Saipem

Investor Presentation • Sep 27, 2018

BERNSTEIN 15TH ANNUAL PAN EUROPEAN STRATEGIC DECISION CONFERENCE

27 SEPTEMBER 2018

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

1	OPENING REMARKS
2	STRATEGY IN ACTION
3	1H 2018 RESULTS
4	LOOKING AT THE FUTURE

SAIPEM: A LEADING GLOBAL OIL & GAS CONTRACTOR

• Currently operating in 63 Countries
• Around 33,000 employees, of which c.5,000 engineers
• 73% local personnel and 118 Nationalities
• In E&C, Saipem designed and built over 130,000 km of land pipelines, sealines and trunklines; in the last decade more than 100 EPCI projects Offshore were executed; more than 100 grass roots complexes and 2,000 process units Onshore were designed and built
• In Drilling, Saipem drilled over 7,300 wells, of which 1,800 offshore

WIDE OIL AND GAS VALUE CHAIN COVERAGE THROUGH FIVE DIVISIONS

TODAY'S PRESENTATION

DELIVERING OUR STRATEGY TO BUILD A STRONGER SAIPEM LAUNCHED IN OCTOBER 2015

STRATEGIC PILLARS

ACHIEVED GOALS

Business portfolio refocus 1

De-risking the business model 2

Cost optimisation & process efficiency 3

Technology and innovation 4

Debt reduction and capital discipline 5

• DIVISIONALIZATION
• FULLY ACCOUNTABLE DIVISIONS
• COST OPTIMIZATION
• FOCUS ON CORE BUSINESSES AND PERFORMANCE
• EARLY ENGAGEMENT THROUGH XSIGHT
• STRENGTHENED AND RATIONALISED ASSET BASE
• COMMERCIAL DISCIPLINE AND TENDER SELECTIVITY
• SETTLEMENT IN ALGERIA
• FIT FOR THE FUTURE PROGRAMS
• ENHANCED INNOVATION CULTURE AND BUDGET
• COST EFFECTIVE SOLUTIONS
• STRONGER FINANCIAL STRUCTURE
• WORKING CAPITAL & CAPEX CONTROL

DIVISIONAL AUTONOMY – FURTHER STEPS

PHASE 1 OF DIVISIONAL ORGANIZATION: COMPLETED

• Procedures and cost structure tailored Division by Division
• Higher accountability: commercial, engineering, procurement, technical and staff functions directly reporting to the respective heads of the divisions

PHASE 2: NOW LAUNCHED, TO BE COMPLETED BY YEAR END

• Full autonomy of Divisions:
• Strategy
• Partnerships
• Commercial policy
• Procurement and project execution
• Capex
• Technology & R&D
• Portfolio strategy by group CEO
• Centralised finance
• Transformation in separate Legal Entities subject to specific strategic options

2018 PORTFOLIO REVIEW: STRATEGIC GOALS AND PRIORITIES

STRATEGIC TECHNOLOGY TARGETS IN E&C OFFSHORE

INNOVATION for GLOBAL SOLUTIONS

SOLID CASH FLOW GENERATION DESPITE ONE-OFFS NET DEBT REDUCTION 2016 – 1H 2018 (€ bn)

• Strong liquidity of c. €2.9bn @ June 30, 2018 (available cash c. €1.1bn)
• Euro Medium Term Non-convertible Notes (EMTN) Program extended to €3bn: bonds for € 2.0bn already placed to-date
• Average debt maturity c.3.9 years. Overall financing interest rate c.4% including treasury hedging

TODAY'S PRESENTATION

1H 2018 RESULTS YoY COMPARISON (€ mn)

ADJUSTED EBITDA RESILIENT, DESPITE LOWER VOLUMES

(*) 1H 2018 Adjusted Revenues: €3,839mn

(**) Loss from a project-related equity affiliate is not included in EBITDA and is accounted for below EBIT

1H 2018 ADJUSTED RESULTS – E&C YoY COMPARISON (€ mn)

(*) E&C Onshore: including Floaters business and Xsight; loss from a project-related equity affiliate is not included in EBITDA and is accounted for below EBIT

BACKLOG

(€ mn)

€4.0bn contract acquisitions in 1H2018 Backlog €12.6bn @June 30, 2018

TODAY'S PRESENTATION

1	OPENING REMARKS
2	STRATEGY IN ACTION
3	1H 2018 RESULTS
4	LOOKING AT THE FUTURE

BUSINESS OPPORTUNITIES INCREASED VISIBILITY ON TENDERS PIPELINE

NEAR TERM E&C OPPORTUNITIES

ALSO VARIOUS NEAR TERM OFFSHORE AND ONSHORE DRILLING OPPORTUNITIES

TARGET BOOK-TO-BILL >1 ALSO IN 2H 2018

2018 GUIDANCE

(*) Inclusive of loss from a project-related equity affiliate

CLOSING REMARKS

CONSISTENT STRATEGIC PATH TO CONSOLIDATE LEADERSHIP IN E&C OFFSHORE

SOLID OPERATIONAL PERFORMANCE AND CASH FLOW GENERATION TROUGHOUT THE DOWNTURN

RECENT AWARDS AND NEAR TERM VISIBILITY PROVIDE COMFORT ON FUTURE REVENUES

PORTFOLIO REVIEW: DIVISIONAL AUTONOMY TO ACHIEVE STRATEGIC PRIORITIES

THANK YOU

The presentation is available on our institutional web site: www.saipem.com Under the section: Documents / Investor Relations / Presentations/other documents

APPENDIX

E&C OFFSHORE – ZOHR: A FIRST TIME EVER A NEW WIN-WIN MODEL

A challenging recipe….

• Demanding Technical Requirements
• Tight Schedule
• Involvement of a Large Specialised Naval Spread

… tackled with Saipem ingredients

• Fast Track Shared Approach
• Early Engagement and Integrated Team Work
• Optimised Vessels Utilisation
• Local Content Environment as Enabler
• Technical and Technological Solutions

E&C ONSHORE BUSINESS OPPORTUNITIES: FOCUS ON LNG

LNG: A PROMISING MARKET DRIVEN BY SOLID DEMAND GROWTH

A SIGNIFICANT NUMBER OF VISIBLE MARKET OPPORTUNITIES:

Mozambique LNG (Anadarko): 2 trains (12MTPA)

Mozambique Rovuma Venture: FEED undergoing for 2 trains (15MTPA)

• NLNG T7 (at Bonny): FEED undergoing of combined
• trains (8MTPA)
• Arctic LNG2: FEED undergoing for 3 GBS

A RECOGNIZED PLAYER IN THE LNG MARKET

TECHNOLOGICAL INNOVATION DRIVERS

SHORT RANGE REACTIVE SOLUTIONS AND NOVEL CONCEPTS TO SECURE MEDIUM/LONG TERM COMPETITIVE EDGE

SHORT TERM (DRIVEN BY PROJECTS)		BUSINESS	LONG TERM (DRIVEN BY ENERGY SCENARIO)
Reduce cost and schedule of O&G projects			Guarantee full exploitation of energy resources
Diversification inside and outside of the O&G market
ENVIRONMENT
	PROTECTING ENVIRONMENT  "Offset Installation Equipment" delivery  Oil spill warning data collection platform	TARGET DECARBONISATION CO2 separation at the source (also subsea) Transportation Re-injection / re-use
DIGITAL TRANSFORMATION
	Increase productivity  xDIMTM  Pilot project  EPC process  Digital Site (IoT)	Offer new value propositions on Small scale LNG improvement
			24

TECHNOLOGICAL INNOVATION: OFFSHORE FOCUS ENHANCING FIELD ECONOMICS AND RETURN FOR CLIENTS

• Innovative field architectures and "building blocks
• Field development CAPEX and/or OPEX costs reduction
• Exploit early engagement with Clients

WORK ON COSTS REDUCTION BY…	…CHANGING FIELD ARCHITECTURE	…ADOPTING NEW TECHNOLOGIES
… bringing surface equipment to seabed	SPRINGS™ Multipipe Spoolsep Hisep™
… new fluid transport & preservation techniques and transport/control lines simplification (e.g. for long-tie backs)		EHT-PiP Local Heating DePressuRiser Subsea Chemicals All-Electric Field
… new products and materials for pipes	Single Independent Riser IPW for Clad pipes FBJ for Plastic Lined Pipes TCP pipes
… new ways to manage field operations		HyDrone platform Production Monitoring Asset Integrity 25 Management

FIT FOR THE FUTURE OPTIMISATION PROGRAMMES

2015 COST OPTIMISATION PROGRAMME completed in 2017 (cumulative cost savings of €1,7bn)

FIT FOR THE FUTURE 2.0 LAUNCHED IN OCTOBER 2016 - ONGOING

• NEW ORGANIZATION IMPLEMENTED IN 2Q 2017: 5 DIVISIONS to enhance operating model, empowered to achieve business targets
• TARGET SAVINGS: €150mn run rate by end of 2019

2018 MAIN AWARDS

DUQM REFINERY Package 3 – Awarded in 1Q

• Client: Duqm Refinery and Petrochemical Industries Company L.L.C
• Location: Oman

• Scope of work: EPC works for a new grassroots Crude Tank Farm at Ras Markaz composed by 8 crude oil tanks with a cumulative volume of 824,000 m3.

• Client: Barzan Gas Company Limited

• Location: Qatar
• Scope of work: EPCI of two export lines and two intrafield pipelines, service lines, and brownfield modifications
• Main vessels employed: De He and Castoro 2

HIGH SPEED TRAIN BRESCIA-VERONA – Awarded in 2Q

• Client: Rete Ferroviaria Italiana (RFI)
• Location: Italy
• Scope of work: first route section of the High Speed Brescia-Verona, encompassing the laying of 48 km of the railway line, crosses the regions of Lombardy and Veneto

NONG FAB LNG TERMINAL – Awarded in 2Q

• Client: PTT LNG Company Limited
• Location: Thailand
• Scope of work: EPC works for the Nong Fab terminal, with a maximum receiving capacity of 9 MMTPA, for the receipt, storage and regasification of liquefied natural gas

SGCP PIPELINES – Awarded in 3Q

• Client: Saudi Aramco
• Location: Saudi Arabia
• Scope of work: procurement and construction of a system of pipelines of various diameter, with an overall length of over 700 km including flowlines, trunklines and transmission lines, as well as associated facilities

LIZA PH.2 – Awarded in 3Q – subject to requisite government approvals

• Client: ExxonMobil
• Location: Guyana
• 27 Scope of work: 2nd phase of the subsea development of the Liza field (SURF) encompassing EPCI of risers, flowlines and subsea structures and T&I of umbilicals and manifolds

CURRENT SHAREHOLDING STRUCTURE

Key terms of shareholders' agreement

• Agreement duration: until early 2022 (3 years extension option already exercised)
• Eni and CDP Equity to submit a single list for the appointment of statutory bodies
• Mutual commitments to standstill and lock-up commitment on all the shares contributed
• Obligation to engage in consultation before exercising voting rights