow used in investing activities (175) $177m
Included share repurchases of $250 million,
Net cash flow used in financing activities (413) dividends paid of $54 million and lease
payments of $81 million
Other (5)
Cash and cash equivalents at 30 September 2019 367
50 © Subsea 7 - 2019 subsea7.comSummary of third quarter 2019 cash flow
$m
181 (112)
(21) (29)
(30)
420 (25)
(6)
(27) 15 367
Cash at 1 July 2019 EBITDA Changes in Tax paid Capex Payment of Share repurchases Repayment of Lease payment Other Cash at 30
operating assets contingent borrowing September 2019
and liabilities consideration in
respect of
acquisitions
At 30 September 2019:
• Net cash of $127 million excluding $368 million of lease liabilities
• Net debt of $241 million including lease liabilities
• Undrawn revolving credit facility of $656 million
51 © Subsea 7 - 2019 subsea7.comFinancial guidance(1)
2019 Guidance
Revenue Slightly lower than 2018
Adjusted EBITDA(2) Lower than 2018, double digit percentage margin
Net Operating Income Positive for the Group
Administrative expense $265 million - $275 million
Net finance cost $10 million - $15 million
Depreciation and Amortisation $480 million - $490 million
Full year effective tax rate 39% - 41%
Capital expenditure (3) $250 million - $270 million
NEW 2020 Guidance
Revenue Higher than 2019
Adjusted EBITDA Higher than 2019
(1) Guidance given 7 November 2019
(2) Adjusted EBITDA in 2019 is expected to benefit by between $100 million and $110 million due to the implementation of IFRS 16 on 1 January 2019
52 (3) Includes approximately $80 million expenditure related to the new-build reel-lay
© Subsea 7 - 2019 vessel subsea7.comIFRS 16 ‘Leases’ guidance
• IFRS 16 ‘Leases’ became effective 1 January 2019. IFRS 16 2019 forecast impact
• Requires the Group to recognise:
Income Statement
➢ a right-of-use asset for long-term leases, to be
amortised straight-line over duration of the Lease expense Decrease by $100m - $110m
lease. Adjusted EBITDA Increase by $100m - $110m
➢ a lease liability (equivalent in value to the right-
Amortisation charge Increase by $90m - $100m
of-use asset) with finance costs recognized over
lease life. Net operating income Increase by $10m - $15m
• No cash flow impact. Net finance charge Increase by $10m - $15m
• No impact on net income over duration of leases.
• Due to modified retrospective implementation, 2019 Net income Decrease by approx. $5m
net income will be adversely impacted by Balance Sheet
approximately $5m, which will reverse in Right-of-use asset $352m at 30th September 2019
subsequent years.
• Impact on 2019 results may differ from the guidance Lease liability $367m at 30th September 2019
given, depending on lease commitments.
53 © Subsea 7 - 2019 subsea7.comAppendix
Major project progression
Track record
ADR
Contact details
54 © Subsea 7 - 2019 subsea7.comMajor project progression
• Continuing projects >$100m between 5% and 95% complete as at
30 September excluding PLSV and Life of Field day-rate contracts
Sonamet (Angola)
Oda (Norway) Announced size
WDDM 9B (Egypt) of project(1)
Snorre Expansion (Norway)
3PDMs (Saudi Arabia) Major
Katmai (USA) (Over $750m)
Nova (Norway)
Very Large
Aerfugl (Norway)
($500-$750m)
Buzzard Phase 2 (UK)
Manuel (USA)
Large
Mad Dog Phase 2 (USA)
($300-$500m)
Substantial
Zinia (Angola)
Penguins Redevelopment (UK)
($150-$300m)
Arran (UK) Sizeable
Berri/Zuluf (Saudi Arabia) ($50-$150m)
YUNLIN Offshore Wind Farm (Taiwan)
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
(1) Project size at date of award
55 © Subsea 7 - 2019 subsea7.com• Shearwater, Shell • Orman Lange, Shell
• Buzzard ph. 2, Nexen • Nova, Wintershall
• Penguins, Shell • IRM Services, Equinor
• Pierce, Shell • Johan Castberg, Equinor
• SCIRM, BP • Snorre, Equinor
• DSVi, Various • Aerfugl, Aker BP
• Beatrice wind farm, BOWL
• Coastal Virginia Offshore Wind, Orsted • Borkum II, Trianel
• Triton Knoll, Innogy • Yunlin Offshore Windfarm, WPD
• Hornsea 2, Orsted • Formosa 2 Windfarm, JdN
• Katmai, Fieldwood
• Hywind Tampen, Equinor
• Mad Dog 2, BP
• Manuel, BP
• Marjan 2, Saudi Aramco
• IRM services, Shell
• 3 GDPs, Saudi Aramco
• Hasbah, Saudi Aramco
• PLSVs, Petrobras
• Zinia Phase 2, Total • Scarborough (FEED), Woodside
• Lapa NE, Total
• West Nile Delta, BP • Julimar (FEED), Woodside
Key
• Jubilee, Tullow • Sole, Cooper
• PUPP, Mobil Producing Nigeria • West Barracouta, Esso
• Oil and Gas projects
• SNE Phase 1 (FEED), Woodside
• Renewables projects
56 © Subsea 7 - 2019 subsea7.comADR information
ADR Ticker: SUBCY
ADR type: Sponsored Level 1 ADR
Listing venue: OTC
CUSIP: 864323100
Ratio: 1 ADR : 1 Ordinary Share
Depositary bank: Deutsche Bank Trust Company
Americas
ADR broker helpline:
New York: +1 8662492593
London: +44 207 547 6500
Hong Kong: +852 2203 7854
e-mail: db@astfinancial.com
ADR website: www.adr.db.com
57 © Subsea 7 - 2019 subsea7.comContact:
Isabel Green, Investor Relations Director
eMail: isabel.green@subsea7.com
Direct Line +44 20 8210 5568
Website www.subsea7.com
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