Saipem — Earnings Release 2018

Feb 28, 2019

2018 FULL YEAR RESULTS PRESENTATION

Photo: Ørjan Richardsen / Woldcam / Statoil

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

2018 results ahead of target

• Strong E&C Offshore execution throughout the year
• Progress in E&C Onshore turnaround
• Resilience in Drilling margins supported by efficiency measures

Net result influenced by special items

"Promising" negotiations for amicable settlement of South Stream arbitration

c.€4.5bn contract awards in 4Q driving BtB ahead of expectations Backlog of €12.6bn as of Dec. 31, 2018, excludes €1.8bn for non-consolidated projects Good visibility on project pipeline

Healthy cash flow generation driving Net Debt below €1.2bn

Portfolio strategy update

• E&C Offshore: continue to strengthen leading competitive position
• E&C Onshore: turnaround progressing, focus on energy transition
• Drilling Divisions: strategic options under assessment

2019 Guidance reflects good progress on contract awards to date and visibility on new orders

FY2018 RESULTS

28 February 2019

FY 2018 RESULTS

YoY COMPARISON (€ mn)

FY 2018 ADJUSTED RESULTS – E&C

YoY COMPARISON (€ mn)

• Higher volumes in Middle East and North Sea more than offset Caspian and Latin America lower volumes
• Good execution underpinning solid margin

• Negotiations for amicable settlement of South Stream arbitration

• Lower volumes in Far and Middle East and West Africa partly offset by Latin America and Caspian

• EBITDA: 2018 not reflecting loss from equity affiliates; 2017 includes negative ruling on Algerian arbitration

(*) E&C Onshore including Floaters business and Xsight (**) E&C Onshore FY 2018 Reported Revenues: €3,708mn

FY 2018 ADJUSTED RESULTS – Drilling

YoY COMPARISON (€ mn)

• Lower volumes mainly due to idleness of Semi-subs Scarabeo 5 and Scarabeo 8

• Resilient margin year-on-year

• Volumes steady year-on-year

• Efficiency actions supporting performance

FY 2018 NET RESULT

RECONCILIATION

Net Result (€ mn)

FY 2018 RESULTS - FROM EBITDA Adjusted TO NET RESULT

FY 2018 NET DEBT EVOLUTION (€ bn)

Good cash flow generation in 2018

(*) Includes full payment for Saipem Constellation acquisition

(**) Includes payment of Algeria settlement

CAPITAL STRUCTURE AS OF DECEMBER 31, 2018

(€ mn)

• New 5Y amortizing bank facility for €150mn partially funding early reimbursement of €250mn loan expiring in '19
• Average debt maturity c.3.6 years. Overall financing interest rate c.4%, including treasury hedging
• Undrawn committed cash facilities totalling c.€1.3bn, in addition to c.€0.3bn of uncommitted facilities
• Available cash and equivalent c.€1.1bn**

(*) Committed

12

(**) Not including trapped cash and marketable securities/other credit for c.€0.7bn

IFRS IMPACTS

F E AT U R E S

I N I T I A L I M PA C T S

IFRS16 ADOPTION FROM JANUARY 1, 2019

• Lease obligations increasing net debt
• Financial charges applied over lease debt

RESTATEMENT AT 1st January 2019

• Modified retrospective approach applied
• Financial debt increased by circa €550mn
• Adjusted EBITDA improved by circa €140mn

NON CONSOLIDATED PROJECTS

Recently-awarded sizable projects to be managed through Equity Affiliates

MARKET AND PORTFOLIO UPDATE

MARKET OUTLOOK

• Geopolitical dynamics
• Oil Co.s focused on capital discipline and dividend policy

• OFS focus on consolidation, innovation and efficiency

• Engineering demand intensifying

• Smaller-scale brownfields, tie-backs
• Sizeable projects in LNG, refining and petrochemicals
• Offshore Drilling day-rates to recover in medium term

• Gradually recovering International market for Onshore Drilling

• source for next decades

• Gas is the transition energy source
• Renewables and LNG advance with technology and economies of scale
• Complementary segments: MMO, decommissioning and infrastructure

PORTFOLIO STRATEGY UPDATE 1/2 E&C OFFSHORE AND ONSHORE

E&C OFFSHORE

Competitive context

• Recovery signals in a challenging market
• Race for innovative and cost effective solutions
• Vertical and horizontal consolidation ongoing

Actions

• Maintain focus on core business
• Selective approach to investments
• Partnerships to boost integrated services

Competitive context

Promising market, especially LNG and downstream

E&C ONSHORE

COMPLETE

TURNAROUND

• Leaders focusing on higher value segments
• Significant competition but slow consolidation

Actions

• Portfolio repositioning: geographies and segments
• Performance recovery ongoing
• Minimal capex, technology driven

DRILLING OFFSHORE AND ONSHORE PORTFOLIO STRATEGY UPDATE 2/2

COMPETITIVE CONTEXT

Tough market context, especially offshore

• High industry leverage
• Many players reviewing consolidation options
• Share deals preferred

OUR PERFORMANCE

• Continued focus on cost base optimization
• Resilient economic performance
• Maintenance & mandatory capex only
• Asset-light growth opportunities

STRATEGIC OPTIONS UNDER ASSESSMENT

OUR INNOVATION MODEL A COMMON THREAD FOR ALL DIVISIONS

	Evolution				two pillars of Saipem's technological innovation	Disruption
CONVENTIONAL	Plasma Welding	New Materials for UREA plants	Subsea Flowline Heating	SPRINGSTM	HYDRONE Subsea Platform	Subsea-to Shore
DECARBONISATION & ENVIRONMENT	Oil Spill Intervention	Hybrid Process Solutions		CO 2 Management Solutions	LiqueflexTM LNG	Floating Wind Farm
	Digital Twin		Digital Transformation enabling Technological Innovation		xDIMTM

OUR SUSTAINABLE BUSINESS MODEL

• CEO and Board level responsibility
• Senior management incentives linked to material sustainability topics
• Enhanced ESG reporting and proactive stakeholder engagement
• Improved scoring by most reputable ESG rating agencies
• Included in leading sustainability indices DJSI and FTSE4Good
• Constant focus on anticorruption: DNV Certification ISO 37001:2016

FOCUS ON CLIMATE CHANGE

Publication of "Tackling Climate Change", in line with the recommendations of the Task Force on Climate-Related Financial Disclosure (TCFD)

BUSINESS UPDATE

28 February 2019

E&C OFFSHORE

MAIN RECENT AWARDS

ZOHR RAMP UP TO PLATEAU PHASE

• Client: Petrobel
• Location: offshore Egypt
• Scope of work: EPCI for subsea field development and installation/ precommissioning of new 30" Gas export pipeline
• Main vessels employed: CastorOne, S7000, FDS, CastoroSei, Normand Maximus, S3000

PROJECT HIGHLIGHTS:

— Extreme Fast Track schedule, massive deployment of assets and tight management of simultaneous operations and interfaces

BERRI AND MARJAN FIELD DEVELOPMENT

• Client: Saudi Aramco
• Location: Kingdom of Saudi Arabia Arabian Gulf
• Scope of work: EPCI of Platforms, with associated subsea pipelines, cables and infrastructures.
• Main vessels employed: DeHe, Castoro II

PROJECT HIGHLIGHTS:

— More than 25 E&C Offshore projects carried out for Saudi Aramco

BP TORTUE MARINE CIVIL WORKS

• Client: BP
• Location: Maritime border of Mauritania and Senegal
• Scope of work: EPCI of berthing and loading facilities, in consortium with Eiffage
• Main vessels employed: Saipem 3000

PROJECT HIGHLIGHTS:

— Up to 22,000 tons of marine structures fabricated in Saipem Karimun yard

GOOD VISIBILITY ON NEAR TERM OPPORTUNITIES c.€20bn OVERALL

E&C OFFSHORE DIVISIONAL STRATEGY

SUBSEA: Expand in Reeling, Integrated SURF, Life of Field, Subsea Processing PIPELINES and CONVENTIONAL: Consolidate Leadership STRATEGIC MARKETS

OFFSHORE WINDFARMS: Leverage on Footprint and Assets DECOMMISSIONING: Service Oriented Approach MMO: Diversify portfolio of opportunities through Strategic Partnerships DIVERSIFICATION

Selective approach to CAPEX initiatives EFFICIENT, ASSET LIGHT Organisation ASSETS

TECHNOLOGY DIGITISATION, ROBOTICS, SUBSEA FACTORY

E&C ONSHORE MAIN RECENT AWARDS

ARCTIC LNG 2 GBS

• Client: LLC ARCTIC LNG-2
• Location: Gydan peninsula, Russia
• Scope of work: construction of 3 Concrete Gravity Based Structures (GBS) with LNG storage facilities totaling 687,000 m³

PROJECT HIGHLIGHTS:

• Highly Strategic project in terms of Client, Country and segment
• Biggest GBS ever: 330 m length, 152 m width, 30 m depth, total weight of 470,000 t

CLEAN FUEL PROJECT

• Client: Thai Oil Public Limited Company (PTT)
• Location: Thailand
• Scope of work: EPC and start-up activities for new production units and revamping of the existing ones to increase production capacity of Sriracha refinery

PROJECT HIGHLIGHTS:

• High technological content: core refining, all process unit are licensed
• Extensive modularization approach: more than 300 modules up to 2,000 t

E&C ONSHORE DIVISIONAL STRATEGY

BECOME THE PARTNER OF CHOICE FOR CLIENTS COMMITTED TO THE ENERGY TRANSITION

Providing carbon-neutral operations along the entire EPC value chain

Providing solutions to shorten time-to-market

Consolidation in Core markets & products

5 KEY GROWTH TARGETS

TOTAL TURNOVER

OPERATING GROSS MARGIN

LNG MARKET SHARE

GREEN TECH. MARKET SHARE

MIDDLE EAST MARKET SHARE

TOWARDS A LOW-CARBON FUTURE

SCOPE	 Engage clients in early phase definition  Disrupt traditional processes and solutions Innovate throughout asset life span 
PRIORITIES	1. Foster client relationships through engineering and consultancy services 2. Unlock opportunities for E&C Divisions 3. Commercialise full potential of proprietary licences
ACHIEVEMENTS	 Client accreditation: 75 initiatives awarded in 2018  Significant awards completing start-up phase:  Exxon Mobil – Ca Voi Xanh FEED  Qatargas – North Field Production Sustainability FEED  Mitsubishi Heavy Industries – Ghorasal Polash Urea Fertilizer FEED

READY FOR

• 2020 IMO regulation implementations

• Medium and Small Scale LNG (inc. floaters)

• Decarbonisation

• High grade petrochemical products

OFFSHORE DRILLING

MAIN AWARDS - 4Q 2018

MITZON PROJECT IN MEXICO

• Client: Eni
• Location: Mexico
• Terms: 15 firm wells for c. 3 year operations (plus options)
• RIG: Pioneer

HIGHLIGHTS:

• Expansion to a new very promising area
• Acquisition of one of the few long term business opportunity currently available on the market
• Jack Up Pioneer Rig in bare boat charter, operated and managed by Saipem

NEW 1Q 2019 AWARD PERRO NEGRO 8 CONTRACT EXTENSION IN UAE WITH ADNOC

FOCUS ON EFFICIENCY AND DIGITISATION

• Continued focus on costs optimization
• Digitisation program progressing

OFFSHORE DRILLING FLEET

Committed New awards in 4Q18 and 1Q19 to date Optional period

			2018	2019	2020 TO	CLIENT	AREA
d n a R A E R T T A L W U P- E E D	V.	Saipem 12000			2022>	Eni	Cyprus-Morocco Pakistan-Mozamb.
	N E H	Saipem 10000				Eni	Egypt
	RS A	Scarabeo 9				Eni	Egypt
	H	Scarabeo 8				Shell - Total - AkerBP - Eni	Norway
R P- E T E		Scarabeo 7				Eni	Indonesia
E A D W		Scarabeo 5*				-	-
R E T A W W- O L L A H S	C	Perro Negro 8				ADNOC	UAE
	HI SPE	Perro Negro 7				Saudi Aramco	Saudi Arabia
		Pioneer**			TO 2022>	Eni	Mexico
	D R	Perro Negro 5			TO 2024>	Saudi Aramco	Saudi Arabia
	A D N A T S	Perro Negro 4				Petrobel	Egypt
		Perro Negro 2*				-	-
		TENDER ASSISTED TAD				Eni - Total	Congo

ONSHORE DRILLING

MAIN AWARDS - 4Q 2018

Rig operating in the Vaca Muerta area

NEW DRILLING ACTIVITIES IN ARGENTINA

• TWO LONG TERM CONTRACTS
• Client: YPF
• Location: Vaca Muerta area
• Terms: 5 year each contract
• Project Highlights: Activities in the unconventional field with fast moving highly efficient rigs
• TWO CONTRACT EXTENSIONS FOR EXXON

Overall awards in Argentina worth c.US\$140mn

NEW 1Q 2019 AWARD 5 YEAR CONTRACT IN SAUDI ARABIA

FOCUS ON EFFICIENCY AND DIGITISATION

• Operational Excellence
• Geographical Expansion
• Digital Drilling
• Integrated Drilling with qualified Partners

ONSHORE DRILLING FLEET

29 ONSHORE FLEET @ DECEMBER 31, 2018: 84 RIGS LATIN AMERICA 48 RIGS UTILISATION RATE 27% MIDDLE EAST 31 RIGS UTILISATION RATE 100% REST OF THE WORLD 5 RIGS UTILISATION RATE 78% UTILISATION RATE IN 2018: 65%

2018 BACKLOG IFRS VIEW (€ mn)

(*) E&C Onshore including Floaters business and XSight

BACKLOG BY YEAR OF EXECUTION IFRS VIEW (€ mn)

NON-CONSOLIDATED BACKLOG BY YEAR OF EXECUTION

	2019	2020	2021+
€ mn	127	331	1,386

(*) E&C Onshore including Floaters business and XSight

GUIDANCE AND CLOSING REMARKS

28 February 2019

2019 GUIDANCE

Metrics	FY 2019*
Revenues	 c. €9bn
Adjusted EBITDA % margin	 >10%
CAPEX	 c. €500mn
Net financial position	 c. €1.0bn

CLOSING REMARKS

2018 AHEAD OF GUIDANCE DUE TO STRONG OPERATIONAL PERFORMANCE AND CASH GENERATION PROMISING NEGOTIATIONS FOR AMICABLE SETTLEMENT OF SOUTH STREAM ARBITRATION

IMPROVING MARKET OUTLOOK ON E&P SPENDING AND OPPORTUNITIES IN THE ENERGY TRANSITION

CONTINUING EVOLUTION TOWARD A GLOBAL SOLUTION PROVIDER IN E&C

ASSESSING STRATEGIC OPTIONS IN DRILLING

DIVISIONAL REORGANISATION AND POSITIVE ORDERS MOMENTUM UNDERPINNING SOLID GUIDANCE FOR 2019

APPENDIX

28 February 2019

FY 2018 RESULTS QoQ TREND (€ mn)

(*) Adjusted Revenues: €2,489mn

(**) Loss from a project-related equity affiliate is included in Adjusted Net Result

FY 2018 RESULTS

QoQ TREND (€ mn)

related equity affiliate

(*) E&C Onshore including Floaters business and XSight

FFF2.0 – UPDATE ON REDUNDANCY PLAN RELEASES CONFIRMED FOR c.1,250 FTE