Subsea 7 — Earnings Release 2015

Nov 11, 2015

Subsea 7 S.A. Announces Third Quarter 2015 Results

Subsea 7 S.A. Announces Third Quarter 2015 Results

Luxembourg - 11 November 2015 - Subsea 7 S.A. (the

Group) (Oslo Børs: SUBC, ADR: SUBCY) announced today

results for the third quarter which ended on 30

September 2015.

Jean Cahuzac, Chief Executive Officer, said:

'Subsea 7 has delivered another quarter of good

results in the three months to 30 September, despite

the continuation of difficult industry conditions and

resultant decline in market activity, with strong

operational performance in both Business Units driven

by consistently good project execution.

Third quarter revenue of $1.2 billion was $702 million

lower than the prior year quarter reflecting reduced

workload due to the sustained downturn in oil company

expenditure. Adjusted EBITDA of $351 million and

margin of 29.2% reflected significant progress on

several large projects and included positive

contribution from projects in the final stages of

execution. Adjusted EBITDA included a $36 million

charge related to the cost reduction and resizing

programme, in line with prior guidance.

Global vessel utilisation was 74% in the quarter

reflecting a reduction in Life of Field work in the

Northern Hemisphere and reduced activity levels as

certain projects completed their offshore phases. In

Brazil, there were high levels of vessel activity

under the long-term PLSV contracts with Petrobras

throughout the quarter.

Backlog at 30 September was $6.7 billion and included

an adverse impact from foreign exchange movements of

approximately $400 million. Order intake, excluding

the adverse foreign exchange impact, was $1.1 billion,

which reflected the Group's strong competitive

position and collaboration with clients to capture

opportunities in a market that has remained subdued.

Cash generated from operating activities in the

quarter was $409 million, which resulted in cash and

cash equivalents of $657 million and net cash of $104

million as at 30 September.

Operational highlights for the third quarter of 2015:

In the Northern Hemisphere and Life of Field Business

Unit the Aasta Hansteen project, offshore Norway,

progressed its offshore installation phase with all

major fabrication completed. Offshore UK, the Montrose

and Catcher projects made significant progress and

concluded offshore activities for 2015, and the

Mariner project also progressed with high levels of

offshore activity in the quarter. In the Gulf of

Mexico, the Heidelberg project was successfully

completed. Life of Field activity remained low as

clients continued to defer non-essential expenditure.

In the Southern Hemisphere and Global Projects

Business Unit the TEN project, offshore Ghana,

progressed well with fabrication, and Seven Borealis

commenced pipelay activity. The completion of the

Gorgon project, offshore Australia, contributed

positively to results in the quarter. Offshore

Nigeria, the Erha North project was substantially

completed with first oil achieved in September. New

awards in the quarter included a contract for phase

one of the West Nile Delta project offshore Egypt.

Towards the end of the quarter the new-build pipelay

support vessel (PLSV) Seven Rio joined the fleet and

commenced work in the Gulf of Mexico; this vessel will

subsequently transit to Brazil to commence a five-year

contract for Petrobras.

The cost reduction and resizing programme announced in

May 2015 is on track to deliver approximately $550

million of annualised cost savings, as previously

guided. The headcount and active fleet reduction has

progressed as planned: of the 12 vessels to leave the

active fleet by early 2016, six owned vessels have

been stacked and one chartered vessel has been

returned during the third quarter. An impairment

charge of $36 million was recognised during the

quarter on Seven Polaris, which will be scrapped.

Outlook: The sustained low oil price environment

continues to result in lower oil company expenditure

and subdued industry activity. The timing of contract

awards to market remains uncertain.

The guidance provided previously for the full year

2015 has been updated. Group revenue is still expected

to be significantly lower in 2015 compared to the

record level reported last year, but due to strong

execution and timing of completion on several projects

Adjusted EBITDA percentage margin is now expected to

be above 2014 levels. Based on the prevailing market

trends both revenue and Adjusted EBITDA percentage

margin in 2016 are expected to be significantly lower

than the Group's forecasts for 2015. The outlook

beyond 2016 remains uncertain.

The fundamental long-term outlook for deepwater subsea

field developments remains intact despite the

challenges facing the industry as a result of the

lower oil price. Subsea 7, in partnership with clients

and suppliers, continues to develop innovative

solutions to lower the cost base such that projects

can become viable in the current low oil price

environment.'

Conference Call Information: Date: 11 November 2015,

12:00 UK Time, Conference Dial In Number: +44 (0)203

139 4830, Conference ID: 37012806#

For further information, please contact: Isabel Green,

Investor Relations Director, email:

isabel.green@subsea7.com, Telephone: +44 (0) 208 210

5568