Subsea 7 — Earnings Release 2022

Apr 28, 2022

First Quarter 2022 Earnings Presentation

28 April 2022

Forward-looking statements

This document 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. 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 Fourth 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 document. We undertake no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

First quarter 2022 – summary

• First quarter performance in line with expectations
• Major projects continued to make good progress
• Solid new orders in Subsea and Conventional with a book-to-bill of 1.1
• Renewables continued to deliver Seagreen and restarted operations in Taiwan
• Upcycle continues
• Pace of tendering remains high despite global supply chain challenges
• Underlying pricing and payment terms gradually improving

Sustainability

• Our third Sustainability Report
• Published in March 2022
• In 2021 we continued to engage and progress against our Sustainability priorities
• Published our target to achieve Net Zero by 2050
• Established BORA Blue Ocean Research AllianceTM
• Continued to focus on business ethics among our suppliers
• Time-bound targets set for our Sustainability priorities

Operational highlights

Sakarya, Turkey

Bacalhau, Brazil

Sverdrup 2, Norway

Seagreen, UK

Good progress on large EPCI projects:

• Bacalhau 41% complete
• Fabrication progressing well
• Sakarya 30% complete
• Two vessels mobilised offshore for preparation works
• Johan Sverdrup Phase 2 92% complete
• Seven Vega completed pipelay
• Seagreen 79% complete
• 21 jackets installed
• 60 jackets delivered to marshalling yard

Russia-Ukraine conflict

• No activities directly in Russia or Ukraine
• Providing support to approximately 200 Russian or Ukrainian members of our offshore crew
• Compliant with sanctions
• Security in the Black Sea
• Active operations approximately 34 kilometres from the Ukrainian maritime border
• New emphasis on energy security in the UK and EU

Managing the supply chain

• Protection in place on contracts already awarded
• Back-to-back contracts, index-linked pricing and escalators
• Project fuel costs hedged or passed through to clients
• Tenders with preferred bidder status and future tenders
• Managing raw material price inflation
• New adjustment mechanisms and mitigation measures being agreed with clients
• Resolving bids subject to public opening is more complex
• Collaboration with clients and suppliers to deliver solutions
• Early engagement with clients and a collaborative relationship with the supply chain helps us to secure capacity
• Integrated SPS-SURF streamlines and de-risks execution

Salamander floating wind update

• Ørsted acquired an 80% stake in the Salamander joint venture
• Subsea 7 and Simply Blue retain minority stakes
• Stepping-stone 100 MW floating wind project off the east coast of Scotland
• Providing the Scottish supply chain with early capacity development before larger ScotWind projects kick off
• The project is at an advanced planning stage
• INTOG leasing round expected to be launched in June 2022
• CFD allocation round expected in 2025

Solid backlog for 2022 and 2023

• Order intake \$1.2 billion
• New awards \$629 million
• Escalations \$532 million
• FX impact \$117 million
• Book-to-bill 1.0
• Group backlog \$7.3 billion

First quarter 2022 – Group

Revenue

Adjusted EBITDA

• Revenue up 20% year-on-year
• Good progress on large EPCI projects
• EBITDA margin 7.2%
• Planned maintenance on key enabler vessels
• Active vessel utilisation 72%

First quarter 2022 – Subsea and Conventional

• Order intake \$1.0 billion

• Including Zuluf, Shenandoah
• Book-to-bill 1.1
• Order backlog \$6.2 billion
• Revenue up 23% year-on-year
• High level of procurement for major EPCI projects including Sakarya
• EBITDA margin 8.4%
• Planned vessel maintenance
• Lower margin contracts
• Seven Waves contract roll over

First quarter 2022 – Renewables

• Order intake \$93 million
• Order backlog \$1.0 billion
• Revenue up 10% year-on-year
• Good progress on Seagreen, Kaskasi and Hornsea II
• EBITDA margin 2.0%
• Planned maintenance of Seaway Strashnov and Seaway Yudin
• Restart of operations in Taiwan

Q1 2021 Q1 2022

Q1 2021 Q1 2022

First quarter 2022 – cash flow summary

• Cash conversion 66%
• Free cash flow \$(14) million
• Net debt \$98 million Including lease liabilities of \$219 million

Financial guidance

		Subsea 7 S.A.
	2021	2022	Of which, Seaway 7 ASA represents:
Revenue	\$5.0 billion	Broadly in line with 2021	• Revenues approximately \$1 billion
Administrative expense	\$228 million	\$240 – 260 million
Adjusted EBITDA	\$521 million	In line or better than 2021	• EBITDA margin towards 10%
D&A	\$444 million	\$460 – 480 million
Net operating income	\$72 million	In line or better than 2021
Net finance cost	\$15 million	\$20 – 25 million
Tax charge	\$64 million	\$35 – 45 million
Capital expenditure	\$167 million	\$420 – 440 million	• Capital expenditure \$280 million

Capital allocation framework

Subsea 7 to provide working capital support and parent company guarantees, if needed during the transition

Outlook - subsea prospects

Outlook – significant offshore wind prospects

Summary – positive momentum

Subsea and Conventional recovery underway

• Tendering activity for large greenfield projects remains strong

Fixed offshore wind prospects maturing

• \$6 billion tender pipeline

Continued momentum in floating wind

• Entry of Ørsted takes Salamander to the next stage

Active supply chain management

• Contractual protection in place on existing projects
• New contract structures proposed to mitigate raw material price volatility
• Collaborating with clients and suppliers to progress tenders

Q&A

Appendix

• Income statement
• Supplementary details

Major project progression

• Continuing projects >\$100m between 5% and 95% complete as at 31 March 2022 excluding PLSV and Life of Field day-rate contracts

Q1 2022 – income statement summary

	Three months ended
In \$ millions, unless otherwise indicated	31 March 2022 Unaudited	31 March 2021 Unaudited
Revenue	1,194	996
Net operating loss	(31)	(9)
(Loss)/income before taxes	(28)	3
Taxation	15	(2)
Net (loss)/income	(12)	1
Adjusted EBITDA	86	102
Adjusted EBITDA margin	7%	10%
Diluted earnings per share \$	(0.05)	0.01
Weighted average number of shares (millions)	295	298

Q1 2022 – supplementary details

	Three months ended
In \$ millions	31 March 2022 Unaudited	31 March 2021 Unaudited
Administrative expenses	(60)	(56)
Depreciation, amortisation, mobilisation and impairment	(117)	(111)
Net operating loss	(31)	(9)
Net finance cost	(4)	(5)
Other gains and losses	7	16
(Loss)/income before taxes	(28)	3
Taxation	15	(2)
Net (loss)/income(1)	(12)	1

(1) Q1 2022: \$15m net loss is attributable to shareholders of the parent company with a net income of \$3m attributable to non-controlling interests

Fleet – 34 vessels in the active fleet at the end of Q1 2022

Renewables and transportation vessels are operated by Seaway 7 ASA

Seaway Alfa Lift and Seaway Ventus are under construction and therefore excluded from the active fleet total.

Maersk Connector is on long-term charter from a third party