Subsea 7 — Earnings Release 2021

Apr 29, 2021

Subsea 7 S.A. Announces First Quarter 2021 Results

Subsea 7 S.A. Announces First Quarter 2021 Results

Luxembourg - 29 April 2021 - Subsea 7 S.A. (the Group) (Oslo Børs: SUBC, ADR:

SUBCY, ISIN: LU0075646355) announced today results for the first quarter which

ended 31 March 2021.

First quarter highlights

* First quarter 2021 revenue up 33% year-on-year to $1.0 billion

* Adjusted EBITDA up 50% to $102 million after incurring net Covid-19 costs of

approximately $9 million

* Order intake of $0.8 billion, equating to a book-to-bill of 0.8 times

* Backlog of $6.0 billion of which 30% in Renewables, with $3.4 billion to be

executed in 2021

* Net cash generated from operations of $71 million in the quarter

* Cash and cash equivalents of $527 million with net cash at quarter end of

$74 million

Three Months Ended

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For the period (in $ millions, except Adjusted     31 Mar 2021 31 Mar 2020

EBITDA margin and per share data) Unaudited Unaudited

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Revenue     996 751

Adjusted EBITDA((a))     102 68

Adjusted EBITDA margin((a))     10% 9%

Net operating loss     (9) (49)

Net income/(loss)     1 (38)

Earnings per share - in $ per share

Basic     0.01 (0.13)

Diluted(()(b)())     0.01 (0.13)

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31 Mar 2021 31 Dec 2020

At (in $ millions) Unaudited Audited

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Backlog - unaudited(()(c)())     6,002 6,214

Cash and cash equivalents     527 512

Borrowings     (203) (209)

Net cash excluding lease liabilities(()(d)())     324 303

Net cash including lease liabilities(()(d)())     74 49

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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 31 March 2021 and 31 December 2020 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:

In the first quarter of 2021 Subsea 7 delivered solid revenue and EBITDA growth

compared with the prior year. Although we experienced a relatively quiet quarter

for announced new orders, the Group's backlog remains robust at $6.0 billion and

tendering activity for oil and gas projects has improved in certain regions of

the world, with several contracts expected to be awarded to the industry in the

coming months. Our high Renewables backlog adds to our revenue visibility and

demonstrates the advantage of a diversified energy services strategy. We look

ahead with optimism to a recovery in new order flow in our oil and gas business

as well as continued, strong growth in our well-established offshore wind

business.

Strategy update

Subsea 7's two-pronged strategy comprised of 'Subsea Field of the Future' and

'Energy Transition - Proactive Participation' made further progress in the

quarter with our first carbon capture and storage award, for the Northern Lights

project in Norway, as well as the establishment of a joint venture to develop

the Salamander floating offshore wind project in Scotland. These form part of a

collection of activities focused on emerging energies that underpin our

commitment to enabling lower carbon solutions both for Subsea 7 and our clients.

First quarter operational review

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

progress on several projects. In the Middle East, Seven Champion was active in

Saudi Arabia installing topsides at the 3 PDM project at the Hasbah and Arabiyah

fields (CRPO 27) as well as the 28 Jackets project at the Marjan, Zuluf,

Safaniya and Ribyan fields (CRPO 47, 48 and 49). In Angola, Seven Arctic and

Simar Esperança completed the final phase of the Zinia project, while the

Sangomar project in Senegal made good progress in the fabrication of pipelines

and subsea equipment. In the Gulf of Mexico, Seven Navica and Seven Pegasus were

active on the Ichalkil project, while Seven Oceans and Seven Pacific continued

offshore activities on the Mad Dog 2 project. Engineering and fabrication

activities continued on the Anchor, King's Quay and Jack St Malo projects. In

Australia, Subsea 7's scope was completed by Seven Eagle at the West Barracouta

field while procurement activity commenced on the Barossa project. The diving

support and light construction vessels achieved good utilisation in the North

Sea.

In the Renewables business unit we continued work on the Seagreen project, with

fabrication of the jackets and inner-array cables making further progress. In

Taiwan, winter weather resulted in Seaway Yudin remaining on standby for most of

the quarter. Seaway Aimery and Seaway Moxie were in transit to Europe ahead of

their campaigns in the North Sea.

Overall, utilisation of Subsea 7's active fleet was 66% in the first quarter,

compared to 63% in the prior year period. The quarter was marked by a number of

international transits of some of our global enablers. In addition, Seven Vega

incurred significant downtime while in the Gulf of Mexico for equipment repairs

to address storm damage. It returned to operation on 14 April and the delay has

largely been accommodated by reallocation of work to Subsea 7's other pipelay

vessels. At the quarter end, the active fleet comprised 29 vessels following the

release of Harvey Intervention.

First quarter financial review

From January 2021 we combined our SURF and Conventional and Life of Field

business units into one business unit, named Subsea and Conventional, which

comprises our full portfolio of services and products dedicated to the oil and

gas industry. Simultaneously, the Renewables and Heavy Lifting business unit was

renamed Renewables and excludes heavy lifting activities relating to the oil and

gas industry.

First quarter revenue of $1.0 billion increased by 33% compared to the prior

year period, reflecting significantly higher activity in Renewables as well as

moderate growth in the Subsea and Conventional business unit as projects

deferred from 2020 into 2021 made progress. Adjusted EBITDA of $102 million was

up 50% year-on-year driven by good progress on Subsea and Conventional projects,

high utilisation of the PLSVs and progress on Seagreen, partially offset by a

high level of vessel transit time. After a depreciation and amortisation charge

of $110 million, the Group recorded a net operating loss of $9 million. Net

income for the quarter was $1 million, after a tax charge of $2 million and

other gains and losses of $16 million, including net foreign exchange gains of

$9 million.

During the quarter, net cash generated from operations was $71 million despite a

$25 million adverse movement in net working capital reflecting the phasing of

prepayments on certain large EPCI projects. Capital expenditure was $24 million

including costs relating to the conversion of Seaway Phoenix for cable lay, as

well as dry docking costs associated with Seven Falcon and continued investment

in the Group's digitalisation initiatives. Overall, cash and cash equivalents

increased by $15 million since 31 December 2020 to $527 million and the Group

ended the quarter with net cash of $74 million, including lease liabilities of

$251 million.

During the first quarter, Subsea 7 booked new orders of approximately $600

million and escalations of approximately $200 million, resulting in a book-to-

bill ratio of 0.8. The backlog at the end of March 2021 was $6.0 billion, of

which $3.4 billion is expected to be executed during the remainder of 2021.

Outlook for full year 2021

The outlook for oil and gas project awards has seen a gradual improvement during

the first quarter, although tendering activity remains focused on certain

regions with advantaged economics. The pace of tendering in Brazil has gained

momentum with several projects scheduled to be awarded to the industry this

year, and early engagement activity in Norway is high, which should drive

increased tendering for EPCI projects from the end of the year onwards. The Gulf

of Mexico remains an active market for smaller tie-back opportunities. While the

offshore phase of these new contracts would fall in the period from late 2023

onwards, Subsea 7's cost reduction plan is designed to optimise use of the fleet

in the interim period. Tendering in Renewables remains active for projects

expected to be awarded to the industry in early 2022, including in Asia, Europe

and the US.

For the remainder of 2021 Subsea 7 benefits from a high level of visible

activity afforded by its backlog, but quarterly results may be adversely

impacted by the net costs associated with the Covid-19 pandemic. We continue to

expect that revenue in 2021 will exceed the prior year level. While it is

difficult to predict the operational and financial impact of Covid-19, Adjusted

EBITDA is expected to improve year-on-year and we forecast net operating income

to be positive.

Conference Call Information

Date: 29 April 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/8478263.

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.