THIRD QUARTER 2017 RESULTS PRESENTATION
24 October 2017
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 assumptions of the Company's management.
These forward-looking statements are only predictions and are subject to known and unknown risks, uncertainties, assumptions and other factors beyond the Company' control that are difficult to predict because they relate to events and depend on circumstances that will occur in the future. These include, but are not limited to: forex and interest rate fluctuations, commodity price volatility, credit and liquidity risks, HSE risks, the levels of capital expenditure in the oil and gas industry and other sectors, political instability in areas where the Group operates, actions by competitors, success of commercial transactions, risks associated with the execution of projects (including ongoing investment projects), in addition to changes in stakeholders' expectations and other changes affecting business conditions.
Therefore, the Company's actual results may differ materially and adversely from those expressed or implied in any forward-looking statements. They are neither statements of historical fact nor guarantees of future performance. The Company therefore caution against relying on any of these forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, economic conditions globally, the impact of competition, political and economic developments in the countries in which the Company operates, and regulatory developments in Italy and internationally. Any forward-looking statements made by or on behalf of the Company speak only as of the date they are made. The Company undertakes no obligation to update any forward-looking statements to reflect any changes in the Company's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based. Accordingly, readers should not place undue reliance on forward-looking statements due to the inherent uncertainty therein.
The Financial Reports contain analyses of some of the aforementioned risks.
Forward-looking statements neither represent nor can be considered as estimates for legal, accounting, fiscal or investment purposes. Forward-looking statements are not intended to provide assurances and/or solicit investment.
TODAY'S PRESENTATION
OPENING REMARKS
9M 2017 Divisional Performance
- Good performance in Offshore E&C Division
- Margin recovery in Onshore E&C Division
- Resilient Offshore Drilling margin despite revenue decline in 3Q
Net Debt at €1.36bn, benefiting from cash flow generation and capital discipline
3Q Awards at €2.6bn (book to bill 115%), additional €0.3bn awarded in early October Backlog as of Sept. 30, 2017 at €12.1bn Good visibility for new projects in the near term
Fit For the Future 2.0:
- Redundancy plan implementation on track
- Ongoing identification of additional savings by Divisions
Improved Guidance on Net Debt as a result of Capex discipline
9 MONTHS 2017 RESULTS
9M 2017 RESULTS YoY COMPARISON (€ mn)
(*) Floaters business reported separately, 9M 2016 restated accordingly
9M 2017 NET RESULT
RECONCILIATION BETWEEN ADJUSTED AND REPORTED (€ mn)
Net Result
9M 2017 NET DEBT EVOLUTION (€ bn)
Net Debt improvement in 3Q thanks to Cash Flow and Capital Discipline
CAPITAL STRUCTURE AS OF SEPTEMBER 30, 2017 (€ mn)
Solid Capital Structure and Liquidity Position
- Average debt maturity of 3.7 years: in 3Q prepayment of €525mn of Term Loan through €300mn of cash and €225mn ECA Facility drawdown
- Undrawn committed cash facilities totalling around €1.8bn, in addition to €0.3bn of uncommitted facilities
- Total cash and equivalents of around €1.7bn (including c.€0.5bn trapped)
OPERATIONAL AND COMMERCIAL UPDATE
MAIN ONGOING E&C PROJECTS
OFFSHORE ONSHORE LEGEND
9M 2017 BACKLOG (€ mn)
(*) Floaters business reported separately, Dec. 31, 2016 restated accordingly
BACKLOG BY YEAR OF EXECUTION (€ mn)
MAIN RECENT AWARDS – E&C OFFSHORE
Field Layout
Zohr Field Development – Ramp up phase
- Client: Petrobel (JV Eni / EGPC) Addendum of the existing Contract
- Location: East Mediterranean Sea, offshore Egypt
- Saipem Additional Scope: EPCI including 30" Gas Export line x 218 Km, 8" MEG Injection line x 217 Km, 4 x14" in-field clad flowlines, 4x in-field Umbilicals and 2 x2" Flexible lines, Infield Subsea Structures.
N. 2 additional shore approach operations to install stab lines 1x 30" + 1 x14" for future use
- Main Saipem Vessels to be utilized: Castorone Castoro Sei Saipem FDS2 – Far Samson – Saipem 3000
- Project highlights:
- Maximum water depth approx. 1,500m
- Super fast-track approach
- High number of vessels to be mobilised Castorone Castoro Sei Saipem FDS2
West Hub
- Client: Eni
- Location: Angolan waters, 350 km north west of Luanda
- Scope of work: construction and deepwater installation of umbilicals, risers and flowlines for the development of Block 15/06
Project highlights:
- Maximum water depth nearly 1,400m
- Cladded pipe in pipe flowlines
- Flexibles installation with Normand Maximus and FDS
MAIN RECENT AWARDS – E&C ONSHORE
KOC Pipelines for New Refinery Project (NRP) – Kuwait
- Client: Kuwait Oil Company
- Location: Kuwait
- Scope of work: EPC of a system of pipelines of various diameters, for a total length of about 450 km, for crude oil and gas transportation from KOC South Tank Farm manifolds to the new Al-Zour refinery and for the transportation of the refined products to storage areas
Project highlights:
UPDATE ON NEAR TERM E&C OPPORTUNITIES
DELIVERING ON NEAR TERM OPPORTUNITIES
UPDATE ON DRILLING
OFFSHORE DRILLING FLEET CONTRACTS
* ON STACKING MODE - TOTALLY WRITTEN OFF
ONSHORE DRILLING FLEET 9M 2017 UTILISATION RATE: 58%
XSIGHT
HIGH VALUE ENGINEERING SERVICES
FROM EARLY ENGAGEMENT TO LIFE-OF-FIELD SOLUTIONS
- Groupwide global presence with c.300 dedicated Engineers to date
- Expertise in Full Field Development, Up/Mid/Downstream, High Tech. Floaters, Renewables
- New contracts with strategic clients secured and robust pipeline of target initiatives
CLOSING REMARKS
2017 GUIDANCE
| Metrics |
FY 2017 |
| Revenues |
c.€9.5bn |
EBITDA
% margin |
c.€1bn
> 10% |
| Net Profit Adjusted |
c.€200mn * |
| CAPEX |
c.€300mn |
| Net financial position |
c.€1.3bn |
|
|
CLOSING REMARKS
SOLID 3Q OPERATIONAL AND FINANCIAL PERFORMANCE
GOOD ORDER INTAKE IN 3Q WITH VISIBILITY ON NEAR TERM COMMERCIAL TARGETS
SAVINGS PROGRAM ON TRACK AND ADDITIONAL EFFICIENCY INITIATIVES UNDER ASSESSMENT
IMPROVED NET DEBT GUIDANCE
APPENDIX
3Q 2017 RESULTS
QoQ TREND (€ mn)
E&C OPPORTUNITIES OFFSHORE
ONSHORE LEGEND
25
Americas
- BP Cassia Compression – fixed facilities
- Petrobras Libra Development – subsea
- Eni Amoca Field – fixed facilities
- ExxonMobil Liza future dev. – subsea New
- Shell LNG Canada – LNG
- Ferrostaal Pacific NW Ammonia Plant – downstream
- Pemex Refineries Maintenance – downstream
- CEP Imperia Valley 1 – renewables New
West and North Africa
- Eni Shorouk (Zohr) future dev. – subsea/pipelines
- BG Shell Burullus Phase IXB – subsea
- Eni Zabazaba – subsea
- Eni West Hub (Vandumbu field) – subsea
- CEC Phase 2 Open Cycle – MMO
- BP Tortue Deepwater Development Phase 1A – Subsea
- Eni Zabazaba – floaters
- BP Tortue FPSO – floaters New
- NAOC Okpai Phase II Power Plant – downstream
Asia Pacific
- ConocoPhillips Barossa Field Dev. – subsea/pipelines
- ONGC KG-98/2 – subsea (URF+SPS)
- ThaiOil Clean Fuel – downstream
- PTTLNG Nong Fab receiving terminal – LNG
- RDA Pentland Bio Enery Project Phase 1 – renewables
Europe/ CIS and Central Asia
- BP Shah Deniz IMR – inspection, maintenance & repair
- EDF Fecamp Offshore Windfarm – renewables
- EDF Courseulles Offshore Windfarm – renewables
- EDF Saint Nazaire Offshore Windfarm – renewables
- Total Garantiana Development Project – subsea
- ExxonMobil Neptune Deepwater - pipelines, platform/subsea
- ConocoPhillips LOGGS Central Complex - decommissioning
- SOCAR Baku Refinery – downstream
- Gazprom Moscow Refinery Upgrading FEED – downstream
- RFI TAV Brescia Verona – infrastructures
- High Speed Railway Moscow – Kazan – infrastructures
Middle East
- S. Aramco LTA development – CRPOs for fixed facilities
- Rasgas Barzan Subsea Pipelines – pipelines
- ADCO BAB Integrated Facilities – upstream/onshore pipelines
- DUQM Refinery – downstream
- OTTCO Ras Markaz Crude Oil Park Project - downstream
- Saudi Aramco Hawiyah e Haradh Field Gas Compression – upstream
- Jurassic Field Development – upstream
- ExxonMobil West Qurna major tie-ins New
- ADCO Qusahwira Field Develop. Phase 2 New
East Africa
- Eni Mamba – subsea
- Anadarko Golfinho – subsea
- Eni Onshore – LNG
- Anadarko Onshore – LNG
- Fauji/Ferrostaal Fertilizer Plant Tanzania – downstream
€110mn OF IDENTIFIED SAVINGS WITH ADDITIONAL EFFICIENCIES POTENTIAL
ADDITIONAL SAVINGS: €10mn per year
- Drilling vessel scrapping: Scarabeo 6, Perro Negro 3
- E&C vessel scrapping: Castoro 8
FURTHER ACTIONS UNDER ASSESMENT
Ongoing review by Divisions Managers on:
- Dedicated business processes simplification and customization to specific Division needs
- Integration of divisional staff functions with business activities
(*) Gross amounts (**) 76 Resources released in 2016