Subsea 7 — Earnings Release 2021

Jul 28, 2021

Subsea 7 S.A. Announces Second Quarter and Half Year 2021 Results

Subsea 7 S.A. Announces Second Quarter and Half Year 2021 Results

Luxembourg - 28 July 2021 - Subsea 7 S.A. (the Group) (Oslo Børs: SUBC, ADR:

SUBCY, ISIN: LU0075646355) announced today results for the second quarter and

first half of 2021 which ended 30 June 2021.

Second quarter highlights

* Second quarter 2021 revenue up 59% year-on-year to $1.2 billion

* Adjusted EBITDA of $90 million equating to a margin of 7.5%

* Order intake of $1.9 billion, equating to a book-to-bill of 1.6 times

* Backlog of $6.8 billion of which 22% in Renewables, with $2.7 billion to be

executed in 2021 and $2.4 billion in 2022

* Cash and cash equivalents of $390 million, after payment of the previously

announced dividend of $72 million

* Net debt including lease liabilities of $39 million at quarter end

Second Quarter Half Year

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For the period (in $

millions, except

Adjusted EBITDA margin Q2 2021 Q2 2020 1H 2021 1H 2020

and per share data) Unaudited Unaudited Unaudited Unaudited

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Revenue 1,198 754 2,194 1,505

Adjusted EBITDA((a)) 90 (9) 193 59

Adjusted EBITDA

margin((a)) 8% (1%) 9% 4%

Net operating loss

excluding goodwill

impairment charges (28) (352) (37) (401)

Goodwill impairment

charges - (578) - (578)

Net operating loss (28) (930) (37) (979)

Net loss (13) (922) (12) (959)

Earnings per share -

in $ per share

Basic (0.04) (3.06) (0.03) (3.19)

Diluted(()(b)()) (0.04) (3.06) (0.03) (3.19)

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30 Jun 2021 31 Mar 2021

At (in $ millions) Unaudited Unaudited

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Backlog -

unaudited((c)) 6,766 6,002

Cash and cash

equivalents 390 527

Borrowings     (197) (203)

Net cash excluding

lease liabilities((d)) 193 324

Net (debt)/cash

including lease

liabilities((d)) (39) 74

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(a) For explanations and reconciliations of Adjusted EBITDA and Adjusted EBITDA

margin refer to Note 8 'Adjusted EBITDA and Adjusted EBITDA margin' to the

Condensed Consolidated Financial Statements.

(b) For the explanation and a reconciliation of diluted earnings per share refer

to Note 7 'Earnings per share' to the Condensed Consolidated Financial

Statements.

(c) Backlog at 30 June 2021 and 31 March 2021 is unaudited and is a non-IFRS

measure.

(d) Net cash is a non-IFRS measure and is defined as cash and cash equivalents

less borrowings.

John Evans, Chief Executive Officer, said:

Subsea 7's onshore and offshore teams continued to work hard in the second

quarter to deliver clients' projects in spite of the challenges associated with

the Covid-19 pandemic. Revenue increased 59% year-on-year due to increased

activity in both the Subsea and Conventional and Renewables business units.

Adjusted EBITDA margin of 7.5% was adversely impacted by continued delays and

Covid-19 affecting renewables projects in Taiwan, as well as low margins in

Subsea and Conventional. The latter reflects the level of activity in the Middle

East and the execution of SURF contracts won during a competitive pricing

environment in 2019 and 2020.

We expect an increase in profitability in the second half of the year with

improved margins in both business units. The long-term outlook continues to

strengthen with higher tendering activity in both Subsea and Conventional and

Renewables. Increased worldwide demand for certain pipelay vessels from late

2023 is supporting positive momentum in the pricing environment for new subsea

awards. We also have increased confidence in the forecast step-up in offshore

wind farm activity as bidding for several projects is underway.

Unlocking value in offshore wind

This month Subsea 7 announced the proposed combination(1) of its Renewables

business unit with OHT ASA to form Seaway 7 ASA, a pure-play renewables company

focused on the offshore fixed wind industry. With its combined fleet of ten

vessels, and two high specification installation vessels under construction,

Seaway 7 ASA will be equipped with the enabling assets, engineering expertise

and project management track record required to forge an enhanced growth

trajectory as a global leader in the offshore fixed wind market. The combination

should help accelerate and enhance value creation for Subsea 7 shareholders

through a majority ownership of this pure-play entity, listed on the Euronext

Growth market in Oslo.

The transaction reflects Subsea 7's proactive commitment to Energy Transition

that is focused on delivering the energy the world needs, with sustainability at

its heart. We look forward to supporting the successful growth of Seaway 7 ASA

while continuing to nurture, in-house, our businesses in floating wind, carbon

capture and other emerging energies.

Second quarter operational review

In the second quarter the Subsea and Conventional business unit made good

operational progress in the engineering and procurement phases of the SLGC,

Sangomar and Barossa projects. Despite the challenges posed by China's strict

Covid-19 restrictions, the Lingshui project was successfully completed utilising

Seven Borealis and Seven Eagle. Elsewhere, offshore activity was centred on the

Gulf of Mexico, Norway, Saudi Arabia and Australia. In Norway, Seven Arctic

installed umbilicals on Ærfugl Phase 2 and Seven Navica made progress installing

gas pipelines on Johan Sverdrup Phase 2. Activity remained high in the Gulf of

Mexico on the installation phases of Manuel, King's Quay and Mad Dog Phase 2,

for which Seven Navica was deployed to accommodate the rescheduling of some work

from Seven Vega. In Saudi Arabia, Seven Champion continued to execute the 28

Jackets installation project (CRPO 47, 48 and 49) throughout the second quarter,

and in Australia, Seven Oceans spent the quarter installing equipment for the

Julimar Phase 2 project. After finishing work in the UK, Seven Oceanic began its

transit to Australia to assist on the Julimar project.

In the Renewables business unit, in Taiwan, the progress of Seaway Yudin was

adversely impacted by restrictions imposed by the government to control the

spread of Covid-19. In addition, environmental conditions at the worksite and a

number of changes in scope have hampered progress. We are in discussions to

recover the incremental costs from our client in accordance with contractual

terms. Elsewhere in Renewables, we continued work on the Seagreen project. The

first five jackets began their transit from China to Europe, and progress on the

remaining 109 jackets by our three suppliers is running to schedule. Good

progress was also made in the UK on the Hornsea II project, on which Seaway

Aimery, Seaway Moxie and Simar Esperança were fully utilised during the quarter.

In June Seaway Strashnov completed an oil and gas heavy lift project and began

mobilising for the Hollandse Kust Zuid wind project, offshore Netherlands.

Overall, utilisation of Subsea 7's active fleet was 82% in the second quarter,

compared to 71% in the prior year period. At the quarter end, the active fleet

comprised 29 vessels.

Second quarter financial review

Second quarter revenue of $1.2 billion increased by 59% compared to the prior

year period, reflecting significantly higher activity in both Subsea and

Conventional and Renewables. Adjusted EBITDA of $90 million was up from an

Adjusted EBITDA loss of $9 million in the prior year quarter. The improvement

largely reflects the absence of restructuring charges in 2021 ($104 million in

2020). The underlying margin has declined year-on-year as a consequence of

continued delays and Covid-19 affecting renewables projects in Taiwan, and

reduced margins in Subsea and Conventional. After depreciation, amortisation and

impairment charges of $118 million, the Group recorded a net operating loss of

$28 million. The net loss for the quarter was $13 million, after a tax credit of

$15 million.

During the quarter, net cash generated from operations was $15 million including

a $48 million adverse movement in net working capital largely due to increased

activity in the Middle East and movement in non-project related balances.

Capital expenditure was $34 million including the payments for the conversion of

Seaway Phoenix. The second quarter was also impacted by the distribution of

dividends amounting to $72 million. Overall, cash and cash equivalents decreased

by $137 million since 31 March 2021 to $390 million and the Group ended the

quarter with net debt of $39 million, including lease liabilities of $232

million.

During the second quarter, Subsea 7 booked new orders of approximately $1.5

billion and escalations of approximately $400 million, resulting in a book-to-

bill ratio of 1.6. The backlog at the end of June 2021 was $6.8 billion, of

which $2.7 billion is expected to be executed during the remainder of 2021 and

$2.4 billion in 2022.

Outlook for full year 2021

The outlook for oil and gas contract awards has remained robust during the

second quarter and continues to be centred on the three key regions with the

most attractive project economics. Tendering activity in Brazil remains strong

following the award of Bacalhau and Mero 3 to Subsea 7 in the second quarter,

with several projects scheduled to be awarded to the industry over the next two

years. Early engagement in Norway is beginning to yield awards such as Kobra

East Gekko and Hasselmus, and front-end engineering activity is high in

preparation for further EPCI prospects. Offshore activity in the Gulf of Mexico

should increase in the second half of the year and we are actively tendering for

further tie-back opportunities.

To accommodate a higher level of tendering and engineering activity, Subsea 7's

onshore workforce is expected to increase in number, though plans to reduce the

size of the active fleet remain in place given the current offshore workload

projected for 2022. Demand for certain vessels from late 2023 onwards is driving

positive momentum in the pricing environment compared to 2019 and 2020, giving

us confidence in the outlook for Subsea and Conventional.

Tendering in Renewables is active for projects expected to be awarded to the

industry in 2022, including in Asia, Europe and the US. This has contributed to

improved visibility on the forecast step-up in installation activity from 2025

onwards, for which the new Seaway 7 ASA will be well-positioned.

Despite the successful roll-out of Covid-19 vaccinations in some countries, we

continue to manage the challenges of operating within the constraints imposed by

many governments around the world. Subsea 7 is likely to continue to incur both

direct costs relating to travel and quarantine of offshore personnel, as well as

indirect adverse impacts on operational efficiency of offshore operations and

the supply chain in general.

Nevertheless, absent a deterioration in the impact of the Covid-19 pandemic, we

continue to expect that revenue and Adjusted EBITDA in 2021 will exceed the

prior year levels, and that net operating income will be positive.

Conference Call Information

Date: 28 July 2021

Time: 12:00 UK Time

Access the webcast at subsea7.com (https://edge.media-server.com/mmc/p/sdhad4b2)

or register for the conference call at

http://emea.directeventreg.com/registration/1977909.

Advance registration is required.

For further information, please contact:

Katherine Tonks

Head of Investor Relations

Email: katherine.tonks@subsea7.com (mailto:katherine.tonks@subsea7.com)

Telephone: +44 20 8210 5568

Special Note Regarding Forward-Looking Statements

Certain statements made in this announcement may contain 'forward-looking

statements' (within the meaning of the safe harbour provisions of the U.S.

Private Securities Litigation Reform Act of 1995). These statements relate to

our current expectations, beliefs, intentions, assumptions or strategies

regarding the future and are subject to known and unknown risks that could cause

actual results, performance or events to differ materially from those expressed

or implied in these statements. Forward-looking statements may be identified by

the use of words such as 'anticipate', 'believe', 'estimate', 'expect',

'future', 'goal', 'intend', 'likely' 'may', 'plan', 'project', 'seek', 'should',

'strategy' 'will', and similar expressions. The principal risks which could

affect future operations of the Group are described in the 'Risk Management'

section of the Group's Annual Report and Consolidated Financial Statements for

the year ended 31 December 2020. Factors that may cause actual and future

results and trends to differ materially from our forward-looking statements

include (but are not limited to): (i) our ability to deliver fixed price

projects in accordance with client expectations and within the parameters of our

bids, and to avoid cost overruns; (ii) our ability to collect receivables,

negotiate variation orders and collect the related revenue; (iii) our ability to

recover costs on significant projects; (iv) capital expenditure by oil and gas

companies, which is affected by fluctuations in the price of, and demand for,

crude oil and natural gas; (v) unanticipated delays or cancellation of projects

included in our backlog; (vi) competition and price fluctuations in the markets

and businesses in which we operate; (vii) the loss of, or deterioration in our

relationship with, any significant clients; (viii) the outcome of legal

proceedings or governmental inquiries; (ix) uncertainties inherent in operating

internationally, including economic, political and social instability, boycotts

or embargoes, labour unrest, changes in foreign governmental regulations,

corruption and currency fluctuations; (x) the effects of a pandemic or epidemic

or a natural disaster; (xi) liability to third parties for the failure of our

joint venture partners to fulfil their obligations; (xii) changes in, or our

failure to comply with, applicable laws and regulations (including regulatory

measures addressing climate change); (xiii) operating hazards, including spills,

environmental damage, personal or property damage and business interruptions

caused by adverse weather; (xiv) equipment or mechanical failures, which could

increase costs, impair revenue and result in penalties for failure to meet

project completion requirements; (xv) the timely delivery of vessels on order

and the timely completion of ship conversion programmes; (xvi) our ability to

keep pace with technological changes and the impact of potential information

technology, cyber security or data security breaches; and (xvii) the

effectiveness of our disclosure controls and procedures and internal control

over financial reporting;. Many of these factors are beyond our ability to

control or predict. Given these uncertainties, you should not place undue

reliance on the forward-looking statements. Each forward-looking statement

speaks only as of the date of this announcement. We undertake no obligation to

update publicly or revise any forward-looking statements, whether as a result of

new information, future events or otherwise.